982 F. Supp. 2d 260
S.D.N.Y.2013Background
- Plaintiffs sought to compel testimony and production of communications by Renger Boonstra, an unlicensed in‑house lawyer at Citco Bank Nederland, in litigation arising from the Madoff scheme.
- Magistrate Judge Frank Maas issued a discovery order overruling Citco Defendants’ attorney‑client privilege assertions and compelling disclosure of Boonstra’s communications.
- Citco filed Rule 72(a) objections arguing (1) privilege under U.S. or Dutch law protects the communications, and (2) Dutch discovery law limits compelled production.
- Magistrate Judge Maas found the communications could “touch base” with either the U.S. or the Netherlands, but that under either jurisdiction the communications were not privileged and should be disclosed.
- District Judge Victor Marrero reviewed the objections and affirmed the Magistrate Judge’s Order, applying the "touch base" choice‑of‑law framework and rejecting Citco’s privilege and Dutch discovery arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law for privilege (which country’s law governs) | Communications touch base with U.S.; U.S. privilege law applies | Communications touch base with Netherlands; Dutch law applies | Communications could touch base with either jurisdiction; magistrate’s dual analysis upheld |
| Attorney‑client privilege for communications with an unlicensed in‑house lawyer | No privilege because privilege under U.S. law covers only licensed attorneys (no protection for unlicensed counsel) | Communications privileged because Citco reasonably believed Boonstra was its attorney | Held for Plaintiffs: reasonable‑mistake exception not available—Citco could not credibly claim reasonable belief Boonstra was licensed; no U.S. privilege applies |
| Privilege under Dutch law for communications with unlicensed in‑house counsel | Plaintiffs: Dutch law also does not recognize privilege for communications with unlicensed in‑house counsel | Citco: even if no privilege, Dutch discovery practice is limited so documents would not be disclosed | Held for Plaintiffs: Dutch law likewise does not protect these communications and Dutch civil procedure provides substantial mechanisms for document production; magistrate’s ruling affirmed |
| Whether magistrate’s discovery order was clearly erroneous or contrary to law | Magistrate’s order is supported and entitled to deference | Order is clearly erroneous/contrary to law | Held for Plaintiffs: district court finds no clear error or legal error and affirms the magistrate judge’s order |
Key Cases Cited
- Thomas v. Arn, 474 U.S. 140 (deference standard to magistrate judge rulings)
- Gucci Am., Inc. v. Guess?, Inc., 271 F.R.D. 58 (choice‑of‑law: communications that "touch base" determine privilege law)
- Astra Aktiebolag v. Andrx Pharms., Inc., 208 F.R.D. 92 (apply law of jurisdiction with predominant interest in confidentiality)
- In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910 (reasonable‑mistake exception discussions for privilege)
- Wultz v. Bank of China Ltd., 979 F. Supp. 2d 479 (treats privilege protection for unlicensed counsel under U.S. law)