38 Studios defendant may not keep disputed memo

PROVIDENCE, R.I. (AP) - The judge hearing the 38 Studios litigation ruled Thursday that a defendant who was inadvertently given a privileged document by an attorney in Gov. Lincoln Chafee’s office may not keep it.

The May 2012 memorandum, said to contain legal advice to Chafee, was mistakenly given to lawyers for Wells Fargo, a defendant in the lawsuit over the collapse of former Red Sox pitcher Curt Schilling’s video game company.

Superior Court Judge Michael Silverstein sided with attorneys for the former Economic Development Corp., who wanted all copies of the memorandum deleted or destroyed.

The exact contents of the memo - sent by attorneys for Chafee to three members of his staff as 38 Studios was imploding - are not known.

In a filing last month, Wells Fargo attorney Thomas Holt said the document “makes certain directly relevant admissions regarding the knowledge of the EDC board” about the $75 million loan guarantee to 38 Studios. He was seeking the production of additional documents related to the memo’s preparation.

The lawsuit by the EDC, now known as the Commerce Corp., claims its board was misled into approving the deal in 2010. Schilling’s company went bankrupt, and the state is on the hook for nearly $90 million related to the transaction.

The defendants deny the charges.

In a ruling delivered from the bench Thursday, Silverstein said the memorandum was clearly handed over by mistake and is protected under attorney-client privilege. He noted a confidentiality order in the case, agreed to by all parties, expressly dealt with the issue of inadvertently produced documents. It demands they be destroyed, he said.

Chafee attorney Anita Flax told Silverstein last week that she turned over the document “inadvertently, unintentionally, unknowingly, accidentally” in the course of responding to a subpoena. Wells Fargo’s attorneys were asked to delete or destroy copies of it, but they had wanted the judge to find that they were entitled to it.

Holt had no comment on the judge’s ruling.