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United States v. National Association of Realtors

May 22, 2007


The opinion of the court was delivered by: Magistrate Judge Morton Denlow


Before the Court is a motion to reject the assertion of attorney-client privilege and attorney work product doctrine brought by Plaintiff United States of America ("DOJ") against Defendant National Association of Realtors ("NAR"). Four documents are at issue: an email sent by NAR's in-house counsel, Laurie Janik ("Janik") relaying to NAR staff advice given to Janik by NAR's outside counsel (Bates-number ENAR 34918); a note handwritten by Janik reflecting a meeting with NAR's outside counsel (Bates-number 08091); and two drafts of a magazine article containing Janik's notes and edits (Bates-numbers NAR 05944 and NAR 05765). NAR claims that the documents are protected by the attorney-client privilege, the work product doctrine, or both. All but the first document appear on NAR's privilege log. The Court has examined the documents in camera. For the reasons below, the Court denies DOJ's motion.*fn1


A. Attorney-Client Privilege

The purpose of the attorney-client privilege is "to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and the administration of justice." Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). The privilege is based on a principle of confidentiality that enables attorneys to advise their clients properly. Id.

To determine whether a document is protected by the attorney-client privilege, the Seventh Circuit has adopted the following test:

(1) Where legal advice of any kind is sought (2) from a professional legal advisor in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client (6) are at his instance permanently protected (7) from disclosure by himself or by the legal advisor, (8) except the protection be waived.

United States v. White, 950 F.2d 426, 430 (7th Cir.1991). The party claiming the privilege has the burden of proving all of its essential elements. Id.

Documents that contain no request for legal advice, nor give legal advice, fall outside the scope of the privilege. McCook Metals L.L.C. v. Alcoa Inc., 192 F.R.D. 242, 253 (N.D. Ill. 2000). While facts themselves are not protected by the privilege, the communication of facts between an attorney and client are protected if transmitted for the purpose of obtaining legal advice. Upjohn, 449 U.S. at 395-96; Kodish v. Oakbrook Terrace Fire Protection Dist., 235 F.R.D. 447, 452-53 (N.D. Ill. 2006). The privilege also protects statements made by the attorney to the client "in circumstances where those communications rest on confidential information obtained from the client" or "where those communications would reveal the substance of a confidential communication by the client." Rehling v. City of Chicago, 207 F.3d 1009, 1019 (7th Cir. 2000).

B. Attorney Work Product

The work product doctrine protects materials prepared by an attorney in anticipation of litigation. Mattenson v. Baxter Healthcare Corp., 438 F.3d 763, 767-78 (7th Cir. 2006). Materials containing an attorney's "mental impressions, conclusions, opinions, or legal theories" are never discoverable. Id. at 768; Fed. R. Civ. P. 26(b)(3). Materials are considered prepared in anticipation of litigation if "in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation." Binks Manufacturing Co. v. National Presto Indus., 709 F.2d 1109, 1119 (7th Cir. 1983) (quoting Diversified Indus. v. Meredith, 572 F.2d 596, 604 (8th Cir. 1977)).

C. Waiver

The general rule is that "[a]ny voluntary disclosure by the holder of the attorney-client privilege is inconsistent with the attorney-client privilege and thus waives the privilege." Powers v. Chicago Transit Auth., 890 F.2d 1355, 1359 (7th Cir. 1989). The burden of showing that the privilege was not waived and that any disclosure was inadvertent is on the party asserting the privilege. United States v. Evans, 113 F.3d 1457, 1461 (7th Cir. 1997); Harmony Gold U.S.A., Inc. v. FASA Corp., 169 F.R.D. 113, 116 (N.D. Ill. 1996).

While there is no consensus in the Seventh Circuit regarding the appropriate test for analyzing waiver, the Court will apply a balancing test, which provides maximum flexibility based on the individual facts of any case. See Judson Atkinson Candies, Inc. v. LatiniHohberger Dhimantec, 476 F. Supp. 2d 913, 944-45 (N.D. Ill. 2007). The balancing approach looks at five factors to determine if waiver has occurred: "(1) the reasonableness of the precautions taken to prevent disclosure; (2) the time taken to rectify the error; (3) the scope of the ...

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