1:20-cv-10299
S.D.N.Y.May 6, 2024Background
- Plaintiffs Martin Nicholas John Trott and Christopher James Smith, as Joint Official Liquidators of Madison Asset LLC, sought to compel Deutsche Bank to produce certain internal documents called Suspicious Activity Information Forms (SAIFs) concerning Madison or its affiliates.
- Deutsche Bank claimed SAR privilege over the SAIFs under the Bank Secrecy Act, withheld them in discovery, and sought to claw back inadvertently produced documents and deposition testimony.
- Plaintiffs filed a motion to reopen discovery and compel production of the SAIFs; Deutsche Bank filed a cross-motion to enforce its privilege assertions and retrieve/discard disputed materials.
- The parties submitted briefing and the Court held oral argument on the discovery dispute.
- Central to the motion was whether SAR privilege, which protects certain bank reports to regulators, applied to the SAIFs, which are used internally to evaluate potential suspicious activity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Reopening discovery to compel SAIFs | Plaintiffs acted diligently, no trial imminent, limited scope, highly relevant docs | Not sufficiently diligent, no good cause | Granted—good cause shown, limited and justified |
| SAR privilege application to SAIFs | SAIFs are underlying docs, not SARs or indicators one was filed | SAIFs part of protected investigatory process | SAR privilege does not cover SAIFs; must be produced |
| Clawback of produced docs/testimony | Docs not privileged, already in record | Privileged and inadvertently produced | Denied—clawback not justified, privilege does not apply |
| Requirement to produce additional SAIFs | All relevant SAIFs must be produced | Further docs should not be produced | Granted—Deutsche Bank ordered to produce all relevant SAIFs |
Key Cases Cited
- Wultz v. Bank of China Ltd., 56 F. Supp. 3d 598 (S.D.N.Y. 2014) (SAR privilege does not bar discovery of underlying documents not expressly revealing a SAR)
- Fort Worth Employees’ Ret. Fund v. J.P. Morgan Chase & Co., 862 F. Supp. 2d 322 (S.D.N.Y. 2012) (interpretive language on SAR confidentiality too ambiguous for broad privilege expansion)
- Moroughan v. Cnty. of Suffolk, 320 F. Supp. 3d 511 (E.D.N.Y. 2018) (lists standards for reopening discovery)