## Facts

- In tax litigation involving Dow Chemical Company’s partnership transactions, the United States sought discovery from Dow’s independent auditor, Deloitte LLP, through a subpoena issued from the U.S. District Court for the District of Columbia.
- Deloitte produced many materials but withheld three documents, asserting attorney work-product protection on Dow’s behalf.
- The withheld documents were: (1) a 1993 draft Deloitte memorandum summarizing a meeting among Dow personnel, Dow’s outside counsel, and Deloitte about possible litigation and related audit accounting; (2) a 1998 Dow in-house counsel memorandum analyzing potential tax litigation risks; and (3) a 2005 outside counsel tax opinion letter.
- The government argued the Deloitte memorandum was not work product because it was created during an audit by an independent auditor, and argued Dow waived protection for the two Dow-authored documents by sharing them with Deloitte.
- The district court denied the government’s motion to compel and declined to conduct in camera review, ruling all three documents were protected work product.
- The United States appealed the denial of the motion to compel.

## Issues

1. Whether a memorandum prepared by an independent auditor during an audit can qualify as protected attorney work product.
2. Whether Dow waived work-product protection for its counsel memoranda by disclosing them to its independent auditor.

## Decision

- The court affirmed that the two Dow-authored documents were work product and held there was no waiver by disclosure to Deloitte.
- The court rejected a categorical rule that third-party documents prepared during an audit cannot be work product, recognizing that third-party materials may contain protected attorney mental impressions.
- The court vacated the order as to the Deloitte memorandum because the record was insufficient to determine whether it was entirely work product.
- The court remanded with instructions to conduct in camera review of the Deloitte memorandum to determine what portions, if any, were protected and whether nonprotected content should be produced.

## Legal Principles

- The work-product doctrine is not limited to materials prepared by attorneys or their formal agents; third-party documents may be protected when they record or reflect counsel’s mental impressions or litigation strategy.
- The proper test for work-product protection is whether a document was prepared “because of” anticipated litigation; creation in the audit context does not, by itself, defeat protection.
- Work-product waiver turns on whether disclosure substantially increases the likelihood that an adversary will obtain the material.
- Disclosure of work product to an independent auditor does not necessarily waive protection when the auditor is not an adversary (or a conduit to adversaries) and confidentiality obligations support a reasonable expectation of nondisclosure.

## Conclusion

The D.C. Circuit held that disclosure of attorney work product to an independent auditor does not automatically waive protection, but required in camera review to determine whether an auditor-prepared memorandum was fully protected work product, affirming in part, vacating in part, and remanding.


United States v. Deloitte LLP, 610 F.3d 129 (D.C. Cir. 2010)