London Luxury LLC v. Walmart Inc.

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IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION
LONDON LUXURY, LLC 	PLAINTIFF/COUNTER-DEFENDANT
V. 	CASE NO. 5:22-CV-5059
WALMART, INC. 	DEFENDANT/COUNTER-PLAINTIFF
ORDER REGARDING GLOBAL INVESTIGATIONS WORK PRODUCT
Before the Court are a series of related discovery disputes. In August of 2023
Walmart notified London Luxury that it was asserting privilege over a host of documents
that were otherwise responsive to London Luxury’s discovery requests. Walmart provided
a privilege log identifying the documents it was withholding. London Luxury protested.
After conferring, it was clear the parties were at an impasse. 	Per the Court’s Case
Management Order, the parties brought their dispute to the Court’s attention in the form
of letters and legal memorandum (which the Court will later mark as Court’s exhibits).
Walmart produced the disputed documents for the Court’s in camera inspection.
In this attorney-client and work product privilege dispute, Walmart is the client who
owns the privilege. Walmart is asserting privilege over communications that its business
employees had with its attorney employees. 	Walmart is also asserting privilege over
investigative 	materials 	prepared 	by 	its 	attorney-investigator 	employees. 	The
communications and work product at issue relate to the nitrile glove transactions that are
at the heart of the parties’ claims and defenses. For factual context, the Court incorporates
by reference and refers the reader to the factual background section of its Summary
Judgment Opinion and Order filed on March 8th. Doc. 399.
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This Order is the second of several rulings on these privilege issues. 	See Doc.
398 for the first Order. This Order categorically addresses investigative reports and
employee interview summaries prepared by Walmart’s in-house internal investigations
team known as Walmart “Global Investigations.”1 	The work of this unit is directed by
attorneys who are employed by Walmart. 	After first reviewing the legal standard, the
Court will then discuss whether the investigative reports may be withheld as attorney-
client communications and/or attorney work-product.
Under Federal Rule of Evidence 501, when parties are litigating state law claims,
state law defines the elements of attorney-client privilege. Arkansas Rule of Evidence 502
provides the basic rule in Arkansas:
A client has a privilege to refuse to disclose and to prevent any other
person from disclosing confidential communications made for the purpose
of facilitating the rendition of professional legal services to the client (1)
between himself or his representative and his lawyer or his lawyer's
representative, (2) between his lawyer and the lawyer's representative, (3)
by him or his representative or his lawyer or a representative of the lawyer
to a lawyer or a representative of a lawyer representing another party in a
pending action and concerning a matter of common interest therein, (4)
between 	representatives 	of 	the 	client 	or 	between 	the 	client 	and 	a
representative of the client, or (5) among lawyers and their representatives
representing the same client.
1. In a few instances, the documents considered here also include benign cover emails
written to-or-from Walmart in-house attorneys and to-or-from other Walmart employees
advising 	of 	matters 	pertaining 	to 	the 	investigation 	being 	conducted 	by 	Global
Investigations. Specifically, this is the situation with WM_Priv Documents ending in bates-
stamp 092,305,306, and 308.
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Further, when evaluating whether a client’s employee’s communications with an
attorney should be shielded from production due to attorney-client privilege, the following
five factors are considered:
(1) whether the communication was made for the purpose of securing legal
advice; (2) whether the employee making the communication did so at the
direction of his corporate superior; (3) whether the superior made the
request so that the corporation could secure legal advice; (4) whether the
subject matter of the communication is within the scope of the employee's
corporate duties; and (5) whether the communication is not disseminated
beyond those persons who, because of the corporate structure, need to
know its contents.
Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 609 (8th Cir. 1977).
Finally, Federal Rule of Civil Procedure 26(b)(3) speaks to documents that may be
withheld when prepared during or in anticipation of litigation.
(A) Documents 	and 	Tangible 	Things. Ordinarily, 	a 	party 	may 	not 	discover
documents and tangible things that are prepared in anticipation of litigation or for
trial by or for another party or its representative (including the other party's
attorney, consultant, surety, indemnitor, insurer, or agent). But, subject to Rule
26(b)(4), those materials may be discovered if:
(i) they are otherwise discoverable under Rule 26(b)(1); and
(ii) the party shows that it has substantial need for the materials to prepare
its case and cannot, without undue hardship, obtain their substantial
equivalent by other means.
(B) Protection Against Disclosure. If the court orders discovery of those materials,
it must protect against disclosure of the mental impressions, conclusions, opinions,
or legal theories of a party's attorney or other representative concerning the
litigation.
(C) Previous Statement. Any party or other person may, on request and without
the required showing, obtain the person's own previous statement about the action
or its subject matter. If the request is refused, the person may move for a court
order, and Rule 37(a)(5) applies to the award of expenses. A previous statement
is either:
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(i) a written statement that the person has signed or otherwise adopted or
approved; or
(ii) 	a 	contemporaneous 	stenographic, 	mechanical, 	electrical, 	or 	other
recording—or a transcription of it—that recites substantially verbatim the
person's oral statement
The Court now applies these legal standards to multiple documents generated by
Walmart’s Global Investigations team, which the Court has reviewed in camera. 	A listing
of such documents is attached to this order as Exhibit 1.
For added context specific to the work-product privilege, it should be noted that by
November 12, 2021, it was clear that Walmart’s relationship with London Luxury was
coming to an ugly end. 	See Doc. 399, pp. 31-33. 	London Luxury filed suit in New York
state court on January 5, 2022. 	Walmart removed the matter to federal court on January
24, 2022. 	Based on the Court’s review of withheld documents, Global Investigation’s
attorneys and investigators began interviewing witnesses on November 22, 2021, and
continued to do so through January 31, 2022. Electronic stored documents (ESI) were
collected and reviewed from December 2, 2021, through February 9, 2022. 	The first
working draft of the Global Investigations report is dated February 18, 2022. 	The report
was then revised a few times before being finalized on April 18, 2022. 	A further revised
report is dated June 7, 2022. The Court will refer to these reports collectively as the ”GI
Report.”
The GI Report is an executive summary of the investigator’s findings about how
Walmart came to do business with London Luxury and a timeline of the subsequent series
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of events. The Heypex transaction is also discussed. The GI Report references attached
documents 	and 	communications 	that 	the 	investigators 	reviewed, 	including 	those
produced by the witnesses they interviewed. 	However, (except for bates-stamped
documents 092, 305, 306, and 308) those ESI materials were not produced for in camera
review. 2 Along the way, the GI Report (as revised and supplemented) contains the
attorney-investigator’s mental impressions, opinions, and conclusions.
Attached to the GI Report are summaries of interviews that were conducted with
Walmart employees (including in-house attorney employees) with knowledge of the nitrile
glove transactions. To be clear, the summaries were written by the attorney-investigators.
To the Court’s knowledge, the interviews were not recorded.
Bates-stamped document 356 are investigator notes from a Zoom videoconference
with Marc Jason and Moshe Abeshera on December 14, 2021. 	The stated purpose of
that interview was to “determine[ ] where the gloves were manufactured and where the
sample gloves were manufactured that were used for previously authorized testing.”
London Luxury contends that the internal investigation by Global Investigations was
not in anticipation of litigation, but rather “for a business purpose to avoid repeating the
business mistakes that its businesspersons made, and it is clear would have been
undertaken regardless of the prospect of litigation with London Luxury.” Doc. 210, p. 13.
2 . The Court’s understanding would be that Walmart is not asserting work-product
privilege over the ESI that Global Investigations identified during its investigation. And
since those documents were not attached to the in camera production, the Court does
not address in this Order whether they might be protected by the attorney-client privilege.
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As far as the argument goes, the Court agrees that Walmart would have wanted to
know how such a large transaction escaped the scrutiny of higher-level corporate
executives. The Court is nevertheless convinced by its in camera review that the GI
Report was prepared in anticipation of litigation and constitutes attorney work product
protected Fed. R. Civ. Proc. 26(b)(3)(A). 	The timeline shows that the investigation began
when a $500 million 3 transaction was in the final stages of failing. The investigation was
still on-going when London Luxury filed suit. 	The investigation was led by Walmart’s
attorney-investigators. The GI Report is replete with attorney mental impressions,
conclusions, and opinions.
Even if the investigation had roots in auditing business control failures, as London
Luxury believes, the GI Report itself––the work-product at issue here––was very clearly
prepared in anticipation of litigation. 	Indeed, the GI Report was completed, revised, and
further supplemented after litigation had commenced. 	For these reasons, Walmart is not
required to produce any of the documents listed on attached Exhibit 1.4
3. 72 million boxes of nitrile gloves at $7.40 per box = $532,800,000.
4. The Court does have some reservations about bates-stamped document 356 which
contains interview notes and “takeaways” from a December 14, 2021 interview of London
Luxury’s executives, Marc Jason and Moshe Abeshera. To the extent this Zoom interview
was recorded (which is not mentioned in the summary), Walmart must produce a copy of
the recording. Fed. R. Civ. Proc. 26(b)(3)(C). And to the extent Walmart intends to
impeach Mr. Jason’s or Mr. Abeshera’s testimony with prior inconsistent statements or
admissions from this interview, Walmart must further explain to the Court why the
summary should not be produced.
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IT IS SO ORDERED on this 10 th day of March, 2024.
TIMOTHY L. BROOKS
UNITED STATES DISTRICT JUDGE
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