The Supreme Judicial Court focused on the issue of whether the attorney-client privilege or the work-product doctrine protect from disclosure communications between an in-house corporate counsel and outside tax accountants consulted by him regarding the structuring of a sale of stock mandated by an antitrust consent judgment.
The general rule is that the voluntary disclosure of privileged information to a third party consultant for the company’s business purposes will be deemed to waive the privilege. There is, however, a narrow exception to this rule, which was the subject of this decision.
In Comcast, the SJC considered whether the attorney-client
privilege or the work product doctrine protect communications between an in-house corporate counsel and outside tax accountants. Corporate counsel retained two Massachusetts-based Arthur Andersen partners to provide Massachusetts tax law advice in connection with a proposed stock sale. The Andersen partners spoke with in-house counsel and prepared several memoranda discussing options for the company relating to the stock sale. Litigation ensued concerning the tax implications of the stock sale. The Commissioner of Revenue sought production of the Arthur Andersen memoranda, which Comcast withheld on the basis of the attorney-client privilege and/or work product doctrine.
The SJC held that the memoranda were not protected by the attorney-client privilege.