found that the undercover investigation
reports must be produced but only after this court conducted an in camera
inspection. Id. On May 23, 2001, following the court's inspection,
Defendant produced the reports to Plaintiffs. Id.
In responding to the subject motion, Defendant presents four arguments:
(1) Defendant asserts that Mr. Kinsella never communicated or caused
another to communicate with Plaintiffs Mr. George and/or Mr. Thompson.
Def.'s Mem. at 12. Defendant asserts that Plaintiffs allege that Mr.
Kinsella violated the ethics rules solely because undercover
investigative reports dated February 29, March 7 and 23, April 27, May
30, June 21, July 6, and August 28, 2000 mention that Investigator
Williams had contact with Mr. George and Mr. Thompson. Def.'s Mem. at
13. Plaintiffs, thus, claim that Defendant (Mr. Kinsella) violated LRs
83.54.2 and 83.58.2 when Mr. Williams spoke or communicated with Mr.
George and Mr. Thompson. Id.
Defendant argues that while Mr. Kinsella had some discussions with
Apollo regarding the undercover investigation, he had only limited
discussions with Myers employees as to the general nature of the
investigation. Def.'s Mem. at 13. Defendant contends that Mr. Kinsella
never directed or caused any undercover investigator to communicate with
a party. Id. In addition, no allegation has been made that Mr. Kinsella
ever communicated with a party outside the presence of the parties'
attorney. Id. Furthermore, the investigative personnel have testified
that neither Mr. Kinsella nor anyone from his law firm ever told any
investigator to contact or communicate with Mr. George, Mr. Thompson, or
any other Plaintiffs who were represented by attorneys. Ex. A, pp.
110-111, 120; Ex. B, pars. 5, 8; and Ex. C, pars. 6, 8; Def.'s Mem. at
Defendant, thus, asserts Plaintiffs' charge is based solely on Mr.
Kinsella's statement that the undercover investigation was done at his
instance and that Mr. Williams spoke with Mr. George and Mr. Thompson.
Def.'s Mem. at 14. Defendant asserts that Plaintiffs have not deposed
Mr. Williams. Ex. E, p. 36; Def.'s Mem. at 14. Moreover, Plaintiffs have
not deposed Investigator Mroz who would have testified that he had never
spoken to nor communicated with Mr. Kinsella during the course of the
investigation. Ex. B; Def.'s Mem. at 15. Furthermore, if Mr. Mroz and
Mr. Williams would have been deposed, Plaintiffs would have learned that
Mr. Ott, not Mr. Kinsella, provided Myers investigators with Mr. George
and Mr. Thompson's names. Ex. B, C; Def.'s Mem. at 14.
(2) Defendant's second argument is that Mr. Kinsella acted ethically in
recommending to Apollo that an undercover investigation be conducted to
seek out discriminatory and/or illegal activity. Def's Mem. at 15.
Defendant asserts that it is permissible for an attorney to advise a
client to perform an undercover investigation. Id. In addition, an
attorney may properly advise a client as to whether the client may
communicate with an adverse party either directly or through a hired
investigator. Id. Defendant, thus, asserts that parties to a matter may
communicate directly with each other. Comment to LR 83.54.2.
In Miano v. AC&R Advertising, Inc., 148 F.R.D. 68 (S.D.N.Y. 1993), a
plaintiff recorded damaging statements from a corporate defendant
employee, which were provided to plaintiffs attorney who eventually
produced them in litigation. The defendant claimed that the plaintiffs
attorney violated the equivalent of LR 83.54.2, by communicating with
persons represented by counsel. As stated in Miano:
Ethics opinions allow that attorneys need not prevent clients from
engaging in ex parte or taped conversation with adversaries, and are
permitted to counsel clients regarding the scope and ramifications of
such conduct . . . While the attorney's subsequent receipt and use of
information secured by the client goes a step further, logic dictates
that if the information was not secured illegally or unethically. its
use does not place the attorney in violation of the disciplinary
rules. . .When a client independently and legally secures information
which is relevant and useful to his case and provides it to counsel,
the attorney's use of the information is not unethical." Id. at 89
In EEOC v. McDonnell Douglas Corp., 948 F. Supp. 54, 55 (E.D. Mo.
1996), in construing the Missouri equivalent of LR 83.54.2, the court
ruled that "there is nothing that prohibits one party to a litigation
from making direct contact with another party to the same litigation."
See Hazard & Hodes, The Law of Lawyering, § 38.4 at 38-5: "Rule 4.2
is designed to prevent lawyers from either overreaching third parties or
interfering with the relationships between opposing parties and their own
lawyers. It follows that the Rule does not (and could not in any event)
prevent one party from directly communicating with another. Furthermore, a
lawyer should be able to advise a client to contact a third-party even a
represented third-party- directly, without running afoul of the
prohibition in rule 8.4 against violating a disciplinary rule through the
acts of another." Id.
Section 99 of the Restatement (3rd) of Law Governing Lawyers has a rule
similar to LR 83.54.2 stating that "[n]o general rule prevents a lawyer's
client, either personally or through a nonlawyer agent, from
communicating directly with a represented nonclient. Thus, while neither
a lawyer nor a lawyer's investigator or other agent . . . may contact the
represented nonclient, the same bar does not extend to the client of the
lawyer or the client's investigator or other agent. As stated in
Subsection (2), the anti-contact rule does not prohibit a lawyer from
advising the lawyer's own client concerning the client's communication
with a represented nonclient, including communications that may occur
with the prior consent . . . or knowledge of the lawyer for the
nonclient. The lawyer for a client intending to make such a communication
may advise the client regarding legal aspects of the communication, . . ."
Id. at 76-77.
Defendant argues that based on the rules and case law discussed,
supra, Mr. Kinsella could have ethnically advised Apollo on the
performance of the undercover investigation and he could have, without
violating, LR 83.54.2 advised Apollo that it directly or through Apollo's
investigator, Myers could contact Plaintiffs herein. Def.'s Mem. at 17.
Defendant asserts, however, that, in any event, the information provided
to Mr. Williams regarding the contacts with Mr. George and Mr. Thompson
came from Mr. Ott, and not from Mr. Kinsella. Exs. B, C; Def.'s Mem. at
17. Moreover, while the decision whether or not to perform the
investigation was discussed with Mr. Kinsella, the decision to proceed
was made by Apollo's President, Mr. Rogers. Def.'s Mem. at 17.
Furthermore, the meeting between Mr. Myers and the Apollo representatives
regarding what would be done did not include Mr. Kinsella. Ex. A, pp.
20-22; Def.'s Mem. at 17.
(3) Defendant's third argument is that disqualification is unwarranted
(too harsh) even assuming, arguendo, that Mr. Kinsella caused the
investigator to communicate with any of the Plaintiffs. Def.'s Mem. at
18. In considering disqualification, courts typically follow a two-step
process. A court must determine whether an ethical violation has
occurred, and if disqualification is the appropriate remedy. SWS Fin.
Fund A. v. Salomon Bros., Inc., 790 F. Supp. 1392, 1399 (N.D. Ill.
1992). In addition, the moving party bears the burden of showing facts
necessitating disqualification. Evans v. Artek Sys. Corp., 715 F.2d 788,
794 (2d Cir. 1983). Moreover, attorney disqualification "is a drastic
measure which courts should hesitate to impose except when absolutely
necessary." Freeman v. Chicago Musical Instrument Co., 689 F.2d 715, 721
(7th Cir. 1982).
In response to Plaintiffs' citation to case law where disqualification
of counsel was ordered, Defendant asserts that, in these cases, the
attorney had communicated with the opposing party, and a finding of
significant prejudice was made by the court. Def.'s Mem. at 18. In each
case cited by Plaintiffs, there was an intentional and egregious
violation by a particular attorney. Id. at 18-19. See Def.'s Mem. at 19
for individual case synopsis.
Defendant also asserts that Plaintiffs have not been prejudiced by Mr.
Williams communicating with Mr. George and Mr. Thompson because the
information about former drug sales is outside "the subject of the
representation" of the suit, and the information about who hung the noose
and made racial remarks is no different than information provided by
other witnesses, including Plaintiffs. Def.'s Mem. at 20. Thus, Defendant
contends that disqualification is not the appropriate remedy because
Plaintiffs have not been prejudiced. Id.
(4) Defendant's fourth argument is that sanctions are not appropriate
with respect to the undercover investigation reports, the claim of work
product privilege and the privilege logs. Pls.'s Mem. at 21. Defendant
argues that it did not violate the Rules of Professional Conduct or the
Federal Rules of Civil Procedure by raising the work product objection as
to the undercover investigation reports. Def.'s Mem. at 22. Defendant
states that although the reports were not detailed in the May. 2000
privilege log, Plaintiffs were aware of their existence and the reports
were detailed in the March 31, 2001 log. Id. In addition, the fact that
the reports were not detailed in the May, 2000 log was not done to
mislead anyone, but was at most an inadvertent oversight, even if,
Plaintiffs request for documents are construed as relating to
investigations conducted, "as a result of each Plaintiffs claim or
allegation of discrimination." Ex. H., ¶ 19; Def.'s Mem. at 22.
Defendant alleges that it never hid any information concerning the
undercover investigation and, in fact, Plaintiffs were aware of it from
the beginning. Id. Defendant asserts that a court typically imposes
sanctions only when a party fails to comply with discovery by displaying
willful conduct, bad faith or fault. See Philips Medical Sys. Intern.,
B.V. v. Bruetman, 982 F.2d 211, 214 (7th Cir. 1992) (citation omitted).
Defendant, thus, alleges that it repeatedly raised valid objections which
were upheld twice, and even when the District Judge ordered the reports
produced, the court acknowledged that the reports were work product, but
found the privilege waived based on one of Defendant's affirmative
defenses. Id. In addition, Defendant promptly complied with the District
Judge (and this court's order) regarding the privilege log. Id.
Defendant, thus, argues that the facts and evidence shown by deposition
testimony and affidavits conclusively establish that neither Mr. Kinsella
nor his law firm violated LRs 83.54.2 and 83.58.4. Def.'s Mem. at 22.
Mr. Kinsella acted properly
at all times. Id. Furthermore, Defendant, in
good faith, continually raised the work product privilege regarding the
undercover investigation reports, made Plaintiffs aware of the undercover
investigation beginning February 7, 2000, and provided a privilege log on
March 23, 2001. Id. The fact that the reports weren't detailed in the
May, 2000 privilege log was not intentional. Id. Defendant, therefore,
asserts that disqualification/sanctions are not appropriate. Id.
II. Plaintiffs' Reply in Support of Amended Notice for Sanctions and to
In this motion, Plaintiffs present five arguments. Most of these
arguments are similar to those presented in Plaintiffs' opening brief.
(1) Plaintiffs allege that the testimony offered by Defendant has been
misstated and does not establish compliance with the Rules of
Professional Conduct. Pls.' Reply at 3. Specifically, Plaintiffs state
that Defendant and its counsel now contend that "the actual decision to
proceed (with the investigation) was made by Mr. Rogers, President of
Apollo." Def.'s Mem. at 17. Defendant also claims that the "[t]he
undercover investigation . . . was not conducted as a result of each
plaintiffs' claim or allegation of discrimination." Id. at 9. Plaintiffs,
however, assert that the actual testimony of Mr. Rogers is that hiring
the investigators "may" have been his idea. Def.'s Ex. F, p. 132; Pls.'
Reply at 3. Mr. Rogers stated during his deposition:
Q. You didn't do (the investigation) simply because there was a lawsuit
pending? Is that true?
A. This happened before the lawsuit. Id.
Plaintiffs argue that Mr. Rogers's testimony cannot be reconciled with
the statements made by Mr. Kinsella and Mr. Miller, who offered a
different story when attempting to establish a work product privilege.
Pls.' Reply at 3. For example, Mr. Kinsella advised the court that the
undercover investigation was done in anticipation of litigation in order
to develop a legal theory of defense. Ex C, pp. 9-10, Pls.' Am. Mot.
(See Transcript of Proceedings from April 3, 2001); Pls.' Reply at 4. In
addition, in a January 30, 2001 letter, Mr. Miller of Rooks, Pitts &
Poust stated that "[w]e may have hired these individuals [investigators]
as part of our investigation into the allegations of this complaint. As
such, they are protected by the attorney/work product privilege." Def's
Ex. R; Pls.' Reply at 4. Furthermore, Plaintiffs assert that Mr. Rogers's
testimony is inconsistent with Judge McKeague's July 9, 2001 order
because he found that, "[a]ttorney Kinsella has acknowledged that the
undercover investigation was initiated at his instance." Ex. 1, p. 3;
Pls.' Reply at 4.
Plaintiffs next argue that the investigators statements (Mr. Myers and
Mr. Mroz) do not conclusively establish compliance with the ethics
rules. Pls.' Reply at 4. In its response, Defendant and its counsel claim
that "Mr. Myers's deposition testimony [is] that Mr. Kinsella did not
direct or cause anyone from Myers to contact or communicate with any
individual at Apollo." Defs. Mem. at 14. However, on May 24, 2001. Mr.
Myer testified that he could "not recall" whether he was directed to
investigate any specific individual. Id. Plaintiffs assert that, with
respect to Mr. Mroz, Defendant claims that, "Mr. Mroz never met with nor
spoke with Mr. Kinsella, nor communication with Mr. Kinsella in any
fashion with regard to the undercover investigation." Def.'s Mem. at 7.
Plaintiffs point out, however, that Mr. Mroz authored all of the
investigative reports that were sent directly to Mr. Kinsella."
Pls.' Exs. J, L, M, and N (Am. Mot.); Pls.' Reply at 5.
Plaintiffs also assert that Mr. Kinsella has not submitted an
affidavit. Pls.' Reply at 5.
(2) Plaintiffs' second argument is that Mr. Kinsella directed the
investigation. Pls.' Reply at 5. Plaintiffs contend that Defendant and
its counsel are attempting to minimize Mr. Kinsella's and his law firm's
involvement by claiming that, "Mr. Kinsella acted ethically in
recommending to his client that an undercover investigation be conducted
to seek out discriminatory . . . activity." Def.'s Mem. at 15.
Plaintiffs, however, assert that Mr. Kinsella merely "recommended . . .
that an undercover investigation be conducted" is contrary to Mr.
Kinsella's prior statements and Judge McKeague's findings that Mr.
Kinsella was "actively involved in directing the investigation." Ex. 1,
p. 3; Pls.' Reply at 6.
Plaintiffs assert that the court should reject Defendant's claim that
"[t]he meeting between Mr. Myers and the Apollo representatives as to
what was desired and what was to be done did not include Mr. Kinsella."
Def.'s Mem. at 17. The claim should be rejected because Mr. Myers
testified that he spoke on the telephone with Mr. Kinsella in late 1998,
early 1999 about "the focus of the investigation, what we needed to look
for, kind of things we needed to uncover . . . making sure we were aware
of the issues . . ." Def.'s Ex. A, pp. 94-95; Pls.' Reply at 6. Mr.
Myers, also, testified that Mr. Kinsella was his client. Ex. 2, p. 6.
Moreover, Defendant's second privilege log identifies five handwritten
notes reflecting various conversations between the investigator and Mr.
Kinsella. Ex. T; Pls.' Reply at 6-7. The privilege log includes
references to documents indicating "a reference from Dan Kinsella" and a
conversation with Mr. Kinsella "regarding the scope and content of the
investigative reports." Pls.' Reply at 7.
Plaintiffs argue that Defendant's attempt to compare the circumstances
in this case to those involving mere communication between clients
fails. Pls.' Reply at 7. For example, in Miano, 148 F.R.D 68, the court
found that those individuals contacted surreptitiously by a party were
not represented by counsel. Second, the court stated that the attorney in
question "did not engineer or arrange" the taped conversations. Id. at
88. The court further found that the attorney "did not suggest, plan or
supervise what [the client] was doing . . ." Id. at 89. The court,
however, did conclude that the attorney was "perilously close to crossing
the line of circumventing the disciplinary rules through his client."
Plaintiffs argue that Defendant's argument disregards the language, in
Miano, which discusses whether an attorney has "caused" a communication
with a party who is represented by counsel. Pls.' Reply at 7. The court
in Miano stated:
Obviously, when an attorney actually requests or
engineers a contact or action by another that would
otherwise be prohibited by the disciplinary rules,
he . . . can be deemed to have "caused" it and to
have circumvented the rule. An attorney cannot
legitimately delegate to another what he himself is
prohibited from doing, nor may he use another as to
his alter ego . . . [T]he constraints on an attorney
must go even further, so as to address the situation
where he or she goes not explicitly instruct another
to act but accomplishes the same result indirectly.
Id. at 82; Pl.'s Reply at 7.
Plaintiffs, thus, assert that Defendant and its counsel have done
precisely what Miano says the rules prohibit, "engineering a contact or
action by another that would otherwise be prohibited by the disciplinary
rules . . ." Miano, 148 F.R.D at 82. For example, Mr. Kinsella received
frequent reports from investigators for the purpose of manufacturing a
defense. Pls.' Reply at 8. Defendant's privilege log identifies multiple
contacts between Mr. Kinsella and the investigators. Id. Plaintiffs
assert that the status reports clearly indicate that investigators were
targeting them directly and seeking information about the case. Id.
Moreover, notwithstanding Mr. Kinsella's knowledge of direct contact with
Plaintiffs, he did nothing to change the direction or focus of the
investigation. Id. at 9.
(3) Plaintiffs' third argument is that Defendant provides no reasonable
justification for why it failed to disclose the investigative reports for
over two years. Pls.' Reply at 9. Plaintiffs argue that Defendant
deliberately failed to disclose the investigative reports despite
numerous requests for production. Id. at 10. The chronology of requests
for production is as follows:
In April, 1999, Plaintiffs' First Production Request sought "all
documents relating to all injuries or investigations conducted as a
result of each Plaintiffs claim or allegation of discrimination."
Plaintiffs assert that Defendant's contention that the investigative
reports were not responsive to this request contradicts Mr. Kinsella's
assertion that the investigation was an effort to develop a legal theory
On March 28, 2000, Plaintiffs' counsel requested all information and
documents relative to Mr. Rogers's letter to the FBI. Ex. I to Def's
Plaintiffs assert that Defendant failed to disclose the existence of the
reports and now Defendant contends that Plaintiffs knew about the reports
when it produced Mr. Rogers's letter. However, the letter, like
Defendant's May 31, 2000 privilege log, makes no reference to the
reports. Furthermore, Plaintiffs made multiple requests for documents
supporting Mr. Rogers's letter, but Defendant continued to conceal the