183 F.Supp.3d 409
S.D.N.Y.2016Background
- Plaintiff Laydon (class representative) alleges banks manipulated Euroyen TIBOR and Yen-LIBOR between 2006–2011 and seeks documents related to regulators' investigations and productions.
- Defendants (major banks) object to production of documents located in the U.K., citing risk of violating the U.K. Data Protection Act (DPA) and the English banker's duty of confidentiality.
- Defendants moved to require plaintiff to pursue U.K. documents through the Hague Convention rather than the Federal Rules.
- Both sides submitted UK legal expert declarations interpreting the DPA and the banker's duty; defendants relied on EU Article 29 Working Party guidance and SWIFT materials.
- Magistrate Judge Pitman found defendants met the threshold of a possible conflict with U.K. law (warranting comity analysis) but, applying the multi-factor comity test, concluded U.S. interests and other factors outweighed requiring Hague-first procedures.
- Court denied defendants’ motion to compel Hague Convention procedures and refused to bar production under the Federal Rules; production subject to existing protective order and other accommodations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether U.K. data protection/confidentiality law bars production | Laydon: DPA contains exceptions for legal proceedings/court orders and Schedule exemptions permit transfer for litigation; protective order and redaction suffice | Banks: DPA and banker’s duty likely prohibit production absent Hague Convention procedures; U.S. order may not satisfy DPA exemptions | Court: Defendants showed a real risk U.K. law could bar production, so comity analysis required, but not dispositive |
| Whether Hague Convention is required/preferred alternative | Laydon: Hague is inadequate for broad pre-trial discovery; U.K. often requires highly specific requests making Hague ineffective | Banks: Hague is viable, routinely executed, and preferred to avoid violation risk | Court: Hague may be ineffective here (narrowing requirement); factor favors plaintiff or is neutral |
| Balancing sovereign interests (comity) — U.S. vs U.K. | Laydon: U.S. has strong interest enforcing commodities laws and applying Federal Rules; U.K. agencies did not object in this case; protective order addresses privacy | Banks: U.K. interest in enforcing DPA and bank confidentiality outweighs U.S. discovery interests | Court: U.S. interests (enforcement, plaintiff’s need, lack of U.K. governmental objection, protective order) outweigh U.K. interests here |
| Hardship and risk of sanctions for compliance | Laydon: Defendants gave no examples of U.K. prosecutions or damages for complying with U.S. court orders; redaction/protection reduce risk | Banks: Producing could expose them to fines, enforcement, or damages under DPA and banker's duty | Court: No demonstrated history of enforcement in comparable circumstances; hardship factor insufficient to displace Federal Rules |
Key Cases Cited
- Societe Nationale Industrielle Aérospatiale v. United States Dist. Court, 482 U.S. 522 (U.S.) (Hague Convention procedures are optional; comity requires particularized balancing)
- First Am. Corp. v. Price Waterhouse LLP, 154 F.3d 16 (2d Cir.) (Hague Convention may be inadequate where foreign execution requires document-by-document specificity)
- Wultz v. Bank of China Ltd., 910 F. Supp. 2d 548 (S.D.N.Y.) (articulating Second Circuit comity factors and applying balancing test)
- Alfadda v. Fenn, 149 F.R.D. 28 (S.D.N.Y.) (party asserting foreign-law obstacle bears burden to prove conflict with sufficient particularity)
- Minpeco, S.A. v. Conticommodity Servs., Inc., 116 F.R.D. 517 (S.D.N.Y.) (consideration of comity factors and when Hague may be appropriate)
- In re Air Cargo Shipping Servs. Antitrust Litig., 278 F.R.D. 51 (E.D.N.Y.) (documents previously produced to regulators are often important and discoverable)