United States District Court, W.D. Texas, Austin Division
SPARKS, UNITED STATES DISTRICT JUDGE
REMEMBERED on this day the Court reviewed the file in the
above-styled cause, and specifically, Defendant Dominique
Colliot's Motion to Compel Disclosure and for Declaration
the Government Has Fully Waived Attorney-Client Privilege
[#31], the Government's Response [#37] in opposition, and
Colliot's Reply [#42] in support. Having reviewed the
documents, the relevant law, the arguments of counsel, and
the case file as a whole, the Court now enters the following
opinion and order.
December 2016, the Government initiated this lawsuit against
Colliot to reduce to judgment and collect outstanding civil
penalties assessed in connection with Colliot's failure
to report a financial interest in a foreign bank account.
Compl. [#1] at 1. Colliot answered in April 2017, and
discovery commenced shortly thereafter. Answer [#22]; Sched.
17, 2017, the Government sent Colliot its Rule 26 initial
disclosures. These disclosures included the unredacted
978-page administrative file on Colliot's case as well as
a privilege log. Upon review, Colliot discovered the
Government had failed to withhold or redact documents as
indicated in its privilege log. Colliot also compared the
file with previous forms he had received from the IRS and
discovered the IRS agent had, on at least one occasion,
copied and pasted portions of an IRS counsel's memoranda
into the forms that were sent to Colliot. Colliot
subsequently notified the Government of the unintentional
disclosure. The Government then provided a revised
administrative file and asked Colliot to delete the
unredacted version the Government had inadvertently produced.
of deleting or returning the unredacted administrative file,
Colliot retained the documents and filed this motion asking
the Court to find the Government has waived attorney-client
privilege as to the entirety of the 978-page administrative
file. This pending motion is now ripe for review.
application of the attorney-client privilege is a question of
fact, to be determined in the light of the purpose of the
privilege and guided by judicial precedents." EEOC
v. BDO USA, LLP, No. 16-20314, 2017 WL 5494237, at *3
(5th Cir. 2017) (internal quotation marks and citations
omitted). Though the party asserting the privilege bears the
burden of proving the privilege applies, "[o]nce the
privilege has been established, the burden shifts to the
other party to prove any applicable exceptions."
Id.The Fifth Circuit pursues two inquiries in
determining whether a claim of privilege has been waived: (1)
whether the person holding the right to claim the privilege
intended to waive it and (2) whether it is fair and
consistent with the assertion of the claim being made to
allow the privilege to be invoked. United States v.
Seale, 600 F.3d 473, 492 (5th Cir. 2010).
asking the Court to find the Government has waived privilege,
Colliot puts forward two arguments. First, Colliot suggests
the IRS revenue agent waived attorney-client privilege when
he inserted language from IRS counsel memos into the IRS
forms sent to Colliot. Second, Colliot argues the Government
cannot assert work product privilege over the documents in
the administrative file because the Government has waived the
right to assert work product privilege and because the
documents were not prepared in anticipation of litigation. It
is unnecessary to reach Colliot's arguments relating to
work product privilege because the Court concludes the
Government did not waive attorney-client privilege as to the
IRS counsel memos.
Waiver by Disclosure
contends IRS Agent Anton Pukhalenko effected a broad waiver
of attorney-client privilege by inserting language from IRS
counsel memos into several IRS forms provided to Colliot. The
IRS form at issue-Form 8 86A-is sometimes provided to
taxpayers in order to explain actions taken or penalties
imposed by the IRS. In connection with assessments of
penalties against Colliot for failure to report his financial
interests in foreign bank accounts, the IRS provided several
such forms to explain why the IRS had imposed the penalties.
In addition to discussing the factual bases for the
imposition of penalties, the forms also contain a "Law
& Analysis" section which lays out the legal basis
for the penalties.
filling out the "Law and Analysis" portion of Form
886A, Agent Pukhalenko sometimes borrowed language from
communications with IRS counsel in order to explain the
assessment of tax penalties imposed upon Colliot. Mot. Compel
[#31] at 3. Agent Pukhalenko did not present the language as
having come from IRS counsel, but instead presented it as his
own attempt to set forth the legal bases underlying the
assessment of the penalties. Colliot contends this use of the
IRS counsel memos constitutes a "voluntary and
substantial disclosure" which "completely ...