Bad Faith Assertion of Privilege – 91% Error Rate

”Applying the clear and convincing standard, Amazon’s withholding of almost 70,000 documents until the eve of, and after, the April 25, 2025 discovery cutoff—including the documents identified above—was tantamount to bad faith.”  Federal Trade Comm’n. v. Amazon.Com, Inc., 2025 WL 1907413 (W.D. Wash. Jul. 10, 2025).

The FTC filed a “Motion for Sanctions due to Defendant Amazon.com, Inc.’s Systematic Abuse of Privilege Claims.”  The issue was whether Amazon acted in bad faith during discovery.

In resolving the motion, the Amazon court looked to its common-law, inherent power.  It wrote that a party “demonstrates bad faith by delaying or disrupting the litigation or hampering enforcement of a court order.” [citation omitted].  It applied a standard of “clear and convincing evidence.”

The FTC investigation began on March 16, 2021.  Amazon produced 29,998 documents.

In October 2022, Amazon’s in-house attorneys certified under penalty of perjury that Amazon’s privilege logs set forth the basis for withholding responsive information and that Amazon’s responses were true to the best of their information, knowledge, and belief.

The FTC filed suit on June 21, 2023.  During discovery Amazon produced documents and updated its privilege log.  The FTC stated that it relied on that privilege log throughout discovery, including in connection with depositions of key witnesses.

In January and April 2024, the FTC raised concerns about some of the privilege assertions and asked that Amazon re-review its privilege logs.  Amazon’s outside counsel responded that Amazon had produced thousands of documents with potential indicia of privilege and this showed it did not intend to hide documents.  Counsel added: “The fact that a privilege log entry does not show an attorney’s response to an email does not mean that the document is not privileged.” Counsel argued that the FTC did not understand Amazon’s privilege process.

Then, however:

About a year later, Amazon re-reviewed its privilege logs and withdrew its privilege claims as to 91% of its log and produced 69,909 documents to the FTC…. Amazon produced these documents to the FTC on a rolling basis from April 2025 until May 22, 2025…. Discovery closed on April 25, 2025…. Amazon served its amended privilege logs on May 8, 2025 and May 22, 2025.

The Amazon court wrote:

The FTC provided the Court with some of the documents Amazon withheld as privileged but then produced to the FTC on the eve of or after the discovery cutoff. In one document, an Amazon non-attorney employee told another non-attorney employee to mark “[a]nything involving accidental/uninformed sign ups…customers settling without realizing it due to auto-renew…is P&C [privileged and confidential].”

After quoting more of that document, the court wrote: “This document does not concern the provision of legal advice.”

The Amazon court wrote that another withheld email from Defendant Ghani told employees to be “diligent” about “marking docs and emails.” Id. at *3.  That document had been logged as “[d]iscussing or relating to legal advice regarding Amazon’s company policies.”  However, the court wrote:

There is no discussion of legal advice in the email. Furthermore, during Ghani’s deposition, the FTC asked if he had ever “told anyone…to mark a document as privileged without regard to whether or not they were actually seeking legal advice?” …. Ghani stated that he had not.

The court looked at another document in which an in-house attorney had been added to an email chain, and wrote: “There is no apparent legal advice, or request for it, anywhere in the email chain.”

In another, an in-house attorney instructed employees to delete a PowerPoint because it lacked “privileged and confidential” markings.  The court wrote that the document “does not contain any legal advice.”

The court wrote: “The documents mentioned above do not contain any apparent legal advice or request for it. And Amazon’s privilege log entries for these documents unambiguously said that these documents reflect legal advice.”

After stating that discovery makes trial “less a game of blind man’s buff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent,” [citation omitted], the court found that Amazon’s conduct was “tantamount to bad faith.”

The court said that the documents had been withheld since 2022, the time of the sworn certification. And, when the FTC raised concerns, Amazon said it had performed a thorough review and asserted that the FTC misunderstood how Amazon provided legal advice. The court wrote:

None of Amazon’s proffered justifications explain why the company waited so long to amend its privilege logs and produce tens of thousands of non-privileged documents. Instead, it appears that the desire to gain a tactical advantage led to such conduct. This type of gamesmanship defies the Federal Rules of Civil Procedure, which require the parties to “to put all their ‘cards’ on the table before trial….  Amazon’s behavior undermined the guiding principle that litigation must be streamlined to “secure the just, speedy, and inexpensive determination of every action and proceeding.”” [citations omitted].

On the facts presented, the Court found “that Amazon’s behavior warrants no more relief except an admonition by this Court. Amazon and its counsel are admonished that their conduct during discovery was tantamount to bad faith. Similar conduct may lead to more serious sanctions.”

For some cases involving alleged overuse of privilege designations, see generally:

• “Federal judge who ruled against Google is ‘taken aback’ by its efforts to avoid paper trail” (Aug. 9, 2024);
• Information Governance – Mis(?)-Labeling Documents as Privileged (Part IV) (May 16, 2022);
• Information Governance – Mis(?)-Labeling Documents as Privileged (Part III) (Apr. 9, 2022);
• Information Governance – Mis(?)-Labeling Documents as Privileged (Mar. 23, 2022);
• Request for “Discovery on Discovery” Was Overbroad; Uber Deponent Was Ordered to Bring Uber Laptop to Deposition; Discovery About Uber Information Governance Training Resolved (Jul. 4, 2025)(alleged “misuse” of privilege designations).