Reed Smith filed an amicus brief yesterday afternoon with the U.S. Supreme Court, asking that the Court grant certiorari and review the First Circuit decision in Textron.1

The Textron case involved a summons the IRS had issued for Textron's tax accrual workpapers in connection with an audit. (As part of the audit, the IRS had determined that Textron had participated in multiple listed transactions and, thus, the IRS' usual policy of restraint in requesting tax accrual workpapers did not apply.) The IRS brought an enforcement action in federal district court. The district court denied the IRS' petition for enforcement, holding that the workpapers were protected by the work product doctrine, because, although the workpapers were prepared to support federally mandated financial statements, the workpapers would not have been prepared "but for" the fact that Textron and its attorneys viewed the items covered by the workpapers as the potential subject of litigation.

On appeal, the First Circuit panel upheld the district court decision. However, the First Circuit later vacated the panel decision and granted the federal government's request for a rehearing en banc.

In its en banc decision, the First Circuit held that the work product doctrine did not apply to the Textron workpapers. Textron then sought review by the U.S. Supreme Court.

In its brief, which was filed jointly with Graybar Electric Company and U.S. Steel Corporation, Reed Smith focused on the uncertainty that the existing split in authority creates for companies seeking candid legal evaluation of litigation risks well in advance of litigation. In particular, the brief notes that the First Circuit's approach to the work product doctrine, when considered in tandem with the Supreme Court's recent decision in Mohawk Industries, will put undue pressure on companies to settle cases simply to avoid being forced to produce documents recording their attorney's work product.2 In Mohawk Industries, the Court held that an adverse ruling on a claim of attorney-client privilege is not immediately appealable. Thus, as a result of the First Circuit decision in Textron, together with the Supreme Court decision in Mohawk Industries, companies face a legitimate threat that they will be required to disclose work product, without any opportunity for immediate appellate review. This threat could fundamentally and unfairly change the dynamics and the balance of power in all civil litigation.

A copy of Reed Smith's Textron amicus brief is available at