The opinion of the court was delivered by: Judge George M. Marovich
MEMORANDUM OPINION AND ORDER
Defendant Mervyn Dukatt ("Dukatt") has filed objections to Magistrate Judge Kim's February 10, 2011 order that denied Dukatt's motion to compel production of responses to interrogatories and document requests to which plaintiff United States had objected on the grounds of privilege. For the reasons set forth below, the Court overrules Dukatt's objections.
When a party timely objects to a pretrial, non-dispositive ruling by a magistrate judge, the district judge "must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law." Fed.R.Civ.P. 72(a).
After the statute of limitations had run, the Court allowed plaintiff United States to add Dukatt as a defendant and to assert against him a claim for response costs under CERCLA. See 42 U.S.C. § 9607(a). To prevail on that claim, the United States will need to establish that Dukatt is equitably estopped (because he took steps to conceal his liability until after the statute of limitations had run) from asserting the statute of limitations. Discovery with respect to equitable estoppel is what brings the parties before the Court today.
When Dukatt issued discovery requests, the United States objected on the grounds that the requested information was protected from disclosure by the attorney-client privilege. Dukatt moved to compel, arguing, among other things, that the United States had waived the privilege by putting equitable estoppel at issue. Judge Kim denied the motion to compel. Dukatt makes two objections to Judge Kim's ruling.
First, Dukatt objects to Judge Kim's conclusion that the government did not waive the attorney-client privilege by putting privileged information at issue. Pursuant to Rule 501 of the Federal Rules of Evidence, federal common law governs privilege issues with respect to federal claims. See Fed.R.Evid. 501. When a court sits in diversity, by contrast, courts apply state privilege law. Lorenz v. Valley Forge, 815 F.2d 1095, 1097 (7th Cir. 1987) ("Because the basis of our jurisdiction is diversity, we apply the Indiana state law of privilege.") (citing Fed.R.Evid. 501).*fn1
The Seventh Circuit has not clearly stated the federal common-law standard for when a party waives the attorney-client privilege by putting privileged information at issue in a case. This Court agrees with the courts in this district that have followed the Third Circuit's decision in Rhone-Poulenc Rorer Inc. v. Home Indemnity Co., 32 F.3d 851 (3rd Cir. 1994). See Silverman v. Motorola, Inc., Case No. 07 C 4507, 2010 WL 2697599 at *4 (N.D. Ill. July 7, 2010) ("courts in this district have followed the Third Circuit's guidance that 'at issue' waiver applies only where 'the client asserts a claim or defense and attempts to prove that claim or defense by disclosing or describing attorney-client communication.'"); Chamberlain Group v. Interlogix, Case No. 01 C 6157, 2002 WL 467153 at *3 (N.D. Ill. Mar. 27, 2002); Beneficial Franchise Co., Inc. v. Bank One, N.A., 205 F.R.D. 212, 216 (N.D. Ill. 2001). In fact, the Seventh Circuit has cited Rhone-Poulenc, albeit in dicta and without discussion. See Garcia v. Zenith Electronics Corp., 58 F.3d 1171, 1175 n. 1 (7th Cir. 1995).
In Rhone-Poulenc, the Third Circuit explained the circumstances in which a client waives the attorney-client privilege by making privileged information an issue in a case:
There is authority for the proposition that a party can waive the attorney client privilege by asserting claims or defenses that put his or her attorney's advice in issue in the litigation. * * *
In these cases, the client has made the decision and taken the affirmative step in litigation to place the advice of the attorney in issue. Courts have found that by placing the advice in issue, the client has opened to examination facts relating to that advice. Advice is not in issue merely because it is relevant, and does not necessarily become in issue merely because the attorney's advice might affect the client's state of mind in a relevant manner. The advice of counsel is placed in issue where the client asserts a claim or defense, and attempts to prove that claim or defense by disclosing or describing an attorney client communication.
Rhone-Poulenc, 32 F.3d at 863 (emphasis added). The Third Circuit also explained that it "completely undermines the interest" served by the attorney-client privilege for a court to find waiver merely because the communications are relevant. Rhone-Poulenc, 32 F.3d at 864. The Court agrees with this approach and agrees that merely asserting a claim or defense to which attorney-client communications are relevant does not constitute a waiver of the privilege under federal common law. See Beneficial Franchise, 205 F.R.D. at 216-217 ("[W]e do not believe that merely asserting a defense or a claim is sufficient, without more, to waive the privilege.
Were it otherwise, then any party asserting a claim or defense on which it bears the burden of proof would be stripped of its privilege and left with the draconian choice of abandoning its claim and/or defense or pursuing and protecting the privilege."). Only if the party also attempts to prove the claim or defense ...