Appeal from the Circuit Court of St. Clair County; the Hon.
QUINTEN SPIVEY, Judge, presiding. Affirmed.
This is an appeal from an order of the Circuit Court of St. Clair County, Illinois, holding the defendant, Illinois Power Company, a Corporation, in contempt of court and assessing a fine of $500 for failure to produce for inspection certain records pursuant to an order to produce.
The facts giving rise to the contempt order are as follows: On the 27th day of January, 1963, a gas main or pipe belonging to the defendant, Illinois Power Company and located on Freeburg Avenue in the City of Belleville, Illinois, ruptured causing an explosion in the home of the plaintiffs located at 814 Charles Street in Belleville. After the explosion, employees of the Illinois Power Company excavated at the site of the ruptured gas pipe. These employees examined, inspected and repaired the pipe and photographs were made thereof. The employees of the Illinois Power Company made written reports of the extent of the damage and the nature of the repairs directly to Cornelius T. Ducey, Attorney at Law. The explosion resulted in injuries to the plaintiffs who filed this case against both the Illinois Power Company and the East St. Louis & Interurban Water Company.
The defendant, East St. Louis & Interurban Water Company filed a motion to produce for inspection and copying any report or reports, picture or pictures made by the agents, servants or employees of the Illinois Power Company, a Corporation, relative to a ruptured gas main on Freeburg Avenue in the City of Belleville. It was stated in the motion that this information discovered by the agents, servants and employees at the ruptured site was known only to them and that it was material and pertinent to the issues of the pending suit and, therefore, subject to discovery.
An affidavit in opposition to the above motion was made and filed by Cornelius T. Ducey stating that the law firm of which he is a partner is on a monthly retainer basis with the Illinois Power Company and that he handles its personal injury cases. The affidavit stated that any report or reports made by agents, servants and employees of the Illinois Power Company relative to a rupture in a gas main on Freeburg Avenue in the City of Belleville on or about the 27th day of January, 1963, were made under the direction and supervision of the affiant and all reports with regard to same and investigation of said claim were made to the affiant as attorney for said defendant and that the same are privileged as part of the work product between attorney and client and are not subject to discovery.
It is further alleged, in the affidavit that on January 28, 1963, the day following the accident, the Illinois Power Company was informed that the plaintiffs were represented by an attorney; that all subsequent investigation of the occurrence was conducted under the direction and supervision of Cornelius T. Ducey, Attorney for the Illinois Power Company. The reports of the investigation were made by the agents, servants and employees of Illinois Power Company directly to said attorney.
This case involves an interpretation of Illinois Supreme Court Rule 19-5, which provides the following:
"(1) Matters Privileged against Discovery. All matters which are privileged against disclosure upon the trial are privileged against disclosure through any discovery procedure. Disclosure of memoranda, reports or documents made by or for a party in preparation for trial or any privileged communications between any party or his agent and the attorney for the party shall not be required through any discovery procedure."
We shall first consider whether or not the reports of the employees or agents of the Illinois Power Company to its attorney are "privileged communications between it and its attorney, Cornelius T. Ducey." The fact that the Illinois Power Company is a corporation is immaterial for it is entitled to the same treatment under the law as any other "client" no more and no less. If it seeks legal advice from an attorney, and in that relationship confidentially communicates information relating to the advice sought it may protect itself from disclosure.
A recent case containing a historical and scholarly discussion of the attorney-client privilege merits our detailed consideration. In Radiant Burners v. American Gas Ass'n, 320 F.2d 314 (U.S. Court of Appeals, Seventh Circuit, June 1963) the question presented was whether or not a corporation may claim the attorney-client privilege to bar discovery of documents. The Circuit Court of Appeals permitting filing of briefs as amici curiae by the American Bar Association, Illinois State Bar Association, and American Patent Law Association in support of the contention that the attorney-client privilege applied to corporations as well as to individuals.
The court pointed out that there was a long line of American and English cases in which the attorney-client privilege had been recognized as applied to corporations and cited as authority therefor, United States v. Louisville & Nashville Ry., 236 U.S. 318, 35 S Ct 363. The court observed that law review writers, like the courts, have recognized the availability of the privilege to corporations. They have assumed that the privilege exists in favor of corporations, however, their concern has focused on the scope of the privilege and the problem inherent in its application to corporations.
In the Radiant Burners case, supra, the court stated: "There has been general agreement that the purpose of the privilege is to facilitate the administration of justice by encouraging full disclosure by the client to its attorney. Since the privilege encourages disclosure, rather than destroy the privilege they would have the courts examine each document to determine the applicability of the privilege in light of its underlying rationale. . . . It is our considered judgment that based on history, principle, precedent and public policy the attorney-client privilege in its broad sense is available to corporations, and we so hold."
The interesting thing about the Radiant Burners case is that the District Court had asked the Circuit Court of Appeals to spell out the answer to questions relating to confidentiality in the corporate chain of command and further, the limitations and extent of the privilege. The Circuit Court of Appeals stated that with due respect, they would decline the invitation to decide, in a vacuum, the limitations to be imposed in the application of the privilege by a corporation and that such matters would have to be resolved on a case-by-case basis. It observed that no one is wise enough to decide them in advance. The court in recognizing that there are certain limitations to the privilege or that there could be abuses thereof, stated at page 324 of 320 F.2d: "Certainly, the privilege would never be available to allow a corporation to funnel its papers and documents into the hands of its lawyers for custodial purposes and thereby avoid disclosure. . . . In balancing the competing goals of the free and unobstructed search for the truth with the right and absolute necessity for confidential disclosure of information by the client to its attorney to gain the legal advice sought thereby, the courts will realize that they are not dealing with a blanket privilege. The limitation surrounding any information sought must be determined for each document separately considered on a case-by-case basis."
The affidavit of Cornelius T. Ducey made in opposition to the motion to produce stated that he was a partner of the law firm of Johnson & Ducey and that the firm was on a monthly retainer basis for the Illinois Power Company and that the reports made by the agents and employees of the Illinois Power Company relative to the rupture of the gas main were made under his direction and supervision and to him directly. Mr. Ducey affirmed that the investigation was conducted by him and reports made to him personally as attorney for defendant, Illinois Power Company. There were no counteraffidavits filed and, therefore, the affidavit of Mr. Ducey must be and is accepted as true. What constitutes a "privileged communication between ...