Corporate Securities Law Blog

In Abu Dhabi Commercial Bank v. Morgan Stanley & Co., Inc., 2009 WL 2828018 (S.D.N.Y. Sept. 2, 2009), the United States District Court Southern District of New York (Scheindlin, J.) held recently that First Amendment free speech immunity does not protect credit rating agencies from claims by investors “where a rating agency has disseminated their ratings to a select group of investors rather than to the public at large.” Although this is not the first decision to deny the rating agencies’ First Amendment defense when the opinion is not published to the “public at large,” it is one of the first decisions to reject the defense in the context of  ratings of mortgage backed securities.
 

In United States v. Textron Inc., 2009 WL 2476475 (1st Cir. Aug. 13, 2009), the United States Court of Appeals for the First Circuit held that the attorney work product doctrine only protects documents “prepared for use in possible litigation.” This arguably marks a significant modification of the previous rule in that Circuit and elsewhere that documents that were prepared “because of” possible litigation were protected under the work product doctrine. The consequences of this decision may be far-reaching. At the very least, corporate and tax counsel assisting in the preparation of documents that have both a business purpose and a possible litigation purpose should be aware that, unless those documents were “prepared for use” in litigation, they may be subject to discovery.
 

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