Concept
Anticipation of Litigation
Work product, privilege, and protective orders
Anticipation of Litigation
Rule 26(b)(3)(A) protects documents and tangible things “prepared in anticipation of litigation or for trial by or for another party or its representative.”1 Two questions sit inside that phrase. The first concerns purpose: did the prospect of a lawsuit or trial have something to do with why the material was created? The second concerns the preparer: was it made by or for a party or one of the representatives the rule lists? A claim must satisfy both before the later questions, substantial need and protection of mental impressions, arise.
Purpose carries so much weight because of what the protection is for. Work product lets a party and its lawyer investigate, analyze, and plan for an adversary proceeding without fearing that the opponent can collect the results on request. A document written for another reason, such as running a business or satisfying a regulator, would exist whether or not anyone expected a suit, so shielding it encourages no additional preparation and withholds material the requester might otherwise obtain. Yet the rule does not wait for a complaint. It reaches material prepared “in anticipation of litigation,” which includes the early investigation a careful lawyer begins once a dispute is foreseeable, as well as preparation for a trial already scheduled. The difficulty lies between those poles, because courts must decide how closely a document’s creation has to be tied to expected litigation.
The four subsections that follow take up that problem in order. They begin with the test most courts use, turn to the documents it excludes and then to documents that serve business and litigation purposes at once, and end with the preparers the rule covers, a group that extends well beyond lawyers.
The Because-Of Test
Rule 26(b)(3)(A) protects documents and tangible things prepared “in anticipation of litigation or for trial,” but it does not say how closely a document’s creation must be tied to a lawsuit.2 Courts filled the gap with a causal test. In United States v. Adlman, the Second Circuit asked whether, “in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation.”3 Most circuits ask the same question. The D.C. Circuit said so in United States v. Deloitte LLP and added that the test applies as well to work product in forms other than documents.4 Because the inquiry turns on why the material came into being, courts treat it as a factual determination that depends on the specifics of the document and the situation.5
Adlman itself shows why the choice of test matters. Sequa Corporation planned a restructuring that would support a tax refund claim, and a 58-page memorandum analyzed the IRS challenges Sequa could expect, the legal theories and strategies it might adopt in response, the preferred ways to structure the transaction, and the likely outcome of litigation. Sequa then carried out the restructuring in essentially the form Arthur Andersen had recommended.6 The IRS argued that the memorandum fell outside the rule because its purpose was to help Sequa decide whether to go ahead with a business transaction.7 The Second Circuit rejected any requirement that a document be prepared primarily or exclusively to assist in litigation. The rule protects documents prepared in anticipation of litigation as well as those prepared for trial, and the court read the first phrase as the broader category.8
The reasoning is practical. A memorandum that predicts how an expected lawsuit will come out is a lawyer’s evaluation of the case, whether or not the client also uses it to decide what to do next, and the rule takes pains to give its special protection to exactly that kind of legal analysis.9 In United States v. ChevronTexaco Corp., the court followed Adlman and added a point from the other direction: the expectation of litigation is either real or it is not, and denying protection to analysis prepared before a transaction would discourage parties from structuring their deals in unobjectionable ways.10
The same causal question sets the test’s limit. A document that would have been created in essentially similar form irrespective of litigation does not qualify, even if it also helps in preparing for suit, because it cannot fairly be said to have been created because of the litigation.11 That limit framed the Adlman remand. The court vacated because it could not tell which standard the district court had applied, and it explained that the outcome would turn on whether Sequa’s memorandum would have been prepared irrespective of the expected IRS litigation.12 The next subsection develops the ordinary-course exclusion.
A minority approach, associated with the Fifth Circuit, asks instead whether the primary motivating purpose behind the document’s creation was to aid in possible future litigation.13 In United States v. El Paso Co., a company prepared a tax pool analysis that weighed legal arguments, predicted the IRS’s position, and forecast its odds of prevailing in court, but it did so to bring its financial books into line with auditing principles. The Fifth Circuit held that the analysis was only a means to a business end and was not prepared in anticipation of litigation.14 The two tests part ways on a document that analyzes expected litigation and also serves a business need. The because-of test protects the document if the prospect of litigation caused it to be written in that form; the primary-purpose approach asks which motive dominated, and a dominant business motive defeats protection.
Both formulations assume that the prospect of litigation is real, although no lawsuit need yet exist. A document is not disqualified because it predates suit, but litigation must at least be a real possibility when the document is prepared, and the document must be prepared with an eye to some specific litigation.15 In the Third Circuit grand jury matter on which James Julian, Inc. v. Raytheon Co. relied, a corporation suspecting undisclosed illegal foreign payments hired outside counsel to investigate. No suit was pending, but if the suspicions proved true some litigation was almost inevitable, and it did not matter that the corporation could not know who would sue or on what theory.16 A Delaware Chancery decision applying a parallel rule reached the same point: threatened or anticipated litigation suffices, and no suit need be pending.17 The word specific keeps the exception from swallowing the rule. Without it, the general chance that any commercial dispute might someday reach court would sweep in nearly every business record.18
The bakery’s summary lacks an identifiable adversary and a concrete dispute, and an administrative claim or a government investigation can supply both. In Deuterium Corp. v. United States, a plaintiff notified the Government’s grantee of a potential patent infringement, and the Department of Energy opened an administrative claim file at once. Administrative claims are themselves adversarial proceedings that often end in litigation, the court observed, so from the date of the notice the agency’s attorneys reasonably anticipated litigation and the work-product doctrine applied.19 Investigations work the same way. In Merrill Lynch & Co. v. Allegheny Energy, Inc., reports from an internal investigation conducted under counsel’s guidance after Merrill Lynch learned it was the subject of a criminal investigation were prepared in anticipation of litigation, because an investigation by a federal agency presents more than a remote prospect of a lawsuit.20
The party resisting discovery carries the burden of showing that the material was prepared in anticipation of litigation. In ChevronTexaco, the court placed on Chevron the burden of establishing that the documents it withheld were prepared in anticipation of litigation by or for Chevron or its representative.21 The allocation tracks who holds the information: the claimant knows why, when, and by whom a document was created, and the requester has never seen it. The claimant’s belief in a real possibility of litigation must also be objectively reasonable, not merely sincere, and one court applying the test to an agency’s withholding required a description of the document, its author, the circumstances of its creation, and the type of litigation for which its use was foreseeable.22 Those details anticipate the description of withheld material that a party must later provide so that others can assess the claim.23
Meeting the because-of test makes a document eligible for protection; it does not make the document immune. The court can then ask whether the requester has shown substantial need and an inability to obtain the substantial equivalent without undue hardship.24 Even if the requester makes that showing, the court must still protect the mental impressions, conclusions, opinions, or legal theories of the party’s attorney or other representative.25
Ordinary-Course Documents
Rule 26(b)(3)(A) shields only what was prepared in anticipation of litigation or for trial, so paper that a business generates for other reasons stays discoverable however sensitive its contents.30 The advisory committee’s 1970 note says that “[m]aterials assembled in the ordinary course of business, or pursuant to public requirements unrelated to litigation, or for other nonlitigation purposes are not under the qualified immunity provided by this subdivision,” as the First Circuit quoted it in United States v. Textron.31 Each category describes a document that would exist without a lawsuit, so the working question is whether the document would have come into being anyway.
The exclusion follows from the purpose of the protection. The doctrine gives a lawyer room to investigate and plan for an adversary proceeding, and that purpose marks where it ends. A financial statement, a regulatory filing, or an operating plan will exist whether or not anyone expects a lawsuit, so withholding it encourages no additional preparation, while granting protection would let a company route ordinary records through its legal department and out of discovery. The First Circuit described the protection as aimed at the litigation process and at work counsel does to help litigate a case, and it observed that the protection was never designed to help lawyers prepare corporate documents or other materials made in the ordinary course of business.32 Lawyer involvement therefore does not supply the missing purpose, since much corporate material prepared in law offices or reviewed by lawyers falls outside the rule, and a subject that might someday be litigated does not supply it either.33 Adlman drew the operative line: the because-of test “withholds protection from documents that are prepared in the ordinary course of business or that would have been created in essentially similar form irrespective of the litigation.”34
Public requirements supply the easiest examples. A document that regulatory law requires a party to prepare exists so that the party can do business in compliance with the regulation, so no work-product claim attaches to it even if a lawyer wrote or reviewed it, although attorney-client privilege may still reach a confidential legal communication inside it.35 El Paso, discussed above, shows the same exclusion at work. The company’s tax pool analysis weighed legal arguments, predicted the IRS’s position, and forecast the odds in court, yet the Fifth Circuit held that it was not prepared in anticipation of litigation, because the company created it to bring its financial books into line with auditing principles, a need that the securities laws compelled.36 Business imperatives, not the press of litigation, called those documents into being.
The First Circuit reached the same result for tax accrual work papers in Textron. The calculations of tax reserves existed to support a financial statement and the independent audit of it, and the court found that the only purpose of the papers was to prepare financial statements.37 That holding does not settle every audit-related document. The D.C. Circuit upheld protection on similar facts the following year in Deloitte, and the law on tax accrual papers remains unsettled.38 Wells Fargo & Co. v. United States draws the line inside one company’s tax files. The district court held that Wells Fargo’s identification of its uncertain tax positions was ordinary-course work, even though attorneys took part, because they acted more as business advisers structuring transactions. Its later recognition and measurement analysis, which referred to IRS challenges, settlement calculations, and the strengths and weaknesses of the company’s positions, was protected, and the court cautioned that its ruling gave no blanket protection to tax accrual papers.39
A court order supplies a different kind of nonlitigation purpose. In Delco Wire & Cable, Inc. v. Weinberger, a court issued an order, and a government attorney named Gever determined which contracts Delco Wire might have been the low bidder on so that the defendants could comply. The court compelled production of the resulting documents, observing that unless the defendants were contemplating disobeying the order, it could not see how steps taken to comply with it were taken in anticipation of litigation.40 Compliance carries out what the court has already decided and builds nothing against an adversary. The same order generated a second document, Gever’s note of a conversation with an agency attorney about the defendants’ legal response to the order, and that note stayed protected because it set out the defendants’ strategy regarding possible litigation.41 One order thus produced two documents with opposite outcomes: the paper that executed the order was ordinary, and the paper that planned the response was preparation.
In In re Grand Jury Subpoenas Dated March 9, 2001, lawyers for Marc Rich argued that everything they did after his indictment was done because of the pending charges. The court disagreed. By early 2000 no further litigation on the charges was expected, the legal work was basically done, and what remained was a non-adversarial effort to persuade the President to grant a pardon petition, a decision that was unreviewable and so could not lead to further litigation.42 The lawyers were being used principally to put legal trappings on a lobbying and political effort that non-lawyers could have carried out, and nothing in the lobbying showed an eye toward possible civil or administrative proceedings.43 Protection follows an adversarial proceeding that is pending or reasonably expected, so a lawyer’s continued retention after the fight is over does not extend the shield.
Investigation files show how a routine label defeats a claim. Documents prepared in the ordinary course of business, under public requirements unrelated to litigation, or for other nonlitigation purposes are unprotected unless they were also created because of litigation, and that holds for investigations as much as for other documents.44 A city that routinely investigates internal complaints cannot claim protection for every such file. In Adams, the city’s investigation of an employee’s discrimination complaint qualified because the employee had threatened suit, the supervising attorney had raised the possibility of litigation and stressed confidentiality, and the city’s internal correspondence referred to work product.45 A cruise line’s report on a passenger struck by lightning, by contrast, was ordered produced in Bridgewater v. Carnival Corp., because the line had a strong business interest in passenger safety and prepared such reports routinely for similar incidents.46
A party that calls its accident investigation work product must also show why. In Wainwright v. Washington Metropolitan Transit Authority, the defendant Schindler withheld its description of the factual circumstances of an escalator accident as work product prepared in anticipation of litigation, and the injured plaintiff answered that the investigation was a routine business report. The court found that Schindler had not met its burden under Rule 26(b)(5) to enable other parties to assess the claim, and it ordered Schindler to produce its accident investigation report.47 The result fits the allocation of proof. The claimant is the one who knows why the report was written, and a claimant that cannot connect the report to anticipated litigation leaves the routine-business explanation standing.
Business plans supply the last category, and one decision isolates the deciding variable cleanly. In United States v. ChevronTexaco Corp., the court sorted Chevron’s withheld documents about a transaction that the company expected the IRS to challenge. Documents that analyzed the anticipated IRS litigation were protected, and so were documents discussing alternative ways to structure the transaction, because those alternatives reflected thinking about how the IRS would react.48 Documents that reflected only the logistics or mechanics of implementing the CEMCO business project were not protected, because Chevron’s business needs would have required them in substantially similar form even with no IRS dispute.49 Both kinds of document concerned the same deal, came from the same company, and were written while the same dispute loomed. The difference was whether the IRS’s expected reaction shaped the content. A structuring discussion reads the way it does because of the expected challenge, while a list of steps to carry out the project reads the same either way. Documents that mix the two motives raise a further question, taken up in the next subsection.
Neither lawyer authorship nor a litigable subject decides this exclusion. Ask whether the document would have existed in essentially similar form with no litigation in view. If it would, the party withholding it has no work-product claim, and the only remaining shield is one with its own elements, such as attorney-client privilege for a confidential communication made to obtain legal advice.50
Dual-Purpose Documents
Rule 26(b)(3)(A) shields documents prepared in anticipation of litigation or for trial, and nothing in its text requires that litigation be the only reason, or even the main reason, a document was written.53 That silence matters whenever one document serves two purposes, as when a company must decide whether to carry out a transaction that it expects to provoke a lawsuit and asks its lawyers to predict how the suit will end. In Adlman, the Second Circuit held that a document created because of anticipated litigation, which tends to reveal mental impressions, conclusions, opinions, or theories about that litigation, does not lose work-product protection merely because it is meant to help make a business decision influenced by the likely outcome. Two conditions control: the document must have been created because of the anticipated litigation, and it must be one that would not have been prepared in substantially similar form but for the prospect of that litigation.54
The court began with the text. Because the rule reaches documents prepared in anticipation of litigation as well as those prepared for trial, the court gave little weight to the references to trial preparation in the rule’s caption and in the advisory committee’s commentary.55 Nothing in the rule requires that a document be prepared primarily or exclusively to aid in litigation.56 Structure points the same way. The rule gives its firmest protection to documents that set out legal analysis, because even a requester who proves substantial need cannot reach the mental impressions, conclusions, opinions, or legal theories of a party’s attorney or other representative.57 Stripping that protection from an analysis of an expected suit merely because the analysis also informed a business decision would undermine the rule’s own purposes.58
The court’s own illustration shows how the rival approach would operate. A publisher weighing a book that a competitor has threatened to sue over, claiming exclusive publication rights, asks its attorneys to evaluate the chance of success and the legal strategies available. If the publisher goes ahead and is sued, a test that asks whether the study’s primary purpose was to assist in litigation would likely require disclosure to the competitor’s lawyers, because the study chiefly informed the decision whether to publish.59 The Second Circuit saw no reason, in the words or the policies of the rule, to withhold protection from such a study.60
The rival test would leave a company in an awkward position. A company that expects a suit from its transaction needs candid legal analysis, including the lawyer’s litigation strategies, the appraisal of likely success, and the feasibility of settlement, in order to decide whether and how to proceed. If the company scrimps on candor to avoid handing an adversary a roadmap, it decides in ignorance. If it commissions a complete study that becomes discoverable because the company also used it in business planning, it surrenders its strategy and its own assessment of its weak points.61
Protection does not follow automatically from a lawsuit somewhere in the background. Adlman’s formulation withholds protection from documents prepared in the ordinary course of business and from documents that would have been created in essentially similar form irrespective of the litigation.62 Protecting a document the business would have generated anyway rewards no additional preparation and would let any company turn routine records into work product by observing that a lawsuit was conceivable. A business purpose therefore settles little in either direction. The decisive question is a counterfactual: remove the expected suit and ask whether essentially the same document would still exist.
In ChevronTexaco, the court ran that counterfactual document by document, which is the practical way to handle a deal file that mixes motives. Chevron showed that an IRS challenge to its CEMCO transaction was a virtual certainty, since the IRS examined all of its returns, the amounts were large, and the IRS had questioned similar transactions before. It also showed that it retained Price Waterhouse as its agent because of the imminent dispute.63 The court held Price Waterhouse’s legal analyses of the anticipated litigation protected, and it extended protection to documents discussing alternative ways to structure the transaction where the alternatives reflected thinking about the IRS’s expected reaction, even though those documents also served the business project.64 Documents that reflected only the logistics or mechanics of implementing the project stayed outside the doctrine, because Chevron’s business needs would have required them in essentially similar form even without the dispute.65 Both kinds of paper served the same deal, and the litigation shaped the content of only the first.
The same sorting can occur inside a single document. In United States ex rel. Bibby v. Wells Fargo Bank, N.A., minutes of a meeting contained two bullet points summarizing the results of an investigation into ongoing litigation, while the rest of the minutes recorded training and guidance telling employees which practices were acceptable for VA closing costs. The court held the two bullet points protected. Ongoing litigation prompted them, they satisfied both the primary-motivating-purpose test and the because-of test, they made no reference to a business decision, and their facts came entirely from the original legal investigation.66 The business purpose of the remaining pages did not strip the bullets of protection, and those pages had already been produced to the requesting parties.67
When the record does not show where protection ends, the usual response is to examine the document itself. The D.C. Circuit stated in United States v. Deloitte LLP that 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.68 The memorandum there arose at an audit-related meeting attended by the auditor’s employees, the client’s employees, and outside counsel, and a third party prepared it. The court doubted that it was purely work product, because it might also hold facts and analyses by non-attorneys that were not so intertwined with counsel’s legal analysis as to warrant protection. It vacated the ruling and remanded for in camera review to decide whether a partial or redacted version could be disclosed.69 A court faced with a mixed document therefore asks which parts the litigation produced and which parts the business would have produced anyway, and it does not treat the whole document as all protected or all open. The mechanics of that review, and the line between fact and opinion work product inside a protected document, return later in this chapter.
The contested edge of the doctrine lies in documents that a company must create for financial-reporting or regulatory reasons and that also rest on an assessment of litigation risk. Tax accrual workpapers are the standard example. In United States v. Textron, the district court had found the workpapers protected under the because-of test, and it treated the Fifth Circuit’s El Paso decision as irrelevant because that circuit follows a different primary-purpose test.70 The en banc First Circuit reached El Paso’s result without leaving the because-of test. It held, under its own precedent, that the workpapers were independently required by statutory and audit requirements and that work-product protection did not apply.71 The immediate motive was to fix the tax reserve and obtain a clean audit opinion, and the district judge had found only that the reserves would cover liabilities that might be determined in litigation, not that the papers were prepared for use in litigation.72 Even if litigation were remote, the company would still have to prepare workpapers to support its judgment, and its own witness acknowledged that it would include in them any new transaction carrying tax exposure whether or not litigation was likely.73
The dissent read the same test the other way. It accepted the district court’s finding that the driving force behind the workpapers was the need to reserve money for disputes with the IRS, so that the business need depended on anticipating litigation and the two purposes were intertwined rather than separable.74 In the dissent’s view, the language about documents that would have been created irrespective of litigation excludes ordinary business papers but does not strip protection from documents that have both purposes, and the majority’s reading lets the exception swallow the rule protecting dual-purpose documents.75 The law on these papers remains unsettled. The D.C. Circuit upheld protection on similar facts the following year in Deloitte, and a later district court divided one company’s tax papers, protecting the legal analysis of recognition and measurement and denying protection to the identification of uncertain tax positions.76
Both opinions apply the because-of test, so the disagreement concerns application: whether a paper a company assembles every year to support its financial statements would exist in essentially similar form if no dispute were anticipated. Adlman’s own example of protected material was a memorandum by company attorneys estimating the likelihood of success in litigation, prepared to help set reserves for litigation losses at the auditor’s request.77 The two positions fit together if the line runs between a specific evaluation of an identifiable expected dispute and routine support assembled whatever the state of the company’s disputes.
The manufacturer’s letter and the routine workpapers in Textron share a financial-reporting use, so that use cannot be what separates them. The letter exists only because a particular suit was filed, while the workpapers, on the majority’s view, would exist every year in similar form whether or not any item was in dispute. An exam stem that mentions a business use for a lawyer’s litigation analysis is testing the counterfactual, because the business use alone neither defeats nor secures protection. A stem that stresses a lawyer’s involvement or a subject that might someday be litigated tests the same question from the other side.
Who May Prepare Materials
Rule 26(b)(3)(A) protects documents and tangible things prepared in anticipation of litigation or for trial “by or for another party or its representative,” and it gives that last word content by listing the party’s attorney, consultant, surety, indemnitor, insurer, and agent.81 That language raises a question separate from the purpose inquiry in the preceding subsections. Purpose asks why a document was written; the preparer language asks whose preparation the rule shelters. The text answers broadly, because the protected class reaches a party’s whole litigation team and not only its lawyers. The doctrinal work lies at the edges, where the question is whether a given employee, consultant, or accounting firm stands inside that team or outside it.
No lawyer need have written anything. The rule covers material prepared by a party as well as for it. Lawyers are not the only people who prepare for trial, and it is often hard to separate what was prepared for the party from what was prepared for counsel, so a rule limited to counsel’s own drafts would breed a dispute over every handoff.82 In one illustration, an Irwin employee named Crane wrote a memo for another Irwin employee, and no lawyer was involved. The rule’s text answers any objection on that ground, since it expressly reaches documents prepared by or for a party.83 Crane’s memo nonetheless faced a different obstacle: it was evidently written to resolve the dispute with the other party, Mauldin, and not to prosecute a lawsuit, which makes it a weak candidate under the anticipation requirement.84 A claimant whose author is its own employee thus clears the preparer element easily and still has to carry the purpose element.
The listed representatives show how far the delegation reaches. A party’s representatives include its attorney, its consultant, its insurance company, and anybody working for any of them, such as a private investigator the attorney hires.85 The Supreme Court explained in United States v. Nobles, as the Third Circuit recounted in In re Cendant Corp. Securities Litigation, that attorneys often must rely on investigators and other agents to compile materials for trial, so the doctrine must protect what those agents prepare as well as what the lawyer writes personally.86 The mechanism is simple. If delegated work were open to the opponent, a lawyer would have to choose between doing every task personally and exposing the results of every task handed off. In United States ex rel. Bibby v. Wells Fargo Bank, N.A., the court applied that reasoning to Ms. Zembower, a non-lawyer whom in-house counsel had assigned to conduct an investigation. It treated her as the lawyer’s agent, so her lack of a law license did not bar protection for the materials she prepared.87
Insurers appear in the rule’s own list, which makes an insurer’s claim investigation the stock illustration. When a defendant’s insurer interviews a nonparty witness to an accident and prepares a transcript, the transcript is qualified work product of a party’s representative. The plaintiff, who could interview the witness without difficulty, will probably fail to show the substantial need and undue hardship that would overcome the protection.88 The same status covers the adjuster’s own evaluation. In Holmgren v. State Farm Mutual Automobile Insurance Co., a State Farm adjuster’s handwritten memoranda assigned values to the claimant’s various losses and fixed the range of potential liability between $78,000 and $145,000. The Ninth Circuit held that they met the threshold requirements for work product because they were documents, prepared for trial, by a representative of State Farm.89 The court then analyzed them as opinion work product, a heightened tier taken up in a later section, because they reflected the adjuster’s view of potential liability.90
Representative status follows the role a person plays, and the label on the engagement does not control it. In Republic of Haiti v. Crown Charters, Inc., a law firm appointed as commissioner under 28 U.S.C. § 1782 to carry out discovery for a Haitian tribunal had, in the court’s view, the primary function of representing Haiti’s interests. It therefore acted as Haiti’s advocate, in the nature of an attorney-client relation, and as its representative for purposes of the work-product rule.91 The same attention to role explains the treatment of litigation consultants. In Cendant, the district court had tried to confine the doctrine to lawyers and, at most, to paralegals and assistants close to them, but the Third Circuit disagreed. It held that the work product of a litigation consultant retained to help prepare a deponent was protected and open only to limited discovery.92 The private communications among the witness, the consultant, and counsel reflected counsel’s strategy for a deposition in the case, which put them at the core of the doctrine, discoverable only in rare and exceptional circumstances, although the witness could still be asked in a circumscribed way whether the testimony had been practiced or rehearsed.93 A consultant’s report prepared for counsel, such as an appraiser’s report in a condemnation case or an engineer’s report in a products case, likely qualifies through the rule’s consultant or agent language.94
The rule’s text also reaches nonattorneys who assist a client without any attorney supervision, but a substantial line of cases presumes that materials were not truly developed in anticipation of litigation where no attorney’s legal expertise was involved.95 That presumption ties the preparer to the purpose requirement. A memo by an employee can be protected in principle, yet when no lawyer appears anywhere in the picture, the claimant has a harder time showing that the document was written for a lawsuit and not for ordinary business, and the claimant is the one who must make that showing. Evidence that counsel directed or commissioned the work, as with Ms. Zembower’s assignment or an investigator hired by a lawyer, is convenient proof of both facts at once: the preparer is a representative, and the document was written because of litigation.
Independence from the party sets the outside auditor apart. In United States v. Arthur Young & Co., the Supreme Court refused to recognize an accountant work-product privilege. It contrasted an attorney, “a loyal representative whose duty it is to present the client’s case in the most favorable possible light,” with an independent certified public accountant who has a “public responsibility” and “owes ultimate allegiance to the corporation’s creditors and stockholders, as well as to the investing public.”98 The contrast tracks the reason for the protection. The doctrine shelters an advocate’s private preparation so that the advocate can plan the client’s side of a dispute without exposing the plan to the opponent. An auditor whose job is to verify the client’s statements for outsiders who rely on them plans no one’s side, so calling the audit work litigation preparation would extend the shelter past its reason.
That reasoning does not end the matter for a document an auditor wrote, because the author’s identity is not the only route to protection. In Deloitte, the government argued, relying on Arthur Young, that a memorandum Deloitte prepared about Dow’s anticipated litigation could not be work product because Deloitte was not Dow’s representative.99 The D.C. Circuit responded that even if the government was right about the rule’s definition, Rule 26(b)(3) only partially codifies Hickman, and under Hickman the question is not who created the document or how that person relates to the party, but whether the document contains the thoughts and opinions of counsel developed in anticipation of litigation.100 The district court had found that the memorandum recorded those thoughts even though Deloitte, and not Dow or its attorney, committed them to paper, and the appellate court held that Deloitte’s authorship did not exclude the possibility that the document contained Dow’s work product.101 A lawyer who explains a litigation assessment at a meeting does not strip it of protection because someone else takes the minutes. The court rejected the government’s categorical argument yet found the record too thin to treat the entire memorandum as protected, which left the document’s contents to be examined more closely.102
The opposite pole appears when an accounting firm works for the party’s side of the dispute. In ChevronTexaco, Chevron showed that it reasonably believed an IRS challenge to its CEMCO transaction was a virtual certainty, that it would not have hired Price Waterhouse but for the imminence of that litigation, and that Price Waterhouse acted as its agent in preparing the documents at issue.103 The IRS invoked Arthur Young, and the court answered that Arthur Young declined to create an accountant’s work-product immunity but acknowledged that the IRS’s subpoena power remains subject to traditional privileges and limitations, so it does not foreclose the attorney work-product doctrine for accountant workpapers in an appropriate situation.104 The court then reviewed the documents for any sign that Price Waterhouse acted as an auditor on Chevron’s tax returns, financial reporting, or tax accruals, and found none. It added that the likelihood that an independent auditor would also analyze the tax treatment of the transaction did not turn Price Waterhouse’s legal analyses into accountant workpapers.105 Arthur Young and ChevronTexaco therefore share a profession and differ in role. The auditor answers to the investing public and receives no protection of its own, while the same kind of firm, engaged because litigation was imminent and acting for the client, can create protected material. A fact pattern that places an accountant, a consultant, or an insurer among its actors is asking which of those roles the person occupied.