Panter v. Marshall Field & Co.

80 F.R.D. 718
CourtDistrict Court, N.D. Illinois
DecidedDecember 19, 1978
DocketNo. 78 C 537
StatusPublished
Cited by45 cases

This text of 80 F.R.D. 718 (Panter v. Marshall Field & Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Panter v. Marshall Field & Co., 80 F.R.D. 718 (N.D. Ill. 1978).

Opinion

WILL, District Judge.

PRETRIAL ORDER NO. 6

These consolidated cases arise from a proposed combination and tender offer by Carter Hawley Hale for the purchase of Marshall Field & Co. Carter Hawley Hale, a California based department store retailer, made overtures to Marshall Field’s through Marshall Field’s board of directors with respect to a possible combination as early as October 1977, and made public its desires on December 12,1977. Resolving against such a combination, the Marshall Field’s board of [720]*720directors authorized and filed suit on behalf of Marshall Field’s against Carter Hawley Hale in the United States District Court for the Northern District of Illinois alleging that acquisition of Marshall Field’s by Carter Hawley Hale would violate Section 7 of the Clayton Act. Press releases and letters in opposition to a proposed combination were also issued. Ultimately, Carter Hawley Hale withdrew its bid to acquire Marshall Field’s.

Plaintiffs have brought these consolidated actions as a class action against the defendant Marshall Field & Co., its directors and certain officers for alleged violations of both state and federal law. Specifically, plaintiffs have alleged numerous violations of 15 U.S.C. § 78n(e), which provides, in pertinent part:

It shall be unlawful for any person to make any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer or request or invitation for tenders, or any solicitation of security holders in opposition to or in favor of any such offer, request, or invitation,

and breaches of fiduciary duty.

This cause now comes before the Court on plaintiffs' motion for an order compelling the production of 38 documents. For analytic purposes, these 38 documents can be grouped into three categories: (1) documents relating to proposed acquisitions, mergers, or other combinations involving Marshall Field prior to the Carter Hawley Hale proposal; (2) documents relating to the proposed Carter Hawley Hale-Marshall Field combination; and (3) documents relating to this or other potential shareholder litigation arising from the Carter Hawley Hale proposal. Defendants seek to protect all of these documents from production on grounds of attorney-client privilege and/or work product privilege and have tendered the documents to us for in camera inspection.

For the reasons hereinafter stated, plaintiffs’ motion is granted as to all documents requested. All documents produced will be subject to a protective order to be drafted by the parties and approved by the Court.

ATTORNEY-CLIENT PRIVILEGE

Defendants resist production of 36 of the 38 documents here in question on the ground of attorney-client privilege. In support of their motion to compel, plaintiffs argue that defendants’ assertion of the attorney-client privilege as to each of these 36 documents is improper (1) because defendants have heavily relied upon “advice of counsel” as the basis for their actions with respect to the proposed Carter Hawley Hale combination and (2) because defendants occupied a fiduciary relationship with respect to the plaintiff shareholders.

Discovery in these consolidated cases to date has revealed heavy reliance by the defendants upon the “advice of counsel” with respect to the conclusion that a business combination between Carter Hawley Hale and Marshall Field & Co. would violate Section 7 of the Clayton Act, the decision to file the Section 7 suit in the Northern District of Illinois, and the decision to oppose the combination. Plaintiffs have cited numerous examples from the defendants’ answers to interrogatories and depositions which indicate such reliance, and urge that defendants have thereby “waived” the attorney-client privilege with respect to all of the documents here sought.

Defendants do not seriously contend that they do not rely heavily upon an “advice of counsel” defense, but rather claim that such reliance only entitles plaintiffs to discovery of the opinions of counsel on the specific question of the illegality under Section 7 of the proposed Carter Hawley Hale-Marshall Field combination. Having already produced such opinions, defendants claim plaintiffs are entitled to no further discovery in the face of their assertions of an attorney-client privilege.

We find that, at this stage of this lawsuit, both plaintiffs and defendants [721]*721overstate the merits of their respective positions. Where, as here, a party asserts as an essential element of his defense reliance upon the advice of counsel, we believe the party waives the attorney-client privilege with respect to all communications, whether written or oral, to or from counsel concerning the transactions for which counsel’s advice was sought. Broad v. Rockwell International Corp., CCH Fed.Sec.L.Rep. ¶ 95,894 (N.D.Tex.1977); Haymes v. Smith, 73 F.R.D. 572 (W.D.N.Y.1976); Garfinkle v. Arcata National Corp., 64 F.R.D. 688 (S.D.N.Y.1974); Smith v. Bentley, 9 F.R.D. 489 (S.D.N.Y.1949). See Trans World Airlines, Inc. v. Hughes, 332 F.2d 602 (2d Cir. 1964); Handgards, Inc. v. Johnson & Johnson, 413 F.Supp. 926 (N.D.Cal.1976).

Illustrative of the scope of a defendant’s waiver of the attorney-client privilege by insertion of “advice of counsel” as a defense to a plaintiff’s claims in Garfinkle v. Arcata National Corp., supra. In Garfinkle, the plaintiff alleged that the defendant corporation had failed to file a registration statement with the Securities and Exchange Commission as required by the stock purchase agreement between plaintiff and the defendant. Areata National asserted as one defense the opinion of counsel that plaintiff’s shares could be sold without registration, and plaintiff sought production of any documents related to the defendant’s counsel’s opinion letter. Over the defendant’s assertion of attorney-client privilege, the court held:

Defendant has clearly injected the opinion letter into this case as a relevant matter and plaintiff is entitled to probe into the circumstances surrounding the issuance of the letter. He cannot be limited to the letter itself — the finished product. He is entitled to know how the letter came into being. .
[Areata] has acknowledged its communication with its attorney as a basis for its failure to register the shares and ultimately for the issuance of the opinion letter. Plaintiff is entitled to all relevant documents bearing on the decision not to register. [Emphasis added.]

64 F.R.D. at 689-90.

Defendants cite numerous cases which they claim sustain their assertion that a “waiver” of the attorney-client privilege must be construed narrowly. We need not deal with these cases at length in light of the additional, independent ground for ordering production in this case, see, pp. 722-724, infra. However, all of defendants’ eases are distinguishable in that none involves a civil defendant asserting the “advice of counsel” as a substantive defense to claims pressed by plaintiffs.

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Bluebook (online)
80 F.R.D. 718, Counsel Stack Legal Research, https://law.counselstack.com/opinion/panter-v-marshall-field-co-ilnd-1978.