United States v. Deloitte LLP, 2010 U.S. App. LEXIS 13226 (D.C. Cir. June 29, 2010) creates at least two cert-worthy issues. Its holding that an auditor-created document, prepared for purposes of determining appropriate reserves based on legal advice of the audit client, is entitled to work product protection is in conflict with the First Circuit’s decision in United States v. Textron Inc., 577 F.3d 21 (1st Cir. 2009) (en banc) (see our post of September 20, 2009). The decision also highlights the conflicting Circuit standards as to whether work product protection is judged under the "because of" anticipated litigation test, rather than the "primary motivating purpose" test. Finally, while Deloitte is the first Circuit decision on the subject, its holding that disclosing work product to an auditor does not waive protection is in at odds with some District Court opinions. Some excerpts:

[T]he question is not who created the document or how 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. ***

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). ***

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 U.S. Dist. LEXIS 41940, 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 U.S. Dist. LEXIS 76169, 2006 WL 2850049, at *1 (N.D. Cal. Oct. 5, 2006) (unpublished decision); Am. S.S. Owners Mut. Prot. & Indem. Ass'n v. Alcoa S.S. Co. , No. 04-Civ-4309, 2006 U.S. Dist. LEXIS 4265, 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 U.S. Dist. LEXIS 23207, 1998 WL 2017926, at *5 (S.D. Fla. May 18, 1998) (unpublished decision); In re Pfizer Inc. Sec. Litig. , No. 90 Civ. 1260, 1993 U.S. Dist. LEXIS 18215, 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 U.S. Dist. LEXIS 24177, 1986 WL 53402, at *1 (N.D. Cal. June 15, 1986) (unpublished decision). ***

[T]he 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. ***

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. ***

[T]he 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. *** Thus Deloitte cannot be considered a potential adversary with respect to the Dow Documents. ***

The government also asserts that Deloitte is a conduit to Dow's adversaries. ***

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 provides: "A member in public practice shall not disclose any confidential client information without the specific consent of the client."