United States District Court, N.D. Illinois, Eastern Division
M. Dow, Jr. Judge
MEMORANDUM OPINION AND ORDER
JEFFREY I. CUMMINGS, UNITED STATES MAGISTRATE JUDGE
September 25, 2019, plaintiff The Solutions Team, Inc.
(“TST”) filed a motion to compel (Dkt. 60)
seeking an order requiring defendant Oak Street Health, MSO,
LLC (“Oak Street”) to answer certain
interrogatories, respond to certain document requests, and
produce documents and/or unredacted copies of documents that
were withheld based on an assertion of attorney-client
privilege. After Oak Street filed its response (Dkt. 75),
this Court held a motion hearing on November 21, 2019,
ordered Oak Street to produce certain additional
documentation sought by TST (namely, all contracts between
Oak Street and CenturyLink dated from 2016 through the
present), and otherwise denied TST's requests for
supplemental answers and responses to its interrogatories and
production requests (Dkt. 86). This Court further ordered Oak
Street to submit for an in camera review documents
that it refused to produce to TST based on its assertion that
the documents are protected by the attorney-client privilege
December 19, 2019, the Court held a second hearing on
TST's motion. The Court ruled that certain documents
concerning communications with Oak Street's in-house
counsel Lee Lowenthal and other documents involving
communications between non-attorney employees of Oak Street
that reflected either information communicated to attorney
Lowenthal for the purpose of receiving legal advice or legal
advice rendered by him were indeed protected by the
attorney-client privilege and were properly withheld (Dkt.
93). The Court also ordered that three other documents should
be produced to TST because they contained discussions of
business practices and not legal advice (Dkt. 93).
the Court took under advisement the question of whether Oak
Street waived its attorney-client privilege over documents
that were shared with defendant Bruce Schaumberg - who is not
an employee of Oak Street. This issue is governed by Illinois
law in this diversity case and Oak Street bears the burden of
establishing that the documents are privileged.
Huntington Chase Condo. Ass'n v. Mid-Century Ins.
Co., No. 16 C 4877, 2017 WL 440730, at *2 (N.D.Ill. Feb.
1, 2017). Oak Street makes a two-pronged argument based on
principles of agency and the common interest doctrine to
support its position that it did not waive its
attorney-client privilege by sharing the documents with
Schaumberg's Agency with Oak Street Avoided Waiver of
Oak Street's Attorney-Client
Street asserts that Schaumberg acted as its agent with
respect to its relationship with TST. Under Illinois law, the
attorney-client privilege protects communications between a
non-employee agent and a corporation if the agent is a member
of the corporate principal's control group. Caremark,
Inc. v. Affiliated Computer Servs., Inc., 192 F.R.D.
263, 267 (N.D.Ill. 2000); Trustmark Ins. Co. v. Gen.
& Cologne Life Re of Am., No. 00 C 1926, 2000 WL
1898518, at *5 (N.D.Ill.Dec. 20, 2000). To make this showing,
a corporation must establish that:
(1) the non-employee agent served as an advisor to top
management of the corporate client; (2) this advisory role
was such that the corporate principal would not normally have
made a decision without the agent's opinion or advice;
and (3) the agent's opinion or advice in fact formed the
basis of the final decision made by those with actual
authority within the corporate principal.
Caremark, 192 F.R.D. at 267; Trustmark,
2000 WL 1898518, at *3. Furthermore, even if a non-employee
is not a member of the corporation's control group, the
corporation's privilege remains intact if the
non-employee serves as a “communicating agent”
between control group members and legal counsel. Certain
Underwriters at Lloyds v. Fid. & Cas. Co. of New
York, No. 89 C 876, 1997 WL 769467, at *2 (N.D.Ill.Dec.
response, Oak Street submitted the declarations of Jason Van
Den Eeden (its Chief Technology Officer) and Schaumberg (Dkt.
75-1) to support its argument that Schaumberg was its
“communicating agent” and that he was also a
member of its control group under the above test. In its
reply brief, TST strongly denies that Schaumberg was ever an
agent of Oak Street because he “never took on the
indicia of an . . . agent” and was “merely an
independent contractor providing consulting services to Oak
Street” (Dkt. 91 at 6). TST further asserts that
Schaumberg was neither a “communicating agent”
nor a member of Oak Street's control group.
considering the parties' written submissions and their
arguments on December 19, the Court finds as follows:
the factual record provided by Oak Street's declarations
establishes that Schaumberg acted as Oak Street's agent
with respect to its dealings with TST. Moreover, even if this
evidence were not considered, TST would be barred from
disputing the fact of Schaumberg's agency by its second
amended complaint, where TST alleges that “Schaumberg
was acting as an agent of Oak Street Health” during the
course of a series of communications between September 2016
and mid-January 2017 (Dkt. 67, at ¶¶ 119, 118).
This allegation regarding Schaumberg's agency is a
judicial admission that is “binding” upon TST.
Soo Lin R. Co. v. St. Louis Sw. Ry. Co., 125 F.3d
481, 483 (7th Cir. 1997), quoting Keller v. United
States, 58 F.3d 1194, 1198 n.8 (7th Cir.
the Court finds that Oak Street has failed to carry its
burden of proof of establishing that Schaumberg was a
“communicating agent” between control
group members and legal counsel as the case law
requires. See Certain Underwriters at Lloyds, 1997
WL 769467, at *2. In Lloyds, the case Oak Street
relies upon, the court found that the attorney-client
privilege was not waived where “the communicating agent
served to ‘facilitate, control and maintain'
privileged communications with Chicago counsel” and the
“agent formed the only effective way for Chicago
Counsel to communicate with all of plaintiffs
entities.” Id. There is no evidence that
Schaumberg played such a role here. Consequently, his
communications with TST on Oak Street's behalf (Dkt. 75
at 13), are insufficient to invoke the “communicating
agent” exception to the waiver of privilege.
the Court finds that the factual record provided by Oak
Street's declarations establishes that Schaumberg meets
the corporate control group test for agency. In particular,
Van Den Eeden avers that: (i) Schaumberg spent
“extensive time” consulting with Oak Street
executives including Chief Financial Officer James Chow,
Chief Operating Officer Geoff Price, and Vice President of
Information Technology Keith Forshaw “about whether to
terminate the TST contract before it automatically renewed
and instead engage a new vendor”; (ii) Van Den Eeden
and Forshaw “were both directly involved in the
decision to terminate Oak Street Health's contract with
TST”; (iii) in making this decision, Van Den Eeden and
Forshaw “heavily relied on Schaumberg's expertise
and recommendations”; and (iv) Oak Street's
executives would not have made a decision of this nature
without consulting with Schaumberg, and they relied on his
advice and insights in coming to their decision with respect