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Daniel J. Schlicksup v. Caterpillar

August 19, 2011

DANIEL J. SCHLICKSUP, PLAINTIFF,
v.
CATERPILLAR, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Byron G. Cudmore, U.S. Magistrate Judge:

E-FILED Friday, 19 August, 2011 11:24:38 AM

Clerk, U.S. District Court, ILCD

ORDER

On May 24, 2011, this Court entered an order deferring a ruling on Defendant Caterpillar, Inc.'s motions to quash subpoenas directed to Howrey, LLP, Ernst and Young, LLP, and PricewaterhouseCoopers, LLP. Caterpillar subsequently filed privilege logs and the documents it seeks to withhold for an in camera review. On July 13, 2011, this Court ruled on Caterpillar's motion to quash the subpoena to Howrey, LLP.

Now before the Court are Caterpillar's privilege log and documents relating to the motion to quash the subpoena to Ernst and Young, LLP ("E&Y"). For the reasons below, the motion will be granted in part and denied in part. The Court will rule on the motion to quash the PricewaterhouseCoopers' documents in a separate order.

Background

The Court assumes familiarity with its May 24, 2011 order. As Plaintiff's claims relate to the subpoena to E&Y, Plaintiff alleges that Caterpillar paid E&Y large sums without required supporting documentation. Plaintiff also alleges that E&Y provided services in relation to Caterpillar's "Luxembourg/Bermuda Tax Structure" (also known as the "Financing Center Transaction"), which Plaintiff maintains was part of an unlawful scheme to avoid over $2 billion in federal income tax.

Plaintiff's subpoena to E&Y seeks:

* invoices and billing documents sent to Caterpillar in 2005 and 2006

* "Any and all documents written to provide supporting opinions for the Caterpillar Inc. Luxembourg/Bermuda tax structures."

*Correspondence and communications with Defendant Beran (Caterpillar's Tax Director and Assistant Treasurer) during 2005 and 2006 (d/e 69-1, p. 2).

On May 24, 2011, the Court directed Caterpillar to provide:

a) a separate, detailed privilege log setting forth the documents withheld or redacted . . . ; b) the documents identified on each privilege log for the court's in camera inspection; and, (c) any engagement letter between Caterpillar, Inc., and . . . E&Y . . .. (d/e 93, p. 20). Caterpillar has complied with that directive and this Court has conducted an in camera review of each E&Y document submitted.

A general description of the financing center transaction provides helpful context. Defendant Beran, Caterpillar's Tax Director and Assistant Treasurer, avers that, "[b]ecause of the accelerating growth of CAT's international operations, [he] recognized that it would be necessary to put in place a financing center ("Financing Center Transaction") that would facilitate the ability to efficiently finance this future growth throughout the world." (Beran Aff. ΒΆ 15, d/e 69-2)." He avers that time was of the essence in order to maximize ...


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