Something goes wrong—perhaps the collapse of a structure during construction, the serious injury of an employee on the job, or an accident with a piece of equipment. Litigation appears inevitable, and government regulations or the business’s own policies and procedures may mandate a root-cause analysis. Corporate clients commonly ask whether they need to produce these internal analyses if a lawsuit ensues. 

The answer requires understanding what legal basis a business might have not to disclose certain information. Two of the most common bases for withholding information are when attorney-client privilege or the work-product doctrine protects the information.

As the Supreme Court of the United States noted in the 1981 case Upjohn Co. v. United States, attorney-client privilege is the “oldest of the privileges for confidential communications known to common law.” While the definition and extent of attorney-client privilege vary by jurisdiction, attorney-client privilege generally protects communications between a client and an attorney for a legal purpose. Importantly, that privilege may be lost or waived in certain circumstances when communications include third parties.

The work-product doctrine protects materials—documents and other things—which are prepared in anticipation of litigation. Notably, the product need not be prepared by an attorney to be protected; however, materials reflecting an attorney’s mental impressions, conclusions, opinions, or legal theories are generally afforded much higher protection. On the other hand, courts generally allow discovery of “fact” work product if another party shows “substantial need.”

LACK OF PROTECTION

Returning to root-cause analysis, where a business conducts such an analysis and discloses the report for any purpose, courts virtually always find that the reports do not retain any protection. Where not disclosed, courts do not apply a blanket rule of work-product immunity to reports or other materials that result from companies’ internal investigations, such as these root-cause analyses. Instead, courts apply a number of context-dependent factors. By including counsel early and keeping these factors in mind when conducting root-cause analyses, businesses can increase the chances that the resulting reports will enjoy immunity from discovery.

The nationwide trend is to reject blanket protection for internal investigations. Instead, courts focus on anticipation of litigation when they decide whether documents deserve protection. 

For reports of internal investigations, like root cause analyses, the challenging element of the work-product immunity is whether the report was “in anticipation of litigation.” Courts apply tests that range from “imminent” to “some possibility of litigation.” This element requires a business to show that the prospect of litigation, instead of other pressures, motivated the business to prepare the documents in question. The work-product doctrine generally does not protect documents generated during investigations mandated by an external requirement, such as government regulation, or an internal requirement, such as corporate policy. 

Because of this “motivation” factor, a business might hesitate to adopt blanket policies that require internal investigations under certain circumstances. An adversary might point to such a policy to show that the policy, not the prospect of litigation, led the business to prepare the documents in question. Courts, however, do not treat the existence of such a policy as a disqualifying factor in every case. 

An important decision that deals with root-cause analyses is Transocean Deepwater, Inc. v. Ingersoll-Rand Co., a 2010 case from a federal court in Louisiana. In that case, an employee was injured while using a winch. After settling the employee’s claims, the employer subsequently sought indemnity and contribution from the distributor of the winch. The distributor moved to compel the production of the employer’s root-cause analysis and argued that the employer prepared this analysis in the ordinary course of business. 

The employer, in contrast, argued that the report was a work product because it was prepared in anticipation of litigation, during an investigation in which outside counsel participated. The employer emphasized that outside counsel reviewed the report and made handwritten revisions. The employer also noted that, given the severity of the accident, litigation was inevitable. The court accepted all of these arguments and held that the work-product doctrine protected the report. 

The court wrote, “While the Court recognizes that the work-product doctrine does not protect all Root Cause Analysis Reports as many are created in the ordinary course of business, the Court’s review of the law here and the Report itself reveals that the work-product doctrine protects this Report.” The court reasoned that the severity of the incident—the amputation of three toes through a steel boot—rendered litigation imminent. Moreover, the court found the participation of counsel in the investigation and the drafting of the report, including revisions to the draft report by counsel, buttressed the court’s conclusion that the report was non-discoverable. 

When courts have favored work-product immunity in these settings, they have noted factors like these: 

  • The investigation is qualitatively different from other investigations.
  • Counsel played a role in initiating and participating in the investigation.
  • The investigation and participation of counsel were not standard company practices.
  • Documents that start the investigation mention litigation and risk, rather than emphasizing business issues and downplaying risk.
  • The language of the documents shows litigation is anticipated.

Some courts have recognized a self-critical analysis privilege that may protect internal investigations and root cause analyses, based on the idea that organizations should be able to undertake candid, critical self-assessments to improve their procedures yet might be hesitant to do so if it could be used against them in litigation. However, most courts considering the issue have not found the self-critical analysis privilege to apply to internal investigation documents, like root-causes analyses. In sum, the self-critical analysis privilege may be asserted as an alternative argument against disclosure of sensitive documents relating to internal investigations, but it should not be relied upon to provide protection. 

BEST OUTCOME

The best possibility for protecting such documents likely remains assertion of the work-product doctrine. Involving counsel early in the investigative process is the best way to ensure work product is identified and treated appropriately. In addition to increasing the likelihood that materials remain protected, counsel can assist in navigating special considerations with employee witnesses, helping ensure evidence is safeguarded, assessing legal risks and opportunities, and communicating effectively with stakeholders inside and outside the business.

While the answer of what to do when all goes awry will vary, including legal counsel early in the process can help to ensure that the investigation itself does not become the “something that goes wrong.”

About the Authors

Dixie T. Wells is a partner in the Greensboro, North Carolina, office of Ellis & Winters LLP. She can be reached at dixie.wells@elliswinters.com. Chris Flurry is an attorney in the Raleigh, North Carolina, office of Ellis & Winters LLP. He can be reached at chris.flurry@elliswinters.com.