Consolidation Coal Co. v. Bucyrus-Erie Co., BUCYRUS-ERIE

• Court: United States Appellate Court of Illinois
• Writing for the Court: McGILLICUDDY
• Citation: 416 N.E.2d 1090,48 Ill.Dec. 568,93 Ill.App.3d 35
• Parties: , 48 Ill.Dec. 568 CONSOLIDATION COAL COMPANY, a corporation, Plaintiff-Appellee, Cross-Appellant, v.COMPANY, a corporation, Defendant-Appellant, Cross-Appellee.
• Docket Number: No. 79-882,BUCYRUS-ERIE,79-882
• Decision Date: 01 December 1980

Page 1090

416 N.E.2d 1090 93 Ill.App.3d 35, 48 Ill.Dec. 568 CONSOLIDATION COAL COMPANY, a corporation,
Plaintiff-Appellee, Cross-Appellant,
v.
BUCYRUS-ERIE COMPANY, a corporation, Defendant-Appellant,
Cross-Appellee. No. 79-882. Appellate Court of Illinois, First District, Third Division. Dec. 1, 1980.
Rehearing Denied Feb. 27, 1981.

[93 Ill.App.3d 36]

Page 1091

[48 Ill.Dec. 569] Quarles & Brady, Milwaukee, Wis., Lord, Bissell & Brook, Richard E. Mueller, Chicago, L. C. Hammond, Jr., Milwaukee, Wis., Hugh C. Griffin, Chicago, Michael H. Schaalman, Milwaukee, Wis., for defendant-appellant, cross-appellee.

Sidley & Austin, Chicago, Robbins, Davis & Lyons, Minneapolis, Minn., Robert A. Downing, Arlene C. Erlebacher, Chicago, Lawrence Zelle, James D. Steiner, Minneapolis, Minn., for plaintiff-appellee, cross-appellant.

McGILLICUDDY, Presiding Justice:

Consolidation Coal Company (CONSOL) brought an action to recover damages resulting from the collapse of its wheel excavator located in its Illinois mine. The excavator was designed, manufactured and repaired by the defendant, Bucyrus-Erie (B-E), whose principal place of business and corporate headquarters are in Milwaukee, Wisconsin. During litigation of this action, B-E refused to comply with certain discovery orders. Its attorney was held in contempt of court and fined $50. B-E appeals from the entry of contempt sanctions and CONSOL cross-appeals from the denial of its motion for entry of alternative sanctions.

The issues presented on appeal are: (1) whether the trial court erred in applying Illinois law on attorney work product, ¹ (2)

Page 1092

[48 Ill.Dec. 570] whether the [93 Ill.App.3d 37] reports and notes held by B-E's counsel were their work product and exempt from discovery and (3) whether the contempt sanctions imposed on B-E's attorney were appropriate.

On May 13, 1977, CONSOL filed a request for the production of all of B-E's documents relating to the design, manufacture and engineering of the wheel excavator and all documents relating to the investigation of the excavator's collapse. Although B-E produced thousands of documents for inspection, CONSOL subsequently filed a motion to compel compliance with its discovery request and alleged, among other matters not here relevant, the absence of a post-accident engineering or metallurgical report. B-E replied that the metallurgical report was privileged because it was prepared for consultation purposes only and pursuant to the direction and supervision of one of its attorneys. The trial court ordered B-E to produce any and all statements taken with respect to the matters in controversy, to furnish an affidavit setting forth its compliance with the plaintiff's production request and to identify any materials not produced and the reasons therefor.

B-E admitted that it had not produced the "Sailors' Metallurgical Report," the "Learmont Report" and notes taken by in-house counsel of interviews with B-E's employees in Wisconsin. The court subsequently ordered that these documents be produced for an in camera inspection. Applying Illinois law the court held that the metallurgical report and notes were not protected as the attorney's work product and ordered their production with certain specified deletions. ² B-E refused to produce the requested documents and its attorney, Michael Schaalman, was held in contempt of court and fined.

I

The first issue presented by B-E is whether the court erred in applying Illinois law concerning the work product privilege. CONSOL contends that B-E waived this issue because its notice of appeal failed to include the court order which held that Illinois law governs discovery. However, an appeal from a "final judgment 'draws in question all prior non-final orders and rulings which produced the judgment.' " (Burtell v. First Charter Service Corp. (1979), 76 Ill.2d 427, 31 Ill.Dec. 178, 394 N.E.2d 380.) The notice of appeal in the instant case specified certain orders of the court including the appealable order of contempt. Its reference to the latter order is sufficient to confer jurisdiction on this court to review all preliminary determinations including the conflict of laws ruling.

[93 Ill.App.3d 38] The scope of attorney work product and the resultant privilege ³ accorded to it differs in Illinois and Wisconsin. In Illinois the work product exemption from discovery is set forth in Supreme Court Rule 201 (Ill.Rev.Stat., 1977, ch. 110A, par. 201) which was derived from Monier v. Chamberlain (1966), 35 Ill.2d 351, 221 N.E.2d 410. (See Ill.Ann.Stat., ch. 110A, par. 201, Historical and Practice Notes, at 122 (Smith-Hurd 1968); Tone, Comments on the New Illinois Supreme Court Rules, 48 Chi.B.Rec. 46 (1967).) If a document is part of the attorney's work product, it has an absolute privilege or exemption. Burnham, Confidentiality and the Corporate Lawyer: The Attorney-Client Privilege and "Work-Product" in Illinois, 56 Ill.B.J. 542 (1968). Monier, by its narrow construction of work product, liberalized discovery by stating:

"only those memoranda, reports or documents which reflect the employment of

Page 1093

[48 Ill.Dec. 571] the attorney's legal expertise, those 'which reveal the shaping process by which the attorney has arranged the available evidence for use in trial as dictated by his training and experience,' (citation) may properly be said to be made in preparation for trial'." 35 Ill.2d at 359-60, 221 N.E.2d at 416.

Documents "made in preparation for trial" and exempt from discovery were those that contained the attorney's mental impressions of prospective clients, those that revealed a particular marshalling of evidentiary facts for presentment at trial and those that revealed the attorney's mental processes in shaping his theory of his client's cause. Memoranda and the like containing all other material and relevant evidentiary facts that would not disclose conceptual data were thus subject to the truth-seeking process of discovery.

Wisconsin similarly defines an attorney's work product as information the attorney:

"has assembled and the mental impressions, the legal theories and strategies that he has pursued or adopted as derived from interviews, statements, memoranda, correspondence, briefs, legal and factual research, mental impressions, personal beliefs, and other tangible or intangible means."

(State ex rel. Dudek v. Circuit Court for Milwaukee County (1967), 34 Wis.2d 559, 150 N.W.2d 387.) However, case law has adopted a broader view of attorney work product to protect most materials and information collected and adopted by a lawyer after retainer in preparation of litigation. State ex rel. Dudek expressly refused to limit the work product privilege to subjective mental processes, and subsequent cases have held that the work need not have been actually done by the attorney [93 Ill.App.3d 39] or at his request as long as it was adopted by him and became a part of his file of the case (State ex rel. Shelby Mutual Insurance Co. v. Circuit Court for Milwaukee County (1975), 67 Wis.2d 469, 228 N.W.2d 161). (Shibilski v. St. Joseph's Hospital of Marshfield, Inc. (1978), 83 Wis.2d 459, 266 N.W.2d 264.) Materials considered to be the attorney's work product are merely given a qualified privilege and may be discoverable upon a showing of good cause. (State ex rel. Dudek.) The extent of the showing of good cause depends upon the type of materials sought and the extent of the attorney's involvement in the preparation thereof. See, e. g., Shibilski; State ex rel. Dudek.

CONSOL has made no showing of good cause or necessity in support of its discovery request. ⁴ Thus, assuming the materials it seeks fall within Wisconsin's broad interpretation of work product, CONSOL would not be entitled to inspect them. For reasons stated later in this opinion, the materials sought by CONSOL would be discoverable under Illinois law. Therefore, a true conflict of laws exists and we must choose between the laws of these two sovereigns. See, e. g., Melville v. American Home Assurance Co. (3rd Cir. 1978), 584 F.2d 1306; Henderson v. State Farm Mutual Automobile Insurance Co. (1973), 59 Wis.2d 451, 208 N.W.2d 423. But see, e. g., Erwin v. Thomas (1973), 264 Or. 454, 506 P.2d 494, and Sedler, Conflict of Laws Round Table: The Value of Principled Preferences, 49 Tex.L.Rev. 224 (1971) (existence of conflict not determined by different laws and results but by different governmental interests).

B-E argues that the conduct of its Wisconsin attorneys should be governed by the law of Wisconsin, the state where its attorneys are authorized to practice law and the state with the most significant interest. CONSOL relies on People v. DeMorrow (1974), 59 Ill.2d 352, 320 N.E.2d 1, and People v. Saiken (1971), 49 Ill.2d 504, 275 N.E.2d 381, cert. denied (1972), 405 U.S. 1066, 92 S.Ct. 1499, 31 L.Ed.2d 796 and asks this court to extend the rulings in those cases and hold that rules on privileges are

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[48 Ill.Dec. 572] procedural rules of evidence governed by the laws of the forum. ⁵

[93 Ill.App.3d 40] Under either argument, however, we believe Illinois law governs the issue of work product. If work product is...