2011 IL App (1st) 110381
Ill. App. Ct.2011Background
- In 2001–2002, Westfield, Rouse, and Simon negotiated to acquire Rodamco North America and Head Acquisition, the general partner of Urban Shopping Centers, L.P. (Urban) which had minority limited partners.
- On the same day as the Rodamco purchase, they executed joint purchase terms and an amended Head partnership agreement allocating control over Urban’s mall interests.
- Plaintiffs allege breach of fiduciary and contractual duties related to the Rodamco acquisition and seek discovery of attorney-client communications among the three buyers about the purchase.
- Defendants disclosed among themselves privileged communications during negotiations, including positions of counsel, written documents, and legal views on transaction structure.
- The circuit court granted plaintiffs’ motion to compel production of disclosed communications and later ordered production of additional communications, prompting this appeal.
- The issue is whether disclosure to a third party during negotiations creates a subject-matter waiver of all related privileged communications.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether third-party disclosure during negotiations creates a subject-matter waiver. | Center Partners argues waiver extends to all communications on Rodamco purchase. | Westfield/Rouse argue waiver should be limited to disclosed communications. | Waiver extends to all communications on the same subject matter. |
| Is the scope of the waiver excessive regarding non-disclosed documents? | Waiver covers all Rodamco-related communications. | Some disclosed documents exceed the subject matter. | Record supports in-camera review; no reversible error shown. |
| Whether certain documents are protected by the attorney work-product doctrine. | Documents prepared during negotiations fall under work-product. | Some documents were not prepared for litigation and are discoverable. | Work-product protection does not apply to these pre-litigation negotiation documents. |
Key Cases Cited
- Hickman v. Taylor, 329 U.S. 495 (U.S. 1947) (work-product protection origin; breadth of protection)
- Waste Management, Inc. v. International Surplus Lines Insurance Co., 144 Ill. 2d 178 (Ill. 1991) (attorney-client privilege narrowly construed; policy of disclosure)
- In re Grand Jury January 246, 272 Ill. App. 3d 991 (Ill. App. 1995) (waiver to remainder on same subject matter; broad scope)
- People v. O’Banner, 215 Ill. App. 3d 778 (Ill. App. 1991) (waiver when defendant testifies about portions of attorney communications)
- Gerold, 265 Ill. 481 (Ill. 1914) (early subject-matter waiver doctrine)
- In re Marriage of Decker, 153 Ill. 2d 298 (Ill. 1992) (privilege should be construed narrowly; disclosure affects related communications)
- Cox v. Yellow Cab Co., 61 Ill. 2d 416 (Ill. 1975) (burden on proponent to show privilege applies)