United States District Court, District of Columbia
MICHAEL HARVEY UNITED STATES MAGISTRATE JUDGE.
case was referred to the undersigned for the management of
discovery. Currently ripe is Claimant Pavel Lazarenko’s
motion for protective order relating to his request for a
private letter ruling from the Internal Revenue Service.
After reviewing the entire record,  the Court will deny the
factual background concerning this in rem asset
forfeiture action has been described in multiple opinions by
Judge Friedman. See, e.g., United
States v. All Assets Held at Bank Julius Baer & Co.,
Ltd., 772 F.Supp.2d 191, 194 (D.D.C. 2011). This Court
will not repeat that lengthy history here. The facts that are
pertinent to adjudication of Claimant’s motion are
First Amended Complaint, the United States seeks the
forfeiture of more than $250 million deposited in over twenty
bank accounts located in Guernsey, Antigua and Barbuda,
Switzerland, Lithuania, and Liechtenstein. First Amended
Complaint [Dkt. 20] ¶¶ 1, 5. The government alleges
that the money in those accounts is traceable to a
"variety of acts of fraud, extortion, bribery,
misappropriation, and/or embezzlement" committed by
Claimant, the former Prime Minister of Ukraine, or by his
associates, between 1992 and 1998. Id. ¶¶
6, 8, 10. The United States asserts its right to the funds
pursuant to federal statutes that provide for the forfeiture
to the government of funds traceable, or otherwise related to
or involved in, criminal activity that occurred at least in
part in the United States. Id. ¶ 1.
January 6, 2016, Claimant provided the government with a
declaration stating that he had filed a request for private
letter ruling ("PLR Request") with the Internal
Revenue Service. Mot. at 1. More specifically, he made the
Request to the IRS Associate Chief Counsel (International).
PLR Request at 1. A private letter ruling ("PLR")
is a written determination issued to a taxpayer by the IRS in
response to a taxpayer inquiry regarding his status for tax
purposes or the tax effects of certain transactions. Rev.
Proc. 2016-1 § 2.01, 2016 WL 20933 (Jan. 4, 2016). In a
PLR, the IRS interprets the tax code in reference to the
taxpayer’s specific circumstances. Id. Certain
information must be set forth in a PLR request, including a
complete statement of all facts relating to the transactions
at issue, legal analysis of those facts under the relevant
law, and a statement of supporting and contrary authorities
in relation to the taxpayer’s legal position.
Id. § 7.01(1), (2)(c), (8), (9). The IRS will
issue a PLR in response to a PLR request "when
appropriate in the sound interest of tax
administration." Id. § 2.01.
asserting the work-product doctrine over his PLR Request, has
not produced it to the government. At a hearing on January 7,
2016, the Court set a briefing schedule for Claimant to seek
a protective order prohibiting disclosure of the PLR Request,
and any subsequent PLR, to Plaintiff. Jan. 11, 2016 Order
[Dkt. 544]. At the Court’s request, see Mar.
23, 2016 Minute Order, Claimant filed the PLR Request ex
parte and under seal for the Court’s in
camera review. See PLR Request.
asks the Court to shield both his PLR Request and any
resulting PLR from disclosure to the government in this
matter. Mot. at 4-7. Claimant contends that his PLR Request
qualifies as opinion work product because it was prepared by
his attorneys and analyzes the complex issues surrounding his
potential tax liability. Id. at 5-6. In
Claimant’s view, even the facts stated in the PLR
Request "were included solely to facilitate the
processing of this request for legal advice" and
therefore should be protected as opinion work product as
well. Id. at 5. Further, Claimant argues that his
disclosure of the PLR Request to the IRS does not waive any
work-product protection the Request enjoys because the IRS is
not his adversary. Id. at 6. Finally, Claimant
posits that the government has not demonstrated a
"substantial need" for the PLR Request because it
"is free to conduct its own legal analysis to determine
if [Claimant] was required to file tax returns."
Id. In passing, Claimant also argues that any PLR
issued in response to the Request will not be relevant to
this litigation because it would merely represent the views
of a third party as to Claimant’s tax liabilities.
government opposes Claimant’s motion. Opp. at 1. First,
Plaintiff argues that any work-product claim as to the PLR
Request or the PLR has been waived. Id. at 9-10.
This is because Claimant disclosed his PLR Request to the
IRS, which in turn must make his Request and any subsequent
PLR "‘open to public inspection.’"
Id. at 10 (quoting 26 U.S.C. § 6110(a)).
to Plaintiff, although the IRS does redact some identifying
information in the PLR Request and PLR, the factual
information proffered in the Request would be disclosed.
Id. Additionally, disclosure of the PLR Request to
the IRS waived any work-product protection the document might
have enjoyed because the IRS is Claimant’s potential
adversary in future proceedings relating to his alleged
failure to file tax returns. Id. at 11-12. Moreover,
Plaintiff contends that Claimant has waived work-product
protection by previously offering to permit discovery of his
PLR Request, although Claimant eventually reneged on that
promise. Id. at 14- 15.
Plaintiff claims that even if Claimant’s work-product
protection has not been waived, the PLR Request should be
disclosed because the work-product doctrine does not apply
here. Id. at 15. In this vein, Plaintiff argues that
Claimant did not prepare the PLR Request in anticipation of
litigation but instead in an effort to determine the tax
effects of certain transactions. Id. at 16. Because
Claimant’s PLR Request concerns his tax liabilities
since 1999, which are not at issue in this case, Plaintiff
claims that there should be no work-product protection for
this document. Id. at 16-17. Additionally, even if
the work-product doctrine did encompass the PLR Request,
Plaintiff posits that it has a compelling need for the
document in order to probe Claimant’s relationship to
the defendant in rem assets. Id. at 18-19.
Information regarding Claimant’s relationship to the
assets is scant, and, in Plaintiff’s view, it cannot
readily obtain the information in Claimant’s PLR
Request from other sources. Id.
reply, Claimant contends that litigation over his tax
liability is foreseeable and, as a result, his PLR Request
was prepared in anticipation of litigation. Reply at 2.
Claimant also challenges Plaintiff’s assertion that
disclosure of the PLR Request to the IRS constitutes a waiver
of work-production protection. Id. at 3. Claimant
argues that any potential future adversaries of his at the
IRS are auditors, not the IRS Office of Chief Counsel, to
which the PLR Request was submitted. Id. His limited
disclosure to that branch of the IRS does not mean that all
IRS employees have access to it. Id. Thus, Claimant
posits that he has not disclosed the PLR Request to a
potential adversary. Id. at 3-4. Further, Claimant
reiterates that the PLR Request will be made public only with
redactions of personally identifying information, which would
render it inadmissible against him in this case. Id.
at 4-5. As a result, the mere fact that the PLR or PLR
Request will be publicly disclosed would not rob them of
work-product protection. Id. From Claimant’s
perspective, Plaintiff’s request for his PLR Request is
really an attempt to freeload on Claimant’s
attorneys’ experience with and analysis of the
intricate tax issues underlying this matter. Id. at
6. Finally, Claimant argues that his mere offer to produce
the PLR Request to Plaintiff does not amount to waiver of his
privilege claims. Id. at 8.
Motion for Protective Order
Rule of Civil Procedure Rule 26(c) permits the court to issue
protective orders to protect a party or person from
annoyance, embarrassment, oppression, or undue burden or
expense. Fed.R.Civ.P. 26(c). Determining whether to grant a
protective order is a matter of discretion for the trial
court. See E.E.O.C. v. Nat’l Children’s Ctr.,
Inc., 146 F.3d 1042, 1047 (D.C. Cir. 1998). A protective
order may be granted upon a showing of good cause. See
Alexander v. FBI, 186 F.R.D. 99, 100 (D.D.C. 1998).
"Protective orders are not permanent or immutable and
may be modified to serve important efficiency or fairness
goals." U.S. ex rel. Pogue v. Diabetes Treatment
Ctrs. of Am., No. Civ.99-3298, 01-MS-50(MDL)(RCL), 2004
WL 2009414, at *2 (D.D.C. May 17, 2004). Indeed, "Rule
26(c) is highly flexible, having been designed to accommodate
all relevant interests as they arise." United States
v. Microsoft Corp., 165 F.3d 952, 959 (D.C. Cir. 1999).
The party seeking modification of an existing protective
order bears the burden of showing that good cause exists for
the modification. Pogue, 2004 WL 2009414, at *2.
Public Disclosure of PLR Requests and PLRs
text of a PLR request and any resulting PLR are usually made
open to public inspection. Rev. Proc. 2016-1 § 7.01(11),
2016 WL 20933; 26 U.S.C. § 6110(a). If a taxpayer
desires it, he or she may ask the IRS to keep certain
contents of a PLR request or any resulting PLR confidential.
See Rev. Proc. 2016-1 § 7.01(11), 2016 WL 20933
("The text of letter rulings and determination letters
is open to public inspection under § 6110. . . . To help
the Service make the deletions required by § 6110(c), a
request for a letter ruling or determination letter must be
accompanied by a statement indicating the deletions
desired[.]"). 26 U.S.C. § 6110 governs what parts
of a PLR request or a resulting PLR may be redacted.
See 26 U.S.C. § 6110.
section 6110, both the IRS’s advice to the taxpayer and
the "background file documents, " i.e.,
the taxpayer’s PLR request, are generally treated as
public documents except for specific categories of
information that must be redacted. Id. §
6110(a), (c). The categories of information the IRS must
redact include, among other things, "(1) names,
addresses, and other identifying details of the person to
whom the written determination pertains; . . . and (5)
information the disclosure of which would constitute a
clearly unwarranted invasion of personal privacy."
Id. § 6110(c)(1), (5). Further, IRS regulations
implementing section 6110 provide that the IRS may not
Any other information that would permit a person generally
knowledgeable with respect to the appropriate community to
identify any person. The determination of whether information
would permit identification of a particular person will be
made in view of information available to the public at the
time the written determination or background file document is
made open or subject to inspection and in view of information
that will subsequently become available, provided the
Internal Revenue Service is made aware of such information
and the potential that such information may identify any
person. The "appropriate community" is that group
of persons who would be able to associate a particular person
with a category of transactions one of which is described in
the written determination or background file document. The
appropriate community may vary according to the nature of the
transaction which is the subject of the written
26 C.F.R. § 301.6110-3(a)(1)(ii).
work-product doctrine is codified in Federal Rule of Civil
Procedure 26(b)(3), which provides, in relevant part:
(A) Documents and Tangible Things. Ordinarily, a party may
not discover documents and tangible things that are prepared
in anticipation of litigation or for trial by or for another
party or its representative (including the other
party’s attorney, consultant, surety, indemnitor,
insurer, or ...