Court Opinion

ID: 3135793
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:41:38.734409+00
Date Added: 2024-06-11T11:54:13.075827
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                         Supreme Court

               Center Partners, Ltd. v. Growth Head GP, LLC, 2012 IL 113107

Caption in Supreme         CENTER PARTNERS, LTD., et al., Appellees, v. GROWTH HEAD GP,
Court:                     LLC, et al., Appellants.

Docket Nos.                113107, 113128 cons.
Filed                      November 29, 2012

Held                       The doctrine of subject matter waiver did not apply to disclosures which
(Note: This syllabus       were otherwise protected by the attorney-client privilege where they were
constitutes no part of     made in an extrajudicial context and were not thereafter used to gain a
the opinion of the court   tactical advantage in the litigation—motion to compel production
but has been prepared      reversed.
by the Reporter of
Decisions for the
convenience of the
reader.)

Decision Under             Appeal from the Appellate Court for the First District; heard in that court
Review                     on appeal from the Circuit Court of Cook County, the Hon. Charles R.
                           Winkler, Judge, presiding.

Judgment                   Judgments reversed.
                           Cause remanded.
Counsel on                Gino L. DiVito, Karina Zabicki DeHayes, Brian C. Haussmann and John
Appeal                    M. Fitzgerald, of Tabet DiVito & Rothstein LLC, of Chicago (John S.
                          Kiernan, Carl Riehl and William H. Taft V, of Debevoise & Plimpton
                          LLP, of New York, New York, of counsel), for appellants Westfield et al.

                          Lynn H. Murray, Laura K. McNally, Pei Y. Chung and Claudia M.
                          Rustad, of Grippo & Elden LLC, of Chicago, and David Lender and
                          Jason Bonk, of New York, New York, and Thomas C. Frongillo, of
                          Boston, Massachusetts, all of Weil, Gotshal & Manges LLP, for
                          appellants The Rouse Company et al.

                          Jeffrey L. Willian, Alyssa A. Qualls and S. Maja Fabula, of Kirkland &
                          Ellis LLP, Michael A. Pollard, of Baker & McKenzie LLP, and Kevin M.
                          Forde, all of Chicago, for appellees.

                          Hinshaw & Culbertson LLP, of Chicago (Stephen R. Swofford, Thomas
                          P. McGarry and Nabil G. Foster, of counsel), for amici curiae Illinois
                          State Bar Association et al.

                          Andrew Kopon Jr., Mollie E. Werwas and Stacy M. Kramer, of Kopon
                          Airdo, LLC, and Michael Resis, of SmithAmundsen LLC, all of Chicago,
                          and Mary-Christine Sungaila, of Snell & Wilmer L.L.P., of Costa Mesa,
                          California, for amici curiae International Association of Defense Counsel
                          and Illinois Association of Defense Trial Counsel.

Justices                  JUSTICE GARMAN delivered the judgment of the court, with opinion.
                          Chief Justice Kilbride and Justices Freeman, Thomas, Karmeier, Burke,
                          and Theis concurred in the judgment and opinion.

                                            OPINION

¶1       Defendants appeal from a circuit court of Cook County order that granted plaintiffs’
      motion to compel the production of certain documents containing privileged attorney-client
      communications.1 Defendants refused to comply with the court’s order to compel production

              1
              There are numerous parties in this case, and referring to all the parties by name would be
      onerous and confusing. The parties are as follows. Defendants: Growth Head GP, LLC, Westfield
      America Limited Partnership, Westfield America, Inc., Westfield America Trust, Rouse-Urban,

                                                 -2-
     of documents and were found in contempt. Defendants appealed pursuant to Supreme Court
     Rule 304(b)(5) (eff. Feb. 26, 2010). The appellate court affirmed the granting of the motion
     to compel. 2011 IL App (1st) 110381. Defendants have appealed to this court, arguing the
     subject matter waiver doctrine should not apply to compel production of undisclosed,
     privileged communications where the disclosed communications were extrajudicial in nature
     and were not used to gain an advantage in litigation. This court granted leave to appeal. Ill.
     S. Ct. R. 315 (eff. Feb. 26, 2010). We have allowed the Illinois State Bar Association,
     Association of Corporate Counsel, Association of Corporate Counsel Chicago Chapter, the
     International Association of Defense Counsel, and Illinois Association of Defense Counsel
     to file amicus curiae briefs pursuant to Supreme Court Rule 345 (Ill. S. Ct. R. 345) (eff. Sept.
     20, 2010). For the following reasons, we reverse the judgments of the appellate and circuit
     courts and remand the cause to the circuit court.

¶2                                    BACKGROUND
¶3      Defendants are independent real estate companies that own and operate retail shopping
     malls throughout the United States. In late 2001 and early 2002, defendants Westfield,
     Rouse, and Simon negotiated to jointly purchase the assets of a Dutch company, Rodamco
     North America, N.V. (Rodamco). Among the assets purchased with the acquisition of
     Rodamco was Urban Shopping Centers, L.P. (Urban), an Illinois limited partnership that
     owns high-end retail shopping centers across the United States. Defendants acquired a large
     majority interest in Urban, including full ownership of Head Acquisitions, L.P. (Head),
     Urban’s general partner. Plaintiffs are minority limited partners in Urban.

¶4                               The Business Negotiations
¶5      Defendants entered into a purchase agreement with Rodamco in January 2002. On the
     same day, defendants entered into a separate joint purchase agreement with one another that
     concerned the allocation of Rodamco’s assets and the share of the purchase price each of

     LLC, TRCGP Inc., The Rouse Company, L.P., The Rouse Company, Rouse LLC, GGP L.P., General
     Growth Properties, Inc., Urban Shopping Centers, L.P., Head Acquisition L.P., SPG Head GP, LLC,
     Simon Property Group, LP, and Simon Property Group, Inc. Urban Shopping Centers, L.P., Head
     Acquisition L.P., SPG Head GP, LLC, Simon Property Group, LP, and Simon Property Group, Inc.
     do not appeal from the circuit court’s order on the motion to compel.
              Plaintiffs are Center Partners, Ltd., Urban-Water Tower Associates, Miami Associates, L.P.,
     and Old Orchard Limited Partnership, all Illinois limited partnerships, individually and derivatively
     on behalf of Urban Shopping Centers, L.P.
              We adopt the approach taken by the appellate court and will refer to plaintiffs simply as
     “plaintiffs.” We will refer to defendants as “defendants,” except where necessary to make the
     distinction we will refer to “defendant Westfield” (Westfield America Trust, Westfield America Inc.,
     Westfield America Limited Partnership and Growth Head GP, LLC), “defendant Rouse” (Rouse-
     Urban LLC, TRCGP, Inc., The Rouse Company, LP, The Rouse Company, Rouse LLC, GGP LP,
     and General Growth Properties, Inc.), and “Simon” (Simon Property Group, LP, and Simon Property
     Group, Inc.).

                                                 -3-
       them would pay. The purchase of Rodamco closed in May 2002. When the purchase closed,
       defendants executed an amended Head partnership agreement that included provisions
       allocating control over Urban’s numerous mall interests amongst themselves. Plaintiffs were
       not a party to the Rodamco purchase transaction or to the negotiations leading up to it.
¶6         During the course of the negotiations leading up to the purchase of Rodamco, defendants
       discussed legal issues in negotiating the transaction’s terms. They also disclosed to each
       other some of their attorneys’ views about the legal implications of the transaction, the legal
       importance of the documents under negotiation, and the rights and obligations of the parties
       to the transaction. Defendants also shared with one another some documents that concerned
       the legal and financial terms of the transaction. Additionally, defendants’ attorneys discussed
       with one another the terms for a new partnership agreement concerning Urban’s mall
       interests. In these discussions, attorneys for Westfield, Rouse, and Simon shared with each
       other their legal concerns and legal conclusions about the structure of a new partnership
       agreement and how it would operate. This new partnership arrangement has been referred
       to in this litigation as the “synthetic partnership.”

¶7                                      The Underlying Lawsuit
¶8          Plaintiffs first brought suit in 2004, alleging that, since purchasing Head, defendants had
       breached alleged fiduciary and contractual duties they owed to Urban and plaintiffs (as
       limited partners of Urban). Plaintiffs alleged that defendants’ division of responsibility for
       Urban’s mall interests under the “synthetic partnership” was a breach of defendants’ alleged
       duties and deprived Urban of sufficient corporate opportunities.
¶9          At the heart of plaintiffs’ claim is the Urban partnership agreement. Urban was founded
       to hold, manage, and grow a portfolio of shopping centers then owned by JMB Realty
       Corporation. In 1993 Urban went public, and by 2000 had become an industry leader in
       operating, managing, and developing regional malls. In late 2000 Rodamco bought Urban’s
       outstanding shares and took the entity private. Plaintiffs continued to own units as Urban’s
       limited partners. Head, a Rodamco subsidiary, became Urban’s new general partner.
       Rodamco negotiated a partnership agreement with Urban’s limited partners (including
       plaintiffs). The Urban partnership agreement defines the rights, obligations, and liabilities
       of Head as general partner, as well as the rights and responsibilities of the limited partners.
       It is plaintiffs’ contention that the “[a]greement reflects an intent to grow Urban through the
       acquisition and development of additional properties.” The agreement does not permit Head
       or its affiliates to compete with Urban in business opportunities, such as acquiring additional
       real estate, attracting joint venture partners to acquire properties, or developing properties.
¶ 10        Plaintiffs alleged that defendants received legal advice on how to structure a “synthetic
       partnership,” so as to evade the contractual terms and avoid the legal and fiduciary
       obligations they owed as Urban’s general partner. Plaintiffs claimed defendants allocated
       Urban’s properties among themselves, stopped growing Urban’s business through
       acquisitions or ground-up developments, disregarded partnership agreement terms, and stole
       Urban’s opportunities for themselves.

                                                 -4-
¶ 11                                   The Motions to Compel
¶ 12       In 2008 plaintiffs filed their first motion to compel the production of privileged
       communications. Plaintiffs noted that, on the privilege log filed by defendants, one defendant
       had purposely disclosed privileged documents to another defendant. Plaintiffs sought the
       compelled production of documents that defendants had shared among themselves.
       Defendants objected, arguing that the sought-after documents were protected by the common
       interest doctrine, and were thus privileged. The circuit court, on December 10, 2008, granted
       plaintiffs’ motion to compel, finding that certain documents containing legal advice could
       be produced on the ground that defendants had waived any assertion of privilege by sharing
       the information amongst themselves. The court, however, was careful to limit its order to
       only those documents that had been disclosed. The court wrote:
                   “Further, with regard to the documents to be produced as identified on Appendix
               B, defendants may redact the contents of any email in an email string if that
               communication with defendant’s counsel was not circulated to any other defendant
               or third party.”
¶ 13       Following the production of the documents, the parties conducted further discovery,
       including depositions of defendants’ executives. In March 2009 plaintiffs filed a second
       motion to compel, arguing, specifically, that defendant Westfield improperly directed
       Westfield witness Mark Stefanek, Westfield’s chief financial officer, not to testify about
       matters as to which he had waived the attorney-client privilege. Plaintiffs claimed that
       Westfield attorneys permitted Stefanek to testify to the actual legal advice received from
       counsel, but then refused to allow him to testify about the rationale and other details of the
       legal advice. Plaintiffs argued that this “selective and offensive invocation of the attorney-
       client privilege waive[d] the privilege regarding the subject matter about which he
       voluntarily testified—his belief that Westfield had no duty to consider new business
       opportunities for Urban.” The circuit court denied the motion.
¶ 14       Plaintiffs filed a third motion to compel, the motion at issue in this appeal, in April 2010,
       seeking over 1,500 documents identified in defendants’ privilege logs. In the third motion
       to compel, plaintiffs accused defendants of breaching their fiduciary duties to Urban by
       usurping business opportunities, in violation of the Urban partnership agreement. Plaintiffs
       alleged that, during depositions, defendants’ witnesses confirmed that during the business
       negotiations in 2001-02 each defendant’s individual counsel attended negotiating sessions
       and discussed with nonclients legal advice regarding: (1) acquisition structure and use of a
       “synthetic partnership” to avoid certain partnership obligations; and (2) liability and
       obligations as Urban’s general partner, including continuing obligations to acquire and
       develop additional properties through Urban. Plaintiffs specifically pointed to the deposition
       testimony of defendants’ witnesses, including arguments concerning the testimony of
       Stefanek that had been raised in the prior motion to compel, to support compelled production
       of the requested documents.
¶ 15       Plaintiffs first contended that Anthony Deering, defendant Rouse’s former chief
       executive officer, testified to privileged attorney-client discussions during his deposition.
       During the January 12, 2010, deposition, plaintiffs’ attorney asked Deering if he ever

                                                 -5-
       conferred with anyone at Rouse as to whether Rouse had a duty to consider putting new
       acquisitions within Urban. Rouse’s deposition counsel objected, as it called for a legal
       conclusion, and cautioned Deering not to disclose any attorney-client communications about
       that issue he may have had at the time. Deering could otherwise answer the question. Deering
       testified that he had consultations with the other defendants’ officers and outside counsel
       about structuring the partnership. Plaintiffs’ attorney asked Deering if he had received legal
       advice, to which Deering responded “yes.” At that point, one of Rouse’s attorneys
       intervened, and informed Deering that any communication his attorneys had with him, in the
       presence of Simon and Westfield, could be disclosed. However, the Rouse attorney
       instructed Deering that any legal advice his attorney gave to him in private should not be
       disclosed. Plaintiffs’ attorney then asked Deering what the legal rationale was for Deering’s
       conclusion that Rouse had no duty, after the transaction was complete, to put new
       acquisitions within Urban. Rouse’s attorney again cautioned Deering that it was acceptable
       to disclose communications he had with his attorney when people from Simon and Westfield
       were present, but private, privileged communications should not be disclosed. Deering
       answered plaintiffs’ question, saying that his attorney did not give a synopsis of why the
       synthetic partnership structure worked, but did outline the structure and assured defendants
       that it would be acceptable and sustainable. Plaintiffs’ attorney later again asked Deering
       what the basis was for his understanding that, after the closing of the Rodamco transaction,
       Rouse did not feel it had a duty to put new acquisitions within Urban. After again being
       warned by counsel to be cognizant of not disclosing attorney-client communications, Deering
       testified that the synthetic partnership insulated Rouse from having to do anything
       extraordinary in terms of presenting corporate opportunities, acquisitions or any other deals
       to Urban. That understanding was based on advice given to him at the time by Rouse’s
       attorney, and was given in front of representatives from Simon and Westfield.
¶ 16       Plaintiffs next cited to the testimony of Robert Minutoli, a former Rouse vice president.
       Minutoli confirmed during the January 28, 2010, deposition that he discussed the substance
       of legal advice he received with representatives from Simon and Westfield concerning the
       synthetic partnership. Minutoli was warned by his counsel not to discuss anything that was
       covered by attorney-client privilege. Plaintiffs’ attorney asked if he could recall any aspects
       of the rationale for the advice that defendants could buy the Urban partnership yet leave
       behind certain provisions of the partnership agreement with a liquidating entity. After
       objections from Rouse’s counsel, Minutoli answered that it was his recollection that Rouse
       was in full compliance with the partnership agreement.
¶ 17       Plaintiffs, in the third motion to compel, also cited to the January 7, 2009, deposition
       testimony of Westfield chief financial officer Mark Stefanek. Plaintiffs’ attorney asked
       Stefanek what basis he had for believing there was no duty to consider business opportunities
       for Urban. Over the objection of counsel, Stefanek answered his belief was based on legal
       advice from Westfield’s attorneys. Plaintiffs’ counsel then asked what the basis was for
       Westfield’s attorneys’ legal advice that Westfield had no duty to put any new business
       opportunities before Urban. Westfield’s attorney at the deposition objected and instructed
       Stefanek not to answer. The following exchange then occurred:
                   “[Plaintiffs’ counsel]: Well, he’s already testified to the legal advice. I take it you

                                                  -6-
               are waiving, right, privilege?
                    [Westfield’s counsel]: No, we are not waiving.
                    [Plaintiffs’ counsel]: Well, you let him testify to the legal advice.
                    [Westfield’s counsel]: I have—you—I have given my instruction. You can
               proceed.”
¶ 18       Plaintiffs’ counsel then told Stefanek that he was only asking his basis for his belief as
       a businessman, not legal advice. Stefanek testified that he believed that, while Westfield had
       a duty on behalf of Urban to consider new business opportunities for Urban in the form of
       existing redevelopments on existing Urban properties, it did not have a duty to consider new
       acquisitions on behalf of Urban. Plaintiffs’ counsel then asked if this understanding was
       based on legal advice from Westfield’s counsel, to which Westfield’s deposition counsel
       objected. Later in the deposition, plaintiffs’ counsel asked the same question, to which there
       was another objection. Plaintiffs’ attorney later asked Stefanek if it was “logical” to think
       that legal advice was shared between defendants, leading to this exchange:
                    “[Stefanek]: Well, we all signed it, so it would seem pretty logical that—you
               know, that—that anything significant would have been discussed with everybody,
               yes.
                    [Plaintiffs’ attorney]: Again, I think that’s—there’s been a waiver in light of the
               court’s prior ruling on that, [Westfield’s attorney], and did you want to reconsider
               your advice to instruct him not to answer that?
                    [Westfield’s attorney]: What’s your question?
                    [Plaintiffs’ attorney]: I would like to know what the legal advice was.
                    [Westfield’s attorney]: If—if—as the—what—if—do you mind asking the
               foundational question, whether he knows what the legal advice that was shared was?
                    [Plaintiffs’ attorney]: You received legal advice on why Simon, Rouse and
               Westfield believed they could exclude certain provisions of the Urban partnership
               agreement. Correct?
                    [Stefanek]: I received advice what—based on why we could.
                    [Plaintiffs’ attorney]: Okay. And you believe that it’s logical that advice was
               shared with the other partners, Simon and—Rouse? Is that correct?
                    [Stefanek]: Seems logical that it would be, yes.”
¶ 19       In the third motion to compel plaintiffs argued that defendants could not have it both
       ways, and having disclosed legal advice on these subjects with each other outside of any
       confidential relationship in 2001-02, they could not in litigation object that advice on those
       same subjects is privileged. Plaintiffs also accused defendants of disclosing “tid-bits” to
       plaintiffs that “act as a sword, while asserting privilege as a shield as to other materials on
       these same subjects.” Plaintiffs contended that any privilege regarding legal advice on the
       Rodamco acquisition structure and the “synthetic partnership” had been waived when
       Rouse’s witnesses testified that the structure was created by Rouse attorneys who relayed
       their legal analyses and conclusions to Simon and Westfield and their attorneys. Plaintiffs
       requested the production of all documents relating to the Rodamco acquisition structure and

                                                 -7-
       “synthetic partnership.” Plaintiffs also claimed that the attorney-client privilege regarding
       legal advice on obligations and liabilities to Urban’s general partners had been waived, since
       witnesses for defendants testified defendants and their attorneys freely shared legal advice
       on this subject matter with each other. Plaintiffs requested the production of all documents
       defendants had withheld regarding the Urban partnership agreement.
¶ 20        Defendants argued in response that they had not intentionally waived the attorney-client
       privilege by asserting the advice of counsel as a defense or otherwise placing privileged
       communications at issue in the litigation, and that the disclosure of even privileged attorney-
       client communications in a business negotiation does not as a matter of law result in a
       “subject matter waiver” of all other undisclosed communication a party has with its attorney.
       The circuit court asked defendants to submit the documents requested by plaintiffs for an in
       camera review, informing the parties it could not make a decision on the motion to compel
       without first looking at the requested documents. In October 2010, the circuit court granted
       the motion to compel, finding that since “[d]efendants had shared privileged communications
       it follows that the subject of those communications is susceptible to discovery.” The court
       rejected defendants’ motion to reconsider. Defendant Westfield’s counsel advised the circuit
       court that Westfield would not produce the documents to plaintiffs and asked to be held in
       “friendly contempt.” The court entered a contempt order against Westfield. Westfield and
       Rouse appealed separately from the court’s order compelling disclosure of the requested
       documents and communications.2

¶ 21                                 The Appellate Court Ruling
¶ 22       The appellate court affirmed the circuit court’s ruling on the motion to compel. The
       appellate court held that when, in 2001 and 2002, defendants “disclosed privileged attorney-
       client communications among one another regarding the purchase of Rodamco and
       specifically the acquisition of Head, those disclosures resulted in a subject-matter waiver of
       all privileged communications regarding the purchase.” 2011 IL App (1st ) 110381, ¶ 15.
       Concerning defendants’ argument that prior Illinois cases on subject matter waiver were
       inapplicable to the instant case because those disclosures occurred in the context of litigation
       rather than a business transaction, the court wrote, “[W]e find no reason to distinguish
       between a waiver occurring during the course of litigation or during a business negotiation.”
       2011 IL App (1st) 100381, ¶ 16. The appellate court also rejected defendants’ arguments that
       the scope of the waiver was excessive, concluding that, because defendants have the burden
       of proving the existence of the privilege, defendants had the burden of pointing out the
       excessive rulings, with specificity as to each document, and they had not done so.

¶ 23                                      ANALYSIS
¶ 24       On appeal, defendants contend that the subject matter waiver doctrine only applies when
       privileged attorney-client communications are disclosed during litigation for the purpose of

              2
               Simon did not appeal the circuit court order. Simon is not a party to the appeal in this court.

                                                   -8-
       achieving an advantage in that litigation. Defendants argue that, in the instant case, the
       privileged communications were disclosed only during business negotiations, and thus the
       subject matter waiver does not apply to compel production of undisclosed, privileged
       attorney-client communications. Plaintiffs respond that subject matter waiver applies when
       certain previously privileged communications are disclosed, regardless of whether the
       disclosure occurred during litigation or in an extrajudicial context. In the alternative,
       plaintiffs argue that defendants, during their deposition testimony, disclosed privileged
       communications so as to gain a tactical advantage in this litigation, justifying application of
       the subject matter waiver doctrine.

¶ 25                    I. Application of the Subject Matter Waiver Doctrine
                                       to Extrajudicial Disclosures
¶ 26       The first question this court must answer is whether, as a matter of law, the subject matter
       waiver doctrine applies to the disclosure of privileged statements made outside of a litigation
       or judicial setting, i.e., in an “extrajudicial” setting. Illinois courts have not previously been
       confronted with the question of extending the subject matter waiver doctrine to extrajudicial
       settings. Therefore, the question is one of first impression in this court.
¶ 27       The issue of whether the subject matter waiver doctrine extends to extrajudicial
       disclosures is a question of law concerning the application of privilege rules in discovery,
       and thus is reviewed de novo. Norskog v. Pfiel, 197 Ill. 2d 60, 71 (2001) (“In this appeal, we
       are deciding whether disclosure of mental health information is prohibited by a statutory
       discovery privilege and whether any exception to the privilege applies. These are matters of
       law subject to de novo review.”).

¶ 28                        A. The Attorney-Client Privilege in Illinois
¶ 29       Before directly addressing the application of subject matter waiver in extrajudicial
       settings, some discussion of the attorney-client privilege is necessary. Our court rules govern
       disclosure of privileged material and work product during discovery. Waste Management,
       Inc. v. International Surplus Lines Insurance Co., 144 Ill. 2d 178, 189 (1991). Supreme
       Court Rule 201(b)(2) states:
                   “(2) Privilege and Work Product. All matters that are privileged against
               disclosure on the trial, including privileged communications between a party or his
               agent and the attorney for the party, are privileged against disclosure through any
               discovery procedure. Material prepared by or for a party in preparation for trial is
               subject to discovery only if it does not contain or disclose the theories, mental
               impressions, or litigation plans of the party’s attorney. The court may apportion the
               cost involved in originally securing the discoverable material, including when
               appropriate a reasonable attorney’s fee, in such manner as is just.” Ill. S. Ct. R.
               201(b)(2) (eff. July 1, 2002).
¶ 30       Where legal advice of any kind is sought from a lawyer in his or her capacity as a lawyer,
       the communications relating to that purpose, made in confidence by the client, are protected

                                                  -9-
       from disclosure by the client or lawyer, unless the protection is waived. Fischel & Kahn, Ltd.
       v. Van Straaten Gallery, Inc., 189 Ill. 2d 579, 584 (2000); People v. Simms, 192 Ill. 2d 348,
       381 (2000); People v. Adam, 51 Ill. 2d 46, 48 (1972); 8 John Henry Wigmore, Evidence
       § 2292 (McNaughton rev. ed. 1961). “The attorney-client privilege is an ‘evidentiary
       privilege [which] provides limited protection to communications from the client by
       prohibiting their unauthorized disclosure in judicial proceedings.’ ” In re Marriage of
       Decker, 153 Ill. 2d 298, 312 (1992) (quoting Annotated Model Rules of Professional
       Conduct R. 1.6, at 90 (2d ed. 1992)). The privilege is one of the oldest privileges for
       confidential communications known to the common law and “has been described as being
       essential ‘to the proper functioning of our adversary system of justice.’ ” Decker, 153 Ill. 2d
       at 312-13 (quoting United States v. Zolin, 491 U.S. 554, 562 (1989)). The privilege is based
       upon the confidential nature of the communications between the lawyer and client. Simms,
       192 Ill. 2d at 381.
¶ 31       “ ‘The purpose of the attorney-client privilege is to encourage and promote full and frank
       consultation between a client and legal advisor by removing the fear of compelled disclosure
       of information.’ ” Waste Management, 144 Ill. 2d at 190 (quoting Consolidation Coal Co.
       v. Bucyrus-Erie Co., 89 Ill. 2d 103, 117-18 (1982)). “Moreover, ‘[t]he [attorney-client]
       privilege recognizes that sound legal advice or advocacy serves public ends and that such
       advice or advocacy depends upon the lawyer being fully informed by the client.’ ” Fischel
       & Kahn, 189 Ill. 2d at 585 (quoting Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)).
¶ 32       Illinois adheres “to a strong policy of encouraging disclosure, with an eye toward
       ascertaining that truth which is essential to the proper disposition of a lawsuit.” Waste
       Management, 144 Ill. 2d at 190. The privilege is to be strictly confined within its narrowest
       limits and limited solely to those communications which the claimant either expressly made
       confidential or which he could reasonably believe under the circumstances would be
       understood by the attorney as such. Waste Management, 144 Ill. 2d at 190.

¶ 33                                 B. Subject-Matter Waiver
¶ 34                                   1. Waiver in General
¶ 35       Among the exceptions to the attorney-client privilege is the concept of “waiver.” The
       attorney-client privilege belongs to the client, rather than the attorney, although the attorney
       asserts the privilege on behalf of the client. Decker, 153 Ill. 2d at 313. Only the client may
       waive the privilege. Decker, 153 Ill. 2d at 313. The attorney, although presumed to have
       authority to waive the privilege on the client’s behalf, may not do so over the client’s
       objection. Richard O. Lempert et al., A Modern Approach to Evidence 884-85 (3d ed. 2000).
       “Any disclosure by the client is inherently inconsistent with the policy behind the privilege
       of facilitating a confidential attorney-client relationship and, therefore, must result in a
       waiver of the privilege.” Profit Management Development, Inc., v. Jacobson, Brandvik &
       Anderson, Ltd., 309 Ill. App. 3d 289, 299 (1999). Thus, for example, the attorney-client
       privilege may be waived by the client when the client voluntarily testifies to the privileged
       matter (Profit Management, 309 Ill. App. 3d at 299), or when the client voluntarily injects
       into the case either a factual or legal issue, the truthful resolution of which requires

                                                -10-
       examination of confidential communications, such as legal malpractice actions (Fischel &
       Kahn, 189 Ill. 2d at 585; Lama v. Preskill, 353 Ill. App. 3d 300, 305 (2004)). The basic, well-
       settled rule is that when a client discloses to a third-party a privileged communication, that
       particular communication is no longer privileged and is discoverable or admissible in
       litigation. Michael H. Graham, Evidence: An Introductory Problem Approach 563 (2002)
       (“The holder of the privilege against disclosure of the confidential matter or communication
       waives the privilege if he or his predecessor while holder of the privilege voluntarily
       discloses or consents to disclosure of any significant part of the matter or communication
       ***.”).

¶ 36                           2. The Subject Matter Waiver Doctrine
¶ 37       The type of waiver at issue in the present case is known as “subject matter waiver.”
       According to Wigmore, “[t]he client’s offer of his own or the attorney’s testimony as to a
       specific communication to the attorney is a waiver as to all other communications to the
       attorney on the same matter.” (Emphasis in original.) 8 John Henry Wigmore, Evidence
       § 2327, at 638 (McNaughton rev. ed. 1961). Further, a client’s offer of his own or his
       “attorney’s testimony as to a part of any communication to the attorney is a waiver as to the
       whole of that communication, on the analogy of the principle of completeness.” (Emphasis
       in original.) 8 John Henry Wigmore, Evidence § 2327, at 638 (McNaughton rev. ed. 1961);
       In re Sealed Case, 676 F.2d 793, 809 (D.C. Cir. 1982) (“[A]ny voluntary disclosure by the
       client to a third party breaches the confidentiality of the attorney-client relationship and
       therefore waives the privilege, not only as to the specific communication disclosed but often
       as to all other communications relating to the same subject matter.”).
¶ 38       Illinois has long recognized the doctrine of subject matter waiver, with this court holding
       that when a client voluntarily testifies and waives the privilege, such waiver “extends no
       further than the subject-matter concerning which testimony had been given by the client.”
       (Emphasis added.) People v. Gerold, 265 Ill. 448, 481 (1914). Our appellate court has refined
       and elaborated on subject matter waiver:
                     “Although voluntary disclosure of confidential information does not effectively
                waive an attorney-client privilege as to all other non-disclosed communications that
                may have taken place [citation], where a client reveals portions of her conversation
                with her attorney, those revelations amount to a waiver of the attorney-client
                privilege as to the remainder of the conversation or communication about the same
                subject matter.” In re Grand Jury January 246, 272 Ill. App. 3d 991, 997 (1995)
                (citing People v. O’Banner, 215 Ill. App. 3d 778, 793 (1991)).
¶ 39       The purpose behind the doctrine of subject matter waiver is to prevent partial or selective
       disclosure of favorable material while sequestering the unfavorable. Graco Children’s
       Products, Inc. v. Dressler, Goldsmith, Shore & Milnamow, Ltd., No. 95 C 1303, 1995 WL
       360590, *8 (N.D. Ill. June 14, 1995). “This is so because the privilege of secret consultation
       is intended only as an incidental means of defense, and not as an independent means of
       attack, and to use it in the latter character is to abandon it in the former.” 8 John Henry
       Wigmore, Evidence § 2327, at 638 (McNaughton rev. ed. 1961). Courts have characterized

                                                -11-
       this reasoning as the “sword” and the “shield” approach, in that a litigant should not be able
       to disclose portions of privileged communications with his attorney to gain a tactical
       advantage in litigation (the sword), and then claim the privilege when the opposing party
       attempts to discover the undisclosed portion of the communication or communications
       relating to the same subject matter. In re Echostar Communications Corp., 448 F.3d 1294,
       1303 (Fed. Cir. 2006) (“The overarching goal of waiver in such a case is to prevent a party
       from using the advice he received as both a sword, by waiving privilege to favorable advice,
       and a shield, by asserting privilege to unfavorable advice.”); In re Keeper of the Records
       (Grand Jury Subpoena Addressed to XYZ Corp.), 348 F.3d 16, 24 (1st Cir. 2003) (“Implying
       a subject matter waiver in such a case ensures fairness because it disables litigants from using
       the attorney-client privilege as both a sword and a shield.”).
¶ 40       The Supreme Court of Delaware articulated the importance of fairness to the subject
       matter waiver doctrine thusly:
                    “The purpose underlying the rule of partial disclosure is one of fairness to
               discourage the use of the privilege as a litigation weapon in the interest of fairness.
               A party should not be permitted to assert the privilege to prevent an inquiry by an
               opposing party where the professional advice, itself, is tendered as a defense or
               explanation for disputed conduct. [Citation.] VLI introduced portions of the advice
               of its new patent counsel in support of its claim that the disclosures concerning the
               prospect of the patent reinstatement were adequate given the uncertainty surrounding
               that issue. It would be manifestly unfair to permit selective utilization of these
               portions and at the same time assert the attorney-client privilege to shield any inquiry
               into the totality of counsel’s advice and its factual basis. [Citation.]” Zirn v. VLI
               Corp., 621 A.2d 773, 781-82 (Del. 1993).
       See also Sylgab Steel & Wire Corp. v. Imoco-Gateway Corp., 62 F.R.D. 454, 457 (N.D. Ill.
       1974) (“[W]hen a party’s conduct reaches a certain point of disclosure fairness requires that
       the privilege should cease whether the party intended that result or not. A party cannot be
       allowed, after disclosing as much as he pleases, to withhold the remainder.”).

¶ 41                  3. Application of the Subject Matter Waiver Doctrine
                                       to Extrajudicial Settings
¶ 42       The issue for the court to decide in this case is whether the subject matter waiver doctrine
       extends to disclosures of privileged communications made in an extrajudicial setting.
       Defendants argue that the purpose of the doctrine would be defeated if the court applied it
       to disclosures made outside of litigation, since the purpose of the doctrine is prevent a party
       from using the privilege as a weapon to gain tactical advantage in litigation. Further,
       defendants claim extending subject matter waiver outside of litigation would hamper
       attorneys’ ability to provide legal advice to clients during business transactions and other
       matters. Plaintiffs respond that some courts have found subject matter waiver extends to
       extrajudicial disclosures, and that such an extension would be in keeping with this state’s
       policy of open disclosure and search for the truth.
¶ 43       First, both parties would concede that the vast majority of cases to apply the subject

                                                -12-
       matter waiver doctrine have done so in the context of judicial disclosures. This court could
       find no Illinois state case, and the parties could point to none, that applied the doctrine to a
       disclosure made in an extrajudicial3 setting. Illinois cases have applied subject matter waiver
       in the context of litigation. In Gerold, the disclosures giving rise to subject matter waiver
       occurred during court testimony in a criminal case. Gerold, 265 Ill. at 481. In Newton v.
       Meissner, 76 Ill. App. 3d 479, 499 (1979), the plaintiff voluntarily testified on cross-
       examination at trial that she told her attorney (at the time) that she had no recollection of the
       accident, thus waiving the privilege and opening the door for her former attorney to testify
       concerning that particular matter. In In re Grand Jury January 246, the court found subject
       matter waiver where a witness testified in her deposition that her attorneys had discussed
       “financial options” with her in her lawsuit against a congressman. In re Grand Jury January
       246, 272 Ill. App. 3d at 996-97. In O’Banner, subject matter waiver applied when the
       defendant took the stand and testified as to portions of conversations with his attorney.
       O’Banner, 215 Ill. App. 3d at 793. Thus, the issue of whether subject matter waiver extends
       to extrajudicial disclosures is one of first impression in Illinois.4
¶ 44       The extension of subject matter waiver to extrajudicial disclosures, however, has been
       addressed in the federal courts. Two federal appellate courts, in In re Von Bulow, 828 F.2d
       94 (2d Cir. 1987), and In re Keeper of the Records (Grand Jury Subpoena Addressed to XYZ
       Corp.), 348 F.3d 16 (1st Cir. 2003), have examined the issue and determined that subject
       matter waiver should not extend to extrajudicial disclosures.
¶ 45       In In re Von Bulow, the plaintiffs attempted to claim subject matter waiver based on
       extrajudicial disclosures made in a book written by Claus von Bulow and his attorney Alan
       Dershowitz about Von Bulow’s prosecution for the murder of his wife. The plaintiffs had
       filed a civil suit against Von Bulow over his wife’s murder. After the civil suit commenced,
       Von Bulow and Dershowitz published a book chronicling Von Bulow’s first trial, successful
       appeal, and eventual acquittal at a second trial. The plaintiffs moved to compel discovery of
       certain discussions between Von Bulow and Dershowitz based on the alleged waiver of
       attorney-client privilege with respect to communications related in the book. The trial court
       found Von Bulow waived the privilege via the publishing of the book, and extended waiver

               3
                For purposes of this opinion, the court relies on the Black’s Law Dictionary definition of
       “extrajudicial.” Extrajudicial is defined as “[o]utside court; outside the functioning of the court
       system . — Also termed out-of-court.” Black’s Law Dictionary 665 (9th
       ed. 2009).
               4
                 In its brief, defendant Westfield cites to In re Estate of Hoover, 226 Ill. App. 3d 422 (1992),
       as support for not applying subject matter waiver to extrajudicial disclosures. In Hoover, the
       plaintiff, seeking testimony from the attorney for his ex-wife in a will contest, argued that the
       privilege had been “completely waived” by prior disclosures via the ex-wife’s letters to third parties
       discussing communications with her attorneys. The trial court found waiver as to the disclosed
       information, but found no blanket waiver as to the undisclosed communications. Defendants argue
       that this is proof that Illinois courts disfavor subject matter waiver in extrajudicial disclosures, but
       plaintiffs correctly point out the Hoover court said nothing about “extrajudicial” disclosures in its
       opinion.

                                                    -13-
       to: (1) the contents of the published conversations; (2) all communications between Von
       Bulow and Dershowitz relating to the published conversations; and (3) all communications
       between Von Bulow and any defense attorney relating to the published conversations. Von
       Bulow, 828 F.2d at 100.
¶ 46       On review, the reviewing court found Von Bulow had waived the privilege. However,
       the court refused to extend subject matter waiver when “the privilege-holder or his attorney
       [have] made extrajudicial disclosures, and those disclosures have not subsequently been
       placed at issue during litigation.” Von Bulow, 828 F.2d at 102. First, as to unpublished
       contents of the published conversations, the appellate court noted that the cases relied on by
       the trial court finding implied waivers on account of fairness involved material issues raised
       by a client’s assertion during the course of a judicial proceeding. Von Bulow, 828 F.2d at
       102. The court concluded that, under the fairness doctrine, extrajudicial disclosures of an
       attorney-client communication, not subsequently used by the client in a judicial proceeding
       to his adversary’s prejudice, do not waive the privilege as to the undisclosed portions of the
       communication. Von Bulow, 828 F.2d at 102.
¶ 47       Next, concerning communications between Von Bulow and Dershowitz that had the
       same subject matter as those disclosed in the book, the court noted that subject matter waiver
       “has been invoked most often where the privilege-holder has attempted to use the privilege
       as both ‘a sword’ and ‘a shield’ or where the attacking party has been prejudiced at trial.”
       Von Bulow, 828 F.2d at 103. The court held that subject matter waiver did not apply to
       extrajudicial disclosures, concluding:
                “[W]here, as here, disclosures of privileged information are made extrajudicially and
                without prejudice to the opposing party, there exists no reason in logic or equity to
                broaden the waiver beyond those matters actually revealed. Matters actually disclosed
                in public lose their privileged status because they obviously are no longer
                confidential. The cat is let out of the bag, so to speak. But related matters not so
                disclosed remain confidential. Although it is true that disclosures in the public arena
                may be ‘one-sided’ or ‘misleading’, so long as such disclosures are and remain
                extrajudicial, there is no legal prejudice that warrants a broad court-imposed subject
                matter waiver. The reason is that disclosures made in public rather than in
                court—even if selective—create no risk of legal prejudice until put at issue in the
                litigation by the privilege-holder. Therefore, insofar as the district court broadened
                petitioner’s waiver to include related conversations on the same subject it was in
                error.” (Emphases in original.) Von Bulow, 828 F.2d at 103.
¶ 48       A subsequent federal appellate court opinion, In re Keeper of the Records, reaffirmed the
       holding of Von Bulow. In In re Keeper of the Records, XYZ Corporation made a decision to
       recall a medical device. XYZ conducted a conference call with its co-venturer Smallco to
       discuss the recall. The participants in the discussion included two officers of XYZ, outside
       counsel for XYZ, the principals of Smallco, and Smallco’s medical advisor. During the
       conference call, XYZ’s outside counsel advocated for XYZ’s position in the face of strong
       counterarguments from the Smallco representatives. The federal government soon
       commenced an investigation of XYZ and, as part of that investigation, filed a motion to
       compel the production of certain documents. The government argued that XYZ had waived

                                                -14-
       the attorney-client privilege during its conference call with Smallco because XYZ’s outside
       counsel had given legal advice in the presence of third parties and had disclosed legal advice
       previously provided to XYZ, thus effecting a waiver of attorney-client privilege as to all
       communications on the same subject matter. The trial court agreed and granted the motion.
¶ 49        On appeal, the reviewing court agreed with the trial court that any previously privileged
       information actually revealed during the call lost any veneer of privilege. However, the court
       rejected any application of subject matter waiver to the extrajudicial conference call. The
       court noted that:
                    “Virtually every reported instance of an implied waiver extending to an entire
                subject matter involves a judicial disclosure, that is, a disclosure made in the course
                of a judicial proceeding. See von Bulow, 828 F.2d at 103 (collecting cases). This
                uniformity is not mere happenstance; it exists because such a limitation makes
                eminently good sense. Accordingly, we hold, as a matter of first impression in this
                circuit, that the extrajudicial disclosure of attorney-client communications, not
                thereafter used by the client to gain adversarial advantage in judicial proceedings,
                cannot work an implied waiver of all confidential communications on the same
                subject matter.” In re Keeper of the Records, 348 F.3d at 24.
¶ 50        The court went on to explain the rationale behind its holding, noting “[t]here is a
       qualitative difference between offering testimony at trial or asserting an advice of counsel
       defense in litigation, on the one hand, and engaging in negotiations with business associates,
       on the other hand.” In re Keeper of the Records, 348 F.3d at 24. The court found that in the
       litigation setting, the likelihood of prejudice loomed large so that once a litigant put
       privileged communications at issue, only the revelation of all related exchanges allowed the
       truth-seeking process to function unimpeded. In re Keeper of the Records, 348 F.3d at 24.
       In the business negotiation setting, however, concerns of prejudice are absent, as the
       introduction of a party’s attorney into the proceedings does nothing to cause prejudice to the
       opposition or subvert the truth-seeking process. In re Keeper of the Records, 348 F.3d at 24.
¶ 51        In support of their argument that subject matter waiver should apply to extrajudicial
       disclosures, plaintiffs cite to Flagstar Bank, FSB v. Freestar Bank, N.A., No. 09 C 1941,
       2009 WL 2706965 (N.D. Ill. Aug. 25, 2009). In Flagstar, the plaintiff asserted the defendant
       waived the attorney-client privilege when the defendant disclosed a certain document to a
       third party, apparently outside the context of litigation or judicial proceedings. Specifically,
       the disclosure at issue concerned a letter authored by the defendant’s attorney and forwarded
       to the defendant’s president, who in turn sent the letter to an employee of a company the
       defendant hired for marketing services. Flagstar, 2009 WL 2706965, at *5. The court found
       the letter was not privileged, as it was disclosed to a third party who was not acting in a legal
       capacity for the defendant. The court found that disclosing the letter “effectuated a waiver
       of the attorney client privilege as to that document and to any other documents of the same
       subject matter.” Flagstar, 2009 WL 2706965, at *6.
¶ 52        Plaintiffs further cite to In re OM Group Securities Litigation, 226 F.R.D. 579 (N.D.
       Ohio 2005), as an example of a court applying subject matter waiver to purely extrajudicial
       disclosures. In OM Group, a plaintiff shareholder sued defendant corporation in a

                                                 -15-
       shareholder action. The defendant corporation’s audit committee was conducting an
       investigation of defendant. The audit committee’s counsel, and a forensic accounting firm
       hired by counsel, gave a power point presentation to the corporation’s board of directors
       regarding the findings of the ongoing investigation. The plaintiff shareholder filed a motion
       to compel production of documents underlying the presentation. After being provided the
       power point presentation itself, along with two spreadsheets regarding the investigation,
       defendant refused to provide any of the requested underlying documents. The plaintiff argued
       that the defendants waived any privilege over the documents containing the same subject
       matter as the presentation. The defendants argued that the scope of any waiver should be
       narrowly construed because they would not gain an unfair tactical advantage by the power
       point presentation and the two spreadsheets.
¶ 53        The court ordered the production of the underlying documents, finding they were within
       the scope and subject matter of the audit committee’s intentional disclosure. OM Group, 226
       F.R.D. at 593. The court rejected the defendants’ pledge that they would not use the
       underlying documents for a tactical advantage in the litigation, reasoning:
                “Defendants attempt to restrict application of the fairness doctrine solely to whether
                they would gain a tactical advantage in litigation by not disclosing the underlying
                documents. The Court does not interpret the fairness doctrine so narrowly. The Court
                must consider, not only whether there is a tactical benefit, but whether it is fair to
                uphold the privilege considering the nature of the disclosure.” OM Group, 226
                F.R.D. at 593.
¶ 54        Plaintiff also points to a comment from the Restatement (Third) of The Law Governing
       Lawyers, stating “[w]ith respect to out-of-court partial disclosures, the substantial majority
       of decisions announces a broad and almost automatic subject-matter-waiver rule.”
       Restatement (Third) of The Law Governing Lawyers § 79, Reporters Notes cmt. f (2000).
       The comment cites to several federal court cases in support. In In re Sealed Case, 877 F.2d
       976 (D.C. Cir. 1989), a company that had contracted with the Department of Defense was
       being audited by the Defense Contract Audit Agency (DCAA). During the audit, an internal
       company document containing legal advice was disclosed to the DCAA. While
       acknowledging that “a waiver of the privilege in an attorney-client communication extends
       ‘to all other communications relating to the same subject matter,’ ” the court remanded the
       cause to the lower court for a determination of how broadly to apply the waiver. In re Sealed
       Case, 877 F.2d at 980-81 (quoting In re Sealed Case, 676 F.2d 793, 809 (D.C. Cir. 1982)).
¶ 55        In In re Martin Marietta Corp., 856 F.2d 619, 623 (4th Cir. 1988), the court allowed in
       all privileged communications relating to a position paper sent by a company facing
       indictment to the United States Attorney. The position paper contained legal arguments on
       why the company should not be indicted. In AMCA International Corp. v. Phipard, 107
       F.R.D. 39 (D. Mass. 1985), the plaintiff sent a memorandum to the defendant containing
       legal advice the plaintiff had received regarding a new formula for calculating royalties for
       the defendant (it is not clear from the written opinion if this was before or after initiation of
       litigation). The defendant argued that the disclosure of the memorandum operated as a waiver
       of the privilege not only as to the document but to all documents relating to the same subject
       matter. The court held the release of the memorandum served as a waiver of the privilege as

                                                 -16-
       to a partial group of documents which related to the same subject matter, but would not
       extend the waiver to all prior and subsequent communications between plaintiff and its
       counsel on the interpretation of the contracts at issue. AMCA, 107 F.R.D. at 44.
¶ 56       Finally, in Smith v. Alyeska Pipeline Service Co., 538 F. Supp. 977 (D. Del. 1982), the
       court ordered production of 36 documents exchanged between the plaintiff and his attorney
       relating to an infringement case. The court found that the plaintiff had waived the privilege
       when plaintiff’s attorney, acting on behalf of plaintiff, sent an opinion letter to the defendant
       concerning the same subject matter as that contained in the 36 privileged documents. The
       disclosure was apparently made in an extrajudicial context.
¶ 57       We find the line of cases declining to extend subject matter waiver to extrajudicial
       disclosures more persuasive. First, limiting application of subject matter waiver to
       disclosures made in litigation better serves the purpose of the doctrine. The purpose of the
       doctrine is to prevent a party from strategically and selectively disclosing partial attorney-
       client communications with his attorney to use as a sword, and then invoking the privilege
       as a shield to other communications so as to gain a tactical advantage in litigation. See In re
       Keeper of the Records, 348 F.3d at 24. Expanding the doctrine to cover extrajudicial
       disclosures that are not made for tactical advantage in litigation would necessarily broaden
       the scope of the doctrine’s purpose. When a partial disclosure is made in the litigation
       context, the apparent prejudice that could result to the opposing party is obvious: a party has
       injected into the litigation communications with his attorney which may aid in the party’s
       prosecution or defense of a claim, yet the party can also frustrate the truth-seeking process
       by claiming privilege when the opposition seeks to discover the full context of the
       confidential communications. Such an abuse of the judicial process should be looked upon
       with disfavor, and the doctrine of subject matter waiver ensures that the full context of the
       partial disclosure is discoverable so the court may fulfill its truth-seeking function and extend
       fairness to the opposing party. That same purpose is not served, however, when the doctrine
       is expanded to cover disclosures made before litigation is initiated or, in many cases, even
       contemplated.
¶ 58       Next, the cases cited in support of limiting the doctrine to the context of litigation are
       more thorough and persuasive than those cited in opposition. As discussed above, both In
       re Keeper of the Records and Von Bulow contain detailed and thorough reasoning as to why
       the subject matter waiver doctrine should not be extended to purely extrajudicial disclosures.
       See In re Keeper of the Records, 348 F.3d at 24-26; Von Bulow, 828 F.2d at 101-03. In
       contrast, Flagstar and the cases cited in the Restatement (Third) of The Law Governing
       Lawyers do not contain any reasoning or explanation for why subject matter waiver should
       extend to purely extrajudicial disclosures. We acknowledge that in those cases the courts did
       apply subject matter waiver to what appear to be extrajudicial disclosures.5 However, as

               5
                  In AMCA it is not exactly clear if the disclosures were made before or after the initiation
       of litigation. See AMCA, 107 F.R.D. at 40-41. In In re Sealed Case and In re Martin Marietta Corp.,
       the disclosures were made during the pendency of a government audit and a government
       investigation leading to a possible indictment by the United States Attorney, respectively. See In re
       Sealed Case, 877 F.2d at 977-78; In re Martin Marietta Corp., 856 F.2d at 623. Under the Federal

                                                   -17-
       those cases do not contain any reasoning or justification for extension of the subject matter
       waiver doctrine, we do not find them as persuasive as the more complete analyses found in
       In re Keeper of the Records and Von Bulow.
¶ 59        Further, we reject the analysis of the court in OM Group. The OM Group court explicitly
       declined to decide whether the defendants gained a tactical advantage in litigation through
       its extrajudicial partial disclosures, instead relying solely on fairness to apply subject matter
       waiver. OM Group, 226 F.R.D. at 593. The purpose behind subject matter waiver is to
       prevent the disclosing party from using the privilege as a sword and a shield in litigation, i.e.,
       to prevent one party from gaining a tactical advantage in litigation over another party through
       selective use of the privilege. “Fairness” should not be separated from the “tactical
       advantage” aspect of subject matter waiver’s purpose. The OM Group analysis is incomplete.
¶ 60        Finally, we believe limiting subject matter waiver to the context of judicial disclosures
       to be sound policy. “[A] rule that would allow broad subject matter waivers to be implied
       from such communications would provide perverse incentives: parties would leave attorneys
       out of commercial negotiations for fear that their inclusion would later force wholesale
       disclosure of confidential information.” In re Keeper of the Records, 348 F.3d at 24. We
       agree with the In re Keeper of the Records court that such a consequence would strike at the
       heart of the attorney-client relationship and could deprive clients of counsel at times when
       such counsel is most valuable.
¶ 61        While we do not limit our holding only to advice given in business transactions, we
       recognize that the present case involves a business transaction and business negotiations
       would be uniquely burdened by extending subject matter waiver. We find informative the
       analysis of the court in Hewlett-Packard Co. v. Bausch & Lomb Inc.:
                    “This court also is concerned about the effect that finding waiver too freely might
                have on the sort of business transaction in which defendant and GEC were involved.
                Holding that this kind of disclosure constitutes a waiver could make it appreciably
                more difficult to negotiate sales of businesses and products that arguably involve
                interests protected by laws relating to intellectual property. Unless it serves some
                significant interest courts should not create procedural doctrine that restricts
                communication between buyers and sellers, erects barriers to business deals, and
                increases the risk that prospective buyers will not have access to important
                information that could play key roles in assessing the value of the business or product
                they are considering buying. Legal doctrine that impedes frank communication
                between buyers and sellers also sets the stage for more lawsuits, as buyers are more
                likely to be unpleasantly surprised by what they receive. By refusing to find waiver
                in these settings courts create an environment in which businesses can share more

       Rules of Evidence, if a disclosure is made in a federal proceeding or to a federal office or agency
       and the disclosure waives the privilege, the waiver extends to an undisclosed communication in a
       federal or state proceeding if the waiver is intentional, the disclosed communication concerns the
       same subject matter, and the communications ought to, in fairness, be considered together. Fed. R.
       Evid. 502(a).

                                                  -18-
                 freely information that is relevant to their transactions. This policy lubricates
                 business deals and encourages more openness in transactions of this nature.” Hewlett-
                 Packard Co. v. Bausch & Lomb Inc., 115 F.R.D. 308, 311 (N.D. Cal. 1987).
¶ 62        It is of no matter if disclosure made during a business negotiation is done to gain a
       tactical advantage during the business negotiation. Such a disclosure during a business
       negotiation is not in the province of this court, but is between the two entities engaging in
       the negotiation, unless a law or Illinois legal ethics rule was broken. Further, to address a
       point raised at oral argument, if a disclosure is made during a business negotiation to gain
       a later tactical advantage in anticipated litigation, subject matter waiver would still apply if
       such a disclosure is later used by the disclosing party at any point during the litigation to gain
       a tactical advantage. See In re Keeper of the Records, 348 F.3d at 25 (“[I]f confidential
       information is revealed in an extrajudicial context and later reused in a judicial setting, the
       circumstances of the initial disclosure will not immunize the client against a claim of
       waiver.”). However, if the disclosure is not later reused during litigation, subject matter
       waiver would not apply, regardless of whether there was some hidden intent on the part of
       the disclosing party to gain some sort of advantage in later litigation. To apply subject matter
       waiver in such a manner would require determining the intent of the disclosing party, and
       would be pure speculation on the court’s part as to why the disclosure was made. Further,
       if the disclosure is not later used in litigation, it would not serve the purpose of the subject
       matter waiver doctrine. We hold that subject matter waiver does not apply to the extrajudicial
       disclosure of attorney-client communications not thereafter used by the client to gain an
       adversarial advantage in litigation. See In re Keeper of the Records, 348 F.3d at 24.

¶ 63            II. Whether Defendants’ Statements During Discovery Depositions
                              Placed Disclosures at Issue in Litigation
¶ 64       Plaintiffs contend, in the alternative, that even if this court holds that subject matter
       waiver does not apply to extrajudicial disclosures, the doctrine would still apply in this case
       because defendants are using the legal advice they received to advance their defense in the
       underlying lawsuit. Specifically, plaintiffs argue that defendants’ witnesses (Rouse’s officers
       Deering and Minutoli and Westfield executive Stefanek6), during deposition testimony,
       disclosed privileged communications in order to gain a tactical advantage in the litigation.
       Defendants respond that plaintiffs’ alternative argument is completely unsupported by the
       record.
¶ 65       While privileged extrajudicial disclosures are not subject to subject matter waiver, if
       those same privileged communications are later reused in a judicial setting, the circumstances
       of the initial disclosure will not immunize the client against a claim of waiver. See In re

               6
                 Plaintiffs also cited to the deposition testimony of a witness for Simon. However, as Simon
       waived the privilege and chose not to appeal the circuit court’s order, we will not consider the
       testimony of Simon’s witness. Only the client may waive the privilege. Decker, 153 Ill. 2d at 313.
       Therefore, in determining whether Westfield and Rouse waived the privilege, we will consider only
       the testimony of Westfield and Rouse’s executives.

                                                  -19-
       Keeper of the Records, 348 F.2d at 25. Thus, if defendants have introduced into the litigation
       privileged communications to be used as a sword for tactical advantage, those
       communications, and undisclosed communications of the same subject matter, are
       discoverable. Whether the attorney-client privilege or any exception thereto exists is
       reviewed de novo. Norskog, 197 Ill. 2d at 71; Fox Moraine, LLC v. United City of Yorkville,
       2011 IL App (2d) 100017, ¶ 63.
¶ 66       In general, “ ‘[w]aiver’ means the voluntary relinquishment of a known right” and arises
       from an affirmative, consensual act consisting of an intentional relinquishment of a known
       right. Maniez v. Citibank, F.S.B., 404 Ill. App. 3d 941, 947 (2010). A waiver by a client of
       the attorney-client privilege can be either express or implied. Lama v. Preskill, 353 Ill. App.
       3d 300, 305 (2004). A clear example of an express waiver is when a client voluntarily
       testifies about privileged communications. See Profit Management, 309 Ill. App. 3d at 299.
       The client may also waive the privilege by expressly agreeing to do so or by failing to assert
       the privilege when privileged information is requested. Richard O. Lempert et al., A Modern
       Approach to Evidence 885 (3d ed. 2000). An implied waiver may be found when the client
       asserts claims or defenses that put his or her communications with the legal advisor at issue
       in the litigation. Profit Management, 353 Ill. App. 3d at 300. However, a party can preserve
       the privilege when it attempts to limit disclosure. See In re Continental Illinois Securities
       Litigation, 732 F.2d 1302, 1314 (7th Cir. 1984). Generally, failure to assert the privilege
       prior to turning over the privileged documents constitutes a voluntary waiver. See Maryville
       Academy v. Loeb Rhoades & Co., 559 F. Supp. 7, 8-9 (N.D. Ill. 1982). The determination of
       whether a party has waived the privilege must be made on a case-by-case basis. Ritacca v.
       Abbott Laboratories, 203 F.R.D. 332, 335 (N.D. Ill. 2001).
¶ 67       If waiver is found, the next step is to determine the scope of the waiver and whether the
       waiver applies to all of the communications relating to the same subject matter. Rowe
       International Corp. v. Ecast, Inc., 241 F.R.D. 296, 301 (N.D. Ill. 2007). “ ‘[T]here is no
       bright line test for determining what constitutes the subject matter of a waiver, rather courts
       weigh the circumstances of the disclosure, the nature of the legal advice sought and the
       prejudice to the parties of permitting or prohibiting further disclosures.’ ” Rowe, 241 F.R.D.
       at 301 (quoting Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349-50 (Fed. Cir. 2005)).
¶ 68       We will examine the deposition testimony of Deering, Minutoli, and Stefanek cited by
       plaintiffs in turn to determine first if waiver occurred and, if so, the scope of the waiver and
       the waiver’s subject matter. We find that Deering and Minutoli, in their depositions, did not
       voluntarily waive the privilege as to legal advice received from counsel and shared with third
       parties. The cited deposition testimony of Deering and Minutoli concern the third-party
       disclosures made by defendants to each other during the 2001-02 business negotiations. First,
       we note that the testimony was elicited after repeated questioning by plaintiffs’ attorney.
       Next, and most important, the testimony occurred after the circuit court granted plaintiffs’
       motion to compel and ordered the production of documents containing or discussing the
       shared communications. Defendants had contested that motion to compel and invoked the
       privilege. Following the court’s order on the motion to compel, it is apparent that defendants
       were operating under the assumption that the court had deemed the privilege waived for
       documents and communications containing legal advice that were shared among defendants.

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       Thus, defendant Rouse did not voluntarily waive the privilege during the depositions. See
       Regan v. Garfield Ridge Trust & Savings Bank, 220 Ill. App. 3d 1078, 1090-91 (1991)
       (privilege not waived where former attorney called to testify by client and reveals no
       privileged communications during direct examination and, during cross examination attorney
       properly invokes the privilege during questioning); Profit Management, 309 Ill. App. 3d at
       300 (“The plaintiffs further waived the privilege when they did not object to the material in
       federal court on the basis of its confidential nature.”).
¶ 69       Plaintiffs also contend that Stefanek, Westfield’s chief financial officer, waived the
       privilege as to attorney-client communications discussed openly among defendants. Again,
       for the same reasons discussed above, we do not find Stefanek’s testimony to have waived
       the privilege. Attorney-client communications shared among defendants had already been
       deemed waived by the circuit court in its December 10, 2008, order. Defendants had objected
       to the motion to compel, invoking the privilege. When Stefanek was deposed on January 7,
       2009, a month after the order, the transcript reveals Stefanek, Westfield’s attorney and
       plaintiffs’ attorney were operating under the assumption that any privilege as to the shared
       communications had been deemed waived, pursuant to the order of the circuit court. This is
       particularly illustrated in the following exchange after plaintiffs’ counsel asked whether
       Stefanek’s understanding of the synthetic partnership was based on legal advice received
       from counsel:
                    “[Stefanek]: Well, we all signed it, so it would seem pretty logical that—you
                know, that—that anything significant would have been discussed with everybody,
                yes.
                    [Plaintiffs’ attorney]: Again, I think that’s—there’s been a waiver in light of the
                court’s prior ruling on that, [Westfield’s attorney], and did you want to reconsider
                your advice to instruct him not to answer that?
                    [Westfield’s attorney]: What’s your question?
                    [Plaintiffs’ attorney]: I would like to know what the legal advice was.
                    [Westfield’s attorney]: If—if—as the—what—if—do you mind asking the
                foundational question, whether he knows what the legal advice that was shared was?
                    [Plaintiffs’ attorney]: You received legal advice on why Simon, Rouse and
                Westfield believed they could exclude certain provisions of the Urban partnership
                agreement. Correct?
                    [Stefanek]: I received advice what—based on why we could.” (Emphasis added.)
¶ 70       Clearly, the parties assumed that waiver had occurred, based on the court’s ruling
       regarding the extrajudicial third-party disclosures made by defendants to each other during
       the 2001-02 business negotiations. By sharing information with each other, defendants,
       during the 2001-02 negotiations, had waived the attorney-client privilege with respect to
       documents and communications containing legal advice disclosed to third parties. However,
       for the reasons stated above in discussing Deering’s and Minutoli’s testimony, Stefanek did
       not waive the privilege during the deposition as to the shared communications.
¶ 71       Plaintiffs further argue that Stefanek waived the privilege as to certain advice he received

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       from Westfield’s attorneys about the structure of the partnership, outside of the shared
       communications covered by the circuit court’s December 10, 2008, order. During the
       deposition, plaintiffs’ attorney asked Stefanek what the basis was “for [Stefanek’s] awareness
       that there was no duty to consider new business opportunities for Urban.” Westfield’s
       attorney immediately objected, stating “[s]ame objection; same instruction.” Stefanek then
       answered that the basis was legal advice given by Westfield attorney Peter Schwartz
       sometime during the acquisition of Rodamco. Plaintiffs’ attorney then asked Stefanek the
       basis for Schwartz’s legal advice. Westfield’s attorney again objected and instructed Stefanek
       not to answer the question. The following exchange then occurred:
                    “[Plaintiffs’ attorney]: Well, he’s already testified to the legal advice. I take it you
               are waiving, right, privilege?
                    [Westfield’s attorney]: No, we are not waiving.
                    [Plaintiffs’ attorney]: Well, you let him testify to the legal advice.
                    [Westfield’s attorney]: I have—you—I have given my instruction. You can
               proceed.
                    [Plaintiffs’ attorney]: I just want you to know that we are going to move to
               compel because you can’t have it both ways. You can’t have him testifying to legal
               advice and then say that you are not waiving. So this will be a motion—
                    [Westfield’s attorney]: He’s—
                    [Plaintiffs’ attorney]: —to compel. I just want to meet and confer on that now.
               So—
                    [Westfield’s attorney]: Proceed with your questioning.
                    [Plaintiffs’ attorney]: Okay. That’s fine. So you are going to continue to stand on
               that instruction?
                    [Westfield’s attorney]: Yeah. I am instructing him not to—not to reveal attorney-
               client advice.
                    [Plaintiffs’ attorney]: All right.”
¶ 72       Plaintiffs’ attorney asked again about the basis for the legal advice. Westfield’s attorney
       interjected, instructing Stefanek not to provide the content of the communication. When
       plaintiffs’ counsel asked what the rationale for the legal advice was, Westfield’s attorney
       stated, “I object it is—Instruct not to answer.”
¶ 73       Based on the transcript excerpt provided in the record, we do not find that defendant
       Westfield waived the privilege through Stefanek’s testimony. The record reveals that, while
       Stefanek did testify to legal advice received from Westfield’s attorneys about the synthetic
       partnership, he did not testify as to the actual content and basis of the legal advice. See
       United States v. O’Malley, 786 F.2d 786, 794 (7th Cir. 1986) (a client does not waive the
       attorney-client privilege merely by disclosing a subject which he had discussed with his
       attorney, but rather, in order to waive the privilege the client must disclose the
       communication with the attorney itself). Further, and most importantly, the record shows that
       Westfield’s attorney at the deposition repeatedly objected to plaintiffs’ attorney’s line of
       questioning regarding legal advice. Westfield’s attorney indicated that he was standing on

                                                  -22-
       his instruction to Stefanek “not to reveal attorney-client advice.” Under such circumstances
       and facts, it is apparent that defendant Westfield invoked the privilege during the deposition,
       and thus did not waive it with regard to Stefanek’s testimony.7
¶ 74       Plaintiffs finally argue that defendants have necessarily put the legal advice received from
       counsel “at issue,” and thus effected an implied waiver by using legal advice as a defense in
       support of defendants’ claims of “good faith” in constructing the synthetic partnership. See
       Lama, 353 Ill. App. 3d at 305. Plaintiffs claim they would suffer prejudice if defendants’
       witnesses are permitted to testify about their reliance on legal advice, but plaintiffs are
       precluded from obtaining discovery on the subject matter at issue. However, based on the
       record before this court, we see no evidence that defendants have claimed reliance, or are
       planning to claim reliance, on legal advice in its defense of this case. Outside of the
       deposition testimony, plaintiffs’ have not pointed this court to any legal filings by defendants
       where defendants utilize legal advice as a defense. If any party has injected defendants’
       lawyers’ legal advice into this case, it is plaintiffs. Plaintiffs have filed three motions to
       compel seeking privileged documents and communications. During depositions, it was
       plaintiffs’ attorney who asked defendants’ witnesses questions relating to legal advice the
       witnesses received. Plaintiffs have already received, following the granting of their motion
       to compel, documents where defendants waived the privilege by disclosing privileged
       communications with one another. We cannot say that defendants impliedly waived the
       privilege by putting “at issue” their attorney-client communications. If, on remand,
       defendants do inject their attorney-client communications into the litigation, the circuit court
       may revisit the issue. Upon the record provided to this court in this appeal, however, we do
       not find any waiver by defendants during the litigation.

¶ 75                                       CONCLUSION
¶ 76       In conclusion, we hold that subject matter waiver does not apply to disclosures made in
       an extrajudicial context when those disclosures are not thereafter used by the client to gain
       a tactical advantage in litigation. Further, the cited deposition testimony of defendants’
       corporate officers did not waive the attorney-client privilege so as to allow application of
       subject matter waiver to certain attorney-client communications. For the foregoing reasons,
       the appellate and circuit courts’ judgments are reversed. The cause is remanded to the circuit
       court for proceedings consistent with this order.

¶ 77       Judgments reversed.
¶ 78       Cause remanded.

               7
                It should be noted that Stefanek’s testimony formed the basis of plaintiffs’ second motion
       to compel. Plaintiffs argued that Stefanek “voluntarily injected” the legal advice into the case to suit
       a defensive position of defendant Westfield and was then refusing to answer questions related to the
       rationale of the legal advice. The circuit court denied plaintiffs’ motion.

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