Selby v. O'Dea ( 2018 )

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Appellate Court Date: 2018.01.23
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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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matter of first impression. We take up that question next.
¶ 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
1
A partial list of names include “the joint-defense doctrine, joint-defense privilege, joint-
prosecutorial privilege, allied-lawyer privilege, common-interest doctrine, common-interest exception,
common-interest privilege, common-interest rule, common-defense doctrine, pooled-information
privilege, common-purpose theory, community-of-interest doctrine, joint-client privilege, joint-client
doctrine, common-interest exception to waiver, and shared-confidentiality privilege.” Id.
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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
2
A small sample of these decisions includes United States v. BDO Seidman, LLP, 492 F.3d 806,
816 n.7 (7th Cir. 2007) (whether to extend to potential litigation); Ambac Assurance Corp., 57 N.E.3d
at 631 (whether to extend rule beyond litigation interests); Schaeffler v. United States, 806 F.3d 34, 41
(2d Cir. 2015) (same); Boyd, 88 S.W.3d at 217 (whether written agreement required); Ken’s Foods, Inc.
v. Ken’s Steak House, Inc., 213 F.R.D. 89, 93 (D. Mass. 2002) (need for written or advance agreement).
- 15 -
underlying suit against the insured) but harbor materially different views on another (whether
the insurer will be required to cover any judgment award against an insured)—so different, in
fact, that the disagreement results “in a subsequent controversy” between the insurer and
insured. Waste Management, 144 Ill. 2d at 193.
¶ 79 Our courts have made it clear that the Waste Management common-interest doctrine
starts and ends with communications concerning that common interest, and any
communications about insurance coverage—or any other matters where the interests
diverge—are not included within the scope of that doctrine. See id. at 200-01
(common-interest doctrine covered communications between insured and lawyer regarding
underlying tort action but not communications involving insurance coverage); Illinois
Emcasco Insurance Co., 393 Ill. App. 3d at 790 (insurer’s communications with counsel
regarding insurance coverage not discoverable by insured in lawsuit over coverage, as those
communications were not part of insured’s and insurer’s common interest in defending
underlying lawsuit against insured). From these cases, there is no doubt that the parties must
share a common interest in the litigation but need not be fully aligned on every issue.
¶ 80 As for case law specifically regarding the common-interest exception to the waiver rule,
the result is the same. The 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”). Thus, in McPartlin, though the
parties’ defenses were in some senses incompatible, they shared a common interest in
discrediting a particular witness, and their joint communications to that common end were
protected from disclosure. Id.; see also Pampered Chef v. Alexanian, 737 F. Supp. 2d 958,
967 (N.D. Ill. 2010) (“[T]he possibility of future discord between the parties is analytically
irrelevant to the current alignment of their interests. It is enough that the parties presently
share a common interest.”).
¶ 81 McPartlin seems to reflect the overwhelmingly accepted approach. See, e.g., Eisenberg v.
Gagnon, 766 F.2d 770, 787-88 (3d Cir. 1985) (“Communications to an attorney to establish a
common defense strategy are privileged even though the attorney represents another client
with some adverse interest.”); United States v. Bay State Ambulance & Hospital Rental
Service, Inc., 874 F.2d 20, 28 (1st Cir. 1989) (quoting Eisenberg for same proposition); In re
Grand Jury Subpoena Duces Tecum Dated November 16, 1974, 406 F. Supp. 381, 392
(S.D.N.Y. 1975) (fact that corporation and individual corporate officers might one day
become adverse, as corporation might have claims against officers for SEC violations, did
not change fact that their interests were currently aligned in immediate SEC action: “That a
joint defense may be made by somewhat unsteady bedfellows does not in itself negate the
existence or viability of the joint defense.”); Static Control Components, Inc. v. Lexmark
International, Inc., 250 F.R.D. 575, 579 (D. Colo. 2007) (some adversity among parties does
not defeat common-interest doctrine).
¶ 82 Notably, when the Supreme Court proposed the codification of the common-interest
exception (though rejected by Congress in favor of no codified privilege), committee
comments suggested the rule applied when clients had “[s]ome interests in common” and not
when “there is [n]o common interest to be promoted by a joint consultation.” (Emphasis
added and internal quotation marks omitted.) McPartlin, 595 F.2d at 1336. That language
likewise suggests that parties’ interests need not be aligned in all respects.
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¶ 83 For all of these reasons, we agree that it would be unreasonable to require perfect
alignment of the parties’ interests. What is critical, as McPartlin noted, and consistent with
Waste Management, is that the communications between the parties sharing the common
interest be in furtherance of that common interest—that they be germane to that common
interest. See Waste Management, 144 Ill. 2d at 200-01; McPartlin, 595 F.2d at 1336. As long
as the communications further the common interest between the parties, it is of no import that
the parties’ positions might be otherwise misaligned. See, e.g., BCR Safeguard Holding,
L.L.C. v. Morgan Stanley Real Estate Advisor, Inc., 614 Fed. App’x. 690, 702 (5th Cir. 2015)
(particular communication did not further common interest but was diametrically opposed to
it); In re Santa Fe International Corp., 272 F.3d 705, 711-12 (5th Cir. 2001)
(communications protected only if they further joint or common interest); Nidec Corp. v.
Victor Co. of Japan, 249 F.R.D. 575, 579 (N.D. Cal. 2007) (doctrine only applies to
communications designed to further common interest); Blockbuster Entertainment Corp. v.
McComb Video, Inc., 145 F.R.D. 402, 404 (M.D. La. 1992) (no “joint defense doctrine”
protection where attorneys did not communicate about joint effort to defend case); Fields, 75
P.3d at 1100 (privilege covers only communications that facilitate rendition of professional
services to both clients).
¶ 84 Here, State Farm’s and O’Dea’s interests are sufficiently aligned to satisfy the standard.
Many of the theories of liability against State Farm are vicarious in nature; the actual acts of
alleged wrongdoing were by O’Dea, allegedly with State Farm’s blessing or later ratification.
If plaintiff’s case against O’Dea failed for whatever reason, likewise its case against State
Farm would fail. State Farm and O’Dea have every reason to assist one another in defeating
this purported class-action lawsuit.
¶ 85 It is true that we could conjure up a scenario where the codefendants’ interests could
diverge. Instead of joining O’Dea’s defense in all respects, State Farm could point the blame
at O’Dea for the allegedly tortious behavior but argue that State Farm neither knew nor
should have known of that conduct. And as plaintiffs note, because O’Dea was State Farm’s
lawyer in the subrogation claims and plaintiffs claim that O’Dea charged sheriff fees that
were never incurred, it is even possible that State Farm might one day have a contract or
malpractice claim against O’Dea.
¶ 86 But “the possibility of future discord between the parties” (Pampered Chef, 737 F. Supp.
2d at 967) is often present. Though State Farm and O’Dea may be “unsteady bedfellows”
(Grand Jury Subpoena, 406 F. Supp. at 392) who conceivably might one day be adverse to
one another, there is nothing particularly unique about that posture. There is always the
possibility that one coparty could turn on another in litigation, finding more strategic
advantage in blaming that coparty to deflect blame from itself. If that hypothetical possibility
were enough, there would be nothing left of the common-interest exception to the waiver
doctrine. There is no question that State Farm and O’Dea would mutually benefit from the
defeat of plaintiffs’ claims, and the possibility they might one day assume adverse positions
against one another does not alter that fact. We find that State Farm and O’Dea shared a
common interest in the outcome of this purported class-action lawsuit.
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¶ 87 2
¶ 88 Now that we have held that the common-interest exception to the waiver rule could at
least theoretically apply in this case, we must determine which communications, exactly, are
protected by the common-interest exception to the waiver rule.
¶ 89 The interrogatory in this case asked whether State Farm ever notified O’Dea of any
irregularities in the handling of the subrogation matters. To the extent that any such
communications took place after the filing of this class-action lawsuit, State Farm asserted
the attorney-client, work-product, and “joint defense” privileges and then wrote: “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.” (Emphasis added.) State Farm
has also stated that no documents were responsive to this interrogatory, only oral
conversations. So we must decide which conversations “involving” parties and their
attorneys are covered by the common-interest exception to the waiver rule.
¶ 90 The Restatement provides that “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.” Restatement § 76(1). The Supreme Court’s proposed
federal rule of evidence (though never codified) provides that a client may assert the
attorney-client privilege for communications made “by him or his lawyer to a lawyer
representing another in a matter of common interest.” Proposed FRE 503(b)(3), 56 F.R.D. at
236. The Uniform Rule, in a broad mouthful, protects 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).
¶ 91 There seems to be universal agreement, then, that the common-interest exception to the
waiver rule covers lawyer-to-lawyer exchanges—that is, to a communication by Party A’s
lawyer to Party B’s lawyer that discloses confidential communications between Party A and
its lawyer. What Party A told its lawyer would normally, and obviously, be protected by the
attorney-client privilege. Party A’s lawyer’s disclosure of that information to Party B’s
lawyer, with Party A’s consent (as part of the common-interest agreement to share
confidential information), would normally be a waiver of its attorney-client privilege, but the
common-interest exception would prevent the waiver from occurring. We are aware of no
case law that would not include attorney-attorney communications within the scope of this
doctrine; it seems to be the most obvious application of the doctrine. See, e.g., O’Boyle, 94
A.3d at 317 (common-interest exception “applies to communications between attorneys for
different parties” (emphasis added)). Even the strictest views of the rule include
lawyer-to-lawyer communications within the scope. See 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. See, 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”). The Supreme Court’s proposed rule specifically said so, as
- 18 -
does the uniform rule. See Proposed FRE 503(b)(3), 56 F.R.D. at 236 (allowing client to
assert privilege over communications made “by him or his lawyer to a lawyer representing
another in a matter of common interest” (emphasis added)); Unif. R. Evid. 502(b)(3) (Unif.
Law Comm’n 2005) (protecting communications, among others, “by the client *** to a
lawyer or a representative of a lawyer representing another party in a pending action and
concerning a matter of common interest therein”).
¶ 93 We should pause here and note that this conclusion—that Party A’s statements to Party
B’s lawyer are protected—seems to run against our earlier statement that the
common-interest exception to the waiver rule is not intended to create new privileges but to
avoid the waiver of existing ones. See, e.g., Tobaccoville USA, 692 S.E.2d at 531 (“The
common interest doctrine is not a privilege in itself, but is instead an exception to the waiver
of an existing privilege.”); Restatement § 76(1) (communication must “otherwise qualif[y] as
privileged”). The attorney-client privilege has never been held to protect a communication
between a party and someone else’s lawyer. Viewed in this way, then, protecting statements
from Party A to Party B’s lawyer would seem to be expanding the attorney-client privilege,
rather than providing an exception to the waiver rule.
¶ 94 We nevertheless concur with the overwhelming weight of authority that would protect
communications from Party A to Party B’s lawyer. First and foremost, it would be consistent
with Waste Management, which recognized that, within this common-interest relationship,
the privilege includes both clients and both lawyers to the extent they share the common
interest. Likewise, as already mentioned twice, Illinois law recognizes, within the
attorney-client privilege umbrella, communications between a client and individuals assisting
the attorney’s efforts, such as an investigator or nontestifying mental-health consultant.
Knuckles, 165 Ill. 2d at 135; Knippenberg, 66 Ill. 2d at 284. Party B’s lawyer, working
pursuant to a common-interest agreement with Party A, does not stand in a materially
different position from an investigator or consultant from Party A’s perspective.
¶ 95 And from a pragmatic standpoint, it would seem odd to protect Party A’s statements to its
lawyer that the lawyer then communicates to Party B’s lawyer—about the only thing on
which virtually every court agrees when it comes to the common-interest exception—but not
allow Party A to skip the intermediary and communicate directly with Party B’s lawyer.
Thus, we agree with the prevailing view that the common-interest exception to the waiver
rule also covers a party’s direct statements to a coparty’s lawyer, in furtherance of the
common interest and pursuant to a common-interest agreement to exchange confidential
information. See 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. A statement Party A makes to its own lawyer would obviously
“otherwise qualif[y] as privileged” (Restatement § 76(1)), and the common-interest
exception would prevent a waiver if that attorney-client conversation between Party A and its
lawyer took place in the presence of Party B’s lawyer, pursuant to the common-interest
agreement. Again, if the law universally accepts the proposition that a party can
communicate to its own lawyer, who then communicates that confidential information to the
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coparty’s lawyer, without waiving privileges, there is no reason not to recognize the same
protection when the coparty’s lawyer happens to witness that attorney-client communication
firsthand during a joint exchange, pursuant to a common-interest agreement. See Square D
Co. v. E.I. Electronics, Inc., 264 F.R.D. 385, 391 (N.D. Ill. 2009) (common-interest doctrine
protects client’s statement “made in confidence not only to his own lawyer, but to an attorney
for a co-defendant for a common purpose” (quoting For Your Ease Only, Inc. v. Calgon
Carbon Corp., No. 02 C 7345, 2003 WL 1989611, at *2 (N.D. Ill. Apr. 28, 2003))).
¶ 97 The more difficult question is whether the doctrine protects communications directly
from one party to the other party in common interest. As a general matter, of course, if one
party speaks to another party, no attorney-client privilege would attach—there is no attorney
present. We do not understand State Farm’s response to the interrogatory to include
O’Dea-State Farm communications that did not involve counsel; we read its response as
stating that every communication “involv[ed]” counsel. And at oral argument, counsel for
State Farm assured us that outside counsel for both O’Dea and State Farm were present for
all joint conferences relevant to this matter.
¶ 98 So whether client-to-client communications, without the presence of counsel, are covered
by the common-interest exception to the waiver rule is not an issue we must decide. But what
about conversations between clients that take place with counsel present?
¶ 99 The prevailing rule seems to be that, as long as counsel is a part of the joint exchange of
information, what one party says to another party is covered by the common-interest
exception to the waiver rule. See, e.g., Burkhead & Scott, Inc. v. City of Hopkinsville, No.
5:12-CV-00198-TBR, 2014 WL 6751205, at *5 (W.D. Ky. Dec. 1, 2014) (noting that “A
conversation between co-clients in front of their attorney would be privileged so long as legal
advice ... is sought”; though court used singular “attorney,” each client was represented by
separate counsel (internal quotation marks omitted)); United States v. Lucas, No. 1:09 CR
222, 2009 WL 5205374, at *6 (N.D. Ohio Dec. 23, 2009) (doctrine “ ‘protects
communications between two or more parties and their respective counsel’ ” (quoting
Travelers Casualty & Surety Co. v. Excess Insurance Co., 197 F.R.D. 601, 606 (S.D. Ohio
2000))); HSH Nordbank AG New York Branch v. Swerdlow, 259 F.R.D. 64, 72 (S.D.N.Y.
2009); Carfagno v. Jackson National Life Insurance Co., No. 5:99CV118, 2001 WL
34059032, at *7 (W.D. Mich. Feb. 13, 2001).
¶ 100 When we consider the doctrine from a practical standpoint, it would be odd not to protect
communications that occur between clients during a joint conference, pursuant to a
common-interest agreement, with counsel present. First of all, in a live, joint conference—be
it in-person or by audio or video conference—if both parties and both attorneys are engaged
in the conversation, it will often be impossible to differentiate who is speaking to whom. One
individual could interrupt another or elaborate on a point or follow up on a question
previously asked. Group communications are rarely so stilted that they devolve into a strict
question-and-answer format.
¶ 101 From an endless number of possible examples, here is one: A lawyer asks each client
what they remember about some specific past event relevant to the lawsuit. Party A says what
it remembers. Party B says it has a different memory. Party A tells Party B that Party B is
confusing two different events and explains why. Party B responds that it is Party A that has
its facts mixed up and explains why. In that exchange, it is hard to pin down who was talking
to whom. Were the statements between Party A and Party B client-to-client exchanges, or
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were they responding to the lawyer’s question? The answer would probably be “yes” and
“yes.” Unless the conversation is taking place in a courtroom, or on the floor of the United
States Senate, or in a formal panel discussion with a moderator, group communications are
often difficult to break down into specific questions-and-answers in that way.
¶ 102 In a less formal setting, when lawyers and clients gather pursuant to their common
interest in a conference designed to encourage 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)), it would be unwise not to protect direct communications between clients. The
ultimate point here is for the attorneys to join forces in preparing their case against the
opposition, and they benefit from hearing what the clients can tell them about the facts,
whether it comes from direct questions the lawyers ask or whether the clients interact directly
with each other in the lawyers’ presence.
¶ 103 So we would concur with many courts that have held that direct client-to-client
communications are protected by the common-interest exception to the waiver rule when
they occur pursuant to a common-interest agreement, they are in furtherance of that common
interest, and they take place with counsel present.
¶ 104 We recognize that some communications are written, not oral, the most common example
these days being e-mail. Again, with a doctrine that has spread to many different scenarios
and engendered much disagreement along the way, we are striving to limit ourselves to what
we must decide here. State Farm’s response to the interrogatory indicated that no documents
were responsive to the interrogatory, and thus we need not outline any parameters regarding
written communications.
¶ 105 To summarize, the common-interest exception to the waiver rule protects from disclosure
to third parties those statements made to further the parties’ common interest, pursuant to a
common-interest agreement, (1) by the attorney for one party to the other party’s attorney,
(2) by one party to the other party’s attorney, (3) by one party to its own attorney, if in the
presence of the other party’s lawyer, and (4) from one party to another, with counsel present.
¶ 106 D
¶ 107 Once the trial court correctly recognized the existence of the common-interest exception
to the waiver rule, the court saw no need to go further, finding it unnecessary to hold an
in camera hearing or require a privilege log under Illinois Supreme Court Rule 201(n) (eff.
July 30, 2014). The 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. App. 3d 484, 497 (2005). But
here, the interrogatory itself did not even mention attorneys, only communications from State
Farm to O’Dea. And we are not entirely sure what State Farm meant by identifying “the
involvement of counsel” in the postcomplaint communications between State Farm and
O’Dea. Does that mean the statements were made to one of the lawyers? In the presence of
the lawyers? With the lawyers’ knowledge or approval but in their absence? Were any
nonclients and nonattorneys present? None of this is clear to us on the record.
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¶ 109 We do have a statement from oral argument by State Farm’s lawyer, who told us that the
joint conferences that occurred involved O’Dea, his lawyer, State Farm’s outside counsel,
and State Farm’s in-house lawyer. But even if a statement in oral argument were a
satisfactory substitute for a privilege log—it is not—many questions remain. We do not
know, for example, what was said in the joint conferences. Only statements that further the
parties’ common interest in defeating plaintiffs’ lawsuit would be covered by the
common-interest exception to the waiver rule. Anything said beyond that would not be
covered; State Farm might have some other basis for refusing to disclose such information,
such as relevance or some other privilege—which State Farm would be free to argue—but
not the common-interest exception. And we cannot even be sure of the status of the
individuals present in the meeting. For example, was the in-house counsel from State Farm a
“client” or another lawyer? That may or may not be a complicated question under Illinois
law, but we are certainly in no position to decide it at this stage.
¶ 110 The best course of action is to remand this matter to the trial court to conduct an
in camera, communication-by-communication analysis. State Farm should be required to log
each communication pursuant to Rule 201(n), and the court should conduct whatever
analysis necessary to determine whether each communication falls within the
common-interest exception to the waiver rule.
¶ 111 Federal district courts, considering the application of the common-interest exception to
the waiver rule, typically conduct a communication-by-communication analysis to ensure
that only protected communications are withheld from disclosure. See, 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”). And Illinois courts considering the
current “common-interest doctrine” have done the same. See Waste Management, 144 Ill. 2d
at 201 (remanding to circuit court to “conduct an in camera inspection of all of the
documents and exclude from disclosure those entitled to protection”); Illinois Emcasco
Insurance Co., 393 Ill. App. 3d at 790 (noting that “Waste Management also provides for the
trial court to conduct an in camera inspection to resolve disputes over which communications
are privileged”). That course of action seems particularly appropriate here, given that the trial
court was operating with a blank slate in terms of Illinois case law and we have now given at
least some contours to this doctrine.
¶ 112 It may well be the case that every postcomplaint communication responsive to that
interrogatory falls within the common-interest exception to the waiver rule. As we have
explained above, it will depend on the substance of the statements, who said them to whom,
and who else was present when the statements were made. As always, the burden of
establishing the privileged nature of the communication will fall on the party asserting the
privilege. Cox v. Yellow Cab Co., 61 Ill. 2d 416, 419-20 (1975); Thomas, 361 Ill. App. 3d at
497. We also reiterate that we are aware that State Farm has lodged other objections to the
information plaintiffs seek about these joint O’Dea-State Farm conferences that occurred
after the lawsuit was filed, and State Farm remains free to pursue those other objections in
addition to its assertion of the common-interest exception to the waiver rule.
¶ 113 III
¶ 114 Plaintiffs raise other discovery issues. For one, they argue that the trial court erred in
granting a protective order. The protective order allowed either party to designate certain
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information confidential, including proprietary information and private information about
insureds, such that opposing counsel could use the information for the purposes of litigation
only and otherwise had to keep it confidential. Plaintiffs say that State Farm advanced no
legitimate interest for keeping this information secret. (Plaintiffs agreed to the redaction of
Social Security numbers regarding insureds.)
¶ 115 The parameters of a protective order are entrusted to the trial court’s discretion. Skolnick
v. Altheimer & Gray, 191 Ill. 2d 214, 224 (2000). “Similar to other discovery matters, the
trial court is in the best position to weigh the competing needs and interests of the parties
affected by a protective order.” Hall v. Sprint Spectrum L.P., 368 Ill. App. 3d 820, 823
(2006). “Absent an abuse of discretion, an order concerning discovery will not be disturbed
on appeal [citation], and protective orders are no exception.” Id.
¶ 116 We find no error here. First, we do not see how this protective order played any role in
the ultimate outcome of this lawsuit against State Farm, much less how it would affect the
ongoing litigation against O’Dea. The protective order did not prevent plaintiffs from using
any information in the litigation; they were just prohibited from otherwise making it public.
And as State Farm notes, the protective order contained a mechanism whereby plaintiffs
could object to the designation of a particular document as confidential, yet plaintiffs never
did so. From this, we can see no way in which this protective order played any role in the
outcome of the litigation.
¶ 117 And beyond that, in the single page they devoted to this subject in their brief, plaintiffs
have provided nothing to persuade us that the trial court’s reasoning was so far beyond the
bounds of reason that its protective order constituted an abuse of discretion. From our view,
the trial court tried to give plaintiffs access to the information while otherwise protecting
confidential information of people who were not parties to the lawsuit. We uphold this ruling
by the trial court.
¶ 118 Plaintiffs further argue that the trial court erred in limiting plaintiffs’ discovery. On
December 18, 2012, the trial court ordered that “[a]ll discovery not related to the named
plaintiffs is stayed until further court order.” The trial court explained that the class action
would not lie against State Farm unless the named plaintiffs could make out a claim against
it. See Avery v. State Farm Mutual Automobile Insurance Co., 216 Ill. 2d 100, 139 (2005) (“It
is well settled that a class cannot be certified unless the named plaintiffs have a cause of
action.” (Internal quotation marks omitted.)). The trial court’s order did not place any
limitations on discovery related to the named plaintiffs’ claims, only to potential claims
beyond the class.
¶ 119 Illinois Supreme Court Rule 201 governs discovery and states, in relevant part: “(e)
Sequence of Discovery. Unless the court upon motion, for the convenience of parties and
witnesses and in the interests of justice, orders otherwise, methods of discovery may be used
in any sequence, and the fact that a party is conducting discovery shall not operate to delay
any other party’s discovery.” Ill. S. Ct. R. 201(e) (eff. May 29, 2014). The trial court is given
great latitude in determining the scope of discovery, but the scope of permissible discovery is
not unlimited; in exercising its discretion, the trial court must balance “the needs of truth and
excessive burden to the litigants.” (Internal quotation marks omitted.) Y-Not Project, Ltd. v.
Fox Waterway Agency, 2016 IL App (2d) 150502, ¶ 43. This court will not disturb a
discovery order absent an abuse of discretion. Id.
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¶ 120 State Farm cites several cases where this court found no abuse of discretion in the trial
court conducting discovery in a sequenced approach. See, e.g., Atwood v. Warner Electric
Brake & Clutch Co., 239 Ill. App. 3d 81, 87-88 (1992) (in cases consolidated for discovery
purposes, trial court had discretion to require plaintiffs to certify by date certain that each
plaintiff’s claim and its cause had been identified, and that cause had been exposure to
material that was subject of cases); Van Hyning v. Hyk, 78 Ill. App. 3d 721, 723 (1979) (trial
court did not abuse discretion in requiring plaintiff to produce expert reports before
defendant was deposed); see Adkins Energy, LLC v. Delta-T Corp., 347 Ill. App. 3d 373, 381
(2004) (no abuse of discretion where trial court stayed discovery until it ruled on motion to
dismiss because, if cause of action had not been stated, discovery would have been
unnecessary).
¶ 121 We find no abuse of discretion in the trial court allowing discovery first as to the named
plaintiffs to ensure that plaintiffs had a valid claim against State Farm before allowing
discovery into a broader category and scope of information relating to potential class
members. We cannot say that the ruling was so arbitrary or unreasonable that no rational
judge would have done the same thing. We uphold that ruling.
¶ 122 IV
¶ 123 There are several remaining issues relevant to this appeal. Plaintiffs say that the trial
court incorrectly dismissed the abuse-of-process counts against State Farm for failing to
plead certain factual information. Plaintiffs complain that the trial court erred in granting
summary judgment to State Farm on counts relating to civil conspiracy and malicious
prosecution.
¶ 124 Because we are remanding this matter for additional proceedings regarding the
common-interest exception to the waiver rule, it would be premature for us to rule on these
other issues. If additional information becomes discoverable after the trial court completes its
in camera examination, it is conceivable that plaintiffs could plead additional facts relevant
to abuse of process, or that they might have additional information to support their claims of
civil conspiracy or malicious prosecution to counter State Farm’s motion for summary
judgment. There is simply no way for us to know at this stage.
¶ 125 We thus vacate both the dismissal of the abuse-of-process claims against State Farm and
the grants of summary judgment entered in State Farm’s favor. We do so without expressing
any opinion on the correctness of the trial court’s rulings on those claims. We do so only
because of the possibility of additional factual information coming to light following our
remand.
¶ 126 Finally, plaintiffs filed a motion for this court to take judicial notice of the proceedings
below. Specifically, plaintiffs requested that we take judicial notice of the filing of O’Dea’s
motion for clarification of paragraph 1(a) of the August 21, 2015 court order regarding class
discovery.
¶ 127 Briefly stated, this motion was relevant to the merits of some of the claims that were the
subject of either dismissal or summary judgment, orders that we have now vacated for the
reasons stated above. Thus, we deny plaintiffs’ motion as moot.
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¶ 128 V
¶ 129 We affirm the trial court’s ruling that recognized the common-interest exception to the
waiver rule. We remand this matter to the trial court to conduct whatever proceedings
necessary to determine whether this doctrine protects communications between O’Dea, State
Farm, and their lawyers that occurred after the filing of this lawsuit in their joint conferences.
We affirm the trial court’s other discovery rulings. We vacate the dismissal of the
abuse-of-process claims and the grants of summary judgment in State Farm’s favor.
¶ 130 Affirmed in part, vacated in part, remanded with instructions; motion denied.
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