Certainty or Uncertainty in Minnesota’s Attorney-Client Privilege Protections?

Submitted by HAWS-KM Profes… on Wed, 01/05/2022 - 16:07

By Aidan Zielske

In December, the Minnesota Supreme Court in In Re Polaris1 formally adopted the “predominant purpose test” to determine whether a document that contains both legal and business advice is entirely protected by the attorney-client privilege.

Under this test, the privilege applies only if the primary or predominant purpose of the attorney-client communication is to seek legal advice or assistance. If this test is not met, any portion of the document that contains legal advice can be redacted, but the remainder of the document remains discoverable.

The dissenting justices expressed concerns that the court’s opinion undercuts the very rationale for the attorney-client privilege and will lead to difficult line-drawing decisions for attorneys and their clients.

Background
Whether a document is privileged is a question of fact. In this case, Colby Thompson brought a product-liability lawsuit against Polaris. Before litigation, Polaris announced a recall of off-road vehicles which prompted the federal Consumer Product Safety Commission (CPSC) to investigate Polaris’ compliance with the Consumer Product Safety Act (CPSA). Polaris retained outside counsel to conduct an audit into its safety processes and policies. This audit resulted in a 32-page report, which Polaris inadvertently disclosed during discovery in the product-liability litigation. Polaris sought to claw back the Report under Minn. R. Civ. P. 26.02(f)(2), asserting attorney-client privilege, but the district court denied the claw back request, finding the predominant purpose of the report was business advice, not legal advice.

The report itself included recommendations to improve compliance performance. It was titled “Embracing Safety as a Business Priority” and each page was marked “PRIVILEGED AND CONFIDENTIAL: Protected by Attorney-Client Privilege and Attorney Work Product.”2 The report clarified that the law firm did not represent Polaris in the underlying investigation but was hired to provide a “privileged and confidential assessment of the current state of the safety processes and procedures” and “to make the company better when it comes to dealing with safety concerns.”

Disagreement in Application
The threshold question in a privilege analysis is whether the contested document embodies a communication in which legal advice is sought or rendered. It was undisputed that the report contained both legal advice and business advice, and that the attorney-client privilege protects legal advice, not ordinary business advice.

Determining the predominant purpose of a document is a question of fact, and relevant factors include the purpose, content, context, and recipients of the communication, as well as whether legal advice permeates the document or whether privileged matters can be redacted. Although the majority and dissent agreed on the standard to apply, the two sides disagreed on how it should apply.

Policy Considerations
The attorney-client privilege is the oldest of the common law privileges. It seeks to promote open and honest discussion between clients and their attorneys by serving as a barrier to the disclosure of some evidence. The majority believes that applying the predominant purpose test to a corporate report prepared by legal counsel, ensures that clients do not hide business and operational communications behind the veil of privilege, while still protecting the portions of the report that contain legal advice.

The dissent did not agree, reasoning that “[the decision will] frustrate attorney-client relations, discourage businesses from seeking legal advice, and require lawyers to pepper client communications with legalese and superfluous citations.”

What Now?
The line between “legal advice” and “business advice” has never been easy to delineate. The In Re Polaris decision arguably provided no clarity to the issue. The dissent maintained that the court created a test without meaningfully articulating what constitutes “business advice” versus “legal advice,” reasoning that the “court’s conclusion is meaningless and provides no clear guidance for Minnesota courts to follow.” The dissent focused heavily on the context of the report’s creation, asserting that the report is mostly, if not entirely, legal advice when read in this context. The majority, on the other hand, focused on the report’s discussion of “corporate culture” and provision of “business recommendations” to conclude it is not predominantly legal advice.

Attorneys and their clients are likewise left without clear guidance moving forward and should remain vigilant to avoid unintended consequences as it relates to attorney-client privilege. Particularly in the wake of In Re Polaris, portions of attorney-client communication might be discoverable if both legal and business advice are included.

Certain Safeguards and Practices May Help Reduce Uncertainty

  • When drafting an attorney-client communication, attorneys should consider inserting language that clearly states the purpose of the writing, including that it is intended as legal advice and not for a business purpose.
  • When withholding documents based on privilege during discovery, it may be beneficial to provide detail in a privilege log regarding the purpose of the document and that it was created in connection with rendering legal advice.
  • Lawyers may also want to consider inserting legal authority that supports their advice in communication to clients, where appropriate.

Questions? We’re Here to Help
If you have questions about how the predominant purpose test could impact you, please contact the author or your HAWS-KM attorney at (651) 227-9411.


1In re Polaris, Inc., No. A20-0427, 2021 WL 5913633, __ N.W.2d __ (Minn. Dec. 15, 2021).
2The Court noted that a document is not cloaked with the privilege merely because it bears the label privileged or confidential
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