Baxter International was sued in a second wave of multidistrict litigation filed by hemophiliacs who alleged that they contracted HIV or Hepatitis C from contaminated blood products. Baxter paid $15 million to settle the lawsuits and then filed its own lawsuit against Axa Versicherung and a German insurance company for indemnification.
During discovery, Axa demanded that the lawyers handling the insurance coverage matter for Baxter turn over its memos and e-mails that it delivered to it. Baxter blacked out or redacted the lawyer’s analysis of insurance coverage issues in the production material it did produce. In other words, Baxter decided to edit the discovery it produced, saying that Axa was not entitled to the legal analysis found in some of the e-mails and memos.
Axa’s motion to compel relied on the Illinois Supreme Court opinion in Waste Management v. International Surplus Lines Insurance Co., 144 Ill.2d 178 (1991), which ruled that attorney-client privilege did not apply to the insured’s communications with its counsel about the underlying tort litigation.