The opinion of the court was delivered by: MARTIN ASHMAN, Magistrate Judge
MEMORANDUM OPINION AND ORDER
This case is before the Court on the Godfrey Firm's Motion for
a Protective Order.*fn1 For the reasons set forth below, the
motion is denied.
On March 11, 2004, the Court granted Defendant Vico Associates,
Inc.'s motion to compel production of documents pursuant to
subpoenas from United Group, Inc. and from the law firm of
Godfrey, Leibsle, Blackbourn & Howarth. Monfardini v. Quinlan,
2004 WL 533132 (N.D. Ill. Mar. 15, 2004). The lineup of the
parties and the underlying facts were set out in that memorandum
opinion and order and will not be repeated here. The ruling was
based on a finding that Plaintiff Paul Monfardini owed a
fiduciary duty to Vico because he was a shareholder of Vico with
the ability to hinder or influence the corporation through his
actions at United Group. Therefore, under the fiduciary exception
to the attorney-client privilege, the communications dealing with
United's stock as it affects Vico are not privileged with respect
to Vico. The Court ordered Vico to not disclose the documents to
Defendants Quinlan and Siech who had never asserted any fiduciary exception to the
attorney-client privilege. Vico interpreted this order as
allowing Quinlan and Siech's attorney to see the documents, but
not the clients. It informed the Godfrey firm of its dubious
interpretation of this Court's order, and the Godfrey firm filed
the instant motion for a protective order.
The attorneys in this case (of which the primary blame falls
upon the shoulder of Vico's attorney as it was Vico's burden to
show an exception to the privilege) neglected to inform the Court
that Monfardini was a director of Vico from at least
approximately June 1999 to approximately June 2000. They also
neglected to inform the Court that Defendant Quinlan is currently
a director of Vico. As a director of Vico, Quinlan would normally
be given access to the documents as part of his managerial
duties. The question then becomes, can Quinlan use the documents
for his own benefit in his individual litigation with Monfardini.
The Godfrey Firm argues that Quinlan should not be allowed to
use the documents for his personal use because that would defeat
the good cause requirement of the fiduciary exception, relying on
Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21 (N.D. Ill.
1980). In Ohio-Sealy, the court found that the
plaintiff-shareholder did not meet the good cause requirement of
the exception to enable him to see documents in the derivative
action because he was also engaged in individual litigation
against the company, and he would be able to use the documents to
the detriment of the corporation and hence, implicitly to the
detriment of the other shareholders. Id. at 31-32. Because this
case is not a shareholder derivative action, it is difficult to
analogize it to Ohio-Sealy. Quinlan will not be using the
documents against the United Group who retains the privilege nor
against the Godfrey Firm who produced the documents. Instead he
would be using them in his litigation against Monfardini, as an
individual. We also note that Vico and Quinlan are involved in the same litigation, not in
separate actions. In any event, the Court has already found that
Vico has met the requirements of the fiduciary exception.
Therefore, we find that even though we decline to reach the issue
of whether Monfardini may have owed a fiduciary duty (or breached
such a duty) to Quinlan, we find that because Quinlan has access
to the documents in his capacity as a director of Vico, he cannot
close his mind and forget the information as regards his personal
litigation. Thus, he may use the documents in this litigation.
Additionally, it would be absurd to allow Quinlan to use the
documents and not Siech, as they are represented by the same
attorney. It is not possible that the attorney, representing
parties with joint interests, can or should withhold information
from one client but not the other.
This leads us to the issue of the July 30, 2003 protective
order covering the documents. These documents, which contain
communications between United Group and its attorneys, were
designated as "proprietary confidential" which means they may
only be distributed to attorneys of record and not to their
clients. Upon review of the privilege log it does not appear that
these documents include proprietary information, i.e.,
information that would cause an unfair advantage to either
party's competitors by providing them information as to the
commercial operations of that party. Under the definitions found
in the protective order, the documents appear to be
"confidential." Therefore, if there are any specific documents
that the United Group believes contain proprietary information as
specified by the protective order, it may submit them to the Court for review. Otherwise, the documents
will be deemed "confidential" and not "proprietary confidential"
and thus may be seen by the clients.
For the above reasons, the Godfrey Firm's motion for ...