In Center Partners, Ltd. v. Growth Head GP, LLC, 981 N.E.2d 345 (Ill. 2012) (Nos. 113107, 113128), the Illinois Supreme Court held that an extrajudicial disclosure of attorney-client privileged communications does not result in subject matter waiver.  In this case, investors in a limited partnership communicated with each other and with each others’ attorneys prior to the transaction regarding the structure of the investment.  Plaintiff, a limited partner, alleged that the structure of the transaction breached the partnership’s duties to minority limited partners, and sought discovery of all communications relating to the transaction.  Plaintiff argued that the defendants’ pre-transaction disclosures to each other resulted in subject matter waiver.  The Illinois Supreme Court denied that request, citing In re von Bulow, 828 F.2d 94 (2d Cir. 1987), and held that subject matter waiver does not apply to disclosures made in an extrajudicial context when those disclosures are not thereafter used by the client to gain a tactical advantage in litigation.  The court explained that this approach better serves the subject matter waiver doctrine, because it prevents parties from strategically and selectively disclosing communications with their attorneys as a sword, and then invoking the privilege as a shield to other communications so as to gain a tactical litigation advantage, but does not result in broad waiver where no litigation advantage has been sought.  Citing Hewlett-Packard Co. v. Bausch & Lomb Inc., 115 F.R.D. 308, 311 (N.D. Cal. 1987), the court stated that this is also good policy.  If disclosures during negotiations were deemed to result in subject matter waiver, it would create a perverse incentive for parties to leave their attorneys out of commercial negotiations “for fear that their inclusion would later force wholesale disclosure of confidential information.