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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOHN E. ABDO, et al.,

Plaintiffs,

v.

MICHAEL FITZSIMMONS, et al.,

Defendants.

RISING TIDE I, LLC, et al.,

Plaintiffs,

v.

MICHAEL FITZSIMMONS, et al.,

 Defendants.

Case No. 17-cv-00851-TSH 

ORDER RE: MOTION TO COMPEL 

AND MOTION TO STRIKE

Re: Dkt. No. 117, 119

Case No. 17-cv-01232-TSH

Re: Dkt. No. 102, 111

In these two related cases, investors allege they purchased millions of dollars in securities 

in reliance on fraudulent misrepresentations by Defendants,1former directors and officers of a 

now-bankrupt corporation named Delivery Agent, Inc. In both cases, Defendants move to compel 

the production of documents responsive to subpoenas served on non-party Latham & Watkins, 

LLP, Delivery Agent’s former counsel. 17-851, ECF No. 117; 17-1232 ECF No. 111. As the 

recipient of the subpoenas, Latham maintains it must “take steps to maintain the privilege of its 

former client.” Opp’n at 2, ECF No. 120. 2 

In case 17-1232, Plaintiffs Rising Tide I, LLC and Rising Tide II, LLC move to strike the 

 

1 Defendants are Michael Fitzsimmons, Peter Lai, Chris G. Power, Peter J. Goettner, Christian 

Borcher, Ernest D. Del, Marc S. Yi, James C. Peters, and Souheil Badran

2 Because the motion to compel was filed in both cases, the Court’s citations herein refer to the 17-

1232 docket numbers, unless otherwise noted.
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United States District Court

Northern District of California

advice-of-counsel defenses asserted by Defendants,

3 pursuant to Federal Rule of Civil Procedure 

12(f), or, in the alternative, move to preclude Defendants from offering advice-of-counsel 

evidence at trial. ECF No. 102. In case 17-851, Plaintiffs John E. Abdo, as Trustee of the John E. 

Abdo Trust Dated June 11, 2014, and John E. Abdo, as Trustee of the John E. Abdo Trust Dated 

March 15, 1976 filed a notice of joinder. ECF No. 119. Because the issues in both motions are 

linked, the Court considers them together. The Court finds these matters suitable for disposition 

without oral argument and VACATES the October 10, 2019 hearing. See Civ. L.R. 7-1(b). 

As to the motion to compel, Rule 45 governs discovery of non-parties by subpoena, but the 

scope of discovery through a Rule 45 subpoena is the same as the scope of discovery permitted 

under Rule 26(b). Beaver Cty. Employers Ret. Fund v. Tile Shop Holdings, Inc., 2016 WL 

3162218, at *2 (N.D. Cal. June 7, 2016) (citing Fed. R. Civ. P. 45 Advisory Comm.’s Note 

(1970); Fed. R. Civ. P. 34(a)). Rule 26 provides that a party may obtain discovery “regarding any 

nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs 

of the case[.]” Fed. R. Civ. P. 26(b)(1). 

Here, Delivery Agent filed for Chapter 11 bankruptcy in September 2016 and ceased to 

function. In such cases, there is a presumption that evidentiary privileges such as attorney-client 

privilege or the work-product doctrine are no longer viable. See Gilliland v. Geramita, 2006 WL 

2642525, at *4 (W.D. Pa. Sept. 14, 2006) (“[T]here should be a presumption that the attorneyclient privilege is no longer viable after a corporate entity ceases to function, unless a party 

seeking to establish the privilege demonstrates authority and good cause.”); TAS Distrib. Co. v. 

Cummins Inc., 2009 WL 3255297, at *2 (C.D. Ill. Oct. 7, 2009) (“Absent some compelling reason 

to the contrary, the attorney client privilege does not survive the death of the corporation.”); 

Trading Techs. Int’l, Inc. v. GL Consultants, Inc., 2012 WL 874322, at *4 (N.D. Ill. Mar. 14, 

2012) (“When the corporation is gone, so too is its interest in protecting its communications; the 

need to promote full and frank exchanges between an attorney and agents of his corporate clients 

 

3

In their Answers, Defendants asserted an advice-of-counsel defense to Plaintiffs’ claims, alleging

that, to the extent the actions alleged in the FAC occurred, they were acting upon advice of 

counsel, including Latham. 17-851, ECF Nos. 85-86; 17-1232, ECF Nos. 79-80.
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disappears when the corporation employing those clients has departed.”); City of Rialto v. Dep’t of 

Def., 492 F. Supp. 2d 1193, 1200-01 (C.D. Cal. 2007) (finding the need for full disclosure 

outweighs the dissolved corporation’s need to protect pre-dissolution communications); Lewis v. 

United States, 2004 WL 3203121, at *4 (W.D. Tenn. Dec.7, 2004) (allowing no privilege when a 

“company is bankrupt and has no assets, liabilities, directors, shareholders, or employees.”).

Further, the burden of proving an evidentiary privilege applies rests not with the parting 

contesting the privilege, but with the party asserting it. Weil v. Investment/Indicators, Research 

and Mgmt., Inc., 647 F.2d 18, 25 (9th Cir. 1981) (attorney-client privilege); Sidibe v. Sutter 

Health, 2018 WL 783808, at *2 (N.D. Cal. 2018) (work-product). Although Delivery Agent’s 

Trustee indicated he does not intend to waive any applicable privilege held by the company, 

Quartaraolo Decl. ¶ 6, ECF No. 120-1, he has failed to provide any basis for why such a privilege 

exists. In fact, according to Defendants, “the Trustee’s counsel has indicated several times that the 

Trustee does not believe that the estate will benefit from engaging in litigation a continent away 

from Delaware over who holds the privilege on specific aspects of Latham’s advice. That advice 

was given 4-5 years ago to a now defunct company that has been in liquidation for over 2 years.” 

Reply at 1, ECF No. 121. Thus, even if Delivery Agent had a viable evidentiary privilege, its 

burden of proof has not been met. 

Accordingly, the Court GRANTS Defendants’ motion to compel Latham to produce 

documents responsive to their subpoenas. As for Plaintiffs’ motion to strike, it is based on their 

purported inability to conduct discovery into Defendants’ advice-of-counsel defense. As this 

order likely resolves that issue, the Court DENIES Plaintiffs’ motion. 

IT IS SO ORDERED.

Dated: October 1, 2019

THOMAS S. HIXSON

United States Magistrate Judge