Illinois State Court Rejects von Bulow Doctrine

November 9, 2011

Under what is called the von Bulow doctrine, most courts hold that a client’s disclosure of privileged communications outside a judicial setting does not trigger a subject matter waiver, and thus does not require the client to disclose additional privileged communications on the same topic. This limitation makes great sense, because such clients normally are not seeking some advantage through the disclosure.

However, not all courts follow the von Bulow doctrine. In Center Partners, Ltd. v. Growth Head GP, LLC, 2011 IL App. (1st) 110381 (Ill. App. Ct. 2011), the court analyzed the waiver impact of a company’s disclosure of privileged communications to another entity during 2002 real estate transaction negotiations. The minority owners of a related party later sued the company which had disclosed the privileged communications, and sought 1,500 privileged documents on the same subject. The court found that the 2002 disclosure triggered a subject matter waiver, concluding that “we find no reason to distinguish between a waiver occurring during the course of litigation or during a business negotiation.” Id. ΒΆ 16.

This would have been a more frightening case if, instead of limited partners in a related company, some third party had argued for a subject matter waiver. Still, some courts’ rejection of the common sense von Bulow doctrine raises the stakes for any company disclosing privileged communications during a business transaction.