Protective Orders Granted in Conservation Easement Cases

GREEN VALLEY INVESTORS, LLC, BOBBY A. BRANCH, TAX MATTERS PARTNER, ET. AL.
Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

United States Tax Court
Washington, D.C. 20217

ORDER

On December 1, 2021 petitioners, in each these consolidated cases, filed motions for protective orders from this Court. In the motions, petitioners request that this Court enter an order prohibiting respondent's counsel from further contacting individual partners of the donor partnerships, prohibiting respondent's counsel from reviewing any information they received from individual partners, and requires respondent's counsel to provide an accounting of any information they have received from individual partners.

On December 22, 2021, respondent filed an objection to petitioners' motions for protective orders. In the memorandum filed in support of respondent's objection, respondent contends the motions should be denied since petitioners have failed to show good cause for a protective order under Tax Court Rule 103(a) and the motions unnecessarily seek to restrict informal pretrial discovery. More specifically, respondent argues communication with individual partners are appropriate, petitioners have failed to established the information sought is privileged, and the requests are proper, relevant, and do not circumvent the Court's limitation on formal discovery.

While we agree that it is petitioners' burden to establish any privilege claimed over an otherwise discoverable document, the Court finds that respondent's informal discovery to the individual partners of the donor partnerships thwarts the spirit of informal discovery between the parties. The individual partners are not unrelated third parties, and therefore we find it is appropriate for respondent to direct his informal discovery to the petitioners in these consolidated matters, rather than the individual partners of the donor partnerships.

The Court also finds ABA Model Rule 4.2 — governing transactions with persons represented by counsel — to be instructive here.

According to comment [1] to Rule 4.2: “[t]his Rule contributes to the proper functioning of the legal system by protecting a person who has chosen to be represented by a lawyer. . . . and the uncounseled disclosure of information relating to the representation.”

Furthermore, according to comment [7] to Rule 4.2: “[i]n the case of a represented organization, this Rule prohibits communications with a constituent of the organization who supervises, directs or regularly consults with the organization's lawyer concerning the matter or has authority to obligate the organization with respect to the matter or whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability.” Based on our reading of this comment, we find the individual partners to be “constituents” of the relevant organizations, namely the donor partnerships, and therefore direct contact of the individual partners by respondent does not appear to be appropriate under Model Rule 4.2.

Considering the foregoing, and for good cause shown, it is

ORDERED that petitioners' motions for protective orders, filed in each these consolidated cases, are granted. It is further

ORDERED that respondent's counsel is to provide copies of any information received from any individual partners of the donor partnerships, to counsel for petitioners on or before January 28, 2022.

(Signed) Christian N. Weiler
Judge