Many courts originally provided work product doctrine protection only to documents created to use in or assist in litigation. However, starting in the Second Circuit about ten years ago, courts began to protect documents created “because of” litigation — even if they would not be used to assist in litigation. Called the Adlman doctrine after the Second Circuit case, this expansion covered documents created for both business and litigation purposes — as long as the documents would not exist but for the anticipated litigation.
Last year the District of Rhode Island applied the Adlman “because of” standard in protecting tax accrual work papers prepared in part by Textron lawyers. Such dual purpose documents highlight the broader nature of the Adlman standard — the work papers would not exist but for Textron’s possible litigation with the IRS, although Textron would obviously not use the work papers to assist in such litigation. The district court pointed to a 2002 First Circuit case explicitly adopting the Adlman standard. The First Circuit affirmed the district court’s analysis, but then agreed to rehear the case en banc. In United States v. Textron Inc., No. 07-2631, 2009 U.S. App. LEXIS 18103 (1st Cir. Aug. 13, 2009), the First Circuit ruled en banc (in a 3 to 2 vote) that Textron’s tax accrual work papers did not deserve work product protection. Although not explicitly rejecting the Adlman standard, the majority said that “the focus of work product protection has been on materials prepared for use in litigation,” and also held that “[i]t is only work done in anticipation of or for trial that is protected.” Id. at *20-21, *23. Interestingly, the majority mentioned (but did not explicitly rely on) other possible arguments why the IRS might have been entitled to Textron’s tax accrual work papers: Textron could not show that it reasonably anticipated litigation with the IRS; Textron prepared the documents to comply with government or accounting regulations (and therefore could not even satisfy the Adlman standard); the IRS could overcome any work product protection because it had “substantial need” for the documents.
The dissent did not mince words — charging that the “majority’s opinion is simply stunning in its failure” to acknowledge First Circuit’s 2002 adoption of the Adlman standard. Id. at *37-38. The dissent warned that “the majority has thrown the law of work-product protection into disarray,” and indicated that “[t]he time is ripe for the Supreme Court to intervene and set the circuits straight” on which standard to follow. Id. at *64, *65.