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 August 19, 2024 Stevenson, Karen L., United States Magistrate Judge Proceedings: ORDER GRANTING IN PART AND DENYING IN PART CLAIMANT GOVERNMENT OF THE STATE OF KUWAIT'S MOTION TO COMPEL PRODUCTION OF DOCUMENTS BY NON-PARTY LEVENE, NEALE, BENDER, YOO & GOLUBCHIK AND DEPOSITION TESTIMONY BY DAVID GOLUBCHIK [DKT NO. 267] *1 Before the Court is Claimant Government of the State of Kuwait's (“Kuwait's”) Motion to Compel Production of Documents By Non-Party Levene, Neale, Bender, Yoo & Golubchik (“LNBYG”) and Deposition Testimony by David Golubchik (the “Motion”), along with the Declaration of Eileen M. Hren (“Hren Decl.”) and related exhibits, filed on June 10, 2024. (Dkt. No. 267.) On June 17, 2024, LNBYG filed a Response to the Motion (“Response”). (Dkt. No. 277.) On June 18, 2024, the Court denied Noval Claimants' Ex Parte Application to continue the motion hearing set for July 10, 2024. (Dkt. No. 281.) On July 19, 2024, counsel for Noval Claimants filed a “Limited Procedural Opposition to the Unilaterally Set Discovery Motions Presently Set for July 10, 2024,” along with a Memorandum of Points and Authorities, and Declarations of Ronald Richards (“Richards Decl.”) and David Colella (“Colella Decl.”) (collectively, the “Noval Response”). (Dkt. No. 280.) On June 24, 2024, Kuwait filed a Reply in support of the Motion. (Dkt. No. 282.) On July 3, 2024, the Court deemed the Motion suitable for decision without oral argument and took the Motion under submission. (Dkt. No. 285.) For the reasons outlined below, the Motion is GRANTED in part and DENIED in part. RELEVANT BACKGROUND The Court outlined the factual and procedural underpinnings of this civil in rem forfeiture proceeding in prior discovery rulings. (See, e.g., Dkt. No. 271.) Therefore, the Court limits its procedural overview to those facts relevant to the instant Motion, concerning Subpoenas Kuwait served on non-party law firm LNBYG, former counsel to 8484 Wilshire Blvd. and Tower Park Properties.[1] (See Opposition at 3.) Kuwait seeks an order compelling LNBYG to produce documents concerning funds allegedly embezzled from Kuwait's Ministry of Defense (the “MAO-MOD Funds”) that were transferred into and later disbursed from LNBYG's Client Trust Account. The Subpoena to LNBYG seeks, among other documents, unredacted billing records and invoices for services LNBYG provided to Noval Claimants in connection with the fund transfers. In addition, Kuwait seeks an order compelling deposition testimony and the production of documents by LNBYG partner, Mr. Golubchik, concerning the MAO-MOD Funds. Noval Claimants object to the production of LNBYG's records and Mr. Golubchik's deposition on the ground of attorney-client privilege. THE MOTION A. Kuwait's Arguments Kuwait emphasizes that the gravamen of the civil in rem forfeiture action is the alleged embezzlement of the MAO-MOD Funds from Kuwait's Ministry of Defense. According to Kuwait, the embezzlement scheme involved the transfer of “at least $104,380,000 to California bank accounts designated by Victorino and Franco Noval. (Motion at 2.) Kuwait asserts that some $33,000,000 of those funds were “transferred directly into a client trust account opened and administered by the LNBYG law firm. (Id.) Kuwait contends that Noval Claimants used the LNBYG attorneys to “launder” the funds embezzled from Kuwait's MOD and that those funds are specifically traceable to the Defendant Assets at issue in this forfeiture action. (Id. at 3-4.) *2 In January 2024, Kuwait served requests for production of documents (“RFPs”) on LNBYG to “determine the circumstances surrounding the transfer of embezzled funds into LNBYG's trust account” along with RFPs and a notice for the deposition of David Golubchik, a named partner at LNBYG. (Motion at 2.) LNBYG produced a small number of documents and withheld others based on Noval Claimants' assertion of the attorney-client privilege. (Id.) Counsel for Noval Claimants provided a privilege log. Kuwait contends that the assertion of the attorney-client privilege regarding the document requests and the deposition subpoena to Mr. Golubchik is improper. Kuwait argues, as an initial matter, that there was no attorney-client relationship with respect to the transfers of $33,000,000 of allegedly embezzled Kuwait funds into LNBYG's Trust Account. (Id. at 9.) Kuwait maintains that the documents and testimony it seeks with respect to the MAO-MOD Funds cannot be subject to attorney-client privilege because Mr. Golubchik was not acting in his capacity as a legal advisor. (Id. at 12.) Finally, Kuwait urges that even if an attorney-client relationship had existed, Noval Claimants waived any privilege by relying on the use of attorneys, including Mr. Golubchik and LNBYG, to support their “innocent owner defense” in the forfeiture action. (Id. at 14-15.) B. LNBYG's Response In its Response, LNBYG frames the dispute as raising three related questions concerning the scope of the attorney-client privilege: (1) whether certain documents within the scope of [LNBYG's] response to the Subpoena are subject to the attorney-client privilege; (2) whether Noval Claimants waived the privilege; and (3) whether “there is any testimony that can be provided at a deposition by Mr. Golubchik in light of the asserted Privilege.” (Oppo. at 2.) LNBYG represents that it has produced “all documents responsive to the Subpoena in its possession, custody and control other than those documents which the Noval Claimants have objected to, based upon their assertion of the Privilege.” (Id.) LNBYG emphasizes that it has no discretion to disregard its Clients' assertion of the privilege. (Id. at 3.)[2] LNBYG recounts that as former counsel to the Tower Park Properties, LLC in a Chapter 11 bankruptcy proceeding, after conferring with their client, LNBYG searched its records and produced 332 pages of potentially responsive documents in March 2024. (Id. at 4.)[3] In response to concerns that LNBYG had not produced documents pertaining to engagement agreements and billing invoices, LNBYG produced public records from the bankruptcy court's docket, including the “Application to Employ LNBYG,” along with the bankruptcy court's order approving LNBYG's employment. (Id. at 5.) LNBYG says it did not locate a signed engagement agreement for 8484 Wilshire Blvd. (Id. at 6.) LNBYG informed counsel for the State of Kuwait and Noval Claimants that in March 2024, Mr. Golubchik had “no responsive documents in his individual capacity” because all of the documents produced on behalf of the former client were “within the firm's records.” (Young Decl., Ex. C.) *3 With respect to the deposition of Mr. Golubchik, LNBYG says it had not been advised of a date for conducting the Golubchik deposition since March 7, 2024, and LNBYG is not aware of any further requests to set a deposition date. (Id.)[4] Finally, LNBYG states that the “issue regarding the asserted attorney client privilege, or waiver of that privilege, is better addressed between the parties to this action,” and LNBYG “will abide by however it is resolved between the parties, whether by agreement of the parties or with the Court's intervention.” (Id. at 6.) C. Noval Claimants' “Limited Procedural Objection” On June 19, 2024, Noval Claimants filed a “Limited Procedural Opposition” to the Motion, in which they argue that the Motion was not properly served pursuant to Federal Rule of Civil Procedure 5. (Noval Response at 2.) Noval Claimants emphasize that the Motion was “filed close to midnight on June 10, 2024” and objected to the unilaterally set hearing date of July 10, 2024. Noval Claimants state that “[p]ending proper service or the Court granting the pending ex parte application, the Noval Claimants reserve the right to file substantive oppositions to the discovery motions.” (Id.) Much of Noval Claimants' objection focused on Mr. Richards' unavailability to attend a hearing on July 10, 2024. The Declaration of Ronald Richards states that both counsel for Noval Claimants were traveling out of the United States when Kuwait filed the Motion and that Mr. Richards had little access to stable Wi-Fi; was traveling by car from one country to another; and he had “provided a notice of unavailability months ago.” (Id. at 2.) Mr. Richards also states that he had been “solely handling the subject Rule 45 subpoenas” and could not “physically be in Los Angeles for this discovery motion.” (Id.) Procedurally, Noval Claimants argue that the Motion “was not served as required by Federal Rule of Civil Procedure Rule 5 and therefore is not properly before the Court.” (Id.) Noval Claimants insist that the defective service was prejudicial and did not provide proper notice because two attorneys, Ms. Young and Mr. Colella “were not on the ECF” and service was not properly effectuated by emailing the motion to Ms. Young and Mr. Colella when neither of these attorneys “consented to electronic service in writing.” (Id. at 4.) Noval Claimants state that to comply with Rule 5, Ms. Young and Mr. Colella had to be served “via US Mail, overnight mail, or personal delivery,” and email service was not an option. (Id. at 3.) On the merits, Noval Claimants argue that the “assertion of the innocent owner defense in this action does not waive attorney client privilege” and a “motion to compel records from [their attorneys] absent a consent by the client to waive the privilege does not constitute a waiver.” (Id. at 4-5.) D. Kuwait's Reply Kuwait appears to have filed two Reply briefs regarding the Motion. On June 26, 2024, Kuwait filed a two-page Reply, responding only as to the Motion re: LNBYG (the “June 24 Reply”) . (Dkt. No. 282.) In the June 24 Reply, Kuwait notes that LNBYG “makes no substantive arguments” in opposing the Motion and simply relies on its position that the assertion or waiver of the attorney-client privilege is best addressed by the parties to the action. (Reply at 2.) The June 24 Reply does not address Noval Claimants' objection that the Motion was not properly served. *4 On June 26, 2024, Kuwait filed a Reply in Support of its Motion to Compel Production of Documents by Non-Party LNBYG and Deposition of Testimony by David Golubchik and its Motion to Compel Production of Documents by Non-Party Fullerton, Lehmann, Schaefer & Dominick, LLP and David Colella and Deposition Testimony by David Colella ( “June 26 Reply”). (Dkt. No. 284.)[5] Regarding the adequacy of service on LNBYG, the June 26 Reply argues that Noval Claimants “failed to articulate any prejudice whatsoever arising from electronic service of the Motions” and LNBYG “received actual, timely, and effective notice of the Motions.” (Dkt. No. 284 at 2.) E. Kuwait's Discovery Requests (1) Subpoena to LNBYG for Production of Documents On January 29, 2024, Kuwait served a Subpoena seeking the production of documents pursuant to Federal Rules of Civil Procedure 26, 34(c), and 45, which included the following eight requests for production (“RFPs”): RFP No. 1 All retainer or engagement letters or agreement between YOU and the SUBJECT ENTITIES. RFP No. 2 All retainer or engagement letters or agreements, and any other contracts or agreements, entered into by YOU on behalf of, at the request of, or with the consent of the SUBJECT ENTITIES. RFP No. 3 All DOCUMENTS and COMMUNICATIONS reflecting or relating to any fees and expenses for services provided by YOU to the SUBJECT ENTITIES, including but not limited to bills, invoices, estimates, and budgets. RFP No. 4 All DOCUMENTS and COMMUNICATIONS reflecting or relating to YOUR receipt of funds from, for, or on behalf of, the SUBJECT ENTITIES, including but not limited to account statements and records of wire transfers. RFP NO. 5 All DOCUMENTS and COMMUNICATIONS concerning the source of funds YOU received from, for, or on behalf of the SUBJECT ENTITIES. RFP NO. 6 All DOCUMENTS and COMMUNICATIONS reflecting or relating to YOUR disbursements of funds to, for, or on behalf of, the SUBJECT ENTITIES, including, but not limited to, account statements and records of wire transfer. RFP No. 7 All DOCUMENTS and COMMUNICATIONS concerning the use or disposition of funds YOU disbursed to, for, or on behalf of the SUBJECT ENTITIES. RFP No. 8 All DOCUMENTS and COMMUNICATIONS reflecting or relating to any bank or client trust accounts held for the benefit of the SUBJECT ENTITIES, including, but not limited to, account opening forms, account statements, and records of wire transfer. (Hren Decl., Ex. 3.) (2) Subpoena to David G. Golubchik Also on January 29, 2024, Kuwait served LNBYG partner, David B. Golubchik, with a subpoena for deposition testimony and production of documents pursuant to Federal Rule of Civil Procedure 45 (“Golubchik Subpoena”). (Hren Decl., Ex. 4.) The Golubchik Subpoena included eight RFPs identical to those served with the LNBYG Subpoena. (Id.) LEGAL STANDARDS A. Scope of Permissible Discovery 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. *5 If a party “fails to make a disclosure required by Rule 26(a), any other party may move to compel “an answer, production, or inspection.” Fed. R. Civ. P. 37(a)(3)(B). 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 Prods., 406 F.3d 625, 635 (9th Cir. 2005) (citing Hallet, 296 F.3d at 751). B. Attorney-Client Privilege The attorney-client privilege protects confidential communications between clients and attorneys that are made for the purpose of giving legal advice. Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). Whether information is covered by the attorney-client privilege is determined by an eight-part test: (1) Where legal advice of any kind is sought; (2) from a professional legal advisor acting as such, (3) communications relating to that purpose, (4) made in confidence (5) by the client, (6) are permanently protected (7) from disclosure by the client or by the legal advisor, (8) unless the protection is waived. United States v. Graf, 610 F.3d 1148, 1156 (9th Cir. 2010). The attorney-client privilege is strictly construed. Weil v. Investment/Indicators, Research and Mgmt. Inc., 647 F.2d 18, 24 (9th Cir. 1981). The party asserting the attorney-client has the burden of establishing the existence of the attorney-client relationship and the privileged nature of the communication.” United States v. Ruehle, 583 F.3d 600, 607 (9th Cir. 2009) (internal citation omitted.) DISCUSSION A. Whether Service Was Proper Under Rule 5 A threshold question here is whether non-parties, LNBYG and Mr. Golubchik, were properly served with the Motion. Federal Rule of Civil Procedure 5 governs how service and filing of pleadings and other papers can be made. Fed. R. Civ. P. 5(b). Rule 5 provides that service may be perfected in several different ways, including by mail, in person, and “sending it to a registered user by filing it with the court's electronic-filing system or sending it by other electronic means that the person consented to in writing.” Fed. R. Civ. P. 5(a)(2). Here, the Proof of Service indicates that the Motion was filed on June 10, 2024 at 11:21 PM PDT by CM/ECF Notice of Electronic Filing. (Dkt. No. 267-20.) The Proof of Service also indicates that LNBYG attorneys, David Golubchik, Esq., and Beth Aminoff R. Young, Esq., received notice “by email only.” (Id.) Kuwait emphasizes that “neither the Noval Claimants, nor counsel for [ ] LNBYG [ ], has articulated any identifiable prejudice arising from electronic service of the Motions here.” (Reply at 3.) The Court notes that despite Noval Claimants' objection to the email service, LNBYG served a Response to the Motion, signed by Beth Ann Young, seven days after the Motion was filed. (Response at 8-9; Young Decl., Ex. C.) Notably, in its response, LNBYG raised no objection to the adequacy of service. In light of LNBYG's timely response, the Court finds that LNBYG received actual notice of the Motion and finds no evidence of prejudice to LNBYG resulting from the email service. Furthermore, LNBYG's timely service of its Response supports a conclusion that any objection to service via email was waived. B. Relevance and Proportionality *6 Before addressing the attorney-client privilege questions raised by the Motion, the Court first considers the relevance and proportionality of the disputed discovery requests. Each of the LNBYG document requests purport to seek “all” documents and/or communications in each of the eight categories. (See Hren Decl., Ex. 3.) The LNBYG Subpoena does not define a relevant time period. Absent any temporal limitation on the RFPs, it is reasonable to conclude that the RFPs require a search for and production of documents and communications between LNBYG and the Noval Claimants throughout any time during which the Noval Claimants were clients of the firm. There are no facts in the citing Consolidated Master Verified Complain (“CMVC”), the Motion or Noval Claimants' Response that define what that time frame might have been. That said, as relevant to the Motion, the CMVC alleges that the first transfers into the LNBYG Trust Account occurred in October 2012 and the last transaction occurred on October 16, 2014. (Motion at 4 (citing CMVC ¶¶ 73-75).) Given the roughly two-year period when the transfers of MAO-MOD Funds allegedly occurred, the lack of any time limitation in the RFPs makes all of Kuwait's eight RFPs facially overbroad. The RFPs arguably require LNBYG to produce information that is both irrelevant to the claims and defenses at issue and disproportionate to the needs of the case. See Fed. R. Civ. P. 26(b)(1). Thus, for purposes of the Motion, the Court concludes that the relevant and proportionate time period is no earlier than three months prior to the first transfer in October 2012 through October 16, 2014 when the last transaction allegedly occurred. The question then becomes, for the relevant time period, what, if any, of Noval Claimants' communications with LNBYG and records held by LNBYG may be privileged. C. LNBYG Documents Are Subject to Attorney-Client Privilege “The attorney-client privilege is the oldest and arguably most fundamental of the common law privileges recognized under Federal Rule of Evidence 501.” In re Napster, Inc., Copyright Litigation, 479 F.3d 1078, 1090 (9th Cir. 2007) (internal citation omitted). The purpose of the privilege “is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.” Upjohn Co., 449 U.S. at 389. But the attorney-client privilege is not absolute. Id.[6] To determine if information is protected based on attorney-client privilege, the Court must conclude that each of the eight factors outlined above are satisfied. *7 It is undisputed that LNBYG and Mr. Golubchik are former counsel to 8484 Wilshire Blvd., a claimant in the pending forfeiture action. (Response at 8; Young Decl. ¶ 3.)[7] It is also undisputed that LNBYG and Mr. Golubchik provided advice as counsel to 8484 Wilshire Blvd. relating to that engagement. Thus, at first glance, a presumption of privilege seems reasonable. However, in the Motion, Kuwait questions whether the advice LNBYG and Mr. Golubchik may have provided the Noval Claimants regarding the trust account transfers was business advice. The attorney-client privilege only shields disclosure of an attorney's communications with a client where the primary purpose is to secure legal advice as opposed to business advice. See, e.g., In re Grand Jury, 23 F.4th 1088, 1091 (9th Cir. 2021) (noting that in applying the “primary purpose” test to dual-purpose communications, “courts look at whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice”) Thus, further inquiry is necessary. (1) Whether LNBYG's Primary Purpose in Advising Noval Claimants re: LNBYG Trust Account Transfers Was Business or Legal As noted above, “the fact that a person is a lawyer does not make all communications with that person privileged.” United States v. Martin, 278 F.3d 988, 999 (9th Cir. 2002). Kuwait argues that to the extent LNBYG provided business rather than legal advice to 8484 Wilshire Blvd., LLC regarding transfers of the MAO-MOD Funds into LNBYG's Client Trust Account that were subsequently used to purchase Defendant Assets, those communications, Kuwait insists, are not privileged. (Motion at 4-5.) The transfers at issue occurred between October 2012 and October 2014, and shortly thereafter, “the LNBYG Trust Account was closed.” (Id. at 4 (citing CMVC ¶ 75).) Kuwait argues “it is unclear whether LNBYG and Mr. Golubchik provided legal advice to the Noval Claimants in connection with the transfers[.]” (Motion at 4.) Kuwait also points to “the absence of engagement letters or invoices for legal services that would tend to support the existence of an attorney-client relationship” as “reasonable cause to question whether such a relationship existed between the Noval Claimants and LNBYG with respect to the transfers at issue here.” (Id.) LNBYG, in responding to Kuwait's subpoena for production of documents, represents that it “conducted a thorough search of its records in order to produce all potentially responsive documents,” and in March 2024, produced 332 pages of documents. (Response at 4.) Noval Claimants' counsel, Mr. Richards, reviewed LNBYG's document production before it was produced and prepared an initial privilege log that LNBYG provided with its documents. (Id. at 5.) From the outset, Kuwait expressed concern that LNBYG's production lacked certain engagement agreements and billing invoices relating to the engagement with 8484 Wilshire Blvd., LLC. But LNBYG responded that its five-year document retention period had long passed with respect to the transactions at issue. (Id.) LNBYG states that on its own initiative, it obtained and produced publicly available documents from the Tower Park Properties, LLC bankruptcy court docket, including “all of the firm's invoices which the Bankruptcy Court approved,” as these documents “were of public record and did not implicate any attorney client privilege.” (Id.) LNBYG states it “did not locate a signed engagement agreement” as to 8484 Wilshire Blvd., LLC. (Id.) LNBYG insists that because it produced “bank records and internal ledgers ... [Kuwait] has the banking information regarding these alleged transactions.” (Id. at 6.) But Kuwait complains that the document descriptions provided in Noval Claimants' Revised Privilege Log do not include sufficient specificity to support the assertion of attorney-client privilege. (Motion at 11.) Kuwait argues that the descriptions in the Revised Privilege Log “tend to reflect the provision of non-legal, business services and advice” or simply “reference[ ] alleged legal advice in conclusory fashion.” (Id.) *8 The Court has examined two LNBYG privilege logs prepared by Noval Claimants' counsel, Mr. Richards, and submitted with the Motion. (Hren Decl., ¶¶ 6, 9, Exs. 5, 6.) But the Court finds nothing in the record here, other than Kuwait's supposition, to suggest that LNBYG was not providing legal advice in its communications with its clients. As noted, Noval Claimants, as the party asserting the privilege, have “the burden to establish the existence of the attorney-client relationship and the privileged nature of the communication.” Ruehle, 583 F.3d at 607. Noval Claimants did not file a comprehensive opposition to the Motion, but instead, filed a “limited procedural opposition” to the Motion. (Dkt. No. 280.) Nonetheless, the limited opposition emphasized Noval Claimants' continued assertion of the privilege with respect to their communications with LNBYG. (Id. at 4-5.) Additionally, Noval Claimants provided a privilege log identifying confidential communications between LNBYG and its client that were withheld from LNBYG's document production based on the Noval Claimants' assertion of its attorney-client privilege. Together, these actions satisfy Noval Claimants' initial burden to establish the existence of the privilege. Kuwait would have the Court draw an inference that LNBYG's communications with 8484 Wilshire Blvd., LLC concerned business rather than legal matters based, at least in part, on the absence of engagement letters or billing records and the allegations of the CMVC. However, LNBYG provides a concrete and plausible explanation that the billing records and invoices are not kept beyond the firm's five-year document retention period, and consistent with that policy, none were located when LNBYG searched for documents in response to Kuwait's discovery requests. (Response at 5; Young Decl., Ex. B.) On this record, the Court declines to vitiate Noval Claimants' attorney-client privilege based on Kuwait's speculation and supposition. (2) Implied Waiver of Attorney-Client Privilege Based on Innocent Owner Defense The Court's inquiry next turns to whether Noval Claimants impliedly waived the privilege by asserting the innocent owner defense. (See Motion at 14-16.) Noval Claimants reject that argument. (Oppo. at 4-5.) For its part, LNBYG correctly states that is has “no discretion to disregard the Clients' assertion of the privilege” and indicates that it will “abide by any agreement of the Parties or Order of the Court on this Motion.” (Response at 3-4.) In an action, such as this one, brought under federal law, the scope of any privilege waiver is determined by federal law. Fed. R. Evid. 501; see Clarke v. Am. Commerce Nat'l Bank, 974 F.2d 127, 129 (9th Cir. 1992) (stating that issues concerning “the application of the attorney-client privilege to the adjudication of federal law are governed by Federal common law”) Federal courts have long recognized that a party may impliedly waive the attorney-client privilege by putting the lawyer's performance at issue during the course of litigation. See Bittaker v. Woodford, 331 F.3d 715, 719 (9th Cir. 2003) (internal citations omitted) (noting implied waiver rule dates back to 19th century). The doctrine of implied waiver is grounded in principles of fairness that prevent the party holding the privilege from using its privilege as both a sword and a shield. Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162 (9th Cir. 1992). An implied waiver involves court-ordered disclosure after the client asserts a claim or defense that puts the nature of the privileged material at issue. Bittaker, 331 F.3d at 721. As the Ninth Circuit explained in Bittaker: “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. The party asserting the claim is said to have implicitly waived the privilege.” Id. In its Motion, Kuwait points out that Noval Claimants have repeatedly stated their reliance on counsel as central to their innocent owner defense. (Motion at 14.) In the Answer to the CMVC, Noval Claimants assert, as an affirmative defense, they are innocent owners of the Defendant Assets. (See Answer, Dkt. No. 71.) Kuwait also emphasizes that, in response to interrogatories that Kuwait propounded asking for all facts that support Noval Claimants' innocent owner defense, Noval Claimants stated: *9 Claimant used attorneys in connection with the receipt of the funds from the MAO-MOD Transfers ... the sender was a member of the Kuwait Royal family and a Minister in the Kuwait government. At no time did the sender of the funds indicate, represent or in any way suggest the funds were being misappropriated or that the sender did not have fully authority to send them. Claimant had no knowledge or information that the funds were being misappropriated or that the sender did not have full authority to send them. (Motion at 6 (citing Noval Rog Resp. Nos. 3, 4, 5, 6).) Kuwait also points to portions of deposition testimony by a Noval witness that further underscore Noval Claimants' reliance on counsel as the basis for Noval Claimants' asserted “innocent” involvement in the transfer of MAO-MOD Funds into the LNBYG Trust Account that were subsequently disbursed from the LNBYG Trust Account and used to purchase the Defendant Assets. (Motion at 6-7.)[8] Thus, in order to challenge Noval Claimant's innocent owner defense, Kuwait must have some access to the communications between Noval Claimants and LNBYG regarding the asserted reliance on counsel as the basis for that affirmative defense. Indeed, Noval Claimants' stated reliance on counsel as the basis for the innocent owner defense triggers concern for the very principles of fairness articulated in Bittaker. Accordingly, the Court finds that Noval Claimants have impliedly waived the attorney-client privilege with respect to communications about reflecting business advice rather than legal advice between Noval Claimants and LNBYG concerning transfers of any MAO-MOD Funds into the LNBYG Trust Account and the disbursement of MAO-MOD Funds from LNBYG Trust Account for the purchase of Defendant Assets. The Court also finds that the relevant and proportionate time period for the implied waiver is limited to three months before the first transfers of $9,500,000 and $5,500,000 into the LNBYG Trust Account in 2012 and October 16, 2014, when the last of MAO-MOD Funds were disbursed from the LNBYG Trust Account. (See Motion at 4 (citing CMVC ¶¶ 73-75.) To avoid inadvertent disclosure of documents that may properly be subject to attorney-client privilege, Noval Claimants shall, within fourteen (14) days of the date of this Order, submit any documents identified as responsive and consistent with this Order, along with a further revised Privilege Log, to the Court for in camera review, prior to disclosure to Kuwait. No deposition of Mr. Golubchik shall occur before the Court concludes its in camera review. If, after any additional search, LNBYG can identify no documents consistent with this Order, then LNBYG shall, within fourteen (14) days of the date of this Order, serve amended responses to the Kuwait's RFPs indicating as such. CONCLUSION For the reasons outlined above, Kuwait's Motion to Compel Further Production of Documents by LNBYG is GRANTED in part and DENIED in part. Kuwait's Motion to Compel the deposition of Mr. Golubchik is GRANTED in part, only as to any transfers of MAO-MOD Funds into and out of the LNBYG Trust Account during the period three months prior to the first transfer of MAO-MOD Funds into the LNBYG Trust Account in October 2012 through October 12, 2014 and subject to in camera review by the Court before production. The motion to compel Mr. Golubchik's compliance with Kuwait's subpoena duces tecum is provisionally DENIED subject to the Court completing its in camera review of any LNBYG documents located in compliance with this Older. *10 IT IS SO ORDERED. Footnotes [1] 8484 Wilshire Blvd., LLC is one of the “Noval Claimants” in this action. [2] LNBYG reserved its right to further respond to the allegations in the Motion regarding the transfers because it only received a redacted copy of the Motion. (Motion at 6, n. 4.) As of the date of this Order, it is unclear whether LNBYG ever received an unredacted version of the Motion. [3] LNBYG also states that it provided the bankruptcy-related documents to Mr. Richards, counsel for Noval Claimants in this in rem action to review and that Mr. Richards then prepared a privilege log identifying documents for which his clients asserted attorney-client privilege. (Oppo. at 5.) This initial privilege log was “produced to Plaintiff along with LNBYG's production of documents.” (Id.) [4] Email correspondence attached to the Declaration of Beth Ann R. Young (“Young Decl.”) indicate that a deposition set for March 8, 2024 did not take place because counsel for Noval Claimants, Mr. Richards, was unavailable on that date, and there is no indication that it has ever been re-scheduled. (Young, Decl., Ex. A.) [5] The Court addressed Kuwait's Motion to Compel re: Fullerton, Lehmann, Schaefer & Dominick and David Colella in a separate Order issued concurrently with this Order. [6] The “crime-fraud exception” to the privilege provides that no privilege protects communications between a lawyer and a client when the client consults the attorney for advice to assist the client in the commission of a criminal or fraudulent scheme. Clark v. United States, 289 U.S. 1, 15 (1933). To establish that the crime-fraud exception applies, a challenger must show: (1) that the client was engaged in or planning a criminal or fraudulent scheme when it sought the advice of counsel to further the scheme; and (2) that “the attorney-client communications for which production is sought were ‘sufficiently related to’ and made ‘in furtherance of’ an intended, or present, continuing illegality.” In re Grand Jury Proceedings, 87 F.3d. 377, 381 (9th Cir. 1996). The Ninth Circuit has emphasized that it is not enough that a party has a “sneaking suspicion the client was engaging in or intending to engage in a crime or fraud when it consulted the attorney.... Rather, the district court must find ‘reasonable cause to believe’ that the attorney's services were ‘utilized ... in furtherance of the ongoing unlawful scheme.” Id. In the Motion, Kuwait does assert that “Noval Claimants used attorneys to launder funds embezzled from Kuwait.” (Motion at 3.) But Kuwait nowhere mentions the crime-fraud exception as a basis for the discovery it seeks from Noval Claimants' attorneys. [7] Footnote Missing [8] The Court refers to the testimony in oblique fashion without direct quotation because the portion of the Motion quoting the specific deposition testimony was redacted in the public version of the Motion and the unredacted version was filed under seal. (See Dkt. Nos. 268, 276.)