Facts
- Tronitech, Inc. sued NCR Corp. in an antitrust action alleging NCR unfairly interfered with Tronitech’s business.
- During discovery, Tronitech moved to compel production of an “audit letter” prepared in March 1984 by NCR’s outside counsel.
- NCR’s independent accounting firm requested the letter to complete its financial audit of NCR.
- The audit letter provided counsel’s legal assessment of the lawsuit’s probable financial implications for NCR.
- NCR opposed production and submitted the letter for in camera review.
Issues
- Whether an audit letter assessing the probable financial impact of pending litigation is within the scope of discovery under Federal Rule of Civil Procedure 26(b)(1).
- Whether the audit letter is protected from discovery as work product, including opinion work product, under Federal Rule of Civil Procedure 26(b)(3).
- Whether providing the audit letter to an independent auditor defeats work-product protection.
Decision
- The court denied Tronitech’s motion to compel.
- The court held the audit letter was not discoverable because it was not relevant and was not reasonably calculated to lead to admissible evidence.
- The court also held the audit letter was protected work product, reflecting counsel’s legal evaluation prepared in anticipation of litigation.
- The court treated the letter as opinion work product and found Tronitech had not made the showing required to overcome that protection.
Legal Principles
- Discovery under Rule 26(b)(1) is limited to matter relevant to the action (or reasonably calculated to lead to admissible evidence under the then-governing standard); a party’s legal assessment of a case’s financial impact for audit purposes may fall outside that scope.
- Materials prepared by counsel in anticipation of litigation are protected under Rule 26(b)(3); legal evaluations and mental impressions receive heightened protection as opinion work product.
- Disclosure of counsel’s audit-response analysis to an independent auditor, when made for audit purposes, does not necessarily defeat work-product protection.
Conclusion
In an antitrust discovery dispute, the court refused to compel production of a corporation’s counsel-prepared audit letter requested by independent auditors, concluding it was neither relevant to the merits nor discoverable in light of work-product protection for counsel’s litigation assessment.