United States of America v. Real Property Located in Los Angeles, California Case No. CV 20-6314-CAS (KS) United States District Court, C.D. California Filed June 11, 2024 Counsel Daniel G. Boyle, Alexander Su, AUSA - Office of US Attorney, Los Angeles, CA, for United States of America. Stevenson, Karen L., United States Magistrate Judge Proceedings: ORDER RE: NOVAL CLAIMANTS' MOTION TO COMPEL FURTHER DEPOSITION OF GOVERNMENT OF THE STATE OF KUWAIT'S FRCP 30(b)(6) WITNESS [Dkt. No. 238] *1 Before the Court for resolution is the Noval Claimants' Motion to Compel the Deposition of the Government of the State of Kuwait's witness pursuant to Federal Rule of Civil Procedure 30(b)(6), filed on April 19, 2024 (the “Motion”), along with a Declaration of Ronald Richards, Esq. (”Richards Decl.”) and related exhibits. (Dkt. No. 238.) The Government of Kuwait filed an Opposition to the Motion on April 23, 2024 (“Opposition: or “Oppo.”). (Dkt. No. 243.) Noval Claimants filed a Reply in support of the Motion on April 25, 2024 (“Reply”). (Dkt. No. 245.) On April 26, 2024, the Court heard oral argument and took the Motion under submission. For the reasons outlined below, the Motion is DENIED. RELEVANT BACKGROUND A. Litigation History The parties are well familiar with the factual allegations and procedural background of this lawsuit, therefore, here the Court summarizes only those proceedings relevant to the instant Motion. Plaintiff, United States of America, filed a Consolidated Master Verified Complaint for Forfeiture on May 9, 2022 (“CMVC”). (Dkt. No. 55.) In the CMVC, the USA alleges that former Kuwait Minister of Defense, Khaled J. Al Sabah (“KAS”), along with co-conspirators at the Ministry of Defense, embezzled funds from the Ministry of Defense of the Government for the State of Kuwait, clandestinely transferred over $100 million of those funds from Ministry of Defense accounts into bank accounts only accessible to the co-conspirators, and then moved those funds to the United States, where a portion of those funds are traceable to the Defendant assets identified in the CMVC. (See, e.g., CMVC at ¶ 46-58, 113-127.) In May 2023, State of Kuwait filed a claim as rightful owner of the embezzled funds. (Dkt. No. 14.) In June 2023, Al Sabah filed an amended claim asserting that he did not violate Kuwaiti law in obtaining the funds and that the funds rightfully belonged to the Kuwaiti royal family of which Al Sabah is a member (dkt. no. 150). Khaled Al Sabah has since withdrawn his claim in this case and is reportedly imprisoned in Kuwait following a criminal conviction. (See dkt. nos. 208, 209.) The Noval Claimants also filed claims to the Disputed Assets and have asserted throughout the case that they are innocent owners of the real properties at issue. (See, e.g., Dkt. No. 71.) B. Genesis of the Dispute re: Kuwait's Rule 30(b)(6) Testimony In August 2023, Plaintiff and KAS exchanged proposed deposition topics for the deposition of Kuwait's Rule 30(b)(6) witness. Kuwait objected to many of the topics. Following an informal discovery conference, on October 20, 2023, the Court limited the scope of topics for the Kuwait witness's 30(b)(6) deposition testimony. (Dkt. No. 189.)[1] On the same date, then-claimant KAS served a deposition notice for Kuwait's Rule 30(b)(6) witnesses for a deposition that was to be held in Kuwait City on October 26-27 and November 3-4, 2023. (Joint Stip. at 4; Richards Decl. ¶ 3, Ex. A.) *2 Kuwait designated Nawaf Al Samham for several topics and Khaled Al Baker (“Al Baker”) for the remaining topics. (Id. at 5.) Mr. Samham testified, but Al Baker has not been deposed and Kuwait now refuses to produce him. (Id.) In a status report on discovery, the parties acknowledged that they completed Al Samhan's portion of the Rule 30(b)(6) deposition on October 30, 2023. However, on November 1, 2023, when the parties met to begin KAS's deposition, before any substantive questioning could commence, KAS indicated “he was too ill to complete the deposition and intended to go to the hospital.” (Joint Stip. at 8 (citing dkt. no. 194).) The parties stipulated, on the record, that KAS's deposition would be resumed on a later mutually convenient date and “Al Baker's deposition would follow thereafter.” (Id.) C. Noval Claimants' Proposed (30)(b)(6) Deposition Topics In a proposed deposition notice to the Government of Kuwait, dated March 4, 2024, the Noval Claimants seek testimony from a Rule (30(b)(6) designee for Kuwait on the following sixteen (16) topics:[2] 1. [Kuwait's] contention that the NOVAL CLAIMANTS knew or should have known that any of the transfers were not authorized by [Kuwait]. 2. [Kuwait's] contention that the NOVAL CLAIMANTS knew or should have known KAS did not have [Kuwait's] authority to make any of the TRANSFERS. 3. [Kuwait's] contention that the NOVAL CLAIMANTS knew or should have known that KAS embezzled any of the funds that were the subject of the TRANSFERS. 4. [Kuwait's] contention that the NOVAL CLAIMANTS knew or should have known AL-JASSAR did not have YOUR authority to make any of the TRANSFERS. 5. [Kuwait's] contention that the NOVAL CLAIMANTS knew or should have known that AL-JASSAR embezzled any of the funds that were the subject of the TRANSFERS. 6. [Kuwait's] contention that the NOVAL CLAIMANTS knew or should have known AL-BAZ did not have YOUR authority to make any of the TRANSFERS. 7. [Kuwait's] contention that the NOVAL CLAIMANTS knew or should have known that Al-Baz embezzled any of the funds that were the subject of the TRANSFERS. 8. YOUR oversight of the AUB MAO ACCOUNTS between January 1, 2012, and December 31, 2015, including YOUR policies and procedures for overseeing activity involving the AUB MAO ACCOUNTS. 9. Any agreements by KAS to repay the funds that were the subject of the TRANSFERS. 10. Any agreements by AL-JASSAR to repay the funds that were the subject of the TRANSFERS. 11. Any agreements by AL-BAZ to repay the funds that were the subject of the TRANSFERS. 12. Any payments re restitution made by KAS to [Kuwait] for the embezzlement alleged in the CONSOLIDATED COMPLAINT and in the KUWAIT ANSWER or for funds that were the subject of the TRANSFERS. 13. Any payments re restitution made by AL-JASSAR to [Kuwait] for the embezzlement alleged in the CONSOLIDATED COMPLAINT and in the KUWAIT ANSWER or for funds that were the subject of the TRANSFERS. 14. Any payments re restitution made by AL_BAZ to [Kuwait] for the embezzlement alleged in the CONSOLIDATED COMPLAINT and in the KUWAIT ANSWER or for funds that were the subject of the TRANSFERS. 15. Any contention that KAS was not authorized by the late Amir of Kuwait His Highness Sabah Al-Ahmad Al-Jaber Al-Sabah (late) to invest funds in the United States. 16. Any contention the letter supplied by KAS to the Court in this action from Ali Jarrah Al-Sabah, Minister of Amiri Diwan Affairs, under the authority of His Highness Nawaf Al-Ahmad Al-Jabar Al-Sabah Amir of Kuwait (“Amir”) ... was not prepared and sent under the authority and with the approval of the Amir. (Richards Decl., Ex. C at pp. 4-5.) THE MOTION *3 The Motion seeks an Order compelling the State of Kuwait to produce a witness to testify on deposition topics originally included in KAS's Rule 30(b)(6) deposition notice for which the State of Kuwait originally designated Al Baker at its Rule 30(b)(6) witness. However, Al Baker was never deposed on those subjects. Alternatively, Noval Claimants ask the Court to order the State of Kuwait to provide a witness for a new deposition pursuant to Federal Rule 30(b)(6) to give testimony on topics identified in the Noval Claimants' Deposition Notice dated March 4, 2024. (Richards Decl., ¶ 6, Ex. C.) Noval Claimants' Positions Noval Claimants argue that they are entitled to testimony from a Rule 30(b)(6) witness of claimant Government of Kuwait. Whether in the form of testimony from Khaled Al Baker previously designated as a Rule 30(b)(6) witness to testify on topics noticed by then-claimant Khaled Al Sabah or, alternatively, a different designee who would be required to respond to topics identified in the Noval Claimants' own Rule 30(b)(6) Notice dated October 20, 2023. (Joint Stip. at 3.) Indeed, Noval Claimants maintain that “the only possible rational dispute as to the deposition of Kuwait's Rule 30(b)(6) witnesses is whether the Noval Claimants were allowed to serve their own Rule 30(b)(6) deposition notice that includes additional topics not included in [Al Sabah's] notice prior to the completion of Kuwait's deposition.” (Id.) Noval Claimants argue that because KAS has withdrawn from the case, Noval Claimants “believe the landscape of the case has changed and they have the right to serve their own [Rule] 30(b)(6) deposition notice on Kuwait.” (Id.) Noval Claimants represent that Kuwait's Rule 30(b)(6) depositions “have not been completed” and emphasize Noval Claimants were “relying on much of the anticipated testimony of KAS.” (Id.) Now, however, KAS is unavailable and has no incentive to cooperate in discovery in this case. (Id.) Further, Noval Claimants insist that Kuwait's refusal to produce its previously designated Rule 30(b)(6) witness, Al Baker, is baseless because the topics were already designated as “ordered by this Court and agreed by the parties.” (Id.) Noval Claimants also believe they are entitled to notice their own Rule 30(b)(6) deposition for testimony from Kuwait because “Kuwait's deposition has not been completed and [Kuwait] is refusing to produce Mr. Al Baker.” (Id. at 4.) Finally, Noval Claimants maintain that the topics included in their new Deposition Notice are “relevant and proportionate to the needs of the case” because they “bear directly on Plaintiff's claim and on the Noval Claimants' claim to the defendants' assets and affirmative defenses.” (Id.) According to the Noval Claimants, KAS's withdrawal from the case “does not moot any of the topics on which Al Baker was designated.” (Id. at 9.) State of Kuwait's Opposition The State of Kuwait urges that the Motion should be denied for several reasons. First, the State of Kuwait argues that the Noval Claimants had ample opportunity to question Kuwait's first 30(b)(6) witness. (Oppo. at 1.) Second, the State of Kuwait maintains that the Noval Claimants' efforts to obtain additional Rule 30(b)(6) testimony on new topics are “untimely, irrelevant, and improper.” (Id.) Kuwait emphasizes that the Noval Claimants did not timely submit topics or join in the Rule 30(b)(6) topics for the deposition of the State of Kuwait, noting that when, in August 2023, this Court directed the parties to submit deposition topics for that deposition, only Plaintiff and Al-Sabah submitted topics (on August 8 and 12, respectively). (Id. at 2-3; and see Smith Decl., at ¶ 2.) Noval Claimants neither submitted their own topics nor joined in the topics submitted by the other parties by the ten-day deadline that the Court set. (Id.) *4 Further, Kuwait rejects Noval Claimants' position that a new Rule 30(b)(6) deposition from Kuwait is necessary to make up for testimony that cannot be obtained from KAS. (Oppo at 6.) Specifically, Kuwait points out that Kuwait and KAS “have always been diametrically opposed” and Noval Claimants' innocent owner defense was not impacted by his withdrawal. (Id. at 7.)[3] In addition, Kuwait objects to the specific categories in the Noval Claimants' new Rule 30(b)(6) Deposition Notice as follows: Topics 1-7: seek testimony on contentions that Kuwait has not made regarding the Noval Claimants' knowledge, including whether the Noval Claimants “knew or should have known that KAS was not authorized to make the transfers at issue or that he embezzled the funds at issue.” Moreover, Kuwait argues that the topics are duplicative of interrogatories the Noval Claimants served seeking the same information and for which “the Noval Claimants ... agreed to accept a consolidated response from the State of Kuwait” specifically directed at “all facts currently known by the State of Kuwait which suggest the Noval Claimants knew or should have known the transfers were embezzled from the State of Kuwait.” (Oppo at 8.) Topic 8: seeks testimony regarding Kuwait's “oversight” of certain bank accounts at Ahli United Bank. (Oppo. at 9.) Kuwait responds that this information is not relevant to any claim or defense in this case but is a “fishing expedition” to obtain information in Noval Claimants' pending state court action against Kuwait. (Id.) Kuwait points out that Mr. Al Samhan “testified at length during his deposition that these accounts were not properly registered” and, therefore, “evaded oversight by the State of Kuwait.” (Id.) Topics 9-14: seeks testimony regarding agreements by Al-Sabah, Al-Jassar, and Al-Baz “to repay the funds that were the subject of the transfers, or any payments or restitution related to such transfers.” (Id.) Kuwait objects that these topics are not proportional to the needs of the case because any repayments “or restitution to the State of Kuwait have no effect on the forfeitability of the Defendant Asserts.” (Id.) Kuwait points out that Plaintiff's claims will be resolved on the merits based on a determination of whether the property was involved in or traceable to certain unlawful activity. (Id.) Specifically, Kuwait notes that under 18 U.S.C. § 981(a)(1)(A) and (C), which governs Plaintiff's claims, “[p]roperty is subject to forfeiture if it is involved in or traceable to property involved in certain unlawful activity, or if it constitutes or is derived from proceeds traceable to certain unlawful activity.” (Id.) Topics 15-16: seek testimony concerning Al-Sabah's lack of authority to make the transfers at issue in the case and the scope of the Amir's powers under Kuwaiti Law. Kuwait objects that these topics are improper insofar as they “require an examination and interpretation of Kuwaiti law, and as such, call for legal conclusions and expert testimony.” (Id. at 10.) Finally, Kuwait emphasizes that “the Noval Claimants have already recognized the State of Kuwait as the owner of the funds at issue.” (Id. at 11 (citing ECF No. 144).) *5 Kuwait argues that there is no basis for a continuation of the Al Samhan's deposition testimony because counsel for Noval Claimants had ample opportunity to directly question Mr. Al Samham about whether the transfers were authorized; about how the unregistered accounts were opened; whether the Amir gave Al-Sabah authority over the accounts in question; about the transfers to the Noval Claimants; and whether a publicly available list exists that identifies a registered account; and who at MAO had authority to transfer funds. (Oppo. at 12 (citing Smith Decl., Ex. E).) Finally, Kuwait insists that because the remaining topics were originally noticed by Al Sabah and related to his specific contentions in the case, including his standing to pursue a claim, these topics have little relevance to discovery at this juncture. (Id. at 13.) Noval Claimants' Reply Noval Claimants respond to Kuwait's arguments by emphasizing that Kuwait was required to produce two Rule 30(b)(6) witnesses on the Court-ordered topics and, to date, has only produced one. (Reply at 1.) Noval Claimants reiterate that they, as a deposing party, “still h[ave] the right to depose the second witness on the topics for which he is expressly designated.” (Id.) This fact, Noval Claimants insist, makes Kuwait's reliance on City of Colton v. Am. Promotional Events, Inc., No. No. ED CV 09–01864 PSG (SSx), 2012 WL 13013380 (C.D. Cal. Jan. 17, 2012), inapposite here because in City of Colton, the party produced a Rule 30(b)(6) witness to testify on topics identified in a deposition notice, but the party was not required to re-produce the witness on the same topics in a later notice. (Id. at 2.) According to Noval Claimants, they are not seeking a “second bite” at the apple because they “never got a first bite.” (Id. at 2.) LEGAL STANDARD A party may obtain discovery concerning any nonprivileged matter that is relevant to any party's claim or defense and is proportional to the needs of the case. FED. R. CIV. P. 26(b)(1). When determining if the proportionality requirement has been met, courts are to consider six factors, namely, the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Id. Relevant information need not be admissible to be discoverable. Id. District courts have broad discretion in controlling discovery. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). When considering a motion to compel, the Court has similarly broad discretion in determining relevancy for discovery purposes. Surfvivor Media, Inc. v. Survivor Productions, 406 F.3d 625, 635 (9th Cir. 2005) (citing Hallet, 296 F.3d at 751). DISCUSSION A. No Basis to Continue Kuwait's First Rule 30(b)(6) Deposition With respect to Noval Claimants' request to compel further deposition testimony of Al Samham, as emphasized by the State of Kuwait, when the Court ordered the parties to conference and submit proposed topics for the State of Kuwait's Rule 30(b)(6) witness, Noval Claimants neither submitted topics nor joined in the topics approved by the Court. (Oppo. at 2-3.) The Court finds that Noval Claimants' efforts to obtain additional testimony from Al Samham are untimely. The Court is also unpersuaded by Noval Claimants' arguments that, because former claimant KAS has now withdrawn from the case, the State of Kuwait should be compelled to provide a further Rule 30(b)(6) deposition on new topics pertinent to Noval Claimants' claims. The time to present topics for any Rule 30(b)(6) deposition of the State of Kuwait was when the parties initially contacted the Court to confirm topics for the deposition and the Court set a schedule for the deposition to occur in Kuwait City. (See Dkt. No. 189.) That time has long passed. *6 Kuwait relies upon the analysis in City of Colton to argue that it need not provide another witness to cover topics already addressed in in a prior Rule 30(b)(6) deposition. (Oppo. at 12 (citing City of Colton, 2012 WL 13013380, at * 4).) In City of Colton, the court held that where prior Rule 30(b)(6) deposition topics were similar to topics on which witness had given prior Rule 30(b)(6) testimony, a witness “is not required to provide that same information again.” Id. Noval Claimants respond that City of Colton does not preclude the additional testimony they seek from a second Kuwaiti witness because Kuwait “did not designate that first witness on all of the topics in [KAS's] 30(b)(6) deposition notice.” (Reply at 1-2.) Thus, Noval Claimants argue, they never got their “first bite at the apple.” (Id.) But the record here suggests otherwise. Indeed, it appears that Noval Claimants seek further testimony on topics on which Al Samham already testified, particularly with respect to the lack of Kuwaiti authorization for any of KAS's transfers of funds from the accounts at issue here. Kuwait points out that the Rule 30(b)(6) testimony of Al Samham has already established that the transfers of the funds at issue were not authorized by any official or governmental authority of Kuwait. (Oppo. at 3; Smith Decl., Ex. D.) As Kuwait also points out, counsel for Noval Claimants had ample opportunity to question Al Samham at that deposition, which is evidenced by the deposition excerpts submitted in support of Kuwait's Opposition brief. (Oppo. at 11-12.) The Court agrees. Accordingly, the Motion as to Noval Claimants' efforts to compel Rule 30(b)(6) deposition testimony from Al Samham pursuant to KAS's original deposition notice is DENIED. B. A Second Rule 30(b)(6) Witness on Noval Claimants' New Topics is Not Warranted Noval Claimants urge that Kuwait “never produced its second 30(b)(6) witness which it designated on numerous topics” and should be required to produce “any other witness that is most knowledgeable about the additional topics included in the Noval Claimants' Deposition Notice.” (Id. at 2.) The Court, therefore, examines the specific topics proposed in the Noval Claimants' new deposition notice through the dual lenses of relevance and proportionality. FED. R. CIV. P. 26(b)(1). With respect to topics 1-7, in which Noval Claimants seek additional Rule 30(b)(6) testimony, the Court finds that Noval Claimants seek information that is neither relevant nor proportionate to the needs of this case. FED. R. CIV. PROC. 26 (b)(1). As an initial matter, Kuwait represents that it makes no such contentions about the Noval Claimants' knowledge or lack thereof. (Oppo. at 7-8.) Further, Kuwait posits that the topics are duplicative of interrogatories the Noval Claimants served seeking the same information, and for which “the Noval Claimants ... agreed to accept a consolidated response from the State of Kuwait” specifically directed at “all facts currently known by the State of Kuwait which suggest the Noval Claimants knew or should have known the transfers were embezzled from the State of Kuwait.” (Oppo at 8.) There is no reason to compel Kuwait to present a Rule 30(b)(6) witness to testify on topics 1-7.[4] *7 As to Topic 8, which seeks testimony regarding Kuwait's “oversight” of the accounts at issue, the Court finds that this information was covered in the Al-Samham deposition testimony, in which counsel for Noval Claimants had a full opportunity to question Al-Samham about any such oversight. The Court declines to order Kuwait to present a second witness to revisit testimony that Kuwait's previous Rule 30(b)(6) witness already gave on Topic 8. Topics 9-14 seek testimony regarding any agreements by Al-Sabah, Al-Jassar and Al-Baz to repay Kuwait for any alleged embezzled funds. Presumably such testimony would be used to quantify a potential offset against any recovery by Kuwait. However, this civil in rem forfeiture action is “governed by the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules for Civil Procedure.” United States v. 2659 Roundhill Drive, 283 F.3d 1146, 1149, n.2 (9th Cir. 2002). Noval Claimants' “innocent owner” defense to civil forfeiture requires that the Noval Claimants establish by a preponderance of the evidence: (1) they were bona fide purchasers of the subject properties when they acquired interests in the Defendant Assets; and (2) they did not know and were “reasonably without cause to believe that the property was subject to forfeiture.” 18 U.S.C. § 983(d)(2)(A); and see U.S. v. Ferro, 681 F.3d 1105, 1113 (9th Cir. 2012). Any restitution or repayment received by Kuwait is not relevant to meeting Noval Claimants' burden to establish their innocent owner defense, and Noval Claimants do not cite any authority to support the relevance of any restitution agreements to these in rem civil forfeiture proceedings. Notably, in their Reply, Noval Claimants offer no additional discussion regarding topics 9-14 at all. The Court, therefore, is unpersuaded that compelling Rule 30(b)(6) deposition testimony from Kuwait on these topics meets the relevance and proportionality requirements of Rule 26(b)(1). Accordingly, Kuwait need not identify a further Rule 30(b)(6) witness to testify on topics 9-14 listed in Noval Claimants' proposed new deposition notice. Finally, topics 15-16 seek testimony concerning Al-Sabah's lack of authority to make the transfers at issue here and the scope of the Amir's powers under Kuwaiti law. The information sought in these topics does not warrant requiring Kuwait to produce a second Rule 30(b)(6) witness. Without deciding whether Noval Claimants' request for testimony regarding Kuwait law and the scope of the former Amir's authority calls for legal conclusions and/or expert testimony, the Court notes that Noval Claimants already have sworn testimony from Al-Samham confirming that Al-Sabah's transfers from the subject accounts were unauthorized. (Smith Decl., Ex. D.) Kuwait also emphasizes that “the Noval Claimants have already recognized the State of Kuwait as the owner of the funds at issue.” (Id. at 11 (citing ECF No. 144).) Noval Claimants do not refute this assertion. Thus, Kuwait is not required to identify a further Rule 30(b)(6) deposition witness on topics 15-16. CONCLUSION For the foregoing reasons, the Noval Claimants' Motion to compel a further Rule 30(b)(6) deposition of Kuwait pursuant to the Khaled Al-Sabah's deposition notice signed October 20, 2024 is DENIED. Noval Claimants' request to compel a new Rule 30(b)(6) deposition of Kuwait pursuant to Noval Claimants' Notice of Deposition dated March 4, 2024 is also DENIED. *8 Each party to bear their own costs. IT IS SO ORDERED. Footnotes [1] The Motion is one of numerous discovery skirmishes that have arisen as discovery draws to a close. (See, e.g., Dkt. Nos. 180, 185, 189, 193, 197, 198,199, 203, 205, 218, 237.) [2] Capitalized terms are defined in the Noval Claimants' Deposition Notice. (Richards Decl., Ex. C.) For brevity's sake, the Court will not recite all of those definitions here. [3] To the extent Noval Claimants argue they cannot obtain needed testimony from Al Sabah himself, Kuwait notes that Noval Claimants have made no efforts to obtain testimony from Al Sabah, as a non-party, under the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters consistent with Rule 28(b)(1). (Oppo. at 7.) [4] To the extent Noval Claimants seek to “pin down” Kuwait as to its contentions about Noval Claimants' knowledge, more proportionate – and economical – discovery on these issues could be obtained through Requests for Admission.