Schlicksup v. Caterpillar, Inc. et al
OPINION by U.S. Magistrate Judge Byron Cudmore: Motion to Quash Subpoenas 68 ALLOWED in part and DENIED in part as to PricewaterhouseCoopers LLP. See written order. Based upon this opinion and Judge Cudmore's previous Opinions 100 114 , the underlying Motion 68 is now completely resolved. (LB, ilcd)
Friday, 09 September, 2011 10:10:33 AM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS, PEORIA DIVISION
Daniel J. Schlicksup,
Caterpillar, Inc., et al.,
BYRON G. CUDMORE, U.S. MAGISTRATE JUDGE:
On May 24, 2011, this Court entered an order deferring a ruling on
Defendant Caterpillar, Inc.’s motions to quash the subpoenas directed to
Howrey, LLP, Ernst and Young, LLP, and PricewaterhouseCoopers, LLP.
Caterpillar subsequently filed privilege logs and the documents it seeks to
withhold for an in camera review. On July 13, 2011, this Court ruled on
Caterpillar’s motion to quash the subpoena to Howrey, LLP. On August
19, 2011, the Court ruled on Caterpillar’s motion to quash the subpoena to
Ernst and Young, LLP. Now before the Court is Caterpillar’s motion to
quash the subpoena to PricewaterhouseCoopers, LLP (“PwC”).
For the reasons below, the motion will be granted in part and denied in
Page 1 of 22
As Plaintiff’s claims relate to the subpoena to PwC, Plaintiff alleges
that he reported what he believed to be a scheme by Caterpillar, Inc.,
(“Caterpillar”) to improperly avoid over $2 billion in U.S. income tax,
purportedly accomplished by shifting U.S. profits to offshore shell
companies in Switzerland. (Complaint ¶ 3; d/e 35, Schlicksup Aff.
¶¶ 39-41). This plan has been referred to as the “Swiss Tax Structure,”
the “Global Value Enhancement Program” and the “Supply Chain
Transactions.” Plaintiff further alleges that the Switzerland profits were
returned to the U.S. by way of a “Bermuda Tax Structure,” also known as
the “Luxembourg Structure” or the “Financing Center Transaction.” Plaintiff
alleges that he was retaliated against for essentially blowing the whistle on
Caterpillar counters that these projects were legitimate business
transactions which were disclosed on its tax returns. According to
Caterpillar, the supply chain project was a “corporate restructuring of
Caterpillar’s international supply chains . . . in 2000 through 2004” in order
to “streamlin[e] the acquisition of parts from our unrelated suppliers and
present a single face to the dealer customers.” (d/e 69, p. 69; Beran Aff.
Page 2 of 22
¶ 5). The purpose of the financing center transaction, according to
Caterpillar, was to efficiently finance foreign affiliates and foreign
acquisitions, and to minimize taxes.
Plaintiff’s subpoena to PwC seeks:
•Documents used to “market” the Global Value Enhancement
program to Caterpillar or to Defendant Beran (Caterpillar’s Tax Director and
•Invoices sent to the Caterpillar Tax Department in Peoria, Illinois for
years 1999-2008 relating to the Global Value Enhancement program
• “Any and all memos written to provide supporting opinions for the . .
. Global Value Enhancement tax structure and/or the
Luxembourg/Bermuda tax structure.”
•Documents “related to the audit of the tax provision on the
Caterpillar Inc. financial statements for 1999 through 2010.”
•Documents “related to the audit of the tax reserves on the Caterpillar
Inc. financial statements for 1999 through 2010.”
•Documents relating to the classification of PwC’s fees charged to
Caterpillar, as submitted by Sharad Jain (PwC audit partner) to PwC’s
• Correspondence with Defendant Beran and/or Burritt (Caterpillar’s
Chief Financial Officer) from 1999-2010
(d/e 69-1, pp. 5-6).
Plaintiff alleged in his OSHA complaint that he informed Defendants Burritt and
Beran that PwC's fees were being improperly classified in the proxy statement as
"non-audit" fees. (d/e pp. 12-13). Plaintiff alleges that material information was omitted
in Jain’s factual summary to the national office regarding the classification of the fees.
Page 3 of 22
Caterpillar moved to quash the subpoena, but this Court reserved a
ruling because the documents had not been submitted for an in camera
review with a detailed privilege log. Caterpillar has since complied with that
directive and this Court has conducted an in camera review of each PwC
Caterpillar’s privilege log asserts primarily the work-product doctrine
and at times the “attorney-client communication” and/or the “tax advisor
communication” privilege. As discussed in the Court’s prior order,
Caterpillar did not assert a “tax advisor” privilege in its motion to quash and
has not briefed the issue. Accordingly, the Court addresses only the
attorney-client privilege and work-product doctrine. The legal standard set
forth below was already set forth in the Court’s prior order, but its repetition
provides helpful context for the analysis here.
The attorney-client privilege protects communications made in
confidence by a client and a client’s employees to an attorney, acting as an
attorney, for the purpose of obtaining legal advice. Sandra T.E. v. South
Berwyn School Dist. 100, 600 F.3d 612, 618 (7th Cir. 2010). Statements
from the attorney to the client are also protected “‘where those
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communications rest on confidential information obtained from the client, or
where those communications would reveal the substance of a confidential
communication by the client.’” Miyano Machinery USA, Inc. v. MiyanoHitec
Machinery, Inc., 257 F.R.D. 456, 460 (N.D. Ill. 2008)(quoted cite omitted).
The party asserting the privilege has the burden of demonstrating that it
applies. Valero Energy Corp. v. U.S., 569 F.3d 626, 630 (7th Cir. 2009).
The attorney-client privilege “is in derogation of the search for the truth and
therefore, must be strictly confined.” In re Grand Jury Proceedings, 220
F.3d 568, 571 (7th Cir. 2000). The analysis is “highly fact specific,”
requiring a “document-by-document” review and a consideration of the
“‘totality of the circumstances.’” Id. at 571, 572 (quoted cite omitted).
Confidential communications by non-lawyers such as PwC for the
purpose of assisting the lawyers to provide legal advice are also protected
by the attorney-client privilege. See U.S. v. Kovel, 296 F.2d 918, 922
(2d Cir. 1961)(accountant’s assistance was protected by the attorney-client
privilege where it enabled “effective consultation between the client and the
lawyer”). “‘[W]hat is vital to the privilege is that the communication be
made in confidence for the purpose of obtaining legal advice from the
lawyer. If what is sought is not legal advice but only accounting service ...
Page 5 of 22
or if the advice sought is the accountant's rather than the lawyer's, no
privilege exists.’ ” In re Grand Jury Proceedings, 220 F.3d at 571, quoting
U.S. v. Brown, 478 F.2d 1038, 1040 (7th Cir.1973), quoting U.S. v. Kovel,
296 F.2d 918, 922 (2d Cir.1961))(emphasis in Kovel). Thus, the attorneyclient privilege applies if a consultant’s communications were “‘necessary,
or at least highly useful, for the effective consultation between the client
and the lawyer.’” Heriot v. Byrne, 257 F.R.D. 645, 667 (N.D. Ill. 2009)
(referring to accountant’s services), quoting Kovel, 296 F.2d at 922; see
also Lawrence E. Jaffe Pension Plan v. Household Intern., Inc., 244 F.R.D.
412, (N.D. Ill. 2006)(“‘the complexities of modern existence prevent
attorneys from effectively handling clients’ affairs without the help of others,
[and] the attorney-client privilege must include all persons who act as the
attorney’s agents.’”)(quoted cited omitted).
The work-product doctrine is separate from the attorney-client
privilege, protecting “documents and tangible things that are prepared in
anticipation of litigation or for trial by or for another party or its
representative . . . .” Fed. R. Civ. P. 26(b)(3)(A). “The work-product
doctrine protects documents prepared by attorneys in anticipation of
litigation for the purpose of analyzing and preparing a client's case.”
Page 6 of 22
Sandra T.E., 600 F.3d at 618. “[W]e look to whether in light of the factual
context ‘the document can fairly be said to have been prepared or obtained
because of the prospect of litigation.’” Logan v. Commercial Union
Insurance Co., 96 F.3d 971, 976-77 (7th Cir. 1996), quoting Binks v. Mfg.
Co. v. National Presto Indus., Inc., 709 F.2d 1109, 1119 (7th Cir.
1983)(emphasis in Binks, quoting 8 Wright & Miller, Fed. Practice and
Procedure § 2024). Documents prepared in the ordinary course of
business addressing matters which present a remote prospect of litigation
are not work-product. In contrast, documents prepared “‘because of the
prospect of litigation’” or prepared because “‘some articulable claim, likely
to lead to litigation’ . . . ha[s] arisen” are work-product. Binks, 709 F.2d at
1120 (emphasis in Binks)(internal quoted cites omitted). Fed. R. Civ. P.
26(b)(3)(A) also extends work-product protection to materials prepared “by
or for another party.” Thus, “[t]he person preparing the materials may be
any representative of the client, regardless of whether the representative is
acting for the lawyer.” Grochocinski v. Mayer Brown Row & Maw LLP, 251
F.R.D. 316, 321 (N.D. Ill. 2008), citing Caremark, Inc. v. Affiliated Computer
Services, Inc., 195 F.R.D. 610, 615 (N.D. Ill. 2000)(“[W]hether a document
Page 7 of 22
is protected depends on the motivation behind its preparation, rather than
on the person who prepares it.”).
Caterpillar contends that PwC’s “Opinion Documents and
Informational Documents would necessarily reflect legal analysis and
opinion of attorneys from within Caterpillar and from McDermott.” (d/e 69,
p. 19). With the exception of a few documents, the Court’s review does not
support that conclusion. By and large, these documents impart tax
analysis and tax-saving proposals by PwC to Caterpillar, not legal advice
from an attorney. “The attorney-client privilege protects communications
made in confidence by a client and a client's employees to an attorney,
acting as an attorney, for the purpose of obtaining legal advice.” Sandra
T.E., 600 F.3d at 618 (emphasis added); In re Grand Jury Proceedings,
220 F.3d at 571 (7th Cir. 2001)(“‘[W]hat is vital to the privilege is that the
communication be made . . . for the purpose of obtaining legal advice from
the lawyer. . . . [I]f the advice sought is the accountant's rather than the
lawyer's, no privilege exists.’ ”)(quoted cites omitted); see also United
States of America v. Telephone and Data Systems, Inc., 2002 WL 2023767
Page 8 of 22
* 3 (W.D. Wis. 2002)(not reported in F.Supp.2d)(attorney-client privilege did
not apply to Arthur Anderson letter, even though letter was similar to law
firm’s letter which did enjoy attorney-client privilege protection). The
documents may be protected by the tax advisor privilege set forth in 26
U.S.C. § 7525 in civil matters before the IRS or brought by the U.S., but
they are not protected by the attorney-client privilege because they are not
communications to or from attorneys.
Caterpillar contends that the attorney-client privilege applies, even
though the documents were not communications from lawyers, because
MWE could not have provided Caterpillar legal advice without PwC’s
assistance. Lowell Yoder avers that “McDermott retained tax advisors from
PwC to assist McDermott (1) in conducting its legal analysis of the federal
tax consequences of the proposed corporate restructuring, (2) determining
litigation risks, and (3) assisting in the defense. Because of PwC’s large
international presence, PwC assisted McDermott, in part, by gathering
facts about the existing international operations and providing information
related to implementation issues.” (Yoder Aff. ¶ 11, d/e 69-3).
The documents do not support this conclusion either. Caterpillar
does not adequately explain how these documents helped any lawyers
Page 9 of 22
provide legal advice, determine litigation risks or assist in the defense of
any litigation, nor is it evident from the face of the documents. Cf.
Lawrence E. Jaffe Pension Plan, 244 F.R.D. 412, 420 (N.D. Ill. 2006)
(attorney-client privilege applied where E&Y retained to “conduct complex
quantitative analysis and extensive information-gathering that was beyond”
in-house counsel’s resources and necessary to enable in-house counsel to
provide legal advice on pending litigation). These documents are primarily
PwC’s own tax analysis and tax-saving business ideas created for
Caterpillar, not documents to help an attorney impart legal advice.
Additionally, even if these communications were made by a lawyer,
many of them would still not be protected by the attorney-client privilege.
Proposals on tax-saving strategies and the creation, analysis and
implementation of business ideas to bolster the bottom line are not
confidential communications of legal advice. See Burden-Meeks v. Welch,
319 F.3d 897, 899 (7th Cir. 2003)(the attorney-client privilege “extends . . .
to communications about legal subjects, and it is hard to see why a
business evaluation meets that description.”); In re Carl Walsh, 623 F.2d
489, 494 (7th Cir. 1980)(“Business or other advice is not privileged, and
should be distinguished from professional legal services.”). For example,
Page 10 of 22
the outlines, presentations, and implementation of the supply chain
transactions do not contain legal advice, nor does the presentation and
implementation of the “like kind exchange program.”
In short, Caterpillar has not sustained its burden of demonstrating
that the attorney-client privilege shields these documents, save for the
documents identified at the end of this order.
A. Business and Tax Advice
Caterpillar asserts that it approached the law firm McDermott, Will &
Emery (“MWE”) to “discuss a proposed significant corporate restructuring
of CAT’s international supply chains (the ‘Supply Chain Transactions’) for
CAT’s products throughout the world.” (Beran Aff. ¶ 5). Defendant Beran
avers that he:
believed that it was reasonably foreseeable that CAT would
only obtain the full benefits of its transactions if it was prepared
to litigate against the IRS. Thus, my reason for engaging
McDermott on this project was to assist CAT and its
subsidiaries in preparing for reasonably foreseeable litigation
with the IRS arising from the tax issues associated with any
complex international corporate restructuring.
(Beran Aff. ¶ 7).
Page 11 of 22
Beran avers that he hired MWE to “provide a legal analysis of the
federal tax consequences, advise CAT as to the potential litigation risks . .
., and defend the transaction in IRS administrative proceedings and
litigation.” (Beran Aff. ¶ 8, d/e 69-2). Beran “was of the view that those
transactions . . . would be closely scrutinized by the IRS and be challenged
during IRS audits, and result in litigation, albeit litigation to which CAT
would ultimately prevail.” (Beran Aff. ¶ 9, d/e 69-2). Beran avers that he
expected litigation because the IRS examines all of Caterpillar’s returns
pursuant to the Coordinated Examination Program, the transactions
significantly reduced tax liability and were disclosed on the return, and that
related-party transactions had been the subject of considerable litigation
between the IRS and other large corporate taxpayers like CAT.” (Beran
Aff. ¶ 9, d/e 69-2). Beran maintains that the prospect of litigation existed
because “the major disputed issues in recent IRS examinations of CAT’s
tax returns have been nearly all ‘international.’ In fact, the largest dollar
issues presently in dispute with the IRS for CAT’s 2000-2004 and 20052006 examination cycles involve the U.S. tax treatment of the sales activity
of CAT’s Swiss operations, albeit ones entirely unrelated to the Plaintiff’s
action.” (Beran Aff. ¶ 10, d/e 69-2).
Page 12 of 22
Lowell Yoder, an MWE partner and head of its international tax
group, offers similar averments. Both Yoder and Beran conclude that the
documents “(a) would not have been generated but for the litigation with
the IRS that was anticipated . . . , or (b) would not have been generated
with all of the content they contained and the subjects they addressed but
for the anticipated litigation. These documents were not prepared in the
ordinary course of CAT’s business.” (Yoder Aff. ¶ 15, d/e 69-3). PwC’s
privilege log asserts repeatedly that documents were “prepared by [PwC] at
the request of [MWE] incorporat[ing] legal advice . . . and prepared in
anticipation of litigation with the IRS.” The IRS has not challenged the
transactions at issue here, but that is not dispositive of whether the
documents were prepared in anticipation of litigation.
As the Court concluded in its prior order, Caterpillar’s expectation that
the transactions would be closely scrutinized by the IRS does not
demonstrate that a prospect of litigation existed when the documents were
created. The Court adopts the same reasoning as it did in its prior order:
The audit of Caterpillar’s returns is in the ordinary course of
business for Caterpillar—all of its returns are audited. As the
Seventh Circuit stated in In re Special September 1978 Grand
Jury (II), 640 F.2d 49, 65 (7th Cir. 1980), which involved an IRS
subpoena for MWE’s work related to a client’s tax filings,
“[a]lthough litigation could ultimately have ensued in connection
Page 13 of 22
with the . . . tax filings, a remote prospect of future litigation is
not sufficient to invoke the work product doctrine.”2 See also
United States of America v. Telephone and Data Systems, Inc.,
2002 WL 2023767 * 3-4 (W.D. Wis. 2002)(not reported in
F.Supp.2d)(documents purportedly prepared in anticipation of
audit pursuant to Coordinated Examination Program were not
subject to work-product protection because the possibility of
litigation was too remote).
(d/e 114, pp. 10-11).
It is also clear that, even if a prospect of litigation existed, most of
these documents were not prepared because of that prospect. They impart
tax analysis, planning and advice, focusing on strategies to minimize taxes,
analyze tax consequences and comply with tax laws. The documents on
their face do not appear to relate to a tangible prospect of litigation with the
IRS, other than the same generalized risk that every business faces. Other
documents do not appear to have any connection whatsoever with a
prospect of litigation, such as PwC’s presentations, documents outlining or
recommending tax-saving strategies, an engagement letter with
McDermott, Will & Emery for specific business initiatives, discussions of tax
and reporting requirements, discussions on how to save money within the
company, business projections, meeting minutes and agendas, letters of
The Seventh Circuit also reasoned that, “[a]t most, the materials were prepared
with an eye toward a possible administrative proceeding with the IRS,” and concluded
that was not enough to warrant work-product protection. 640 F.2d at 65.
Page 14 of 22
understanding with the IRS, discussions of IRS cases (which are of public
record), and concerns about billing. For example, one e-mail addresses
concerns about the size of PwC’s bill, but the privilege log describes the
document as an “Email discussing work product re corporate restructuring
prepared with D.Ryder McDermott Will & Emery and in anticipation with the
IRS.” (PwC-CAT-6360). If these kinds of documents are work-product,
then nearly all the work PwC performs for clients is work-product.
B. Tax Accrual Workpapers
In addition to devising and assisting with tax-saving transactions,
PwC serves as Caterpillar’s independent financial auditor, reviewing tax
returns and financial statements prepared by Caterpillar. According to
CAT prepares financial statements in accordance with United
States generally accepted accounting principles (“US GAAP”).
As part of this financial reporting, CAT is required to prepare tax
accrual work papers that identify, evaluate, and measure the
likely success of its “uncertain tax positions.” In reporting on
these “uncertain tax positions,” CAT’s counsel makes
judgments about the likelihood that the tax positions will be
upheld if challenged by the IRS and the amount of tax benefit
CAT will realize through a settlement should the IRS challenge
one or more of the tax positions. The product of assessing
“uncertain tax positions” is that CAT makes a provision on its
financial statements for a tax reserve, which provides a current
reflection of an uncertain potential future tax liability. These tax
accrual workpapers contain CAT’s in-house legal counsel’s
Page 15 of 22
beliefs, analysis, opinions, and conclusions regarding its
“uncertain tax positions.” These materials are created after
obtaining the opinion work product of its outside tax advisors
that are engaged to provide guidance and assess the
anticipated risks associated with litigating “uncertain tax
(Beran Aff. ¶ 23, d/e 69-2). As Caterpillar’s auditor, PwC keeps copies of
the Caterpillar’s tax accrual workpapers and creates its own workpapers
during its independent review.3
Caterpillar argues that the work-product doctrine applies to the
“Opinion Documents, Tax Accrual Workpapers, or Information Documents”
because they would not have been created but for the prospect of litigation
with the IRS. According to CAT, these papers contain the “mental
impressions, conclusions, opinions and legal theories” by MWE, PwC and
E&Y. (d/e 69, p. 16).
Much of the information highlighted for redaction are the reserve
numbers themselves, or spreadsheets, or terse statements about changes
to reserves, not substantive evaluations of the likelihood of succeeding a
tangible and anticipated IRS challenge in court. While numbers may be
Tax accrual workpapers created by PwC as part of its independent auditor
duties are not protected from an IRS summons. See U.S. v. Arthur Young & Company,
465 U.S. 805 (1984).
Page 16 of 22
privileged in certain circumstances, U.S. v. Frederick, 182 F.3d 496, 501
(7th Cir. 1999), Caterpillar does not explain why these numbers,
spreadsheets and statements are protected work-product. The Court
realizes that the reserves are reflections of Caterpillar’s assessment of the
strength of its uncertain tax positions, but that alone does not demonstrate
that they were prepared in anticipation of litigation. Businesses must
assess and plan for litigation risks as part of the ordinary course of their
business and as part of complying with accounting requirements. While
that planning may be literally “because of the prospect of litigation,” the
prospect itself is too generalized and uncertain to warrant work product
For example, in Binks Mfg. Co. v. National Presto Indus., Inc.,
709 F.2d 1109 (7th Cir. 1983), a company’s in-house counsel investigated
problems with purchased equipment and made recommendations on
negotiations with the seller of that equipment, as well as an evaluation of
the allocation of responsibility for the equipment malfunctions.
Negotiations broke down and litigation ensued. The Seventh Circuit upheld
the district court’s ruling compelling production of the documents,
reasoning that “‘[t]he mere contingency that litigation may result is not
Page 17 of 22
determinative. . . . The fact that a defendant anticipates the contingency of
litigation resulting from an accident or event does not automatically qualify
an ‘in house’ report as work product .... A more or less routine investigation
of a possibly resistable claim is not sufficient to immunize an investigative
report developed in the ordinary course of business.’” 709 F.2d at 1119,
quoting with approval Janicker v. George Washington University, 94 F.R.D.
648, 650 (D.D.C.1982). This reasoning applies here as well. The
documents here are routine and required business assessments of general
risks regarding possible tax liabilities. As the court stated in its prior order,
the possibility of litigation over tax positions is too remote, by itself, to
amount to a prospect of litigation for work-product purposes. In re Special
September 1978 Grand Jury (II), 640 F.2d 49, 65 (7th Cir. 1980)(“[a]lthough
litigation could ultimately have ensued in connection with the . . . tax filings,
a remote prospect of future litigation is not sufficient to invoke the work
product doctrine.”); United States of America v. Telephone and Data
Systems, Inc., 2002 WL 2023767 * 3-4 (W.D. Wis. 2002)(not reported in
F.Supp.2d) (documents purportedly prepared in anticipation of audit
pursuant to Coordinated Examination Program were not subject to workproduct protection because the possibility of litigation was too remote).
Page 18 of 22
Further, the cases cited by Caterpillar do not hold that the kind of
routine papers they are withholding here are protected by the work-product
doctrine. For example, the Sixth Circuit case of U.S. v. Roxworthy, 457
F.3d 590, 594 (6th Cir. 2006) dealt with “memoranda contain[ing] dense
legal analysis . . ., including arguments and counter-arguments.” The
Second Circuit case of U.S. v. Adlman, 134 F.3d 1194 (2d Cir. 1998)
involved a similarly detailed memorandum, and, in any event, only
remanded the case for a redetermination using the proper legal standard.
See also United States v. Deloitte LLP, 610 F.3d 129 (D.C. Cir. 2009)
(remanding for in camera review of memorandum created during audit).
The California district court case of U.S. v. ChevronTexaco Corp., 241
F.Supp.2d 1065 (N.D. Cal. 2002) involved an in-depth analysis of litigation
positions, and the Illinois district court case of Lawrence E. Jaffe Pension
Plan v. Household International, Inc., 237 F.R.D. 176, 178 (N.D. Ill. 2006),
involved “opinion letters summarizing pending and threatened litigation.”
Lastly, the D.C. Circuit case of U.S. v. Deloitte LLP, 610 F.3d 129
(D.C. Cir. 2009), cited by Caterpillar, dealt with a memo summarizing a
meeting regarding likely litigation over a corporate transaction. The
Deloitte Court remanded the case, reasoning that the document might
Page 19 of 22
contain work-product material even though it was prepared during an
independent audit. This Court agrees with Deloitte that there is no blanket
rule denying work-product protection to all documents created or produced
during an independent audit. There are no blanket rules, only general
principles; the decision must be made on a document-by-document basis.
Deloitte does not support Caterpillar’s conclusion that all of its tax accrual
workpapers are protected by the work-product doctrine.4
The Court found only a few documents in its review that were
prepared because of the prospect of litigation. These few documents
appear to have been created in response to a tangible and imminent
prospect of litigation in a foreign country. Plaintiff makes an undeveloped
argument that any protection is waived because the documents were
disclosed to an independent auditor, citing a California district case,
Medinol v. Boston Scientific Corp., 214 F.R.D. 113 (S.D.N.Y. 2002).
(d/e 80, ¶ 15). However, Plaintiff does not address the D.C. Circuit’s
conclusion otherwise in U.S. v. Deloitte, LLP, 610 F.3d 129, 136 (D.C. Cir.
The cases of U.S. v. Textron, Inc., 577 F.3d 21 (1st Cir. 2009) and U.S. v. El
Paso, 682 F.2d 530 (5th Cir. 1982)(applying different standard from 7th Circuit), also
mentioned by Caterpillar, did deal with tax accrual work papers, but both cases held that
the papers did not constitute work-product material. While these cases provide helpful
reasoning, in the end it comes down to the content of each document and the factual
context in which each document was created. The application of other cases to this
fact-specific inquiry therefore has its limits.
Page 20 of 22
2010), cited by Caterpillar, or Caterpillar’s other arguments on this issue.
See also Lawrence E. Jaffe Pension Plan, 237 F.R.D. at 183 (disclosure to
independent auditor was not a waiver); Westernbank Puerto Rico v.
Kachkar, 2009 WL 530131 *7-8 (D.Puerto Rico 2009)(unpublished)(stating
that Medinol has been “roundly criticized” and that majority of courts have
found no waiver). Accordingly the Court finds the argument waived. In re
Extradition of Jarosz, — F.Supp.2d —, 2011 WL 3205367 *12 (N.D. Ill.
2001)(“And, of course, skeletal and perfunctory arguments are waived.”).
IT IS THEREFORE ORDERED THAT:
Caterpillar’s motion to quash the subpoena to
PricewaterhouseCoopers, LLP, is granted in part and denied in part
(d/e 68). The Court finds that the following documents are protected by the
Page 21 of 22
The Court further finds that the following documents are protected by
the work-product doctrine:
2) Except for the documents identified in paragraph (1) above, the
motion to quash is denied as to the PwC documents. By September 23,
2011, Caterpillar is directed to produce to Plaintiff the PwC documents
submitted for an in camera review, except for those identified in paragraph
September 9, 2011
_______s/ Byron G. Cudmore_______
BYRON G. CUDMORE
UNITED STATES MAGISTRATE JUDGE
Page 22 of 22
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