FOLLOW US

Energy giant FirstEnergy Corp. has urged the Sixth Circuit Court of Appeals to reaffirm that investors suing over its $1 billion bribery scandal cannot depose company officials about internal investigations conducted by law firms Jones Day and Squire Patton Boggs.

In a filing Thursday, the Ohio-based utility accused investors of attempting to “gut” the court’s earlier writ of mandamus — a rare order that overturned a lower court’s decision forcing the company to hand over privileged materials. The plaintiffs, FirstEnergy said, are now wrongly arguing that while documents are protected, depositions about the same privileged facts are still fair game.

“Ordinarily, we’d just request denial of rehearing,” FirstEnergy told the court. “But here, the court should explicitly confirm that its mandamus ruling bars both documents and deposition testimony drawn from privileged internal probes.”

Company Defends Attorney-Client Privilege

The company said the district court erred when it ruled that internal investigations weren’t protected under attorney-client privilege, ordering the release of confidential findings and testimony. The Sixth Circuit later vacated that order in full, but investors have continued pressing for depositions, citing a special master’s interpretation that favors them.

FirstEnergy countered that such a reading “distorts established privilege law,” warning that allowing questioning about information “learned solely through privileged internal investigations” would dismantle corporate confidentiality protections established under the landmark Upjohn Co. v. United States decision.

The company rejected the plaintiffs’ reliance on the 2022 United States v. Sadler case, arguing that it doesn’t apply. “Sadler involved attorneys merely relaying third-party facts. This case involves counsel gathering internal company data to provide legal advice — the core of privilege,” FirstEnergy said.

Fallout From Ohio Bribery Scandal

The investor lawsuit stems from FirstEnergy’s admitted role in bribing former Ohio House Speaker Larry Householder, who was convicted and sentenced for accepting tens of millions in payments to advance legislation rescuing two nuclear plants.

Under a deferred prosecution agreement, the company paid $230 million to avoid federal wire fraud charges. FirstEnergy also successfully argued that bribery does not constitute securities fraud, leading to the reversal of a class certification sought by investors.

The company emphasized that investors already possess extensive evidence — over one million pages of documents and 40 witness depositions — and have access to findings from investigations by the U.S. Department of Justice, SEC, FERC, and the Ohio Attorney General.

“Reopening discovery to probe Jones Day’s and Squire’s privileged work would upend decades of settled law,” the company warned.

Legal Teams Face Off

FirstEnergy is represented by Robert J. Giuffra Jr., Sharon L. Nelles, David M.J. Rein, Nicholas F. Menillo, Maxwell F. Gottschall, and Morgan L. Ratner of Sullivan & Cromwell LLP.

The investors are represented by Jason Forge, Darren Robbins, and Mark Solomon of Robbins Geller Rudman & Dowd LLP, alongside Joseph Murray and Brian Murphy of Murray Murphy Moul & Basil LLP.