Plaintiff asserts that she subsequently learned that Keck, Mahin and Cate's firm client had voluntarily and without any compulsion consented to disclosure to ARDC on July 2, 1992 specific details of a certain business transaction, and for two years defendants purposefully concealed this disclosure from the court. Thus, the protective order was entered without knowing that the firm client has consented to disclosure. Plaintiff further asserted that at the time of the disclosure to ARDC there was no established privilege protecting that disclosure, thereby constituting waiver. Plaintiff filed a motion to compel defendants to disclose the details of the business transaction that a firm client had previously disclosed to ARDC. Plaintiff's motion also sought sanctions.
In response to plaintiff's motion to compel, defendants asserted that plaintiff's attempt to disclose and use her former client's confidences and secrets in pursuit of her personal claims is particularly wrong because her claims caused the disclosures she now wants to use. Defendants further contended that plaintiff cannot avoid the basic ethical obligations to her former firm client by her belated filing of an ARDC charge and by her filing of this charge which prompted the SEC's investigation of her former firm client's transaction.
The court granted plaintiff's motion to compel disclosure and denied the motion for sanctions. The court found that defendants may not raise the defense that plaintiff was terminated for violating ethical policies while simultaneously claiming that all information concerning the firm's normal procedures with respect to past ethics violations are privileged. In citing Lorenz v. Valley Forge Ins. Co., 815 F.2d 1095, 1098 (7th Cir. 1987), the court applied the Seventh Circuit's rationale that if defendants rely on attorney-client communications to support their defense, the attorney-client privilege will be waived as to those communications and others pertaining to the same subject matter.
The court reasoned that defendants and their client cannot claim that information is not a secret" when dissemination of the information is beneficial to them and a "secret" when release of the facts is detrimental to them, citing In re Subpoenas Duces Tecum (D.C. Cir. 1984), 238 U.S. App. D.C. 221, 738 F.2d 1367. In In re Subpoenas Duces Tecum, 238 U.S. App. D.C. 221, 738 F.2d 1367, 1370, the court held a client cannot waive the attorney client privilege in circumstances where disclosure might be beneficial while maintaining it in other circumstances where nondisclosure would be beneficial.
Alternatively, the court in this case, held the information surrounding the business transaction is not a "secret" as defined by the Illinois Rules of Professional Conduct since the client who permitted release of the information in order to fend off the SEC, also permitted Keck, Mahin & Cate to use the information in order for the firm to respond to an ARDC investigation. The court further held that the facts do not meet the necessary threshold of "embarrassing" or "detrimental" under the Rules of Professional Conduct, since the client voluntarily released the information about the business transaction to the SEC and ARDC.
The first issue is whether the court's ruling presents a manifest error of law or fact or whether defendants presented newly discovered evidence to merit granting its motion for reconsideration. Motions for reconsideration serve a limited function:
"To correct manifest errors of law or fact or to present newly discovered evidence. Such motions cannot in any case be employed as a vehicle to introduce new evidence that could have been adduced during pendency... Nor should a motion for reconsideration serve as the occasion to tender new legal theories for the first time." Publishers Resource, Inc. v. Walker-Davis Publications, Inc., 762 F.2d 557, 561 (7th Cir. 1985), citing Keene Corp. v. International Fidelity Ins. Co., 561 F. Supp. 656, 665-66 (N.D. Ill. 1982).