In today’s Fortune 500 companies, many of which have a presence in the State of Illinois, lawyers perform a variety of roles, including but clearly not limited to, that of corporate counsel. In performing their roles, information is communicated to and from corporate lawyers by correspondence, e-mail, the preparation of memoranda and in the day-to-day performance of the corporate lawyers’ responsibilities. Just because a corporate employee has a law license, however, does not mean that communications to, from, or through that attorney are privileged.The Basics. Federal Rule of Evidence 501 provides that the Federal Common Law of Privileges is applicable to a Federal question case.1 Federal common law on the issue of privileges also applies to a supplemental jurisdiction State law claim.2 Whenever there is a conflict between bodies of privilege law, the conflict is resolved in favor of the reception of evidence.3
The 7th Circuit has adopted the "Wigmore Test" in determining the elements of an attorney/client privilege. All of the following elements must be established by the party attempting to invoke the attorney/client privilege:
1. Legal advice as sought;
2. From a professional legal advisor in his capacity as such;
3. The communications relate to that purpose;
4. The communications are made in confidence;
5. By a client;
6. At his insistence permanently protected;
7. From disclosure by himself or by the legal advisor;
8 Unless the protection is waived.4
As privileges impair the Court’s search for the truth, they are to be narrowly construed.5 Not all information transmitted to an attorney becomes cloaked with the privilege.6 A document claimed privilege must reveal, directly or indirectly, the substance of a confidential attorney/client communication.7
The Seventh Circuit continues to construe the attorney/client privilege narrowly, allowing protection only for attorney/client communications that are clearly seeking or giving legal advice, while disallowing the privilege for any other types of attorney/client communications, such as transmittal of business or technical information, or information that is intended to be disclosed to a third party in unedited form.8 A document which itself states or contains no legal analysis or legal conclusions by, definition, falls outside the privilege.9 A memo drafted by an attorney that contains only a phrase or sentence which is privileged because it provides legal advice should still be produced but the privileged sentence redacted.10 Communications made by an attorney to his client are privileged only insofar as they reveal confidential information furnished by the client.11
The Control Group Test in Not Applicable in Federal Court. The U.S. Supreme Court has rejected application of the control group test under Federal Rule of Evidence 501.12 In that case, the U.S. Supreme Court stated that the control group test "overlooks the fact that privilege exists to protect not only the giving of professional advice to those who can act on it, but also the giving of information to the lawyer to enable him to give sound and informed advice." In the corporate context, it is frequent that employees beyond the control group such as mid-level managers possess information needed by the corporation’s lawyers to analyze information and make legal decisions.13 In Rehling v. City of Chicago, the court held that communications between a city attorney and ranking officers regarding the Plaintiff’s transfer/accommodation issues which pre-dated any threat of litigation were nevertheless privileged.14 Additionally, there is a presumption that communications with a corporate legal department are for the purpose of giving legal advice as opposed to providing business or management advice.15
Documents and Communications Claimed Privileged Must be Made in Confidence and Permanently Protected From Disclosure. Only those documents that appear to reflect confidential attorney/client communications are potentially immune from discovery. Documents available to other individuals either as recipients or authors waive the privilege.16 A claim that the individual recipients are "management" fails to comply with the requirements of F.R.C.P. 26(b) (5).17
Additionally, courts have viewed the failure to implement specialized filing systems for corporate employee communications with counsel to result in a lack of confidentiality.18 Merely funneling papers past or through corporate counsel does not shield communications from disclosure which otherwise sets forth factual information between members of management.19 A waiver can result when information contained within e-mails or other documents are circulated to third parties such as third party administrators of benefit plans.20 Even though the "control group test" is not applicable in Federal Court, distributing an otherwise privileged communication within an organization and beyond top echelon employees may waive the attorney/client privilege.21 Business Advice is Not Privileged. The mere fact that corporate counsel has a law license does not cloak all communications filtered to or from corporate counsel with an attorney/client privilege.22 The foundational basis of a claim of attorney/client privilege is that the communication relates to legal advice from a professional legal advisor. Materials that are meant to provide factual information do not rise to the level of either attorney/client communications.23 Business advice is not subject to the privilege.24 If corporate counsel is acting in the capacity as a business advisor or management decision maker, her communications are not subject to the privilege.25 Additionally, the attorney/client privilege attaches only to statements made by the client to the lawyer or legal advice from the lawyer. Any other statements made by the lawyer to the client will be protected only when it is established that those communications from the lawyer rest on confidential information obtained from the client.26 The Work Product Doctrine. For the Work Product Doctrine to apply, the communications claimed privileged must be created or produced in "anticipation of litigation" and not simply developed during the ordinary course of business.27 However, the mere fact that litigation may be anticipated or even in progress does not necessarily shield those documents which continue to be prepared in the ordinary course of business rather than for the purpose of the anticipated or ending litigation.28 The Work Product Privilege has been codified in federal court pursuant to FRCP 26(b)(3). Even when the privilege appears applicable, it can be overcome if the opponent establishes a need for the materials and would suffer an undue hardship in procuring the information some other way.29 Furthermore, to the extent that corporate counsel provides human resource-type advice, such communication which existed prior to any claim being filed, would constitute business advice and is not governed by the privilege.30
Privilege Logs. A party asserting the privilege must identify the specific capacities of the authors and recipients on its privilege log. Providing names without capacities does not suffice.31 Cryptic descriptions of the subject matter of the document do not apprise the Court how it meets the elements of the attorney/client privilege.32 A document prepared for both legal and non-legal review is not privileged.33 The failure to provide a specific and complete distribution of the communication with the descriptions of each individual’s capacity and reason for receiving the document is reason in and of itself to order production.34
Describing a document within a privileged log as "legal advice" or "work product" is not the same as establishing that the document is immune from discovery.35 For example, documents identified as "cite summaries" or "claim summary" are too vague to determine if the materials qualify as legal advice or work product.36 A claim that alleged privileged communications were received by members of "management" fails to comply with the requirements of FRCP 26(b)(5).37 Mere ipse dixit recitations of the materials or communications claimed privileged fails to satisfy the log requirement in asserting a work product privilege.38
Waiver. The attorney/client privilege is subject to the doctrine of waiver.39 The privilege is waived when a party shares confidential information with third parties.40 In addition, the voluntary disclosure of some privilege communications waives the privilege as to all other communications dealing with the same subject matter.41
There can be an "implicit waiver" when a litigant makes the assertion that he acted in good faith on the advice of counsel.42 The implicit waiver rule applies when a party attempts to use advice of counsel as part of either the claim or a defense.43 This principle is referred to as subject matter waiver and embodies the doctrine that a party can only protect those matters which are truly confidential and cannot be permitted to exploit selective disclosures for tactical advantage.44 However, some courts have construed the implicit waiver rule narrowly because it hinders full and frank communications between attorneys and their clients.45 The "implicit waiver" or "at issue waiver" doctrine is not applicable merely when a defendant answers plaintiff’s claims rather than injecting new claims or affirmative defenses into the litigation.46 Some courts have held that to waive the privilege, the corporation must affirmatively put at issue the specific communication, document or information to which the privilege attaches such as in an affirmative defense.47
The Fiduciary Duty or "Garner" Exception. Even those documents that are arguably compliant with the attorney/client privilege, may be subject to disclosure pursuant to the Garner exception.48 However, some courts have explicitly limited Garner’s applicability solely to shareholder derivative suits.49 The fiduciary duty exception to the standard privilege rule is based upon the doctrine that a communication between an attorney and client is not privileged from those to whom the client owes a fiduciary duty.50 Corporate shareholders may have access to otherwise privileged information after a showing of good cause.51 A party must demonstrate good cause for overcoming an attorney/client privilege.52
Final Analysis. In litigation, when confronted with a claim of privilege, the first step is to require the party claiming privilege to produce a detailed privilege log. As set forth above, the privilege log must describe the author, recipients, date of communication and more than an "ipse dixit" of what the communication was about. The party asserting the privilege must also state whether they are relying upon the attorney/client privilege or attorney/work product privilege. Just because the author or recipient of the communication has a law license does not mean that the communication is privileged. It is the burden of the party claiming the privilege to establish all of the requisite elements as any privilege impairs the Court’s search for truth and is to be narrowly construed.53
1 In Re Pebsworth, 705 F.2d 261 (7th Cir. 1983).
2 NSB Technologies, Inc. v. Specialty Direct Marketing, Inc., 2004 U.S. Dist. LEXIS 16830 (N.D.Ill. 2004).
3 F.R.C.P. 43(a); Federal Deposit Ins. Corp. v. Mercantile Nat’l Bank, 84 FRD 345 (N.D.Ill. 1979).
4 United States v. White, 950 F.2d 426, 430 (7th Cir. 1991).
5 United States v. Evans, 113 F.3d 1457, 1461 (7th Cir. 1997).
6 United States v. White, 970 F.2d 328, 334 (7th Cir. 1992).
7 Allen v. Chicago Transit Authority, 198 FRD 495, 499 (N.D.Ill. 2001).
8 McCook Metals LLC v. Alcoa Inc., 192 FRD 242, 252 (N.D.Ill. 2000).
9 In Re Walsh, 623 F.2d 489, 494 (7th Cir. 1980).
10 McCook Metals LLC v. Alcoa Inc., 192 FRD 242, 253 (N.D.Ill. 2000).
11 Viskase Corporation v. American National Can Co., 888 F.Supp. 899, 900 (N.D. Ill. 1995). In Re Aircrash Disaster at Sioux City, Iowa, 133 FRD 515, 518 (N.D. Ill. 1990).
12 Upjohn Co. v. United States, 449 U.S. 383 (1981).
13 Upjohn Co. v. United States, 449 U.S. at 391.
14 207 F. 3rd 1009 at 1019 (7th Cir. 2000)
15 Breneisen v. Motorola, Inc., 2003 WL 21530440 (N.D. Ill. July 3, 2003).
16 Smith Kline Beecham Corp. v. Apotex Corp., 193 FRD 530, 539 (N.D. Ill. 2000).
17 Smith Kline Beecham Corp. v. Apotex Corp., 194 FRD 624, 626 (N.D. Ill. 2000).
18 Hardy v. New York News, 114 FRD 633, 644 (S.D.N.Y. 1987); In Re Grand Jury Proceedings involving Berkley & Co., 466 F. Supp. 863, 870 (D.Minn.1979); United States v. Kalsey-Hayes Wheel Co., 15 FRD 461, 465 (E.D. Mich. 1954).
19 Radiant Burners, Inc. v. American Gas Assn., 320 F.2d 314, 324 (7th Cir. 1974).
20 Christman v. Brauvin Realty Advisors, Inc., 185 FRD 251, 255 (N.D. Ill. 1999).
21 Burden-Meeks v. Welch, 319 F.3d 897, 901-02 (7th Cir. 2003).
22 In Re Air Crash Near Rose Lawn, 1997 U.S.Dist. LEXIS 5197 (D. Ill., Feb. 20, 1997).
23 Dawson v. New York Life Ins. Co., 901 F.Supp. 1362, 1368 (N.D.Ill. 1995).
24 6 Morre’s Federal Practice, §2649 (Matthew Bender Third Edition 2002).
25 Breneisen v. Motorola, Inc., 2003 U.S. District Lexis 11485, (N.D.Ill., July 3, 2003).
26 In Re Witnesses Before the Special March, 1980 Grand Jury, 729 F.2d 489, 493 (7th Cir. 1994).
27Binks Manufacturing Co. v. National Presto Industries, Inc., 709 F.2d 1109, 1118 (7th Cir. 1983).
28 Slater v. Centel Corp., 1995 U.S. Dist. LEXIS 6942 (1995).
29 Logan v. Commercial Union Ins. Co., Ins. 96 F.3d 1971, 1976 (7th Cir.1976).
30 Allendale Mutual Ins. Co. v. Bull Data Sys., 152 FRD 132 (1993 U.S. Dist. LEXIS 17195).
31 In Re General Instrument Corp. Securities Litigation, 190 FRD 527, 530 (N.D. Ill. 2000).
32 Allendale Mutual Insurance Co. v. Bull Data Systems, Inc., 145 FRD 84 (N.D. Ill. 1992).
33 In Re Air crash Disaster at Sioux City, Iowa, 133 FRD 515, 519 (N.D. Ill. 1990).
34 Sioux City, 133 FRD at 522; In Re General Instrument Corp. Securities Litigation, 190 FRD 531.
35 Coltec Industries, Inc. v. American Motorists Ins., 197 FRD 368, 373 (N.D. Ill. 2000).
36 Coltec Industries, Inc., 197 FRD at 374.
37 Smith, Kline, Beecham Corp. v. Apotex Corp., 194 FRD 624, 626 (N.D. Ill. 2000).
38 Smith, Kline, Beecham Corp., 194 FRD at 627.
39 Eagle Compressors, Inc. v. HEC Liquidating Corp., 206 FRD 474, 477 (N.D. Ill. 2002).
40 Christman v. Brauvin Realty Advisors, Inc., 185 FRD 251, 255 (N.D. Ill. 1999).
41 Blanchard v. Edge Mark Financial Corp., 192 FRD 233, 236 (N.D. Ill. 2000).
42 Solomon v. Kimberly-Clark Corp., 1999 U.S. Dist. LEXIS 1594 (N.D. Ill., Feb.12, 1999).
43 Rhone-Poulenc Rorer, Inc. v. Home Idem. Co., 32 F. 3d 851, 863 (3d Cir. 1994).
44 In Re Consolidated Litigation Concerning International Harvester’s Disposition of Wisconsin Steel, 666 F.Supp. 1148, 1153 (N.D. Ill. 1987).
45 Chamberlain Group v. Interlogics, Ink, 2002 WL 467153 (N.D. Ill. March 27, 2002).
46 Lorenz v. Valley Forge Ins. Co., 815 F.2d 1095 (7th Cir. 1987).
47 Quality Croutons, Inc., v. George Weston Bakeries, Inc., 2006 WL 2375460 (N.D. Ill. August 14, 2006).
48 Garner v. Wolfinbarger, 430 F2d 1093 (5th Cir. 1970).
49 Weil v. Investments/Indicators Research & Management, 647 F.2d 18 (9th Cir. 1981).
50 J.H. Chapman Group, Ltd. v. Chapman, 1996 WL 238863 (N.D. Ill. May 2, 1996).
51 In re General Instrument Corp. Securities Litigation, 190 FRD 527 (N.D. Ill. Jan.7, 2000).
52 JH Chapman Group, Ltd. v. Chapman, 1996 WL 238863 (N.D. Ill. 1996).
53 United States v. Evans, 113 F.3d 1457, 1461 (7th Cir. 1997).
Glenn R. Gaffney is a partner in the law firm of Gaffney & Gaffney in Bloomingdale, concentrating his practice in Labor and Employment law. He received his Bachelor of Science in Marketing from the University of Illinois at Champaign/Urbana and received his J.D. from Southern Illinois University, College of Law.