Challenges and delays during the discovery process are a frustrating part of civil litigation. One cause for such delay is the attorney-client privilege arising from internal investigation materials. Internal investigations are a critical part of any civil matter, and most investigations are conducted under, and subject to, privilege claims and disputes. Courts and litigants have generally addressed this issue in the latter part of discovery, once the process is well underway. However, the new amendments to the Federal Rules of Civil Procedure (FRCP) have sought to address this issue, and litigants must now prepare earlier to:
- Safeguard the privilege of internal investigations from their inception;
- Manage third parties with privilege in mind; and
- Address internal investigation materials in early case management.
Background
On December 1, 2025, new amendments to the FRCP became effective, which now raise important privilege issues in the initial phases of litigation. Given that this change shifts the burden onto parties to proactively identify and manage privilege issues early in litigation—rather than tackle them deep into the discovery process—the 2025 amendments operate as a catalyst for earlier, more disciplined privilege planning.
The U.S. Court of Appeals for the Sixth Circuit's October 2025 decision in In re FirstEnergy Corp., 154 F.4th 431 (6th Cir. 2025), provides timely guidance for addressing internal investigation privilege issues in light of the 2025 amendments. FirstEnergy offersinsight on how companies can uphold work product doctrine and attorney-client privilege protections for their internal investigation record. This article sets out best practices to implement and pitfalls to avoid regarding the 2025 federal rule amendments and the FirstEnergy ruling.
What are the New Post-2025 FRCP Amendments?
The amendments affect Rules 16 and 26. The amendments require that the parties identify, early in litigation, the method they will employ to assert privilege and comply with privilege-logging obligations. Specifically, the amendment to Rule 26 provides that the discovery plan must include:
- The timing and method for complying with privilege-logging obligations; and
- any agreement about privilege post-production, including orders under Federal Rule of Evidence 502.
Likewise, the amendment to Rule 16 permits the court to address the timing and method of such compliance in the scheduling order.
Prior to the amendments, parties were able to challenge the privilege status of internal investigation materials in the latter part of the discovery period. Now, parties must address potential privilege issues in the preliminary stages of litigation.
By requiring early document review to identify privileged materials, these amendments may be cumbersome for parties. They do not, however, require the parties to resolve privilege issues at the outset of litigation. They merely require the parties to discuss potential privilege issues to uncover disputes that may warrant court intervention or that the parties can resolve by agreement. This requirement is the precise reason a judicial committee proposed these amendments. See Committee Notes on Rules—2025 Amendment.
In re FirstEnergy Corporation Decision
With the new amendments to Rules 16 and 26, parties must now address privilege issues—including those regarding internal investigation materials—earlier in litigation, rather than at the end of the discovery stage. The In re FirstEnergy Corp. decision offers recent guidance on how companies can structure internal investigations to clearly establish these protections.
In In re FirstEnergy Corp., FirstEnergy (a public utility company) and its board retained separate law firms to investigate bribery implications raised in a federal criminal complaint and subpoenas.1 Plaintiffs in a securities case related to the allegations sought the “fruits” of those investigations in discovery.2 The district court held that the attorney-client privilege and work product doctrine did not apply to FirstEnergy's internal investigation documents because the court found that the company conducted the investigations for “business purposes.”3 The district court therefore ordered that FirstEnergy produce the materials generated from the investigations.4 FirstEnergy and its executives filed a petition for a writ of mandamus to vacate the district court's order.5
The Sixth Circuit granted mandamus and vacated the production order.6 The court held that:
- the attorney-client privilege applied to the internal investigation materials because the company sought legal advice in response to the sudden and significant legal risk it faced;
- work product doctrine protection applied to FirstEnergy's internal investigations because the company investigated “because of” anticipated litigation, satisfying Rule 26(b)(3);
- the subsequent use of legal advice for business purposes did not preclude privilege; and
- FirstEnergy did not waive privilege when it
shared part of its internal investigation with its independent
auditor because:
- FirstEnergy withheld privileged documents from the auditor; and
- The auditor's professional obligations prevented it from disclosing any confidential information without FirstEnergy's consent.7
The FirstEnergy holdingconfirms that attorney-client privilege and work product doctrine protections apply to counsel-directed corporate internal investigations. Accordingly, companies have greater assurance that internal investigation materials will remain protected and are not automatically subject to disclosure in civil litigation discovery.
Best Practices to Implement and Pitfalls to Avoid
1. Safeguard the privilege of internal investigations from their inception.
- Document early and often that the company retained counsel to investigate and provide legal advice on potential civil, criminal, or regulatory exposure.
- Tie the event that caused the need for the internal investigation into the documentation.
- Do not include multiple purposes for retaining a law firm to conduct an internal investigation in the documentation.
2. Manage third parties with privilege in mind.
- Do not provide third parties with the entire internal investigation record and findings.
- Limit sharing of internal investigation materials with third parties to non-privileged documents.
- Include explicit confidentiality constraints in the third party's contract, including the inability to share any client information without the client's consent.
3. Address internal investigation materials in early case management.
- The Rule 26(f) discovery plan and proposed Rule 16 scheduling
order should explicitly address internal investigation materials in
the following ways:
- Identify internal investigation documents as a distinct category of privileged material at the Rule 26(f) stage;
- Propose categorical privilege logging for those categories rather than document-by-document logs in the Rule 26(f) discovery plan;
- Propose tailored FRE 502(d) orders that expressly cover internal investigation materials; and
- Secure the court's endorsement of all agreements reflected in the Rule 26(f) discovery plan in the proposed Rule 16 scheduling order, especially in multidistrict litigation or parallel matters.
Fundamentally, companies that take an early, strategic approach to internal investigations are better positioned to preserve privilege, reduce discovery disputes, and gain greater predictability and efficiency in litigation.
Footnotes
1. 54 F.4th 431, 435 (6th Cir. 2025).
2. Id. at 435-436.
3. Id. at 436.
4. Id.
5. Id.
6. Id. at 444.
7. In re FirstEnergy Corp.,154 F.4th at 436-444.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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