United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
GERALDINE SOAT BROWN, Magistrate Judge.
Defendants' Second Motion to Compel [dkt 74] is before the court. This opinion rules on one document defendants seek to compel - a document plaintiff purportedly received in a mediation. For the reasons set out below, the motion to compel production of that document is denied. Rulings with respect to the remaining contested documents will follow shortly.
The background of Defendants' Second Motion to Compel was set out in this court's earlier order. (Order, Feb. 14, 2014.) [Dkt 89.] In response to that order, plaintiff United States Surety Company ("Surety") filed a supplemental memorandum (Pl.'s Suppl. Mem. [dkt 93]), and defendants filed a sur-reply (Defs.' Suppl. Mem. [dkt 95]).
The dispute on the motion has been narrowed somewhat by those filings. Defendants no longer seek the document in category 2, that is, the indemnity agreement with prior owners. (Defs.' Suppl. Mem. at 2.) The other documents, however, remain contested.
Notwithstanding the caution in the earlier order that the supplemental memorandum would be Surety's "last opportunity" to support its claims of privilege or work product protection with factual evidence or authority (Order, Feb. 14, 2014, at 7), Surety has submitted no additional factual material to support its claims. The only evidence Surety has submitted in connection with the motion consists of the affidavit of Joe Bagwell described in the earlier order ( id. at 5), and the affidavit of Emily Brennan, Surety's Bond Claim Director, stating that the descriptions on the Supplemental Log are correct (Pl.'s Resp. Mot., Ex. E) [dkt 81].
"[S]tate law governs privilege regarding a claim or defense for which state law supplies the rule of decision." Fed.R.Evid. 501. The District Judge has found that California law "provides the substantive rules of decision between the litigants" under the indemnity agreement. (Order, Mar. 5, 2014, at 2 [dkt 96]; see also Order, Nov. 26, 2012, at 5 [dkt 40].) In its discussion of choice of law regarding its claim of attorney-client privilege, Surety acknowledges that California substantive law applies. (Pl.'s Suppl. Mem. at 5 n. 1.) Nevertheless, it asserts that Illinois law governs its claim of attorney-client privilege because "a district court sitting in diversity applies the law of the state in which it sits regarding privilege." ( Id. at 2.) Defendants discuss only Illinois law.
Issues of privilege are substantive. Bell Microproducts, Inc. v. Relational Funding Corp., No. 02 C 329, 2002 WL 31133195 at *3-4 (N.D. Ill. Sept. 25, 2002); see also In re Yasmin and Yaz (Drospirenone) Mktg., Sales Prac. & Prod. Liab. Litig., No. 3:09-MD-02100-DRH-PMF, MDL 2100, 2011 WL 1375011 at *2-3, 6 (S.D. Ill. Apr. 12, 2011) (stating that "the rationale underlying Rule 501 and its congressional history... emphasize the view that privilege law is substantive"). Thus, when a "contract specifies the application of another state's (say California's) law, " the court must "honor the contractual provision that looks to substantive California law" if that law "would be chosen under the choice-of-law rules used by the state where the court sits." Bell Microproducts, 2002 WL 31133195 at *4.
Surety cites Abbott Laboratories v. Alpha Therapeutic Corp., 200 F.R.D. 401, 404 (N.D. Ill. 2001), to support its position that Rule 501 requires the application of the forum state's law of privilege notwithstanding the application of a different state's substantive law to the claim itself. (Pl.'s Suppl. Mem. at 2.) This court, however, agrees with the analysis in Bell Microproducts. That decision characterized the holding in Abbott as "analytically questionable" under Rule 501 because privilege rules are generally viewed as substantive, not procedural, and because "Illinois itself calls for California law to provide the rules of decision where the parties' contract so specifies." See Bell Microproducts, 2002 WL 31133195 at *4 (emphasis in original). Logic also suggests that the reference in Rule 501 to the "state law [that] governs privilege" and the "state law [that] supplies the rule of decision" means the same state. Once the court has, by applying appropriate choice of law principles, determined the substantive law applicable to a claim based on state law, the privilege issues are determined by that same state's law. Accordingly, the law of California - not Illinois - governs plaintiff's claim of attorney-client privilege.
The first document on Surety's Supplemental Log consists of five pages (bates nos. 1760-64) described on the log as "Attorney Work Product received from BE&K at Mediation." (Pl.'s Resp., Ex. E at 1.) The document is entitled "UNC Dental Sciences-ASTC Default/Timeline of Relevant Events /9/11/2012." Its first page bears a handwritten notation, "Rec'd from BE&K Mediation 9/11/12, " and subsequent pages bear a few other short handwritten notations. There are three pages of a timeline of events regarding ASTC's default on the Dental Science Building work, and a calculation of what appears to be BE&K's claim. On each page appears: "For Settlement Purposes Only."
Although Surety's Supplemental Log asserts work-product protection for the document, there is no suggestion that it is Surety's own work product. Rather, the suggestion is that it is work product of BE&K, handed to Surety's representatives during the mediation. Assuming that is the background of the document, Surety argues that it is privileged from production by the Illinois Uniform Mediation Act, 710 Ill. Comp. Stat. § 35/1, et seq. (Pl.'s Suppl. Mem. at 5.) With respect to privilege, the Act provides, in pertinent part, that:
(a) Except as otherwise provided in Section 6, a mediation communication is privileged as provided in subsection (b) and is not subject to discovery or admissible in evidence in a proceeding ...