between Union Pacific, CTS, and Continental Casualty. In support of this argument, Union

Pacific cites Waste Management, Inc. v. International Surplus Lines Ins. Co., 579 N.E.2d 322

(Ill. 1991). In Waste Management, the Illinois Supreme Court considered whether an insurer was
entitled to the insured attorney’s files in the underlying litigation. The court held that the insurer
was entitled to the documents because the common interest doctrine renders the attorney-client
privilege inapplicable where an attorney “acts for the mutual benefit of both the insured and the
insurer.” Id. at 329.

The court has conducted an in camera review of the documents listed in the privilege log
prepared by Continental Casualty. Most of these documents are not the documents of an attorney
acting for the mutual benefit of Continental Casualty, CTS, and Union Pacific. Rather, they are
internal documents prepared by Continental Casualty’s own attorney that analyze Continental
Casualty’s coverage obligations. As such, they are protected by even the narrow attorney-client
privilege recognized by the Illinois courts. Accordingly, Continental Casualty’s motion for
protective order is granted as to the following documents listed in the privilege log it prepared:
CONT001866-72, 1909, 5518-46, 5618-35, 5642, 5827, 6045-48, 6058-96, 6098, 6100, 6102,
and 6129. Continental Casualty’s motion for protective order is denied as to CONT005512-17,
5643-45, and 5828-29.

B. Work Product Doctrine

The court next considers the application of the work product doctrine to the remaining
documents listed in the privilege log prepared by Continental Casualty. As codified in Federal
Rule of Civil Procedure 26(b)(3), the work product doctrine protects from disclosure documents

and tangible things prepared in anticipation of litigation or for trial, by or for a party, or by or for



prepared by CTS were created by the counsel retained by Continental Casualty to represent CTS
pursuant to Continental Casualty’s duty to defend under its policies, or reflect communications
between retained counsel and Continental Casualty personnel handling the claims made by CTS
under Continental Casualty’s policies, and as such are protected under the work product doctrine:
CONT000006-7, 474, 603-14, 615-23, 625, 629-39, 640, 642, 645, 646, 648, 653, 658, 659, 678,
686-87, 688-700, 701-14, 715-16, 718-21, 722, 723-24, 725-26, 727-28, 769-85, 786, 794, 795-
96, 801-02, 804, 805, 837-38, 844-45, 857-58, 869-88, 889-90, 894-900, 904, 907-08, 909-10,
911-13, 914-20, 921-32, 933, 934-42, 943, 998-99, 1000, 1001, 1085-86, 1088, 1089, 1225,
1226, 1665-66, 1667, 1671-78, 1680, 1681-86, 1700, 1742, 1799, 2189-2200, 2214, 2230, 2276,
2277-2301, 2302, 2303-30, 2375-77, 2378-81, 2386-87, 2388-2402, 2403-20, 2432-33, 2437-39,
2440, 2441, 2442-47, 2448-59, 2460-65, 2466-81, 2482, 2483-99, 2502-03, 2522-23, 2524,
2525, 2526, 2527, 2530, 2537-38, 2539-40, 2541, 2542-53, 2555, 2577-78, 2616-17, 2637, 2854-
66, 2879-87, 2888-98, 2990-91, 2992-93, 2994-97, 3003-04, 3006-07, 3009-10, 3017-19, 3020-
25, 3026-27, 3033-39, 3040, 3041-44, 3177-80, 3181-86, 3187, 3188-89, 3190, 3192, 3197,
3211, 3310-24, 3325-26, 3329-30, 3339, 3370-71, 3565-66, 3640-49, 3861-70, 3885, 3886-87,
3964-66, 3986, 3987-88, 4028-45, 405456, 4076-77, 4278-80, 4288-92, 4319-23, 4343-44, 4346-
48, 4350-53, 4359-62, 4371-72, 4384, 4433, 4742, 4782, and 5443.

The remaining documents listed in the privilege log prepared by CTS were neither
created by the counsel retained by Continental Casualty to represent CTS pursuant to Continental
Casualty’s duty to defend under its policies, nor reflect communications between retained
counsel and Continental Casualty personnel handling the claims made by CTS under Continental

Casualty’s policies. Since Continental Casualty has made no argument as to why these


attorney-client privilege applies. See Fed. R. Evid. 501. In a case such as this, where a discovery

dispute arises in Illinois out of litigation in another state, Hlinois law controls the attorney-client

privilege issues. See Urban Outfitters, Inc. v. DPIC Cos., 203 F.R.D. 376, 379 (N.D. Ill. 2001).
A. Attorney-Client Privilege

The court first considers whether the attorney-client privilege protects the documents at
issue. Continental Casualty asserts the attorney-client privilege as to documents created by its
counsel that analyze Continental Casualty’s coverage obligations under the policies issued to
CTS, and communications between Continental Casualty and its counsel retained to give advice
regarding the CTS policies. Continental Casualty lists these documents in a privilege log it
prepared.

Continental Casualty has also submitted a second privilege log, which was prepared by
CTS. In its memorandum in support of its motion for protective order, Continental Casualty
argues that the documents listed in the second privilege log are documents created by counsel
retained by Continental Casualty to represent CTS, and also are protected by the attorney-client
privilege, as well as the work product doctrine. However, the privilege log submitted by
Continental Casualty for these documents states only that these documents are protected by the
work product doctrine. Accordingly, Continental Casualty waived the attorney-client privilege as
to these documents. The court will evaluate these documents in the context of its analysis of the
application of the work product doctrine below.

The court turns to the question of whether the attorney-client privilege protects the
documents listed in the privilege log prepared by Continental Casualty. Union Pacific argues

that the privilege is inapplicable because a common interest in defending the prior claims existed


a party’s attorney. Fed. R. Civ. P. 26(b)(3). Materials protected under the work product doctrine
may nevertheless be subject to disclosure if the party seeking discovery shows a substantial need
for the materials, and an inability to obtain the substantial equivalent of the information by other
means. Id. However, an attorney’s “mental impressions, conclusions, opinions, or legal
theories” are “nearly absolutely protected” and are not discoverable except in “very rare and
extraordinary circumstances.” Minnesota Sch. Bds. Ass’n Ins. Trust v. Employers Ins. Co. of
Wausau, 183 F.R.D. 627, 630 (N.D. Ill. 1999).

The court concludes that the following documents listed in the privilege log prepared by
Continental Casualty are protected under the work product doctrine: CONT001909, 5543-46,
5636-40,' 5994-6000, 6177-21, and 6140-43. Continental Casualty’s motion for protective order
is granted as to these documents.

Finally, the court considers the application of the work product doctrine to the documents
listed in the privilege log prepared by CTS. In its memorandum filed in support of its motion for
protective order, Continental Casualty describes these documents as “documents created by the
counsel retained by Continental Casualty to represent CTS pursuant to Continental Casualty’s
duty to defend under its policies, and documents reflecting communications between retained
counsel and Continental Casualty personnel handling the claims made by CTS under Continental
Casualty’s policies.” To the extent that such documents were prepared in anticipation of
litigation, they are work product, unless an exception to the work product doctrine applies.

Moreover, the documents created by counsel are opinion work product, and thus not

' Continental Casualty’s privilege log erroneously identifies these documents as
CONT005619-35.



documents are protected under the work product doctrine, they must be produced.
ORDERED: Continental Casualty Company’s Motion for Protective Order is granted in
part and denied in part.

ENTER:

lapelb Cilia

George ¥ Uindberg
Senior U.S, District Judge

DEC 02 2003

DATED:



Minute Order Form (08/97)

United States District Court, Northern District of Illinois

Mail AO 450 form. doing deputy intals

Copy to judge/magistrate judge

19N09 L3IINLSIG “SA
WUdTD

DEC 0 3 2082
date mailed notice

courtroom

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initials

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central 's Office,

‘mailing deputy initials

Name of Assigned Judge i Sitting Judge if Other
or Magistrate Judge George W. Lindberg than Assigned Judge
CASE NUMBER 03 C 5005 DATE 12/2/2003
CASE Union Pacific Railroad Co. vs. Crew Transportation
TITLE
{Un the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.}
DOCKET ENTRY:
(0) Oo Filed motion of [ use listing in “Motion” box above.]
(2) Q Brief in support of motion due
(3) im Answer brief to motion due. . Reply to answer brief due. .
(4) Qo Ruling/Hearing on set for at
(5) Qo Status hearing{held/continued to] [set for/re-set for] on set for at
(6) Q Pretrial conference[held/continued to] [set for/re-set for] on. set for at :
() oO Trial{set for/re-set for] on at
(8) Oo [Bench/Sury trial] [Hearing] held/continued to at
(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) CLocal Rule 41.1 CFRCP41(a)(1) CFRCP41(a)(2).
(10) MM (Other docket entry) Continental Casualty Company’s motion for Protective Order (6-1) is granted
in part and denied in part. Enter memorandum opinion and order.

(1) a [For further detail see order attached to the original minute order.]

No notices required, advised in open court. Document

. Number.

No notices required. umber of notices

Notices mailed by judge’s staff. DEC 03 2063

Notified counsel by telephone detiocksted
Y | Docketing to mail notices i



discoverable. As for the documents that are ordinary work product, Union Pacific has not made
any showing of a substantial need for the materials, and an inability to obtain the substantial
equivalent of the information by other means.

Instead, Union Pacific argues that the work product doctrine does not protect the
documents at issue because the documents were not created in anticipation of the current
litigation, but rather in anticipation of past litigation in which Union Pacific, CTS, and
Continental Casualty shared a common interest. Union Pacific’s reliance on the common interest
doctrine here is misplaced. As noted above, federal law governs the application of the work
product doctrine, not state law, and thus Union Pacific’s reliance on the Illinois Supreme Court’s
opinion in Waste Management is unavailing. Nor has Union Pacific persuaded the court that the
federal standard should embrace the common interest exception under the facts presented in this
case. See Abbott Labs. v. Alpha Therapeutic Corp., 200 F.R.D. 401, 410 (N.D. Ill. 2001) (“At
this point there is no certainty that the common interest between Abbott and Alpha, that had its
roots in successfully defending or defeating the underlying hemophiliac litigation, is sufficient to
abrogate the work product protection claimed by Alpha. While that common interest is sufficient
to render the attorney-client privilege inapplicable..., that reasoning is derived from Illinois

common law and not from a federal standard which we must here apply.”). But see LaSalle Nat’]

Trust v. Schaffner, No. 91 C 8247, 1993 WL 105422, at *6 (N.D. Ill. Apr. 6, 1993) (applying
common interest exception under federal law to abrogate the work product doctrine between an
insurer and an insured with respect to documents prepared for underlying litigation).

The court has conducted an in camera review of the documents listed in the privilege log

prepared by CTS. The court finds that the following documents listed in the privilege log



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNION PACIFIC RAILROAD CO.,
Plaintiff,

03 C 5005
v.

Judge George W. Lindberg
CREW TRANSPORTATION SERVICES, INC.,

Defendant/Third-Party Plaintiff,
v.

BROWN’S CREW CAR OF WYOMING, INC.,
d/b/a Armadillo Express,

BRE Eng
DEC 08 2003

SSS SSS SS SS SSS SS

Third-Party Defendant

MEMORANDUM OPINION AND ORDER

fe
Non-party Continental Casualty Company (“Continental Casualty”) moves for a

protective order precluding discovery of documents sought by plaintiff Union Pacific Railroad
(“Union Pacific”) under a June 25, 2003 subpoena duces tecum, which are listed in the privilege
logs of Continental Casualty or defendant Crew Transportation Services (“CTS”). Because the
privilege logs inadequately describe the authors and recipients of the documents listed in the
logs, the court directed Continental Casualty to provide a description of the authors and
recipients of the documents, and to supply the documents at issue for an in camera inspection.
For the reasons stated below, the motion for protective order is granted in part and denied in part.

I. Background

Ina 1992 contract between CTS and Union Pacific, CTS agreed to provide transportation

services to Union Pacific employees. The contract provided that CTS would indemnify Union


Pacific for losses arising out of injuries resulting from an “insurable casualty.” In 1999, three
Union Pacific employees were injured in an accident that occurred in Nebraska while they were
riding in a van operated by CTS subcontractor Armadillo Express. Union Pacific paid a
settlement to the three employees, and recovered part of its expenses from Armadillo pursuant to
an indemnification agreement between Armadillo and CTS. Union Pacific then demanded that
CTS indemnify it for its remaining $2.5 million of expenses it claims it incurred. CTS refused,
and Union Pacific filed suit in the United States District Court for the District of Nebraska,
alleging claims of breach of contract, promissory estoppel, quantum meruit/unjust enrichment,
reformation, and waiver/estoppel/modification.

The action in the District of Nebraska turns on the question of whether the van accident
was an “insurable casualty” under the contract between Union Pacific and CTS. CTS takes the
position that it is not. According to Union Pacific, in a number of prior accidents involving
Union Pacific employees being transported in CTS vans, CTS agreed to defend and indemnify
Union Pacific for the resulting losses.

Continental Casualty, an Illinois corporation headquartered in Chicago, is CTS’s
insurance carrier. On June 26, 2003, Union Pacific served Continental Casualty with a subpoena
issued out of this court, seeking documents relating to the prior van accidents, Continental
Casualty moves for a protective order in this court, on the basis that the subpoenaed documents
are protected under the attorney-client privilege or the work product doctrine.

It. Analysis

In this case, federal law controls the work product doctrine issues. See Fed. R. Civ. P.

26(b)(3). On the other hand, the court must look to state law in determining whether the