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Sanction against firm reversed

What the court held

Case: Hobley v. Burge, No. 05-1367

Issue: Can a law firm be sanctioned for not producing documents, when the firm is not a party to the proceedings, and was never subpoenaed or ordered to produce them?

Holding: No. In the absence of a subpoena, the firm cannot be faulted for not producing documents, even if the firm may have known that they were relevant to litigation.

The Seventh Circuit held on Jan. 9 that a law firm cannot be sanctioned for withholding documents in discovery when those documents were neither subpoenaed, nor ordered to be produced by the court.

Chicago Police Lt. Jon Burge was fired from the police force in 1993 for allegedly torturing a confession from a murder suspect. The law firm Jones Day represented the city in the police board proceedings leading to Burge’s dismissal.

In December 2002, a lawyer for the city notified Jones Day attorney June Ghezzi that a special prosecutor was investigating allegations of torture by Chicago police, and that a grand jury had subpoenaed documents from the board proceedings against Burge.

Jones Day identified 57 boxes of documents and sent all but 5 to the firm of Hinshaw and Culbertson, the firm representing the City at that time, informing a Hinshaw attorney that it considered the five other boxes privileged under the attorney work-product doctrine.

In 2003, Madison Hobley was pardoned by the governor after having spent 16 years on Illinois’ death row for murder. In May of that year, he filed a Section 1983 suit against Lt. Burge, the City of Chicago, and others, claiming that Burge and several subordinates had tortured and framed him for the murders that led to his convictions.

During discovery, the City waived its claims to either attorney-client or work-product privilege, and in January 2004, produced to Hobley the 52 boxes of documents in its possession.

Although the City knew Jones Day was still holding five boxes under a claim of privilege, they made no mention of them to Hobley’s attorneys, nor did they inform Jones Day about Hobley’s lawsuit.

In March 2004, the City finally disclosed that Jones Day was holding some documents under a privilege claim. The magistrate judge ordered that they be produced.

Jones Day asked the magistrate to reconsider the order, filing a privilege log. Instead, the magistrate found that Jones Day had withheld the documents without a proper notice of privilege, and imposed waiver of the privilege as a sanction, ordering that the five boxes be produced to Hobley’s attorneys.

Jones Day appealed, but the district court affirmed. The Seventh Circuit granted Jones Day’s request for an interlocutory appeal, and reversed in a decision by Judge Terence T. Evans.

The court rejected the magistrate judge’s conclusion that FRCP 34 authorized the order, reasoning, “by its terms, Rule 34 applies only to parties. It is the City, not Jones Day, that is the responsive party in this suit. And even if Jones Day were the City’s current counsel, Rule 34 would not be the correct discovery tool for gaining access to work product held by an attorney (cites omitted).”

The magistrate had concluded that, for purposes of Rule 34, the City had “control” of the documents, even though they were in the possession of Jones Day, and were thus encompassed by Hobley’s requests.

Rejecting this reasoning, the Seventh Circuit concluded, “The problem, though, is that the City never sought to exercise control over the documents by asking Jones Day to part with or make them available to Hobley. Moreover, since it was not representing the City in this litigation, Jones Day was not looped into requests or orders that encompassed documents it was holding. We don’t see how Jones Day can be accused of behaving dilatorily toward discovery requests it never received.”

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7th Circuit Court of Appeals

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Case Analysis

The magistrate had also found that Jones Day was “subjectively aware” of the lawsuit, and thus was obligated to come forward with its documents once it was asked to start preparing a privilege log.

However, the Seventh Circuit disagreed, finding that the request for the privilege log cannot be equated to a discovery request or subpoena.

Finally, the court rejected the magistrate’s conclusion that Jones Day was “subject to a sort of inquiry notice,” concluding, “as Jones Day was a nonparty and was not representing anyone, we are at a loss to understand why it should have been expected to monitor the proceedings.”

The court added, “The issue is not ‘What did Jones Day know and when did they know it?’ Regardless of whether the firm was ‘subjectively aware’ of Hobley’s suit, there is
no authority for the proposition that a nonparty has an affirmative duty to learn about and inject itself into litigation simply because it possesses information one of the parties might find useful.”

Accordingly, the court vacated the sanctions order, and remanded the case, with directions that, should Hobley subpoena the document’s the firm’s privilege claims should be tested under the normal attorney work product procedures.

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David Ziemer can be reached by email.

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