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DAWSON v. NEW YORK LIFE INS. CO.

September 29, 1995

RONALD D. DAWSON, Plaintiff,
v.
NEW YORK LIFE INSURANCE COMPANY and NYLIFE SECURITIES, INC., Defendants.



The opinion of the court was delivered by: CASTILLO

 This matter is before the Court on plaintiff Ronald D. Dawson's ("Dawson") motion to compel from defendants New York Life Insurance Company and NYLIFE Securities, Inc. (collectively "New York Life") answers to certain deposition questions and discovery of certain documents. For the reasons stated below, the motion is granted.

 BACKGROUND

 In this diversity action, Dawson sues New York Life alleging that it defamed him in speeches given by three employees of the company, in videotaped excerpts of the speeches disseminated to its general offices throughout the United States, and in an Amended Form U-5 document filed with the National Association of Securities Dealers ("NASD"). *fn1"

 In its answer to Dawson's complaint, New York Life asserted the affirmative defense of qualified privilege to justify each of the statements made about Dawson. Qualified privilege is an affirmative defense to a defamation claim. The elements of the privilege are: (1) good faith by the defendant; (2) an interest or duty to be upheld; (3) a statement limited in its scope to that purpose; (4) a proper ocassion; and (5) publication in a proper manner and to proper parties only. Zeinfeld v. Hayes Freight Lines, Inc., 41 Ill. 2d 345, 243 N.E.2d 217, 221 (Ill. 1968). The existence of the privilege is a question of law for the Court to decide. Babb v. Minder, 806 F.2d 749, 753 (7th Cir. 1986). Once the Court decides that a qualified privilege exists, the plaintiff has the burden of showing that the defendant abused and lost the privilege by acting with actual or express malice. Id. The question of whether the defendant abused the privilege is a factual issue for the jury. Id.

 New York Life also moved for summary judgment on the basis of qualified privilege. The resolution of the pending motion for summary judgment has been delayed because Dawson has asked New York Life to produce documents and answer deposition questions concerning the information about the Hernandez trial that was given to the speakers. Dawson has also asked New York Life to answer deposition questions concerning the information that was given to Robert Galler to aid in preparing the Amended Form U-5. Dawson specifically seeks to compel: (1) Communications to and from Alice Kane; (2) Communications to and from Alan Taxerman; (3) Communications from New York Life counsel to Lisa Frazier; (4) Communications to and from Michael McLaughlin; and (5) Communications from New York Life counsel to Lyle Paul and Lee Gammill. *fn2" New York Life has refused to disclose these communications by claiming they are subject to the attorney-client privilege and work-product doctrine. Dawson argues that there has been an implied waiver of any discovery privileges with regard to these materials because of New York Life's assertion of qualified privilege defenses. Alternatively, Dawson argues that even if a waiver is not found, the communications do not fall within the requirements of the claimed privileges.

 ANALYSIS

 At the outset, the Court notes that Dawson's main argument is that New York Life has waived its asserted privileges through its affirmative defenses of qualified privilege. However, because the burden of showing facts that give rise to a privilege rests on the party who claims the privilege, we will first analyze whether New York Life has met this burden before turning to the waiver question. See Consolidation Coal Co., v. Bucyrus-Erie Co., 89 Ill. 2d 103, 119, 432 N.E.2d 250, 257, 59 Ill. Dec. 666 (Ill. 1982) (stating the burden of showing facts that give rise to the attorney-client privilege rests on the one who claims the privilege.); ChemCentral/Grand Rapids Corp. v. United States EPA, 1992 U.S. Dist. LEXIS 12539, No. 91 C 4380 at *15 (August 19, 1992) ("As with attorney-client privilege, the party asserting work product immunity has the burden of establishing eligibility for protection.").

 I. Attorney-Client Privilege

 New York Life has refused to produce the requested materials by asserting the attorney-client privilege. Although neither party has addressed the issue, the Court must first determine whether federal or state law applies. Under Federal Rule of Evidence 501, in civil actions in which state law provides the rule of decision, state law privileges apply. Because this is a diversity action in which Illinois law supplies the rule of decision, the Court finds that Illinois law on the attorney-client privilege governs.

 The Illinois attorney-client privilege generally attaches upon a showing that the communication: (1) originated in a confidence that it would not be disclosed; (2) was made to an attorney acting in his legal capacity for the purpose of securing legal advice or services; and (3) remained confidential. Hartford Fire Ins. Co. v. PLC Enterprises, Inc., 1994 U.S. Dist. LEXIS 5228, No. 93 C 6905, at *5 (April 15, 1994).

 1. Communications from New York Life Attorneys to New York Life Employees.

 At least one Illinois Appellate court has held that the attorney-client privilege only covers communications made by the client to the attorney and not by the attorney to the client. See Dalen v. Ozite Corp., 230 Ill. App. 3d 18, 594 N.E.2d 1365, 1370, 171 Ill. Dec. 845 (2d Dist. 1992). However, we believe that this interpretation of the privilege is too narrow. Instead, we follow the decision in Hartford Fire Ins. Co. There, the court expressed its agreement with Robertson v. Yamaha Motor Corp., 143 F.R.D. 194 (S.D. Ill. 1992) which stated "it is generally held that the privilege will protect at least those attorney to client communications which would have a tendency to reveal the confidences of the client." This broader interpretation of the privilege is consistent with Illinois Supreme Court Rule 201(b)(2), which defines privileged communications in terms of "communications between a party or his agent and the attorney for his party," not ...


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