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provided tax advice, while allowing communications from others to
be disclosed. Rebuttal of the affirmative defense will depend on
the sum of tax advice received on the disputed transactions;
respondent will be prejudiced if only portions (presumably those
not detrimental to petitioners’ position) are available.
To rephrase a conclusion of the Court of Appeals for the
Ninth Circuit, petitioners “cannot invoke the attorney-client
privilege to deny * * * [respondent] access to the very
information that * * * [respondent] must refute in order to
demonstrate” the unreasonableness or nonexistence of the claimed
reliance. Chevron Corp. v. Pennzoil Co., supra at 1163. Doing
so would engender precisely the sort of unfairness that the
implied waiver doctrine was devised to avoid.
We therefore hold that all three elements of the Hearn v.
Rhay, supra, test for implied waiver have been established. We
shall grant respondent’s motion in limine on this basis.
Furthermore, since we reach our ruling based solely on
petitioners’ posture and defenses before this Court, we need not
consider the potential impact of the State court decision in
Fitzsimon v. Good, Wildman, Hegness & Walley, supra, which
addressed only respondent’s alternative grounds of waiver by
disclosure and the crime-fraud exception.
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