This isn’t exactly current news but nonetheless very noteworthy. A Delaware Supreme Court en banc opinion, Wal-Mart Stores, Inc. v. Indiana Electrical Workers Pension Trust Fund IBEW, Del. Supr., No. 614, 2013 (July 23, 2014), explicitly endorsed the Garner exception to the attorney-client privilege in a Section 220 books-and-records proceeding. Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970) recognized an exception “where the corporation is in suit against its stockholders on charges of acting inimically to stockholder interests, [and] protection of those interests as well as those of the corporation and of the public require that the availability of the privilege be subject to the right of the stockholders to show cause why it should not be invoked in the particular instance.” Huge victory for shareholders who can show cause, and huge loss for those who think that the attorney-client privilege should be absolute.
Also noteworthy is the resignation of Maritza Munich, the general counsel of Walmart International. Munich had tried to stop a bribery scandal as it was unfolding at Walmart. Michael Scher of the FCPA Blog provides some interesting detail on the scandal and Munich’s resignation.
For teaching purposes, one can construct a hypothetical based on the facts of the Wal-Mart case and ask the student to put herself in the shoes of an in-house attorney (such as Munich) who uncovers serious law violations within her corporation: what would she do? Good opportunity to talk about how to comply with Sarbanes-Oxley 307 (SOX 307) and the meaning of an attorney “appearing and practicing before the Commission” under SOX 307 covers. If you want to add a psychological perspective to the discussion, I talked about the pressures of being in-house counsel in prior work.