In-House Counsel

Is Delaware decision a sensible 'chip in the attorney-client privilege'?

A former Wal-Mart lawyer who apparently sought an aggressive internal investigation into possible bribes at a corporate subsidiary in Mexico has said she can’t talk to investigators because of attorney-client privilege.

In an interview with her alumni magazine at Arizona State University, Maritza Munich said she is available to speak with investigators, but absent a waiver she can’t talk because of “attorney-client privilege constraints.”

The situation is changing, however, because of a recent Delaware Supreme Court decision, according to the New York Times DealBook blog. The July 23 decision (PDF) allows institutional investors to inspect documents protected by the attorney-client privilege to decide whether to pursue a claim against Wal-Mart directors for an alleged failure to properly supervise the Mexico operations.

The opinion cites a 2012 New York Times article, summarized by the lawyers representing the Indiana Electrical Workers Pension Trust Fund in the shareholder suit against Wal-Mart. According to allegations in the newspaper article, Munich worked with Willkie Farr & Gallagher to develop an investigatios plan, but Wal-Mart officials rejected it, opting instead for a more limited preliminary inquiry. Munich, who was general counsel of Wal-Mart International, is said to have resigned after control of the investigation was allegedly moved to a target.

The Delaware Supreme Court decision allowed inspection of protected documents under an exception to the privilege rule for shareholders.

DealBook calls the decision “yet another chip in the attorney-client privilege, a sensible one perhaps.” A press release (PDF) by Grant & Eisenhofer, which represented the investors, says the ruling “marks a key milestone in an ongoing shareholder challenge over Wal-Mart’s handling of the alleged bribery scheme.”

Wal-Mart told Dealbook that it is cooperating fully in an ongoing federal investigation.

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