## Facts

- Medinol, an Israeli biotechnology company, licensed Boston Scientific distribution rights and limited back-up manufacturing rights for Medinol’s coronary stents.
- Medinol sued Boston Scientific in 2001, alleging Boston Scientific breached the parties’ agreements by developing secret alternative supply sources and engaging in related misconduct.
- Boston Scientific formed a Special Litigation Committee (SLC) of independent directors to investigate practices related to the Medinol relationship and to consider responses to the litigation and related issues.
- The SLC maintained minutes reflecting counsel’s investigation, legal advice, and litigation-related discussions.
- In connection with financial reporting and assessment of litigation contingencies, Boston Scientific voluntarily provided the SLC minutes to its independent outside auditors, Ernst & Young.
- During discovery, Medinol sought production of the SLC minutes; Boston Scientific withheld them as protected by the work-product doctrine and, to the extent applicable, attorney–client privilege.

## Issues

1. Whether Boston Scientific waived work-product protection (and any related privilege) for the SLC minutes by disclosing them to its independent outside auditors.
2. Whether a “common interest” between a company and its auditors can prevent waiver of work-product protection for litigation-related materials shared with auditors.

## Decision

- The court held that the SLC minutes were work product because they were prepared in anticipation of litigation and reflected counsel’s investigation and advice.
- The court ruled that Boston Scientific waived work-product protection by voluntarily disclosing the SLC minutes to Ernst & Young.
- The court rejected the argument that Boston Scientific and Ernst & Young shared a sufficiently aligned legal interest to avoid waiver.
- The court denied Boston Scientific’s motion for reconsideration and left in place the prior order compelling production of the SLC minutes.

## Legal Principles

- Work product protects materials prepared in anticipation of litigation to preserve a lawyer’s ability to develop legal theories and strategy without adversarial intrusion.
- Work-product protection is generally waived by voluntary disclosure to a third party when the disclosure is inconsistent with maintaining confidentiality or materially increases the likelihood an adversary will obtain the materials.
- Disclosure to independent outside auditors ordinarily waives work-product protection because auditors must remain independent and serve a public-facing verification function, not the company’s litigation interests.
- A “common interest” rationale requires sufficiently aligned legal interests; an arm’s-length auditor relationship is not treated as joint defense for purposes of avoiding waiver.
- The fact that disclosure may assist financial reporting or compliance does not create an exception preventing waiver when litigation-focused work product is shared with auditors.

## Conclusion

The court required production of SLC minutes in discovery because the company’s voluntary disclosure of those litigation-related materials to its independent auditors waived work-product protection, and the auditor relationship did not support a common-interest theory to preserve confidentiality.


Medinol, Ltd. v. Bos. Sci. Corp., 214 F.R.D. 113 (S.D.N.Y. 2002)