GMO Gamecenter USA, Inc. v. Whinstone US, Inc.
1:22-cv-05974
S.D.N.Y.Jun 25, 2025Background
- GMO Gamecenter USA, Inc. and GMO Internet, Inc. ("GMO") sued Whinstone US, Corp. ("Whinstone") and Riot Blockchain, Inc. ("Riot") for breach of contract related to the construction and operation of cryptocurrency data centers in Louisiana and Texas.
- Initial disputes arose from delays and deficiencies in the Louisiana data center, leading to a subsequent Texas-based agreement where GMO provided significant loans and relocated mining operations.
- Riot later acquired Whinstone from Northern Data, triggering post-acquisition disputes over purchase price adjustments and ultimately, litigation in Delaware.
- GMO moved to compel Whinstone and Riot to produce documents withheld as privileged (attorney-client privilege, work product doctrine), particularly communications with advisors and third parties related to post-closing adjustments and contract termination.
- The motion focused on whether specific documents were privileged, if privilege was waived by sharing with third parties, and distinctions between legal and business communications.
- The case was decided on a document-by-document basis after in camera review, applying federal and New York privilege doctrines.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Attorney-client privilege scope | Many withheld documents are business/factual, not legal, thus not privileged | All withheld documents involve legal advice, thus privileged | Some documents properly withheld as privileged, others not—must produce or produce in part |
| Waiver by third-party disclosure | Privilege waived by copying advisors (e.g., investment bankers, accountants) | Communications with advisors are privileged (translator/functional equivalent exceptions) | Privilege waived where third parties unnecessary for legal advice or not functional equivalents |
| Work product doctrine applicability | Some work product claims invalid; docs were not in anticipation of litigation | All disputed docs created in anticipation of litigation (especially with Northern Data) | Only docs created after litigation was reasonably anticipated (June 2022) are protected as work product |
| Substantial need exception | GMO has substantial need for some withheld work product for case preparation | GMO has sufficient access and no undue hardship; protection should remain | GMO failed to show substantial need or undue hardship; no override of work product protection |
Key Cases Cited
- Upjohn Co. v. United States, 449 U.S. 383 (attorney-client privilege protects confidential legal communications within corporations)
- Hickman v. Taylor, 329 U.S. 495 (work product doctrine protects documents prepared in anticipation of litigation)
- Fisher v. United States, 425 U.S. 391 (attorney-client privilege is to be narrowly construed)
- In re County of Erie, 473 F.3d 413 (distinguishing between legal and business advice for privilege)
- United States v. Kovel, 296 F.2d 918 (translator exception for privilege where third party aids legal advice)
- United States v. Constr. Prods. Research, Inc., 73 F.3d 464 (scope and application of attorney-client privilege)
- In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032 (privilege does not cover routine business communications)