Contract analysis

I. PURPOSE This memorandum identifies qualified alternative counsel to whom the firm may refer Metropolitan Transit Development Corp. ("MTDC") following the Conflicts Committee's determination, rendered on May 14, 2024, that the firm's proposed engagement of MTDC (Matter No. 1031-00001) must be declined due to an unwaivable conflict of interest under Illinois Rules of Professional Conduct 1.7(a)(1) (direct adversity)

II. BACKGROUND ON THE MTDC MATTER A. The Client MTDC is a unit of local government and special-purpose transit authority organized and existing under the Illinois Local Mass Transit District Act (70 ILCS 3610/0.01 et seq.). MTDC is headquartered at 550 West Harrison Street, Suite 1400, Chicago, Illinois 60607. MTDC operates a multi-modal public transit system serving the greater Chicago metropolitan area, with an ann

III. CRITERIA FOR RECOMMENDED COUNSEL In evaluating potential alternative counsel for referral, this memorandum applied the following selection criteria, which reflect the specific demands of the MTDC matter and the characteristics necessary for effective representation of a governmental transit authority facing simultaneous regulatory enforcement and private class-action litigation:

1. Substantive Expertise. The recommended firm must possess demonstrated experience defending BIPA enforcement actions and BIPA class actions in Illinois state and federal courts. Given the dual nature of MTDC's exposure — both an Attorney General CID and investigation, and a putative class action in Cook County — the firm must have attorneys with proven track records in both regulatory enforcement defense and comple

2. Government-Client Experience. The recommended firm must have familiarity with the unique considerations that attend the representation of governmental entities. These include, but are not limited to, sovereign-immunity doctrines and their applicability (or inapplicability) to BIPA claims against governmental bodies; open-records and Freedom of Information Act obligations that may affect litigation strategy and doc

3. Capacity and Resources. The recommended firm must have sufficient bench depth to manage simultaneous defense of an Attorney General enforcement action and a putative class action involving approximately 12,400 class members, together with potential cross-claim and indemnification proceedings against Pinnacle Workforce Analytics, Inc., and possibly additional technology vendors. The engagement will require signific

4. No Conflicts of Interest. The recommended firm must have no conflicts of interest with MTDC, the Illinois Attorney General's Office, Kessler, Brandt & O'Neill LLP (class counsel), Pinnacle Workforce Analytics, Inc., or any other identified party to the matter. This criterion is of particular importance given that Calderwood & Harkness's own inability to undertake the engagement stems from a conflicts issue. It is

5. Geographic Proximity. The recommended firm should be based in Chicago or maintain a substantial Chicago office presence. The Cook County litigation, coordination with MTDC's headquarters, interaction with the Illinois Attorney General's office, and proximity to the Circuit Court of Cook County all require a meaningful on-the-ground presence in the Chicago metropolitan area. While some aspects of the engagement (pa

6. Rate Competitiveness. The recommended firm's billing rates should be within a range appropriate for a governmental transit authority operating within defined outside-counsel budget parameters. As noted above, MTDC's annual outside-counsel budget is approximately $14.8 million across all matters. While the BIPA matter is expected to represent a significant share of that budget during the engagement period, rate pro

IV. RECOMMENDED FIRM A: ALDRIDGE, PAULSON & CHO LLP A. Firm Overview Full Name: Aldridge, Paulson & Cho LLP ("APC") Address: 150 North Michigan Avenue, Suite 3500, Chicago, Illinois 60601 Entity Type: Illinois limited liability partnership Contact Partner: Victoria Aldridge, Partner and BIPA Practice Lead Telephone: (312) 555-8200 Email: valdridge@apclaw.com APC is a mid-size, Chicago-based litigation and regulatory

V. RECOMMENDED FIRM B: NORTHFIELD McKAY LLP A. Firm Overview Full Name: Northfield McKay LLP ("NM") Address: 311 South Wacker Drive, Suite 4800, Chicago, Illinois 60606 Entity Type: Illinois limited liability partnership Contact Partner: Damien Northfield, Partner and Data-Privacy Litigation Lead Telephone: (312) 555-6100 Email: dnorthfield@northfieldmckay.com NM is a Chicago-based litigation firm with approximately

VI. COMPARATIVE ASSESSMENT AND RECOMMENDATION Both APC and NM are well-qualified firms, and either would be capable of providing competent and effective representation to MTDC in connection with the matters described in this memorandum. Each firm possesses the substantive expertise, litigation capacity, and geographic presence necessary to manage the simultaneous defense of the Attorney General enforcement action and

VII. NEXT STEPS The following steps are recommended to complete the referral process:

1. Obtain Approval for Referral Letter. Obtain approval from Helen Drazkowski, General Counsel, and Lawrence Keating, Senior Partner and Chair of the Conflicts Committee, to transmit the referral letter to Terrence Whitfield at MTDC. This memorandum is submitted for their review and approval.

2. Transmit Referral Letter to MTDC. Following receipt of the necessary approvals, send the referral letter to Mr. Whitfield at MTDC providing contact information for and brief descriptions of both APC and NM. The target date for transmission of the referral letter is May 20, 2024. The referral letter will not disclose the identity of the existing client giving rise to the conflict, the nature of the conflict, or any

3. Send Courtesy Notifications to Recommended Firms. Send courtesy heads-up emails to Victoria Aldridge at APC and Damien Northfield at NM advising that MTDC may be in contact regarding a potential engagement. The courtesy notifications will include a high-level, non-privileged description of the matter — specifically, that MTDC is a governmental transit authority seeking representation in connection with BIPA-relate

4. Confirm Termination of Calderwood & Harkness's Obligations. Calderwood & Harkness's obligation to MTDC ends with the transmission of the referral letter. The firm should not provide any substantive legal advice to MTDC, should not participate in any discussions regarding the merits or strategy of the underlying matters, and should not share any confidential information regarding the existing client relationship th

5. Document Retention and Filing. File this memorandum and all related correspondence — including the declination notice to MTDC, the referral letter, the courtesy notifications to APC and NM, and any intake materials received from MTDC — in the firm's document management system under Matter No. 1031-00001. The file should be classified under Retention Category: Declined Engagements — Conflicts, which carries a seven

VIII. CONFIDENTIALITY NOTICE This memorandum is privileged and confidential attorney work product, prepared exclusively for internal use by Calderwood & Harkness LLP in connection with the Conflicts Committee's determination regarding Matter No. 1031-00001. It is protected by the attorney-client privilege, the attorney work-product doctrine, and all other applicable privileges and protections. This memorandum must no