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Forum v. Phyllis Schlafly's American Eagles

United States District Court, S.D. Illinois

March 29, 2018

EAGLE FORUM, an Illinois Not for Profit Corporation, and ANNE SCHLAFLY CORI, on behalf of EAGLE FORUM, et al., Plaintiffs,
PHYLLIS SCHLAFLY'S AMERICAN EAGLES, a Virginia Not for Profit Corporation, Defendant.


          Hon. Reona J. Daly, United States Magistrate Judge.

         This matter is before the Court on the Motion to Quash (Doc. 105) and Motion for Protective Order (Doc. 112) filed by Subpoena Respondent Joel Rohlf. Plaintiffs Anne Schlafly Cori, Shirley Curry, Rosina Kovar, Cathie Adams, Carolyn McLarty, and Eunie Smith filed timely responses (Docs. 110 and 115). Mr. Rohlf filed a reply in support of his Motion for Protective Order (Doc. 116) that will be considered by the Court as it complies with SDIL-LR 7.1(g). For the reasons set forth below, the Motions are DENIED.

         Procedural Background

         The Court presumes the parties' familiarity with the background and posture of this case, but briefly recites the background relevant to the motions now before it.

         This is a trademark infringement action in which Plaintiffs seek injunctive relief and damages arising from violations of federal and state law. This litigation was preceded by a fracture among the Eagle Forum Board Members transpiring on or about April 11, 2016. On that date, Runnymede Law Group was retained by Phyllis Schlafly and Ed Martin, on behalf of Eagle Forum, to provide the following services: “representation and counsel with respect to governance matters, Board disputes and litigation as necessary” (see Doc. 112-2). Respondent Joel Rohlf was of counsel with Runnymede at the time of its engagement.

         Soon thereafter, Runnymede entered its appearance on behalf of Eagle Forum in an action filed in the Circuit Court of Madison County, Illinois by the individual Plaintiffs in this lawsuit (Anne Schlafly Cori, Eunie Smith, Cathie Adams, Carolyn McLarty, Rosina Kovar, and Shirley Curry) (see Doc. 112-7). Eagle Forum was named as a nominal defendant in the Madison County action. On April 29, 2016, a temporary restraining order (“TRO”) was entered in the Madison County action preserving the status quo as to the operation of Eagle Forum and indicating that Ed Martin retained his role as President of Eagle Forum (see Docs. 112-14 and 112-15). An amended TRO was entered on October 20, 2016, wherein Plaintiffs, in their capacity as the majority of the Eagle Forum Board of Directors, assumed temporary sole control and possession over all Eagle Forum property (see Doc. 112-27). Ed Martin was suspended from his office and all of his duties as President of Eagle Forum, and John Schlafly was suspended from his office and duties as Treasurer of Eagle Forum (id.).

         On October 6, 2016, shortly before the amended TRO issued in the Madison County action, Runnymede withdrew its representation of Eagle Forum (see Doc. 112-22). Runnymede indicated that it would “continue to appropriately maintain the attorney-client privilege and the confidentiality of attorney work product” (id.). Eagle Forum, through Ed Martin and John Schlafly, then retained Smith Amundsen as substitute counsel and, on October 10, 2016, authorized Runnymede to turn its file over (see Doc. 112-23). Smith Amundsen continues to represent Eagle Forum in the Madison County action as well as the case at bar.

         On November 10, 2017, counsel for individual Plaintiffs issued a subpoena for deposition to Joel Rohlf (see Doc. 110-6). Rohlf asks that the Court enter a protective order forbidding the deposition as Plaintiffs' counsel has not identified any relevant, non-privileged topics because, he contends, the communications between him and Eagle Forum are protected by attorney-client privilege. In particular, Rohlf argues that the individual Plaintiffs seek to discover information regarding his representation of Eagle Forum although they were, and remain, adverse to Eagle Forum in the Madison County action.

         Plaintiffs contend that Eagle Forum, not Joel Rohlf, controls its privilege and can waive it. Because Eagle Forum will be present at Rohlf's deposition, Plaintiffs argue that Eagle Forum can either invoke attorney-client privilege or waive it, if necessary. Plaintiffs also assert that the deposition of Rohlf is crucial insofar as they allege that Rohlf and his colleagues at Runnymede were actively colluding with directors of Phyllis Schlafly's American Eagles (“PSAE”) and pursuing the destruction of Eagle Forum, for the benefit of PSAE, while purportedly representing Eagle Forum.


         Under Federal Rule of Civil Procedure 45(a), a party may issue a subpoena to command a person to attend and testify at a deposition. A district court must quash or modify a subpoena that fails to allow a reasonable time to comply or requires disclosure of privileged or other protected matter, if no exception or waiver applies. Fed.R.Civ.P. 45(d)(3). Also, Federal Rule of Civil Procedure 26(c) provides that a court, upon motion by a party or person from whom discovery is sought may, for good cause, “issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, ” including “forbidding the disclosure or discovery” or “forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to certain matters.” Rule 26(b)(2)(C) grants additional discretion to the court to limit discovery in the event that the discovery sought is “unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive, ” or is “outside the scope permitted by Rule 26(b)(1).”

         The attorney-client privilege is the oldest and one of the most carefully guarded privileges known to the common law. Jaffee v. Redmond, 518 U.S. 1, 11 (1996); Upjohn Co. v. United States, 449 U.S. 383, 389 (1981); see also Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998). “Its purpose is to encourage full and frank communications between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.” Upjohn, 449 U.S. at 389.

         It is well settled that the attorney-client privilege attaches to corporations as well as to individuals. Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 348 (1985). However, unlike an individual, a corporation must act through its agents. Id. Accordingly, “it cannot directly waive the privilege when disclosure is in its best interest.” Id. Any waiver must “be undertaken by individuals empowered to act on behalf of the corporation.” Id. In particular, the power to waive the privilege rests with the corporation's management and is normally exercised by its officers and directors. Id.

         Rohlf concedes that ordinarily a change of control of a corporation generally passes control of the privilege on to new management. Id. at 349. However, he contends that the “ordinary” rule should not apply here. Rohlf asks the Court to find that the control of Eagle Forum's privilege did not, and could not, pass to the individual Plaintiffs from the control group (Ed Martin and Phyllis Schlafly) who retained ...

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