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Whitney v. Tallgrass Beef Company LLC

United States District Court, N.D. Illinois, Eastern Division

June 18, 2015

JAMES WHITNEY et al., Plaintiffs,
v.
TALLGRASS BEEF COMPANY LLC et al., Defendants.

MEMORANDUM OPINION AND ORDER

DANIEL G. MARTIN, Magistrate Judge.

Before the Court is Defendants' Renewed Motion to Compel. Plaintiffs James Whitney and the Bloom Agency, Inc. have sued Defendants Tallgrass Beef Company LLC and William Kurtis for employee wages and consultant compensation. Whitney was hired in 2008 as the Chief Executive Officer and Chief Financial Officer of Tallgrass, a single-member company operated by Defendant Kurtis. Tallgrass produces and sells grass-fed beef. Whitney alleges that Tallgrass and Kurtis owe him back wages and other reimbursable expenses. The Bloom Agency claims that it is entitled to payment for work it performed on a marketing plan for Tallgrass.

In July 2014, Defendants filed a motion to compel discovery. The motion included demands that Plaintiff James Whitney respond to Requests to Produce Nos. 17 and 18. Request 17 sought the production of communication records between Whitney and any third party relating to business dealings between Whitney, the law firm of Murphy & Hourihane, and Tallgrass. Request 18 asked for documents between the Bloom Agency and the law firm concerning Defendants "to the extent such document or communication was made in the presence of or was otherwise disclosed to a third party (including the Bloom Agency)." Requests 9 and 10 posed similar requests to the Bloom Agency in a separate set of discovery demands.

Plaintiffs refused to answer any of the requests by claiming that the relevant documents were protected by one or more privileges. The Court withheld a ruling on these four production requests because Plaintiffs had not produced a privilege log to substantiate their privilege claims. The Court rejected Plaintiffs' contention that they were not required to produce a log by noting that Fed.R.Civ.P. 26 plainly states otherwise. The log must identify the documents at issue, the privilege relied on, and should describe the subject matter with enough details that "will enable other parties to assess the claim." Fed.R.Civ.P. 26(b)(5)(A)(ii). See also Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 145 F.R.D. 84, 88 (N.D. Ill. 1992). In addition, the log must address the protected material on a document-by-document basis. Broad claims are ineffective. Courts in this district have been very clear that the failure to comply with Rule 26's requirement can result in a waiver of the privilege. See, e.g., Babych v. Psych. Solutions, Inc., 271 F.R.D. 603, 608 (N.D. Ill. 2010); Wunderlich-Malec Sys., Inc. v. Eisenmann Corp., 2006 WL 3370700, at *8-9 (N.D. Ill. Nov. 17, 2006).

Several complications ensued. The Court permitted Defendants to file a renewed motion to compel once Plaintiffs complied with their obligation under Rule 26. Plaintiffs eventually produced a log. Defendants filed the instant motion, and Plaintiffs responded. The Court then issued an order on March 31, 2015 that found the privilege log to be inadequate. It directed Plaintiffs to submit a new log. The revised log identifies approximately 109 emails. Plaintiffs claim that each of these communications is protected by both the attorney-client privilege and the work product doctrine. Defendants argue that Plaintiffs have waived the attorney-client privilege because Whitney and the Bloom Agency do not share any common legal interest in this case. Defendants claim that the knowing disclosure of otherwise privileged information between the two Plaintiffs is tantamount to a third party disclosure that results in a privilege waiver. They also argue that Plaintiffs have waived some of their work product claims.

Legal Standard

When, as here, a court's jurisdiction arises under the diversity statute, the court construes most privileges under the law of the state in which it sits. See Abbott Labs. v. Alpha Therapeutic Corp., 200 F.R.D. 401, 404-05 (N.D. Ill. 2001); Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 152 F.R.D. 132, 139 (N.D. Ill. 1993). Illinois law is identical to federal law for the purpose of deciding whether the attorney client privilege exists. See Wielgus v. Ryobi Technologies, Inc., 2010 WL 3075666, at *3 (N.D. Ill. Aug. 4, 2010).

The Seventh Circuit has adopted eight principles that define the existence and scope of the attorney-client privilege. It arises

(1) [w]here legal advice of any kind is sought (2) from a professional legal adviser 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 adviser, (8) except the protection be waived.

United States v. White, 950 F.2d 426, 430 (7th Cir. 1991) (internal quote and citation omitted). The purpose of the privilege is "to encourage clients to make full disclosure to their attorneys." Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). Only communications that are made for the purpose of obtaining legal advice are protected. Matter of Grand Jury Proceeding, 898 F.2d 565, 567 (7th Cir. 1990). The party asserting the privilege bears the burden of showing that it applies and has not been waived. United States v. Evans, 113 F.3d 1457, 1461 (7th Cir. 1997); Square D Co. v. E.I. Electronics, Inc., 264 F.R.D. 385, 390 (N.D. Ill. 2009).

Unlike the attorney-client privilege, the work product doctrine is always governed by federal law. Abbott Labs., 200 F.R.D. at 405. This privilege protects records that counsel or a representative of a party creates in anticipation of litigation in order to prepare or analyze her client's case. Fed.R.Civ.P. 26(b)(3); Sandra T.E. v. South Berwyn Sch. Dist. 100, 600 F.3d 612, 618 (7th Cir. 2010). "A lawsuit need not be underway for the doctrine to apply provided the prospect of litigation [is] not remote." Stopka v. Am. Fam. Mut. Ins. Co., Inc., 816 F.Supp.2d 516, 524 (N.D. Ill. 2011) (internal quote and citation omitted).

Discussion

A. The Work Product Doctrine

Plaintiffs' revised privilege log claims that all of the emails it identifies are protected by the work product doctrine. Defendants challenge this claim on a limited ground that fails to address the log's complete scope. For reasons that are unclear, Plaintiffs have not addressed the work product issue at all.

Plaintiffs' original privilege log claimed that all of the documents that Plaintiffs identified were protected as work product. The Court disagreed. The March 31, 2015 order found that Plaintiffs had waived the work product doctrine with respect to Requests 17 and 18. That was because Plaintiffs had not asserted that privilege in its original response to these two requests. Rule 33(b)(4) states that "[a]ny ground not stated in a timely objection is waived unless the court, for good cause, excuses the failure." Plaintiffs did not show good cause because they failed to address the issue in their earlier briefing. That acted as a waiver to the work product doctrine for Requests 17 and 18.

The Court did not make the same finding concerning Requests 9 and 10 because Defendants' motion did not address them. Any argument on the issue would have been unavailing. Unlike Requests 17 and 18, Plaintiffs relied on the work product doctrine in their responses to Requests 9 and 10. (Dckt. 31 at Ex. 5). The March 31 order then instructed Plaintiffs to provide an ...


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