In re Grand Jury

In re Grand Jury arose from a federal grand jury subpoena issued to an unnamed law firm, demanding documents related to tax advice provided to an unnamed corporate client. The firm and client refused, invoking attorney-client privilege and tax practitioner privilege. The United States Court of Appeals for the Ninth Circuit applied the primary purpose test, concluding that because the communications were primarily for tax, not legal, advice, they were not protected. The parties sought Supreme Court review, urging adoption of a more protective standard for dual-purpose communications. On January 23, 2023, the Supreme Court denied certiorari without comment, leaving the Ninth Circuit decision in place.

The Supreme Court denied certiorari. The Ninth Circuit ruling remains controlling, holding that the communications were not privileged because their primary purpose was tax advice.

Whether attorney-client privilege or tax practitioner privilege protects dual-purpose communications where legal and tax advice are intertwined, and whether the primary purpose test should be replaced by the broader because of test.

The denial leaves a circuit split unresolved and imposes a strict standard on law firms and clients in the Ninth Circuit, potentially chilling candid communications during tax planning. Practitioners must carefully structure engagements to emphasize legal advice to preserve privilege.