A federal judge from the Southern District of New York has denied the NCAA’s assertion that certain documents prepared by Deloitte & Touche are protected by the attorney-client privilege.
Specifically, the court found in the antitrust case involving the Metropolitan Intercollegiate Basketball Association and the NCAA that Indiana privilege law does not apply in a federal case and that, even if it did, the documents in question “are most accurately characterized as management advisory documents,” which “do not implicate any of the specialized knowledge or skills associated with accounting.”
Since the late 1930’s, MIBA, which is owned by New York University, Fordham University, Wagner College, St. Johns University and Manhattan College, has conducted the Postseason NIT. While initially the NIT was on even footing with the NCAA’s post-season tournament in terms of stature, its position began to erode in the 1980s when the NCAA rapidly expanded the field of participating teams and revised the Commitment to Participate Rule. The latter required NCAA member schools that were offered the opportunity to play in the NCAA’s post-season tournament to play in that tournament instead of the NIT
Filed in 2002, MIBA’s suit alleged that some of the NCAA’s rules are unreasonable restraints of trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. In addition, the plaintiff claimed that the NCAA uses the rules affecting postseason competition to achieve or attempt to gain monopoly power in the market for Division I men’s college basketball tournaments, in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. The complaint also asserted a common law claim of tortuous interference with contract.
The litigation has survived numerous pre-trial motions, one of the last being the instant discovery battle.
In considering the plaintiff’s motion to compel, the court noted that since the case arises under the federal antitrust law, state laws do not provide the rules of decision.
“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.”
The court added that “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 any professional service as a certified public accountant, a public accountant, or an accounting practitioner.’
“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.”
MIBA v . NCAA et al.; S.D.N.Y.; 01 Civ. 0071 (MGC) (HBP); 7/26/05
Attorneys of Record: (for plaintiff) Jeffrey L. Kessler, David G. Feher, Julie D. Wood and David Schepard of Dewey Ballantine LLP, in NewYork, N.Y.; Bruce S. Meyer and Renee M. Fishman of Weil, Gotshal & Manges LLP, in New York, NY. (for defendants) Gregory L. Curtner, Kimberly K. Kefalas, Atleen Kaur and Eric McLand of Miller, Canfield, Paddock & Stone, P.L.C., in New York, NY.