In Assured Guaranty Municipal Corp. v. UBS Real Estate Securities Inc., Nos. 12-1579, 12-7322 (S.D.N.Y. Mar. 25, 2013), the court held that documents created by an internal working group that was overseen by outside counsel generally were not protected by either the work product doctrine or the attorney-client privilege. AGM provided financial guaranty policies to UBS regarding three RMBS transactions sponsored by UBS. After experiencing significant losses, AGM met with UBS and threatened litigation if disputed losses were not resolved to AGM’s satisfaction. After receiving the threat, UBS retained outside counsel and UBS created an internal working group to work under outside counsel’s direction. The working group analyzed the insured transactions in response to AGM’s repurchase requests. UBS asserted that the vast majority of the working group’s documents were protected by both the work product doctrine and the attorney-client privilege. The court disagreed. The Second Circuit applies the broad “because of” test for work product: if a document was created because of litigation, then it may be protected work product. However, where the work product has both business and legal uses, the protection applies only if the document would not have been prepared in the ordinary course of business absent the threat of litigation. Here, UBS performed the repurchase analysis in the ordinary course of business; therefore, the documents were not protected. “The mere fact that outside counsel and consultants were retained to assist the repurchase review is insufficient to shield all of the repurchase documents from discovery.” UBS asserted attorney-client privilege over communications among business people and not in the presence of counsel on the basis that the communications were for the purpose of assisting counsel. The court rejected this position as well. “There is no privilege for communications between non-lawyers merely because they were purportedly ‘done for the purposes of assisting outside litigation counsel[.]’”