United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 26, 2010 Decided June 29, 2010

No. 09-5171

UNITED STATES OF AMERICA,

APPELLANT

v.

DELOITTE LLP,

APPELLEE

DOW CHEMICAL COMPANY,

INTERVENOR

Appeal from the United States District Court

for the District of Columbia

(No. 1:08-mc-00411-RJL)

Judith A. Hagley, Attorney, U.S. Department of Justice,

argued the cause for appellant. With her on the briefs were

Gilbert S. Rothenberg, Deputy Assistant Attorney General, and

Robert W. Metzler, Attorney. Andrew Weiner, Attorney, and R.

Craig Lawrence, Assistant U.S. Attorney, entered appearances.

Hartman E. Blanchard, Jr. argued the cause for intervenor

Dow Chemical Company on behalf of appellee. With him on

the brief were Christopher P. Murphy and John B. Magee. 

Michael D. Warden entered an appearance.
2

Before: SENTELLE, Chief Judge, andBROWN and GRIFFITH,

Circuit Judges.

Opinion for the Court filed by Chief Judge SENTELLE.

SENTELLE, Chief Judge: The United States appeals from a

district court order denying its motion to compel Dow Chemical

Company’s independent auditor, Deloitte & Touche USA, LLP,1

to produce three documents in connection with ongoing tax

litigation between Dow and the government. The district court

ruled that all three documents were protected from discovery

under the work-product doctrine. On appeal, the government

contends that one of the documents is not work product because

it was prepared by Deloitte during the audit process. In

addition, while it concedes that the other two documents are

work product, it argues that Dow waived work-product

protection when it disclosed them to Deloitte. We vacate the

district court’s decision that the document prepared by Deloitte

is work product and remand for in camera review to determine

whether it is entirely work product. With respect to the other

two documents, we affirm the district court’s decision that Dow

did not waive work-product protection when it disclosed them

to Deloitte.

I. Background

This discovery dispute arises from ongoing tax litigation in

the U.S. District Court for the Middle District of Louisiana. The

litigation concerns the tax treatment of two partnerships owned

by Dow Chemical Company and two of its wholly-owned

subsidiaries. The first of these partnerships was Chemtech

Royalty Associates, L.P. (Chemtech I); it was succeeded by

Chemtech II, L.P. (Chemtech II). In 2005, Dow filed a civil suit

1

Deloitte & Touche USA, LLP is now known as Deloitte LLP.
3

challenging IRS adjustments to partnership returns filed by

Chemtech I and Chemtech II. Chemtech Royalty Assocs., L.P.

v. United States, No. 05-944 (M.D. La. filed July 13, 2005). 

During discovery, the government subpoenaed documents from

Dow’s independent auditor, Deloitte & Touche USA, LLP. 

Since the subpoena sought production in Washington, D.C., it

issued from the U.S. District Court for the District of Columbia. 

Deloitte produced a number of documents, but refused to

produce three documents Dow identified as attorney work

product. In response, the government filed a motion to compel

production.

The three disputed documents are described in Dow’s

privilege log and in a declaration by William Curry, Dow’s

Director of Taxes. The first document is a 1993 draft

memorandum prepared by Deloitte that summarizes a meeting

between Dow employees, Dow’s outside counsel, and Deloitte

employees about the possibility of litigation over the Chemtech

I partnership, and the necessity of accounting for such a

possibility in an ongoing audit. This meeting took place after

Dow informed Deloitte about the likelihood of litigation over

the Chemtech I transaction. The second is a 1998 memorandum

and flow chart prepared by two Dow employees—an accountant

and an in-house attorney. The third is a 2005 tax opinion

prepared by Dow’s outside counsel. Curry’s declaration

explains that the second and third documents were disclosed to

Deloitte so that it could “review the adequacy of Dow’s

contingency reserves for the Chemtech transactions.” 

According to Curry, Deloitte “compelled Dow’s production of

these documents by informing the company that access to these

documents was required in order to provide Dow with an

unqualified audit opinion for its public financial statements.” 

The privilege log describes the subject matter of these

documents as “[t]ax issues related to the Chemtech partnership”

and states that each one is a “[d]ocument prepared in
4

anticipation of litigation.” We will refer to the first document,

which was prepared by Deloitte, as the “Deloitte

Memorandum,” and the second and third documents, which

were created by Dow, as the “Dow Documents.”

The district court denied the government’s motion to

compel without reviewing the disputed documents in camera. 

United States v. Deloitte & Touche USA LLP, 623 F. Supp. 2d

39, 40-41 (D.D.C. 2009). It concluded that the Deloitte

Memorandum was work product because it was “prepared

because of the prospect of litigation with the IRS over the tax

treatment of Chemtech.” Id. at 40 n.1. The court further

concluded that, although the document was created by Deloitte,

it was nonetheless Dow’s work product because “its contents

record the thoughts of Dow’s counsel regarding the prospect of

litigation.” Id. In addition, the court rejected the government’s

contention that Dow had waived work-product protection for the

three documents. The court acknowledged that disclosing work

product to a third party can waive protection if that disclosure is

“inconsistent with the maintenance of secrecy from the

disclosing party’s adversary,” id. at 41 (quoting Rockwell Int’l

Corp. v. U.S. Dep’t of Justice, 235 F.3d 598, 605 (D.C. Cir.

2001)), but concluded that Dow’s disclosure to Deloitte was not

inconsistent with maintaining secrecy because (1) Deloitte was

not a potential adversary and (2) nothing suggested that it was

unreasonable for Dow to expect Deloitte to maintain

confidentiality, id. The government appeals this ruling, and

Dow has intervened to assert work-product protection. Since the

government’s motion to compel was the sole issue before the

district court, its disposition of that motion was an appealable

final judgment. In re Multi-Piece Rim Prods. Liab. Litig., 653

F.2d 671, 676 (D.C. Cir. 1981).
5

II. Analysis

The government contends that the Deloitte Memorandum

is not attorney work product. Alternatively, it argues that even

if the Deloitte Memorandum is work product, Dow waived

work-product protection when it orally disclosed the information

recorded therein to Deloitte. Turning to the Dow Documents,

the government concedes they are attorney work product, but

argues that Dow waived work-product protection when it gave

them to Deloitte. We generally review the district court’s

discovery orders for abuse of discretion. United States v.

Williams Cos., 562 F.3d 387, 396 (D.C. Cir. 2009). If the

district court applied an incorrect legal standard, however, we

review de novo. In re Sealed Case, 146 F.3d 881, 883-84 (D.C.

Cir. 1998). 

A. The Work-Product Doctrine

The Supreme Court established the work-product doctrine

in Hickman v. Taylor, 329 U.S. 495 (1947), which held that an

attorney’s notes recording his interviews with witnesses to the

litigation-prompting incident were protected from discovery. Id.

at 509-10. The Court recognized that to prepare for litigation,

an attorney must “assemble information, sift what he considers

to be the relevant from the irrelevant facts, prepare his legal

theories and plan his strategy without undue and needless

interference.” Id. at 511. This preparation “is reflected . . . in

interviews, statements, memoranda, correspondence, briefs,

mental impressions, personal beliefs, and countless other

tangible and intangible ways.” Id. The Court reasoned that

giving opposing counsel access to such work product would

cause significant problems:

[M]uch of what is now put down in writing would remain

unwritten. An attorney’s thoughts, heretofore inviolate,
6

would not be his own. Inefficiency, unfairness and sharp

practices would inevitably develop in the giving of legal

advice and in the preparation of cases for trial. The effect

on the legal profession would be demoralizing. And the

interests of the clients and the cause of justice would be

poorly served.

Id. Consequently, the Court concluded that attorney work

product is protected from discovery unless “the one who would

invade that privacy” carries the burden of “establish[ing]

adequate reasons to justify production through a subpoena or

court order.” Id. at 512.

The work-product doctrine announced in Hickman was

subsequently partially codified in Federal Rule of Civil

Procedure 26(b)(3), which states:

(A) Documents and Tangible Things. Ordinarily, a party

may not discover documents and tangible things that are

prepared in anticipation of litigation or for trial by or for

another party or its representative (including the other

party’s attorney, consultant, surety, indemnitor, insurer, or

agent).

FED. R. CIV. P. 26(b)(3)(A). Rule 26(b)(3) allows a court to

order disclosure when the requesting party can show a

“substantial need” for the material and an inability to procure

equivalent information “without undue hardship.” FED.R.CIV.

P. 26(b)(3)(A)(ii). When a court orders disclosure under this

exception, however, it must still “protect against disclosure of

the mental impressions, conclusions, opinions, or legal theories

of a party’s attorney or other representative concerning the

litigation.” FED. R. CIV. P. 26(b)(3)(B). This type of work

product, which is often described as opinion work product, “is

virtually undiscoverable.” Dir., Office of Thrift Supervision v.
7

Vinson & Elkins, LLP, 124 F.3d 1304, 1307 (D.C. Cir. 1997).

B. The Deloitte Memorandum

The government makes two categorical arguments that the

Deloitte Memorandum cannot be work product. First, it argues

that the Deloitte Memorandum cannot be work product because

it was created by Deloitte, not Dow or its representative. 

Second, it argues that the Deloitte Memorandum cannot be work

product because it was generated as part of the routine audit

process, not in anticipation of litigation. If either argument is

correct, the Deloitte Memorandum cannot be work product,

regardless of its contents. We reject both arguments, but

nevertheless conclude that the district court lacked sufficient

information to determine that the entire Deloitte Memorandum

is work product.

1

The government first contends that Dow cannot claim workproduct protection for the Deloitte Memorandum because it was

prepared by Deloitte. Rule 26(b)(3) only protects “documents

and tangible things that are prepared . . . by or for another party

or its representative.” FED. R. CIV. P. 26(b)(3)(A). Given this

language, the government argues that the Deloitte Memorandum

is not work product because Deloitte is not Dow’s

representative. It relies principally on United States v. Arthur

Young & Co., 465 U.S. 805 (1984), in which the Supreme Court

refused to recognize an accountant work-product privilege. In

Arthur Young, the Court contrasted the role of an attorney with

that of an accountant, explaining that an attorney is “a loyal

representative whose duty it is to present the client’s case in the

most favorable possible light,” whereas an independent certified

public accountant has a “public responsibility” and “owes

ultimate allegiance to the corporation’s creditors and
8

stockholders, as well as to the investing public.” Id. at 817-18. 

In the government’s view, Arthur Young demonstrates that

Deloitte cannot be Dow’s representative, which in turn means

that the Deloitte Memorandum cannot be work product under

the plain language of Rule 26(b)(3). Dow counters that the

“representative” for purposes of Rule 26(b)(3) is its counsel,

whose thoughts and opinions are recorded in the document. In

addition, it argues that the Deloitte Memorandum is work

product because it contains the same type of opinion work

product that is found in the Dow Documents, which the

government concedes are work product.

Even if the government is correct in asserting that the

Deloitte Memorandum falls outside the definition given by Rule

26(b)(3), this does not conclusively establish that it is not work

product. The government mistakenly assumes that Rule

26(b)(3) provides an exhaustive definition of what constitutes

work product. On the contrary, Rule 26(b)(3) only partially

codifies the work-product doctrine announced in Hickman. Rule

26(b)(3) addresses only “documents and tangible things,” but

Hickman’s definition of work product extends to “intangible”

things. 329 U.S. at 511. Moreover, in Hickman, the Court

explained that the attorney’s “mental impressions” were

protected from discovery, so that he could not be forced to

“repeat or write out” that information in discovery. Id. at 512-

13. Thus Hickman provides work-product protection for

intangible work product independent of Rule 26(b)(3). Accord

In re Seagate Tech., LLC, 497 F.3d 1360, 1376 (Fed. Cir. 2007);

In re Cendant Corp. Sec. Litig., 343 F.3d 658, 662 (3d Cir.

2003); United States v. 266 Tonawanda Trail, 95 F.3d 422, 428

n.10 (6th Cir. 1996).

The government focuses on Deloitte’s role in creating the

document and on its relationship to Dow. Under Hickman,

however, the question is not who created the document or how
9

they are related to the party asserting work-product protection,

but whether the document contains work product—the thoughts

and opinions of counsel developed in anticipation of litigation. 

The district court found that the memorandum records those

thoughts, even though Deloitte and not Dow or its attorney

committed them to paper. The work product privilege does not

depend on whether the thoughts and opinions were

communicated orally or in writing, but on whether they were

prepared in anticipation of litigation. Thus Deloitte’s

preparation of the document does not exclude the possibility that

it contains Dow’s work product.

2

The government next contends that the Deloitte

Memorandum cannot be work product because it was generated

during an annual audit, not prepared in anticipation of litigation. 

The courts are not unanimous on the proper test for determining

whether a document was prepared “in anticipation of litigation.” 

Under the test adopted by most circuits, the question is whether

the document was created “because of” the anticipated litigation. 

See, e.g., Sandra T.E. v. S. Berwyn Sch. Dist. 100, 600 F.3d 612,

622 (7th Cir. 2010); In re Prof’ls Direct Ins. Co., 578 F.3d 432,

439 (6th Cir. 2009); In re Grand Jury Subpoena, 357 F.3d 900,

907 (9th Cir. 2004); PepsiCo, Inc. v. Baird, Kurtz & Dobson

LLP, 305 F.3d 813, 817 (8th Cir. 2002); Maine v. U.S. Dep’t of

the Interior, 298 F.3d 60, 68 (1st Cir. 2002); Montgomery

County v. MicroVote Corp., 175 F.3d 296, 305 (3d Cir. 1999);

United States v. Adlman, 134 F.3d 1194, 1195 (2d Cir. 1998);

Nat’l Union Fire Ins. Co. v. Murray Sheet Metal Co., 967 F.2d

980, 984 (4th Cir. 1992). The Fifth Circuit, however, requires

that anticipation of litigation be the “primary motivating

purpose” behind the document’s creation. United States v. El

Paso Co., 682 F.2d 530, 542 (5th Cir. 1982). 
10

Like most circuits, we apply the “because of” test, asking

“whether, in light of the nature of the document and the factual

situation in the particular case, the document can fairly be said

to have been prepared or obtained because of the prospect of

litigation.” In re Sealed Case, 146 F.3d at 884 (quotation

omitted). In addition, while this standard addresses a

“document,” it applies equally to work product in other forms. 

Thus for the Deloitte Memorandum, the question is whether it

records information prepared by Dow or its representatives

because of the prospect of litigation.

In the government’s view, the Deloitte Memorandum was

prepared not “because of the prospect of litigation,” but as part

of the routine audit process. The government asserts that a

document’s function, not its content, determines whether it is

work product. For this proposition the government relies on

Delaney, Migdail & Young, Chartered v. IRS, 826 F.2d 124

(D.C. Cir. 1987). In Delaney, a law firm sought to obtain under

the Freedom of Information Act memoranda and supporting

documents relating to the government’s legal analysis of an

Internal Revenue Service program concerning the use of

statistical sampling in auditing large accounts. In that case it

was the IRS that asserted work-product protection. The court

held that the documents were work product because they

“advise[d] the agency of the types of legal challenges likely to

be mounted against a proposed program, potential defenses

available to the agency, and the likely outcome.” Id. at 127. In

its reasoning, the court noted that a previous work-product

decision had identified “the function of the documents as the

critical issue.” Id. at 127 (citing Coastal States Gas Corp. v.

Dep’t of Energy, 617 F.2d 854, 858 (D.C. Cir. 1980)). The

government seizes on this language, arguing that the Deloitte

Memorandum is not work product because its function was to

facilitate Deloitte’s audit, not to prepare Dow for litigation.
11

We think the government misreads Delaney. While

Delaney used the term “function,” it was not considering any

distinction between function and content in determining whether

a document constituted work product. On the contrary, the court

evaluated the function of the IRS documents at issue by

examining their contents. It contrasted the documents at issue

in the Coastal States case, which were like “an agency manual,

fleshing out the meaning of the statute it was authorized to

enforce,” with the documents at issue in Delaney, which were

memoranda describing potential legal challenges, possible

defenses, and likely outcomes. Id. Delaney does not support the

proposition that we should look solely to a document’s function

divorced from its contents in determining its status as work

product. 

The government also relies on two decisions holding that a

corporation’s tax accrual workpapers were not prepared in

anticipation of litigation. In El Paso, the Fifth Circuit applied

the “primary motivating purpose” standard and concluded that

El Paso’s tax accrual workpapers were not work product because

the company’s primary motivation in creating them was “to

bring its financial books into conformity with generally accepted

auditing principles” as required by federal securities laws. 682

F.2d at 543. The court reasoned that the “primary motivating

force . . . [was] not to ready El Paso for litigation over its tax

returns,” but “to anticipate, for financial reporting purposes,

what the impact of litigation might be on the company’s tax

liability.” Id. 

In United States v. Textron Inc., 577 F.3d 21 (1st Cir. 2009)

(en banc), the First Circuit likewise held that a corporation’s tax

accrual workpapers were not prepared in anticipation of

litigation. Applying the “because of” test, the court concluded

that the workpapers were “tax documents and not case

preparation materials” that were “prepared in the ordinary
12

course of business” and that their only purpose was “to support

a financial statement and the independent audit of it.” Id. at 28,

30. It found no evidence that the workpapers were prepared for

“potential use in litigation” or that they “would in fact serve any

useful purpose for Textron in conducting litigation if it arose.” 

Id. at 30. 

The government argues that El Paso and Textron

demonstrate that when a document is created as part of an

independent audit, as the Deloitte Memorandum was, its sole

function is to facilitate that audit, which means it was not

prepared in anticipation of litigation. Neither case convinces us. 

El Paso was decided under the “primary motivating purpose”

test, which is more demanding than the “because of” test we

employ. Under the more lenient “because of” test, material

generated in anticipation of litigation may also be used for

ordinary business purposes without losing its protected status. 

For example, in Adlman, the Second Circuit considered whether

a document containing legal analysis about possible future

litigation qualified as work product when it was procured to

assist the parties in deciding whether to go through with a

proposed merger. The court held that

a document created because of anticipated litigation, which

tends to reveal mental impressions, conclusions, opinions

or theories concerning the litigation, does not lose

work-product protection merely because it is intended to

assist in the making of a business decision influenced by the

likely outcome of the anticipated litigation. Where a

document was created because of anticipated litigation, and

would not have been prepared in substantially similar form

but for the prospect of that litigation, it falls within Rule

26(b)(3).
13

134 F.3d at 1195. Under this same reasoning, material

developed in anticipation of litigation can be incorporated into

a document produced during an audit without ceasing to be work

product. Textron, which did apply the “because of” standard, is

distinguishable because it turned on the court’s examination of

the particular documents at issue. While the court concluded

that those documents were not work product, it did not exclude

the possibility that other documents prepared during the audit

process might warrant work-product protection. Moreover,

Judge Torruella’s dissenting opinion in Textron makes a strong

argument that while the court said it was applying the “because

of” test, it actually asked whether the documents were “prepared

for use in possible litigation,” a much more exacting standard. 

577 F.3d at 32. 

In short, a document can contain protected work-product

material even though it serves multiple purposes, so long as the

protected material was prepared because of the prospect of

litigation.

3

Rejecting the government’s categorical arguments

establishes only that the Deloitte Memorandum may be

protected work product under the law; we must now determine

whether it is. On examination of the record, we conclude that

the district court did not have a sufficient evidentiary foundation

for its holding that the memorandum was purely work product. 

According to the record, the document was created during

Deloitte’s preparation of an audit report which in Deloitte’s

view required consideration of potential litigation. The meeting

generating the document included both Deloitte and Dow

employees, as well as Dow’s outside counsel. The document

itself was prepared by a third party. While none of this negates

the possibility of work-product privilege, it could make it likely
14

that the document includes other information that is not work

product. According to Dow’s privilege log and the Curry

declaration, the memorandum does contain thoughts and

analyses by legal counsel, but this does not rule out or even

render unlikely the possibility that it also includes other facts,

other thoughts, other analyses by non-attorneys which may not

be so intertwined with the legal analysis as to warrant protection

under the work-product doctrine. We will therefore remand this

question to the district court for the purpose of independently

assessing whether the document was entirely work product, or

whether a partial or redacted version of the document could have

been disclosed. Accordingly, we vacate the district court’s

decision that the Deloitte Memorandum was work product and

remand so that the district court can examine the document in

camera to determine whether it is entirely work product. See In

re Sealed Case, 146 F.3d at 886-88 (remanding for in camera

review to determine whether documents were prepared in

anticipation of litigation); In re Sealed Case, 29 F.3d 715, 718

(D.C. Cir. 1994) (same).

C. The Dow Documents

Although the government concedes that the Dow

Documents are work product, it contends that Dow waived

work-product protection by disclosing them to Deloitte. To the

best of our knowledge, no circuit has addressed whether

disclosing work product to an independent auditor constitutes

waiver. Among the district courts that have addressed this issue,

most have found no waiver. E.g., Regions Fin. Corp. v. United

States, No. 2:06-CV-00895-RDP, 2008 WL 2139008, at *8

(N.D. Ala. May 8, 2008) (slip op.); Lawrence E. Jaffe Pension

Plan v. Household Int’l, Inc., 237 F.R.D. 176, 183 (N.D. Ill.

2006); In re JDS Uniphase Corp. Sec. Litig., No. C-02-1486

CW, 2006 WL 2850049, at *1 (N.D. Cal. Oct. 5, 2006)

(unpublished decision); Am. S.S. Owners Mut. Prot. & Indem.
15

Ass’n v. Alcoa S.S. Co., No. 04-Civ-4309, 2006 WL 278131, at

*2 (S.D.N.Y. Feb. 2, 2006) (unpublished decision); Frank Betz

Assocs., Inc. v. Jim Walter Homes, Inc., 226 F.R.D. 533, 535

(D.S.C. 2005); Merrill Lynch & Co., Inc. v. Allegheny Energy,

Inc., 229 F.R.D. 441, 447-49 (S.D.N.Y. 2004); In re Honeywell

Int’l, Inc. Sec. Litig., 230 F.R.D. 293, 300 (S.D.N.Y. 2003);

Gutter v. E.I. Dupont de Nemours & Co., No. 95-CV-2152, 1998

WL 2017926, at *5 (S.D. Fla. May 18, 1998) (unpublished

decision); In re Pfizer Inc. Sec. Litig., No. 90 Civ. 1260, 1993

WL 561125, at *6 (S.D.N.Y. Dec. 23, 1993) (unpublished

decision). At least two courts have found waiver. Medinol, Ltd.

v. Boston Scientific Corp., 214 F.R.D. 113, 115-17 (S.D.N.Y.

2002); In re Diasonics Sec. Litig., No. C-83-4584-RFP, 1986

WL 53402, at *1 (N.D. Cal. June 15, 1986) (unpublished

decision).

While voluntary disclosure waives the attorney-client

privilege, it does not necessarily waive work-product protection. 

United States v. Am. Tel. & Tel. Co., 642 F.2d 1285, 1299 (D.C.

Cir. 1980) (AT&T). As we explained in AT&T, the attorneyclient privilege and the work-product doctrine serve different

purposes: the former protects the attorney-client relationship by

safeguarding confidential communications, whereas the latter

promotes the adversary process by insulating an attorney’s

litigation preparation from discovery. Id. Voluntary disclosure

waives the attorney-client privilege because it is inconsistent

with the confidential attorney-client relationship. Id. Voluntary

disclosure does not necessarily waive work-product protection,

however, because it does not necessarily undercut the adversary

process. Id. Nevertheless, disclosing work product to a third

party can waive protection if “such disclosure, under the

circumstances, is inconsistent with the maintenance of secrecy

from the disclosing party’s adversary.” Rockwell Int’l Corp. v.

U.S. Dep’t of Justice, 235 F.3d 598, 605 (D.C. Cir. 2001)

(quoting AT&T, 642 F.2d at 1299). Under this standard, the
16

voluntary disclosure of attorney work product to an adversary or

a conduit to an adversary waives work-product protection for

that material.

Applying this standard, the government contends that Dow

has waived work-product protection for the Dow Documents

because Deloitte is (1) a potential adversary and (2) a conduit to

other adversaries. We reject both contentions and conclude that

Dow has not waived the protection.

1

The government contends that Deloitte is a potential

adversary of Dow because disputes sometimes arise between

independent auditors and their clients and because independent

auditors have the power to issue opinions that adversely affect

their clients. Neither argument demonstrates that Deloitte is a

potential adversary for purposes of waiver analysis. First, as an

independent auditor, Deloitte cannot be Dow’s adversary. Even

the threat of litigation between an independent auditor and its

client can compromise the auditor’s independence and

necessitate withdrawal. See AMERICAN INSTITUTE OF CERTIFIED

PUBLIC ACCOUNTANTS (AICPA), AICPA PROFESSIONAL

STANDARDS,CODE OF PROFESSIONAL CONDUCT § 101.08 (2005)

(hereinafter AICPA CODE OF PROFESSIONAL CONDUCT)

(discussing the effect of actual and threatened litigation on

auditor independence). Further, Deloitte’s power to issue an

adverse opinion, while significant, does not make it the sort of

litigation adversary contemplated by the waiver standard. 

Similarly, “any tension between an auditor and a corporation

that arises from an auditor’s need to scrutinize and investigate

a corporation’s records and book-keeping practices simply is not

the equivalent of an adversarial relationship contemplated by the

work product doctrine.” Merrill Lynch, 229 F.R.D. at 448. 

Second, the possibility of a future dispute between Deloitte and
17

Dow does not render Deloitte a potential adversary for the

present purpose. If it did, any voluntary disclosure would

constitute waiver. Yet the work-product doctrine allows

disclosures as long as they do not undercut the adversary

process. See AT&T, 642 F.2d at 1299.

Here, the question is not whether Deloitte could be Dow’s

adversary in any conceivable future litigation, but whether

Deloitte could be Dow’s adversary in the sort of litigation the

Dow Documents address. We conclude that the answer must be

no. In preparing the Dow Documents, Dow anticipated a

dispute with the IRS, not a dispute with Deloitte. The

documents, which concern the tax implications of the Chemtech

partnerships, would not likely be relevant in any dispute Dow

might have with Deloitte. Thus Deloitte cannot be considered

a potential adversary with respect to the Dow Documents.

The government argues that United States v. Massachusetts

Institute of Technology, 129 F.3d 681 (1st Cir. 1997), supports

its argument that an independent auditor is a potential adversary. 

In that case, a defense contractor (MIT) under IRS investigation

claimed work-product protection for expense reports it had

disclosed to the Defense Contract Audit Agency, a branch of the

Department of Defense. The First Circuit held that MIT had

waived the protection by disclosing its expense reports to a

potential adversary. Id. at 687. The court’s reasoning is clear:

MIT disclosed the expense reports to the auditing arm of the

Defense Department, the most likely adversary in any dispute

over expense reports. In doing so, it disclosed its work product

not to an independent auditor, but to an auditor affiliated with a

potential adversary. Dow’s disclosure to its independent

auditor, which is not a potential adversary in tax litigation over

the Chemtech partnerships, is wholly different.
18

2

The government also asserts that Deloitte is a conduit to

Dow’s adversaries. It claims the district court failed to address

this question, but this ignores the district court’s explicit

statement that “no evidence suggests that it was unreasonable

for Dow to expect Deloitte USA to maintain confidentiality.” 

Deloitte, 623 F. Supp. 2d at 41. Like the district court, we

conclude that Deloitte is not a conduit to Dow’s adversaries.

Our prior decisions applying the “maintenance of secrecy”

standard, while fact-intensive, have generally made two discrete

inquiries in assessing whether disclosure constitutes waiver. 

First, we have considered whether the disclosing party has

engaged in self-interested selective disclosure by revealing its

work product to some adversaries but not to others. Williams,

562 F.3d at 394; In re Subpoenas Duces Tecum, 738 F.2d 1367,

1372 (D.C. Cir. 1984). Such conduct militates in favor of

waiver, for it is “inconsistent and unfair to allow [parties] to

select according to their own self-interest to which adversaries

they will allow access to the materials.” In re Subpoenas, 738

F.2d at 1372.

Second, we have examined whether the disclosing party had

a reasonable basis for believing that the recipient would keep the

disclosed material confidential. Williams, 562 F.3d at 394; In re

Subpoenas, 738 F.2d at 1372-74. A reasonable expectation of

confidentiality may derive from common litigation interests

between the disclosing party and the recipient. In re Subpoenas,

738 F.2d at 1372. As we explained in AT&T, “[t]he existence of

common interests between transferor and transferee is relevant

to deciding whether the disclosure is consistent with the nature

of the work product privilege.” 642 F.2d at 1299. This is true

because when common litigation interests are present, “the

transferee is not at all likely to disclose the work product
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material to the adversary.” Id. Alternately, a reasonable

expectation of confidentiality may be rooted in a confidentiality

agreement or similar arrangement between the disclosing party

and the recipient. Nevertheless, a confidentiality agreement

must be relatively strong and sufficiently unqualified to avoid

waiver. In Williams, for example, we concluded that the

government’s assurance that it would maintain confidentiality

“to the extent possible” was not sufficiently strong or

sufficiently unqualified to prevent the government from

disclosing the information to a criminal defendant under Brady

v. Maryland, 373 U.S. 83 (1963). 562 F.3d at 395-96. 

Likewise, we have determined that a mere promise to give the

disclosing party notice before releasing documents does not

support a reasonable expectation of confidentiality. In re

Subpoenas, 738 F.2d at 1373.

The selective disclosure inquiry is straightforward. 

Selective disclosure involves disclosing work product to at least

one adversary. As we have explained, Deloitte is not an

adversary, so Dow’s disclosure to Deloitte was not selective

disclosure. The “reasonable expectation of confidentiality”

inquiry is more complicated. As to common interests, Dow and

Deloitte do not have common litigation interests in the Dow

Documents—Dow has a litigation interest in the documents

because of its interest in the Chemtech partnerships, but Deloitte

has no similar interest in the documents. Absent common

interests, the question is whether a confidentiality agreement or

similar assurance gave Dow a reasonable expectation that

Deloitte would keep its work product confidential.

We conclude that Dow had a reasonable expectation of

confidentiality because Deloitte, as an independent auditor, has

an obligation to refrain from disclosing confidential client

information. Rule 301 of the American Institute of Certified

Public Accountants (AICPA) Code of Professional Conduct
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provides: “A member in public practice shall not disclose any

confidential client information without the specific consent of

the client.” AICPACODE OF PROFESSIONAL CONDUCT § 301.01. 

William Curry’s declaration explains that “Dow furnished these

documents to D&T [Deloitte] with the expectation that D&T

would retain the confidentiality of the two documents.” Given

the obligation imposed by Rule 301, we think this expectation

was reasonable.

The government responds that this is a “qualified

assurance” that does not suffice to prevent waiver because Rule

301 also explains that it “shall not be construed . . . to affect in

any way the member’s obligation to comply with a validly

issued and enforceable subpoena or summons.” Id. But an

assertion of work-product protection challenges the

enforceability of a subpoena with respect to those materials. 

Thus Deloitte could refuse to produce the documents, thereby

allowing Dow to intervene and assert work-product protection,

without violating its obligation to comply with enforceable

subpoenas. Indeed, this is exactly what Deloitte did. 

Accordingly, this caveat does not significantly diminish the

reasonableness of Dow’s expectation of confidentiality.

The government also attempts to bolster its waiver

argument by identifying instances in which an independent

auditor might disclose information obtained from a company

whose finances it audits. For example, it asserts that Deloitte

could make Dow disclose its confidential tax analysis in

footnotes to its public financial statements. Likewise, Deloitte

could testify about confidential information obtained from Dow

in proceedings brought by the SEC or private parties. Or

Deloitte might report illegal acts it detects during its audit in

accordance with § 10A of the Securities and Exchange Act, 15

U.S.C. § 78j-1. Finally, the government returns to Arthur

Young, arguing that as an independent auditor, Deloitte is a
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“public watchdog” whose ultimate allegiance is to Dow’s

creditors, stockholders, and the investing public—all potential

adversaries of Dow. In sum, the government contends that Dow

could not reasonably expect confidentiality from Deloitte after

giving it the Dow Documents, given the myriad ways Deloitte

could reveal that information.

Of course Deloitte might disclose some information

relevant to Dow’s finances. But the government has neither

pointed to any regulatory provision nor posited any specific

circumstance under which Deloitte would be required to disclose

attorney work product like that contained in the Dow

Documents. An independent auditor can fulfill its duties and

render an opinion concerning a company’s public financial

statements without revealing every piece of information it

reviews during the audit process. In short, Deloitte’s

independent auditor obligations do not make it a conduit to

Dow’s adversaries. 

Likewise, the government’s reliance on Arthur Young is

misplaced. In Arthur Young, the Court considered whether

accountant work-product should be granted the same protection

attorney work product receives. The government quotes the

Court’s statement that “[t]o insulate from disclosure a certified

public accountant’s interpretations of the client’s financial

statements would be to ignore the significance of the

accountant’s role as a disinterested analyst charged with public

obligations.” Arthur Young, 465 U.S. at 818. All well and

good. In this case, however, the government attempts to

discover not an independent auditor’s “interpretations of the

client’s financial statements,” which Arthur Young would

permit, but an attorney’s thoughts and opinions developed in

anticipation of litigation, which the work-product doctrine

forbids.
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Furthermore, we are mindful that independent auditors have

significant leverage over the companies whose finances they

audit. An auditor can essentially compel disclosure by refusing

to provide an unqualified opinion otherwise. Finding waiver

based on such disclosures could well encourage the sort of

“[i]nefficiency, unfairness and sharp practices” that Hickman

sought to avoid. For example, it might discourage companies

from seeking legal advice and candidly disclosing that

information to independent auditors. Moreover, the government

has not proffered any good reason for wanting the Dow

Documents other than its desire to know what Dow’s counsel

thought about the Chemtech partnerships. Granting discovery

under these circumstances would undercut the adversary process

and let the government litigate “on wits borrowed from the

adversary,” Hickman, 329 U.S. at 516 (Jackson, J., concurring). 

We conclude that the district court applied the correct legal

standard and acted within its discretion in determining that Dow

had not waived work-product protection. Consequently, we

affirm the district court’s decision denying the government’s

motion to compel with respect to the Dow Documents.

* * *

For the reasons set forth above, we vacate in part, affirm in

part, and remand for further proceedings consistent with this

opinion.

So ordered.