Case May Impact Role of Lawyers in Data Breaches and IR

Mark Rasch writes:

On January 9, 2023, the U.S. Supreme Court heard oral arguments on a criminal tax investigation case out of California that might impact the scope and extent of attorney-client privileges in data forensic investigations. The case, called In Re Grand Jury, Dkt. No. 21-1397, involves a federal grand jury demand for records created by a law firm in connection with a client’s decision whether or not to “expatriate”—that is, to renounce U.S. citizenship and obtain other citizenship to achieve a certain tax result. The government opened a criminal investigation related to the taxpayer’s status and subpoenaed documents from the law firm. The firm produced some documents which were not privileged but withheld others; it claimed that a “significant purpose” for the creation of the documents was to render legal advice. The trial court and the federal appeals court held that the documents could not be withheld unless it was “the primary purpose” of the creation of the documents to provide legal advice, as opposed to simple tax or business advice, and that the burden of demonstrating that this was “the primary purpose” lay with the person asserting the privilege—the law firm on behalf of the client.

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