Digitally signed by Reporter of Decisions Reason: I attest to the Illinois Official Reports accuracy and integrity of this document Appellate Court Date: 2018.01.23 17:20:31 -06'00'

Selby v. O’Dea, 2017 IL App (1st) 151572 Appellate Court FRANK SELBY, MARTIN YOUNG, ADRIANA LOPEZ, and Caption KATHERINE SCHEIWE, n/k/a Katherine Polk, Individually and on Behalf of All Others Similarly Situated, Plaintiffs-Appellants, v. JAMES M. O’DEA, Individually and d/b/a James M. O’Dea & Associates, and STATE FARM MUTUAL AUTO INSURANCE COMPANY, Defendants (State Farm Mutual Auto Insurance Company, Defendant-Appellee). District & No. First District, Fourth Division Docket No. 1-15-1572 Filed December 7, 2017 Decision Under Appeal from the Circuit Court of Cook County, No. 10-CH-43684; the Review Hon. Sebastian T. Patti, the Hon. Richard J. Billik, and the Hon. Rodolfo Garcia, Judges, presiding. Judgment Affirmed in part, vacated in part, remanded with instructions; motion denied. Counsel on Grace E. Wein, of Wein & Associates, P.C., of Chicago, for Appeal appellants. James P. Gaughan, of Riley Safer Holmes & Cancila LLP, of Chicago, for appellee. Panel JUSTICE ELLIS delivered the judgment of the court, with opinion. Presiding Justice Burke and Justice McBride concurred in the judgment and opinion. OPINION ¶1 When parties on the same side of a lawsuit wish to strategize to defeat their common litigation opponent, they may meet together and share information that would otherwise be privileged under the attorney-client or work-product doctrines. A lawyer may share privileged information from his or her client with the other party’s lawyer. One party may speak to the other party’s lawyer. One client may speak to the other client, in the presence of the lawyers. When these communications occur, the parties risk waiving privileges because they are disclosing privileged information to third parties—the other client and the other client’s lawyer. ¶2 This case requires us to decide whether two codefendants to a lawsuit waived these privileges when they met and shared information about that lawsuit as part of a “joint defense agreement” they executed. ¶3 Federal courts and many state courts have recognized an exception to the waiver rule in this context, protecting the confidentiality of these joint communications as to third parties. Other states have codified this exception to the waiver rule into statute. Surprisingly, no published decision in Illinois has ever decided whether parties with a common interest in defeating a litigation opponent may share and pool information without waiving their attorney-client and work-product privileges as to third parties. ¶4 After considering our supreme court’s decisions on related issues and taking into account case law from other jurisdictions, we likewise recognize a common-interest exception to the waiver rule. As in virtually every other jurisdiction, we hold that coparties in a case who agree to share information pursuant to their common interest in defeating their litigation opponent do not waive either the attorney-client or work-product privilege when they do so. ¶5 While we agree with the trial court’s recognition of this common-interest exception to the waiver rule, we remand this matter to the trial court to conduct an in camera, communication-by-communication review of the challenged conversations involving the codefendants and their attorneys. We vacate the trial court’s dispositive rulings—the dismissal of one count, the grant of summary judgment on two others—pending the outcome of the in camera review, given the possibility that additional facts may become discoverable after that review. ¶6 I ¶7 Between 2006 and 2009, State Farm Mutual Auto Insurance Company (State Farm) filed a series of subrogation lawsuits through its counsel, James M. O’Dea, individually and doing business as James M. O’Dea & Associates, including suits against Frank Selby, Martin Young, Adriana Lopez, and Katherine Scheiwe, now known as Katherine Polk. In October 2010, these four individuals, as named plaintiffs, filed a purported class-action lawsuit in which they claim that their subrogation lawsuits were part of “a large scale scheme

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perpetrated by defendants in subrogation lawsuits” to obtain “fraudulent default judgments” against subrogation defendants “by circumventing the State of Illinois [r]ules governing service of process.” ¶8 In sum, plaintiffs claimed that O’Dea, an attorney engaged by State Farm in its subrogation cases, was bypassing the office of the sheriff of Cook County for the purposes of service of summons, using unlicensed process servers, and obtaining default judgments without service of process, resulting in the suspension of their drivers’ licenses based on these void judgments and requiring them to take steps to vacate their default judgments. The complaint further alleged an overall scheme involving State Farm and claimed that this scheme was financed by State Farm’s payment of invoices from O’Dea for sheriff’s fees—fees that were never incurred, permitting O’Dea to retain these funds for his own use. ¶9 Relevant to this appeal, plaintiffs sued State Farm for abuse of process, civil conspiracy, and malicious prosecution. The trial court dismissed the abuse-of-process claims for failure to state a claim. The court later entered summary judgment on the claims of civil conspiracy and malicious prosecution. The action is still pending in the trial court against O’Dea. This appeal only concerns the judgments as to State Farm. ¶ 10 Plaintiffs appeal from several of the circuit court’s orders, including the court’s application of the “joint legal defense privilege,” other discovery orders, the dismissal of plaintiffs’ abuse-of-process action against State Farm for failure to state a claim, and grant of summary judgment on plaintiffs’ claims of civil conspiracy and malicious prosecution. ¶ 11 Plaintiffs argue that “to understand the issues related to the dismissal of State Farm from the litigation, it is important to review the seminal problem related to discovery that overshadowed the trial court’s subsequent rulings.” Plaintiffs argue that the trial court’s ruling on certain discovery matters prevented them from fully responding to the motion for summary judgment, one of many reasons, they claim, that the trial court erred in entering summary judgment on the civil-conspiracy and malicious-prosecution counts. ¶ 12 Within the discovery matters alone, there are sub-issues. One is the trial court’s recognition of the “joint legal defense privilege.” Another is the trial court’s refusal to require a privilege log for information it deemed covered by that privilege. Third, plaintiffs complain of a protective order entered in this case to protect confidential and sensitive information disclosed in discovery. Finally, plaintiffs claim that the trial court erred in sequencing discovery such that they were permitted to issue discovery requests only regarding the four named plaintiffs and not concerning other members of the purported class of subrogation defendants sued by State Farm and O’Dea during the relevant time period. We will take up these issues in turn.

¶ 13 II ¶ 14 We begin with the trial court’s recognition of the “joint legal defense privilege” in Illinois. Our review is de novo. See Center Partners, Ltd. v. Growth Head GP, LLC, 2012 IL 113107, ¶ 65 (existence of privilege, or exception thereto, is question of law subject to de novo review). ¶ 15 Several years into this lawsuit, plaintiffs submitted this interrogatory to State Farm: “Did State Farm ever notify, or advise, from January 1, 2006 to the present, either in writing or orally, [O’Dea] that there were any irregularities discovered in the

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handling of the State Farm subrogation matters? If so, state the date upon which the notification occurred, whether it was orally or in writing, the person from State Farm that issued the notification and the individual to whom the notification was addressed.” (Emphasis added.) ¶ 16 Because the scope of that interrogatory included conversations between codefendants State Farm and O’Dea and their lawyers that occurred after the filing of this purported class-action lawsuit in October 2010, State Farm asserted (besides attorney-client and work-product privileges) a “joint defense privilege,” arguing that anything that codefendants State Farm and O’Dea, as well as their respective lawyers, said to each other after the filing of the lawsuit, about the lawsuit, was privileged as part of communications concerning a common or joint defense. State Farm did acknowledge that postcomplaint conversations between State Farm and O’Dea responsive to this interrogatory had occurred: “Subject to these objections, and without waiving them, State Farm and O’Dea, with the involvement of counsel, have had privileged discussions relating to [p]laintiff’s allegations during the pendency of this lawsuit.” ¶ 17 The circuit court, after briefing and argument, recognized the “joint legal defense privilege” in Illinois. The court acknowledged that no Illinois reviewing court had recognized the privilege. But the court noted that the privilege had been recognized in federal court and other jurisdictions and reasoned that Illinois should recognize it, too, finding “nothing in Illinois case law that would preclude its application in an Illinois cause of action.” The trial court thus ruled that, to the extent that plaintiffs sought postcomplaint communications between State Farm and O’Dea in their interrogatory, that information was privileged from discovery. ¶ 18 On appeal, State Farm tells us that the “joint defense” doctrine has already been recognized in Illinois as the common-interest doctrine, pursuant to our supreme court’s opinion in Waste Management, Inc. v. International Surplus Lines Insurance Co., 144 Ill. 2d 178, 193 (1991). Plaintiffs disagree; they argue that the Waste Management common-interest doctrine is different than the protection State Farm seeks. As we will explain below, plaintiffs are correct that the Waste Management common-interest doctrine is different than the remedy State Farm seeks. But State Farm is not altogether wrong, either, because the Waste Management common-interest doctrine is rooted in many of the same principles as the remedy State Farm seeks, whether we call it the “joint defense” doctrine or by another name. ¶ 19 We will begin by examining Waste Management common-interest doctrine as it currently exists in Illinois.

¶ 20 A ¶ 21 In Waste Management, our supreme court explained what it called the common-interest doctrine this way: “[U]nder the common interest doctrine, when an attorney acts for two different parties who each have a common interest, communications by either party to the attorney are not necessarily privileged in a subsequent controversy between the two parties. [Citations.] This is especially so where an insured and his insurer initially have a common interest in defending an action against the [insured], and there is a possibility that those communications might play a role in a subsequent action between the insured and his insurer.” Id.

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¶ 22 At first blush, that seems simple enough. If one lawyer represents two parties who share a common interest in the outcome of a lawsuit (typically an insured and its insurer, who both want the insured to defeat a lawsuit brought by a plaintiff) and those parties are later embroiled in a controversy themselves (usually over whether the insurer has to cover the insured for the underlying judgment), either party may discover communications the other party made with that lawyer about that underlying lawsuit. Id. ¶ 23 That doctrine was expanded, however—by Waste Management itself—to include the situation where the insured retained counsel to defeat the underlying tort lawsuit but the lawyer did not represent the insurance company that was potentially liable to cover the insured’s loss, nor did the insurance company even speak to the insured’s lawyer. Despite the fact that the insurer did not retain or communicate with the insured’s counsel, when the insured and insurer later became adverse in a declaratory-judgment action over coverage of the tort judgment, the insurance company was able to discover all communications between the insured and its counsel regarding the underlying tort lawsuit. Id. at 194. ¶ 24 The supreme court recognized that the common-interest doctrine was initially rooted in the so-called “dual-representation” doctrine, in which one lawyer represented two different parties simultaneously. See id. (noting that “[i]n the typical case *** the attorney has provided joint or simultaneous representation of the parties”); see also Brunton v. Kruger, 2015 IL 117663, ¶ 79 (“The common interest doctrine is rooted in the dual representation doctrine, which has a long history as an exception to the attorney-client privilege.”). But in Waste Management, 144 Ill. 2d at 194, the supreme court made clear that the common-interest doctrine “may properly be applied where the attorney, though neither retained by nor in direct communication with the insurer, acts for the mutual benefit of both the insured and insurer.” In fact, the Waste Management common-interest doctrine has even been held to apply when each party with the common interest has its own lawyer and neither party communicates with the other party’s lawyer. See Western States Insurance Co. v. O’Hara, 357 Ill. App. 3d 509, 512 (2005). ¶ 25 So in the Waste Management common-interest doctrine, the focus is on the “commonality of interests” between the two parties, not whether they retained the same lawyer. Waste Management, 144 Ill. 2d at 194. And while Illinois courts have never explicitly limited this doctrine to the insurer-insured relationship, that is the situation where it is most obviously applicable, as Waste Management itself noted. See id. at 193. ¶ 26 An insurer and an insured often have a complicated relationship; they have a common interest in defeating a lawsuit against the insured, but they might hold very different views on whether the insurer has to cover any resulting monetary judgment against the insured. Id. at 194. Thus, to the extent that an insurer and insured share a common interest in defeating the underlying lawsuit, either party may discover what the other communicated to its attorney about that underlying lawsuit, if the two parties later fight over insurance coverage. Id. But the parties may not discover what the other party discussed with its lawyers about insurance-coverage issues, because those are not interests they have in common; they are diametrically opposed on that issue. See id. at 200-01 (insurer may discover insured’s attorney’s work files relating to underlying tort litigation but may not discover any insured-attorney communications regarding insurance coverage); Illinois Emcasco Insurance Co. v. Nationwide Mutual Insurance Co., 393 Ill. App. 3d 782, 790 (2009) (noting that Waste Management “preserves the attorney-client privilege for communications between [insurer]

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and its attorneys regarding the coverage issues arising in this declaratory judgment action [over insurance coverage]”). ¶ 27 State Farm says that the Waste Management common-interest doctrine supports its claim of a “joint defense privilege” here with its codefendant, O’Dea. To be sure, there are some similarities between that doctrine and what State Farm seeks. State Farm is saying that, after this purported class-action lawsuit was filed against State Farm and O’Dea, the two codefendants have, on various occasions, discussed a mutual defense of this lawsuit in joint conferences with their respective lawyers. State Farm says that the joint defense of this lawsuit is a matter of “common interest” between the codefendants and the law should respect those conversations as privileged. ¶ 28 But plaintiffs are correct that the remedy State Farm seeks, though obviously related to the Waste Management common-interest doctrine, in fact occurs under different circumstances and produces very different results. The Waste Management common-interest doctrine defeats a claim of privilege, when asserted by one party to the common interest against the other party to the common interest, when the two parties later become adverse. See Brunton, 2015 IL 117663, ¶ 83 (“the common-interest doctrine is not intended to protect a claim of attorney-client privilege” but, rather, “to defeat a claim of privilege when both parties to a lawsuit share a common interest in the communications made in confidence by one of the parties to its attorney” (emphases in original)). ¶ 29 State Farm does not want to defeat a claim of privilege but to assert one. To put a finer point on the matter, State Farm is trying to avoid the waiver of attorney-client or work-product privilege that would ordinarily result if, during its joint conferences with O’Dea and his lawyer, State Farm shared information or work product with its codefendant and codefendant’s counsel. See Center Partners, Ltd., 2012 IL 113107, ¶ 35 (client waives attorney-client privilege if it discloses privileged information to third party); Sherman v. Ryan, 392 Ill. App. 3d 712, 736 (2009) (same for work-product privilege). Without the ability to assert some sort of exception, State Farm’s privilege would be waived by disclosure of information to, or in the presence of, third parties—O’Dea and O’Dea’s lawyer. ¶ 30 Viewed in this way, the remedy State Farm seeks—what it calls the “joint defense privilege”—is looking at the same situation as the common-interest doctrine but from a different viewpoint. The Waste Management common-interest doctrine looks at whether one party with the common interest may shield its communications from the other party with the common interest, in a later proceeding. The “joint defense privilege,” using State Farm’s vernacular, looks at whether the two parties to the common interest may shield their joint communications about that common interest from third parties—including their opponent in litigation. ¶ 31 So as related as the two doctrines may be, State Farm cannot simply latch onto the Waste Management common-interest doctrine for its relief. That doctrine is not applicable here. ¶ 32 The trial court found it inapplicable, too. But the court decided that, after a review of the doctrine and careful consideration, Illinois should recognize the “joint legal defense” doctrine in this case. Because State Farm spent much of its original brief arguing that its claim was supported by the Waste Management common-interest doctrine in Illinois and plaintiffs spent most of their briefs arguing that it was not, we ordered additional briefing on whether this court should recognize a “joint defense” doctrine, by whatever name we may call it, as a

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¶ 33 B ¶ 34 As we noted, generally, a client waives an attorney-client privilege if it discloses privileged information to a third party. Center Partners, Ltd., 2012 IL 113107, ¶ 35. The work-product privilege may be waived in much the same way. Sherman, 392 Ill. App. 3d at 736 (but finding no waiver of work-product privilege in that context). So without some protection in the law, when parties on the same side of a lawsuit meet together, clients and lawyers alike, to strategize over the prosecution or defense of the case, they risk waiving their attorney-client privilege for anything that is said in that meeting and likewise the work-product privilege for any work product shared. ¶ 35 The Restatement of the Law Governing Lawyers provides that, in this context, lawyers and parties on the same side of a lawsuit (or potential lawsuit) may converse together and may share work product, without waiving any privilege as to third parties, including the opposing party in the lawsuit. Specifically, section 76, paragraph 1, of the Restatement (Third) of the Law Governing Lawyers, lays out this doctrine: “(1) If two or more clients with a common interest in a litigated or nonlitigated matter are represented by separate lawyers and they agree to exchange information concerning the matter, a communication of any such client that otherwise qualifies as privileged under [the attorney-client privilege] that relates to the matter is privileged as against third persons. Any such client may invoke the privilege, unless it has been waived by the client who made the communication.” Restatement (Third) of the Law Governing Lawyers § 76 (2000) (hereinafter Restatement § 76(1)). ¶ 36 State Farm cites this Restatement section as the embodiment of what it seeks here. State Farm and O’Dea entered into a “joint defense agreement,” whereby they would confidentially share information concerning their joint defense of this class-action lawsuit. Because State Farm and O’Dea are “clients with a common interest in a litigated *** matter” and are “represented by separate attorneys,” and “they agree[d] to exchange information concerning the matter” with one another, State Farm argues that any communications between the codefendants are “privileged as against third persons,” including plaintiffs. See id. ¶ 37 The protection State Farm seeks was first recognized in 1871 by the Virginia Supreme Court, in the context of criminal litigation, and became known as the “common-defense” or “joint defense” rule. See Chahoon v. Commonwealth, 62 Va. 822, 841-42 (1871) (“They had a right, all the accused and their counsel, to consult together about the case and the defence, and it follows as a necessary consequence, that all the information, derived by any of the counsel from such consultation, is privileged ***.”). ¶ 38 The doctrine was recognized through the first half of the 1900s by a few courts, in different contexts, including civil cases, and involving work product as well as attorney-client communications. See, e.g., Schmitt v. Emery, 2 N.W.2d 413, 417 (Minn. 1942), overruled on other grounds by Leer v. Chicago, Milwaukee, St. Paul & Pacific Ry. Co., 308 N.W.2d 305 (Minn. 1981) (civil case protecting shared work product); State v. Emmanuel, 259 P.2d 845, 854 (Wash. 1953) (en banc) (recognizing and applying doctrine where “[t]he persons present at this conference had a mutual interest in defending against the allegations of [the] complaint”); see also Note, Waiver of Attorney-Client Privilege on

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Inter-Attorney Exchange of Information, 63 Yale L.J. 1030, 1032 (1954) (as of 1954, “[t]he few cases relevant to the more complicated question of the attorney-client privilege indicate that persons conducting a ‘joint defense’ may pool information without waiving this privilege”). ¶ 39 Since that time, “courts have extended” this doctrine “[b]ecause ‘the need to protect free flow of information from client to attorney logically exists whenever multiple clients share a common interest about a legal matter.’ ” In re Grand Jury Subpoenas, 89-3 & 89-4, John Doe 89-129, 902 F.2d 244, 249 (4th Cir. 1990) (quoting United States v. Schwimmer, 892 F.2d 237, 243-44 (2d Cir. 1989)). Thus, this doctrine has been extended to: * civil codefendants (see Western Fuels Ass’n v. Burlington Northern R.R. Co., 102 F.R.D. 201 (D. Wyo. 1984)); * companies and employees that had been individually summoned before a grand jury who shared information before any indictment was returned (see Continental Oil Co. v. United States, 330 F.2d 347 (9th Cir. 1964)); * potential coparties to prospective litigation (see In re LTV Securities Litigation, 89 F.R.D. 595 (N.D. Tex. 1981)); * coplaintiffs in a civil action (see In re Grand Jury Subpoenas, 902 F.2d at 249; United States ex rel. Pogue v. Diabetes Treatment Centers of America, No. Civ. 99-3298, 2004 WL 2009413, at *4 (D.D.C. May 17, 2004)); * governmental coplaintiffs in multi-state litigation (see Tobaccoville USA, Inc. v. McMaster, 692 S.E.2d 526, 531 (S.C. 2010)); * plaintiffs who were pursuing separate actions in different states (see Schachar v. American Academy of Ophthalmology, Inc., 106 F.R.D. 187 (N.D. Ill. 1985)); and * civil defendants who were sued in separate actions (see Transmirra Products Corp. v. Monsanto Chemical Co., 26 F.R.D. 572 (S.D.N.Y. 1960)). Because of this expansion, courts have recognized this doctrine under many different names, sometimes even referring to it as an independent privilege. See George S. Mahaffey, Jr., Taking Aim at the Hydra: Why the “Allied-Party Doctrine” Should Not Apply in Qui Tam Cases When the Government Declines to Intervene, 23 Rev. Litig. 629, 630-32 (2004).1 ¶ 40 We are more inclined toward the modern trend of referring to the doctrine not as a privilege in and of itself—the privilege is either the attorney-client or work-product privilege—but as an exception to the rule of waiver that would ordinarily be triggered when attorneys and clients communicate in the presence of, or share information with, third parties; this exception is based on the parties’ common interest in defeating a litigation adversary. See, e.g., O’Boyle v. Borough of Longport, 94 A.3d 299, 317 (N.J. 2014) (adopting “the common interest rule” as “exception to waiver of confidential attorney-client communications or work product”); Ambac Assurance Corp. v. Countrywide Home Loans, Inc., 57 N.E.3d 30, 39 (N.Y. 2016) (explaining that “common-interest exception” or

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“common-interest doctrine” is “not an evidentiary privilege or an independent basis for the attorney-client privilege” but, instead, “limits the circumstances under which attorneys and clients can disseminate their communications to third parties without waiving the privilege” (emphasis in original)); Tobaccoville USA, 692 S.E.2d at 531 (“common-interest doctrine” is “not a privilege in itself, but is instead an exception to the waiver of an existing privilege”); Arizona Independent Redistricting Comm’n v. Fields, 75 P.3d 1088, 1100 (Ariz. Ct. App. 2003) (“The doctrine does not create a privilege, but is an exception to the rule that communications between a person and a lawyer representing another person are not privileged.”). ¶ 41 Among many other federal courts, federal courts sitting in Illinois have recognized this common-interest exception to the waiver rule, though not by that name. For example, in United States v. McPartlin, 595 F.2d 1321, 1336 (7th Cir. 1979), the court held that a party was entitled to the protection of the attorney-client privilege when his statements were made in confidence to an attorney for a codefendant for a common purpose related to both defenses. The Seventh Circuit held that “[t]he privilege protects pooling of information for any defense purpose common to the participating defendants.” Id. at 1337; see also Schachar, 106 F.R.D. at 191 (“It is now well established that attorneys facing a common litigation opponent may exchange privileged communications and attorney work product in order to prepare a common defense without waiving either privilege.”). ¶ 42 Aside from federal court, many states have recognized that parties with a common interest in defeating a litigation opponent (or potential opponent) may share privileged information without waiving the privilege as to third parties. For example, just three years ago, the New Jersey Supreme Court, as a matter of first impression, “expressly adopt[ed] the common interest rule.” O’Boyle, 94 A.3d at 317. Other state supreme courts, in the last 10 years, have adopted the doctrine, including South Carolina, Pennsylvania, Texas, and Massachusetts. See Tobaccoville USA, 692 S.E.2d at 531; Karoly v. Mancuso, 65 A.3d 301, 315 (Pa. 2013); In re XL Specialty Insurance Co., 373 S.W.3d 46, 51 (Tex. 2012); Hanover Insurance Co. v. Rapo & Jepsen Insurance Services, Inc., 870 N.E.2d 1105, 1111-12 (Mass. 2007). ¶ 43 New York has recognized the common-interest exception to the waiver rule since 1989 and since then has applied it “in criminal as well as civil matters, to communications of both coplaintiffs and codefendants.” Ambac Assurance Corp., 57 N.E.3d at 37. The Tennessee Supreme Court recognized it in 1950, though finding it inapplicable in that instance; in modern times, the lower courts have reiterated its viability in Tennessee. See Vance v. State, 230 S.W.2d 987, 990-91 (Tenn. 1950); Boyd v. Comdata Network, Inc., 88 S.W.3d 203, 214 (Tenn. Ct. App. 2002). ¶ 44 State appellate courts have recognized it, including courts in Maryland, Arizona, Indiana, and Florida. See Gallagher v. Office of the Attorney General, 787 A.2d 777, 784-85 (Md. Ct. Spec. App. 2001) (recognizing it is “uniformly held that under the common interest rule, parties with shared interests in actual or pending litigation against a common adversary may share privileged information without waiving their right to assert the privilege”); Fields, 75 P.3d at 1100; Price v. Charles Brown Charitable Remainder Unitrust Trust, 27 N.E.3d 1168, 1173 (Ind. Ct. App. 2015); Visual Scene, Inc. v. Pilkington Bros., plc., 508 So. 2d 437, 443 (Fla. Ct. App. 1987).

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¶ 45 Equally interesting is that we are aware of no jurisdiction that has rejected the principle when called upon to recognize it. Many states apparently have not addressed the question in a published decision—as in Illinois—probably owing to the fact that discovery issues infrequently make their way to an appellate court. But as far as our research discloses, every court that has addressed it has recognized it in some form. To be sure, courts have disagreed on the scope of this common-interest exception: whether the parties must be perfectly aligned or just generally share a common litigation goal, whether it applies beyond current litigation to anticipated litigation, whether it applies beyond litigation to commercial interests generally, which communications are protected, and the like. See generally O’Boyle, 94 A.3d at 317 (noting various disagreements over scope of common-interest exception on which courts around country have disagreed). ¶ 46 But as far as our research and that of the parties discloses, none of those courts has refused to recognize the common-interest exception to the waiver rule. None of them has held that parties with a common interest to defeat an adversary in a case or potential case should not be allowed to pool information and communicate with each other without fear of waiving a privilege. ¶ 47 We also find it worthy of note that, when the United States Supreme Court was recommending language to Congress for the Federal Rules of Evidence in 1972, it listed nine specific privileges for inclusion, including the attorney-client privilege and including this common-interest exception to waiver within that privilege. In proposed Rule 503(b)(3), the Supreme Court recommended this language for statutory codification: “(b) General rule of privilege. A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client, *** (3) by him or his lawyer to a lawyer representing another in a matter of common interest.” (Emphasis added.) Order, Amendments to the Federal Rules of Evidence, 56 F.R.D. 183, 236 (Dec. 18, 1972) (hereinafter Proposed FRE 503(b)(3)). ¶ 48 Ultimately, “Congress rejected this recommendation in favor of [Federal Rule of Evidence] 501’s general mandate.” Jaffee v. Redmond, 518 U.S. ^[1], 8 n.7 (1996); see also Trammel v. United States, 445 U.S. 40, 47 (1980); Fed. R. Evid. 501, Advisory Committee Notes to 1974 Enactment (noting that “the House amended article V to eliminate all of the Court’s specific rules on privileges”). So while we glean little precedential value per se from this history, it is at least worth mentioning that the United States Supreme Court was prepared to see the common-interest exception to the waiver rule codified in federal statute. ¶ 49 The Uniform Law Commission of the National Conference of Commissioners on Uniform State Laws drafted Uniform Rules of Evidence, including section 502(b)(3), which protects attorney-client communications “by the client or a representative of the client or the client’s lawyer or a representative of the lawyer to a lawyer or a representative of a lawyer representing another party in a pending action and concerning a matter of common interest therein.” (Emphasis added.) Unif. R. Evid. 502(b)(3) (Unif. Law Comm’n 2005). Several states have enacted this provision into law in identical or similar form. See, e.g., Ark. R. Evid. 502(b)(3); Del. R. Evid. 502(b)(3); Haw. Rev. Stat. § 626-1, R. 503(b)(3); Ky. R. Evid. 503(b)(3); Me. R. Evid. 502(b)(3); Miss. R. Evid. 502(b)(3); N.H. R. Evid. 502(b)(3); N.D. R. Evid. 502(b)(3); 12 Okla. Stat. § 2502(B)(3); S.D. Codified Laws § 19-19-502(b)(3); Tex.

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R. Evid. 503(b)(1)(C); Vt. R. Evid. 502(b)(3); see Ambac Assurance Corp., 57 N.E.3d at 37 (discussing current legislation on common-interest exception). ¶ 50 With all of this in mind, we must determine whether Illinois should recognize the common-interest exception to the waiver rule in Illinois. We find many reasons that it should. ¶ 51 First, the common-interest exception to waiver “offers all parties to the exchange the real possibility for better representation by making more information available to craft a position and inform decision-making in anticipation of or in the course of litigation.” O’Boyle, 94 A.3d at 316. “Uninhibited communication among joint parties and their counsel about matters of common concern is often important to the protection of their interests.” McPartlin, 595 F.2d at 1336. Without such protection between two parties sharing a common interest, “the threat of mandatory disclosure may chill the parties’ exchange of privileged information and therefore thwart any desire to coordinate legal strategy.” Ambac Assurance Corp., 57 N.E.3d at 38. Protecting these communications thus “promotes candor that may otherwise have been inhibited” (id.) and allows attorneys “to fully and completely prepare for trial by assuring that their legal preparations will not be accessible to an adversary.” Pogue, 2004 WL 2009413, at *4. ¶ 52 Second, “[c]ooperation between defendants in such circumstances is often not only in their own best interests but serves to expedite the trial or *** the trial preparation.” McPartlin, 595 F.2d at 1337. Co-counsel in multiple-party cases often pool their resources at trial; one lawyer may cross-examine one of the opponent’s witnesses, while the other will focus on a different witness; one may handle the opening statement, while another focuses on the summation. Entire portions of the defense or prosecution of a case may be divided up among the parties. That division of work not only helps the multiple parties on the same side of the case; it promotes efficiency at trial, preventing what could be a fair amount of redundancy in questioning and argument. The discovery process is likewise better served when parties are allowed to pool resources, avoiding unnecessary repetition. ¶ 53 Third, the attorney-client privilege in Illinois already protects statements made by the client to necessary agents of the attorney or client, including certain nontestifying experts and investigators who assist in the preparation of the case. See, e.g., People v. Knuckles, 165 Ill. 2d 125, 135 (1995) (conversations between client and nontestifying mental health consultant privileged from disclosure); People v. Knippenberg, 66 Ill. 2d 276, 284 (1977) (defendant’s communications with defense investigator privileged from disclosure). The privilege so extends because of lawyers’ need “to fully investigate their clients’ cases” (Knuckles, 165 Ill. 2d at 132) and to “investigate fully and without delay” (internal quotation marks omitted) (Knippenberg, 66 Ill. 2d at 284). It feels like a logical extension to treat confidential communications between a client and his coparty’s attorney the same way, given that the stated reason for the common-interest exception to waiver is essentially the same as the attorney-client privilege, to “ ‘protect the free flow of information from client to attorney.’ ” In re Grand Jury Subpoenas, 902 F.2d at 249 (quoting Schwimmer, 892 F.2d at 243-44); see Hanover, 870 N.E.2d at 1111 (likewise noting that common-interest exception to waiver is consistent with extension of attorney-client privilege to statements made to agents of attorney, including consultants). ¶ 54 Another factor to consider, at least anecdotally, is that at least some practitioners in Illinois state court and some judges seem to be under the impression that “common-interest agreements” and “joint defense agreements” are already recognized and enforceable under

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Illinois law. See, e.g., BorgWarner, Inc. v. Kuhlman Electric Corp., 2014 IL App (1st) 131824, ¶ 6 (parties “entered into a ‘Joint Defense and Confidentiality Agreement’ *** to outline the parties’ common interest relating to the underlying” claims); Brandon Apparel Group v. Kirkland & Ellis, 382 Ill. App. 3d 273, 279 (2008) (trial court had found documents at issue were protected subject to “common interest doctrine” because documents were prepared in order to further parties’ “joint litigation strategy”). ¶ 55 Indeed, federal district courts in Illinois, sitting in diversity jurisdiction on Illinois state-law claims and thus applying Illinois law on questions of privilege, have written that Illinois recognizes the same common-interest exception as federal courts. See Grochocinski v. Mayer Brown Rowe & Maw LLP, 251 F.R.D. 316, 326 (N.D. Ill. 2008) (“The legal principles governing application of the common interest doctrine appear to be the same under Illinois and [f]ederal law.”). That conclusion, as we have tried to explain above, is simply incorrect. The district court in Grochocinski cited no Illinois case law for that proposition and exclusively relied on a federal magistrate’s decision in Dexia Credit Local v. Rogan, 231 F.R.D. 268, 273 (N.D. Ill. 2004). ¶ 56 Dexia, in turn, cited only federal cases, too, with the exception that it cited our supreme court’s decision in Waste Management for the proposition that “ ‘[i]t is the commonality of interests which creates the exception, not the conduct of the litigation.’ ” Id. at 273 (quoting Waste Management, 144 Ill. 2d at 194). While that statement in Waste Management is no doubt true, Waste Management was not talking about the same “common-interest doctrine” that Dexia was. Dexia was discussing the doctrine we have been most recently analyzing, the common-interest exception to the waiver rule. See id. at 274-75 (finding that parties “share[d] a common interest in pursuing a common legal goal” and “[a]ccordingly, we find that [coplaintiffs] fall within the common interest doctrine, such that [one party] does not waive the attorney-client privilege by sharing with [other party] documents that fall within that common interest”). ¶ 57 But however incorrect those federal decisions may be, the fact remains that the prevailing view in federal courts sitting in Illinois seems to be that Illinois has already adopted a common-interest exception to the waiver doctrine. ¶ 58 Secondary legal sources seem to think so, too. Any practitioner in Illinois, looking for tips on “Illinois civil trial evidence” from the Illinois Institute for Continuing Legal Education (IICLE), may read about the “ ‘common-interest rule’ or ‘joint-defense doctrine’ or sometimes the ‘common-defense rule,’ ” though the IICLE cites only federal decisions for support. Michael J. Baron, et al., Common-Interest Doctrine, in Illinois Civil Trial Evidence § 7.8, at 7-16 (Ill. Inst. For Cont. Legal Educ. 2012 Supp.). So, too, does the Illinois Practice series, on the topic of “Civil Discovery,” also citing exclusively federal case law. See 10 Jeffrey S. Kinsler & Jay E. Grenig, Illinois Practice, Civil Discovery § 1.14 (2d ed. 2017 Supp.). Likewise, Westlaw’s “Practical Law Litigation” series online, specific to Illinois, provides a model “joint defense agreement” on this topic. See Joint Defense and Confidentiality Agreement (IL), Thomson Reuters Practical Law Standard Document, 2014 WL 2749134. ¶ 59 We are not bound by what practitioners think or what secondary legal authorities say. Nor are we required to follow a federal court’s interpretation of Illinois law. But as we grapple with whether to recognize a common-interest exception to the waiver rule, it is helpful to know that many practitioners and authorities in Illinois seem to think it already has

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been recognized. See Hanover Insurance Co., 870 N.E.2d at 1111-12 (in adopting common-interest exception to waiver, noting that litigants in Massachusetts “have relied on [the] implicit existence” of doctrine). ¶ 60 Against all of this, we must consider the reasons not to recognize this doctrine in Illinois. The most obvious reason is that disclosure of information in Illinois is the rule and privileges the exception; thus, privileges should be narrowly construed. Consolidation Coal Co. v. Bucyrus-Erie Co., 89 Ill. 2d 103, 118 (1982). No doubt, the attorney-client privilege, itself, is in derogation of our legal system’s traditional search for the truth. Id.; Adler v. Greenfield, 2013 IL App (1st) 121066, ¶ 41 (because attorney-client privilege “poses a bar to the discovery of relevant and material facts, it is an exception to the general duty to disclose and is interpreted narrowly”). Likewise, any extension of that privilege would only further inhibit the truth-seeking function of our system. ¶ 61 To that point, Professor Graham complains that, while the common-interest exception to the waiver rule “is efficient because it increases the flow of information between co-litigants,” the flip side is that “it also reduces the flow of information to the court and no one has ever made a convincing argument that strategy sessions among codefendants produce a benefit to the legal system that outweighs the cost of the loss of evidence to the courts.” 24 Charles Alan Wright & Kenneth W. Graham, Federal Practice & Procedure Evidence § 5493, at 461-62 (1986) (“Privileged Communications—Allied Lawyer”). ¶ 62 In the end, taking everything we have detailed above into account, the overwhelming weight of authority and reason leads us to conclude that Illinois should likewise recognize the common-interest exception to the waiver rule. ¶ 63 Principal among the reasons for recognizing the common-interest exception to the waiver rule is that, as we mentioned earlier, we find it to be a logical extension of the Waste Management common-interest doctrine, which already recognizes the unique relationship between two separate parties that share a common interest in the outcome of a matter, whether they have the same lawyer or separate counsel and regardless of whether they have actually shared information. See Waste Management, 144 Ill. 2d at 194; Western States Insurance Co., 357 Ill. App. 3d at 517. Although it is ultimately used to defeat a claim of privilege, the Waste Management common-interest doctrine is in fact an expansive view of the attorney-client privilege—one that includes both parties with the common interest, and each of their lawyers, within the privilege’s umbrella, which is why one of the coparties cannot assert the privilege against the other. ¶ 64 In that respect, the common-interest exception to the waiver rule is no different. It stems from that same relationship of common interest, and it likewise expands the protection of the attorney-client privilege to cover both parties sharing the common interest and their lawyers. The only differences are that with the common-interest exception to waiver, each party will always have separate counsel and, most significantly, the fight over disclosure is not between the coparties but with a third party—usually the opposing party in the case or controversy—wishing to intrude on those coparty conversations with counsel. It would make little sense to view the privilege expansively in the Waste Management scenario, when the coparties are trying to discover each other’s conversations, but restrictively when those coparties are trying to shield their joint communications from a third party. Simply put, if Illinois already recognizes a broad umbrella of privilege between parties while they share a

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common interest in the outcome of a lawsuit, there is no reason not to enforce that privilege as against third parties just as broadly. ¶ 65 As we previously noted, we also find the common-interest exception to the waiver rule to be a logical extension of our supreme court decisions extending the attorney-client privilege to include client communications with nontestifying mental-health experts (Knuckles, 165 Ill. 2d at 135) and investigators (Knippenberg, 66 Ill. 2d at 284). If the basis for protecting those communications is to allow a full and thorough preparation of the case (id.; Knuckles, 165 Ill. 2d at 132), that same reasoning would apply to allowing a client to speak in the presence of a coparty and its lawyer for the express purpose of pooling information for the better of the case. ¶ 66 The decisions we have discussed above provide additional reasons why the common-interest exception to the waiver rule should be recognized, and not a single court, when facing the question, has refused to recognize it. Several other states recognize it by statute. The United States Supreme Court recommended it for inclusion in the Federal Rules of Evidence. And for what it is worth, a lot of practitioners and judges will be surprised to learn that it has not already been recognized in Illinois. ¶ 67 We disagree with Professor Graham’s criticism that the need to allow coparties to strategize is not worth the price of withholding evidence from the justice system. We do not see how any more evidence would be exempt from disclosure than that which is already exempt from disclosure under the attorney-client and work-product privileges. ¶ 68 Consider, for example, the underlying case before us. State Farm and O’Dea are accused of conspiring to engage in tortious conduct toward plaintiffs. Hypothetically, if State Farm admitted to certain tortious conduct to its lawyers, that communication would be exempt from disclosure as an attorney-client privilege. But the tortious conduct, itself, would certainly be discoverable through the traditional process of interrogatories, document requests, requests to admit, subpoenas, and depositions. See Upjohn Co. v. United States, 449 U.S. 383, 395 (1981) (“The privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney ***.”); Kunz v. South Suburban Hospital, 326 Ill. App. 3d 951, 958 (2001) (“Communications are privileged; facts are not.”). Likewise, if State Farm and O’Dea engaged in some act or some exchanges of words indicative of a tort or conspiracy, those acts and those exchanges would unquestionably be discoverable—but State Farm’s discussion of them to its counsel, and O’Dea’s discussion of them to his counsel, would be exempted by the attorney-client privilege. ¶ 69 The only thing the common-interest exception to the waiver rule adds to this construct is that the lawyers and clients are together, communicating jointly. They are communicating on the same topics—the underlying facts of the case, their strategic significance, a plan of attack going forward—but the underlying facts, themselves, will remain just as discoverable as they always were. So the fear that a broad new category of information will be withheld if we recognize the common-interest exception to waiver is, in our view, overblown. ¶ 70 Simply put, any reason not to recognize the common-interest exception to the waiver rule is a reason not to recognize the attorney-client privilege in the first place. Likewise, any reason to recognize an attorney-client privilege, as we obviously do, is a reason to recognize the common-interest exception to the waiver rule, too. See, e.g., Hanover Insurance Co., 870 N.E.2d at 1110 (adopting common-interest exception to waiver; acknowledging limitation on

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truth-seeking function but reasoning that “the social good derived from the proper performance of the functions of lawyers acting for their clients … outweigh[s] the harm that may come from the suppression of the evidence” (internal quotation marks omitted)); O’Boyle, 94 A.3d at 317 (recognizing “intru[sion] on the fact-finding function of litigation” but recognizing common-interest exception as logical extension of attorney-client privilege). ¶ 71 For all of these reasons, the trial court properly recognized the common-interest exception to the waiver rule in Illinois.

¶ 72 C ¶ 73 Recognizing the existence of the common-interest exception to the waiver rule is one thing. Outlining its scope is another. At the margins, this doctrine has been the source of considerable debate and controversy. Courts have considered such questions as whether the common-interest exception extends beyond actual cases to potential litigation, whether the doctrine extends beyond litigation interests to other interests, and whether a written common-interest agreement is required or the extent to which the parties must establish some form of advance agreement to confidentially share information.^[2] ¶ 74 While the Restatement provision answers many of these questions, we will leave it to our supreme court whether to adopt that Restatement; being in uncharted terrain, we will confine our analysis to the facts before us and the questions we must necessarily resolve. We need not decide whether this doctrine extends beyond actual litigation to the threat of litigation, or whether a written or advance agreement is required, because in this case, an actual lawsuit was filed, and State Farm is asserting the common-interest exception to the waiver rule only to post-lawsuit statements between State Farm, O’Dea, and their lawyers after they executed a written confidentiality agreement. Nor do we need to decide whether the doctrine extends beyond litigation to other common interests, as here, the interests are obviously related to litigation. ¶ 75 But two points require resolution. The first is the extent to which the coparties must share a common interest—need they be aligned in all respects? The second question we must determine is which statements, precisely, are covered by the common-interest exception to the waiver rule. We will take these questions in that order.

¶ 76 1 ¶ 77 The first question, a matter of dispute between State Farm and plaintiffs here, is whether the parties sharing a “common interest” must be perfectly aligned in all respects or whether it suffices that they share some common interest in defeating a litigation opponent. ¶ 78 Our earlier discussion of the Waste Management common-interest doctrine easily answers that question. That doctrine, almost always occurring in the context of the complicated insurer-insured relationship, necessarily—indeed, by definition—involves situations where the parties share a common interest on one topic (the defense of an