Wal-Mart Stores, Inc. v. Indiana Electrical Workers Pension Trust Fund IBEW, Del. Supr., No. 614, 2013 (July 23, 2014).
This Delaware Supreme Court en banc opinion requires Wal-Mart to produce documents about an alleged bribery scandal involving their Mexican subsidiary. Even though the initial focus of this case was on DGCL Section 220 and what documents a stockholder of Wal-Mart could demand, the most noteworthy aspect of this decision, about which we will write more later, is that for the first time the Delaware Supreme Court directly addressed and recognized an exception to the rule that documents protected by the attorney/client privilege do not need to be produced. It is referred to as the Garner exception after a case of that name from the Fifth Circuit.
In this case, the Delaware high court said that the well-established attorney/client privilege does not apply to bar production, or is subject to an exception, if a stockholder needs the otherwise inaccessible information to sue a director for breach of fiduciary duty. A similar analysis was applied to documents otherwise protected by the work-product doctrine. This opinion will have lasting importance for corporate and commercial litigators regarding this topic.
Frank Reynolds of Thomson Reuters has published an insightful article on the case that provides a helpful overview.
Michael Scher of the FCPA Blog has written extensively on the background of this case, and has provided commentary on this decision as well.
UPDATE: The venerable Professor Bainbridge observes a sampling of the commentary on this case thus far, and wonders what all the fuss is about. It may prompt me to reconsider the need to supplement this short post.
Postscript: Yours truly published an article on this case for Directorship, a publication of the National Association of Corporate Directors. That article focuses on the attorney/client privilege aspects of this decision.