Why Shell vs. CLF Could Change Your AI Governance Program
Key quote:
A producing party’s good-faith averment of nonexistence resolves a production dispute.
Why it matters:
Welp, I’m *not* an attorney, but I’m tracking this one closely. In our last episode of How the Conservation Law Foundation, Inc. v. Shell Oil Company Turns, CLF had been ordered (PDF) to produce the prompts that were used by their expert witness. They don’t like this much, and are objecting, saying that the AI prompts fall under the protected “drafting process” umbrella, arguing that the parties agreed to keep this level of detail out of discovery before the dispute arose. They’re also saying that the AI ate their homework – claiming that they cannot comply because the data simply does not exist. However, back in episode 970 (weirdly not a PDF), the judge had been pretty skeptical about the data’s non-existence. The district judge hasn’t ruled on this objection yet, but the clock is ticking.
This isn’t just a squabble between an environmental group and an oil giant. It sets a potential precedent for every boardroom and security team. If a court eventually decides that AI prompts are part of the “methodology” rather than protected drafts, your use of AI in your incident response playbook could eventually be subject to Discovery, and if we’ve learned nothing from Sam Altman before, it’s that everything’s being logged unless you turn that off. Judge Farrish already signaled he won’t accept a “good faith averment” of nonexistence when the opposing side has proof the data was generated.
The stakes go beyond legal fees. If prompts are deemed discoverable, your AI governance program needs to change moving forward, and you probably need to tell your executive team what’s not okay to ask an AI as those prompts and outputs could soon be fair game for cross-examination in cases from cybersecurity breaches to workforce reductions. So, if you’re relying on AI to filter documents or build reports, you’re creating a paper trail that a judge might order you to hand over. The idea that you can delete the inputs and keep the outputs is risky. Either log everything, or stop using the tools in a way that influences your strategy. In effect, if a precedent is established, the court can ask for the entire thought process of a person and see how they came to their conclusions, which could be problematic.
