Attorney-client privilege confers powerful protection over confidential corporate documents. But according to arulingThursday by Chancellor Leo Strine of Delaware Chancery Court, once documents have become public – even if by dubious means – they can be used in litigation.
In May of 2012, shareholder lawyer Stuart Grant of Grant & Eisenhofer opened a thick packet he’d received in the mail. On behalf of clients, Grant had recently sent a demand for information to Wal-Mart, following up on The New York Times’ stunning revelations about the company’s attempt to shut down an internal investigation of alleged bribery of Mexican officials. Wal-Mart lawyers had said they would respond to Grant’s books-and-records demand, and Grant told me in an interview that he at first thought the envelope contained that response. Grant quickly realized that the mailing was not, in fact, official corporate correspondence: He had been sent a 190-page trove of confidential Wal-Mart documents.
“Immediately our reaction was, ‘What are our obligations?’ We did research, we did everything we needed to do,” Grant said. After determining that the return address on the packet was a fake, Grant notified Wal-Mart that he’d received the documents on June 1, 2012.
For Wal-Mart, Grant’s letter must have produced a familiar sinking feeling. Since early 2007, the company has been trying to stopper leaks of information. Wal-Mart believes the leaks have all come from Bruce Gabbard, a former computer security tech who was fired for monitoring phone conversations between Wal-Mart employees and The New York Times. The company asserts that Gabbard took terabytes of documents with him when he departed and has disseminated that confidential information despite court orders in Arkansas and Oklahoma that forbid him from doing so. (As the Times reported in 2011, Gabbard has not been prosecuted for his supposed theft, though an Arkansas judge has ordered him to be arrested for questioning in Wal-Mart’s civil suit if he ever returns to the company’s home state.)
Nothing has ever tied Gabbard specifically to the anonymous mailing Stuart Grant received. Nevertheless, the company insisted that he hand over the documents. Grant, who refers to his anonymous benefactor as a whistle-blower, sent copies but retained the originals. “They said, ‘We have an order restraining the guy who sent the documents to you,’” Grant told me. “We said, ‘Show us where these documents are related.’”