MEMORANDUM OPINION
INTRODUCTION
Caterpillar and Miller had a decades-long, mutually beneficial business relationship, during which Miller shared confidential information and trade secrets with Caterpillar. In 2008, Caterpillar suddenly severed that relationship and began manufacturing a product that previously had utilized and allegedly depended on the confidential information supplied by Miller. Miller sued, claiming that Caterpillar misappropriated its trade secrets. Caterpillar has fiercely denied the charges, and the case has been bitterly contested at every turn. The overwhelming majority of the disputes have been over discovery, “the bane of modern litigation.” Rossetto v. Pabst Brewing Co., Inc.,
Creative businessmen, ever alert to new opportunities for profit, perceived in this economic inequality a chance to make money and devised what has come to be known as third party litigation funding, where money is advanced to a plaintiff, and the funder takes an agreed upon cut of the winnings. If the plaintiff loses the case, the funder may get nothing. Third party litigation funding is a relatively new phenomenon in the United States. The business model has generated a good deal of commentary about and controversy over its intrinsic value to society (or lack thereof depending on one’s perspective) and the discoverability of the actual funding contract and information turned over to prospective funders by a party’s lawyer during negotiations to secure financing.
Although it says it has produced any all documents that contain admissions or statements regarding the merits of the claims or defenses in the case (Miller Memorandum at 2), Miller has resisted any further production on the grounds that the actual funding contract (and related documents) are irrelevant, and that whatever information about the case it provided to any funder in connection with any funding request is privileged under the attorney-client and work-product privileges, and that those privileges were not waived by disclosure to the potential funders. Caterpillar has a divergent view, denying the documents are privileged and that any privileges that might have existed were waived by disclosure of the documents to prospective funders.
ANALYSIS
Caterpillar claims it learned from one of the third party funders that Miller had contacted it to obtain funding for the case, but that it had rejected the overture. Caterpillar has not disclosed who tattled or when. (Defendant’s Memorandum In Support Of Its Motion To Compel, at 13)(Dkt# 365)(“Defendant’s Memoran
1. All documents created by Miller, Miller’s counsel, or any third party entity for the purpose of considering, investigating, pursuing, arranging, or obtaining litigation funding.
2. All documents transmitted, shared, or discussed between Miller and Miller’s counsel, between Miller’s counsel and any third party entity, or between Miller and any third party entity for the purpose of considering, investigating, pursuing, arranging, or obtaining litigation funding.
3. All communications between Miller and Miller’s counsel, between Miller’s cоunsel and any third party entity, or between Miller and any third party entity relating to litigation funding.
Miller produced a number of documents responsive to Caterpillar’s requests, including:
—a draft letter to third party funders summarizing the case, acknowledging that plaintiffs thought a cause of action might exist in 2003, and stating that plaintiffs made substantial investments to expand their operations even though it “felt compromised by the situation”; —an email exchange discussing between plaintiffs and a public relations firm strategy to sell their story by portraying a “David and Goliath scenario” in an attempt to “influence potential funders,” a plan to lobby defendant’s board of directors by sending materials to board members, assess the legal status of the case “[t]o see what can be done to stall matters whilst funding is being sought,” and asking to see “ASAP” plaintiffs’ lawyer’s written evaluation of the case;
—email from plaintiffs to the public relations firm warning “you might not like what Jodi [Rosen Wine] said!”; email from public relations firm asking plaintiffs to get “constructive advice” from Nixon Peabody for inclusion in a letter distributed to third party funders;
—email exchange between plaintiffs and third party funders reflecting Nixon Peabody attorney’s “thoughts on the claim” and concerns from the funder that the case is more complicated than originally believed and asking for correspondence between plaintiffs and their attorneys.
(Defendant’s Memorandum, Exs. B, C, D).
Miller withheld documents showing the structure and terms of its financing deal on the grounds of relevance. Also withheld were agreements Millеr has with Kirkland and Ellis, an English bank, and agreements with Dig Ventures LLC, the managing member of which is Arena Consulting.
There are two broad categories of documents at issue. One is referred to as the “deal documents” and encompasses documents evidencing the structure and terms of the funding transaction. Caterpillar contends that the funding agreement and related documents are discoverable as they obviously relate to the case, and in one sense that is true. But the inquiry under Rule 26 is whether the funding contract (and related documents) relate to the claims or defenses, and that requires a more exacting analysis than Caterpillar has made.
The second category of documents is comprised of those submitted to potential third party funders that Miller had contacted. Miller concedes that some of these documents are relevant, and has produced almost 300. But, it argues that, that the balance of the documents are not discoverable, not because thеy are not relevant, but because they are privileged, and the applicable privileges have not been waived.
I.
The Relevance of the “Deal Documents”
The terms of Miller’s actual funding agreement would seem to have no apparent relevance to the claims or defenses in this case, as required by Rule 26 as a precondition to discovery. Caterpillar’s argument that the “deal documents” are relevant is largely based on the oft-repeated, and indisputable proposition, that discovery under Rule 26 is “broad.” See Tellabs Operations Inc. v. Fujitsu,
While the discovery rules were designed to end what Wigmore and others called “the sporting theory of justice” that once prevailed throughout the Nation, cf., In re Barnett
The Supreme Court has cautioned that the requirement of Rule 26(b)(1) that the material sought in discovery be “relevant” should be firmly applied, and the district courts should not neglect their power to restrict discovery where necessary. Herbert v. Lando,
The cases Caterpillar cites to support its argument that funding documents are relevant require more analysis than its Memorandum has given them. It must not be forgotten that relevance for discovery purposes does not exist in the air. It is a function of the claims and defenses in the case. Rule 26(b)(1).
The Seventh Circuit has been critical of the approach to the reading of cases exemplified by Caterpillar’s Memоrandum — an approach that ignores the critical factual setting of the case. To look solely to the result in a case “can be misleading if [the holding is] carelessly lifted from the case-specific contexts in which they were originally uttered.” All-Tech Telecom, Inc. v. Amway Corp.,
It is Caterpillar’s failure to recognize these basic principles that led it to rely on Abu-Ghazaleh v. Chaul,
If the lender’s agreement provided (as it did) that Van Diepen had to approve the filing of the lawsuit, controlled virtually every aspect of the case from the selection of the plaintiffs attorneys and approval of their bills to whether to settle, the lender was, the court held, a “party” under Florida law — and on the hook for attorney’s fees for the baseless suit it authorized and ran. In that setting, the financing agreement was obviously relevant to the plaintiffs claim for attorney’s fees. Unfortunately, the critical and outcomе-determinate factual setting of the case is ignored by Caterpillar’s brief. Cf., Beam v. IPCO Corp.,
Then there is Berger v. Seyfarth Shaw LLP,
Leader Technologies, Inc. v. Facebook, Inc.,
That leaves Abrams v. First Tennessee Bank Nat. Ass’n,
Caterpillar’s claim of relevance for the “deal documents” ultimately rests on the theory that they relate to the unpled defense that Miller has violated the Illinois maintenance statutе, and that Miller’s fun-der is or may be the real party in interest under Rule 17(a). (Defendant’s Memorandum at 7). Neither argument has any cogency.
A.
Champerty and Maintenance
Caterpillar’s claim that the “deal documents” are relevant rests on its largely unexplained assertion that the Miller’s funding agreement offends the Illinois statute prohibiting champerty and maintenance and its utterly unsupported and unexplained conclusion that that a violation of the statute by Miller is a defense to Miller’s claims against it. (Defendant’s Memorandum at 14). Indeed, we are told unequivocally that “litigation funding agreements are unlawful in Illinois and support a new Caterpillar defense.” (Id. at 7, incorporating the discussion in the Rule 37.2 report).
ITT argues that the assignment of Ghi-baudys’ right of action for contribution against ITT is void as against public policy because it encourages litigation which otherwise would not be brought. To allow the assignment in this case, ITT argues, would constitute approval of what was known at common law as champerty or maintenance.
We disagree.
Black’s Law Dictionary defines cham-perty as “[a] bargain by a stranger with a party to a suit, by which such third person undertakes to carry on the litigation at his own cost and risk, in consideration of receiving, if successful, a part of the proceeds or subject sought to be recovered.” Maintenance is defined as “maintaining, supporting, or promoting the litigation of another.” Champerty and maintenance have been disapproved by the courts as against public policy because a litigious person could harass and annoy others if allowed to purchase claims for pain and suffering and pursue the claims in court as an assignee. However, plaintiff in the instant case is no stranger to the action between third-party plaintiffs Ghibaudys and third-party defendant ITT. Nor is plaintiff promoting the litigation of another which otherwise might not be maintained. Instead, plaintiff has a direct and immediate interest in Ghibau-dys’ right of action for contribution against ITT. Allowing Ghibaudys to assign that cause of action to plaintiff is not violative of any public policy of which we are aware.
The situation in Puckett is not remotely comparable to that in the instant case.
In Illinois, the common-law offense of maintenance was abolished long ago by statute, Brush v. City of Carbondale,
In construing penal statutes, the goal is to ascertain and give effect to the intent of the legislature. People v. Davis,
Officiousness is synonymous with meddlesomeness and can be described as volunteering one’s services where they are neither asked for nor needed. Matter of Estate of Milborn,
Finally, Caterpillar’s claim that the deal documents are relevant because they will show whether it can raise the “new” defense of champerty and maintenance (Defendant’s Memorandum at 7) overlooks the fact that neither would be a viable defense by Caterpillar to Miller’s claims, which have nothing to do with the conduct forbidden by the Illinois maintenance statute. Compare Oil, Inc. v. Martin,
Not surprisingly, the few state courts that have held funding agreements cham-pertous under their state statutes have only done so in the context of a suit by the parties to the contract seeking its enforcement. See Rancman v. Interim Settlement Funding Corp.,
Ultimately, Caterpillar’s argument, although not phrased as such, is a kind of unclean hands argument. Beyond begging the question of the applicability of the Illinois maintenance statute to this case, such an argument would be misapplied here, as Judge Posner’s panel opinion in Schlueter v. Latek,
When as in such cases the plaintiff is asking for equitable relief, the in pari delicto defense is referred to as the unclean-hands defense. But the label doesn’t matter, and the defenses were equated in McKennon v. Nashville Banner Publishing Co.,513 U.S. 352 , 360-61,115 S.Ct. 879 ,130 L.Ed.2d 852 (1995). The second ground is the one on which the defense was rejected in Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299 , 312-14,105 S.Ct. 2622 ,86 L.Ed.2d 215 (1985), and Perma Life Mufflers, Inc. v. International Parts Corp.,392 U.S. 134 , 137-39,88 S.Ct. 1981 ,20 L.Ed.2d 982 (1968) (plurality), the latter a case in which the plaintiff challenged, as a violation of antitrust law, restrictions on its competitive freedom, to which it had agreed in contracts with the defendant. The defendant pleaded in pari delicto as a defense to the plaintiffs suit for damages. The Court rejected the defense, holding that antitrust law, which would be disserved by enforcing the contracts, trumps contract law. The law could easily do without an unclean-hands doctrine and an in pari delicto doctrine, since they reduce to the principle that a court will not entertain a claim or defense that would create a greater legal wrong than vindicating the claim or defense would avert. (Emphasis supplied).
To sustain a maintenance/champerty defense in this case would create a greater legal wrong than vindicating the defense would avert. It would effectively endorse the alleged misappropriation of trade secrets (if, in fact, that occurred) and would encourage future commercial dishonesty— a wrong of manifestly greater significance than whatever wrong could be averted by recognizing the defense at the insistence of the alleged tortfeasor, who is a stranger to the contract claimed to be champertous. “The maintenance of standards of commercial ethics and the encouragement of invention are the broadly stated policies behind trade secret law. ‘The necessity of good faith and honest, fair dealing, is the very life and spirit of the commercial world.’ ” Kewanee Oil v. Bicron Corp.,
By contrast, over the centuries, maintenance and champerty have been narrowed to a filament. Indeed, they “ha[ve] been so pruned away and exceptions so grafted upon [them], that there is nothing of substance left of [them] in this State, and [they] ha[ve] been wholly abandoned in others.” Dunne v. Herrick,
The ABA Commission on Ethics 20/20’s white paper of February, 2012 concluded that “shifts away from older legal doctrines such as champerty, and society’s embracing of credit as a financial tool have paved the way for a litigation financing industry that appears poised to continue to grow....” Jennifer Anglim Kreder, Benjamin A. Bauer, Litigation Finance Ethics: Paying Interest, 2013 Prof. Law. 1, 21 (2013). The Massachusetts and South Carolina Supreme Courts have recognized that the champerty doctrine is no longer needed to protect against the evils once feared, such as speculation in lawsuits, the bringing of frivolous lawsuits, or financial overreaching by a party of superior bargaining position because there are now other devices that more effectively accomplish these ends. See, Saladini v. Righellis,
In sum, for the same reason that it is proper to deny discovery that is relevant only to claims or defenses that have been stricken, Oppenheimer Fund, Inc.,
The cases Caterpillar relies on do not begin to support its argument. In Todd v. Franklin Collection Service, Inc.,
B.
The “Real Party in Interest” Contention
Attempting to liken third party litigation funding to subrogation in an insurance context, Caterpillar argues that the funding agreement (and related transactional documents) are therefore relevant to the issue of who the real party in interest is— Miller or the funder. What Judge Posner said in Adams v. Raintree Vacation Exchange, LLC,
Rule 17(a)(1) provides that “an action must be prosecuted in the name of the real party in interest.” Rule 17(a) “is a procedural rule requiring that the complaint be brought in the name of the party to whom that claim ‘belongs or the party who, according to the governing substantive law, is entitled to enforce the right.” Rawoof v. Texor Petroleum Co.,
While Rule 17 does not define “real party in interest,” the generally accepted definition of the term is “the person holding the substantive right sought to be enforced, and not necessarily the person who will ultimately benefit from the recovery.” Farrell Constr. Co. v. Jefferson Parish, La.,
Subrogation is the ‘“substitution of one person in the place of another with reference to a lawful claim ... so that he who is substituted succeeds to the rights of the other in relation to the ... claim, and its rights, remedies, or securities.’ ” Employers Insurance, of Wausau v. James McHugh Constr. Co.,
Applicable state law determines who has the substantive right for purposes of subrogation. Id. at 460, n.10; 3A Moore’s Federal Praсtice, ¶ 17.07 (2nd Ed. 1996). For the reasons discussed in American Nat. Bank and Trust Co. of Chicago, that should be the law of Illinois.
I have reviewed in camera the agreement between Miller and its funder, and there is nothing in those agreements that remotely supports Caterpillar’s attempt to equate Miller’s funding agreement to the relationship between an insured and its insurer. Unlike an insurer, the funder in this case has not paid nor will ever pay Miller for any losses caused by Caterpillar’s claimed misappropriation of trade secrets and breach of contract; it will never be a plaintiff seeking indemnification from Caterpillar. American Nat. Fire Insurance. Co. ex rel. Tabacalera Contreras Cigar Co., supra. Nor is it an assignee of Miller.
Abraham Lincoln once was asked how many legs a donkey has if you call its tail a leg. His answer was four: calling a tail a leg does not make it one. Blue Cross Blue Shield of Massachusetts, Inc. v. BCS In
II.
Discoverability Of The Non-Deal Documents Claimed To Be Privileged Under The Attorney-Client And Work Product Privileges
The second category of documents Miller has refused to turn over are documents that were provided to the actual and any potential funders by Miller and its counsel. For purposes of a relevancy analysis, there is nothing unique about documents submitted to an entity from which litigation funding is sought. Clearly, they may well include information relating to Miller’s claims against Caterpillar, and thus could themselves be admissible or otherwise could reasonably lead to the discovery of admissible evidence. The relevance of these documents is not really contested. Miller’s essential objection is that they are privileged under the attorney-client and/or work-product privileges.
Caterpillar argues that there is no attorney-client privilege in documents that are prepared “primarily for a business transaction, rather than for securing legal advice.” (Defendant’s Memorandum at 8). Although documents prepared “for business purposes or for the purpose of obtaining advice on ‘political, strategic, or policy issues’ ” do not receive protection, “legal advice relating to business matters clearly does.” Sullivan v. Alcatel-Lucent USA Inc.,
Caterpillar’s contention about the proposed uses of the funding documents is borne out by Miller, itself. For example, Miller repeatedly argues that the case is its own, and there was nothing beyond a funding relationship. (Dkt. # 402, at 5-6; Dkt. #362, at 21-23). In fact, Miller’s written Mutual Non-Disclosure Agreement with Juris Capital explicitly states that the parties contemplated “business discussions” involving “business matters,”
Although Caterpillar has the better of the argument, we shall assume, arguendo, that Miller has sustained its burden of showing that the materials it provided to its lawyers for further submission to prospective funders were protected by the attorney-client privilege and proceed to the question of waiver.
A.
“Evidentiary privileges in litigation are not favored.” Herbert,
Since the purpose behind the attorney-client privilege is to encourage full disclosure to one’s lawyer by assuring confidentiality, disclosure to a third party that eliminates that confidentiality constitutes a waiver of the privilege. United States v. Hamilton,
In this, as in most Circuits, the “common interest” doctrine will only apply “where the parties undertake a joint effort with respect to a common legal interest, and the doctrine is limited strictly to those communications made to further an ongoing enterprise.” BDO Seidman,
The rationale underlying the “common interest” doctrine accounts for the Seventh Circuit’s insistence that the parties claiming protection must share a common legal interest. The “common interest” doctrine is designed to encourage “parties with a shared legal interest to seek legal ‘assistance in order to meet legal requirements and to plan their conduct’ accordingly.” BDO Seidman,
Here, there was no legal planning with third party funders to insure compliance with the law,
Miller relies exclusively on Devon IT, Inc. v. IBM Corp.,
Thompson involved an obvious, shared, legal interest among family members to whom privileged information was circulated to determine if they wanted to join the plaintiffs in their lawsuit. And Third Circuit precedent seems to support the requirement that the shared interest be legal not commercial. See In re Teleglobe Communications Corp.,
And finally, and most importantly, whatever Devon IT was intended to hold, it cannot trump the Seventh Circuit’s decision in EDO Seidman, see United States v. Watson,
In conclusion, any documents otherwise protected by the attorney-client privilege that Miller shared with any prospective funder lost their protection under the attorney-client privilege when shared with third party funders.
B.
That leaves the attorney work product privilege. For purposes of a privilege analysis, there is nothing unique about cases involving third party litigation funding. The principles that govern other cases apply equally where privilege claims are asserted.
The attorney work product privilege establishes a zone of privacy in which lawyers can analyze and prepare their client’s case free from scrutiny or interference by an adversary. It protects documents prepared by attorneys in anticipation of litigation for the purpose of analyzing and preparing a client’s case. Sandra T.E,
Underlying the privilege is the deeply felt notion that the opposing party “shouldn’t be allowed to take а free ride on the other party’s research, or get the inside dope on that party’s strategy, or ... invite the [trier of fact] to treat candid internal assessments of a party’s legal vulnerabilities as admissions of guilt.” Menasha Corp. v. U.S. Dept. of Justice,
Miller argues that documents turned over to potential funders containing counsel’s mental impressions and theories were created “because of’ this litigation and thus are protected as core work product. (Miller Memorandum at 9). Some cases contain language that the burden is on the party claiming protection to show that anticipated litigation was the “driving force behind the preparation of each requested document.” In re Professionals Direct Insurance. Co.,
The majority held that framing the inquiry as whether the primary or exclusive purpose of the document was to assist in litigation “threatens to deny protection to
The majority concluded: “as most other courts have held, this court finds that the ‘because of test [in Wright & Miller] is the proper way to determine whether a document was prepared ‘in anticipation of litigation’ and thus is eligible for protection under [Rule] 26(b)(3).” This is the formulation employed by the Seventh Circuit in Binks Mfg. Co. v. National Presto Industries, Inc.
Any documents containing Miller’s lawyers’ mental impressions, theories and strategies about Caterpillar’s claimed misappropriation of trade secrets that were given to prospective funders were only prepared “because of’ the litigation. Adl-man, supra. And a review of the documents reveals quite clearly that a numbеr of them were prepared to aid Miller’s counsel in the preparation of the case. Materials that contain counsel’s theories and mental impressions created to analyze Miller’s case do not necessarily cease to be protected because they may also have been prepared or used to help Miller obtain financing. See Mississippi Public Employees’ Retirement System v. Boston Scientific Corp.,
Even the dissent in Adlman does not support a different result. Judge Kearse disagreed with what he called the majority’s “expansion of the work-product privilege to afford protection to documents not prepared in anticipation of litigation but instead prepared in order to permit the client to determine whether to undertake a business transaction, where there will be no anticipation of litigation unless the transaction is undertaken.” Id. at 1205. That concern does not apply here since litigation antedated the business transaction—i.e. the funding. The question then is whether the work product privilege was waived by the turnover of protected documents to funders.
While disclosure of a document to a third party waives attorney-client privilege unless the disclosure is necessary to further the goal of enabling the client to seek informed legal assistance, the same is not necessarily true of documents protect
Because the work-product doctrine serves to protect an attorney’s work product from falling into the hands of an adversary, a disclosure to a third party does not automatically waive work-product protection. Westinghouse Elec. Corp.,
To avoid the risk of disclosure, Miller took precautions through confidentiality agreements with at least some prospective funders. Its October 27, 2011 agreement with Juris Capital was written. (Defendant’s Memorandum, Ex. H).
It perhaps could be argued that the assertions that Miller and one or more prospective funders “agreed” and had an “understanding” regarding confidentiality are merely legal conclusions, and that therefore the Declaration should not be considered.
Ecologix, Inc. v. Fansteel, Inc.,
Here, Mr. Miller’s statement that there was an oral agreement, in effect, asserts that there was an offer and an acceptance. Moreover, there is no inconsistency of behavior alleged by Caterpillar. Quite the contrary. Caterpillar’s claim that a funder blew the whistle on Miller’s unsuccessful attempt to secure funding is not a violation of the oral confidentiality agreements referred to in Mr. Miller’s Declaration. The agreements merely required that shared information be kept confidential. There was no agreement that the fact that Miller had approached the funder for money would be also be kept confidential. Thus, the claimed disclosure by the unnamed funder is not inconsistent with the arrangement alleged by Mr. Miller. In fact, the absence of any claim by Caterpillar that it was provided with confidential information is, at least facially, consistent with Mr. Miller’s dеscription of his confidentiality agreements with funders.
In contrast to the attorney-client privilege, the party asserting work product immunity is not required to prove non-waiver. The party asserting waiver has the burden to show that a waiver occurred. Ecuadorian Plaintiffs v. Chevron Corp.,
In Mondis Technology, Ltd. v. LG Electronics, Inc.,
Miller has made an adequate showing for purposes of the present motion that it had oral confidentiality agreements with the prospective funders named in Mr. Miller’s Declaration as well as a written agreement with Juris Capital. Therefore, Caterpillar has failed to carry its burden to show that Miller made disclosures to these entities under circumstances that substantially increased the likelihood that Caterpillar would learn of them.
It is a relevant inquiry in cases like this whether the disclosing party had a reasonable basis for believing that the recipient would keep the disclosed material confidential. United States v. Deloitte LLP,
However, even if Caterpillar had shown waiver of the work product privilege, not
III.
The In Camera Review
A.
Caterpillar requested that I conduct an in camera review of the documents Miller has refused to produce. See Balderston v. Fairbanks Morse Engine Div. of Coltec Industries
There are innumerable unenlightening emails that discuss amounts sought from funders and the progress of funding efforts, thoughts about meals, budgets, observations about particular people and entities, comments about all manners of things, blank form agreements and questionnaires from potential funders, completed applications for funding with information that is obviously known to Caterpillar and which was public information, documents apparently relating to prior dealings or relationships Miller had with one or more banks, communications between Miller and its present and former lawyers, the transactional documents for the funding Miller did obtain, and various other documents, none of which contains any information that could be utilized by either party in proving or disproving Miller’s claims or Caterpillar’s counterclaim or defenses and none of which would allow Caterpillar’s lawyers “to perform [their] functions ... on wits borrowed from their adversary,” Hickman v. Taylor,
A perfect example is an email from Chris Parkin to John Burley, a public relations consultant in England who was assisting Miller’s funding efforts. (See Defendants’ Memorandum, Ex. F). It is mystifying why this document was redacted. It notes what was public information, namely that a jury trial has been demanded, that the case has not yet been set for trial, that discovery is ongoing, and that Caterpillar is mounting a vigorous defense. The document goes on to sat that, “no one can estimate with certainty how a U.S. jury will decide the case.” But that simply expresses the reality known to first year law students, that juries are inherently unpredictable, In re Southeastern Milk Antitrust Litigation,
The actual transactional documents between Miller and its funder — the “deal documents” reflect the terms of the funding agreement, the amount funded, and the details about how any recovery is to be divided between Miller and the funder if Miller wins the case and what happens if it does not. This and related information— some of which is generally adverted to in emails — have nothing to do with the claims or defenses in the case — contrary to Caterpillar’s arguments to the contrary.
The only arguable relevance of the information about the terms of the Miller funding agreement goes to the question of whether the funder is the or a real party in interest. The provisions of a funding agreement that would bear on that question would appear to involve whether the funder has been accorded some measure of control over the case or its settlement — it hasn’t — and whether Miller has effectively assigned or transferred some part of its claims against Caterpillar to the funder — it hasn’t. A review of the funding contract and related documents shows quite clearly that Miller is the real party in interest, and that the funder is not an assignee or subrogee.
My review of the documents compels the conclusion that the following items in the revised privilege log are not relevant and need not be turned over: Nos. 1-3, 5, 8-12, 14, 16, 18-74, 76-84, 86-95, 97-160. Many of these documents are simply copies of each other and deal with funding, budgets, scheduling, etc. While a number of them make reference to an attorney’s opinion regarding chances of success, I did not see such a document.
B.
There is, however, a category of documents that apparently have not been turned over by Miller that are relevant, namely damage estimates, summaries, or worksheets created by Miller and/or its lawyers that were shared with third party funders. By disclosing these documents, Miller waived whatever protection they might have enjoyed under the attorney-client privilege. The question is whether they lost whatever protection they may have enjoyed under attorney work-product.
In those instances where Miller had an oral or written confidentiality agreement, they remain protected and are not discoverable. But what about those funders with which Miller had no agreement? All Miller has said is that the turnovers to funders did not increase the chances that Caterpillar would get the information. (Miller Memorandum at 7). But that is nothing more than an unsupported contention and thus does not preserve the point. United States. v. Dunkel,
Thus, on the present record, it appears that Miller took protective measure with some but perhaps not all prospective fun-ders. On the present record and given the absence of any developed legal argument from Miller, Caterpillar has sufficiently shown that as to the latter group of fun-ders a turnover of information substantially increased the risk of disclosure to Caterpillar and resulted in a waiver of the work product privilege. Miller must produce all damage summaries, damage estimates and spread sheets. These include, but are not necessarily limited to item
Additionally, Miller must also produce all documents that it concedes are relevant, but which it claimed were privileged under either the attorney/client or work-product privilege and which it shared with any actual or prospective funder, except those with which it had a confidentiаlity agreement as discussed in Mr. Miller’s declaration, including the written agreement it had with Juris.
Miller need not turn over any document that in whole or in part deals with budgets for the case, expected funding requirements, legal fees, expected or actual, or any other document that discusses funding efforts or actual or prospective funders. Certain of the documents I reviewed (i.e. No. 75) has been turned over in redacted form. The redactions on No. 75 deal with funding issues, expected costs and legal fees, discussion of abstract legal questions, etc. These redactions are proper.
C.
There is a final aspect of the materials I reviewed in camera that warrants separate mention. Miller has redacted on a funding application a percentage estimate of the chances of success in the case. The percentage estimate, which it bears repeating is quite high, is unexplained. It is simply a number. The identical, unexplained, percentage estimate appears in a number of other documents — many are duplicates — that Miller has listed on its revised Privilege Log. See, e.g., Nos. 5, 12, 16, 43, 44, 47, 50, 61, 66, 67, 68, 71, 72, 85, 99, 101. The question is whether documents containing this unexplained, percentage assessment should be turned over to Caterpillar. I think not.
A numerical estimate of the chances of success, even if unexplained, would appear to fall within that portion of Rule 26(b)(3)(B) that covers materials containing “the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.” Cf., United States v. Frederick,
Miller, quite obviously, could not use its own estimate at trial since it would be irrelevant and run afoul of the hearsay rule. And given the rosy estimate, Caterpillar would never try to use it as an admission. But even if it did, it would never be admitted: the lawyers certainly could not testify about the basis for the estimate. In fact, that would be error essentially for the reasons explained in Mattenson: “What [Mattenson] should not be allowed to do [on remand] is cross-examine lawyer Bradley about the company’s ‘legal vulnerabilities.’ That cross-examination, irrelevant and highly prejudicial, should not have been permitted quite apart from the work-product doctrine. Fed. R. Evid. 403.”
In sum, even if Caterpillar were foolhardy enough to seek admission of Miller’s high estimate of its chances of success on the theory that the estimate was an admission, it would inevitably be excluded under Rule 403. See Mattenson, supra Mister v. Northeast Illinois Commuter R.R. Corp.,
CONCLUSION
My in camera review of the withheld documents has revealed that, quite apart from any questions of privilege and waiver, few of the documents for which Miller has claimed privilege are relevant: most do not contain analysis or discussion of the facts underlying or implicating the claims or defenses or counterclaims. They contain no admissions or statements that undercut any claim or support or undercut any defense or counterclaim in the case. They could not reasonably lead to the discovery of admissible evidence. Moreover, for the reasons discussed earlier, Caterpillar is not entitled to discover the amount of money sought or received by Miller, the details of the agreement it has with its funder, or how much the funder will receive if Miller wins the case. In the setting of this case, that information is simply irrelevant, It bears repeating that one of the necessary and ultimate limitations on discovery that comes into play is when “inquiry touches upon the irrelevant....” Hickman,
The Seventh Circuit has recognized that district courts are in the best position to decide the proper scope and pace of discovery. Scott v. Chuhak & Tecson, P.C.,
A final thought. The literature on litigation funding contains divergent views of its merit. See e.g., Kenneth L. Jorgensen, Presettlement Funding Agreements: Benefit or Burden, 61 Bench & B. Minn. 14 (2004); Andrew Hananel & David Staubitz, The Ethics of Law Loans in the post-Rancman Era, 17 Geo. J. Legal Ethics 795 (2004); Terry Carter, Cash Up Front, 90 A.B.A.J. 34 (2004); Douglas R. Richmond, Other People’s Money: The Ethics of Litigation Funding, 56 Mercer L.Rev. 649 (2005). But questions of societal value are generally for the Legislature, and a judge ought not “succumb to the temptation to substitute his own ‘incandescent conscience’ for the will of the legislature.” H. Shanks, The Art and Craft of Judging: The Decisions of Judge Learned Hand 13
Caterpillar’s Motion to Compel Litigation Funding Documents [Dkt. #364] is GRANTED IN PART AND DENIED IN PART.
Notes
. See e.g., Jasminka Kalajdzic, Peter Cashman, Alana Longmoore, Justice for Profit: A Comparative Analysis of Australian, Canadian and U.S. Third Party Litigation Funding, 61 Am.J.Comp.L. 93, 111-12 (Winter 2013); Jennifer Anglim Kreder, Benjamin A. Bauer, Litigation Finance Ethics: Paying Interest, 2013 Prof. Law. 1, 21 (2013); Grace M. Giesel, Alternative Litigation Finance and the Work-Product Doctrine, 47 Wake Forest L.Rev. 1083, 1085 (Winter 2012); Elizabeth Chamblee Burch, Financiers as Monitors in Aggregate Litigation, 87 N.Y.U.L.Rev 1273, 1326 (Nov.2012); Maya Steinitz, The Litigation Finance Contract, 54 Wm. & Maty L.Rev. 455, 503 (Nov.2012); Jonathan T. Molot, Third Party Litigation Funding: Pros, Cons, and How It Works, ALI-ABA 95 (Nov. 2012); Meriam N. Alrashid, Jane Wessel, John Laird, Impact of Third Party Funding on Privilege in Litigation and International Arbitration, 6 No. 2 Disp.Resol. Int'l 101 n.36 (Oct.2012); Aren Goldsmith, Third-Party Funding in International Dispute Resolution, 25-AUT Int’l L. Practicum 147 (Autumn 2012); Jenna Wims Hashway, Litigation Lоansharks: A History of Litigation Lending and a Proposal to Bring Litigation Advances Within the Protection of Usury Laws, 17 Roger Williams U.L.Rev. 750 n.64 (Summer 2012); Elisha E. Weiner, Price and Privilege, 35-APR.L.A. Law 20, 23 (April 2012); Robin Miller, Enforcement and Validity of Litigation Funding Agreements,
. Before turning to the merits, the manner in which the parties chose to brief the motion warrants mention. Both parties have violated Local Rule 7.1 by filing briefs that incorporate by reference their 32 page, Combined Rule 37.2 report, which contain extensive legal arguments. This requires the court to flip back and forth from document to document to attempt to assess arguments that are not fully developed in the parties' supporting memoranda, as they should have been. Miller UK Ltd. v. Caterpillar, Inc.,
. Unfortunately, none of the "deal documents” were specifically identified, described, or discussed in any way in Miller’s brief. Nor were they otherwise categorized or indexed in the five large binders that were provided for my in camera review. It was only after a request to Miller’s counsel during a conference call with the parties that the deal documents were separately provided to the court. The documents that evidence or pertain to the actual financing agreement are found at: Binderl, Exhibit numbers: LIT-FUNDING 0000168, LITFUNDING0000171, and LITFUNDING0000329; Binder3 at Exhibit numbers: PURCELP 0067225, PUR-CELP0067393, PURCELP0067597, PUR-CELP0067600; and Binder5at MILLERREV-006939, MILLERREV-006940, MILLER-REV-006941, MILLERREV-006942, MIL-LERREV-006943, MILLERREV-006944, MILLERREV-006945, MILLERREV-006946, MILLERREV-006947, MILLERREV-006948, MILLERREV-006949, MILLERREV-006950, MILLERREV-006951, MILLERREV-006952, MILLERREV-006953, MILLERREV-006954, MILLERREV-006955, MILLERREV-006956, MILLERREV-006957, MILLERREV-006958, MILLERREV-00695 9.
. For good cause, the court may order discovery "relevant to the subject matter involved in the action.” Rule 26(b)(1). This provision has not been invoked by Caterpillar.
. If third party funding agreements were "illegal” in Illinois, one would expect there to be a defense to that effect raised by Caterpillar. Tellingly, there is none. Cf. Muhammad v. Oliver,
. Thus, there is no implied private cause of action for champerty, maintenancе or barra-try. Galinski v. Kessler,
. None of these cases have been cited by the parties.
. As in American Nat. Bank and Trust Co. of Chicago, neither party has addressed the question of the applicable state law. Thus, as in situations where the parties do not raise the issue of which law should apply, Illinois law will be selected. Faulkenberg v. CB Tax Franchise Systems, LP
. Miller was careful to divorce the funders from any legal interest in this case. It repeatedly argues that the case was and continues to be its own, and that it has no more than a funding relationship with the funder. (Dkt. # 402, at 5-6; Dkt. # 362, at 21-23). A review of the funding agreement confirms these representations.
. Caterpillar’s Memorandum points to the following items in “Miller’s Privilege Log for Funding Documents,” which is attached as Exhibit G to its Memorandum — as being documents "created either for Plaintiffs to finalize their claimed business transaction with third party funders or for the full or partial purpose of third party review”: Entry Nos. 4, 6-7, 9, 11, 16, 18, 21, 24, 26-51, 53-62, 64-81, 84-87, 88-91, 93, 96-97, 101-104, 107, 109-112, 121-154, 158, 160-167, 170, 172-174. (Caterpillar Memorandum at 9). Caterpillar contends that "the same is true for Privilege Log Entry Nos. 8, 10, 12-15, 17, 19, 21, 23, 25, 52, 54, 63, 73-76, 78, 83, 88, 94-95, 98-99, 105, 106, 108, 114 and 118, which are spreadsheets and summaries apparently prepared for third party funder review.” (Caterpillar Memorandum at 9).
At my request, Miller produced in one binder copies of the materials which it has refused to produce on the ground of attorney/client or work-product privilege, or both. The numbers in the revised privilege log no longer correspond to those in the original log. I have reviewed in camera the 160 items in the revised Privilege Log.
. While the parties’ characterization in the agreement is not conclusive, cf., TKO Equipment Co. v. C & G Coal Co.,
. The "common interest” exception is closely related to the exception for jointly represented co-parties, with the difference being that parties may have a "common interest” even if they are not represented by the same lawyer. See In re Pacific Pictures Corp.,
. Miller seems to have tacitly acknowledged the necessity that the interest be legal. In his Declaration of February 12, 2013, Miller's Chairman of the Board, Keith Miller, states that Miller and one of the funders it consulted with, "had a common legal interest in obtaining and/or providing financial assistance that would allow Miller to pursue its legal claims against Caterpillar.” (Motion, Ex. I, ¶ 3).
. The Court of Appeals cited BDO Seidman in support of this proposition.
. There is no claim by Miller that it undertook a joint litigation strategy with any funding source. See United States v. Evans,
. The Court of Appeals in In re Teleglobe Communications Corp. cited Duplan Corp. v. Deering Milliken, Inc.,
“ 'A community of interest exists among different persons or separate corporations where they have an identical legal interest with respect to the subject matter of a communication between an attorney and a client concerning legal advicе. The third parties receiving copies of the communication and claiming a community of interest may be distinct legal entities from the client receiving the legal advice and may be a non-party to any anticipated or pending litigation. The key consideration is that the nature of the interest be identical, not similar, and be legal, not solely commercial. The fact that there may be an overlap of a commercial and a legal interest for a third party does not negate the effect of the legal interest in establishing a community of interest.' ” (Emphasis supplied).
After noting that the Restatement (Third) of the Law Governing Lawyers, takes a more flexible approach than Duplan, the Third Circuit said: "For our purposes, it is sufficient to recognize that members of the community of interest [i.e., those not represented by the same lawyer] must share at least a substantially similar legal interest.” In re Teleglobe Communications Corp.,
. The Seventh Circuit cited Diversified Industries, Inc. v. Meredith,
. Miller’s Reply Brief has represented that no confidential materials were disclosed to Juris before October 27.
. See Nester v. Diamond Match Co., 143 F.72 (7th Cir.1906); Ocasio-Hernandez v. Fortuno-Burset,
.Caterpillar's Memorandum (at 4) merely notes, without discussion or analysis, that a letter from Miller’s counsel states in "conclu-sory fashion” that Mr. Miller and Mr. John Burley, a public relations expert in England who was advising Miller on funding issues and who was a recipient of most of the materials listed on the Privilege Log, had an oral confidentiality agreement. But that is a very different matter than advancing a supported argument regarding the question of whether Mr. Miller's Declaration is insufficient because it statеs a legal conclusion.
. Skeletal and perfunctory arguments are essentially mere assertions and are deemed waived. Plan Trust Funds v. Royal Intern. Drywall and Decorating, Inc.,
. Contrary to Caterpillar’s argument, it does not follow that Caterpillar must have learned of Miller’s attempts to obtain funding from a third-party funder. (Defendant’s Memorandum at 13). The information could have come from a faithless present or former employee of Miller or could have been an educated guess by Caterpillar about Miller’s financial condition following the severance of its relationship with Miller and its possible need for money.
. This rationale would apply to John Burley, who was counseling Miller on funding issues. One of the withheld documents says he had a confidentiality agreement (Privilege Log No. 78), but even if he did not, it is obvious a turnover to him did not substantially increase the chances of Caterpillar learning of the information.
. To be certain that all of the materials on Miller's privilege log were included in the Litigation Funding Materials, I requested that they be submitted separately. I have reviewed the 160 items in that submission that Miller claims are covered by the work-product privilege, the attorney/client privilege, or both, as well as the five volumes of Litigation Funding Documents.
. The original privilege log seems to have more entries for this category of documents. See 22, supra n.10.
. Frederick holds that numerical information can fall within the attorney-client or work-product privilege, and Adlman held that an evaluation of the likelihood of success in contemplated litigation would be protected even though its primary purpose was to inform a business decision of whether to initiate contemplated litigation.