In Re: Dealer Management Systems Antitrust Litigation

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

MDL No. 2817

IN RE: DEALER MANAGEMENT Case No. 18 C 864

SYSTEMS ANTITRUST LITIGATION

Magistrate Judge Jeffrey T. Gilbert

MEMORANDUM OPINION AND ORDER

This matter is before the Court on Defendants CDK’s and Reynolds and Reynolds’s Motion

to Compel Plaintiff Authenticom to Produce Third-Party Communications or, In the Alternative,

Submit Such Communications for In Camera Review [EFC Nos. 539, 541]. For the reasons

discussed herein, Defendants’ Motion to Compel [EFC Nos. 539, 541] is granted in part, denied

in part, and denied without prejudice in part.

I. BACKGROUND

In their Motion to Compel Plaintiff Authenticom to Produce Third-Party Communications

or, In the Alternative, Submit Such Communications for In Camera Review [EFC Nos. 539, 541],

Defendants CDK Global LLC (“CDK”) and Reynolds and Reynolds Company (“Reynolds and

Reynolds”) (together, “Defendants”) challenge Plaintiff Authenticom’s refusal to produce three

categories of documents it is withholding based on the attorney-client privilege and/or the work-

product doctrine. The documents Authenticom is withholding fall within the following categories:

(1) communications dated from May 2015 to February 2017 between Authenticom and third

parties, including AutoLoop, Dominion, Advent Resources, CarFax, MOC Products, DARCARS,

eLead, SIS, DealerSocket, and Autopoint (together, the “Common Interest Group”), that

Authenticom asserts are privileged based on the common interest doctrine; (2) communications

between Authenticom and third parties BMO Harris Bank, Motormindz, Inc., and data extractor

Gilbert Hale that Authenticom asserts are privileged also based on the common interest doctrine;

and (3) communications between Authenticom and other third parties, including management

coach/consultant Lori Zimmer, investment firms Presidio Group and Gerchen Keller, and law firm

Davis Polk, that Authenticom claims are protected by the attorney-client privilege even though the

communications have been shared with third parties..

On June 10, 2019, the Court set a procedure by which the parties would submit a sample

set of documents for the Court to review in camera for each of the identified categories. See [ECF

No. 717]. As set forth in the Court’s June 10, 2019 Order [ECF No. 717], the Court requested that

Defendants CDK and Reynolds and Reynolds together and Plaintiff Authenticom, respectively,

identify 10 documents from each of the categories at issue in Defendants’ Motion and submit those

documents to the Court for a limited in camera review. The parties submitted the documents, and

the Court has completed its review of the parties’ briefs and the documents that were submitted in

camera. The Court will address each category of documents in turn.

II. ANALYSIS

A. Communications Authenticom Asserts Are Privileged Based On The Common Interest

Doctrine

Authenticom has refused to produce certain communications between Authenticom and

members of the so-called Common Interest Group based on the common interest doctrine. In their

Motion, Defendants CDK and Reynolds and Reynolds challenge Authenticom’s claim of attorney-

client privilege and its assertion of the common interest doctrine over those documents. CDK and

Reynolds and Reynolds argue that Authenticom’s invocation of the common interest doctrine is

unsupported by the facts and that Authenticom did not (and currently does not) share any viable

or protectable common legal interest with the Common Interest Group.

In opposition, Authenticom claims that it did, in fact, share a common interest with the

Common Interest Group to pursue potential antitrust litigation against Defendants CDK and

Reynolds and Reynolds as a result of restrictions Defendants imposed on access by members of

the Group and other companies to the dealer data stored on Defendants’ Data Management

Systems (“DMSs”) and the resulting damage caused by those restrictions. Authenticom argues that

Defendants’ alleged anticompetitive practices “decimated competing data integrators (Advent,

Authenticom, and Dominion), raised the prices paid by application vendors for access to data on

CDK’s and Reynolds’s DMS (Dominion, CarFax, AutoLoop, eLead, and MOC1 Solutions), and

resulted in dealers paying more for vendors’ applications (DARCARS).” Authenticom’s

Opposition [ECF No. 571], at 7-8.

The Seventh Circuit has articulated the following test for the existence of the attorney-

client privilege: “(1) where legal advice of any kind is sought (2) from a professional legal adviser

in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence

(5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by

the legal adviser, (8) except the protection be waived.” Naik v. Boehringer-Ingelheim Pharms.,

Inc., 2008 WL 4866015, at *1 (N.D. Ill. June 19, 2008) (citing United States v. White, 950 F.2d

426, 430 (7th Cir. 1991)). Of course, not all communications between the attorney and the client

are privileged. See Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371,

388 (7th Cir. 1991)). The attorney-client privilege applies “‘only if [the communications]

constitute legal advice or tend directly or indirectly to reveal the substance of a client confidence.’”

Id. (quoting United States v. Defazio, 899 F.2d 626, 635 (7th Cir. 1990)).

It is clearly established black letter law that “a party waives the attorney-client privilege

when the otherwise privileged documents are disclosed to a third party.” Grochocinski v. Mayer

Brown Rowe & Maw LLP, 251 F.R.D. 316, 326 (N.D. III. 2008). The common interest doctrine,

however, is a narrowly construed “exception to the rule that no privilege attaches to

communications between a client and an attorney in the presence of a third person.” United States

v. BDO Seidman, LLP, 492 F.3d 806, 815 (7th Cir. 2007). The common interest doctrine is

applicable when (1) parties undertake a joint effort (2) with respect to an identical legal interest,

as opposed to a business or rooting interest, and (3) the withheld communications are made to

further said ongoing legal enterprise. BDO Seidman, LLP, 492 F.3d at 815-16; Miller UK Ltd. v.

Caterpillar, Inc., 17 F. Supp. 3d 711, 732 (N.D. Ill. 2014). The party asserting the common interest

doctrine and privilege bears the burden of showing that it applies and has not been

waived. Whitney v. Tallgrass Beef Co. LLC, 2015 WL 3819373, at *2 (N.D. Ill. June 18, 2015).

After reviewing the parties’ briefs and the documents submitted, the Court is not persuaded

by Authenticom’s arguments and concludes that Authenticom has failed to establish that the

common interest doctrine applies to the communications and documents at issue. The purpose of

the common interest doctrine is to “foster communication” between parties that share a common

interest and to “protect the confidentiality of communications ... where a joint … effort or strategy

has been decided upon or undertaken by the parties and their respective counsel.” United States

v. Evans, 113 F.3d 1457, 1467 (7th Cir. 1997). 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, LLP, 492 F.3d at 815

(internal citations omitted); Pampered Chef v. Alexanian, 737 F. Supp. 2d 958, 964 (N.D. Ill.

2010). Here, there is no evidence there was any joint legal planning. Nor is there any evidence that

purported members of the Common Interest Group jointly sought legal assistance to pursue a

common goal other than maybe a general consensus to approach the Federal Trade Commission

(“FTC”) in hopes that the FTC would agree to take legal action against CDK and Reynolds and

Reynolds.

Other than its own assertions, Authenticom has not submitted any evidence that the

purported Common Interest Group actually existed and that such a group contemplated and

pursued a specific joint effort or enterprise. Rather, the evidence that has been submitted (other

than Authenticom’s say-so) contradicts Authenticom’s position.1 In addition, of the parties

Authenticom has identified as being members of the Common Interest Group, only Authenticom

filed suit in May 2017. Autoloop later filed suit in April 2018, and the remainder of the purported

members of the Common Interest Group are non-parties to this litigation. Even more telling,

Authenticom’s counsel (on behalf of Plaintiff MVSC) actually threatened to sue SIS, a purported

member of the Common Interest Group, as a co-conspirator with CDK and Reynolds and Reynolds

but then settled with SIS prior to filing suit. It is not clear how Authenticom can argue that it

shared a common legal interest with SIS to pursue a case against CDK and Reynolds and Reynolds

for an alleged conspiracy in which SIS was an alleged co-conspirator.

Authenticom contends that the Common Interest Group members had the same interest in

challenging Defendants’ alleged anticompetitive restrictions on access to the dealer data on their

DMSs. Courts have recognized that the common interest doctrine only applies when the parties

undertake a joint effort with respect to “a common legal interest.” BDO Seidman, LLP, 492 F.3d

1 See e.g., eLead Declaration [ECF No. 541-5], at 1 (“eLead is not involved in this lawsuit and wishes to

remain neutral.”); Tony Petruzzelli Dep. [ECF No. 585-2], at 45:15-46:6. (“Q: [H]as AutoLoop formed an

agreement with anyone else concerning either the complaints you’ve made to the FTC or this litigation? A:

Not that I’m aware of. Q: To your knowledge, has there ever been an agreement consummated between

AutoLoop and any other third-parties that purports to allow the sharing of attorney-client privileged

information? A: Not that I’m aware of.”); Phillip Battista (SIS) Dep. [ECF No. 585-3], at 308:18-309:67

(“So this document was my understanding of it was [Mr. Petruzzelli] was looking to get a group of people

together of to join the fight, potentially go to the FTC it’s my understanding.... We did not participate in

that effort.”).

at 815-16. “The key consideration is that the nature of the interest be identical, not similar, and be

legal, not solely commercial.” Graco Children’s Products, Inc. v. Dressler, Goldsmith, Shore &

Milnamow, Ltd., 1995 WL 360590, at *5 (N.D. Ill. June 14, 1995).

It may be true that Authenticom and the members of the purported Common Interest Group

shared some business interests in opposing CDK’s and Reynolds and Reynolds’s conduct, but that

does not necessarily translate to a shared identical legal interest sufficient to protect otherwise non-

privileged communications among third parties. The members of the Common Interest Group

operate different businesses in the automobile industry, have different business interests, and in

some instances are competitors with diverging interests. The Court is not persuaded that the

Common Interest Group members shared identical legal interests. The Court recognizes that the

members of the so-called Common Interest Group may have shared a similar business interest in

opposing CDK’s and Reynolds and Reynolds’s allegedly unlawful business practices under the

antitrust laws in litigation or with regulators like the FTC. That shared business or commercial

interest, however, does not amount to a joint effort or an identical legal interest for purposes of the

application of the common interest doctrine.

It is clear that Authenticom and the Common Interest Group may have wanted similar

things from CDK and Reynolds and Reynolds, including certain functionality on Defendants’

DMSs, access to their DMSs, and/or lower prices for access, and perhaps, they even share a desire

Authenticom prevail in this litigation. That, however, is not enough for the common interest

doctrine exception to attach to these otherwise non-privileged communications. See Whitney, 2015

WL 3819373, at *7 (holding that “two parties have an interest in pressing a case forward

simultaneously is not, in itself, sufficient to show that the common interest doctrine applies”).

There must be a joint effort or strategy that is pursued by the parties to the common interest effort

and their counsel. See Evans, 113 F.3d at 1467. That joint effort is lacking in this case.

Most of the communications among the purported Common Interest Group that were

submitted to the Court for review occurred years before actual litigation was filed. In addition,

common business and legal sense dictates that if the members of the so-called Common Interest

Group believed they had a protectable joint interest to pursue litigation and truly shared an

identical legal interest, then they and their counsel would have memorialized that understanding

in a common interest agreement that then could have been trotted out to blunt precisely the

challenge that Defendants have mounted here. The Court recognizes that a writing is not required.

The withheld communications, however, involve sophisticated attorneys with sophisticated clients

who, in the Court’s view, would have executed a common interest agreement if they could have

reached closure on such an agreement. Moreover, the members of this Common Interest Group

were not static, and new members popped up years after the Group supposedly was formed that

were not included in Authenticom’s original privilege log. All of these factors cut against this

being a group that can invoke the common interest privilege.

Further, Authenticom has asserted that the common interest that binds the Common Interest

Group together is this litigation. The Court questions how companies that have chosen not to

become parties to this litigation share an identical legal interest with the parties who are

participating in the litigation. It is not disputed that the non-parties may benefit from the outcome

in this litigation. But by definition, that is a rooting interest, not a legal interest. A shared rooting

interest in the “successful outcome of a case” is not a common legal interest. See Miller UK Ltd.

v. Caterpillar, Inc., 17 F. Supp. 3d 711, 731-32 (N.D. Ill. 2014). Authenticom has not cited any

case similar to the present litigation in which the purported common legal interest (1) arose years

before a lawsuit was filed; (2) is shared between nearly a dozen differently situated parties; (3)

almost none of whom were represented by the same counsel—and many of whom never were

represented by outside counsel at all; (4) when the counsel who later filed the lawsuit was not

involved at the time the communications occurred; (5) the vast majority of the entities never filed

suit (and there is no evidence they ever seriously considered doing so); (6) one of the supposed

members of the common interest group actually threatened suit against another on the ground that

it conspired with the named Defendants in this litigation and then settled that claim; and (7) other

than the party (Authenticom) claiming the privilege, no other party has affirmed the existence of

any common interest group and some actually have disclaimed joining any common interest

arrangement.

For all of these reasons, the Court finds Authenticom failed to establish that the

communications at issue are privileged based on the common interest doctrine. Defendants’

Motion to Compel, therefore, is granted as to Authenticom’s communications with the so-called

Common Interest Group. Authenticom must produce those documents to Defendants. The Court

declines to engage in further review of any additional documents at this time, and Authenticom is

ordered to produce the communications at issue.

2. Communications with BMO Harris, Gilbert Hale, and Motormindz

Authenticom also has claimed a common interest privilege with three other entities: (1)

BMO Harris, Authenticom’s lender on a loan that Authenticom used to re-purchase the shares of

investors in April 2014; (2) Gilbert Hale, a competitive data extractor; and (3) Motormindz, a

marketing company Authenticom previously hired to assist with the marketing and launch of its

products. Based on the documents submitted and reviewed in camera, the Court again is not

persuaded that Authenticom shared any common legal interest with BMO Harris, Gilbert Hale, or

Motormindz.

It appears that any interest Authenticom shared with BMO Harris is purely financial, and

not a common legal interest. Courts in this District consistently have held that communications

with lenders, financiers, or other parties whose sole interest in a case is financial are not entitled

to common interest privilege protection. See Miller UK Ltd., 17 F. Supp. 3d at 732-33 (“The

funders, for their part, were interested in profit…. [They] did not share a common legal interest,

and materials shared with any actual or prospective funders lost whatever attorney-client privilege

they might otherwise have enjoyed.”); Grochocinski, 251 F.R.D. at 328 (holding that because the

third party only had a financial interest in this case the common interest doctrine did not apply to

the plaintiff's attorney’s communications with the third party and its attorneys).

Authenticom also has not established that either Gilbert Hale or Motormindz had any

common legal interest with Authenticom, were similarly situated, or shared a common legal

interest in this litigation. Courts generally have found that outside marketing agencies like

Motormindz generally do not share a common interest in litigation. LG Electronics U.S.A., Inc. v.

Whirlpool Corp., 661 F. Supp. 2d 958, 966 (N.D. Ill. 2009). And without any other evidence, it is

not clear to the Court how Gilbert Hale, which is a competitor data extractor, would have anything

other than maybe a shared commercial or business interest with Authenticom.

Putting aside the common interest doctrine, a review of the documents at issue, frankly,

confirms the communications are not privileged. For the documents to be privileged, it must be

clear from the communication that the lawyer is seeking or needs input and/or advice from the

third-party advisor/consultant in order to provide legal advice to the lawyer’s client. A

communication is not privileged if the lawyer (or the client) is asking the third-party

advisor/consultant to offer its independent assistance, assessment, and opinion separate and apart

from the legal advice being provided by counsel. The Court’s review of the documents submitted

in camera confirms that Authenticom’s communications with BMO Harris, Gilbert Hale, and

Motormindz are not protected by any attorney-client privilege or the common interest doctrine.

For these reasons, Defendants’ Motion to Compel is granted as to Authenticom’s

communications with BMO Harris, Gilbert Hale, and Motormindz, and Authenticom is ordered to

produce the communications at issue.

B. Other Communications With Third Parties Over Which Authenticom Asserts The

Attorney-Client Privilege

As discussed above and in the Court’s recent orders on related discovery motions, attorney-

client communications and documents that otherwise would be privileged are discoverable if they

have been shared with or disclosed to a third party. Allendale Mut. Ins. Co. v. Bull Data Sys., Inc.,

152 F.R.D. 132, 139 (N.D. Ill. 1993); see also March 4, 2020 Order [ECF No. 903] and March 30,

2020 Order [ECF No. 937].2 An exception to this rule exists and the presence of a third-party does

not waive the privilege if the third party’s presence (or, in the context of this case, the reason the

third-party is included in or copied on email communications) is to facilitate effective

communication between lawyer and client. In re Grand Jury Investigation, 918 F.2d 374, 386

n.20 (3rd Cir. 1990) (holding that the presence of an agent does not abrogate privilege). To avoid

waiver, Authenticom must show that “statements made to one’s attorney in the presence of a third

party non-lawyer” were “necessary to the obtaining or giving of legal advice.” Motorola Sols., Inc.

v. Hytera Commc’ns. Corp., 2018 WL 1804350, at *4 (N.D. Ill. Apr. 17, 2018).

2 The Court incorporates by reference its discussion and analysis in its March 4, 2020 Order [ECF No. 903]

and March 30, 2020 Order [ECF No. 937].

1. Communications with Lori Zimmer

Authenticom argues that Lori Zimmer is a consultant to Authenticom and the functional

equivalent of an employee, and therefore, any communications shared with Ms. Zimmer did not

waive the attorney-client privilege. The Court, however, is not persuaded by Authenticom’s

arguments as matter of law. In addition, the Court’s review of the underlying documents reveals

that some of the communications in those documents probably are not covered by the attorney-

client privilege in any event. But even if they are, the privilege was waived by disclosure to Ms.

Zimmer.

Authenticom contends that Ms. Zimmer is a management coach and consultant who was

hired “to advise on organizational changes associated with Authenticom’s then-substantial

growth.” Authenticom’s Opposition [EFC No. 571], at 4. Authenticom asserts that her duties

included providing leadership consulting and strategic planning to Authenticom’s senior

executives, and that such duties required her to participate in discussions regarding the company’s

legal issues. Authenticom’s Opposition [EFC No. 571], at 4. Authenticom argues that Ms.

Zimmer was the “functional equivalent” of an employee, and therefore, communication with her

did not waive the attorney-client privilege.

The Seventh Circuit, however, has not yet adopted the “functional equivalent” test, and

courts within the Circuit have “doubt[ed] its wisdom” and been “doubtful of whether the Seventh

Circuit would endorse this test.” BSP Software, LLC v. Motio, Inc., 2013 WL 3456870, at *2 (N.D.

Ill. July 9, 2013); see also LG Electronics. U.S.A., 661 F. Supp. 2d at 963 (collecting cases). One

court in this District opined that adopting the functional equivalent test has “the potential to expand

the privilege dramatically and thus would run contrary to the Seventh Circuit’s frequent

admonition that the scope of the privilege must be carefully circumscribed.” BSP Software, LLC,

2013 WL 3456870, at *3 (citing In re Grand Jury Proceedings, 220 F.3d 568, 571 (7th Cir. 2000)).

This Court also declines to adopt the functional equivalent test in this case and concludes that any

privilege for communications shared with Ms. Zimmer has been waived.

Even if the Court were to apply the functional equivalent test, Authenticom falls short of

establishing that Ms. Zimmer satisfies the functional equivalent test. Cases that have endorsed

this test apply a multi-factor analysis: (1) “whether the consultant had primary responsibility for a

key corporate job,” (2) “whether there was a continuous and close working relationship between

the consultant and the company’s principals on matters critical to the company’s position in

litigation,” and (3) “whether the consultant is likely to possess information possessed by no one

else at the company.” LG Electronics U.S.A., 661 F.3d at 963. Authenticom’s arguments that Ms.

Zimmer’s role and her coaching reach a level to satisfy these requirements are not persuasive.

The Court is not persuaded that Ms. Zimmer effectively held a key corporate position at

Authenticom or that she possessed information that no one else at Authenticom possessed. Ms.

Zimmer is a management consultant and coach. Authenticom argues that Ms. Zimmer needed to

be included in attorney-client communications to be effective in providing her services to

Authenticom executives. “[Ms. Zimmer’s] duties included providing leadership consulting and

strategic planning to Authenticom’s senior executives—duties that required her to participate in

discussions regarding the company’s legal issues.” See Declaration of Lori Wilkins (formerly

Zimmer), [ECF No. 571-4], at 2. That is a stretch. But even if it was helpful for Ms. Zimmer to

be privy to communications between Authenticom executives and the company’s attorneys for her

to provide her coaching services to those executives, that does not mean her presence was

“necessary, or at least highly useful, for the effective consultation between the client and the

lawyer.” Heriot v. Bryne, 257 F.R.D. 645, 666-67 (N.D. Ill. 2009). There is no contention here

that Authenticom executives were having difficulty communicating with the company’s lawyers

and that Ms. Zimmer was there to better effectuate those communications. She was there for

leadership consulting and strategic planning, pure and simple. She did not need to be privy to

attorney-client communications to perform that function even if it may have been helpful or

practical for her to hear or see those discussions.

Taking Authenticom’s argument at face value, Ms. Zimmer was included in the

communications so that she could more effectively provide her coaching services to Authenticom

executives. That it was helpful for Ms. Zimmer in providing her coaching services to Authenticom

executives to be privy to attorney-client communications does not mean that Ms. Zimmer’s

presence was necessary for the lawyers to provide legal services to their client, Authenticom. In

Ms. Zimmer’s own words, it would have been “impractical” for her not to be included in attorney-

client communications about litigation that was important to the company in the context of her

work providing management consulting and executive coaching services. See Declaration of Lori

Wilkins (formerly Zimmer), [ECF No. 571-4], at 2. While it may not always be easy to preserve

the attorney-client privilege, preserving the privilege is not a matter of whether it would be easier

not to protect it against waiver.

The Court agrees with Defendants that Authenticom’s argument turns the functional

equivalent test on its head. To maintain the confidentiality of an attorney-client communication

in the context of the functional equivalent test, communications with the consultant must be

essential for the provision of legal advice, not the other way around. Here, Authenticom’s

argument is not that Ms. Zimmer was essential to the provision of legal advice but that it was

helpful for Ms. Zimmer to hear the legal advice being given to her clients so she could more

effectively provide her management consulting and coaching services. That argument does not

work. In addition, the Court’s review of the underlying documents reveals that some of the

communications in those documents probably are not covered by the attorney-client privilege in

any event. But even if they are, the privilege was waived by disclosure to Ms. Zimmer. The Court

does not need to review any additional documents to resolve this issue.

For all of these reasons, Defendants’ Motion to Compel is granted as to Authenticom’s

communications with Lori Zimmer, and Authenticom is ordered to produce its communications

with Ms. Zimmer.

2. Communications with Presidio Group and Gerchen Keller

For the reasons discussed immediately above and in the Court’s recently issued Orders on

related discovery matters involving communications with third parties (see [ECF Nos. 903, 937]),

the Court is not convinced as a matter of law that the communications Authenticom shared with

third parties, Presidio Group and Gerchen Keller, are protected attorney-client communications.

As discussed above, for a communication to be privileged, it must be clear from the

communication that the lawyer is seeking or needs input and/or advice from the third-party

advisor/consultant in order to provide legal advice to the lawyer’s client. A communication is not

privileged if the lawyer (or the client) is asking the third-party advisor/consultant to offer its

independent assistance, assessment, and opinion separate and apart from the legal advice being

provided by counsel.

As a threshold matter, none of the documents submitted to the Court in camera contain

communications between Authenticom and Presidio Group. The parties do not cite to Bates

numbers for any such documents, and the Court could not find any based on its own review. If

Authenticom is withholding any such documents from production, however, perhaps the

discussion below will be instructive as to those documents as well.

There were two communications with Gerchen Keller, AUTH_MDL_PRIV_0163 (Tab 2

of Defendants’ in camera Selections for the Common Interest Communications) and

AUTH_MDL_PRIV_1103 (Tab 7 of Defendants’ in camera Selections for the Communications

with Ms. Zimmer), neither of which are confidential attorney-client communications. Gerchen

Keller was a litigation finance firm with whom Authenticom was considering doing business. The

communications at issue are between an outside Authenticom lawyer and an analyst at Gerchen

Keller trying to understand certain issues in the litigation presumably as part of the firm’s due

diligence in preparation for potentially providing litigation funding. These are not

communications in which the lawyer is providing legal advice to a client or in which the lawyer is

consulting with a third party whose expertise is necessary for the lawyer to provide legal advice to

his client. Rather, the lawyer is asking if the analyst needs any more information for the analyst

to do his job, and the analyst is asking questions of the lawyer as part of the analyst’s due diligence

and analysis of the litigation. These are not communications protected by attorney-client

privilege.3

For all of these reasons, Defendants’ Motion to Compel is granted as to Authenticom’s

communication with Presidio Group and Gerchen Keller, and Authenticom is ordered to produce

its communications with Presidio Group and Gerchen Keller.

3. Communications with Davis Polk

In its opposition to Defendants’ Motion to Compel, Authenticom asserts that four of the

communications that Defendants challenge were shared with third party Davis Polk, which is a

law firm Authenticom was considering formally retaining. See Authenticom’s Opposition [ECF

3 It also is not clear these documents would be covered by the work product doctrine because they are not

being prepared by or for the lawyer at his request in connection with or in anticipation of litigation.

No. 571], at 12. Courts clearly have recognized that the attorney-client privilege “extends to

preliminary consultation by a prospective client with a view to retention of the lawyer, although

actual employment does not result.” Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d

1311, 1319 (7th Cir. 1978). Authenticom represents that it informed Defendants of its basis for

asserting the attorney-client privilege over these challenged communications. Defendants,

however, did not address Authenticom’s position in their Motion to Compel.

It is not clear to the Court whether Defendants have dropped their challenge to these

communications based on Authenticom’s representations or if Defendants still are seeking their

production over Authenticom’s objections. In any event, the Court agrees with Authenticom that

because Defendants did not address Authenticom’s objections in their Motion, Defendants have

forfeited their challenge to these communications. See Labella Winnetka Inc., v. Gen. Cas. Ins.

Co., 259 F.R.D. 143, 151 (N.D. Ill. 2009) (holding that an argument raised for the first time in a

reply brief is waived and cannot be considered).

For these reasons, Defendants’ Motion to Compel is denied as to Authenticom’s

communication with Davis Polk.

C. Communications Authenticom Contends Are Covered By The Work-Product Doctrine

Authenticom contends not only that the attorney-client privilege and common interest

doctrine protect some of the documents that Defendants CDK and Reynolds and Reynolds have

challenged, but also that some of the challenged documents are protected by the work-product

doctrine. Authenticom states that 37 or 38 (both numbers appear in the briefs) of the challenged

documents are protected as attorney work product as well as subject to the attorney-client privilege

in some instances. “The work-product doctrine protects (1) documents and tangible things

otherwise discoverable (2) prepared by or for another party or by or for that other party’s

representative (3) in anticipation of litigation or for trial.” Christman v. Brauvin Realty Advisors,

Inc., 185 F.R.D. 251, 255 (N.D. Ill. 1999) (internal citations omitted). To be protected, work

product must have been prepared for adversarial proceedings. Binks Mfg. Co. v. National Presto

Indus., Inc., 709 F.2d 1109, 1118-1119 (7th Cir. 1983). Work prepared in the regular course of

business is not protected by the work-product doctrine. Allendale Mut. Ins. Co. v. Bull Data Sys.

Inc., 152 F.R.D. 132, 135 (N.D. Ill. 1993). Moreover, mere anticipation of litigation is not

sufficient to invoke the doctrine. Ferguson v. Lurie, 139 F.R.D. 362, 367 (N.D. Ill. 1991). Finally,

the burden of establishing the elements of the work-product doctrine is on the party claiming

protection. Binks Mfg. Co., 709 F.2d at 1118.

Courts have analyzed the work-product privilege in two contexts—fact work product and

opinion work product. Both are generally protected and can be discovered only in limited

circumstances. In re Grand Jury Proceedings, 33 F.3d 342, 348 (4th Cir. 1994); McCook Metals

L.L.C. v. Alcoa Inc., 192 F.R.D. 242, 258-59 (N.D. Ill. 2000). In either case, the burden rests on

the party asserting the work-product doctrine to establish the necessary elements. Logan v.

Commercial Union Insurance Co., 96 F.3d 971, 976 (7th Cir. 1996). In the fact work product

context, the burden then would shift to the movant to demonstrate a substantial need for the

information, and that it would be exceedingly difficult to obtain the information any other

way. McCook Metals L.L.C., 192 F.R.D. at 259.

Unfortunately, because of the way in which the dispute ultimately has been presented to

the Court, the parties’ and particularly Defendants’ arguments are made very generally, and the

Court does not appear to have (for its in camera review) all the documents Authenticom is

withholding solely on the basis of the work-product doctrine. Authenticom did not submit for in

camera review all the documents it says are protected by the work-product doctrine (nor did the

Court require it to do so), and it is not obvious to the Court in all instances which documents are

in play for this purpose, particularly those documents that are not covered by the attorney-client

privilege.

The Court is not persuaded by Defendants’ general arguments that Authenticom has not

established that the communications were made in anticipation of litigation or that the documents

were not created for Authenticom. Those determinations should be made in the context of each

document Authenticom contends is protected as attorney work product or at least like categories

of documents and cannot be made in the context of a blanket ruling applicable to all challenged

documents. The Court also notes that it is missing certain information necessary to make any final

determination as to whether documents are work product (and if so, if they still should be

produced) since Defendants CDK and Reynolds and Reynolds have failed to establish or even

address whether they have a substantial need for the information at issue and whether it would be

difficult for them to obtain the information any other way.

The Court also notes that Defendants contend that Authenticom has waived any work-

product privilege that existed by sharing the communications with third parties. The Court,

however, also cannot make that determination on a blanket basis and needs more information and

context to make such a determination which Defendants have not provided in their written

submissions. For example, courts have recognized that “disclosure to a third party does not

automatically waive work-product protection.” Miller UK Ltd., 17 F. Supp. 3d at 736. In the

context of work-product as opposed to attorney-client communications, waiver occurs when

disclosure to a third party “substantially increases the opportunity for potential adversaries to

obtain the information.” Id. That is substantially different than the standard for waiver of the

attorney-client privilege as discussed above, and in the Court’s previous orders. In addition, it is

Defendants’ burden to show that waiver occurred. Id. at 737. Again, some of the information the

Court would need to rule on this question is not available to the Court based on how this dispute

has been presented.

For all these reasons, the Court cannot issue any specific rulings on the documents

Defendants CDK and Reynolds and Reynolds challenge based on Authenticom’s claims of the

work-product doctrine. Accordingly, Defendants’ Motion [ECF Nos. 539, 541] is denied without

prejudice in this respect.

The Court recognizes that Defendants’ Motion to Compel has been pending for some time.

If the parties still need the Court to resolve this dispute, it is possible that additional information

has come to light during discovery that would bear on the issues. The Court expects the parties to

meet and confer in good faith to address any disputes that still need to be resolved as to documents

that otherwise are not protected by the attorney-client privilege but that Authenticom still

maintains are covered by the work-product doctrine, and Defendants want Authenticom to

produce. Perhaps some of the discussion in this Memorandum Opinion and Order may be helpful

in that regard. After meeting and conferring, if disputes remain that still must be resolved, then

counsel jointly should reach out to the Court’s courtroom deputy and request a telephone

conference to discuss how to proceed. Most likely, the Court would then order the parties to file

additional submissions that identify the specific documents still in issue and receive in camera the

documents in dispute.

Ill. CONCLUSION

For all the reasons set forth in the Court’s Memorandum Opinion and Order, Defendants’

Motion to Compel Plaintiff Authenticom to Produce Third-Party Communications or, In the

Alternative, Submit Such Communications for In Camera Review [EFC Nos. 539, 541] is granted

in part, denied in part, and denied without prejudice in part.

It is so ordered.

Jeffrey T. Gilbert

United States Magistrate Judge

Dated: June 8, 2020

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