By Gerald L. Maatman, Jr., and Alexis P. Robertson

On January 8, 2015, in S37 Management, Inc. v. Advance Refrigeration Co., No. 06 CH 20999 (Ill. Cir Ct. Jan 8, 2015),  an Illinois Circuit Court, located in Cook County’s Chancery Division, denied a Defendant’s motion to certify a question for interlocutory appeal regarding the application of the crime-fraud exception to the attorney-client and work product privilege as it applies to communications between a defendant, its counsel, and putative class members during the opt-out period.

Although not a workplace class action, the decision is significant to the process of defending any type of class action in terms of discovery from putative class members and the notice process following class certification.

Case Background

The Court granted Plaintiff’s motion for certification of a class consisting of  Advance Refrigeration’s  (“Advance”) customers who had paid a particular fee to Advance in association with their purchases. The Class Notice described the nature of the claims, and directed putative class members to contact class counsel in writing regarding any question on the Notice. The Notice did not direct putative class members to contact Advance’s counsel.

Plaintiff subsequently filed a motion requesting a protective order and sanctions, asserting that Advance had impermissibly engaged in a campaign to urge its customers to opt-out of the class during the opt-out period. The Court subsequently issued an order barring Advance from communication with any class members. Plaintiff then filed an amended motion for a protective order and sanctions, providing additional evidence of Advance’s alleged communication to its customers during the opt-out period.  Plaintiff also sought discovery from Advance’s counsel about their role in Advances’ communications.

Specifically, Plaintiff moved to compel all documents “relating to communications between Defendant and Defense Counsel regarding Defendant’s communications to members of the Class regarding opting out of the Class.” Id. at 2. Advance objected to the Plaintiff’s request based on the attorney-client and work product privileges. In response, Plaintiff argued that the crime-fraud exception applied to its request, and therefore, the privilege did not bar the discovery request. Plaintiff attached evidence to the motion illustrating that there was reason to believe that counsel had assisted Advance in unilaterally reaching out to its customers and urging them to opt- out of the case. Plaintiff alleged that this was accomplished using misleading information about the litigation, which constituted illegal or fraudulent activity.

The Court found that this evidence gave it reasonable basis to suspect Advance’s counsel may have assisted or advised in the communication asserted to be an illegal or fraudulent opt-out campaign. On this basis, the Court granted Plaintiff’s motion to compel discovery regarding Advance’s counsel’s communications with the class.

The Decision Of The Circuit Court

Advance then filed a motion under Rule 308(a) of the Illinois Supreme Court Rules to certify a question for interlocutory appeal. The question Advance sought to certify was, “[w]heather the crime-fraud exception to the attorney-client and work product privilege applies to communications between a defendant and its counsel that relate to the defendant’s communications with putative class members during the opt-out period.” Id. at 6-7. The Court denied Advance’s motion.

The Court reasoned that the manner which Advance had worded the question was improper. As worded, the question would require the Illinois Appellate Court to determine whether the crime-fraud exception could ever apply, as a matter of law, to attorney/defendant communications that relate to a defendant’s communications with putative class members during the opt-out period. The Court reasoned that there was no substantial ground to dispute that the crime-fraud exception could apply to such communications, if a sufficient showing was made. Additionally, the Court found that the question did not accurately address the specific issue on which it had ruled.  It had not ruled that any and all communications between a client and its attorney, that involve the client speaking to class member during an opt-out period, were automatically subject to the crime-fraud exception. Rather, the ruling was explicitly premised on evidence which raised the possibility, that defense counsel conferred with Advance about soliciting customers to fill out opt-out forms and affidavits during the opt-out period.

Implications For Employers

The circumstances, and outcome, in this case are somewhat novel and unique. It is rare that we see the crime-fraud exception applied to pierce the protections of the attorney-client and work production productions, especially in the class action context.  Nonetheless, this case is a reminder to employers, and attorneys alike, that the protections offered by these doctrines are not absolute, and can be applied in the class action, and other contexts, to discover communications between attorney and client.