Appeals court vacates $1,000-per-day sanction against BigLaw lawyer
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The Illinois Appellate Court's Second District has vacated a $1,000-per-day sanction imposed against a Winston & Strawn lawyer who refused to turn over emails in discovery in expectation of a contempt order that would allow for an appeal.
The appeals court said the lawyer, Sean Wieber, couldn’t assert attorney-client privilege on behalf of two defunct companies to protect the emails. But the court vacated the daily fine because the privilege issue in the case was one of first impression in the state, and Wieber was seeking an appellate ruling on the issue.
“A person may expose themselves to a contempt finding as an appropriate method to test the validity of a court order, and refusing to comply with a court’s order may constitute a good faith effort to have a reviewing court interpret an issue without direct precedent,” the appeals court said.
Turning to the privilege issue, the appeals court said dissolved companies cannot invoke attorney-client privilege if there is no representative to assert it.
Wieber had cited attorney-client privilege in refusing to release emails that would have revealed the identity of his clients, who were accused of perpetrating a fraud on an Illinois trial court before he was hired as their lawyer.
Wieber said his aim was to get an appellate ruling on the privilege issue. He asked the trial court to hold him in “friendly contempt,” which would allow for appeal, and to refrain from entering a “draconian” fine.
The trial judge said they had “utmost respect” for Wieber as a practitioner, but they considered his refusal to comply with the order to be “willful and contumacious.” The judge imposed the $1,000 daily fine, saying, “I want to get the attention of whoever is running this show.”
The judge wanted to know who was behind the now-dissolved corporations Ritchie Risk-Linked Strategies and Ritchie Risk-Linked Strategies Trading.
The companies, which first identified themselves as John Doe Corporation 1 and John Doe Corporation 2, had filed a suit in Madison County, Illinois.
The companies at first said they were based in the Cayman Islands, and they operated investment funds for insurance-related investments. Their lawsuit claimed that a company that provided investment management services had violated a subscription agreement that required the company to keep their information confidential and to avoid disparaging them.
A judge granted an ex parte temporary restraining order against the defendants, who later told the court that the alleged disparaging statements were made in litigation in Cook County, Illinois, that had been pending for more than a decade. The defendants sought sanctions for the plaintiff companies’ failure to tell the Madison County court that the alleged disparaging statements were in court pleadings.
Winston & Strawn entered an appearance for the plaintiffs in 2018 and identified the two Ritchie Risk-Linked companies as the Madison County plaintiffs. In discovery, the companies said they were organized in Bermuda, and they did not have any documents showing an agreement with the defendants. The companies were involuntarily dissolved in August 2019.
Although the appeals court vacated the fine against Wieber, it noted that the plaintiffs “are still subject to significant sanctions in the underlying proceeding.”
Dan Webb of Winston & Strawn told Law360 that the law firm respectfully disagrees with the appellate opinion.
“The attorney-client privilege is a fundamental procedural safeguard for any party in an Illinois courtroom,” Webb said.
The case is John Doe Corporation 1 v. Huizenga Managers Fund.