DRC LV Ventures, LLC v. Dalpour
- Clarke
- 1:23-cv-07827
- U.S. District Court · Southern District of New York
- 3
In DRC Ventures v. Dalpour, Judge Clarke ordered former counsel to identify documents for private privilege review and allowed objections.
The order affected the plaintiffs, the defendants, the defendants’ former counsel Morritt Hock & Hamroff, and the documents subject to the court’s attorney-client privilege review.
What happened
In DRC Ventures v. Dalpour, the plaintiffs asked the court to require production of communications under an exception to attorney-client confidentiality for communications related to crime or fraud. The court had already found probable cause to believe that a fraud occurred and that some communications furthered it.
The court clarified that it had not found that the defendants’ former law firm, Morritt Hock & Hamroff, committed any crime or fraud. The court reviewed documents provided by the firm to determine which materials were actually connected to the subjects raised by the plaintiffs.
Judge Jessica G. L. Clarke ordered the firm to identify responsive documents or portions of documents by June 13, 2024. The court said it expected to withhold irrelevant material and produce portions that qualified for the exception, while allowing the defendants to object and the plaintiffs to respond.
The detailed version
- DRC LV Ventures, LLC v. Dalpour · No. 1:23-cv-07827
- Clarke
- May 30, 2024
Background
The plaintiffs moved for an order compelling production of communications under the crime-fraud exception to the attorney-client privilege. That exception can permit disclosure of otherwise protected communications when there is probable cause to believe that a crime or fraud occurred and that the communications were made to further it.
In an earlier order, the court found that the plaintiffs had made the required showing of probable cause. The court ordered Morritt Hock & Hamroff (MHH), the defendants’ former counsel, to provide documents withheld as privileged for in-camera review, meaning the court would examine them privately.
The court emphasized that its earlier finding did not determine that MHH had committed any crime or fraud. Such a finding was not necessary for the exception to apply.
Materials Under Review
The court identified five subjects relevant to the review:
- The defendants’ operating partner in Las Vegas, MGM, distributing funds to the defendants;
- Delays in the defendants’ payments allegedly caused by technical problems at their banks;
- Idin Dalpour pledging assets to the plaintiffs that he had not pledged to others;
- Funds in the defendants’ bank accounts that would be used to pay the plaintiffs; and
- Dalpour selling stock to raise money to pay the plaintiffs.
The court stated that the private review would determine whether particular documents were actually related to those subjects. Based on its initial review, the court believed that some documents might not be relevant.
Order
The court directed MHH to identify the documents or document portions in its production that were responsive or relevant to the five subjects. MHH was required to email the court a log with that information by June 13, 2024. The court stated that it intended to withhold documents or portions that were irrelevant.
The court also reviewed internal MHH memoranda. Although those memoranda were not themselves attorney-client communications because they were internal law-firm documents, some portions recounted communications between MHH and Dalpour. The court stated that portions memorializing communications covered by the crime-fraud exception would be produced.
If the defendants objected, they could submit a letter explaining why the memoranda or excerpts should not be produced by June 13, 2024. The plaintiffs could respond by June 20, 2024. Judge Jessica G. L. Clarke therefore continued the document-by-document privilege review and set procedures and deadlines for identifying relevant material and addressing objections.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.