Opinion
No. 01 Civ. 0071 (MGC) (HBP).
July 22, 2005
MEMORANDUM OPINION AND ORDER
Plaintiff's letter application to compel production of the "Deloitte Touche Documents" is granted.
Having reviewed the Deloitte Touche Documents in camera, I agree with plaintiff that they are responsive to plaintiff's document requests 7 and 27 and that they are sufficiently relevant to be discoverable.
Defendants reliance on the Indiana statutory accountant-client privilege is misplaced. This case arises under the federal antitrust laws. Since state laws do not provide the rules of decision, issues of privilege must be resolved under common law principles. von Bulow v. von Bulow, 811 F.2d 136, 141 (2d Cir. 1987); Lego v. Stratos Lightwave, Inc., 224 F.R.D. 576, 578 (S.D.N.Y. 2004). At common law there is no accountant-client privilege. United States v. Arthur Young Co., 465 U.S. 805, 817-19 (1984); In re Grand Jury Proceedings, 220 F.3d 568, 571 (7th Cir. 2000); see United States v. Adlman, 68 F.3d 1495, 1499-1500 (2d Cir. 1995). The federal courts in Indiana have declined to apply the Indiana statutory accountant-client privilege in federal question cases for precisely this reason. Dudley v. Ski World, Inc., No. IP87-1025C, 1989 WL 73207 at *1 (S.D. Ind. Jan. 25, 1989);Wooten v. Loshbough, 649 F. Supp. 531, 536-37 (N.D. Ind. 1986).
The parties do not explain why Indiana law has any bearing at all in this case. Since neither party raises an issue concerning the connection between Indiana and this litigation, I assume there is sufficient connection to at least suggest that Indiana law is applicable.
Finally, even if the privilege were applicable, the Deloitte Touche Documents are not within the scope of the privilege. Indiana Code § 25-2.1-14-1 2 provide:
Sec. 1. A certified public accountant, a public accountant, an accounting practitioner, or any employee is not required to divulge information relative to and in connection with any professional service as a certified public accountant, a public accountant, or an accounting practitioner.
Sec. 2. The information derived from or as the result of professional services is confidential and privileged. However, this section does not prohibit a certified public accountant, a public accountant, or an accounting practitioner from disclosing any data required to be disclosed by the standards of the profession:
(1) in rendering an opinion on the presentation of financial statements;
(2) in ethical investigations conducted by private professional organizations;
(3) in the course of quality reviews; or
(4) in making disclosure where the financial statements or the professional services of an accountant are contested.
Contrary to defendant's argument, these statutes do not provide a broad privilege for anything an accountant does. The privilege is limited to information "relative to and in connection with anyprofessional service as a certified public accountant, a public accountant, or an accounting practitioner." Ind. Code § 25-2.1-14-1 (emphasis added). "Professional" in defined in Indiana Code § 25-2.1-1-10.3 as follows:
Sec. 10.3. "Professional" means the following:
(1) For a certified public accountant, arising out of or related to the specialized knowledge or skills associated with certified public accountants.
(2) For a public accountant, arising out of or related to the specialized knowledge or skills associated with public accountants.
(3) For an accounting practitioner, arising out of or related to the specialized knowledge or skills associated with accounting practitioners.
The Deloitte Touche Documents are most accurately characterized as management advisory documents; they simply do not implicate any of the specialized knowledge or skills associated with accounting. The preparation of the Deloitte Touche Documents does not, therefore, constitute the rendition of "professional" services within the meaning of the statute. Although defendant correctly points out that Indiana defines the "practice of accountancy" to include "management advisory, financial advisory [and] consulting services," Indiana Code § 25-2.1-1-10(a)(2), the scope of the privilege is defined in terms "professional services" and not the "practice of accountancy." Thus, the broad definition Indiana ascribes to the "practice of accountancy" is immaterial.
Finally, defendants have also failed to make any showing that an accountant prepared the Deloitte Touche Documents. These document appear to be business strategy documents, and, based on their content, there is no reason to believe that their author(s) had any knowledge of accounting.
Defendant is ordered to produce the Deloitte Touche Documents no later than 5:00 p.m. on Monday, July 25, 2005.
SO ORDERED.