CALL ONE INC., Plaintiff, v. BERKLEY INSURANCE CO., Defendant No. 21-cv-00466 United States District Court, N.D. Illinois, Eastern Division Filed February 28, 2022 Counsel Carrie Ellen Davenport, Kalli Kling Nies, David Benjamin Goodman, Goodman Law Group | Chicago, Chicago, IL, for Plaintiff. Edward Keating, Keith M. St. Aubin, Mark Albert Bradford, Duane Morris LLP, Chicago, IL, for Defendant. Wood, Andrea R., United States District Judge ORDER *1 Plaintiff's motion to compel production of documents withheld on assertion of privilege [27] is denied without prejudice. Defendant is directed to revise its privilege log to provide more information as to the type of document being withheld and the basis for the privilege assertion. Defendant shall produce its second amended privilege log to Plaintiff by 3/11/2022, and the parties shall meet and confer as to any remaining disputes by 3/25/2022. In the event Plaintiff believes that Defendant is improperly withholding documents after the conference, Plaintiff shall file a renewed motion to compel by 4/8/2022. In any such motion, Plaintiff shall identify the disputed privilege log entries with sufficient specificity such that the documents can be produced for in camera review. STATEMENT This case concerns an insurance coverage dispute between Plaintiff Call One Inc. (“Call One”) and Defendant Berkley Insurance Company (“Berkley”). In 2019, while Call One was insured under a policy issued by Berkley, Call One learned that it was the target of a pending complaint alleging violations of the Illinois False Claims Act (“IFCA”), 740 ILCS 175/6 (“Underlying Lawsuit”). Although Berkley agreed to cover defense costs related to a subpoena duces tecum issued in connection with the Underlying Lawsuit, it took the coverage position that any other defense costs or contribution to a settlement of the Underlying Lawsuit fell outside the scope of its policy. With the instant lawsuit, Call One seeks to recover defense costs it incurred in the Underlying Lawsuit as well as payment towards the settlement resolving that matter. Now before the Court is Call One's motion to compel Berkley to produce documents withheld as privileged. I. On September 7, 2021, Berkley served responses to Call One's discovery requests and made its initial document production. Berkley did not produce a privilege log at that time; according to Berkley, it wished to discuss the parameters of the privilege log with Call One before compiling anything. At a status hearing on October 5, 2021, the Court directed the parties to meet and confer regarding any discovery issues. That day, Call One emailed Berkley to set up a meeting and to inquire about the status of Berkley's privilege log. (Pl.’s Mot. to Compel (“PMC”), Ex. 5, Discovery Conf. Emails at 3, Dkt. No. 27-5.) On October 12, 2021, Call One wrote to Berkley insisting that it receive the privilege log before any meeting took place. Berkley responded that it was preparing a log but the process was taking longer than anticipated due to the large number of documents. (Def.’s Resp. to Mot. to Compel (“DRMC”), Ex. 2 at 1, Discovery Conf. Emails, Dkt. No. 29-2.) Again, on October 21, 2021, Call One wrote to Berkley demanding a privilege log by the following day. (PMC, Ex. 6, Discovery Conf. Emails at 2.) On October 22, 2021, Berkley produced a privilege log. On October 28, 2021, the parties participated in their first (and only) meet-and-confer session regarding the privilege log. Call One noted various deficiencies with the privilege log, including that some entries listed the sender or recipient of emails as only “Microsoft Outlook” or “MLM Claims Attach-No Task,” rather than identifying an actual individual; that many entries involved generic document descriptions; and that Berkley simply listed that each of the 1,260 documents was “privileged” without identifying the basis for the privilege. After the meet and confer, on November 11, 2021, Berkley produced its amended privilege log. On November 19, 2021, without notice or any further request to confer, Call One filed the present motion to compel. (Dkt. No. 27.) II. *2 In opposition to Call One's motion to compel, Berkley first complains that Call One failed to satisfy the meet-and-confer requirements of Federal Rule of Civil Procedure 37 and this District's Local Rule 37.2 before filing its motion. Call One maintains that it met its obligations by discussing with Berkley the defects in its initial privilege log. According to Call One, that Berkley's amended privilege log failed to address all the issues identified with respect to the initial privilege log indicated Berkley was unwilling to cooperate in discovery and any further efforts to confer would needlessly delay the process. Although the Court acknowledges Call One's frustrations, a review of Berkley's amended privilege log and the parties’ briefs indicate that another discussion between the parties could resolve several outstanding disputes. Although Call One might not have been fully satisfied by Berkley's amended privilege log, the Court's review indicates that Berkley did make substantive changes from the initial log. There is little reason to assume that Berkley would be unresponsive to another round of requested amendments. Nor is this a case where the parties have already “gone back and forth for months” regarding the privilege assertions, as in cases cited by Call One. See, e.g., St. Paul Guardian Ins. C. v. Walsh Construction Co., No. 15 cv 10324, 2021 WL 4745385, at *2 (N.D. Ill. Oct. 12, 2021). Accordingly, the Court concludes that another meet and confer by the parties is warranted before the Court considers the merits of Call One's objections. Nonetheless, to assist the parties in narrowing the disputed topics, the Court will address the substance of certain of Call One's objections briefly below. III. Call One asserts that Berkley is unable to claim privilege over certain documents because outside counsel was providing business advice rather than legal advice. Specifically, Call One suggests that outside counsel (Macklin) performed business functions for Berkley by assisting in the claims adjustment process and, as such, his communications cannot be privileged. Call One relies on Chicago Meat Processors, Inc. v. Mid-Century Insurance, Co. to support the contention that the attorney-client privilege does not apply when the outside attorney is merely acting as a claims adjuster. No. 95 C 4277, 1996 WL 172148, at *3 (N.D. Ill. Apr. 10, 1996). This is because “insurance companies, which are in the business of reviewing, processing, and adjusting claims, should not be permitted to insulate the factual findings of its claims investigation by the involvement of an attorney to perform such work.” Id. Berkley disputes that any retained outside counsel acted as a claims adjuster, conducted a factual investigation, or otherwise performed basic business functions for Berkley. Instead, Berkley insists that outside counsel provided only privileged legal advice. Whether the withheld documents actually contain privileged legal advice or merely demonstrate that outside counsel was performing a business function for Berkley is a question suitable for in camera investigation by the Court.[1] See id. at *1 (noting that the Court reviewed the disputed documents in camera before determining that some of them were prepared by outside counsel in the ordinary course of business and did not contain legal advice). Thus, if the parties are unable to resolve the application of privilege to Berkley's communications with outside counsel after meeting and conferring, any disputed documents shall be submitted for in camera review and a ruling on the merits. *3 Call One also contends that it is entitled to production of any “claim notes” in Berkley's possession regardless of whether they contain privileged information.[2] Generally, “where allegations of bad faith exist against an insurance company, the plaintiff insured is entitled to know the substance of the investigation, the information available and used to make a decision, and the evaluations and advice relied upon for the decision.” Prisco Serena Sturm Architects, Ltd. v. Liberty Mut. Ins. Co., No. 94 C 5716, 1996 WL 89225, at *1 (N.D. Ill. Feb. 27, 1996) (internal quotation marks omitted). But that does not mean privileged documents in a claim file must automatically be disclosed. Instead, when a claim file involves documents determined to be privileged, the moving party must “show[ ] both a compelling need for the documents and that the information was not available elsewhere.” Am. Safety Cas. Ins. Co. v. City of Waukegan, 2010 WL 11587903, at *7 (N.D. Ill. Sept. 9, 2010) (citing cases); compare Prisco, 1996 WL 89225 at *2 (granting the motion to compel on the basis that the contested documents in the claims file were prepared “in the ordinary course of business” and not protected by either the work-product doctrine or attorney-client privilege). Accordingly, resolution of this issue requires the Court to consider whether the withheld documents are truly privileged and, if so, whether disclosure is nonetheless warranted. So with respect to these documents as well, if the parties are unable to resolve their dispute after meeting and conferring, any disputed documents shall be submitted for in camera review. Finally, Call One asserts that Berkley circulated allegedly privileged documents outside of its control group. Illinois law governs this privilege dispute.[3] In the corporate context, Illinois law requires a corporation claiming attorney-client privilege to show that the communication was made by someone in the corporation's “control group.” Claxton v. Thackston, 559 N.E.2d 82, 85 (Ill. App. Ct. 1990). Only a company's “top management who have the ability to make a final decision” and any “employee whose advisory role to top management in a particular area is such that a decision would not normally be made without his advice or opinion, and whose opinion in fact forms the basis of any final decision by those with actual authority” are considered to be part of the control group. Consolidation Coal Co. v. Bucyrus-Erie Co., 432 N.E.2d 250, 258 (Ill. 1982). Distribution outside of the company's control group destroys the attorney-client privilege. Sullivan v. Alcatel-Lucent USA, Inc., No. 12 C 7528, 2013 WL 2637936, at *4 (N.D. Ill. June 12, 2013). Call One contends that Berkley failed in both its privilege logs and its response to identify individuals who received two allegedly privileged documents sent to “MLM Claims Attach – No Task.”[4] In response, Berkley declares that this account is merely an email account used by Berkley's in-house attorneys serving in a claims-professional capacity to manage internal communications. Nonetheless, the Court directs Berkley to disclose the names of all those with access to the account during the relevant time period to make certain that the withheld documents were disclosed only to attorneys working in the specific department handling Call One's case and those within the control group. IV. *4 In sum, the Court finds it premature to order production of the withheld documents in the privilege log. In so doing, the Court notes that “there are, in essence, no bright line rules, or rulings” in resolving routine discovery disputes. Am. Council of Blind of Met. Chi. v. City of Chicago, No. 19 C 6322, 2021 WL 5140475, at *2 (N.D. Ill. Nov. 4, 2021). As it stands, the current privilege log encompasses more than 600 entries. The Court finds it likely that the parties can further reduce the number of disputed documents that require in camera review. The parties are therefore directed to meet and confer at least one more time to resolve or narrow the remaining issues for the Court's consideration. Footnotes [1] Although Call One insists that any entries in the privilege log concerning communications with outside counsel and where the description mentions “policy or claims analysis” must necessarily relate to the claims adjustment process, the Court is unwilling to order disclosure of potentially privileged documents on the basis of such a description. [2] The Court notes that Berkley has not clearly identified which entries in the privilege log refer to “claim notes.” [3] When jurisdiction is premised upon diversity of citizenship and the claims are brought under Illinois state law, Illinois law governs questions of attorney-client privilege. Simon v. Nw. Univ., 259 F. Supp. 3d 848, 852 (N.D. Ill. 2017). [4] Call One initially suggested that other entries were not privileged because individuals listed as recipients were not identified in Berkley's answers to interrogatories as individuals who participated in, were consulted about, or had any role in the coverage determination for Call One's claim (and therefore included within the control group). In its response, Berkley states that these individuals were Berkley administrative support personnel who were assigned to the subject file and who fell within the exception to the control group rule for “ministerial agents” of the attorney or client who facilitate transmission of the attorney-client communications. See Abbott Lab'ys v. Airco, Inc., No. 82 C 3292, 1985 WL 3596, at *4 (N.D. Ill. Nov. 4, 1985). Call One appears to concede (by focusing its reply only on whether sending documents to “MLM Claims Attach – No Task” destroys privilege) that the presence of these individuals on any communications would not affect the privilege determination.