By As Law Online 
Introduction
In a significant decision for corporate internal investigations, the U.S. Court of Appeals for the Sixth Circuit ruled in October 2025 that materials from FirstEnergy Corporation’s internal probes into a major bribery scandal are protected by attorney-client privilege and the work-product doctrine. This FirstEnergy attorney-client privilege ruling overturned a lower court’s order to disclose the documents, emphasizing that companies can shield investigative communications when seeking legal advice, even if the advice informs business decisions. The ruling matters now amid heightened scrutiny of corporate compliance and government investigations, reinforcing protections for counsel-led inquiries while highlighting the need for careful documentation to preserve privileges.
This development impacts corporations facing regulatory or litigation risks, in-house counsel, compliance officers, and external legal advisors. It underscores the importance of structuring internal investigations to maximize legal protections, particularly in high-stakes scenarios involving potential criminal or civil liability.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Readers should consult qualified legal professionals for advice specific to their situations.
Background & Legal Context
FirstEnergy Corporation, a major utility company based in Ohio, became embroiled in one of the largest political corruption scandals in the state’s history. The controversy centered on House Bill 6 (HB6), a 2019 law that provided a $1.3 billion bailout for two nuclear power plants owned by a FirstEnergy subsidiary. Investigations revealed that FirstEnergy allegedly funneled over $60 million through dark money groups to support the election of Larry Householder as Ohio House Speaker, who then championed the legislation.
In July 2020, the U.S. Department of Justice (DOJ) arrested Householder and others on federal racketeering charges, unsealing a criminal complaint that implicated FirstEnergy in the scheme. The company received grand jury subpoenas shortly after, prompting a cascade of civil lawsuits, regulatory inquiries, and shareholder actions. In response, FirstEnergy’s board and management initiated internal investigations to assess the allegations, evaluate legal exposure, and guide responses to ongoing probes.
Attorney-client privilege, a cornerstone of U.S. legal practice recognized since common law origins, protects confidential communications between clients and attorneys made for the purpose of obtaining or providing legal advice. The U.S. Supreme Court in Upjohn Co. v. United States (1981) extended this privilege to corporate settings, covering employee communications during internal investigations when directed by counsel. Similarly, the work-product doctrine, codified in Federal Rule of Civil Procedure 26(b)(3), shields materials prepared in anticipation of litigation from discovery, including attorney opinions and strategies.
Prior rulings, such as those from the Sixth Circuit, have emphasized a broad application of these protections in corporate investigations, provided the primary purpose is legal rather than purely business-oriented. The FirstEnergy case builds on this precedent, addressing tensions when investigative findings influence corporate governance or compliance decisions.
Key Legal Issues Explained
The core dispute in the FirstEnergy attorney-client privilege ruling revolved around whether internal investigation materials—such as reports, interviews, and analyses—qualified for protection. FirstEnergy retained two law firms: Jones Day to investigate the Householder allegations and advise on the DOJ’s criminal probe, and Squire Patton Boggs for a board-led inquiry into related matters.
Attorney-Client Privilege: This doctrine applies to communications where a client seeks legal advice from an attorney. In plain terms, it prevents forced disclosure of discussions about legal risks, compliance, or strategy. The Sixth Circuit clarified that the privilege holds even if the advice is later used for business purposes, like personnel decisions or regulatory filings. The court rejected arguments that “dual-purpose” documents lose protection, stating that what matters is the intent to obtain legal counsel, not subsequent applications.
Work-Product Doctrine: This protects documents created because of anticipated litigation, including those with attorney mental impressions. It requires showing that litigation was reasonably foreseeable—here, met by the DOJ subpoenas, arrests, and ensuing lawsuits. The doctrine is broader than privilege, as it can apply even without an attorney-client relationship, but often overlaps in investigations.
Key challenges include waiver risks, such as through voluntary disclosures to third parties like auditors or regulators. The ruling affirmed that limited, factual sharing does not automatically waive protections for underlying legal analyses.
Latest Developments or Case Status
The case arose in In re FirstEnergy Corp. Securities Litigation, a consolidated class action in the U.S. District Court for the Southern District of Ohio, where plaintiffs sought discovery of the internal investigation materials. A special master recommended compelling production, and the district court agreed, finding the materials primarily business-related rather than legal.
FirstEnergy petitioned the Sixth Circuit for a writ of mandamus—an extraordinary remedy for clear legal errors. On October 3, 2025, a unanimous panel granted the writ, vacating the order. The court held that the investigations were conducted to secure legal advice amid “significant legal risk,” including potential criminal charges. Plaintiffs’ petition for rehearing was denied on November 6, 2025.
As of January 2026, the ruling stands, with the securities litigation ongoing but the investigative materials shielded. FirstEnergy previously entered a deferred prosecution agreement (DPA) with the DOJ in 2021, admitting involvement and paying $230 million in penalties, but the privilege ruling does not directly affect that resolution.
Who Is Affected & Potential Impact
This ruling primarily affects corporations in regulated industries like energy, finance, and healthcare, where internal investigations are common responses to allegations of misconduct. In-house counsel and compliance officers must navigate privilege claims during probes into fraud, bribery, or regulatory violations.
Businesses could face broader implications: stronger privilege protections encourage thorough investigations without fear of disclosure in civil suits, potentially improving compliance. However, plaintiffs in shareholder or consumer lawsuits may encounter barriers to evidence, shifting litigation dynamics.
For individuals, such as employees interviewed in investigations, the ruling reinforces confidentiality but highlights the need for Upjohn warnings—notifications that communications are privileged and belong to the company, not the employee.
Potential outcomes include appeals in similar cases or legislative scrutiny of corporate privileges, though no immediate changes are anticipated.
What This Means Going Forward
The FirstEnergy attorney-client privilege ruling bolsters protections for internal investigations, signaling to courts that dual-purpose documents remain shielded if rooted in legal advice. It aligns with federal trends favoring robust corporate self-policing, as encouraged by DOJ guidelines on voluntary disclosures.
For industries, it promotes proactive compliance programs, where engaging outside counsel early can preserve privileges. Readers should monitor related cases in other circuits, as privilege standards can vary, and watch for SEC or DOJ policy updates on investigation disclosures.
Practical advice for counsel and compliance officers includes:
- Document Retention Purpose: Use engagement letters specifying that counsel is hired for legal advice in anticipation of litigation.
- Structure Investigations: Lead with attorneys, provide Upjohn warnings to interviewees, and label materials as privileged.
- Manage Disclosures: Share only factual summaries with third parties like auditors to avoid waiver; use non-privileged versions where possible.
- Anticipate Challenges: Prepare for privilege logs and in-camera reviews; consider protective orders under Federal Rule of Evidence 502(d).
Conclusion
The FirstEnergy attorney-client privilege ruling reaffirms essential safeguards for corporate internal investigations, balancing the need for candid legal advice with discovery demands in litigation. By prioritizing legal intent over business applications, it encourages companies to address misconduct proactively. As regulatory environments evolve, staying informed on privilege developments remains crucial for effective compliance and risk management.
Frequently Asked Questions
What is the FirstEnergy attorney-client privilege ruling?
The Sixth Circuit’s October 2025 decision in In re FirstEnergy Corp. protected internal investigation materials from disclosure, holding that attorney-client privilege and work-product doctrine apply when companies seek legal advice, regardless of business uses.
How does attorney-client privilege apply to corporate investigations?
It shields confidential communications for legal advice, including employee interviews and analyses, as established in Upjohn v. United States. The privilege extends to corporations when investigations assess legal risks.
Can sharing investigation findings waive privilege?
Limited factual disclosures, such as to regulators under a DPA or auditors, do not typically waive privilege for underlying legal work, but broad sharing risks waiver.
What steps can compliance officers take to preserve privilege?
Engage counsel early, document the legal purpose, restrict access to materials, and use warnings in interviews to maintain confidentiality.
Does this ruling affect ongoing FirstEnergy litigation?
It shields specific materials in the securities class action but does not resolve the broader case, which continues in district court.
Is work-product protection different from attorney-client privilege?
Yes; work-product focuses on materials prepared for litigation, offering protection even for non-attorney work, while privilege centers on advice communications.