No. 183 Perspectives on Developments in the Law from Sharp-Hundley, P.C. June 2020
Appellate Court Tells Privilege Waiver Rules
By John T. Hundley, 618-242-0200, firstname.lastname@example.org
Selby v. O’Dea, 2020 IL App (1st) 181951, discussed on other points in Sharp Thinking No. 182 (May 2020), looks to become a key case on waiver of evidentiary privileges.
In Selby, State Farm Mut. Auto Ins. Co. moved for summary judgment on a civil conspiracy claim without attaching documents upon which affiants’ affidavits were based. When met with an argument that this violated Illinois Supreme Court Rule 191(a), State Farm argued that the documents were privileged. In addition to ruling that the privilege did not trump Rule 191(a) (Sharp Thinking No. 182, p. 2), the Appellate Court alternatively ruled the privilege waived.
The court’s analysis used as a starting point the Illinois Supreme Court’s decision in Center Ptnrs., Ltd. v. Growth Head GP, LLC, 2012 IL 113107. See Sharp Thinking No. 80 (Dec. 2012). It noted that that decision dealt with two kinds of waiver: express waiver and implied waiver.
Express Waiver: Express waiver occurs “when the client voluntarily testifies to the privileged matter,” the court said. It said State Farm “expressly waived its attorney-client privilege” when its claim manager, by affidavit, “voluntarily testified to the privileged matter.”
State Farm argued that the manager “did not testify as to what [the lawyer] did tell State Farm but what he did not tell them” (emphasis in original). The court was not impressed with that distinction. “It would be an abuse of privilege to allow a litigant to secretly peruse its privileged communications, sprinkle out select examples of things that were not said, but then disallow any substantive follow-up through a claim of privilege.”
“[The claim manager] was unequivocally testifying about the content of State Farm’s communications with [the lawyer], if only by testifying as to what [the lawyer] did not tell State Farm. That, in our view, can only be considered a voluntary disclosure of the privileged communication.”
Implied Waiver: The court characterized the implied-waiver doctrine as follows: “if the litigant injects an issue into the case that relies on privileged attorney-client communications, fundamental fairness requires that the opposing party be allowed to examine those otherwise privileged communications.” The reasoning is that implied waiver “prevents a party from strategically and selectively disclosing partial attorney-client communications with his attorney to use as a sword, and then invoking the privilege as a shield to other communications so as to gain a tactical advantage in litigation.”
As another court put it, “litigants cannot hide behind the privilege if they are relying upon privileged communications to make their case.”
The court said this doctrine applied in Selby, even if express waiver did not. “Through [the claim manager’s] review of the privileged communications and his testimony as to what was not found therein, State Farm was obviously attempting to seek tactical advantage, by way of summary judgment, based on the content of privileged communications . . . . It is hard to imagine a more blatant example of using the communications a ‘sword’ while invoking the privilege as a ‘shield.’”
“State Farm impliedly waived the attorney-client privilege by affirmatively relying on the content of the privileged communications contained in those case files to obtain summary judgment. Plaintiffs were entitled to challenge [the claim manager’s] factual assertions by reviewing those documents themselves.”
Doctrine Expanded: State Farm, however, argued that the doctrine of implied waiver was limited to situations where the privilege holder asserted claims or defenses on which the litigant bears the burden of proof. Many cases in fact apply that limitation. However, Selby said “our Supreme Court has spoken on this topic in broad terms and has never suggested that waiver should be limited exclusively to the context of a formal claim or affirmative defense.”
Moreover, it said moving for summary judgment was “an affirmative act” in which State Farm sought to use its attorney-client communications as a “sword” for its “tactical advantage” and on which it had the burden of proof. The court said that was enough.
It said that whatever unfairness State Farm claimed “utterly pales in comparison to the unfairness to plaintiffs if State Farm were allowed to do what it did here – affirmatively reference and describe the privileged communications as evidence in support of summary judgment, then turn around and deny plaintiffs access to that very evidence, leaving plaintiffs defenseless to challenge that proof.”
The extension of the implied waiver doctrine to motions for summary judgment is new, at least in Illinois, and may become controversial, particularly when used in a defensive posture. That is, the conspiracy issue in Selby was one which plaintiffs raised and on which they ultimately had the burden of proof. In a motion for summary judgment, the party does more than just deny a claim in its answer – an act the court admits does not constitute waiver. But it does not necessarily assert a claim or a defense on which it has the ultimate burden of proof. Whether a motion on which the movant has the burden is sufficient use of a “sword” as to impliedly waive the privilege is an issue which the Supreme Court may be asked to decide.