Wal-Mart Says ‘Extraordinary Effort' Made To Comply With Supreme Court §220 Order

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By Susan Bokermann

Feb. 13 — Wal-Mart Stores Inc. asserts in its brief in opposition to a motion for contempt that the punitive sanctions sought in the closely watched §220 action are “unprecedented” given the company's “extraordinary effort” to comply with a Delaware Supreme Court production order.

In a brief partially unsealed Feb. 13, Wal-Mart addresses the Independent Electrical Workers Pension Trust Fund's three main concerns regarding its to-date production of documents related to what directors may have known about claims that officials handed out bribes to facilitate Mexican real estate deals.

Parties for both sides did not immediately respond to requests for comment.

Baseless Concerns

In its response brief, Wal-Mart states that because IBEW disregarded the court's prior order requiring the parties to meet and confer about any concerns they have regarding redactions, IBEW has waived its right to complain about the redactions the company has made in its productions.

Wal-Mart claims that IBEW's “concerns are baseless,” and that IBEW made no attempt to contact Wal-Mart during the six weeks between Wal-Mart's final production of documents and IBEW's motion for civil contempt, filed Dec. 11.

Wal-Mart further asserts that if there were any responsive documents that the company did not produce, it was the “product of human error, not bad faith.” Wal-Mart further contends that in the event any documents were incorrectly not produced, it is re-reviewing all of the documents to which IBEW is entitled under the July 2014 Delaware Supreme Court order.

Wal-Mart asserts that its decision and willingness to undertake this re-review, without instruction from the court, is evidence of its good faith and “weighs heavily against a finding of contempt.”

Furthermore, Wal-Mart defends as proper its use of contract attorneys, supervised by outside counsel, to assist in the first-level review of documents. Wal-Mart states that courts have recognized the use of supervised contract attorneys, “particularly in large-scale complex document reviews” such as this one. Wal-Mart also points out that its re-review is being conducted without contract attorneys and thus IBEW's complaint is moot.

Sanctions Request

On Dec. 8, Wal-Mart certified to the chancery court that it had fully complied with the Delaware Supreme Court's July 2014 production order.

However, three days later, IBEW, filed a contempt motion claiming that the retailer failed to fully comply with the supreme court order. IBEW asked the court to order the megastore to pay a $1 million fine and $10,000 per day until it complies with the production order.

Subsequently, a dispute arose regarding a proposed scheduling order, and as a result Chancellor Andre G. Bouchard sent a Jan. 30 letter directing Wal-Mart to file a “substantive response” setting forth its opposition to the contempt motion.

To contact the reporter on this story: Susan Bokermann in Washington at sbokermann@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com

Wal-Mart's reply brief is available at: http://www.bloomberglaw.com/public/document/CONS_W_CA_7726_CS_CONF_ORD_ON_DISC_Indiana_Electrical_Workers_Pen/8.