Work Product Protection Not Waived by Disclosure to Auditors


In a decision of interest to attorneys and accountants alike, the United States Court of Appeals for the D.C. Circuit recently upheld protection for attorney work product disclosed to an auditor during its audit.

During discovery in a case involving the tax treatment of two partnerships owned by Dow Chemical Company, the government subpoenaed documents from Dow’s independent auditor, Deloitte & Touche LLP. Deloitte withheld from production three documents identified by Dow as attorney work product. The district court denied the government’s motion to compel, and the government appealed.

The first document at issue was a memorandum prepared by Deloitte summarizing a meeting between Dow employees, Dow’s outside counsel, and Deloitte employees regarding the possibility of litigation over one of the partnerships and the impact of this possibility on the audit. The government argued that this memorandum did not qualify as work product because it was prepared by Deloitte rather than by Dow or its counsel, and because it was generated as part of the routine audit process rather than in anticipation of litigation. The court rejected both arguments.

First, the court held that under Hickman v. Taylor, 329 U.S. 495 (1947), “the question is not who created the document or how they are related to the party asserting work product protection, but whether the document contains work product—the thoughts and opinions of counsel developed in anticipation of litigation.” (Id. at *11–12.) Accordingly, the fact that the memorandum was prepared by an auditor did not preclude its treatment as work product. Second, the court concluded that the memorandum’s immediate purpose of facilitating an audit did not negate its work product status: “a document can contain protected work-product material even though it serves multiple purposes, so long as the protected material was prepared because of the prospect of litigation.” (Id. at *18.) The court remanded for the district court to review the memorandum in camera to determine whether it should be withheld in its entirety or produced in redacted form.

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