In re Carvana Co Securities Litigation

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
United Association National )
Pension Fund, et al., ) CASE NO. CV-22-02126-PHX-MTL
)
Plaintiffs, ) SPECIAL MASTER COHEN
)
v. ) RULING REGARDING
) TRANCHE ONE OF
Carvana Company, et al., ) CARVANA DOCUMENTS
)
Defendants. )
This Honorable Court appointed the undersigned as Special Master to review in camera
documents withheld as privileged by Defendants. See docket no. 500 (“Appointment Order”).
Defendants have listed about 50,000 documents on their privilege logs. Id. at 2. The Special Master
promptly conferred with the parties and directed Plaintiffs to pick a “First Tranche” of “bellwether
documents,” with these characteristics: (1) as best Plaintiffs could tell, the documents appeared to
be among the most important to their case; and (2) the parties could apply the Special Master’s
rulings on these documents to other, similar documents. Plaintiffs responded by identifying 364
documents for review in “Tranche One.”
The instant Ruling addresses the Tranche One documents. Section I below sets forth the legal
standards that the Special Master applied, and will apply going forward, to all documents submitted
or review.1 Section II summarizes the Special Master’s document-specific rulings. The attached
Chart lists all of the documents and specific rulings for each.
1 These Legal Standards are incorporated by reference into all future Rulings.
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 1 of 12

I. Legal Standards.
A. Attorney-Client Privilege.
In the Ninth Circuit, the attorney-client privilege has eight essential elements:
(1) Where legal advice of any kind is sought (2) from a professional legal adviser in
his capacity as such, (3) the communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance permanently protected (7) from
disclosure by himself or by the legal adviser, (8) unless the protection be waived.
In re Fischel, 557 F.2d 209, 211 (9th Cir. 1977). “The party asserting the privilege bears the burden
of establishing each element.” United States v. Rite Aid Corp., 2021 WL 1196250, at *5 (E.D. Cal.
Mar. 30, 2021). The inquiry is “a mixed question of law and fact.” Greer v. Cnty. of San Diego, 127
F.4th 1216, 1222 (9th Cir. 2025).
“The attorney-client privilege protects confidential disclosures made by a client to an attorney
in order to obtain legal advice, . . . as well as an attorney’s advice in response to such disclosures.”
United States v. Ruehle, 583 F.3d 600, 607 (9th Cir. 2009). “The privilege only protects disclosure
of communications; it does not protect disclosure of the underlying facts.” Upjohn Co. v. United
States, 449 U.S. 383, 395 (1981).
“Because it impedes full and free discovery of the truth, the attorney-client privilege is
[narrowly and] strictly construed.” Weil v. Inv./Indicators, Rsch. & Mgmt., Inc., 647 F.2d 18, 24 (9th
Cir. 1981); In re Cal. Bail Bond Antitrust Litig., 778 F. Supp. 3d 1051, 1057 (N.D. Cal. 2025). See
also BankDirect Cap. Fin., LLC v. Cap. Premium Fin., Inc., 326 F.R.D. 176, 181 (N.D. Ill. 2018)
(“Because the privilege operates in derogation of the search for truth, it is narrowly construed. It
applies only where necessary to achieve its purpose.”); In re Columbia/HCA Healthcare Corp.
Billing Pracs. Litig., 293 F.3d 289, 294 (6th Cir. 2002) (“Claims of attorney-client privilege are
2
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 2 of 12

narrowly construed because [the privilege] reduces the amount of information discoverable during
the course of a lawsuit.”).
For the privilege to attach, the “primary purpose” of the communication must be to “to give
or receive legal advice, as opposed to business . . . advice.” In re Grand Jury, 23 F.4th 1088,
1091–92 (9th Cir. 2021). When a communication involves both legal and non-legal matters, courts
“must evaluate the context and purpose of the communications” to determine whether the primary
purpose is to render or solicit legal advice. In re Cal., 778 F. Supp. 3d at 1057. “If the advice sought
from the professional legal advisor is not legal advice, . . . the privilege does not apply.” Oracle Am.,
Inc. v. Google, Inc., 2011 WL 3794892, at *2 (N.D. Cal. Aug. 26, 2011). “Even though it
theoretically sounds easy to isolate ‘the primary or predominant’ purpose of a communication, the
exercise can quickly become messy in practice.” In re Grand Jury, 23 F.4th at 1094; see also
BankDirect, 326 F.R.D. at 182 (acknowledging the “difficulty in negotiating the fine line between
legal as opposed to business advice.”).
The Seroquel MDL court explained why the “primary purpose” rule must be applied
especially carefully in a case where the defendant asserting privilege operates in a heavily regulated
industry:
Almost any act by a business (or an individual for that matter) carries the potential
for running afoul of some law or regulation or giving rise to a civil action. * * * The
fact of extensive or pervasive regulation does not make the everyday business
activities legally privileged from discovery.
In re Seroquel Prod. Liab. Litig., 2008 WL 1995058, at *7 (M.D. Fla. May 7, 2008). The Vioxx
MDL Court made a similar observation:
3
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 3 of 12

It is often difficult to apply the attorney-client privilege in the corporate context to
communications between in-house corporate counsel and those who personify the
corporate entity because modern corporate counsel have become involved in all
facets of the enterprises for which they work. As a consequence, in-house legal
counsel participates in and renders decisions about business, technical, scientific,
public relations, and advertising issues, as well as purely legal issues.
In re Vioxx Prod. Liab. Litig., 501 F.Supp.2d 789, 797 (E.D. La. 2007).
A court must be especially careful when examining the primary purpose of a communication
if made by in-house counsel. “In-house counsel may act as integral players in a company’s business
decisions or activities, as well as its legal matters. When attempting to demonstrate that an internal
communication involving in-house counsel deserves privileged status, a party therefore ‘must make
a clear showing that the speaker made the communication[ ] for the purpose of obtaining or
providing legal advice.’” Oracle, 2011 WL 3794892, at *4 (quoting United States v. ChevronTexaco
Corp., 241 F. Supp. 2d 1065, 1076 (N.D. Cal. 2002) (emphasis added). Courts in other jurisdictions
also instruct that this level of scrutiny is appropriate. See, e.g., Fed. Trade Comm’n v. Abbvie, Inc.,
2015 WL 8623076 at *3 (E.D. Pa. Dec. 14, 2015) (“In recognition that [i]n-house counsel performs
a dual role of legal advisor and business advisor, the corporation must clearly demonstrate that the
communication in question was made for the express purpose of securing legal not business
advice.”) (emphasis added).
When a communication includes in-house counsel, “[t]he court will also take into account
‘the breadth of the recipient list in assessing the centrality of potential legal advice generated by the
communication’ and ‘whether a communication explicitly sought advice and comment.’” Phillips
v. C.R. Bard, Inc., 290 F.R.D. 615, 629 (D. Nev. 2013) (quoting In re CV Therapeutics, Inc. Sec.
Litig., 2006 WL 1699536, at *9 (N.D. Cal. June 16, 2006)). When in-house counsel appears as one
of many recipients of an otherwise business-related communication, there is a heavy burden to show
4
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 4 of 12

that counsel was acting in a legal rather than business capacity. See Garner v. Amazon.com, Inc.,
2024 WL 4266665, at *2 (W.D. Wash. Sept. 23, 2024) (concluding assertions of privilege were
improper where “most of the communications seek and share operational or business information
between non-legal professionals. While an attorney is regularly listed as a recipient of the document
or participant in a meeting . . . , there is no discernable request for or giving of legal advice in the
communications.”); A.A. v. Cnty. of Riverside, 2016 WL 11953845, at *7 (C.D. Cal. Aug. 8, 2016)
(“in-house counsel warrant heightened scrutiny in regards to establishing the privileged nature of the
communications, [because] in-house counsel often wear a non-legal business hat, and
communications in that capacity are not privileged”).
The “primary purpose” test often comes into play when examining counsel’s communications
regarding state or federal regulations applicable to a business. “An attorney’s advice does not
constitute legal advice simply because it relates to regulatory activity.” In re Cal., 778 F. Supp. 3d
at 1060. Indeed, everyday “compliance with regulations is usually a business matter, not a legal one.”
In re Nat’l Prescription Opiate Litig., No. 1:17-MD-2804, ECF No. 5053 at 7 (N.D. Ohio June 7,
2023). “[A]ttorney-client privilege does not apply . . . if the client seeks regulatory advice for a
business purpose.” Abbvie, 2015 WL 8623076 at *9. Thus, a document reflecting discussions with
counsel on how to respond to a specific regulatory investigation may be privileged, while a
document reflecting how to comply with regulations as a matter of normal business operations may
not. See City of Roseville Employees’ Ret. Sys. v. Apple Inc., 2022 WL 3083000, at *11 (N.D. Cal.
Aug. 3, 2022) (“[T]here is no bright-line rule that communications related to regulatory compliance
are per se business or legal communications. Rather, the content and context of such
5
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 5 of 12

communications must be considered in order to determine the primary purpose of the
communication.”).
The eighth essential element of attorney-client privilege addresses waiver. In re Fischel, 557
F.2d at 211. “There are “several ways by which parties may waive the privilege.” In re Pac. Pictures
Corp., 679 F.3d 1121, 1126 (9th Cir. 2012). “First, voluntarily disclosing privileged documents to
third parties will generally destroy the privilege. Also known as an express waiver, this type of
waiver occurs when a party discloses privileged information to a third party who is not bound by the
privilege, or otherwise shows disregard for the privilege by making the information public.” United
States v. Sanmina Corp., 968 F.3d 1107, 1116–17 (9th Cir. 2020) (cleaned up). Any voluntary
disclosure to a third party—including a government agency or adversary—waives the privilege. See
Creative Power Sols. v. Energy Servs. Grp., 2025 WL 691665, at *1 (D. Ariz. 2025); United States
v. Ruehle, 583 F.3d at 607; In re Pac. Pictures Corp., 679 F.3d at 1126–27.
Second, “waiver by implication, or implied waiver, is based on the rule that ‘a litigant waives
the attorney-client privilege by putting the lawyer’s performance at issue during the course of
litigation.’” Sanmina Corp., 968 F.3d at 1117 (quoting Bittaker v. Woodford, 331 F.3d 715, 719 (9th
Cir. 2003)). Waivers by implication rest on the “fairness principle,” which “is often expressed in
terms of preventing a party from using the privilege as both a shield and a sword. * * * In practical
terms, this means that parties in litigation may not abuse the privilege by asserting claims the
opposing party cannot adequately dispute unless it has access to the privileged materials.” Bittaker,
331 F.3d at 719.
Finally, the fairness principle “also animates the concept of subject matter waiver, in which
‘voluntary disclosure of the content of a privileged attorney communication constitutes waiver of
6
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 6 of 12

the privilege as to all other such communications on the same subject.’” Sanmina Corp., 968 F.3d
at 1117 (quoting Weil, 647 F.2d at 24).
B. Work Product Doctrine.
The work product doctrine is “distinct from and broader than the attorney-client privilege,”
United States v. Nobles, 422 U.S. 225, 238 n.11 (1975), and operates “not [as] a privilege but [as]
a qualified immunity protecting from discovery documents and tangible things prepared by a party
or his representative in anticipation of litigation.” Admiral Ins. Co. v. U.S. Dist. Ct. for Dist. of
Arizona, 881 F.2d 1486, 1494 (9th Cir. 1989). The doctrine is designed to allow an attorney to
“assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare his
legal theories and plan his strategy without undue and needless interference.” Hickman v. Taylor,
329 U.S. 495, 511 (1947).
The doctrine is codified in Fed. R. Civ. P. 26(b)(3)(A): “Ordinarily, a party may not discover
documents and tangible things that are prepared in anticipation of litigation or for trial by or for
another party or its representative (including the other party’s attorney, consultant, surety,
indemnitor, insurer, or agent).” But, those materials may be discovered if “the party shows that it has
substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their
substantial equivalent by other means.” Id. “To qualify for work product protection, documents must:
(1) be ‘prepared in anticipation of litigation or for trial’ and (2) be prepared ‘by or for a party or that
party’s representative.’” Docket no. 192 at 3 (quoting In re Grand Jury Subpoena (Torf), 357 F.3d
900, 907 (9th Cir. 2003)).
7
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 7 of 12

For dual-purpose documents—those serving purposes separate or independent from
litigation—the document qualifies for protection if, “in light of the nature of the document and the
factual situation in the particular case, the document can be fairly said to have been prepared or
obtained because of the prospect of litigation” and “would not have been created in substantially
similar form but for that prospect.” Id. at 908. “[T]he degree to which counsel is involved in creating
[a] document bears directly on whether the document was prepared in anticipation of litigation.”
Phoenix Techs. Ltd. v. VMware, Inc., 195 F. Supp. 3d 1096, 1101 (N.D. Cal. 2016). The party
asserting work product protection bears the burden of demonstrating that the documents qualify for
the protection. See Hernandez v. Tanninen, 604 F.3d 1095, 1102 (9th Cir. 2010) (recognizing burden
is on party invoking work-product doctrine).
The doctrine distinguishes between “fact” work product and “opinion” work product. Fact
work product—“the written or oral information transmitted to the attorney and recorded as conveyed
by the client”—may be obtained upon a showing of substantial need and inability to otherwise obtain
without material hardship. In re Antitrust Grand Jury, 805 F.2d 155, 163 (6th Cir. 1986); Meyer v.
Mittal, 2023 WL 4348731, at *3 (D. Or. July 5, 2023).
Absent waiver, however, opinion work product—“any material reflecting the attorney’s
mental impressions, opinions, conclusions, judgments, or legal theories”—is afforded heightened
protection; some courts in the Ninth Circuit have concluded opinion work product is discoverable
only “when mental impressions are at issue in a case and the need for the material is compelling.”
In re Antitrust Grand Jury, 805 F.2d at 163; Sec. & Exch. Comm’n v. Pulier, 2020 WL 8102053, at
*3 (C.D. Cal. Nov. 13, 2020) (citing Holmgren v. State Farm Mut. Auto. Ins. Co., 976 F.2d 573, 577
(9th Cir. 1992)).
8
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 8 of 12

Documents “prepared by a corporation as part of efforts to ensure compliance with federal
regulatory agencies . . . and not because of possible litigation, are not protected by work-product
doctrine.” Graff v. Haverhill N. Coke Co., 2012 WL 5495514 at *6 (S.D. Ohio Nov. 13, 2012)
(quoting In re Avandia Marketing, Sales Practices and Prods. Liab. Litig., 2009 WL 4641707 at *3
(E.D. Pa. Dec.7, 2009)).
II. Tranche One Rulings.
Plaintiffs initially identified 364 documents for review, and Carvana responded by
undertaking an additional, more careful assessment and dropping its privilege claims for all but 157
of those documents. (These counts include embedded images as separate documents, which is how
they were submitted to the Special Master.) This strongly suggests Carvana should undertake an
additional, careful assessment of all of the documents listed in its privilege log and remove those
where the privilege claim is not appropriate.
Second, as shown by the attached Chart, of the 84 “parent documents” that the Special
Master reviewed, the claim of privilege is sustained fully or in part for 40 of them. (These counts do
not include embedded images as separate documents, for reasons explained at the end of this
Ruling.) This suggests even more strongly that Carvana should review its privilege log and remove
those documents where the privilege claim is not appropriate.
Regarding the documents where the claim of privilege is overruled, this decision was very
often based on the following two above-discussed tenets, which the Special Master urges Carvana
to keep in mind as it re-reviews its privilege log and submits future documents:
9
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 9 of 12

(1) If advice sought or given is primarily business advice or everyday regulatory advice for
a business purpose, as opposed to legal advice, then the document is not privileged—even when the
advice is sought from or given by counsel. In the attached Chart, “Primary purpose is business, not
legal” means the document is (at best) a dual-purpose communication, but the primary purpose of
the communication is to solicit or provide business advice. Indeed, many of the Tranche One
documents reflect only business advice, or even no actual advice at all.
(2) Carvana bears the burden of proving its privilege claim. That burden is often not carried
by providing simple boilerplate in an Excel spreadsheet. Regarding virtually every document where
the claim of privilege is overruled, the conclusion is based at least in part on Carvana’s failure to
carry its burden of proof. The undersigned will strive to understand the meaning of and
circumstances surrounding every document submitted, but if Carvana does not supply the context
and explanation necessary to understand the privilege claim, the Special Master will overrule it for
failure of the proponent to carry its burden. In the attached Chart, “Carvana’s provided reason
insufficient to carry its burden” means: (a) Carvana did not sufficiently explain its assertion why the
document is privileged, and (2) the undersigned could not divine a basis for the privilege claim
despite concerted attempts to understand the claim from the face of the document itself, including
any context provided by all other documents.
Carvana should also note the Court’s statement that it “will not consider—any evidence or
argument that was not presented to the Special Master” when assessing an objection to a Ruling.
Appointment Order at ¶6. So, Carvana must provide thorough discussion to the Special Master at
the outset to carry its burden of proof.
10
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 10 of 12

III. Next Steps.
Carvana should promptly produce to Plaintiffs those documents listed in the Chart where the
privilege claims are overruled, unless Carvana intends to object to the ruling on that specific
document. Carvana should also promptly produce to Plaintiffs those documents it removed from the
privilege log after re-review.
The Special Master will examine Tranche Two of documents. As this process continues,
Plaintiffs should continue to choose documents they suspect may be the most meaningful to their
case. Plaintiffs’ choices should be informed by all document-specific rulings as follows: (i) if the
Special Master overruled a privilege claim on a document and Carvana now produces it, and
Plaintiffs see the document is not meaningful, Plaintiffs should try not to choose similar,
non-meaningful documents for review; and (ii) if the Special Master sustained a privilege claim,
Plaintiffs should try not to choose similar documents for review. In other words, as Plaintiffs askfor
review of additional documents and Tranches, they should take direction from all prior rulings.
Carvana should carefully review those documents where the privilege claim is overruled and
apply the Special Master’s reasoning to all other documents listed. This should lead to removal of
documents from the privilege log and also from future Tranches.
Using this process, as rulings on succeeding Tranches are issued, the parties and the Court
will essentially be engaged in triage. This should hasten reaching the point where Plaintiffs believe
the Court has undertaken sufficient privilege review and the marginal benefit of continuing this
review is not worth the cost. The undersigned hopes the entire process will ultimately require review
of far fewer than 50,000 documents
As agreed by the parties, Carvana will no longer submit embedded images as separate
11
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 11 of 12

documents; rather, a ruling on a document will apply to images embedded in it. “Embedded Images,”
however, does not include substantive non-image embedded objects, such as spreadsheets, PDFs,
and Word documents. If selected by Plaintiffs, these objects will be submitted for review.
RESPECTFULLY SUBMITTED,
/s/ David R. Cohen
David R. Cohen
Special Master
Dated: June 26, 2026
12
Case 2:22-cv-02126-MTL Document 552 Filed 06/26/26 Page 12 of 12