In Re Cendant Corp

Opinions of the United

2003 Decisions States Court of Appeals

for the Third Circuit

9-16-2003

In Re Cendant Corp

Precedential or Non-Precedential: Precedential

Docket No. 02-4386

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2003

Recommended Citation

"In Re Cendant Corp " (2003). 2003 Decisions. Paper 230.

http://digitalcommons.law.villanova.edu/thirdcircuit_2003/230

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 2003 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

PRECEDENTIAL

Filed September 16, 2003

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 02-4386

IN RE: CENDANT CORPORATION SECURITIES

LITIGATION

Ernst & Young LLP,

Appellant

On Appeal from the United States District Court

for the District of New Jersey

D.C. Civil Action No. 98-cv-01664

(District Judge: Honorable William H. Walls)

Argued April 24, 2003

Before: SCIRICA, Chief Judge,* AMBRO and GARTH,

Circuit Judges

(Filed September 16, 2003)

ALAN N. SALPETER, ESQUIRE

(ARGUED)

Mayer, Brown, Rowe & Maw

190 South LaSalle Street

Chicago, Illinois 60603

* Judge Scirica began his term as Chief Judge on May 4, 2003.

2

DOUGLAS S. EAKELEY, ESQUIRE

Lowenstein Sandler PC

65 Livingston Avenue

Roseland, New Jersey 07068

Attorneys for Appellant,

Ernst & Young LLP

GREGORY L. DISKANT, ESQUIRE

(ARGUED)

ROBERT P. LoBUE, ESQUIRE

Patterson, Belknap, Webb & Tyler

1133 Avenue of the Americas

New York, New York 10036

Attorneys for Appellee,

Cendant Corporation

HERBERT J. STERN, ESQUIRE

(ARGUED)

Stern, Greenberg & Kilcullen

75 Livingston Avenue

Roseland, New Jersey 07068

Attorney for Appellees, James E.

Buckman, Leonard S. Coleman,

Jr., Christel DeHaan, Martin L.

Edelman, Scott E. Forbes, Stephen

P. Holmes, Robert D. Kunisch,

Michael P. Monaco, Brian

Mulroney, Robert E. Nederlander,

Robert W. Pittman, E. John

Rosenwald, Leonard Schutzman,

Henry R. Silverman, Robert F.

Smith and John D. Snodgrass

3

DANIEL L. BERGER, ESQUIRE

Bernstein, Litowitz, Berger

& Grossmann

1285 Avenue of the Americas,

33rd Floor

New York, New York 10019

Attorney for Appellees,

California Public Employees’

Retirement System, New York

State Common Retirement Fund,

New York City Pension Funds

ANDREW ENTWISTLE, ESQUIRE

Entwistle & Cappucci

299 Park Avenue

New York, New York 10171

Attorney for Appellee,

State Board of Administration of

Florida

OPINION OF THE COURT

SCIRICA, Chief Judge.

At issue on appeal is whether the “work product” of a

non-testifying trial consultant in this case is privileged and

subject to only limited discovery. Ernst & Young, LLP, and

Cendant Corporation are co-defendants in a federal

securities class action involving Cendant’s alleged

accounting fraud. The class action claims were settled,

leaving claims asserted by Cendant and Ernst & Young

against each other as the focus of the remaining litigation.1

1. Cendant alleges that Ernst & Young was at least negligent in its

audits and that it actively participated in a conspiracy to hide fraud from

the investing public. Ernst & Young counter-claims that Cendant

defrauded its auditors.

4

I.

Cendant deposed Simon Wood, a former Ernst & Young

senior manager and auditor who prepared the Cendant

financial statements at issue in the underlying litigation.2

At Wood’s deposition, Cendant inquired into

communications that took place between Wood, Ernst &

Young’s counsel who also represented Wood, and Dr. Phillip

C. McGraw of Courtroom Sciences, Inc. Dr. McGraw is a

consulting expert in trial strategy and deposition

preparation who was retained as a non-testifying trial

expert to assist Ernst & Young’s counsel in anticipation of

litigation.

Specifically, Cendant’s counsel asked Wood: “Have you

ever met Phil McGraw?”; “On how many occasions did you

meet with Phil McGraw?”; “Did you understand Phil

McGraw to be a jury consultant?”; “Did Mr. McGraw

provide you with guidance in your conduct as a witness?”;

“Did you rehearse any of your prospective testimony in the

presence of Mr. McGraw?”; “In the course of preparing for

this deposition . . . did you review any work papers?”; “Did

you select the work papers that you reviewed?”; “Did you

ask anyone for the opportunity to review any particular

work papers?”; and “Did you ask to review work papers on

any particular subject?” Ernst & Young’s counsel objected,

citing the work product doctrine and the attorney-client

privilege and arguing the discovery sought related to private

communications relayed in the presence of counsel and for

the purpose of assisting counsel in rendering legal advice.

In March 2002, the Special Discovery Master3 held:

Wood may be asked whether he has met with Dr.

McGraw, the date and duration of any meetings, who

was present and the purpose for same. He may not be

asked what Dr. McGraw told the witness, whether

testimony was practiced, whether any part of the

meetings were recorded, whether the witness took any

notes, or whether Dr. McGraw provided the witness

2. Wood was manager on the Ernst & Young audit team for the audit

year that ended January 31, 1997 and senior manager on the audit

team for the calendar year that ended December 31, 1997.

3. The Special Discovery Master was Robert E. Tarleton, J.S.C. (Ret.).

5

with any documents. In my view, answers to the latter

questions would violate the work product doctrine.

From the information developed thus far, it appears

that Dr. McGraw is an expert retained by Ernst &

Young’s counsel to assist in trial preparation. He is not

expected to be called as a witness and no exceptional

circumstances have been cited to justify the

exploration Cendant seeks.

In November 2002, the District Court reversed the

Special Discovery Master’s determination, holding the work

product doctrine and attorney-client privilege did not apply.

The District Court said:

[W]ork product deals with things legal, things with

preparation, evaluation, strategies, tactics and it is at

first limited to lawyers and then will strictly or rigidly

expand it, or restrictively expand it to include people

such as paralegals and maybe assistants to lawyers

because of their intimacy with the lawyer.

The privilege is really that of the lawyers. . . .

because he or she has a right to tell his or her client

certain things. But, when we go beyond that into a

person who is not dealing with the law but telling

someone how to prepare it as Blumenthal v. Drudge

indicates, one of the questions where the lawyer was

telling this witness what to do, it’s a question what this

jury consultant [is] more or less telling that person

what to do.

Let me read from . . . the Blumenthal opinion . . . .

“It is true that in some cases the attorney-client

privilege may be extended to non lawyers who are

employed to assist the lawyer in the rendition of

professional legal services. This extension of the

privilege to non lawyers, however, must be strictly

confined within the narrowest possible limits

consistent with the logic of its principle and should

only occur when the communication was made in

confidence for the purpose of obtaining legal advice

from the lawyer. If what is sought is not legal advice or

if the advice itself is the accountant’s rather than the

lawyers, no privilege exists.

6

. . . .

Here it appears that Mr. Horowitz was retained for

the value of his own advice, not to assist the

defendant’s attorney in providing their legal advice, and

the attorney has not carried the burden of

demonstrating that the privilege applies.”

[W]e all know what a jury consultant does. He doesn’t

come down and tell you in the case of Expert Z you

have to blah, blah and you have to be careful of the

countervailing opinion in B versus J. He or she says

come on now, you’ve got to spruce up. You have to look

this way and you never know what the jury may be

composed of demographically. . . .

It’s not designed to augment. It’s not designed to

substitute for legal advice. That’s not legal advice.

That’s the cosmetic applied . . . .

(quoting Blumenthal v. Drudge, 186 F.R.D. 236, 243 (D.D.C.

1999)). Ernst & Young now appeals. We will reverse.4

II.

The District Court had jurisdiction under 28 U.S.C.

§ 1331. We have jurisdiction under 28 U.S.C. § 1291.5

Although we generally review the decision to grant a motion

to compel for abuse of discretion, our review is plenary

where the decision was based upon the interpretation of a

legal precept. Armstrong v. Dwyer, 155 F.3d 211, 214 (3d

Cir. 1998).

4. Because we resolve this dispute on the federal work product doctrine

issue, we do not reach the attorney-client privilege issue.

5. We have jurisdiction under the collateral order doctrine of 28 U.S.C.

§ 1291 because the District Court Order compels the disclosure of

materials that Ernst & Young contends are protected by the work

product doctrine and attorney-client privilege. See Montgomery County v.

Microvote Corp., 175 F.3d 296, 300 (3d Cir. 1999) (stating that we follow

the “bright-line rule permitting appeals from discovery orders requiring

the disclosure of content putatively privileged by the attorney-client and

work-product privileges”).

7

III.

A.

The work product doctrine is governed by a uniform

federal standard set forth in Fed. R. Civ. P. 26(b)(3)6 and

“shelters the mental processes of the attorney, providing a

privileged area within which he can analyze and prepare his

client’s case.” United States v. Nobles, 422 U.S. 225, 238 &

n.11 (1975); United Coal Cos. v. Powell Constr. Co., 839

F.2d 958, 966 (3d Cir. 1988). Under Rule 26(b)(3), the work

product doctrine applies to “documents and tangible things

. . . prepared in anticipation of litigation or for trial by or for

another party or by or for that other party’s representative

(including the other party’s attorney, consultant, surety,

indemnitor, insurer, or agent) . . . .” Fed. R. Civ. P. 26(b)(3);

see also 8 Charles Alan Wright & Arthur R. Miller, Federal

Practice and Procedure § 2024, at 359 (2d ed. 1994) (“[I]t is

clear that all documents and tangible things prepared by or

for the attorney of the party from whom discovery is sought

are within the qualified immunity given to work product, so

long as they were prepared in anticipation of litigation or

preparation for trial.”). The Supreme Court articulated the

essential nature of the doctrine in Hickman v. Taylor, 329

U.S. 495, 510-11 (1947):

In performing his various duties, it is essential that

6. Fed. R. Civ. P. 26(b)(3) provides, in relevant part:

Subject to the provisions of subdivision (b)(4) of this rule, a party

may obtain discovery of documents and tangible things otherwise

discoverable under subdivision (b)(1) of this rule and prepared in

anticipation of litigation or for trial by or for another party or by or

for that other party’s representative (including the other party’s

attorney, consultant, surety, indemnitor, insurer, or agent) only

upon a showing that the party seeking discovery has substantial

need of the materials in the preparation of the party’s case and that

the party is unable without undue hardship to obtain the

substantial equivalent of the materials by other means. In ordering

discovery of such materials when the required showing has been

made, the court shall protect against disclosure of the mental

impressions, conclusions, opinions, or legal theories of an attorney

or other representative of a party concerning the litigation.

8

a lawyer work with a certain degree of privacy, free

from unnecessary intrusion by opposing parties and

their counsel. Proper preparation of a client’s case

demands that he assemble information, sift what he

considers to be the relevant from the irrelevant facts,

prepare his legal theories and plan his strategy without

undue and needless interference. That is the historical

and the necessary way in which lawyers act within the

framework of our system of jurisprudence to promote

justice and to protect their clients’ interests. This work

is reflected, of course, in interviews, statements,

memoranda, correspondences, briefs, mental

impressions, personal belief, and countless other

tangible and intangible ways—aptly though roughly

termed . . . as the “work product of the lawyer.” Were

such materials open to opposing counsel on mere

demand, much of what is now put down in writing

would remain unwritten. An attorney’s thoughts,

heretofore inviolate, would not be his own. Inefficiency,

unfairness and sharp practices would inevitably

develop in the giving of legal advice and in the

preparation of cases for trial.

It is clear from Hickman that work product protection

extends to both tangible and intangible work product. Id.;

Federal Practice and Procedure § 2024, at 337 (“Rule

26(b)(3) itself provides protection only for documents and

tangible things and . . . does not bar discovery of facts a

party may have learned from documents that are not

themselves discoverable. Nonetheless, Hickman v. Taylor

continues to furnish protection for work product within its

definition that is not embodied in tangible form . . . .

Indeed, since intangible work product includes thoughts

and recollections of counsel, it is often eligible for the

special protection accorded opinion work product.”).

Furthermore, this protection extends beyond materials

prepared by an attorney to include materials prepared by

an attorney’s agents and consultants. As the Supreme

Court explained, “[A]ttorneys often must rely on the

assistance of investigators and other agents in the

compilation of materials in preparation for trial. It is

therefore necessary that the [work product] doctrine protect

materials prepared by agents of the attorney as well as

9

those prepared by the attorney himself.” Nobles, 422 U.S. at

238-39; see also Federal Practice and Procedure § 2024, at

361 (“[I]f statements of witnesses are to be protected from

discovery at all, the protection should not depend on who

obtained the statement. Accordingly the 1970 amendment

expressly extends protection to documents prepared by or

for a representative of a party, including his agent.”).

Similarly, in explaining Rule 26(b)(3), the Advisory

Committee on Civil Rules said:

Subdivision (b)(3) reflects the trend of the cases by

requiring a special showing, not merely as to materials

prepared by an attorney, but also as to materials

prepared in anticipation of litigation or preparation for

trial by or for a party or any representative acting on

his behalf. The rule then goes on to protect against

disclosure the mental impressions, conclusions,

opinions or legal theories concerning the litigation of

an attorney or other representative of a party.

Fed. R. Civ. P. 26, Advisory Comm. Notes, 1970

Amendment.

B.

But the work product doctrine is not an absolute bar to

discovery of materials prepared in anticipation of litigation.

Work product can be produced

upon a showing that the party seeking discovery has

substantial need of the materials in the preparation of

the party’s case and that the party is unable without

undue hardship to obtain the substantial equivalent of

the materials by other means. In ordering discovery of

such materials when the required showing has been

made, the court shall protect against disclosure of the

mental impressions, conclusions, opinions, or legal

theories of an attorney or other representative of a

party concerning the litigation.

Fed. R. Civ. P. 26(b)(3).

Thus, Rule 26(b)(3) provides that, even if the party

seeking discovery of information otherwise protected by the

work product doctrine has made the requisite showing of

10

need and undue hardship, courts must still protect against

the disclosure of mental impressions, conclusions,

opinions, or legal theories of an attorney and his agents.

Fed. R. Civ. P. 26(b)(3). Stated differently, Rule 26(b)(3)

establishes two tiers of protection: first, work prepared in

anticipation of litigation by an attorney or his agent is

discoverable only upon a showing of need and hardship;

second, “core” or “opinion” work product that encompasses

the “mental impressions, conclusions, opinion, or legal

theories of an attorney or other representative of a party

concerning the litigation” is “generally afforded near

absolute protection from discovery.” Id.; In re Ford Motor

Co., 110 F.3d 954, 962 n.7 (3d Cir. 1997). Thus, core or

opinion work product receives greater protection than

ordinary work product and is discoverable only upon a

showing of rare and exceptional circumstances.

Courts have wrestled with the idea of affording opinion

work product absolute immunity from discovery. Federal

Practice and Procedure § 2026, at 400; 6 Moore’s Federal

Practice § 26.70[5][e], at 26-224 (Mathew Bender 3d ed.). In

1946, the Advisory Committee on Civil Rules proposed a

rule that would create absolute protection against discovery

into information at the core of the work product doctrine,

but the Supreme Court declined to adopt it. Federal

Practice and Procedure § 2026, at 400.

In Upjohn v. United States, 449 U.S. 383 (1981), the

Supreme Court declined to establish a rule for discovery of

core or opinion work product, noting that “some courts

have concluded that no showing of necessity can overcome

protection of work product which is based on oral

statements from witnesses” and that other courts in

“declining to adopt an absolute rule have nonetheless

recognized that such material is entitled to special

protection.” Id. at 401-402. Although the Supreme Court

refused to “decide the issue at this time,” the Court took an

expansive approach to the work product doctrine,

explaining that “such work product cannot be disclosed

simply on a showing of substantial need and inability to

obtain the equivalent without undue hardship. While we

are not prepared at this juncture to say that such material

is always protected by the work-product rule, we think a far

11

stronger showing of necessity and unavailability . . . would

be necessary to compel disclosure.” Id.

This holding is consistent with the language of Rule

26(b)(3) which provides that a court, in ordering discovery

once a showing of need and hardship has been made, “shall

protect against disclosure of the mental impressions,

conclusions, opinions, or legal theories of an attorney or

other representative of a party.” Fed. R. Civ. P. 26(b)(3).

Accordingly, we have held that opinion work product

protection is not absolute, but requires a heightened

showing of extraordinary circumstances. See Sporck v. Peil,

759 F.2d 312, 316 (3d Cir. 1985) (“Opinion work product

. . . is accorded an almost absolute protection from

discovery because any slight factual content that such

items may have is generally outweighed by the adversary

system’s interest in maintaining the privacy of an attorney’s

thought processes and in ensuring that each side relies on

its own wit in preparing their respective cases.”); see also

Rhone-Poulenc Rorer Inc. v. Home Indemnity Co., 32 F.3d

851, 866 (3d Cir. 1994) (“[E]fforts to obtain disclosure of

opinion work product should be evaluated with particular

care.”); In re Grand Jury Investigation, 599 F.2d 1224, 1231

(3d Cir. 1979) (“Memoranda summarizing oral interviews

. . . may indirectly reveal the attorney’s mental processes,

his opinion work product. . . . [S]pecial considerations . . .

must shape any ruling on the discoverability of interview

memoranda like those at issue in this case. The result, we

believe, is exactly that contemplated in Hickman; such

documents will be discoverable only in a ‘rare situation.’ ”);

accord In re San Juan Dupont Plaza Hotel Fire Litig., 859

F.2d 1007, 1015 (1st Cir. 1988) (“Courts typically afford

ordinary work product only a qualified immunity, subject to

a showing of substantial need and hardship, while

requiring a hardier showing to justify the production of

opinion work product.”); In re Sealed Case, 856 F.2d 268,

273 (D.C. Cir. 1988) (“As the work product sought here is

based on oral statements from witnesses, a far stronger

showing is required than the ‘substantial need’ and

‘without undue hardship’ standard applicable to discovery

of work-product protected documents and other tangible

things.”).

12

Nevertheless, Cendant argues that Rule 26(b)(3)’s work

product protection is superseded by Rule 26(b)(4)(B), which

governs discovery of “facts known or opinions held by an

expert who has been retained or specially employed by

another party in anticipation of litigation or preparation for

trial and who is not expected to be called as a witness at

trial.” Fed. R. Civ. P. 26(b)(4)(B).7 But Rule 26(b)(3) provides

work product protection independently of Rule 26(b)(4)(B).

In Bogosian v. Gulf Oil Corp., 738 F.2d 587 (3d Cir. 1984),

we held attorney opinion work product shown to experts in

an antitrust case was not discoverable. We explained:

[T]he first sentence [of Rule 26(b)(3)] requires protection

against disclosure of the mental impressions,

conclusions, opinions, or legal theories of an attorney

or other representative of a party. The proviso

introduces the first sentence of Rule 26(b)(3) (“Subject

to the provisions of subdivision (b)(4) of this rule, a party

may obtain discovery of documents . . . prepared in

anticipation of litigation or for trial . . .”) and signifies

that trial preparation material prepared by an expert is

also subject to discovery, but only under the special

requirements pertaining to expert discovery set forth in

Rule 26(b)(4). The proviso does not limit the second

sentence of Rule 26(b)(3) restricting disclosure of work

product containing “mental impressions” and “legal

theories.” Thus, it does not support the district court’s

conclusion that Rule 26(b)(3), protecting this category

of attorney’s work product, “must give way” to Rule

7. Rule 24(b)(4)(B) precludes discovery against an expert informally

consulted in preparation for trial. Fed. R. Civ. P. 26(b)(4), Advisory

Comm. Notes, 1970 Amendment. Under this rule, a party “may discover

facts known or opinions held by an expert who has been retained or

specially employed . . . upon a showing of exceptional circumstances

under which it is impracticable for the party seeking discovery to obtain

facts or opinions on the same subject by other means.” Fed. R. Civ. P.

26(b)(4)(B). Once such a showing is made, a court, before ordering

discovery, must analyze the policy considerations underlying the rule to

determine whether they outweigh the exceptional circumstances. Moore’s

Federal Practice § 26.80[2], at 26-236.5 (citing the policy consideration of

“allowing counsel to obtain the expert advice they need to properly

evaluate and present their clients’ positions without fear that every

consultation with an expert may yield grist for the discovery mill”).

13

26(b)(4), authorizing discovery relating to expert

witnesses.

Id. at 594.

C.

Litigation consultants retained to aid in witness

preparation may qualify as non-attorneys who are protected

by the work product doctrine. See, e.g., Ford Motor Co., 110

F.3d at 967 (the work product doctrine protected materials

prepared by an in-house technical assistant for meetings to

be attended by an outside technical consulting firm and

lawyers regarding an issue in a product liability suit);

Martin v. Bally’s Park Place Hotel & Casino, 983 F.2d 1252

(3d Cir. 1993) (a technical report prepared by a consulting

firm was protected from discovery because the document

was prepared in anticipation of litigation by a party’s

representative (a consultant) for that party’s representative

(the company’s in-house lawyer)); United Coal Cos. v. Powell

Constr. Co., 839 F.2d 958, 966 (3d Cir. 1988) (the work

product doctrine extended beyond materials reflecting an

attorney’s mental impressions to encompass materials

prepared in anticipation of litigation by a party’s insurer);

Sprague v. Director, Office of Workers’ Compensation

Programs, 688 F.2d 862, 869-870 (1st Cir. 1982) (opinion

letter setting forth expert’s medical opinion was protected

because it was prepared to advise counsel); see also Dennis

P. Stolle et al., The Perceived Fairness of the Psychologist

Trial Consultant, 20 Law & Psychol. Rev. 139, 169 (1996)

(“Modern trial consulting methods typically consist of many

techniques such as witness preparation, and mock trials,

that clearly could not be framed as falling outside of the

work product rule.”). Moreover, a litigation consultant’s

advice that is based on information disclosed during private

communications between a client, his attorney, and a

litigation consultant may be considered “opinion” work

product which requires a showing of exceptional

circumstances in order for it to be discoverable. Duplan

Corp. v. Deering Milliken, Inc., 540 F.2d 1215, 1219 (4th

Cir. 1976) (“[O]pinion work product immunity now applies

equally to lawyers and non-lawyers alike.”); Stanley D.

Davis & Thomas D. Beisecker, Discovering Trial Consultant

14

Work Product: A New Way to Borrow an Adversary’s Wits?,

17 Am. J. Trial Advoc. 581, 619 (1994) (“[T]he attorney’s

discussions of case theory and the consultant’s suggestions

thereon should qualify for the higher protection accorded

mental impressions.”).

D.

Cendant concedes “that the work product doctrine

extends to materials compiled by a non-attorney, who, as

the ‘agent’ of a party or a party’s attorney, assists the

attorney in trial preparation,” and further, “that the

doctrine also protects the ‘intangible’ work product of an

attorney, such as testimony that would reveal counsel’s

mental impressions or trial strategy.” (Appellee Br. at 26).

But Cendant contends that a non-attorney’s advice

regarding witness testimony does not fall under the work

product doctrine. Cendant asserts that the jury is entitled

to know the consultant’s communications with the witness,

in the same way it is entitled to know and assess all other

factors that may have informed the witness’s testimony and

may affect credibility. The District Court held that the work

product doctrine should be cabined to lawyers and be

strictly limited when applied to a lawyer’s agent. The

District Court said:

[W]ork product deals with things legal, things with

preparation, evaluation, strategies, tactics and it is at

first limited to lawyers and then will strictly or rigidly

expand it, or restrictively expand it to include people

such as paralegals and maybe assistants to lawyers

because of their intimacy with the lawyer.

The privilege is really that of the lawyers. . . .

because he or she has a right to tell his or her client

certain things. But, when we go beyond that into a

person who is not dealing with the law but telling

someone how to prepare it as Blumenthal v. Drudge

indicates, one of the questions where the lawyer was

telling this witness what to do, it’s a question what this

jury consultant [is] more or less telling that person

what to do.

15

As noted, in reaching its decision, the District Court

relied on Blumenthal, which held communications between

a client and a political consultant were not protected by the

attorney-client privilege when no attorney was involved in

the communication. 186 F.R.D. 236. But the Blumenthal

court never considered the work product doctrine because

it was never raised. Id. at 243 n.9. The District Court’s

reliance on Blumenthal therefore was misplaced because

“the work product doctrine is distinct from and broader

than the attorney-client privilege.” Nobles, 422 U.S. at 238

n.11.

E.

As noted, the District Court held that the work product

doctrine should be cabined to lawyers and be strictly

limited when applied to a lawyer’s agent. The District Court

said:

I admit that if an attorney had prepped his witness like

I think all of us who are single or small firms have

done without the need for a jury consultant X, you’ve

got to shave, you’ve got to do this, you got to put this

question, you’ve got to put that answer that way and

all of that, I’m quite sure anyone in his right mind

would consider that part of work product and attorney-

client activity and no one even tries to find out what

went on.

But my problem is when you don’t bring in a lawyer,

you bring in someone who is not dealing with the law

but dealing with the manner in which things are

presented, then I think it may be a little bit much to

expect that to be countenanced . . . .

After the District Court made this determination,

Cendant conceded that it was not accusing Ernst & Young

of fabricating false testimony in the meetings between

Wood, his attorney, and Dr. McGraw.8 But Cendant argued

8. The protection afforded opinion or core work product may be breached

when there is a charge of falsified testimony. See In re Impounded Case,

879 F.2d 1211, 1213-14 (3d Cir. 1989) (noting that the attorney-client

16

that, as a result of the District Court’s conclusion that the

work product doctrine did not extend to meetings with Dr.

McGraw, they were entitled to inquire into the content of

those meetings. Cendant said “We are not here now

deciding what they did or accusing them of anything. But

once it is not privileged . . . once that veil is no longer

there, we are entitled . . . to show anybody, judge or jury,

what went on as they practiced with the witness.” (Tr. Dec.

13, 2002).

We disagree and hold that the work product of Dr.

McGraw is privileged and subject to only limited discovery.

Ernst & Young contends that questioning into the content

of advice Dr. McGraw gave to Wood during a private

consultation with Wood’s attorney clearly calls for attorney

work product protection. In retaining Dr. McGraw, Ernst &

Young expected all counsel’s communications with him to

be confidential and protected from discovery. Had Ernst &

Young or its counsel anticipated that counsel’s

communications with this litigation consultant would be

subject to discovery, Ernst & Young asserts Dr. McGraw

would not have been retained or the nature and extent of

the matters counsel communicated to him would have been

severely curtailed.

Ernst & Young asserts that, based upon the expectation

of confidentiality, Dr. McGraw participated in frank and

open discussions with Ernst & Young’s counsel regarding

counsel’s view of the important facts of the case, the

contentions of the parties, and Ernst & Young’s trial

themes, theories, and strategies. These discussions were at

all times understood and intended to be confidential by all

participants. Furthermore, in connection with these

discussions, Dr. McGraw was provided with documents

prepared by Ernst & Young’s counsel reflecting counsel’s

mental impressions, opinions, conclusions, and legal

privilege, like the work product doctrine, does not limit discovery into

matters where a law firm allegedly acted criminally); In re Doe, 662 F.2d

1073 (4th Cir. 1981) (affirming a district court order that allowed

disclosure of opinion work product where the government presented a

prima facie case of subordination of perjury by the attorney during his

representation of clients in criminal trials).

17

theories. In addition, Dr. McGraw’s notes of these

discussions may reflect the mental impressions, opinions,

conclusions, and legal theories of Ernst & Young’s counsel.

Discovery of this information goes to the core of the work

product doctrine and, therefore, is discoverable only upon

a showing of extraordinary circumstances. Cendant has

failed to cite any extraordinary circumstances that would

justify discovery of the information sought. Thus, the

private communications between Wood, Dr. McGraw, and

counsel merit protection under the work product doctrine,

as they reflect and implicate Ernst & Young’s legal strategy

regarding a deposition taken as part of this litigation.

IV.

Compelled disclosure of the substance of conversations

between Wood, his counsel, and Dr. McGraw would require

disclosure of communications protected by the work

product doctrine. The communications took place during a

consultation that focused on those issues that counsel and

Dr. McGraw perceived to be central to the case. Moreover,

the communications were intended to be confidential and

made in anticipation of litigation. As such, the

communications are at the core of the work product

doctrine and are only discoverable upon a showing of rare

and exceptional circumstances. The issue on appeal is

whether the District Court erred in concluding that

communications between Dr. McGraw, Wood, and counsel

are not protected from discovery by any privilege or

immunity.

We hold that the District Court erred and that the

Special Discovery Master’s ruling is essentially correct.

These communications merit work product protection. The

Special Discovery Master properly found that no exceptional

circumstances were cited to justify the exploration sought

by Cendant. Nonetheless, we believe Wood may be asked

whether his anticipated testimony was practiced or

rehearsed. But this inquiry should be circumscribed. As

with all discovery matters, we leave much to the sound

discretion of the District Court.

18

For the reasons outlined, we will reverse the order of the

District Court and remand for proceedings consistent with

this opinion.

19

GARTH, Circuit Judge, concurring.

I concur fully with the analysis and holding of the Court’s

opinion authored by Chief Judge Scirica. There is no

question but that Federal Rules of Civil Procedure 26(b)(3)

and (4) do not permit the discovery of Dr. McGraw which

Cendant sought.

I am also in accord with Chief Judge Scirica’s holding

that the Special Discovery Master’s ruling and directions as

to limited discovery are correct. In my view, that ruling and

those directions should govern the further discovery

proceedings.

I write separately, however, for I am also of the opinion

that the discovery which was sought in the instant context

was precluded as well by the attorney-client privilege—an

issue not reached by Chief Judge Scirica in his opinion. See

Maj. Op. at 6 n.5. The parties extensively briefed, and

presented oral argument on, the applicability of the

attorney-client privilege.

While I recognize that in certain respects the attorney-

client privilege has more narrow parameters than the work

product doctrine, see, e.g., United States v. Nobles, 422

U.S. 225, 238 n.11 (1975), I nevertheless am satisfied that

the attorney-client privilege was operative when Dr.

McGraw, the client Wood, and E&Y’s counsel were engaged

in contemporaneous and simultaneous discussions

concerning the instant litigation. As counsel for E&Y stated

in its brief, “the District Court’s attempt to ‘carve out’

allegedly non-privileged ‘two-way’ communications between

a client and a trial consultant during a ‘three-way’ meeting

among counsel, the client, and the trial consultant is . . .

impossible to execute.” (E&Y Br. at 15.) That view was

expressed even more forcefully in Stanley D. Davis &

Thomas D. Beisecker, Discovering Trial Consultant Work

Product: A New Way to Borrow an Adversary’s Wits?, 17

Am. J. Trial Advoc. 581, 626-27 (1994) (explaining that

communications between a client practicing testimony and

a consultant are not discoverable because “[i]ntertwined

with the client’s responses to mock questions, and the

consultant’s reactions thereto, will inevitably be client

communications . . . which are . . . intended by the client

20

to be a confidential part of the relationship with counsel.

Extirpating the comments of the consultant from this

context may well be impossible without bringing along

these communications and thus frustrating the purpose of

the attorney-client privilege.”).

The attorney-client privilege operates to protect from

disclosure communications among the client, counsel, and

in circumstances such as are present here, a third party

(here, Dr. McGraw) who was assisting E&Y’s counsel in the

formulation of legal advice. Thus, I am persuaded that in

addition to the work product privilege, the attorney-client

privilege also protected communications voiced at the

meetings of Wood’s counsel and Dr. McGraw. As I cannot

conceive of how this three-way interchange of views among

these three participants at their strategy conferences could

be dissected or parsed, leaving only E&Y’s questions and

advice, I would also hold that the attorney-client privilege

was implicated.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit