SANDRA TE v. South Berwyn School Dist. 100

• Decision Date: 25 February 2009
• Docket Number: No. 08-3344.,08-3344.
• Parties: SANDRA T.E., et al., Plaintiffs-Appellees, v. SOUTH BERWYN SCHOOL DISTRICT 100, Defendant-Appellant, and Sidley Austin LLP, Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

600 F.3d 612

SANDRA T.E., et al., Plaintiffs-Appellees, v. SOUTH BERWYN SCHOOL DISTRICT 100, Defendant-Appellant, and Sidley Austin LLP, Appellant.

No. 08-3344.

United States Court of Appeals, Seventh Circuit.

Argued February 24, 2009.

Decided February 25, 2009.^*

Opinion March 30, 2010.

COPYRIGHT MATERIAL OMITTED

Jonathan I. Loevy, Samantha Liskow (argued), Loevy & Loevy, Chicago, IL, for Plaintiffs-Appellees.

Michael Doss (argued), Sidley Austin LLP, Chicago, IL, for Appellant.

Darcy L. Proctor, Ancel, Glink, Diamond, Bush, Dicianni & Krafthefer, P.C., Chicago, IL, for Defendant-Appellant.

Before ROVNER, WOOD, and SYKES, Circuit Judges.

SYKES, Circuit Judge.

An elementary-school music teacher in the South Berwyn School District 100 was charged with sexually molesting numerous students over a period of several years during his tenure in the district. Some of the victims brought this civil lawsuit against the District and a school principal who allegedly knew about the abuse long before the charges were filed but did not take appropriate responsive action. Reacting to the criminal charges and the filing of the civil suit, the School Board hired attorneys from Sidley Austin LLP to conduct an internal investigation and provide legal advice to the Board. As part of this investigation, Sidley attorneys interviewed many current and some former school-district employees and third-party witnesses. These interviews were not recorded. Instead, the attorneys took handwritten notes and later drafted memoranda summarizing the interviews. Sidley delivered its findings and legal advice to the School Board in an oral report and a written executive summary, but has not represented the defendants in this litigation.

During discovery the plaintiffs issued a subpoena for the documents in Sidley's possession relating to its District 100 investigation. Relying on the attorney-client privilege and the work-product doctrine, Sidley declined to produce its notes and internal memoranda relating to the employee and witness interviews and other legal memoranda prepared in connection with the investigation. On the plaintiffs' show-cause motion, the district court concluded that Sidley had been hired to provide investigative services, not legal services, and ordered the firm to produce the documents. Sidley appealed.

Immediately following oral argument, we issued an expedited order reversing the district court and holding that the law firm's documents were protected by the attorney-client privilege and the work-product doctrine. This opinion explains the rationale behind that summary order and also addresses an intervening development regarding the scope of the collateral-order doctrine, which supplied our jurisdiction to immediately review the district court's order.

I. Background

In January 2005 police arrested Robert Sperlik, an elementary-school band teacher employed by District 100, on charges that he had repeatedly sexually abused numerous female students ages nine to twelve. Sperlik would tie up or bind the girls with duct tape during private lessons and then sexually molest them; the abuse began in 1998 and continued until Sperlik's arrest in early 2005. Sperlik eventually confessed to the crimes and was convicted and sentenced to 20 years in prison. Some of Sperlik's victims told police they had reported the abuse to the school principal after it occurred, but the principal failed to take appropriate action against Sperlik. On January 26, 2005, shortly after Sperlik's arrest, some of the victims and their families filed this civil lawsuit against District 100 and the school principal who was alleged to have been deliberately indifferent to the ongoing sexual abuse; they asserted claims under 42 U.S.C. § 1983, 20 U.S.C. § 1681 (Title IX of the Education Amendments of 1972), and various state laws.

As news of Sperlik's arrest became known, the families of District 100 students were understandably outraged at the extent and duration of the teacher's crimes and the possibility that the school administration knew about the sexual abuse but had failed to respond. Reacting to the criminal charges, the public outcry, and the filing of the civil lawsuit, the School Board retained the law firm of Sidley Austin LLP (then Sidley Austin Brown & Wood LLP) to conduct an internal investigation.¹ The School Board wanted Sidley to review the criminal charges filed against Sperlik, investigate the actions of school administrators in response to the allegations of sexual abuse, examine whether any district employees had failed to comply with district policies or federal or state law, and analyze the effectiveness of the District's existing compliance procedures. According to the February 4, 2005 engagement letter between Sidley and the School Board, Sidley was to "investigate the response of the school administration to allegations of sexual abuse of students" and to "provide legal services in connection with" the investigation. Scott Lassar, a partner at Sidley and a former U.S. Attorney for the Northern District of Illinois, spearheaded the investigation.

On the same day the engagement letter was issued, the School Board president and superintendent of schools sent a joint letter to parents announcing the District's retention of Lassar to conduct the investigation. Ten days later the superintendent sent another more detailed letter to parents explaining that the investigation had begun and would be completed as soon as possible. As the investigation proceeded, attorneys from Sidley interviewed many school-district employees, including current and former principals, social workers, administrative employees, and members of the School Board. Sidley also interviewed a handful of third parties who had never been employed by the School District. None of the interviews were recorded. Instead, the attorneys took notes of the witnesses' answers and later prepared written memoranda memorializing the interviews for future use in Sidley's legal advice to the Board. These notes and memoranda are the subject of the present discovery dispute.

Lassar and a Sidley colleague delivered an oral report of the firm's findings at a closed executive session of the Board in April 2005, and later that month delivered a written "Executive Summary"—marked "Privileged and Confidential," "Attorney-Client Communication," and "Attorney Work Product"—to the Board. This concluded Sidley's engagement; other lawyers have represented the defendants throughout this litigation.

In the fall of 2006, the plaintiffs launched a discovery effort aimed at forcing the disclosure of the contents of Sidley's investigation. They subpoenaed Lassar to appear for a deposition and to produce documents in the firm's possession relating to Sidley's work for the School Board.

After a motion to quash was denied, Sidley turned over more than a thousand pages of documents. But the firm withheld its notes and memoranda from the witness interviews and other internal legal memoranda prepared in connection with the investigation. These documents, Sidley asserted, were protected by the attorney-client privilege and the work-product doctrine. The plaintiffs moved to compel production of the missing documents. After a series of hearings—of which Sidley had only informal notice and no opportunity to file a brief—the district court ordered the School Board to disclose any documents relating to Sidley's investigation that it had in its possession. The judge concluded that the Board hired Lassar "as an investigator, not as an attorney," and therefore the attorney-client privilege did not apply. The court later deferred ruling on the question of the documents in Sidley's possession: "If the plaintiffs insist that there are other documents or other information which they are entitled to which you have not turned over to the board, that's a different issue. We haven't gotten to that issue."

When it became clear that Sidley, not the School Board, had the documents the plaintiffs wanted, the plaintiffs turned their attention back to Sidley. They served a second subpoena on Lassar, essentially a duplicate of the first. Sidley responded by again asserting that the documents were protected by the attorney-client privilege and the work-product doctrine. The plaintiffs then filed a Motion for a Rule to Show Cause asking the court to hold Lassar in contempt. This time the court solicited briefing on the privilege and work-product claims, and the engagement letter between Sidley and the Board and other evidence about the nature of Sidley's engagement was brought before the court. After another hearing the court declined to commence contempt proceedings because Sidley had not yet been ordered to comply with the subpoena. But the court summarily rejected Sidley's attorney-client privilege and work-product claims and ordered the firm to produce the documents: "The Court's prior ruling regarding attorney client privilege will stand.... The materials requested by Plaintiffs should be produced in accordance with the Court's prior ruling." Sidley moved for reconsideration, but this motion was denied. Sidley and District 100 appealed.²

II. Discussion

A. Appellate Jurisdiction under the Collateral-Order Doctrine

Before proceeding to the merits of Sidley's arguments, we pause to address a recent development in the caselaw governing the collateral-order doctrine, which supplied our jurisdiction to hear an immediate appeal of the district court's disclosure order. In Mohawk Industries, Inc. v. Carpenter, ___ U.S. ___, 130 S.Ct. 599, 603, ___ L.Ed.2d ___ (2009), the Supreme Court held that discovery disclosure orders adverse to the attorney-client privilege do not qualify for immediate appeal under the collateral-order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Resolving a circuit split, the Court held that "postjudgment appeals, together with other...