Supreme Court Will Not Review First Circuit's Textron Decision

 
Journal of International Taxation
August 2010

Douglas S. Stransky was quoted in the August 2010 issue of the Journal of International Taxation in an article entitled "Supreme Court Will Not Review First Circuit's Textron Decision." This article discusses the Supreme Court’s denial of Textron’s petition for a writ of certiorari. Textron had sought Supreme Court review of the First Circuit’s 3-2 en banc decision in United States v. Textron, Inc. See United States v. Textron, 577 F.3d 21 (1st Cir. 2009). For further discussion of the First Circuit decision, see Douglas S. Stransky, United States v. Textron, Inc.: The First Circuit En Banc Eviscerates the Work Product Doctrine and Creates a New 'Prepared For' Test, Practical U.S./Domestic Tax Strategies (July 2009). 

In the Journal of International Taxation article, Mr. Stransky commented on Textron's arguments in its petition to the Supreme Court. He noted that “Textron set forth three reasons why the Supreme Court should hear the case. First, Textron argued that the en banc decision widened the existing split in the circuits over the scope of the work product privilege. Second, Textron asserted that the en banc decision was wrong as a matter of law. Finally, Textron's petition emphasized that the question presented was one of paramount importance to all attorneys and their clients and thus deserving of the Court's attention.”

In addition to Textron's brief, “[t]here were eleven amicus curiae briefs in support of Textron's petition, emphasizing the importance of this case. The briefs urged the Court to take the case and settle the split among the circuits on the scope of the work product doctrine, arguing that the standard articulated by the First Circuit undermined the doctrine and has a chilling effect on clients' use of counsel. Evidently, those briefs fell on deaf ears at the Supreme Court. Because the decision by the en banc court eviscerated the work product protection that shielded exactly the type of attorney analysis that was present in this case, attorneys and their clients now know that the Supreme Court will not in the words of the dissent in the First Circuit 'intervene and set the circuits straight on this issue which is essential to the daily practice of litigators across the country.'”

Mr. Stransky further commented that “'[t]he prepared for' test established by the First Circuit sets a troubling precedent that could hinder attorneys from preparing analyses that are of the greatest importance to their clients. Under this 'prepared for' test, every party (not only IRS or state tax authorities) in commercial litigation whose opponent files GAAP financial statements that report contingent liabilities for litigation exposure will be able to obtain in discovery the hazards of litigation analysis of its opponent's lawyers. The First Circuit's decision has eviscerated the work product protection that exists to protect exactly the type of attorney analysis that was present in this case. It's surprising that the Supreme Court did not recognize this, especially where there were so many briefs that highlighted the danger of having the First Circuit's decision stand.”