The U.S. Department of Justice has turned to a federal appeals court in Washington in the hope of forcing the accounting firm Deloitte LLC to turn over tax-related documents that government lawyers say are not protected by the work product privilege.
DOJ Tax Division lawyer Judith Hagley made the government's pitch today before a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit. Chief Judge David Sentelle and Judges Thomas Griffith and Janice Rogers Brown made up the panel.
Last year, U.S. District Judge Richard Leon of the District of Columbia ruled for Deloitte and Dow Chemical Co., which asserted privilege over the documents the Justice Department is seeking via subpoena. As part of a civil tax suit in federal district court in Louisiana, the government is seeking certain documents that Dow turned over to Deloitte during the firm’s audit of the company.
Hagley today argued that the work product privilege does not apply to the documents Dow turned over to Deloitte because the documents were prepared during what Hagley said was the ordinary course of business—and not prepared for litigation purposes.
“Are you looking for anything other than the attorney’s opinion in these documents?” Sentelle asked Hagley several times during the hearing. “What you want here is the attorney’s opinion. Isn’t that precisely what the attorney work product privilege is designed to protect—the attorney’s opinion?”
Deloitte’s lawyers at Sidley Austin, including partner Michael Warden, did not argue today. Warden said in court papers in October that Deloitte was not participating as a party in the appeal because Dow is the party asserting a privilege over the requested documents.
A lawyer for Dow, Bingham McCutchen partner Hartman Blanchard Jr., said today that Dow believed the documents it turned over to Deloitte would remain confidential. Blanchard said companies should not be punished for making candid disclosures during the course of an audit.
Hagley and Blanchard said neither side was opposed to having the case returned to the trial court to allow Leon to inspect the disputed records in camera.