Urban 8 Fox Lake Corp. v. Nationwide Affordable Hous. Fund 4, LLC

415 F.Supp.3d 827

URBAN 8 FOX LAKE CORPORATION, Urban 8 Zion Corporation, Plaintiffs,

v.NATIONWIDE AFFORDABLE HOUSING FUND 4, LLC, SCDC, LLC, Wentwood Capital Advisors, LP, Defendants.

No. 18 C 6109

United States District Court, N.D. Illinois, Eastern Division.

Signed November 21, 2019

David Allan Davenport, Pro Hac Vice, Christina Rieck Loukas, Pro Hac Vice, Winthrop & Weinstine, Minneapolis, MN, Caitlin Martini Mika, Arnold & Porter Kaye Scholer LLP, Chicago, IL, for Plaintiffs.

Marc Andre Al, Stoel Rives LLP, Minneapolis, MN, Stephen Donald Koslow, Koslow Law LLC, Rolling Meadows, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

Jeffrey Cole, UNITED STATES MAGISTRATE JUDGE Defendants have made three recent submissions to the court – a letter, two binders full of documents, and what is captioned "Resubmission of Defendant's Privilege Log for Motion for Protective Order (Contested)." [Dkt. #121, 124]. Over eight months ago, on March 8, 2019, defendants asked the court to conduct an in camera review of about five dozen documents. The defendants claimed these documents were protected from discovery by the privilege. [Dkt. #76, at 8-10]. They claimed to have attached a "chart" to their motion that apparently was to serve as a privilege log describing the documents and stating why each was privileged. But, there was no chart attached to the motion. That only came about a month later, when defendants finally filed it, saying it had been inadvertently omitted. [Dkt. # 85]. In any event, the purportedly privileged documents deposited for in camera inspection were contained in five large, three-ring binders and occupied approximately 2,275 pages! If basic competent procedures were followed, the lawyers obviously had to look at the mass of documents before a privilege could properly be asserted. But that, apparently, is not what happened.

Luckily, due to the unfortunate history of this case – detailed in the Order of November 13^th – the court did not analyze the overly broad collection of documents wrongly claimed to be privileged.¹ Each hour needlessly spent on a dispute is an hour squandered. "Litigation is costly not only for the litigants but also for parties in other cases waiting in the queue for judicial attention." Chicago Observer, Inc. v. City of Chicago, 929 F.2d 325, 329 (7th Cir.1991). This is a problem that the Seventh Circuit has repeatedly adverted to. See, e.g., Otto v. Variable Annuity Life Insurance. Co., 134 F.3d 841, 854 (7th Cir.1998) ; Channell v. Citicorp Nat. Services, Inc., 89 F.3d 379, 386 (7th Cir.1996) ; Szabo Food Service, Inc. v. Canteen Corp., 823 F.2d 1073, 1077 (7th Cir.1987).

The law demands that a legitimate claim of privilege can only be made after a document by document examination. In re Grand Jury Proceedings , 220 F.3d 568 (7th Cir. 2000). Consequently, by making the very large submission that the defendants initially made, they in effect were representing that such an examination had been conducted. Yet, now after eight months, defendants' counsel now suddenly tells the court he has "no idea what was delivered to [the court], nor do[es he] have any idea how this [submission of thousands of documents [in five huge binders] occurred." (Marc A. Al Letter of November 10, 2019). Yet, counsel has now deposited a new set of documents totaling 570 pages for in camera inspection, which occupy just two three-ring binders. He asserts that he was not making a frivolously sweeping claim of privilege as to the 2,275 pages of documents. Instead, counsel says he meant to claim the privilege as to only two binders of documents covering only about 570 pages. While claims of inadvertence are not uncommon, they need not to be taken at face value. Union Switch & Signal Co. v. Louisville Frog, Switch & Signal Co., 73 F.2d 550, 552 (6th Cir. 1934) ; Ah Quin v. Cty. of Kauai Dep't of Transp. , 733 F.3d 267, 271 (9th Cir. 2013). The assertions made in the current motion is, I believe, inherently incredible, and no court is bound to credit an inherently incredible explanation. See Anderson v. Bessemer City , 470 U.S. 564, 575, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985) ("the story itself may be so ... implausible on its face that a reasonable factfinder would not credit it."). See also' Geigy Chemical Corp. v. Allen , 224 F.2d 110, 114, n.5 (5th Cir. 1955) ; Northern Trust Company v. Garman , 643 F.2d 1252, 1260 (7th Cir. 1980), cert. denied , 450 U.S. 910, 101 S.Ct. 1347, 67 L.Ed.2d 333 (1981) ; Kearney & Trecker Corp. v. Giddings & Lewis, Inc. , 452 F.2d 579, 595 (7th Cir. 1971).

Although defense counsel apologizes for the claimed "mistake" [Dkt. ##121, 124], counsel suggests that this was somehow a result of some confusion on the court's part regarding the difference between documents filed publicly and those filed in camera , or confusing exhibit numbers, or in the transfer of this motion and those documents from one judicial officer to another on two successive occasions. [Dkt. # 124, at 1-2]. In other words, the fault lay with defense counsel's recently filed "Motion for a Protective Order" [Dkt. #124]. Counsel seeks to explain what had been filed back in March:

Exhibits 1, 2, and 65 were publicly filed, respectively as Dockets 78-1, 78-2, and 78-3. The remaining exhibits were not publicly filed, and exhibits 5 through 62 were submitted for in camera review by Judge Durkin and transmitted to him in a box, which box was subsequently transferred to Judge Rowland and then to this Court's Chambers. Thus, the first document in the box was the first document that the Court was asked to review, which was Exhibit 5 to the Declaration of Marc Al.

Exhibit 5 consists of a 9-page lead document, AMTX-Urban 00000272-00000280 (an email chain), and the first attachment to that chain. Exhibits 6, 7, and 8 were further attachments to that email chain, as indicated in the Declaration of Marc Al (Docket 78) at paragraphs 14 through 17 and in the sixth column of the "chart" (Docket 85), and those exhibits should be reviewed in conjunction with the lead document, AMTX-Urban 00000272-00000280. Exhibits 9 and 10 were "stand-alone" documents, without a "lead" document. Exhibit 11 contained another lead document, to with an email (AMTX-Urban 0002321), with its first attachment (AMTX-Urban 0002322-0002327). Exhibit 12 (AMTX-Urban 0002328-0002371) was the second attachment to the email and should be reviewed in conjunction with the lead document, AMTX-Urban 0002321.

[Dkt. #124, at 1-2].

To disabuse counsel of any notion they might have that there was any confusion on the court's part over their submission, what defendants actually deposited for in camera review were, again, five large binders, each ranging from three to four inches thick: Exhibits 1-7 to Declaration of Marc A. Al, Exhibits 8-16 to Declaration of Marc A. Al, Exhibits 17-62 to Declaration of Marc A. Al, Exhibit 63 to Declaration of Marc A. Al, and Exhibits 64-65 to Declaration of Marc A. Al. Clearly, that's a world of difference from the two binders counsel have submitted now: 62 exhibits instead of 65; 570 pages instead of 2275. Documents can be mislaid, or misidentified, or misfiled, especially as complex litigation unfortunately may necessarily entail massive volumes of discovery. But, while even the best judges make mistakes, see, e.g., Dietz v. Bouldin , ––– U.S. ––––, 136 S. Ct. 1885, 1896, 195 L.Ed.2d 161 (2016) ("All judges make mistakes. (Even us.)"); In re City of Milwaukee , 788 F.3d 717, 722 (7th Cir. 2015), no one is going to confuse a stack of five binders over a foot and a half high, and containing thousands of pages with a couple of binders no more than six inches high containing some 500 pages.

With the new, slimmed-down submission comes the required privilege log, no longer referred to as a mere "chart" as defense counsel had been doing previously. See Fed.R.Civ.P. 26(b)(5)....