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RKF Retail Holdings, LLC v. Tropicana Las Vegas, Inc.

United States District Court, D. Nevada

May 25, 2017

RKF RETAIL HOLDINGS, LLC, a Delaware limited liability company, Plaintiff,
TROPICANA LAS VEGAS, INC., a Nevada corporation, Defendant


          GEORGE FOLEY, JR. United States Magistrate Judge

         This matter is before the Court on Plaintiff RKF Retail Holdings, LLC's (“RKF”) Motion to Compel Defendant Tropicana Las Vegas, Inc. (“Tropicana”) to respond to Plaintiff's Fifth Request for Production of Documents (ECF No. 85), filed on March 16, 2017. Defendant Tropicana filed its Opposition (ECF No. 94) on April 7, 2017, and Plaintiff filed its Reply (ECF No. 97) on April 21, 2017. The Court conducted a hearing in this matter on May 5, 2017.


         RKF filed its action against Tropicana on July 28, 2014. RKF Retail Holdings, LLC v. Tropicana Las Vegas, Inc., Case No. 2:14-cv-01232-APG-GWF, Complaint (ECF No. 1). RKF alleged that it entered into an exclusive agency contract with Tropicana in August 2012 pursuant to which RKF would act as Tropicana's broker to lease space in a retail shopping center to be built on Tropicana's hotel-casino premises in Las Vegas. Pursuant to the agency agreement, RKF performed substantial work to market the project and obtain letters of intent from prospective tenants. Id. at ¶¶ 12-18. RKF performed other services for Tropicana outside the scope of the agency agreement, including developing budgets for the project, tenant construction manuals, design, architectural and signage criteria, premises delivery conditions and other materials to assist Tropicana. Id. at ¶ 19. RKF alleges that despite allowing RKF to perform services pursuant to the contract, Tropicana “had no intention of immediate development of the Premises, but rather procured RKF's services in marketing and cultivating interest in its potential development by means of fraudulent misrepresentations of fact.” Id. at ¶ 21. RKF alleges that Tropicana wrongfully terminated the exclusive agency contract on March 26, 2014 and repudiated its obligation to pay RKF commissions based upon the leasing work that it had undertaken. Id. at ¶¶ 24-25. Tropicana denied RKF's allegations and asserted in a counter-claim that RKF misrepresented its ability to secure tenants for the proposed shopping center. Tropicana stated that had it known the true extent of RKF's experience and contacts, it would not have hired RKF. Counterclaim (ECF No. 10), ¶ 10. On July 29, 2015, RKF filed a separate lawsuit against Eastern Real Estate, LLC, (“Eastern”) which alleged that Eastern induced and conspired with Tropicana to terminate RKF's exclusive agency contract so that Tropicana and Eastern could then proceed with the development. RKF Retail Holdings, Inc. v. Eastern Retail, LLC, Case No. 2:15-cv-1446-APG-GWF, Complaint (ECF No. 1). These two actions were consolidated on May 10, 2016. As of this date, a retail shopping center has not been built, although it may again be in the process of development.

         RKF asserts in its motion to compel that Penn Gaming acquired ownership of Tropicana in late August 2015.[1] Before and after the merger, Tropicana provided information about these lawsuits to Penn Gaming, including information regarding reserves that Tropicana had set on the case. On November 14, 2016, RKF served its fifth request for production of documents which seeks “[a]ll documents and communications between Tropicana and Penn Gaming concerning the Litigation, including but not limited to those concerning (i) RKF; (ii) Eastern; (iii) the claims or allegations asserted in the Pleadings; and (iv) any contingency funds considered and/or monies set aside in connection with the Litigation.” Motion (ECF No. 85), Exhibit A. Tropicana objected to this request on the grounds that it is irrelevant, and that the requested documents and information are protected from disclosure by the attorney-client privilege, the work product doctrine, the accountant-client privilege and the common interest doctrine. Id. at Exhibit B. On January 10, 2017, RKF served a subpoena duces tecum on Penn Gaming which commanded it to produce the same documents sought in the request for production to Tropicana. Id. at Exhibit D. Penn Gaming objected to this subpoena on the same grounds as Tropicana. Id. at Exhibit E. Tropicana subsequently produced privilege logs on March 10, 2017 listing the allegedly privileged communications between it and Penn Gaming before and after the August 2015 acquisition/merger. Id. at Exhibit C. Although RKF's motion sought production of communications before and after the August 2015 merger, it has since dropped its demand for post-merger communications.

         The privilege logs prepared on behalf of Tropicana and Penn Gaming list (1) the identification numbers of the document, (2) the date the document was sent, (3) the names of the sender(s) and recipient(s), (4) the identities of persons who were sent copies of the document, (5) the privileges claimed, and (6) a description of the document. Exhibit C. The descriptions are brief, e.g. “[c]ommunication regarding status of RKF litigation;” “[c]ommunications regarding due diligence requests containing reference to RKF litigation;” or “[c]ommunication regarding due diligence requests containing reference to RKF litigation and various litigation reserves.” Id. The privilege logs asserted the common interest doctrine and attorney-client privilege, but not the work-product doctrine, as to a significant number of pre-merger documents. The logs also asserted the work-product doctrine in conjunction with the common interest doctrine and attorney-client privilege to other pre-merger documents.

         Tropicana and Penn Gaming did not submit any affidavits in response to RKF's motion to compel to further describe the documents or the factual basis for their privilege claims. Tropicana states in its opposition that “relying on the attorney-client privilege and the protection of the common interest doctrine in engaging in such communications, Tropicana and Penn Gaming discussed the status of the litigation and issues relating to the litigation with the understanding that Penn Gaming would be acquiring this new subsidiary along with this litigation.” Opposition (ECF No. 94), pg. 3. Tropicana's counsel represented at the hearing that the listed documents consist primarily of emails or correspondence between Tropicana's and Penn Gaming's attorneys.


         1. Attorney-Client Privilege.

         “In a federal action such as this based on diversity of citizenship jurisdiction, state law governs attorney-client privilege claims.” Kandel v. Brother Intern. Corp., 683 F.Supp.2d 1076, 1081 (C.D.Cal. 2009) (citing Fed.R.Evid. 501; Star Editorial, Inc. v. United States District Court for Central District of California (Dangerfield), 7 F.3d 856, 859 (9th Cir. 1993); Oakes v. Halvorsen Marine Ltd., 179 F.R.D. 281, 284 (C.D.Cal. 1998)). See also Elizabeth Retail Properties, LLC v. KeyBank National Assn., 2015 WL 6549616, *2 (D.Or. Oct. 28, 2015). Nevada law governs the state law claims and defenses in this action.

         Nevada Revised Statute (NRS) § 49.095 states:

A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications:
1. Between himself or his representative and his lawyer or his lawyer's representative.
2. Between his lawyer and the lawyer's representative.
3. Made for the purpose of facilitating the rendition of professional legal services to the client, by him or his lawyer to a lawyer representing another in a matter of common interest.

         The attorney-client privilege is waived when the client voluntarily reveals the confidential communication to a person outside the scope of the attorney-client relationship. Wardleigh v. Second Judicial Dist. Court, 111 Nev. 345, 891 P.2d 1180, 1186 (1995); Manley v. State, 115 Nev. 114, 979 P.2d 703, 707 (1999). NRS § 49.095.3 extends the protection of the attorney-client privilege to communications between the client's lawyer and a lawyer representing another in a matter of common interest-where the communication is “[m]ade for the purpose of facilitating the rendition of professional legal services to the client.” The parties have not cited and the Court has not found a Nevada Supreme Court decision that interprets the scope of this provision in the context of a case such as this.

         In Nidec Corp. v. Victor Co. of Japan, 249 F.R.D. 575 (N.D. Cal. 2007), a case that applied the federal common ...

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