William McGhee, et al. v. J.E.T. Limousines & Transportation LLC, et al.

• Court: District Court, D. Arizona
• Decided: May 6, 2026
• Docket: 2:24-cv-03394
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 William McGhee, et al., No. CV-24-03394-PHX-SMB

10 Plaintiffs, ORDER

11 v.

12 J.E.T. Limousines & Transportation LLC, et al., 13 Defendants. 14 15 Pending before the Court is Plaintiffs’ “Motion to Compel Compliance with Third- 16 Party Subpoena and Discovery Obligations.”1 (Doc. 195.) At issue in the instant Motion is 17 whether Defendants, by asserting a 29 U.S.C. § 260 good faith reliance defense to 18 liquidated damages based upon its former counsel’s advice on Fair Labor Standards Act 19 (“FLSA” or “Act”) Motor Carrier Act exemptions, have implicitly waived its attorney- 20 client privilege as to all communications and documents related to that advice—both pre- 21 and post-initiation of the instant action. (Id.) In other words, whether Defendants’ good 22 faith reliance defense based on advice rendered before this case was filed by Defendants’ 23 prior counsel requires the disclosure of all attorney communications rendered on the 24 subject-matter of the advice, even if they were created after this action commenced. (Id.) 25 Defendants and Movant Sacks Tierney P.A. (Defendants’ prior litigation counsel) 26 have filed responses in opposition to Plaintiffs’ Motion. (Docs. 197, 198.) Defendants 27 assert that Plaintiffs’ request is overbroad and unsupported by Ninth Circuit caselaw. (Doc.

28 1 Discovery matters in this action have been referred to this Court by the presiding United States District Judge. (Doc. 55.) 1 198.) Movant asserts that Plaintiffs should have first gained court guidance on the matter 2 of privilege waiver and attempted to obtain the requested discovery before seeking to 3 obtain the communications from it. (Doc. 197.) Moreover, Movant requests sanctions be 4 placed upon Plaintiffs because their subpoena inflicted “significant and unnecessary 5 burden, lost time, and expense” upon Movant. (Id. at 4.) 6 I. SUMMARY. 7 Defendants have undertaken two courses of conduct that have waived their attorney- 8 client privilege as to advice rendered on the Motor Carrier Act (“MCA”) exemption to the 9 FLSA’s overtime wage requirement. First, Defendants have expressly waived the attorney- 10 client privilege as to all Zazueta Law Firm communications and documents given to 11 Plaintiffs. Second, Defendants have affirmatively asserted an advice-of-counsel defense 12 based on Zazueta Law Firm’s 2021 advice on the MCA exemption. This defense has 13 implicitly waived the attorney-client privilege as to all business-practice advice rendered 14 on the MCA exemption. This includes any advice on the MCA exemption rendered by 15 Defendants’ past and current trial counsel, that, in all fairness, must be provided to 16 Plaintiffs. 17 Given Defendants’ waiver of the attorney-client privilege as to advice rendered on 18 the MCA exemption, the Court shall grant the instant Motion in part. This finding is 19 caveated in that Defendants have only waived the attorney-client privilege as to any and 20 all advice received on the MCA exemption to the FLSA’s overtime wage requirements. 21 Put differently, fairness requires the disclosure of opinions or advice on the applicability 22 of MCA exemption to certain class members, not the disclosure of trial counsel’s 23 communications on the entire subject matter in preparation for the instant litigation—i.e., 24 business advice does not equate to litigation advice. Furthermore, because the Court does 25 not find that Plaintiffs issued the subpoena in bad faith or for an improper purpose, it will 26 deny Movant’s request for Rule 45 sanctions. 27 II. BACKGROUND. 28 On November 29, 2024, Plaintiffs initiated this FLSA class-action suit. (Doc. 1.) 1 Plaintiffs allege that Defendants violated the FLSA and Arizona wage-and-hour laws by 2 failing to pay overtime to non-exempt putative class members,2 unlawfully retaining 3 customer-paid gratuities, and failing to maintain required payroll and time records. (Doc. 4 59 at 2–3.) Plaintiffs aver that the aforementioned violations of the FLSA and Arizona 5 labor laws have occurred since at least 2021. (Id. at 2.) 6 Specifically at issue in the instant Motion is Defendants’ alleged failure to pay 7 overtime to non-exempt putative class members. (Doc. 195.) Plaintiffs allege that 8 Defendants’ failure to pay overtime—alongside their alleged failure to give customer-paid 9 gratuities and maintain payroll and time records—was willful, entitling them to liquidated 10 damages and a three-year statute of limitations 29 U.S.C. §§ 216(b), 255(a). (Id. at 2.) 11 Regarding the FLSA’s liquidated damages provision, 29 U.S.C. § 216, if an employer, “to 12 the satisfaction of the court,” shows that violation of the Act “was in good faith and that he 13 had reasonable grounds for believing that his act or omission was not a violation of the 14 [FLSA] . . . the court may . . . award no liquidated damages[.]” 29 U.S.C. § 260. Given that 15 the good faith reliance defense may prevent liquidated damages for Defendants’ alleged 16 failure to pay overtime to non-exempt putative class members, Plaintiffs propounded the 17 following non-uniform interrogatory upon Defendants: 18 NON-UNIFORM INTERROGATORY NO. 6: Please describe in detail all efforts by, or on behalf of, Defendants to determine whether Drivers legally 19 can be classified or treated as exempt from the overtime requirements of the 20 [FLSA]. Describing the efforts made includes identifying the person who made the effort(s), the date(s) each such effort(s) were taken, and identifying 21 all persons contacted, including attorneys, if any, and identify all documents 22 generated, reviewed, or considered as part of each such effort(s). 23 (Doc. 195-2 at 75–76.) 24 Defendants’ response, in pertinent part, states: 25 In 2021, JET received an attorney letter regarding unpaid overtime claims by 26 a departed employee[.] JET was referred to the Zazueta Law Firm, whose response thereto has been produced as JET_0000169-71.3 JET’s success in 27 2 “Plaintiffs and Class Members are current and former employees of Defendants who 28 work or have worked for Defendants as chauffeur drivers.” (Doc. 59 at 2.) 3 The attorney letter in question from the Zazueta Law Firm states that “it is 1 contesting these claims reaffirmed the decades of experience and practice supporting the classification of JET’s employees as being subject to the 2 [MCA] exemption4 from overtime. 3 4 (Id. at 78.) 5 Based upon the response and enclosed exhibit, Plaintiffs propounded a request for 6 admission that requested Defendants to “[a]dmit that You are asserting reliance on the 7 advice of counsel as a defense to Plaintiffs’ claims that the alleged violations of the [FLSA] 8 were willful, or as a basis for any contention that You acted in good faith within the 9 meaning of 29 U.S.C. § 260.” (Id. at 115.) At first Defendants, although they admitted to 10 relying upon the advice-of-counsel defense, objected to Plaintiff’s request for admission. 11 (Id. at 116.) 12 Following Defendants’ admission, Plaintiffs served a subpoena duces tecum upon 13 Movant issuing the following Commands for Production: 14 COMMAND FOR PRODUCTION NO. 1: Produce all documents and 15 communications related to the classification of Drivers as either exempt or non-exempt from the overtime requirements of the [FLSA] and related 16 Department of Labor regulations. This request includes, without limitation, 17 all documents and communications authored by, sent to, received by, or otherwise involving any Sacks Tierney Attorneys. 18 COMMAND FOR PRODUCTION NO. 2: Produce all documents and 19 communications reviewed, generated, or considered in providing advice to 20 Defendants related to or concerning the classification of Drivers as either exempt or non-exempt from the overtime requirements of the [FLSA]. This 21 request includes, without limitation, all such materials reviewed, generated, 22 considered, or relied upon by any Sacks Tierney Attorneys. 23 COMMAND FOR PRODUCTION NO. 3: Produce all internal memoranda, research, analyses, notes, drafts, or other materials prepared by 24 any Sacks Tierney Attorneys relating to the classification of Drivers as either 25 irrefutable that Willie falls squarely within the FLSA’s motor-carrier exemption, and 26 consequently was not entitled to overtime pay while employed with JET.” (Doc. 195-2 at 97.) 27 4 “The [maximum hours provision] of this title shall not apply with respect to any employee with respect to whom the Secretary of Transportation has power to establish 28 qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49[.]” 29 U.S.C. § 213(b)(1). 1 exempt or non-exempt from the overtime requirements of the [FLSA], whether or not such materials were transmitted to Defendants. 2 3 (Id. at 171.) 4 Movants objected to Plaintiffs’ subpoena in its entirety. (Id. at 174.) Additionally, 5 Defendants subsequently filed a supplemental response to Plaintiffs’ request for admission. 6 (Id. at 189.) In the supplemental response, Defendants provided a qualified admission 7 whereby they admitted to asserting an advice-of-counsel defense that “is limited to, and 8 only to, the advice of counsel provided to JET from the Zazueta Law Firm in 2021.” (Id. 9 at 189.) Following Movant’s objection and Defendants’ supplemental response, Plaintiffs 10 filed the instant discovery Motion. Seeing as this matter is fully briefed, (docs. 195, 197– 11 98, 202), and having heard oral arguments from the parties, (doc. 237), the Court shall 12 address instant Motion. 13 III. PARTIES’ ARGUMENTS. 14 The arguments asserted by the parties, both during oral proceedings and in their 15 written submissions, are provided below. 16 A. Plaintiffs. 17 Plaintiffs assert four arguments in support of their Motion. First, Plaintiffs assert 18 that Defendants’ advice-of-counsel defense results in a subject-matter waiver of the 19 attorney-client privilege as to all advice it has received as to the MCA exemption on 20 overtime wages.5 (Doc. 195 at 7–8.) Second, Plaintiffs assert that the attorney-client 21 privilege is waived as to all counsel Defendants have relied upon. (Id. at 8–11.) That is, 22 Defendants must provide the totality of documents prepared by any counsel related to the 23 MCA exemption, not just Zazueta Law Firm. (Id.) 24 Third, Plaintiffs assert that the waiver of the attorney-client privilege applies to both 25 pre- and post-litigation communications. (Id. at 11.) Hence, Plaintiffs assert that the waiver

26 5 The Court notes that in Plaintiffs’ Motion, it asserts that the waiver applies to all of Defendants’ alleged violations, not just the overtime wages violation. (Doc. 195 at 13–16.) 27 However, Plaintiffs, during their oral argument, only assert that it applies to the alleged violation of FLSA’s overtime wages provisions. Given that Plaintiffs have abandoned their 28 waiver argument as to all of Defendants’ alleged violations, the Court shall only address the overtime wage argument. 1 applies to Defendants’ former counsel Zazueta Law Firm and Sacks Tierney P.A. and their 2 current counsel Fennemore Craig, P.C. (Id.) Finally, Plaintiffs assert that Defendant J.E.T. 3 Limousines & Transportation LLC’s (“JET”) post-filing change in procedure and policy 4 “fall squarely within the scope of the subject-matter waiver.”6 (Id. at 16.) 5 B. Defendants. 6 Defendants assert five arguments in opposition of Plaintiffs’ Motion. First, 7 Defendants assert that “JET’s advice-of-counsel defense is expressly and narrowly limited 8 to the pre-litigation advice it received from Zazueta Law in 2021 regarding the MCA 9 exemption and JET’s resulting good-faith belief concerning its driver classification.” (Doc. 10 198 at 4.) Expanding this filing any further, Defendants contend, would have no basis nor 11 “support in controlling law.” (Id. at 5.) Second, Defendants assert that “neither JET nor its 12 trial counsel have ‘injected’ the advice of Sacks Tierney or Fennemore into this lawsuit.” 13 (Id. at 7) (cleaned up). Third, Defendants assert that in similar cases, courts have not 14 required the disclosure of post-filing attorney-client communications. (Id. at 8–12.) 15 Fourth, Defendants assert that the information Plaintiffs seek is not vital to this case. 16 (Id. at 12–13.) Fifth, Defendants assert that “evidence related to changes JET made to its 17 pay plan in December 2025 is irrelevant and inadmissible under FRE 407.” (Id. at 15–16) 18 (cleaned up). 19 C. Movant. 20 Movant assert two main arguments in opposition of Plaintiffs’ Motion. Namely, 21 Movant asserts that “the Motion to Compel should be denied as to [it] “Because (1) the 22 Same Documents Can be Obtained Directly from Defendants; and (2) the Burden Imposed 23 on [it].” (Doc. 197 at 9.) Additionally, Movant seeks the imposition of sanctions upon 24 Plaintiffs in the form of “reimbursement for the needless expense of its firm’s resources 25 which could have been avoided by a more procedurally sound and respectful course of 26 conduct.” (Id. at 13.) 27 6 The Court notes that Plaintiffs’ Reply largely mirrors their Motion. Compare (doc. 28 202) with (doc. 195). Given this, the Court has not summarized the points contained within the Reply. 1 IV. LEGAL STANDARDS. 2 The court has broad discretion regarding whether to permit or deny discovery via a 3 motion to compel. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). Generally, 4 discoverable evidence is “any nonprivileged matter that is relevant7 to any party’s claim 5 or defense and proportional to the needs of the case . . . .” Fed. R. Civ. P. 26(b)(1) (emphasis 6 added). 7 While a party’s right to discovery is broad, that does not mean that it is limitless. 8 See Fed. R. Civ. P. 26(b)(2). Courts will limit discovery where: 9 (a) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, 10 or less expensive; (b) the party seeking discovery has had ample opportunity 11 to obtain the information by discovery in the action; or (iii) the proposed discovery is outside the scope permitted by Rule 26(b)(1). 12 13 Fed. R. Civ. P. 26(b)(2)(C)(i)–(iii). 14 Generally, the party seeking to compel additional discovery bears the burden of 15 showing that the additional discovery is relevant under Rule 26(b)(1). See Soto v. City of 16 Concord, 162 F.R.D. 603, 610 (N.D. Cal. 1995). Thereafter, the opposing party carries “a 17 heavy burden” in showing why such discovery request should be denied. Blankenship v. 18 Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975). 19 V. DISCUSSION. 20 The crux of the instant Motion is whether Defendants, by asserting an advice-of- 21 counsel defense, have implicitly waived the attorney-client privilege as it relates to that 22 defense. Pursuant to 29 U.S.C. § 216, an employer who violates the FLSA “shall be liable 23 to the employee or employees affected in the amount of their unpaid minimum wages, or 24 their unpaid overtime compensation, . . . and . . . an additional equal amount as liquidated 25 damages. 29 U.S.C. § 216(b). “These liquidated damages represent compensation, and not

26 7 Evidence is considered relevant if: “(a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in 27 determining the action.” Fed. R. Evid. 401. “Irrelevant evidence is not admissible.” Fed. R. Evid. 402. Further, a court may exclude relevant evidence where its probative value is 28 substantially outweighed by the danger of confusing the issue in the present case. Fed. R. Evid. 403. 1 a penalty.” Local 246 Util. Workers Union v. S. Cal. Edison Co., 83 F.3d 292, 297 (9th Cir. 2 1996). “Double damages are the norm, single damages the exception.” Id. (quoting Walton 3 v. United Consumers Club, 786 F.2d 303, 310 (7th Cir. 1986)). 4 While a court may grant liquidated damages under the Act, it is not required to do 5 so if “the employer shows to the satisfaction of the court that the act or omission giving 6 rise to such action was in good faith and that he had reasonable grounds for believing that 7 his act or omission was not a violation of the [FLSA.]” 29 U.S.C. § 260. “To satisfy § 260, 8 a FLSA-liable employer bears the ‘difficult’ burden8 of proving both subjective good faith9 9 and objective reasonableness, ‘with double damages being the norm and single damages 10 the exception.’” Alvarez v. IBP, Inc., 339 F.3d 894, 910 (9th Cir. 2003) (quoting Herman 11 v. RSR Sec. Servs., 172 F.3d 132, 142 (2d Cir. 1999)). “Absent such a showing, liquidated 12 damages are mandatory.” EEOC v. First Citizens Bank, 758 F.2d 397, 403 (9th Cir. 1985). 13 In the instant action, Defendants have admitted that they intend to use a good faith 14 reliance on the advice of counsel advice as a defense to liquidated damages as to Zazueta 15 Law Firm’s advice on the MCA exemption to overtime wages. (Doc. 195-2 at 189.) While 16 Defendants acknowledge that by relying on the defense, they have waived their attorney- 17 client privilege as to communications with Zazueta Law Firm regarding its advice rendered 18 in 2021, they contend that “[e]xtending [the] waiver beyond those bounds would 19 improperly strip JET of privilege over unrelated communications and litigation strategy[.]” 20 (Doc. 198 at 16–17.) Plaintiffs aver that Defendants have waived the attorney-client 21 privilege as to all communications related to the advice-of-counsel defense, regardless of 22 whether they were made pre- or post-filing of the instant action. (Doc. 195 at 8–10.) 23 For the following reasons, the Court finds that Defendants have waived the attorney- 24 client privilege as to all communications regarding the Defendants’ advice of counsel as it 25 relates to the MCA exemption to overtime wages. This includes any communications from

26 8 “The employer’s burden is to establish that it had ‘an honest intention to ascertain and follow the dictates of the Act’ and that it had ‘reasonable grounds for believing that its 27 conduct complied with the Act.’” Local 246 Util. Workers Union, 83 F.3d at 298 (cleaned up) (quoting Marshall v. Brunner, 668 F.2d 748, 753 (3d Cir. 1982)). 28 9 “Good faith is an honest intention to ascertain what the [Act] requires and to act in accordance with it.” First Citizens Bank, 758 F.2d at 403. 1 Sacks Tierney or Fennemore as to the MCA exemption to overtime wages made post-filing 2 of the instant action. However, this waiver of the attorney-client privilege does not 3 “extend[] to all communications, documents, and attorney work product bearing on the 4 legality of the challenged wage-and-hour practices, including overtime compensation, 5 recordkeeping obligations, and gratuity retention.” (Id. at 13–14.) Rather, the waiver of the 6 attorney-client privilege shall be applied with the following caveat. Given that Defendants’ 7 advice-of-counsel defense is limited to advice received as to the MCA exemption to 8 overtime wages, (doc. 195-2 at 189), the waiver of the attorney-client privilege shall be 9 limited to any communications and documentation related to their classification of drivers 10 as exempt to the FLSA’s dictate of overtime wages. 11 A. Implied Waiver of Attorney-Client Privilege. 12 The Court first considers whether Defendants, by asserting an advice-of-counsel 13 defense, has implicitly waived its attorney-client privilege. “The attorney-client privilege 14 protects confidential disclosures made by a client to an attorney in order to obtain legal 15 advice as well as an attorney’s advice in response to such disclosures.” United States v. 16 Chen, 99 F.3d 1495, 1501 (9th Cir. 1996) (cleaned up) (quoting In re Grand Jury 17 Investigation, 974 F.2d 1068, 1070 (9th Cir. 1992)). “Its purpose is to encourage full and 18 frank communication between attorneys and their clients and thereby promote broader 19 public interests in the observance of law and administration of justice.” Upjohn Co. v. 20 United States, 449 U.S. 383, 389 (1981). Because this case is based on the FLSA, federal 21 privilege law applies. See Fed. R. Evid. 501; see also NLRB v. N. Bay Plumbing, 102 F.3d 22 1005, 1009 (9th Cir. 1996) (“In federal question cases, federal privilege law applies.”). 23 The “party asserting the attorney-client privilege has the burden of establishing the 24 relationship and the privileged nature of the communication.” United States v. Bauer, 132 25 F.3d 504, 507 (9th Cir. 1997). “One of the elements that the asserting party must prove is 26 that it has not waived the privilege.” Weil v. Inv./Indicators, Rsch. & Mgmt., Inc., 647 F.2d 27 18, 25 (9th Cir. 1981). The privilege may be explicitly or implicitly waived. See Rock River 28 Commc’n, Inc. v. Universal Music Grp., Inc., 745 F.3d 343, 353 (9th Cir. 2014). 1 “The privilege which protects attorney-client communications may not be used both 2 as a sword and a shield.” Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162 (9th Cir. 3 1992) (citing United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir. 1991)). “Where a 4 party raises a claim which in fairness requires disclosure of the protected communication, 5 the privilege may be implicitly waived.” Kaiser Found. Health Plan, Inc. v. Abbott Labs., 6 Inc., 552 F.3d 1033, 1042 (9th Cir. 2009) (quoting Chevron Corp., 974 F.2d at 1162). In 7 the Ninth Circuit, courts apply the following three-part test to determine whether an 8 implied waiver of the attorney-client privilege has occurred: 9 First, the court considers whether the party is asserting the privilege as the result of some affirmative act, such as filing suit. Second, the court examines 10 whether through this affirmative act, the asserting party puts the privileged 11 information at issue. Finally, the court evaluates whether allowing the privilege would deny the opposing party access to information vital to its 12 defense. 13 United States v. Amlani, 169 F.3d 1189, 1195 (9th Cir. 1999) (cleaned up) (quoting Home 14 Indem. Co. v. Lane Powell Moss & Miller, 43 F.3d 1322, 1326 (9th Cir. 1995)). “[A]n 15 overarching consideration is whether allowing the privilege to protect against disclosure of 16 the information would be ‘manifestly unfair’ to the opposing party.” Home Indem. Co., 43 17 F.3d at 1326. 18 The Court first considers whether Defendants have asserted the attorney-client 19 privilege as the result of an affirmative act. Here, Defendants have explicitly admitted that 20 they intend to rely upon the affirmative defense of advice of counsel to rebut that their 21 alleged violations were willful. (Doc. 195-2 at 189.) Given that Defendants are 22 affirmatively relying upon the advice-of-counsel defense in this action, they have, in fact, 23 asserted the attorney-client privilege as the result of an affirmative act.10 24 Next, the Court considers whether Defendants have placed privileged information 25 at issue in this action. “The ‘quintessential example’ is a defendant who raises an 26 affirmative defense that he relied on the advice of counsel, and is thereby deemed to have 27 10 See Sorensen v. Black & Decker Corp., No. 06cv1572-BTM (CAB), 2007 U.S. Dist. 28 LEXIS 26335, at *7 (S.D. Cal. Apr. 9, 2007) (“The privilege is waived only when a party chooses to utilize the information to advance a claim or defense.”). 1 waived the attorney-client privilege with respect to that advice.” United States ex rel. 2 Calilung v. Ormat Indus., No. 3:14-cv-00325-RCJ-VPC, 2016 U.S. Dist. LEXIS 100292, 3 at *11 (D. Nev. Aug. 1, 2016) (citation omitted). To put the advice of counsel at issue, a 4 “[d]efendant must support its good faith defense by citing the advice of counsel[.]” 5 McKeen-Chaplin v. Provident Sav. Bank, FSB, No. 2:12-cv-03035 GEB AC, 2015 U.S. 6 Dist. LEXIS 14143, at *24 (E.D. Cal. Jan. 4, 2015) (emphasis added). 7 In the instant action, Defendants have acknowledged that they intend to assert the 8 advice-of-counsel defense as to legal advice received on the MCA exemption to overtime 9 wages. (Doc. 195-2 at 189.) By asserting this defense to rebut a finding of willfulness, (id.), 10 Defendants have placed their scienter at issue—i.e., Defendants have placed their 11 knowledge of whether their classification complied with the Act ‘at issue.’ 12 This is akin to situation in Phelps v. MC Communications, Inc, No. 2:11-cv-00423- 13 PMP-VCF, 2013 U.S. Dist. LEXIS 101965 (D. Nev. July 19, 2013). In that case, the 14 defendants, in defense to Plaintiff’s FSA claims, raised two affirmative defenses: (1) “that 15 [d]efendants at all times had a good faith and reasonable belief that it had compensated 16 [p]laintiff in accordance with the FLSA”; and (2) “that any alleged violation of the FLSA 17 was not willful[.]” Phelps, 2013 U.S. Dist. LEXIS 101965, at *37. While the defendants in 18 Phelps asserted to the contrary, the court found that the defendants relied upon the advice 19 of counsel regarding their obligations under the Act. Id. at 41–43, 58–59; Harris v. 68-444 20 Perez, No. ED CV 19-2184-JGB (SPx), 2020 U.S. Dist. LEXIS 253383, at *21 (C.D. Cal. 21 Sep. 8, 2020) (“But in Phelps, it was clear that defendants in that case relied on the advice 22 of counsel regarding their obligations under the FLSA[.]”). The court found that: 23 [d]efendants, through these affirmative defenses, put their state of mind and their knowledge regarding the FLSA, its requirements, and their obligations 24 ‘at issue.’ Any communication between defendants and counsel regarding 25 conduct relating to the allegations in this action which could arguable form the basis for defendants’ ‘reasonable belief’ that they were acting in ‘good 26 faith’ and did not intentionally violate the FLSA, would have a direct bearing 27 on the viability of defendants’ affirmative defenses. The court finds, therefore, that the ‘at issue’ exception applies. 28 Phelps, 2013 U.S. Dist. LEXIS 101965, at *59 (citation omitted). 1 Similarly here, Defendants have placed their state of mind at issue by asserting an 2 advice-of-counsel defense to any allegedly willful violation of the FLSA. Hence, any 3 communication between Defendants and their counsel that formed Defendants’ belief that 4 they were, in good faith, following the FLSA, has been placed at issue.11 5 Finally, the Court considers whether allowing the privilege would deny the 6 opposing party access to information vital to its defense. Because Defendants are expressly 7 relying upon the advice of counsel to rebut willfulness under the Act, (doc. 195-2 at 189), 8 Defendants’ “knowledge about the law is vital, and the advice of counsel is highly relevant 9 to the legal significance of its conduct.” Calilung, 2016 U.S. Dist. LEXIS 100292, at *14– 10 15 (citation omitted). By affirmatively asserting an advice-of-counsel defense and placing 11 attorney-client communications at issue, it appears clear to the Court that allowing the 12 attorney-client privilege to remain would prevent Plaintiffs from accessing vital 13 information. Cf. Goro v. Flowers Foods, Inc., No. 17-cv-02580-JLS-JLB, 2019 U.S. Dist. 14 LEXIS 203568, at *50 (S.D. Cal. Nov. 22, 2019) (finding that where defendants have not 15 asserted an advice-of-counsel defense, maintaining the attorney-client privilege would only 16 deny plaintiffs relevant, not vital, information). 17 For the foregoing reasons, the Court finds that Defendants have waived the attorney- 18 client privilege as to communications regarding the classification of employees under the 19 MCA exemption to overtime wages.12 20 B. Temporal Scope. 21 The next matter the Court shall address is the temporal scope of the waiver. The 22 crux of this issue is whether an implied waiver of the attorney-client privilege due to advice 23 rendered by opinion counsel necessarily extends to trial counsel. 24 Plaintiffs contend that advice rendered by opinion counsel does necessarily extend 25 to trial counsel. (Doc. 195 at 9–13.) To support their assertion, Plaintiffs rely on United 26 Specialty Ins. Co. v. Dorn Homes, Inc., 334 F.R.D. 542 (D. Ariz. 2020) and a number of 27 11 However, this finding is solely related to Defendants’ classification of employees 28 under the MCA exemption to overtime wages. See infra section V.C. 12 See infra section V.C. 1 out-of-district cases. (Id.) Defendants contend that advice rendered by opinion counsel does 2 not necessarily extend to trial counsel because Defendants have not “relied upon any advice 3 from Sacks Tierney or Fennemore.” (Doc. 198 at 7–12.) Furthermore, Defendants assert 4 that none of the cases Plaintiffs have cited support their assertion that advice rendered by 5 opinion counsel does extend to trial counsel. (Id. at 10–12.) 6 Regarding the temporal scope of the waive, this Court joins those within the District 7 of Arizona, and those throughout the Ninth Circuit, that have found “that a temporal 8 limitation is not appropriate.”13 United Specialty Ins. Co., 334 F.R.D. at 547; McCormick- 9 Morgan, Inc. v. Teledyne Indus., 765 F. Supp. 611, 613 (N.D. Cal. 1991) (“However, under 10 the law this court finds persuasive, and in light of policy considerations, it is not appropriate 11 thereafter for the waiving parties or judge to limit the waiver on a temporal basis.”); Chiron 12 Corp. v. Genentech, Inc., 179 F. Supp. 2d 1182, 1188 (E.D. Cal. 2001) (“While there is 13 some authority that cuts off the waiver at time of the filing of the action, the better authority 14 requires that all communications, both pre and post-complaint filing, should be 15 disclosed.”); Disney Enters. v. Vidangel Inc., No. CV 16-4109-AB (PLAx), 2019 U.S. Dist. 16 LEXIS 240877, at *22–23 (C.D. Cal. Feb. 26, 2019) (refusing to limit the waiver to 17 communications issued before the filing of the case, and noting that “plaintiffs [were] 18 entitled to any communications . . . between [defendant] and any attorney relating to the 19 legality . . . whether or not those communications confirm, contradict, qualify, update, 20 or modify the opinions” of pre-trial counsel) (emphasis added). 21 Specifically, the Court finds that a temporal limit is inappropriate in the instant case 22 because the initiation of this action neither foreclosed Defendants’ reliance on Zazueta’s

23 13 Undersigned acknowledges that there is “conflicting authority on this issue[.]” United Specialty Ins. Co., 334 F.R.D. at 546 (citation omitted). Some districts have found 24 that the waiver “does not extend to litigation-related communications after the complaint is filed[.]” Collaboration Props. v. Polycom, Inc., 224 F.R.D. 473, 476 (N.D. Cal. 2004) 25 (citing Dunhall Pharm., Inc. v. Discus Dental, Inc., 994 F. Supp. 1202, 1206 (C.D. Cal. 1998)); Sharper Image Corp. v. Honeywell Int’l Inc., 222 F.R.D. 621, 644–45 (N.D. Cal. 26 2004) (stating that it was unlikely, by limiting the waiver to communications before the case was filed, that plaintiff would be deprived “of any of the relief to which it is entitled 27 under the law.”). Given the facts of this case, and considering the precedent in the District of Arizona, the Court shall not set a temporal scope on the waiver of the attorney-client 28 privilege. 1 advice nor did it “form a clear cutoff of research and analysis that would inform 2 [Defendants’] advice of counsel defense.” United Specialty Ins. Co., 334 F.R.D. at 547. As 3 the Court noted during oral arguments, while Defendants assert that they relied upon the 4 advice of Zazueta Law Firm in 2021 when it classified certain putative class members as 5 exempt from FLSA overtime wages pursuant to the MCA, there is the possibility that either 6 trial counsel rendered advice that confirmed, contradicted, updated, or modified the 7 opinions of Zazueta Law. (Doc. 237.) Based on this possibility, and given Defendants’ 8 change of policy in December of 2025 regarding payment of overtime wages to certain 9 categories of drivers, (doc. 195-2 at 193–97)—a change that occurred after the 10 commencement of this action—it appears only fair that may seek discovery into whether 11 either trial counsel provided any opinion on the AMC exemption that prompted such 12 change. 13 Such a finding appears harmonious with other courts in the Ninth Circuit. 14 Furthermore, this finding appears congruent with the Presiding Judge’s decision in Salazar. 15 In Salazar, the Presiding Judge determined whether an email communication between 16 opinion and litigation counsel was related to the advice-of-counsel defense, necessitating 17 its disclosure. Salazar v. Driver Provider Phx. LLC, No. CV-19-05760-PHX-SMB, 2022 18 U.S. Dist. LEXIS 96884, at *2 (D. Ariz. May 31, 2022). In finding that the communication 19 was discoverable, the Presiding Judge specifically noted that “Plaintiffs’ need to discover 20 the information, out of fairness, overrides Defendants’ interest in protecting its work 21 product.” Id. at *6–7. Just as was the case in Salazar, the Court finds that, out of 22 fundamental fairness, Plaintiffs are entitled to discovery into communications from both 23 advice and trial counsel. 24 “In sum, invoking the advice of counsel defense is not a painless decision or a free 25 lunch. There are discovery consequences to such an assertion.” Chiron Corp., 179 F. Supp. 26 2d at 1189–90. By invoking the advice-of-counsel defense to rebut a finding of willfulness, 27 Defendants have necessarily opened the door for Plaintiffs to test, with caveats,14 whether 28 14 See infra section V.C. 1 they truly violated the FLSA based upon a good faith reliance on the advice of counsel. 2 Such discovery should not be limited to advice rendered before this action commenced, 3 because the alleged violation of the FLSA continued after this case began. Accordingly, 4 the Court will not limit the waiver to advice rendered before this action commenced. 5 C. Subject-Matter of the Waiver. 6 The next matter the Court shall consider is how broad the waiver of the attorney- 7 client privilege is. As previously noted, the attorney-client privilege “may not be used both 8 as a sword and a shield.” Chevron Corp., 974 F.2d at 1162. “[W]hen a client raises a claim 9 or defense that puts protected information at issue, . . . the client also waives any attorney- 10 client privilege that may have existed as to communications with counsel relevant to that 11 claim or defense.” De Jesus Ortega Melendres v. Arpaio, No. CV-07-2513-PHX-GMS, 12 2015 U.S. Dist. LEXIS 195873, at *12 (D. Ariz. May 14, 2015). “Under Federal Rule of 13 Evidence 502, a waiver of privilege/immunity extends to all other documents on the same 14 topic of a protected communication that the party selectively disclosed, or otherwise placed 15 at issue, that should in fairness be considered along with the voluntary disclosure.” Id. 16 (citing Fed. R. Evid. 502). 17 While the waiver of the attorney-client privilege extends to all documents on the 18 same topic as the protected communication, it would be “clear[] err[or] in finding a blanket 19 waiver of the attorney-client and work product privileges as to the entire case.” Hernandez 20 v. Tanninen, 604 F.3d 1095, 1101 (9th Cir. 2010). “[T]he court must impose a waiver no 21 broader than needed to ensure the fairness of the proceedings before it.” Bittaker v. 22 Woodford, 331 F.3d 715, 720 (9th Cir. 2003). “Because a waiver is required so as to be fair 23 to the opposing side, the rationale only supports a waiver broad enough to serve that 24 purpose.” Id. In other words, the waiver of the attorney-client privilege is limited to the 25 express subject-matter of the advice rendered by Defendants’ business counsel, not to any 26 communication or documentation related to litigation strategy.15 See In re Seagate Tech.,

27 15 The rational for this finding “is to prevent a party from using the advice he received as both a sword, by waiving privilege to favorable advice, and a shield, by asserting 28 privilege to unfavorable advice,” not to give Plaintiffs “unfettered discretion to rummage through [Defendants’] files and pillage all of their litigation strategies.” In re EchoStar 1 LLC, 497 F.3d 1360, 1373 (Fed. Cir. 2007) (“fairness counsels against disclosing trial 2 counsel’s communications on an entire subject matter in response to [a party’s] reliance on 3 opinion counsel’s opinion to refute a willfulness allegation.”); see also Disney Enters., 4 2019 U.S. Dist. LEXIS 240877, at *23 (limiting the waiver of the attorney-client privilege 5 to the express topics counsel rendered advice on); see also Calilung, 2016 U.S. Dist. 6 LEXIS 100292, at *17–18 (limiting the waiver to certain plants and expansion projects). 7 While Plaintiffs contend that by “placing reliance on legal advice at issue as a 8 defense to willfulness and liquidated damages, JET has triggered a subject-matter waiver 9 that extends to all communications, documents, and attorney work product bearing on” all 10 alleged violations, (doc. 195 at 13–14), the Court disagrees. Defendants have only placed 11 their reliance on the advice of counsel as to the MCA exemption to the FLSA’s requirement 12 of overtime wages at issue. (Doc. 195-2 at 75–78, 90–98, 143–44, 159, 189.) Because 13 Defendants reliance on the advice of counsel is solely related to the MCA exemption, 14 fairness only requires that the waiver of the attorney-client privilege relate to that subject 15 matter.16 Hence, Defendants and Movant17 shall only be required to disclose 16 communications and documentation that confirm, contradict, qualify, update, or modify 17 the opinions of Zazueta Law Firm. 18 This holding shall include both disclosed and undisclosed communications and 19 documentation that confirm, contradict, qualify, update, or modify the opinions of Zazueta 20 Law Firm. “Indeed, ‘district courts in the Ninth Circuit have routinely held that reliance on 21 the advice of counsel defense waives work product protection for both undisclosed and 22 disclosed documents and information.’” United Specialty Ins. Co., 334 F.R.D. at 545 23 (quoting Adidas Am., Inc. v. Payless Shoesource, Inc., No. CV 01-1655-RE, 2006 U.S. 24 Dist. LEXIS 79154, at *6–7 (D. Or. Oct. 19, 2006)). “Fairness requires that Plaintiffs be 25 given the opportunity to fully test the legitimacy of Defendants’ advice of counsel defense, 26 Fed. R. Evid. 502(a), which involves permitting Plaintiffs inquiry into the basis and facts

27 Communs. Corp., 448 F.3d 1294, 1303 (Fed. Cir. 2006). 16 Of course, if Defendants intend to rely upon the advice-of-counsel defense as to 28 other matters, they will have waived the attorney-client privilege as to those matters. 17 See infra section V.D. 1 surrounding the advice provided by counsel, not just those materials that communicated 2 the advice to Defendants.” Melendres, 2015 U.S. Dist. LEXIS 195873, at *19. Therefore, 3 Defendants and Movant shall provide disclosed and undisclosed communications and 4 documentation that confirm, contradict, qualify, update, or modify the opinions of Zazueta 5 Law Firm. 6 D. Request for Sanctions. 7 The final matter the Court shall address is Movant’s requests for sanctions and for 8 denial, or, in the alternative, reduction of the subpoena’s scope. Pursuant to Rule 45, “[a] 9 party or attorney responsible for issuing and serving a subpoena must take reasonable steps 10 to avoid imposing undue burden or expense on a person subject to the subpoena.” Fed. R. 11 Civ. P. 45(d)(1). “The court for the district where compliance is required must enforce this 12 duty and impose an appropriate sanction—which may include lost earnings and reasonable 13 attorney’s fees—on a party or attorney who fails to comply.” Id. 14 Rule 45(d)(1) sanctions are discretionary. Legal Voice v. Stormans Inc., 738 F.3d 15 1178, 1185 (9th Cir. 2013). “[W]hile failure [to] narrowly . . . tailor a subpoena may be a 16 ground for sanctions, the district court need not impose sanctions every time it finds a 17 subpoena overbroad; such overbreadth may sometimes result from normal advocacy, 18 which . . . should not give rise to sanctions.” Id. “A court may, however, impose sanctions 19 when a party issues a subpoena in bad faith, for an improper purpose, or in a manner 20 inconsistent with existing law.” Id. “when considering Rule 45(d) sanctions, we have put 21 more emphasis on the recipient’s burden than on the issue’s motives.” Mi Familia Vota v. 22 Hobbs, 343 F.R.D. 71, 101 (D. Ariz. 2022) (quoting Legal Voice, 738 F.3d at 1186). 23 Here, the Court does not find that Plaintiffs’ actions in issuing the subpoena warrant 24 sanctions under Rule 45(d)(1). Although, as discussed below, the Court finds the instant 25 subpoena to be slightly overbroad, such overbreadth does not warrant imposition of 26 sanctions. Additionally, the Court does not find that the subpoena was issued in bad faith, 27 was for an improper purpose, or in a manner inconsistent with existing law. Although 28 Plaintiffs could have sought to adjudicate the implied waiver issue before issuing the 1 subpoena, they were not obligated to do so. Moreover, while it is possible that Movant did 2 provide Fennemore with all documents and communications regarding its representation 3 of Defendants, there is also the possibility that communications regarding the advice 4 received by Zazueta Law Firm on the MCA exemption may not have been transferred to 5 Fennemore. Hence, the Court does not find fiscal sanctions warranted here. 6 Although monetary sanctions are unwarranted, the Court does find that the 7 subpoena should be narrowed. Pursuant to Rule 45, the Court may modify a subpoena that 8 subjects a party to undue burden. See Fed. R. Civ. P. 45(d)(3)(A)(iv). “Non-parties are 9 entitled to special consideration when it comes to subpoena requests under Rule 45.” In re 10 Subpoenas for Deposition Testimony of Dr. Bruce Bethancourt, No. MC-23-00038-PHX- 11 JJT, 2023 U.S. Dist. LEXIS 194813, at *3 (D. Ariz. Oct. 31, 2023) (citing Dart Indus. Co. 12 v. Westwood Chem. Co., 649 F.2d 646, 649 (9th Cir. 1980)). “The proper way to afford 13 this special consideration is to weigh the burden to the subpoenaed party against the value 14 of the information to the serving party.” Aquastar Pool Prods. v. Paramount Pool & Spa 15 Sys., No. CV-19-00257-PHX-DWL, 2019 U.S. Dist. LEXIS 8273, at *6 (D. Ariz. Jan. 16, 16 2019) (citation omitted). 17 The Court considers the value of the information sought to Plaintiffs compared to 18 the burden upon Movant. Regarding the value to Plaintiffs, the Court notes that information 19 into the advice rendered by trial counsel may prove vital to rebutting Defendants’ reliance 20 upon the advice-of-counsel defense. Hence, any communication or document created by 21 Movant that confirms, contradicts, qualifies, updates, or modifies the opinions of Zazueta 22 Law Firm would be highly relevant in the instant action. 23 Regarding undue burden, Movant asserts that the subpoena “has caused Sacks 24 Tierney significant and unnecessary burden, lost time, and expense.” (Doc. 197 at 4.) While 25 the Court does acknowledge that, by requiring Movant to comply with the subpoena, the 26 Court will have caused a fiscal and time burden upon Movant. However, the Court finds 27 that requiring Movant to comply with a modified subpoena will correctly balance the scale 28 between Plaintiffs’ discovery rights and Movant’s valid concerns. Specifically, the Court 1 shall limit the subpoena’s commands for production to communications and documents 2 that Movant has not provided to Fennemore when Defendants switch trial counsel. This 3 shall include disclosed and undisclosed communications and documents.18 4 VI. CONCLUSION. 5 In total, Defendants’ assertion of an advice-of-counsel defense related to Zazueta 6 Law Firm’s 2021 advice on the MCA exemption to the FLSA’s overtime wage requirement 7 has affected a narrow waiver of the attorney-client privilege with Defendants’ current and 8 former trial counsel. Absent Defendants’ withdrawal of the advice-of-counsel defense, 9 fairness dictates that Plaintiffs be permitted to seek limited discovery to test whether 10 Defendants did, in good faith, believe that their acts complied with the FLSA. This finding 11 is of course limited to communications and documentation regarding the MCA exemption. 12 In short, Defendants cannot both wield the advice of counsel ‘sword’ and the attorney- 13 client privilege shield. 14 Accordingly, 15 IT IS ORDERED that Plaintiff’s Motion to Compel Compliance with Third-Party 16 Subpoena and Discovery Obligations (doc. 195) is GRANTED IN PART. 17 IT IS FURTHER ORDERED that Defendants, on or before MAY 22, 2026, may 18 either withdraw the advice-of-counsel defense as to Zazueta Law Firm’s 2021 advice or 19 produce any disclosed and undisclosed communications and documentation that confirm, 20 contradict, qualify, update, or modify Zazueta Law Firm’s 2021 advice on the MCA 21 exemption. This shall include communications and documentation created or issue after 22 the commencement of this action. 23 IT IS FURTHER ORDERED that Movant’s request for Rule 45(d)(1) sanctions 24 is DENIED. 25 IT IS FURTHER ORDERED that Plaintiffs’ third-party subpoena upon Movant 26 is MODIFIED. Movant shall provide any disclosed and undisclosed communications and 27 documentation that confirm, contradict, qualify, update, or modify Zazueta Law Firm’s 28 18 See supra section V.C. 1 || 2021 advice on the MCA exemption that have not been provided to Defendants current 2|| trial counsel. Movant shall do so on or before MAY 22, 2026. 3 IT IS FURTHER ORDERED that, if the parties disagree over whether a 4|| communication or document falls under the narrow attorney-client waiver, they shall 5 || submit the document for in camera review by this Court. 6 Dated this 6th day of May, 2026. 7 hoy —— Honorable John Z. Boyle 9 United States Magistrate Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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