by David B. Anders, Randall W. Jackson, and Michael W. Holt

Left to right: David B. Anders, Randall W. Jackson, and Michael W. Holt (photos courtesy of Wachtell, Lipton, Rosen & Katz)

Conducting an internal investigation in a disciplined and organized way is essential to protecting privilege.  A recent decision of the U.S. Court of Appeals for the Sixth Circuit, In re FirstEnergy Corporation, No. 24-3654 (Oct. 3, 2025), underscores that courts will uphold attorney-client privilege and work-product protections where counsel directs the investigation and its legal purpose is clear—even when the resulting work also informs a company’s business decisions. 

In FirstEnergy, shareholders brought a securities fraud class action suit against FirstEnergy and sought in discovery documents from FirstEnergy’s internal investigations related to a bribery scheme.  The district court ordered broad production of the company’s internal investigation files, reasoning that privilege and work-product protection did not apply because the company “initiated the investigations for business advice, not legal advice” and “later used the fruits of the investigations for business decisions.”  The Sixth Circuit took the rare step of granting mandamus and vacating the lower court’s order compelling the production of the internal investigation materials.  The Sixth Circuit held that there is “no way to affirm the district court’s ruling without abandoning nearly a half century . . . of jurisprudence concerning the scope of the attorney-client privilege and work-product doctrine or without discouraging full and frank communication between companies and their attorneys when investigating their own wrongdoing.” (citations omitted).

The Sixth Circuit’s reasoning provides helpful confirmation of the “bedrock privilege and work-product” protections and highlights why structured investigations led by outside counsel are critical to preserving such protections:

• The Attorney-Client Privilege.  The Sixth Circuit held that the attorney-client privilege applied because the company and its board retained lawyers “to secure legal advice” about “the very significant legal risk it suddenly faced.”  The court emphasized that the company’s reliance on that advice for business decisions did not change the analysis.  As the court noted, “[i]n the context of . . . high-stakes criminal and civil allegations . . . it will be the rare company that will not also have business purposes for seeking essential legal advice.”
• Work-Product Protection.  The Sixth Circuit stressed that the company hired outside counsel to conduct internal investigations “because of actual, not merely anticipated, legal and regulatory threats.”  Put simply, work-protect protection applied because “criminal and civil investigations, state and federal regulatory action, and numerous shareholder lawsuits led FirstEnergy to expect litigation and seek legal advice.”
• No Waiver Through Limited Disclosures to Government and Auditors.  The Sixth Circuit also held that limited disclosures to the government in connection with securing a deferred prosecution agreement and providing documents to the company’s auditors did not constitute waiver because the material disclosed was not privileged, was already discoverable, or consisted of “bare conclusions from the investigation,” not “the substance of the[] attorney’s advice.”  With respect to the disclosures to auditors, the court noted that the company made efforts to withhold documents from the auditor on the basis of privilege and that, in any event, the documents remained protected as work product because they were not disclosed to an adversary.   

The FirstEnergy decision affirms that privilege and work-product protections will hold when internal investigations are thoughtfully structured and led by counsel familiar with navigating the many pitfalls that arise in the context of parallel government investigations and civil proceedings.  The Sixth Circuit’s decision reinforces the need to retain counsel promptly when legal risk arises, to document clearly that the purpose of the investigation is to obtain legal advice, and to manage disclosures to the government and auditors carefully to avoid waiver.   

David B. Anders and Randall W. Jackson are Partners and Michael W. Holt is Counsel at Wachtell, Lipton, Rosen & Katz. This post first appeared on the firm’s blog.

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