GMO Gamecenter USA, Inc. v. Whinstone US, Inc.

Background

This breach-of-contract case involved cross-motions to compel production of documents that the parties withheld as privileged. The court had previously granted in part and denied in part GMO’s motion concerning documents withheld by Whinstone. In this opinion, the court addressed Whinstone’s cross-motion challenging GMO’s privilege assertions.

GMO had served a privilege log containing more than 11,000 entries and later supplemented and revised it. GMO also reclaimed more than 1,200 documents that it had previously produced, asserting that they were privileged. Whinstone challenged many of GMO’s privilege assertions. After Whinstone filed the motion, GMO produced more than half of the challenged documents, and the court ordered selected remaining documents for private judicial review.

Issues and Legal Standards

Whinstone raised three principal challenges. First, it argued that GMO had not shown that some documents were protected because they were not connected to an attorney, identified only an “in-house legal team,” or merely copied attorneys on communications. Second, it argued that GMO had not shown that some documents were prepared because of anticipated litigation and therefore qualified for work-product protection. Third, it argued that GMO waived privilege by reclaiming documents after March 10, 2025.

The court explained that whether a privilege applies to a particular document is generally a factual question. It rejected the argument that a privilege log must always identify a specific attorney by name or that an attorney must be a participant in the communication. The court also applied the standard that a protective order does not prevent waiver if the producing party acted “completely recklessly,” meaning it showed no regard for preserving confidentiality. Producing a large number of documents alone was not enough to establish that level of recklessness.

Rulings

The court concluded that GMO’s privilege descriptions generally provided enough factual information to evaluate the claims. The court nevertheless determined, document by document, that some materials were protected and could be withheld, some materials had to be produced in full, and some could be produced only after privileged portions were redacted. The court’s specific determinations appear in Appendices A and B.

For GMO’s documents, the court found attorney-client privilege and/or work-product protection for materials including litigation strategy, draft pleadings, discovery-collection communications, settlement-conference strategy, draft contract advice, and communications with counsel. The court found that other documents contained business information, factual material, transmittal messages, or no legal advice and therefore ordered them produced in full or in part. For one expert-related communication, the court upheld work-product protection for the time being but stated that production could later be required if GMO’s expert relied on the information in forming an opinion.

For the documents submitted concerning Whinstone, the court similarly allowed some documents to be withheld, required some to be produced in full, and required redaction and partial production for others. The court found that several documents did not contain requested or conveyed legal advice. It also found that GMO had not established a sufficient factual basis to protect one document as privileged and ordered that document produced in full.

The court rejected Whinstone’s waiver argument concerning GMO’s clawback notices. Although GMO made errors in its productions and privilege logs, the court found that GMO had conducted extensive and sophisticated privilege reviews and had not acted completely recklessly. The court also held that GMO did not waive privilege merely because some documents reclaimed on March 14 were not included in the March 10 revised log. The court stated that GMO remained obligated to update its privilege log.

Disposition

The court granted in part and denied in part Whinstone’s motion. GMO was ordered to produce the documents identified in Appendices A and B within two weeks and to serve a revised privilege log within twenty-one days. The clerk was directed to terminate the motion.