United States District Court, C.D. Illinois
SCHANZLE-HASKINS, U.S. MAGISTRATE JUDGE.
matter comes before the Court on Plaintiff Ali Naqvi's
Motion to Disqualify Defense Counsel (d/e 36) (Naqvi Motion),
and Defendants Illinois Health and Science (IHS); Decatur
Memorial Hospital (DMH); Zevacor Molecular; Zevacor Pharma,
Inc., n/k/a/ Global Isotopes, LLC; Board of Directors of IHS;
Board of Directors of DMH; Timothy D. Stone, Jr.; Roy Mosser,
Ron Drane; and Robin King's Motion for Protective Order
(d/e 45) (Defense Motion) (collectively Motions). The Court
held an evidentiary hearing on the Motions on January 22,
2018. Naqvi appeared in person with his counsel Dawn Wall.
Defendants appeared by attorneys Daniel Delaney, Imam
Boundaoui. Defendant IHS's General Counsel Katie Anderson
appeared as the representative of Defendant IHS. For the
reasons set forth below, the Court DENIES the Naqvi Motion
and ALLOWS in part the Defense Motion.
asks the court to disqualify the law firm representing
Defendants in this case, Drinker Biddle & Reath LLP
(Drinker Biddle or the Firm). Naqvi asserts that he is a
former client of Drinker Biddle, and so, the Firm has a
conflict of interest and cannot now represent Defendants in
this case. In the alternative, Naqvi argues that he was a
prospective client who communicated confidential adverse
information to Drinker Biddle, and thus, Drinker Biddle has a
conflict of interest because it has confidential information
from a prospective client. Naqvi asks the Court to disqualify
Drinker Biddle from representing the Defendants in this case.
assert that Drinker Biddle never represented Naqvi. Rather,
the Defendants assert that Naqvi, the former Executive Vice
President and Chief Financial Officer (CFO) of IHS and DMH,
communicated with attorneys of Drinker Biddle in his role as
CFO. Defendants assert that those communications are subject
to IHS and DMH's attorney client privilege. Defendants
assert that Naqvi improperly relayed privileged information
from those conversations to his counsel and she improperly
disclosed privileged information in filings submitted in
support of the Naqvi Motion. Defendants ask the Court to
disqualify Naqvi's counsel for her improper breach of IHS
and DMH's attorney-client privilege and bar Naqvi from
using privileged communications in this case.
Amended Complaint (d/e 32) alleges that Defendants
discriminated against him and retaliated against him during
his employment as CFO of IHS and DMH. The discrimination and
retaliation ultimately resulted in the termination of his
employment on November 5, 2015. IHS and DMH are related
not-for-profit corporations. Amended Complaint,
¶¶ 6-7. IHS is the parent corporation of DMH. DMH
operates Decatur Memorial Hospital in Decatur, Illinois.
See Transcript of January 22, 2018 Hearing (d/e 53)
(Transcript), at 99. Naqvi alleges that Zevacor Pharma,
Inc. n/k/a Zevacor and Zevacor Molecular n/k/a Global
Isotopes LLC (collectively Zevacor) are subsidiaries of IHS.
Naqvi alleges that he was also the CFO of
Zevacor. He alleges that Zevacor is a holding
company for various “for-profit” assets of IHS.
Amended Complaint, Parties ¶¶ 8-9, Count
II and 27-28.
alleges that he alerted Defendants that IHS and DMH's
investment in the for-profit Zevacor enterprises violated the
Illinois version of the Uniform Prudent Management of
Institutional Funds Act (Institutional Funds Act or UPMIFA),
760 ILCS 51/3. Naqvi also alleges that he refused to engage
in activities that violated the Institutional Funds Act.
Naqvi asserts that Defendants retaliated against him for
alerting the Defendants of the illegal conduct and for
refusing to participate in the illegal conduct. Naqvi
contends that Defendants' retaliation culminated in
termination of his employment in violation of the Illinois
Whistle Blower Protection Act, 740 ILCS 174/15. Amended
Complaint, Count II. Naqvi also asserts a claim for
wrongful discharge because of Defendants' alleged
retaliation against him for speaking up about the alleged
violation of the Institutional Funds Act. Amended
Complaint, Count III.
August and early September 2015, Naqvi communicated with
Drinker Biddle attorneys Michael Rosenbaum, Quin Frazer, and
T.J. Sullivan about the IHS and MDH's compliance with the
Institutional Funds Act. Both parties rely on these
communications to support each side's respective Motion
now before the Court. Naqvi and attorneys Rosenbaum and
Frazer submitted conflicting affidavits regarding these
of Law in Support of Plaintiff's Motion to Disqualify
Counsel (d/e 37), Exhibit 1, Affidavit of Ali
Naqvi; Defendants' Memorandum in Opposition to
Plaintiff's Motion to Disqualify Defense Counsel (d/e
41), Exhibits 1, Affidavit of Michael D.
Rosenbaum, and Exhibit 2, Affidavit of Quin
Frazer. The Court set an evidentiary hearing to resolve
the conflict in the evidence. See Opinion entered
November 30, 2017 (d/e 49). Upon careful review and
consideration of the parties' submissions and the
evidence presented at the hearing, the Court finds the
Biddle, or its predecessor law firm, has represented DMH for
more than twenty years on various legal matters. See
Transcript, at 99-102, 150. Naqvi, as CFO, approved
payment of Drinker Biddle's invoices for services
rendered. See Defendant's Exhibit 1, Drinker
Biddle invoice to IHS (f/k/a MDH Health Systems) dated June
30 2014, and approved for payment by Naqvi;
Transcript, at 48, 105 (Naqvi approved payment of
Drinker Biddle legal services in connection with clinical
patient billing system called EPIC).
Biddle attorney Rosenbaum represented DMH and IHS on matters
related to employee benefits and executive compensation. In
his capacity as attorney for DMH and IHS, Rosenbaum attended
the meetings of the Plan Administration Committee (sometimes
called the PAC). The Plan Administration Committee worked
with and monitored employee benefit plans for IHS, DMH, and
related companies. Transcript, at 103. As CFO, Naqvi
was a member of The Plan Administration Committee.
Transcript, at 9, 105. In addition, Naqvi also
contacted Rosenbaum for legal advice from time to time on
issues related to DMH and IHS employee benefits plans.
Transcript, at 45.
alleges in his complaint that he expressed concerns to
individuals within MDH and IHS management that the
investments in Zevacor violated the Institutional Funds Act.
Naqvi testified that he was concerned about both corporate
liability and his personal liability under the Institutional
Funds Act. Naqvi testified that he began seeking personal
representation to protect himself from personal liability.
21, 2015, Naqvi sent an email to an attorney named Neville M.
Bilimoria of the law firm of Duane Morris LLP.
Plaintiff's Exhibit 5, Email thread between
Naqvi and Bilimoria dated July 21-22, 2015 (Bilimoria Email
Thread). Bilimoria previously represented another
IHS corporate committee called the Special Committee. The
Special Committee was conducting a special investigation of
Naqvi's reports of improper conduct within MDH and IHS,
including violations of the Institutional Funds Act.
Transcript, at 10; see Amended Complaint,
Count I ¶ 27, and Count II ¶ 29. Naqvi testified
that MDH and IHS designated him as a
“whistleblower” because he reported this
information. Transcript, at 19. Naqvi testified that
he decided to ask Bilimoria to review his employment
contract. Naqvi asked Bilimoria because he knew him from his
representation of the Special Committee, and because Duane
Morris was no longer involved in the special investigation.
Transcript, at 13-14, 86.
sent the email to Bilimoria on Naqvi's personal email
account email@example.com. Naqvi stated the
following in the email:
Neville- If I ask you the following question: would you be
able to represent me if I need help in reviewing my
employment contract or ensuring I am protected - are you
obligated to inform your client (Special Committee of IHS)
that this questions ...