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Sixth Circuit Reaffirms Robust Privilege And Work-Product Protection For Internal Investigations In FirstEnergy Mandamus Ruling
10/15/2025On October 3, 2025, the United States Court of Appeals for the Sixth Circuit issued a decision granting FirstEnergy Corporation’s (“FirstEnergy”) petition for a writ of mandamus and vacating a district court order compelling production of materials created by outside counsel in the course of conducting two internal investigations. In re FirstEnergy Corp., No. 24-3654 (6th Cir. Oct. 3, 2025). In a closely watched case, the Sixth Circuit’s decision reaffirms that materials prepared by outside counsel undertaking corporate internal investigations remain protected by the attorney-client privilege and the work-product doctrine notwithstanding later business uses, and that disclosures to auditors do not, without more, effect a waiver of work-product protection.
Background
The ruling arises from a securities class action filed after a federal criminal complaint charged former Ohio House Speaker Larry Householder in connection with an alleged bribery scheme linked to Ohio House Bill 6. According to the Sixth Circuit decision, the complaint, while not naming FirstEnergy, implicated FirstEnergy, triggered the issuance of criminal subpoenas, and precipitated a 45% drop in FirstEnergy’s stock price the next day.[1]
During discovery, plaintiffs moved to compel “all previously withheld documents” related to both internal investigations led by outside counsel and to require FirstEnergy’s witnesses to answer all questions related to the internal investigation. In support, plaintiffs argued that the investigations were motivated by “business and human resources purposes.” FirstEnergy opposed, claiming that the investigations were conducted to obtain legal advice and to defend against anticipated legal actions. To this point, FirstEnergy filed a declaration from Defendant and Board member James O’Neil (“O’Neil declaration”) who detailed that the motive behind the investigations was the extraordinary legal risk from government investigations and mounting litigations.
On November 29, 2023, the special master recommended granting the motion, reasoning that the investigations were primarily for business and human resources purposes, including for the purpose of adhering to SEC requirements for public companies. In re FirstEnergy Corp. Secs. Litig., 2023 WL 8290917, at *9 (S.D. Ohio Nov. 29, 2023). In reaching this conclusion, the special master refused to consider the O’Neil declaration, finding it non-compliant with federal law when O’Neil failed to swear “as true” in his declaration. Id. at *8. Without the O’Neil declaration, the special master found that FirstEnergy’s arguments establishing that its documents and materials were protected under either attorney-client privilege or work-product doctrine lacking.[2]Id. at *8 (“Stated simply: FirstEnergy’s argument falls apart without the O’Neil Declaration.”).
On May 6, 2025, the district court adopted the recommendation and later denied certification for interlocutory appeal. In re FirstEnergy Corp. Secs. Litig., 2024 WL 1984802 (S.D. Ohio May 6, 2024). To avoid disclosure of the purportedly privileged materials, FirstEnergy sought mandamus relief in the Sixth Circuit and obtained a stay. The Sixth Circuit granted the petition and vacated the production order.
Attorney-Client Privilege
Reaffirming the Upjohn framework in siding with FirstEnergy, the Sixth Circuit held that the dispositive inquiry is whether the company sought legal advice, not how it later deployed that advice in business decision-making. The record further showed that FirstEnergy and its Board retained outside counsel to investigate potential misconduct and to provide legal analyses and assessments of potential criminal and civil liability. The Court rejected the district court’s reliance on later business use as a basis to compel production, emphasizing that companies commonly make business decisions informed by counsel’s legal advice and that, in the context of significant criminal and civil exposure, it will be the “rare company” that lacks parallel business considerations when seeking essential legal advice. The Court likewise rejected the contention that the investigations were merely factual recitations divorced from legal analysis, noting that outside counsel’s work encompassed legal assessments integral to the advice provided.
Work-Product Doctrine
The Court also held that the work-product doctrine protected the investigation materials because they were prepared “because of” actual and reasonably anticipated litigation, not ordinary business purposes. According to the Court, the timeline was decisive: the internal investigations began immediately after the criminal complaint, issuance of subpoenas, and precipitous stock decline, and amid multiple pending and anticipated civil suits and regulatory actions. The district court’s contrary conclusion, the Court explained, ignored the “realities of litigation” that FirstEnergy faced.
On waiver, the panel rejected arguments that sharing information with FirstEnergy’s independent auditor waived protection. The Court underscored that work-product protection is not automatically waived by disclosure to third parties; only disclosures to an adversary will effect waiver. Auditor independence and ethical obligations, together with auditor workpapers noting that privileged materials had been withheld, undercut any claim that FirstEnergy’s auditor stood as an adversary. The Court also concluded that overlapping disclosures in other proceedings did not amount to a waiver of privileged communications or attorney work product, distinguishing between non-privileged factual overlap or high-level conclusions and the substance of counsel’s advice.
Practical Implications
The decision provides authoritative Sixth Circuit guidance that internal investigations conducted by outside counsel in response to criminal, civil, and regulatory threats are protected by privilege and the work-product doctrine, even when their results inform subsequent business actions. It confirms that work-product protection is not waived by disclosures to independent auditors, absent disclosure to an adversary, and that high-level, non-substantive overlap between investigation findings and disclosures in other contexts does not forfeit core protections.
Companies facing parallel enforcement and civil exposure should engage counsel early to scope and conduct investigations designed to provide legal advice and to prepare for litigation. The Sixth Circuit’s decision strengthens the legal foundation supporting such investigations and underscores the importance of maintaining clear privilege protocols, including with external auditors, to preserve these protections.
Footnotes[1] For more information on the securities allegations, A&O Shearman’s Securities Newsletter previously wrote on the district court’s denial of FirstEnergy’s motion to dismiss.
[2] The Sixth Circuit concluded that, even though the district court’s rejection of the O’Neil declaration was in error, the materials should have been afforded attorney-client privilege and work-product doctrine protections anyway.
