Highlander Home, Inc. v. Walmart, Inc.

The relevant discovery was propounded in September 2025. Defendant provided an initial response in October 2025. The motion to compel was filed in January 2026. Defendant provided two supplemental productions, in May 2026 and June 2026, respectively. Defendant also provided an updated privilege log with its opposition to the motion.

Waiver of Statutory Privilege Related to the Patriot Act

“If an objection is based on a claim of privilege, the particular privilege invoked shall be stated.” (Code Civ. Proc., § 2031.240, subd. (b)(2).) Failure to assert a privilege waives the privilege, absent a showing of a supplemental response in substantial compliance and that the party’s failure to raise the privilege was the result of mistake, inadvertence, or excusable neglect. (Code Civ. Proc., § 2031.300, subd. (a); Scottsdale Ins. Co. v. Superior Court (1997) 59 Cal.App.4th 263, 274 [failure to assert privilege in initial response waived the privilege].)

Defendant’s updated privilege log withholds certain documents, citing Evidence Code section 911 and “Section 314(b) of the Patriot Act.” Defendant’s initial responses did not assert that privilege. Defendant’s opposition does not address this issue. Nor does it seek relief from waiver. Defendant has waived the privilege. Any responsive documents withheld based on that privilege must be disclosed.

Categories of Discovery

There are three categories of discovery in dispute: (1) documents related to defendant’s investigation into allegedly unauthorized access to plaintiff’s account; (2) documents related to defendant’s termination of plaintiff’s account; and (3) documents related to a notice of unclaimed property sent to plaintiff by defendant.

Unauthorized Access

Several requests seek documents related to defendant’s actions taken in response to receiving notice of unauthorized access to plaintiff’s account. (E.g., RFP No. 14 [“All Documents concerning Walmart’s actions taken in response to the notice of unauthorized access to Highlander’s Marketplace Partner Portal from January 1, 2022 through January 1, 2024.”].) Plaintiff acknowledges that defendant’s supplemental productions have provided at least “some emails regarding the unauthorized access issue.” But plaintiff argues defendant is still unlawfully withholding documents.

Based on the court’s review of the records available to it (including defendant’s updated privilege log), the court finds that defendant’s responses are now code-compliant. 8

Defendant is correct that communications directly involving corporate counsel are protected by the attorney-client privilege. (Evid. Code, § 952; Zurich American Ins. Co. v. Superior Court (2007) 155 Cal.App.4th 1485, 1495.) Communications and documents prepared as part of an attorney-led internal investigation are entitled to work product protection. (Southern California Edison Co. v. Superior Court (2024) 102 Cal.App.5th 573, 586.) The examples plaintiff provides in its reply of documents that have not been produced (including “reasoning supporting findings” related to IP data; “ ‘internal’ conversations”; and draft versions of an investigation memorandum) all implicate either the attorney-client privilege or attorney work product doctrine.

Plaintiff contends defendant “failed to produce the connective tissue providing the timeframe, reasoning, and bases for [defendant’s] conclusions.” (Reply at 5:1-10.) It is true that the attorney-client privilege “may not be used to shield facts, as opposed to communications, from discovery.” (Edwards Wildman Palmer LLP v. Superior Court (2014) 231 Cal.App.4th 1214, 1226.) But plaintiff’s chosen discovery method for requesting those facts cannot overcome the privilege.

Account Termination

Plaintiff contends defendant failed to produce all documents regarding the termination of plaintiff’s account. (Reply, 5:12-21.) As with the unauthorized access issue, the court finds defendant’s responses are now code-compliant. Defendant produced responsive documents, and provided an updated privilege log to support its argument that any other responsive documents are protected by either the attorney-client privilege or the attorney work product doctrine.

Unclaimed Property

Plaintiff seeks documents or communications related to defendant’s notice of unclaimed property, which was apparently sent to plaintiff by defendant in July 2025. Defendant argues the documents are not relevant to plaintiff’s complaint. The court finds t hese requests relevant to the subject matter of this action. As such, the court will compel defendant to produce responsive documents no later than July 2, 2026.

Request for Sanctions

Defendant did not have substantial justification for withholding the documents about unclaimed property. And the court finds no substantial justification for defendant delaying the supplemental productions related to the other categories until the eve of trial. But the court will not award the full amount of sanctions requested by plaintiff in its reply because plaintiff failed to support its initial motion with facts supporting a specific amount of requested sanctions. (Code Civ. Proc., § 2023.040 [request for sanctions “shall be supported by a memorandum of points and authorities, and accompanied by a declaration setting forth facts supporting the amount of any monetary sanction sought.”].) Based on the court’s review of the record, the court finds sanctions appropriate in the amount of $6,000 (20 hours at $300/hour).

Conclusion

Plaintiff’s motion to compel is GRANTED IN PART. Defendant is ordered to produce (1) all documents and communications related to defendant’s notice of unclaimed property; 9

and (2) all documents withheld based on the waived statutory Patriot Act privilege. The documents must be produced no later than July 2, 2026. Defendant is ordered to pay plaintiff sanctions in the amount of $6,000, no later than July 20, 2026. The court will prepare the order.

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