(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Alison Frankel

April 10 (Reuters) - A former Walmart supplier won a

$101 million verdict on Tuesday from an Arkansas federal jury

that found Walmart breached its agreement to buy millions of

boxes of nitrile gloves in the first 18 months of the COVID

pandemic.

London Luxury, which was crippled when Walmart canceled the

deal to buy 72 million boxes of gloves, persuaded jurors that

Walmart ditched the agreement not because of problems on London

Luxury's end but because of the collapse of Walmart's ( WMT ) plan to

resell the gloves to a medical equipment supplier at a hefty

profit.

And according to London Luxury's lawyers at Holwell Shuster

& Goldberg, Walmart can blame its own privileged

documents, in part, for helping them make their client's case.

"Over and over, the documents contradicted what Walmart

witnesses said," said London Luxury counsel Brendon DeMay in an

interview on Wednesday. "It was part of a pattern."

Before I explain how Holwell Shuster was able to pierce

Walmart's ( WMT ) privilege, I should note that Walmart prevailed on its

counterclaim that London Luxury's CEO persuaded the Walmart

executive who was its primary liaison with the company to breach

his duty to the company with the promise of a future business

relationship.

The jury awarded Walmart $350,000 in damages based on

evidence that London Luxury's CEO was plotting with his Walmart

liaison to open their own nitrile glove factory in Florida.

A Walmart spokesperson said the company does not believe the

jury's breach-of-contract verdict is supported by the evidence

that emerged at trial and is weighing its post-trial options.

Walmart also reiterated that the real story is the alleged

scheme between London Luxury and its since-fired employee. At

trial, Walmart asserted that London Luxury wooed the employee

with a swanky trip to Miami and the promise of a future

partnership.

"The jury's findings that London Luxury engaged in tortious

conduct vindicate what Walmart has argued from day one: This

case is about allegations of London Luxury's unethical

behavior," the Walmart statement said. "We expect our suppliers

to live up to the highest ethical standards, and we look forward

to continuing to make our case in court that behavior like

London Luxury's is unacceptable."

Walmart was represented by Jones Day, which did not respond

to my query.

So how did Holwell Shuster get its hands on Walmart

documents?

Earlier this year, as U.S. District Judge Timothy Brooks of

Fayetteville weighed summary judgment motions, Walmart told

Holwell Shuster that it intended to call one of its in-house

lawyers to testify about the initial February 2021 agreement

between Walmart and London Luxury. That agreement was a key

point of dispute: Walmart insisted that the employee who signed

the deal had essentially gone rogue and entered into the

agreement without authorization.

Walmart said the lawyer would offer only limited testimony to

rebut London Luxury's assertion that she had reviewed and

approved the agreement. The company said it was waiving

privilege for her testimony, but only over the limited time

period before the execution of the agreement.

Holwell Shuster contested the proposed limited waiver. A

week before the in-house lawyer's deposition, the firm asked

Brooks to order Walmart to produce an array of privileged

documents based on Walmart's ( WMT ) plan to call the lawyer as a trial

witness.

Walmart protested, but in a March 8 opinion, Brooks ruled

that Walmart was required to turn over all of the lawyer's

documents that it had designated as privileged, except for those

dated after the start of the litigation and those related to

Walmart's ( WMT ) internal investigation of the London Luxury deal.

And that wasn't all. The judge also ruled that Walmart could

not claw back inadvertently produced documents in which Walmart

employees discussed legal advice from another Walmart in-house

lawyer. This lawyer had concluded that the February agreement

was enforceable. Walmart waived privilege about his assessment,

Brooks said, when non-legal employees repeated and discussed his

advice.

In addition, Brooks said that Walmart had implicitly waived

privilege over documents from a third in-house lawyer who had

advised the company on its prospective deal with the medical

equipment outfit slated to buy the gloves that London Luxury

supplied to Walmart. The judge ordered Walmart to turn over all

of her pre-suit documents (except for those related to the

internal investigation) to Holwell Shuster.

Brooks' order came too late for Holwell partner Priyanka

Timblo to get hold of Walmart's ( WMT ) privileged documents before her

deposition of the in-house lawyer on the company's witness list.

But at trial, Timblo said, she was able to use privileged

materials to undermine the lawyer's contention that she hadn't

reviewed the February agreement and would have sounded an alarm

if she had.

"The documents showed she had not been straight with us in

her deposition," Timblo said.

In another example of how privileged documents affected the

trial, DeMay said he was questioning a Walmart witness who

denied that the company canceled its deal with London Luxury

because of the collapse of its plan to resell the gloves to the

medical equipment company. DeMay said he was able to confront

the witness with emails that said the medical equipment company

had, in fact, ditched the deal.

He later told jurors during his closing argument that the

Walmart witness' testimony was "a lie" disproved by the

company's own documents. (The email exchange he cited was one of

a batch of documents Walmart produced during the trial, as

Holwell Shuster continued to press the company to turn over all

of the material encompassed by Brooks' order.)

DeMay's closing argument emphasized the contrast between

testimony from several Walmart witnesses, including the in-house

lawyer questioned by Timblo, and the privileged material that

Walmart was forced to disclose. The documents, he told jurors,

proved that the company was lying when it sought to scapegoat

its allegedly rogue employee and impugn the quality of London

Luxury's products.

If there is a lesson from Holwell Shuster's fight to see

Walmart's ( WMT ) privileged documents, DeMay said, it's that lawyers

should keep pushing to find out what's hidden beneath that

cloak. "We kept pestering the judge," said DeMay, who noted that

London Luxury's CEO is now planning to revive the company. "But

you don't know what's there until you get the documents. You

have to be persistent."