ROYZENSHTEYN et al v. ONYX ENTERPRISES CANADA INC. et al

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
STANISLAV ROYZENSHTEYN, et al.,
Plaintiffs,
v.
ONYX ENTERPRISES CANADA INC.,
et al.,
Defendants.
Civ. No. 22-7514 (GC)(JBD)
MEMORANDUM ORDER
Before the Court is a discovery dispute regarding a single email chain and its
attachment, which defendants Onyx Enterprises Canada Inc., Prashant Pathak,
Carey Kurtin, and In Colour Capital Inc. (collectively, the “OEC defendants”) have
withheld in discovery pursuant to the work product doctrine. Plaintiffs challenge
the designation, arguing that the materials do not qualify for work-product
protection. For the reasons set forth below, the Court agrees with plaintiffs and will
direct the OEC defendants to produce the disputed materials in their entirety.
*
The Court assumes the parties’ familiarity with this case and proceeds
directly to the dispute. On their privilege log in connection with jurisdictional
discovery, the OEC defendants identified an email chain from December 10, 2020,
and an attachment to one of the emails. The original email was sent by an
accountant at PricewaterhouseCoopers LLP (“PWC”) to defendant Carey Kurtin and
bore the subject line “Onyx Dividend Options.” The PWC accountant attached a
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document bearing the file name “Cash Modeling – In Colour Group – Sale of Onyx
US.” Carey Kurtin forwarded the email and the attachment to his father,
defendant William Kurtin. According to a declaration executed by the Kurtins’ tax
counsel, Jack Bernstein, Esq., the information that PWC provided in the
attachment had been collected for the purpose of facilitating Bernstein’s legal
advice to the Kurtins regarding the possible tax implications of the merger
transaction that is at the center of this lawsuit. See [Dkt. 325-2] (“Bernstein Decl.”)
¶¶ 4-5.
Plaintiffs objected to the OEC defendants’ designation of the documents as
shielded from discovery and a dispute ensued. The parties filed an initial joint
letter summarizing the dispute on August 7, 2026, [Dkt. 305], and the Court
discussed the dispute with the parties during a video status conference held on
September 14, 2026. The Court directed the parties to continue to meet and confer
further on that issue (and others), but they could not resolve this dispute. Another
letter followed on October 6, 2026 from plaintiffs, [Dkt. 325], and the Court again
discussed the dispute with the parties during a video status conference held on
October 7, 2026. During that conference, the Court directed the OEC defendants to
submit the disputed materials for the Court’s in camera review, and to file a letter
responding to plaintiffs’ letter. The OEC defendants did so, [Dkt. 330], and the
Court has considered the parties’ correspondence and has reviewed the disputed
materials in camera.
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*
The bases on which the OEC defendants have withheld the disputed
materials have shifted over time. The OEC defendants first invoked a privilege
under Canadian law, on the theory that information provided by accountants
related to legal advice qualifies for the solicitor-client privilege. The OEC
defendants then changed course, asserting that the materials are instead privileged
under New Jersey’s attorney-client privilege. Thereafter, the OEC defendants
withdrew their invocation of the attorney-client privilege altogether, landing
instead on the work product doctrine. The OEC defendants now invoke the work
product doctrine—and only the work product doctrine—to shield the materials from
discovery. The Court therefore confines its analysis to the work product doctrine
and offers no view whether the materials qualify for the attorney-client (or any
other) privilege.
*
The work product doctrine derives from the Supreme Court’s decision
in Hickman v. Taylor, 329 U.S. 495 (1947), and is now embodied in Rule 26(b)(3) of
the Federal Rules of Civil Procedure. The rule provides that “[o]rdinarily, 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 agent).” Fed. R.
Civ. P. 26(b)(3)(A).
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At issue in this dispute is the requirement that the materials in question be
prepared “in anticipation of litigation.” The analysis is context-specific, and asks
whether, “in light of the nature of the document and the factual situation in the
particular case, the document can fairly be said to have been prepared or obtained
because of the prospect of litigation.” Martin v. Bally’s Park Place Hotel & Casino,
983 F.2d 1252, 1258 (3d Cir. 1993) (quoting United States v. Rockwell Int’l, 897 F.2d
1255, 1266 (3d Cir. 1990)). To answer that central question, the Court first must
determine whether the preparing party actually—and objectively reasonably—
anticipated litigation. Id. at 1260. If it did, the Court then must determine
whether the materials at issue were prepared because of the anticipated litigation,
or instead whether they were “assembled in the ordinary course of business, or
pursuant to public requirements unrelated to litigation, or for other nonlitigation
purposes.” Id. (quoting Fed. R. Civ. P. 26(b)(3) advisory committee’s note to 1970
amendment). If the materials fall into the latter category, they are not protected:
“Work product prepared in the ordinary course of business is not immune from
discovery.” Holmes v. Pension Plan of Bethlehem Steel Corp., 213 F.3d 124, 138
(3d Cir. 2000); accord Rockwell, 897 F.2d at 1265-66. Although “[l]itigation need
not be imminent” and the invoking party need not intend affirmatively to use or
introduce the document in the litigation, the work product doctrine requires the
invoking party to show that “the primary motivating purpose behind the creation of
the document was to aid in possible future litigation.” Rockwell, 897 F.2d at 1266
(quoting United States v. El Paso Co., 682 F.2d 530, 542-43 (5th Cir. 1982)).
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In short, the proponent must establish a purpose-based connection between the
preparation of the materials at issue and the prospect of litigation.
The “party claiming work-product immunity bears the burden of showing
that the materials in question were prepared in the course of preparation for
possible litigation.” Holmes, 213 F.3d at 138 (internal quotation marks omitted).
*
Applying these standards, the Court rejects the OEC defendants’ claim of
work-product protection over the disputed materials. Although the OEC defendants
have shown that litigation regarding the merger was reasonably anticipated when
the disputed materials were prepared, the OEC defendants have not met their
burden of demonstrating that the materials were prepared because of that or any
other litigation. On this record, the Court concludes that the OEC defendants have
not shown that “the primary motivating purpose behind the creation of the
[disputed] document[s] was to aid in possible future litigation.” Rockwell, 897 F.2d
at 1266 (quoting El Paso, 682 F.2d at 542-43).
The Court accepts Bernstein’s declaration explaining that the information in
the materials had been collected and conveyed at his request for the purpose of
providing legal advice to the Kurtins regarding the tax implications of the merger at
issue in this case. See Bernstein Decl. ¶ 5.1 The Court also agrees that, at the time
1 	The Court again notes that because the OEC defendants have withdrawn
their assertion of the attorney-client privilege, the Court does not consider whether
information collected and conveyed by an accountant for the purpose of facilitating
legal advice qualifies for that separate privilege.
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PWC assembled and conveyed the information in the materials to the Kurtins,
litigation concerning the merger was actually and reasonably anticipated; indeed,
plaintiffs at that time had already sought to block the merger in court. See id. ¶ 4.
Neither counsel’s declaration nor the materials themselves, however, indicate
that the materials were created for any purpose other than to analyze the tax and
accounting implications of the merger in the ordinary course, and to provide the
Kurtins potential tax and accounting options for proceeding. Counsel’s declaration
explains that his representation “included legal advice regarding the possible tax
implications associated with the contemplated business transaction based on, for
example, how the transaction was structured and the amounts and types of
payments that would be generated as a result of the business transaction—all in
the context of the applicable laws governing taxation.” Id. ¶ 5. Counsel continues,
explaining that he “instructed [the Kurtins] to gather certain financial information
from their tax professionals so that [he] could consider that information in providing
advice as to the tax implications, both before and after the transaction closed.” Id.
Counsel and the OEC defendants do not explain, however, how the purposes
behind that ordinary tax advice included aiding the Kurtins in any eventual
litigation. The explanations establish why Bernstein needed the information to
evaluate the merger’s tax consequences, but not why the information was requested
or collected to prepare for or assist with litigation concerning the transaction.
Indeed, the OEC defendants do not identify a single litigation-related reason for
requesting, collecting, assembling, or conveying the information in the disputed
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materials; the OEC defendants identify only the separate purpose of evaluating the
transaction’s tax and accounting consequences.2 The Court’s in camera review of
the disputed materials themselves likewise corroborates the tax-planning purpose
described in Bernstein’s declaration rather than a litigation-aiding purpose that
would qualify the materials for protection under the work product doctrine.3
Tax and accounting advice concerning the ramifications of a complex
transaction like the one at issue here is reasonable and expected in the ordinary
course. Here, the OEC defendants have not explained or shown how the
information in the disputed materials would, or was intended to, aid the Kurtins in
litigation. Instead, the record strongly suggests that the information would have
been collected and the analysis performed in the ordinary course, irrespective of any
litigation. That the merger happened also to be the subject of anticipated litigation
does not alone accord work-product protection to materials addressing the
accounting treatment of the merger. “[T]he mere fact that litigation does eventually
2 	To be clear, the OEC defendants need not establish that the Kurtins intended
actually to use or introduce the materials in litigation. The inquiry instead
concerns whether aiding the Kurtins in litigation was the primary motivating
purpose behind the preparation of the materials.
3 	The OEC defendants observe that materials need not have been prepared for
the specific litigation in which the materials are sought. See [Dkt. 330] at 3; In re
Ford Motor Co., 110 F.3d 954, 967 (3d Cir. 1997), abrogated on other grounds by
Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (2009); JNL Mgmt. LLC v.
Hackensack Univ. Med. Ctr., Civ. No. 18-5221 (SCM), 2019 WL 2315390, at *10
(D.N.J. May 31, 2019). That observation, while correct, misses the point.
The principle that the OEC defendants invoke concerns the identity of the
litigation, not the purpose of preparation. The deficiency here is not the OEC
defendants’ failure to connect the purpose behind the disputed materials to this
case. Rather, it is the OEC defendants’ failure to show that the disputed materials
were prepared for the purpose of aiding some litigation.
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occur, does not by itself bring documents within the ambit of the work-product
doctrine.” Leonen v. Johns-Manville, 135 F.R.D. 94, 97 (D.N.J. 1990).
For these reasons, the Court concludes that the materials in dispute were not
compiled for the primary purpose of aiding litigation. Accordingly, the OEC
defendants cannot shield the materials under the work product doctrine. See, e.g.,
In re Rutter’s Data Sec. Breach Litig., Civ. No. 20-382 (KM), 2021 WL 3733137, at
*2-3 (M.D. Pa. July 22, 2021) (denying work-product protection to an incident report
that would have been prepared regardless whether lawsuits were filed, concluding
in that context that “it cannot be said that the ‘primary motivating factor’ behind
the creation of the [report] was to aid in identifiable or impending litigation”
(quoting Rockwell, 897 F.2d at 1266)); United States v. Microsoft Corp., Civ. No. 15-
102 (RSM), 2020 WL 263577, at *3 (W.D. Wash. Jan. 17, 2020) (rejecting work-
product protection to accounting firm’s tax analysis of transactions later challenged
by the IRS, explaining that Microsoft, having “decid[ed] to pursue these complex
transactions, certainly would have considered the tax consequences of the
transactions and whether they complied with applicable tax provisions,” regardless
whether they were later challenged in court).4
4 	The Court does not hold that tax-planning and accounting materials can
never qualify for work-product protection. Those kinds of materials could qualify,
in appropriate circumstances, where the invoking party establishes that the
primary motivating purpose behind their preparation was to aid litigation.
The Court’s decision here rests on the OEC defendants’ failure to make that
showing on this record.
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*
The Court has considered the parties’ arguments and applicable law and has
reviewed in camera each communication in the email chain, as well as the
attachment to the chain. With the benefit of that review, the Court concludes that
the OEC defendants have not shown that the materials were generated, prepared,
or collected for the primary purpose of aiding litigation. The Court therefore rejects
the OEC defendants’ assertion of the work product doctrine. Because the OEC
defendants assert no other privilege over the disputed materials, they are directed
to produce the email chain and the attachment in their entirety no later than
October 19, 2026.
IT IS SO ORDERED this 15th day of October, 2026,
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