DRC LV Ventures, LLC v. Dalpour

Background

The opinion is a jointly submitted letter concerning Plaintiffs’ motion to compel production of communications between Defendants and their former law firm, Morritt Hock & Hamroff (MHH). Defendants asserted attorney-client privilege, which generally protects confidential communications between a client and lawyer made for legal advice. Plaintiffs invoked the crime-fraud exception, which can remove that protection when communications were made to further or conceal a crime or fraud.

Plaintiffs alleged that Idin Dalpour made false statements and provided falsified documents concerning a purported Las Vegas hospitality business. They asserted that MHH passed some of that information to Plaintiffs during discussions about repayment of loans and possible legal action. Plaintiffs identified alleged false information concerning payments from MGM, bank transfers, pledged assets, bank-account funds, and stock sales. They specifically described documents concerning an alleged MGM payment, stock trades, and bank-account balances that Plaintiffs said were inconsistent with information later obtained from MGM, TD Securities, or a bank.

Parties’ Positions

Plaintiffs argued that there was probable cause to believe the communications with MHH were intended to conceal earlier fraud and continue the alleged fraud by inducing Plaintiffs to renegotiate loan agreements or delay legal action. They relied on a two-part standard requiring a showing that the communication or work product itself furthered the crime or fraud and that there was probable cause to believe it was intended to facilitate or conceal the criminal activity.

Defendants argued that Plaintiffs had not shown any crime or fraud. They characterized the alleged statements as misrepresentations during voluntary settlement discussions and argued that lying to private parties is not itself the federal crime discussed in Plaintiffs’ cited precedent. Defendants also argued that Plaintiffs had not shown reliance or damages and had not established the required connection between the particular privileged communications and the alleged wrongdoing. They contended that MHH’s transmission of documents did not itself further the alleged fraud.

Court’s Action

The court did not resolve whether the crime-fraud exception applies, whether the communications are privileged, or whether the requested production should be compelled. The court ordered Plaintiff to file, by April 25, 2024, the written requests at issue and Defendant’s responses. Judge Jessica G. L. Clarke signed the order, dated April 23, 2024.

Disposition

The opinion reflects a procedural direction concerning the materials needed for the pending motion. It does not state that the motion to compel was granted, denied, granted in part, or denied in part.