First Circuit Orders Production of Textron Documents

Last week, the First Circuit Court of Appeals overturned an earlier three-judge ruling as well as a federal district court in holding – via a 3-2 decision – that the work product doctrine did not protect tax accrual workpapers of aviation and industrial conglomerate Textron Inc. from IRS summons.

In the majority opinion, authored by Judge Michael Boudin, the Court held that because the documents sought were prepared not for litigation, but for a statutorily required purpose of financial reporting, the work product privilege did not prevent their discovery by the IRS, even though they contemplated the possibility of litigation. In response to the rejection of privilege under Federal Rule of Civil Procedure 26(b)(3), the dissent, led by Judge Juan Torruella, said such dual-purpose documents can be covered by the privilege and that the Supreme Court should weigh-in on this issue.

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