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Motorola Solutions, Inc. v. Hytera Communications Corp.

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

April 17, 2018

MOTOROLA SOLUTIONS, INC. Plaintiff,
v.
HYTERA COMMUNICATIONS CORP, et al, Defendants.

          MEMORANDUM OPINION AND ORDER

          JEFFREY COLE MAGISTRATE JUDGE

         INTRODUCTION

         From the outset of this case, Hytera has contended that Motorola waited too long to file suit. Thus, Hytera moved to dismiss Motorola's Complaint, arguing that the statute of limitations for the federal Defense of Trade Secrets Act (two years) and the Illinois Trade Secrets Act (five years) barred Motorola's trade secret, misappropriation claims, because Motorola had (or should have) discovered its claims more than five years before it filed suit on March 14, 2017. [Dkt. #32]. Motorola's position is that it only discovered the misappropriation shortly before it filed its Complaint and that its former employees - now Hytera employees - secretly downloaded the trade secret materials and concealed not only their intent to take them to Hytera, but even that they were going to work for Hytera. [Dkt. #49, at 7-8].

         On September 7, 2017, Judge Der-Yeghiayan (who has since retired) concluded that “Motorola's claims appear to be untimely based upon the representations made by [Hytera], ” but he determined it was best to convert Hytera's motion to dismiss to a motion for summary judgment in order to resolve the statute of limitations issue based on evidence rather than allegations and representations, which, of course, would not suffice. [Dkt. #58]. The court allowed the parties until October 6, 2017, to conduct discovery on the statute of limitations issue. [Dkt. #58].

         Despite the cooperativeness among counsel, and even though discovery was limited to the statute of limitations issue, discovery proceeded with perhaps even more than the usual difficulties, thus validating Judge Posner's dreary (but unfortunately realistic) view that discovery is the bane of modern litigation. Rossetto v. Pabst Brewing Co., Inc., 217 F.3d 539, 542 (7th Cir. 2000). The October 6, 2017 discovery deadline was extended twice for a total of more than five months to February 2, 2017, and then extended twice more for depositions. [Dkt ## 153, 169]. During that time, the parties repeatedly required judicial intervention to resolve disputes. [Dkt. ##67, 84, 110, 119, 121, 140, 173]. Along the way, there have been nearly fifty discovery-related filings amounting to about 3400 pages.[1]

         As so often occurs, claims of privilege have played an important role in this case, with Motorola raising the privilege to the turnover of over 700 documents, which were supported by a plainly inadequate privilege log, which Motorola was forced to redo to comply with basic requirements under the Federal Rules of Civil Procedure. See Motorola Solutions, Inc. v. Hytera Corp., 2018 WL 1281393 (N.D.Ill. 2018). [Dkt. #128]. Motorola then slashed its privilege claims to cover just over 100 documents, proving once again that unfortunately excessive claims of privilege are commonplace in modern litigation, and that they are often indiscriminately and improperly used “on documents that do not truly qualify for protection.” Towne Place Condo. Ass'n v. Philadelphia Indem. Ins. Co., 284 F.Supp.3d 889 (N.D. Ill. 2018). See also Dietz & Watson, Inc. v. Liberty Mut. Ins. Co., 2015 WL 2069280, at *6 (E.D. Pa. 2015); Falin v. Condo. Ass'n of La Mer Estates, Inc., 2012 WL 760831, at *1 (S.D. Fla. 2012); Employer's Reinsurance Corp. v. Clarendon Nat. Ins. Co., 213 F.R.D. 422, 430 (D. Kan. 2003). The claims of privilege often dissipate when a party is required to properly support them. That is what happened here. For Hytera, the 100 or so purportedly privileged documents that remained are still too many.

         Hytera argues in addition that it isn't fair for Motorola to claim that it did not discover the alleged misappropriation that is the basis of its lawsuit until 2016 (Dkt. #141-1, at 111/101), and, at the same time, to raise a claim of attorney-client privilege to production of otherwise privileged documents that would or might show otherwise. Part of the focus is on item 364 on Motorola's privilege log. Item 364 is an email sent by a Motorola engineer to numerous other Motorola engineers. No. lawyer was involved in the communication either as sender or recipient, or even as a person copied on the email. Legal advice was not sought, nor is any such advice revealed. See United States ex rel. Bibby v. Wells Fargo Bank, N.A., 165 F.Supp.3d 1319 (N.D.Ga. 2015)(the court held that an e-mail sent by and to non-attorneys was not protected by attorney-client privilege).

         For Motorola none of this matters, because - its lawyers assure us, with absolutely no evidentiary support - that the email was the necessary first step in the obtaining legal advice. But, “[u]nfortunately... saying so doesn't make it so....” United States v. 5443 Suffield Terrace, Skokie, Ill., 607 F.3d 504, 510 (7th Cir.2010). “Lawyers' talk is no substitute for data.” Phillips v. Allen, 668 F.3d 912, 916 (7th Cir. 2012). Little wonder that the courts are unanimous in requiring proof of assertions made in briefs. See cases cited infra at 18.

         Beyond this we are presented with the question of whether there has been an implied waiver of the privilege by Motorola - what in common parlance is the permissibility of a party injecting an issue into the case. In varying contexts, courts have consistently refused to allow a party to use the privilege simultaneously as in an affirmative and defensive fashion - what is commonly referred to as using the privilege both as a “sword and as a shield.” See discussion infra at 9.[2] Hytera claims that by filing suit, Motorola has impliedly waived the attorney-client privilege as to the question of whether it knew or should have known by virtue of statements from its lawyers that the applicable limitations periods had run, but filed suit nonetheless. Needless to say, Motorola has a very different view; it contends that the mere filing of a suit does not impliedly waive the attorney-client privilege and that the case law supports its contention.

         We begin with a brief overview of the attorney-client privilege.

         I. THE ATTORNEY-CLIENT PRIVILEGE

         The attorney-client privilege is the oldest of the recognized privileges for confidential communications known to the common law. United States v. Jicarilla Apache Nation, 564 U.S. 162, (2011); Jaffee v. Redmond, 518 U.S. 1, 11 (1996); Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). The privilege's central concern-and its ultimate justification-is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and the administration of justice. Without that frankness, sound legal advice is impossible, and without informed advice, the ultimate goal of the attorney-client privilege is unattainable. Jicarilla Apache Nation, 564 U.S. at 169; Upjohn, 449 U.S. at 389.

         The privilege extends to confidential communications between counsel and his or her client “[w]here legal advice of any kind is sought ... from a professional legal advisor in his capacity as such.” Rehling v. City of Chicago, 207 F.3d 1009, 1019 (7th Cir.2000). See also Shaffer v. Am. Med. Ass'n, 662 F.3d 439, 446 (7th Cir. 2011). The question is whether the “primary” or “predominant purpose” of the communication is to render or solicit legal advice. See United States v. Bey, 772 F.3d 1099, 1101 (7th Cir. 2014); E.E.O.C. v. BDO USA, L.L.P., 876 F.3d 690, 695 (5th Cir. 2017); In re County of Erie, 473 F.3d 413, 420 (2nd Cir. 2007); United States v. Horvath, 731 F.2d 557, 562 (8th Cir. 1984); Skyline Wesleyan Church v. California Dep't of Managed Health Care, 322 F.R.D. 571, 584-85, 2017 WL 4227026, at *10 (S.D. Cal. 2017); Dansko Holdings, Inc. v. Benefit Tr. Co., 2017 WL 5593321, at *7 (E.D. Pa. 2017); Koumoulis v. Independent Financial Marketing Group, Inc., 295 F.R.D. 28, 45-46 (E.D.N.Y. 2013); SmithKline Beecham Corp. v. Apotex Corp., 232 F.R.D. 467, 482 (E.D. Pa. 2005). It cannot be too often repeated or too strongly emphasized that while a particular communication may be privileged, the underlying facts are not. Upjohn Co. v. U.S., 449 U.S. 383, 396 (1981).[3]

         Thus, the status of the drafter (or the recipient) of the supposedly privileged document is not decisive on the question of whether the document is protected. It is for that reason that progress or status reports, investigation summaries, and general updates are generally not privileged merely because they were written by a lawyer to the client. See Loguidice v. McTiernan, 2016 WL 4487779, at *16 (N.D.N.Y. 2016); Koumoulis, 295 F.R.D. at 45-46; A & R Body Specialty & Collision Works, Inc. v. Progressive Casualty Ins. Co., 2013 WL 6044342 at *3 (D. Conn. 2013); Navarrete v. Gov't Employee Ins. Co., 2010 WL 11558228, at *22 (S.D. Fla. 2010); Wolf Creek Ski Corp. v. Leavell-McCombs Joint Venture, 2006 WL 1119031, at *2 (D. Colo. 2006); In Re Sealed Case, 737 F.2d 94 (D.C.Cir.1984)(“The letter summarizes statements made by third persons to the partnership's attorney, and neither reveals any confidences of the client (the partnership) nor suggests a legal opinion.”).

         “Evidentiary privileges in litigation are not favored.” Herbert, 441 U.S. at 175. “Whatever their origins, these exceptions to the demand for every man's evidence are not lightly created nor expansively construed for they are in derogation of the search for the truth.” United States v. Nixon, 418 U.S. 683, 710 (1974). See also Pierce County, Wash. v. Guillen, 537 U.S. 129, 144-145 (2003); University of Pennsylvania v. EEOC, 493 U.S. 182, 189 (1990). The privilege, like all testimonial privileges and all exclusionary rules, comes at a significant price. Since it makes the search for truth more difficult by preventing disclosure of what is often exceedingly relevant information, the privilege “contravene[s] the fundamental principle that ‘the public ... has a right to every man's evidence, '” and is therefore strictly construed. University of Pennsylvania v. E.E.O.C., 493 U.S. 182, 189 (1990). See also Pierce County, Wash. v. Guillen, 537 U.S. 129, 144-145 (2003); United States v. Lawless, 709 F.2d 485, 487 (7th Cir.1983). The privilege is limited to those instances where it is necessary to achieve its purposes. Fisher v. United States, 425 U.S. 391, 403 (1976); Jenkins v. Bartlett, 487 F.3d 482, 490 (7th Cir. 2007).

         Whether the privilege exists is a fact intensive inquiry, In re Grand Jury Proceedings, 220 F.3d 568, 571 (7th Cir. 2000), and cannot be solved by simply looking to the identity of the sender or recipient of a communication. See In re: Subpoena Upon Nejame Law PA, 2016 WL 3125055 at *3 (N.D.Ill. 2016). The burden of proof is on the party claiming privilege. Shaffer v. AMA, 662 F.3d 439, 446 (7th Cir. 2011); Comtide Holdings, LLC v. Booth Creek Mgmt. Corp., 2010 WL 5014483, at *3 (S.D. Ohio 2010). Thus, the lawyer-client relationship, itself, “does not create ‘a cloak of protection which is draped around all occurrences and conversations which have any bearing, direct or indirect, upon the relationship of the attorney with his client.'” In re Walsh, 623 F.2d 489, 494 (7th Cir.1980). See also Burden-Meeks v. Welch, 319 F.3d 897, 899 (7th Cir.2003).

         Consequently, not all communications even between an attorney and client are privileged. Merely communicating with a lawyer or copying a lawyer on an otherwise non-privileged communication, will not transform the non-privileged communication or attachment into a privileged one, even if the otherwise non-privileged communication was at the behest of the lawyer. See Bell Microproducts, Inc. v. Relational Funding Corp., 2002 WL 31133195, at *1 (N.D.Ill.2002) (instruction from an attorney to employees to ...


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