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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

INGENCO HOLDINGS, LLC, AND BIO ENERGY (WASHINGTON), LLC v. ACE AMERICAN INSURANCE COMPANY

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
1:15-cv-01139 Search Pacer
ACE Group party(s): 
Opposing Party: 
INGENCO HOLDINGS, LLC, a Delaware limited liability company, and BIO ENERGY (WASHINGTON), LLC
Court Type: 
Federal
US District Court: 
Northern District of Illinois
Date Filed: 
Feb 5 2015

Now comes ACE American Insurance Company (“ACE”), Defendant in the above
referenced matter pending in the United States District Court for the Western District of
Washington and its attorneys in that action and subpoenaed parties herein, Foran Glennon
Palandech Ponzi & Rudloff, PC and Michael L. Foran, and move under Fed. R. Civ. P.
45(d)(3)(A)(iii) & (iv) to quash subpoenas that Plaintiffs Bio Energy (Washington), LLC and
Ingenco Holdings, LLC served on ACE’s attorneys, Michael L. Foran and Foran Glennon
Palandech Ponzi & Rudloff PC.

I. INTRODUCTION
The above captioned case is an insurance coverage dispute pending in the United States
District Court for the Western District of Washington.  Michael L. Foran and the law firm of
Foran Glennon Palandech Ponzi & Rudloff PC represent ACE in that matter, along with the
Patrick M. Paulich and Matthew Munson of the Seattle based law firm Thorsrud Cane & Paulich,
LLP.   
ACE, Mr. Foran, and the Foran Glennon law firm bring this Motion to Quash subpoenas
directed to Mr. Foran and his law firm in the United States District Court for the Northern
District of Illinois because the subpoenas requested depositions and production of documents in
Chicago, Illinois. Because the Northern District of Illinois is the district where compliance with
the subpoenas is required it is also the forum in which a motion to quash those subpoenas must
be filed. See Fed. R. Civ. P. 45(c), (d)(3), and (f).
In the case pending in the Western District of Washington, Plaintiffs filed a Motion to
Compel ACE to Produce The Complete Unredacted Insurance Claim File on October 20, 2014
(“Plaintiffs’ Motion to Compel”).   A copy of that motion is attached hereto as Exhibit 1. ACE
opposed Plaintiffs’ Motion to Compel.  A copy of ACE’s opposition to the Motion is attached
hereto as Exhibit 2.  On December 8, 2014, the Court terminated Plaintiffs’ Motion to Compel,
instructing the parties to attempt to resolve or narrow their disputes and, if unable to do so, to
submit a joint motion pursuant to Local Rule 37 of the Local Rules of the United States District
Court for the Western District of Washington by January 30, 2015.  A copy of the Court’s
December 8, 2014 order is attached hereto as Exhibit 3.
Following the Court’s order, counsel for the parties engaged in extensive efforts to
resolve the discovery issues presented by Plaintiffs’ Motion to Compel.  The parties were able to
resolve issues pertaining to reserves and documents referencing other insureds.  ACE also
produced a significant number of additional documents in an effort to resolve Plaintiffs’ requests
for attorney-client and work product privileged material.  ACE’s privilege log was 10 pages long
at the time of Plaintiffs’ Motion to Compel. After the parties’ negotiations, the disputed
document log was reduced to 3 pages. Ultimately, however, counsel were unable to resolve all
disputed issues and the parties filed the joint motion with the Washington District Court on
January 30, 2015, a copy of which is attached hereto as Exhibit 4.  
In midst of the efforts to resolve the discovery disputes in the Washington case, counsel
for Plaintiffs advised ACE’s counsel that Plaintiffs would be serving subpoenas on Michael
Foran, individually, and the Foran Glennon firm.  On January 20, 2015 ACE’s counsel wrote to
counsel for Plaintiffs advising that the proposed subpoenas served no legitimate purpose and that
the documents sought, billing records and a letter of engagement were either in ACE’s
possession and the subject of the privilege dispute ongoing in the Washington case (the Foran
Glennon invoices for legal services) or simply did not exist (the engagement letter).  A copy of
the January 20, 2015 letter is attached hereto as Exhibit 5. Plaintiffs nevertheless proceeded to
serve the subpoenas on Mr. Foran and the Foran Glennon law firm.  The subpoena to Foran
Glennon was served on Tracey Jordan, an attorney with Foran Glennon that is also representing
ACE in the Washington case, on January 22, 2015 while Ms. Jordan was in Virginia for
depositions of Ingenco’s executives.  The subpoena to Mr. Foran was left with the receptionist at
Foran Glennon’s office in Chicago on January 23, 2015.  Copies of the subpoenas are attached
hereto as Exhibits 6 and 7.
The subpoena to Mr. Foran directed him to appear for deposition on February 6, 2015 at
his own office in Chicago, Illinois and to bring with him documents including copies of all
invoices, billing statements, and/or similar billing documents that either Mr. Foran personally or
Foran Glennon submitted to ACE, Starr Technical Risk Agency, Inc., and/or Charles Taylor
Adjusting Ltd. during the period from May 1, 2011 to July 11, 2013 in connection with the
insurance claim that Ingenco submitted to ACE in May of 2011, as well as copies of all
agreements and/or engagement letters between the same parties from the same time period
related to Ingenco’s claim.  That claim is the subject of the litigation pending in the United States
District Court for the Western District of Washington.  
In addition to being the subject of both Plaintiffs’ Motion to Compel and the LR 37 joint
motion filed in the Washington District Court, the discovery sought in the subpoenas to Mr.
Foran and to the Foran Glennon law firm are the subject of a Fed. R. Civ. P. 30(b)(6) notice of
deposition for ACE in the Washington District Court matter served on January 13, 2015.  A copy
of that notice is attached hereto as Exhibit 8. ACE objected to the 30(b)(6) notice on January 14,
2015.  A copy of the objection ACE served is attached as Exhibit 9. Plaintiffs have not sought a
ruling from the Washington District Court regarding ACE’s objections to the Fed. R. Civ. P.
30(b)(6) notice. Instead, Plaintiffs served the subpoenas to Mr. Foran and the Foran Glennon law
firm seeking much of the same information Plaintiffs sought to obtain from ACE through the Fed
R. Civ. P. 30(b)(6) deposition notice served on ACE on January 13, 2015.

II. THE SUBPEONAS SERVED ON MICHAEL FORAN INDIVIDUALLY
AND ON THE FORAN GLENNON LAW FIRM MUST BE QUASHED
Parties may obtain discovery regarding any nonprivileged matter that is relevant to any
party’s claim or defense. Fed. R. Civ. P. 26(b)(1). By the same token, parties may not obtain
discovery regarding privileged matters or any matter that is not relevant to a claim or defense. Id.   
Pursuant to Fed. R. Civ. P. 45(d)(3)(A) a court must quash or modify a subpoena to a
non-party that “requires disclosure of privileged or other protected matter” or that “subjects a
person to undue burden.” Id; Pac. Century Int’l, Ltd. v. Does 1-37, 282 F.R.D. 189, 193 (N.D. Ill.
2012). A subpoena may also be quashed or limited “when ‘the discovery sought is unreasonably
cumulative or duplicative, or can be obtained from some other source that is more convenient,
less burdensome, or less expensive” or when the burden of the proposed discovery outweighs its
likely benefit.” Ameritox, Ltd. v. Millenium Laboratories, Inc., 2012 WL 6568226, at *2 (N.D.
Case: 1:15-cv-01139 Document #: 1 Filed: 02/05/15 Page 5 of 9 PageID #:5
Ill. Dec. 14, 2012) (citing Fed. R. Civ. P. 26(b)(2)(C)). By way of illustration, if the information
sought by a subpoena “would not assist in the exploration of a material issue in the case” then it
should be quashed. Id. (citation omitted).
Moreover, as non-parties, Mr. Foran and the Foran Glennon law firm are entitled to
greater protection against the potential abuse of the discovery process than are parties to
litigation. See Thayer v. Chiczewski, 257 F.R.D. 466, 469 (N.D. Ill. 2009). That protection is
even greater when a party seeks discovery through a subpoena directed to opposing counsel:
“Normally, the party seeking to modify or quash a subpoena bears the burden of
showing an undue burden, and that burden of proof is particularly great when the
party seeks to prevent a deposition entirely rather than merely modify
it…However, the burden shifts when the potential deponent is opposing counsel.
Depositions of opposing counsel are generally disfavored in federal courts.
Hickman v. Taylor, 329 U.S. 495, 513, 67 S.Ct. 385, 91 L.Ed. 451 (1947);
Jennings v. Family Mgmt., 201 F.R.D. 272, 276–77 (D.D.C.2001); Shelton v. Am.
Motors Corp., 805 F.2d 1323, 1327 (8th Cir.1986); Theriot v. Parish of Jefferson,
185 F.3d 477, 491 (5th Cir. 1999). Thus, when seeking to depose opposing
counsel, the cards are stacked against the requesting party from the outset and
they must prove the deposition's necessity. Jennings, 201 F.R.D. at 277.”
Guantanamera Cigar Co. v. Corporacion Habanos S.A., 263 F.R.D. 1, 8 (D.D.C. 2009).
The prevailing authority on this issue is Shelton v. American Motors Corp., 805 F.2d
1323 (8th Cir. 1986), which concluded that a party seeking to depose opposing counsel must
show that: “(1) no other means exist to obtain the information than to depose opposing counsel;
(2) the information sought is relevant and nonprivileged; and (3) the information is crucial to the
preparation of the case.” Id. at 1327 (citation omitted).
Shelton and its tripartite test is “generally regarded as the leading case on attorney
depositions,” FMC Technologies, Inc. v. Edwards, 2007 WL 836709, at *3 (W.D. Wash. March
15, 2007) (quotation omitted), and is followed by courts throughout the country, including courts
in both Washington and Illinois.
See id.;
Miyano Machinery USA, Inc. v. MiyanoHitec
Machinery, Inc., 257 F.R.D. 456, 464 (N.D. Ill. 2008) (applying Shelton and acknowledging that
while the Seventh Circuit has not expressly adopted it, “numerous courts in this district have
followed the Shelton approach.”).
 
III. PLAINTIFFS HAVE FAILED TO MEET SHELTON’S REQUIREMENTS
Shelton requires that Plaintiffs demonstrate that no means other than the subpoenas
served on Mr. Foran and the Foran Glennon law firm exist to obtain the information sought by
the subpoenas.  Plaintiffs cannot credibly make such an argument because the same discovery is
sought from ACE and is the subject of motions pending before the Court hearing the substance
of the dispute in the Western District of Washington. There is no legitimate reason to burden
ACE’s counsel and another court with these issues. Since these subpoenas serve no legitimate
purpose they must be quashed pursuant to 45(d)(3)(A)(iv).
The discovery sought from Mr. Foran and the Foran Glennon law firm is also protected
by the attorney-client privilege and therefore fails the second prong of the Shelton test. Under
Illinois law “legal advice of any kind is sought from a professional legal advisor in his capacity
as such, the communications relating to that purpose, made in confidence by the client, are
protected from disclosure.” Illinois Emasco Ins. Co. v. Nationwide Mut. Ins. Co., 393 Ill. App. 3d
782, 786, 913 N.E.2d 1102, 1105 (2009); Fischel & Kahn, Ltd. v. van Straaten Gallery, Inc., 189
Ill. 2d 579, 584, 727 N.E.2d 240, 243 (2000).
While not categorically protected by the attorney-client privilege, an attorney’s “bills,
ledgers, statements, and time records which also reveal the motive of the client in seeking
  While there are instances where courts in the Northern District of Illinois have not applied
Shelton, see, e.g. Quad.Inc., v. ALN Associates, Inc., 132 F.R.D. 492, 494 (N.D. Ill. 1990),
“the circuit courts considering this issue seem to hold generally that a deposition of opposing
counsel should not proceed unless there is a strong showing of need and evidence that all
other discovery avenues have been exhausted.” Howard v. Securitas Sec. Services, USA Inc.,
630 F. Supp. 2d 905, 910-911 (N.D. Ill. 2009).
representation, litigation strategy, or the specific nature of the services provided, such as
researching particular areas of law, fall within the privilege.” Clarke v. Am. Commerce Nat’l
Bank, 974 F.2d 127, 129 (9th Cir. 1992). Similarly, Illinois recognizes that “billing records may
contain explanations for legal fees and may indicate the type of work done or matters discussed
between the attorney and client. As such, they could reveal the substance of confidential
attorney-client discussions, and be subject to valid claims of attorney-client privilege.” People
ex. rel. Ulrich v. Stukel, 294 Ill. App. 3d 193, 201 (1997). Because Foran Glennon’s time sheets
and billing statements to its client contain such descriptions of confidential matters they are
protected by the attorney-client privilege.
In addition, Plaintiffs ignore hornbook law providing that “the attorney-client privilege
belongs to the client, rather than the attorney” and therefore “only the client may waive the
privilege.” Center Partners, Ltd. v. Growth Head GP, LLC, 2012 IL 113107, ¶ 35, 981 N.E.2d
345, 356 (Ill. 2012) (emphasis added). “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.” Id. Because
ACE is asserting that the documents are privileged, neither Mr. Foran nor the Foran Glennon law
firm can waive that privilege.     
Third and finally, it cannot seriously be said that there is any “crucial” need to depose
ACE’s counsel. The information Plaintiffs seek to obtain from counsel is available, if at all,
through ACE and is presently the subject of a motion pending in the Western District of
Washington. Given ACE’s objection to the discovery sought through the subpoenas to its
attorneys, neither Mr. Foran nor the Foran Glennon law firm could waive that privilege over
ACE’s objection. There is simply no need to depose ACE’s attorney, let alone a “crucial” need,
to obtain information that the deponent would not be authorized to disclose.
Case: 1:15-cv-01139 Document #: 1 Filed: 02/05/15 Page 8 of 9 PageID #:8
WHEREFORE, ACE, together with ACE’s counsel Michael L. Foran and Foran Glennon
Palandech Ponzi & Rudloff, P.C., respectfully requests this Honorable Court, pursuant to Fed. R.
Civ. P. 45(d)(3)(A)(iii) & (iv), enter an order quashing the subpoenas issued by Plaintiffs and
served on Foran Glennon Palandech Ponzi & Rudloff, PC, and its shareholder Michael Foran,
and for such other and further relief as this Court may deem just.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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