common-interest exception in Illinois

2020OPINION ¶1 The issue presented is whether the common-interest exception to the attorney-client privilege as set forth in Waste Management, Inc. v. International Surplus Lines Insurance Co., 144 Ill. 2d 178, 190 (1991), extends to the circumstances of this case, where there is no insured- insurer relationship between the parties and the party claiming the privilege is bringing suit based on the defendant’s negligence in failing to procure appropriate insurance as a broker.

2020In that regard, the insurers argued that, under the common- interest doctrine, “the attorney-client privilege is unavailable to insureds.” (Emphasis added.) Id. at 193 .

2020And, according to Gallagher, none of the treatises cited by the court in Waste Management predicated the applicability of the common-interest doctrine on the special relationship of insured and insurer. ¶ 30 Although good arguments have been presented on both sides and it is certainly true, as Gallagher maintains, that no Illinois court so far has explicitly limited the common-interest doctrine to the insurer-insured relationship (see Selby v. O’Dea, 2017 IL App (1st) 151572, ¶ 25 (“while Illinois courts have never explicitly limited this doctrine to the insurer-insured relationship, that is t

2019And, according to Gallagher, none of the treatises cited by the court in Waste Management predicated the applicability of the common-interest doctrine on the special relationship of insured and insurer. ¶ 30 Although good arguments have been presented on both sides and it is certainly true, as Gallagher maintains, that no Illinois court so far has explicitly limited the common-interest doctrine to the insurer-insured relationship (see Selby v. O’Dea, 2017 IL App (1st) 151572, ¶ 25 (“while Illinois courts have never explicitly limited this doctrine to the insurer-insured relationship, that is t

2018See Western States Insurance Co. v. O’Hara, 357 Ill.

2009In Western States, the circuit court ruled that the common-interest doctrine applied to defeat privilege claims in a declaratory judgment action regarding a firm hired to advise the insurer on coverage issues, stating, “ T don’t think Tressler [coverage counsel] or Western States can insulate themselves from the advice and coverage obligations by hiring the Tressler firm and hiring the separate firm to represent O’Hara [the insured].’ ” Western States, 357 Ill.

2018See 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 .

2018It 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 att

2018See Grochocinski v. Mayer Brown Rowe & Maw LLP, 251 F.R.D. 316, 326 (N.D.

2017See Grochocinski v. Mayer Brown Rowe & Maw LLP , 251 F.R.D. 316 , 326 (N.D.

2018See, e.g., Square D Co., 264 F.R.D. at 391 (application of doctrine “must be resolved on a communication- by-communication or document-by-document basis”).

2017See, e.g. , Square D Co. , 264 F.R.D. at 391 (application of doctrine "must be resolved on a communication-by-communication or document-by-document basis").

2018See 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 .

2017See Tobaccoville USA , 692 S.E.2d at 531 ; Karoly v. Mancuso , 619 Pa. 486 , 65 A.3d 301 , 315 (2013) ; In re XL Specialty Insurance Co. , 373 S.W.3d 46 , 51 (Tex. 2012) ; Hanover Insurance Co. v. Rapo & Jepsen Insurance Services, Inc. , 449 Mass. 609 , 870 N.E.2d 1105 , 1111-12 (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. , 36 N.Y.S.3d 838 , 57 N.E.3d at 37 .

2018See In re Teleglobe Communications Corp., 493 F.3d 345, 364 (3d Cir. 2007) (limiting common-interest exception to situations where both parties are represented by different attorneys and the communications are between those attorneys). ¶ 92 The prevailing view also seems to be that the common-interest exception to waiver protects communications directly from Party A to Party B’s lawyer, provided it is done in furtherance of the common-interest agreement.

2017See In re Teleglobe Communications Corp. , 493 F.3d 345 , 364 (3d Cir. 2007) (limiting common-interest exception to situations where both parties are represented by different attorneys and the communications are between those attorneys). ¶ 92 The prevailing view also seems to be that the common-interest exception to waiver protects communications directly from Party A to Party B 's lawyer, provided it is done in furtherance of the common-interest agreement.

2018See, e.g., McPartlin, 595 F.2d at 1335-36 ; Fields, 75 P.3d at 1100 (doctrine covers “communications between a person and a lawyer representing another person”).

2017See, e.g. , McPartlin , 595 F.2d at 1335-36 ; Fields , 75 P.3d at 1100 (doctrine covers "communications between a person and a lawyer representing another person").

2018See United States v. Almeida, 341 F.3d 1318, 1324 (11th Cir. 2003) (finding weak justification for protecting one party’s statements to other party’s lawyer, but determining that overall purpose of common-interest exception is furthered by allowing parties to exchange information in this way). ¶ 96 It also seems to fall within the letter and spirit of the common-interest exception to include communications from the party to its own attorney that take place in the presence of the coparty’s lawyer.

2017See *1165 United States v. Almeida , 341 F.3d 1318 , 1324 (11th Cir. 2003) (finding weak justification for protecting one party's statements to other party's lawyer, but determining that overall purpose of common-interest exception is furthered by allowing parties to exchange information in this way). ¶ 96 It also seems to fall within the letter and spirit of the common-interest exception to include communications from the party to its own attorney that take place in the presence of the coparty's lawyer.

2018“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 .

2018The Seventh Circuit held that coparties’ positions need not be “in all respects compatible.” McPartlin, 595 F.2d at 1336 (finding that “[t]he cases do not establish such a limitation, and there is no reason to impose it”).

2018See 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 .

2018Evid. 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.

2018See 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.

2018We 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 .

2018See 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.

2017See Brunton , 2015 IL 117663 , ¶ 83, 392 Ill.Dec. 259 , 32 N.E.3d 567 ("the common-interest doctrine *1151 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.

2020Gallagher suggests that BorgWarner, Inc. v. Kuhlman Electric Corp., 2014 IL App (1st) 131824 , extended Waste Management in a way that is helpful to its position.

2019Gallagher suggests that BorgWarner, Inc. v. Kuhlman Electric Corp., 2014 IL App (1st) 131824 , extended Waste Management in a way that is helpful to its position.

2018The court seemed to find it clear that any communications identified by State Farm in that interrogatory response would be covered by the common-interest exception to the waiver rule. ¶ 108 When a discovery request “reveals on its face that the [information] sought fall[s] within the scope of an absolute privilege, compliance with Rule 201(n) *** serves no useful purpose and is *** entirely unnecessary.” Thomas v. Page, 361 Ill.

2017The court seemed to find it clear that any communications identified by State Farm in that interrogatory response would be covered by the common-interest exception to the waiver rule. ¶ 108 When a discovery request "reveals on its face that the [information] sought fall[s] within the scope of an absolute privilege, compliance with Rule 201(n) * * * serves no useful purpose and is * * * entirely unnecessary." Thomas v. Page , 361 Ill.

2018See 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 .

2017See Tobaccoville USA , 692 S.E.2d at 531 ; Karoly v. Mancuso , 619 Pa. 486 , 65 A.3d 301 , 315 (2013) ; In re XL Specialty Insurance Co. , 373 S.W.3d 46 , 51 (Tex. 2012) ; Hanover Insurance Co. v. Rapo & Jepsen Insurance Services, Inc. , 449 Mass. 609 , 870 N.E.2d 1105 , 1111-12 (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. , 36 N.Y.S.3d 838 , 57 N.E.3d at 37 .

2018First, Illinois and the Second Circuit, where the LBO litigation is being heard, have consistently applied the common-interest exception in similar fashion (compare Waste Management , 144 Ill.2d 178 , 161 Ill.Dec. 774 , 579 N.E.2d 322 , with Schaeffler v. United States , 806 F.3d 34 , 40 (2d Cir. 2015) (citing United States v. Schwimmer , 892 F.2d 237 (2d Cir. 1989) ), so this would hardly be a question of first impression for a district court in that circuit.

2018First, Illinois and the Second Circuit, where the LBO litigation is being heard, have consistently applied the common-interest exception in similar fashion (compare Waste Management, 144 Ill. 2d 178 , with Schaeffler v. United States, 806 F.3d 34, 40 (2d Cir. 2015) (citing United States v. Schwimmer, 892 F.2d 237 (2d Cir. 1989))), so this would hardly be a question of first impression for a district court in that circuit.

2017App. 3d 273 , 279, 320 Ill.Dec. 604 , 887 N.E.2d 748 (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.

2017App. 3d 273 , 279, 320 Ill.Dec. 604 , 887 N.E.2d 748 (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.

2018See 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 .

2017See Tobaccoville USA , 692 S.E.2d at 531 ; Karoly v. Mancuso , 619 Pa. 486 , 65 A.3d 301 , 315 (2013) ; In re XL Specialty Insurance Co. , 373 S.W.3d 46 , 51 (Tex. 2012) ; Hanover Insurance Co. v. Rapo & Jepsen Insurance Services, Inc. , 449 Mass. 609 , 870 N.E.2d 1105 , 1111-12 (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. , 36 N.Y.S.3d 838 , 57 N.E.3d at 37 .