Southern District of New York Court Finds That Sharing Opinion Work Product with an Actuary Does Not Cause a Waiver

April 5, 2006

For obvious reasons, lawyers carefully scan the advance sheets for cases dealing with an important issue — whether a company waives the opinion work product protection by sharing opinion work product (usually litigation assessments) with the company’s outside auditor. In 2002, a well-respected Southern District of New York judge found that such sharing caused a waiver — in essence because after Enron an auditor is never the company’s friend. Medinol, Ltd. v. Boston Scientific Corp., 214 F.R.D. 113 (S.D.N.Y. 2002). Two years later, another judge in the Southern District ruled the other way. Merrill Lynch & Co. v. Allegheny Energy, Inc., 229 F.R.D. 441 (S.D.N.Y. 2004).

Although inexplicably failing to cite the Merrill Lynch case, another Southern District of New York judge has declined to follow Medinol, and instead held that a company did not waive the opinion work product protection by sharing the opinion work product with an actuary (who used the report in preparing filings with the New York Insurance Department). American S.S. Owners Mut. Prot. & Indem. Ass’n, No. 04 Civ. 4309 (LAK) (JCF), 2006 U.S. Dist. LEXIS 4265 (S.D.N.Y. Feb. 2, 2006).

Although the Second Circuit or the United States Supreme Court might ultimately deal with this issue, companies and their lawyers should be heartened by this trend.