"why the clients Nevada HSA contribution, (not California),"

Did you properly allocate by Source (State)? If the Spouse has the HSA account and the policy, you should be able to show that this income is not CA sourced. If that is Family coverage and the owner of the HSA is the taxpayer, I can see how it might get treated as reportable for the taxpayer for CA, because that will be linked by name.

Facts and circumstances apply.