Failing to Mention Litigation Weakens Work Product Claim

September 15, 2021

The work product doctrine protects documents primarily motivated by litigation or anticipated litigation. It does not protect documents created in the ordinary course of a company’s business, or required by an external or internal mandate. If a company is already in litigation, failing to acknowledge that fact can weaken a work product claim.

In In re Valeant Pharmaceuticals International, Inc. Securities Litigation, Master No. 3:15-cv-07658-MAS-LHG, 2021 U.S. Dist. LEXIS 118140 (D.N.J. June 24, 2021), securities violation defendant Valeant claimed work product protection for documents created by its consultant FTI after litigation against Valeant had begun. The court rejected Valeant's work product claim – concluding that Valeant "cannot demonstrate that the primary motivating purpose underlying the FTI documents was a response to pending or anticipated litigation." Id. at *34. Among other things, the court noted that FTI's engagement letter contains "no mention of legal advice [or] pending investigations, government or criminal [or] pending civil suits, class actions or otherwise." Id. at *49. The court similarly emphasized that "neither the [Valeant] Board meeting minutes nor the Board's official resolution establishing [an Ad Hoc Committee] even mention litigation, although lawsuits existed at that time." Id. at *62. The court concluded that "irrespective of pending litigation against the Company, Valeant . . . would have taken – and was obligated to take – exactly the same steps." Id. at *57-58.

Although Valeant presumably would have lost its work product claim in any event, its argument would have been stronger if its consultant FTI and its board had mentioned the ongoing government and civil litigation against the company. But companies must be careful – mentioning anticipated litigation before it begins carries the risk of supporting an adversary's argument that the company should have started preserving pertinent documents at that time.

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