768 F.Supp.3d 619
S.D.N.Y.2025Background
- This case involves the estate and family of Quinn Lucas Schansman suing Russian financial institutions, including VTB Bank PJSC, under the Antiterrorism Act (ATA) for allegedly providing material support to the Donetsk People’s Republic (DPR), classified here as a terrorist organization, responsible for the downing of MH17.
- Plaintiffs served discovery requests for documents relating to VTB's financial transactions and compliance practices regarding alleged DPR support; VTB largely refused production, citing Russian bank secrecy laws and the need for approval from Russian regulators.
- Significant delays occurred as VTB sought regulatory approval for document production, with only about 3% of responsive documents ultimately disclosed, much of it highly redacted and not tailored to the specific discovery sought by plaintiffs.
- The plaintiffs moved to compel, arguing such laws should not preclude production under U.S. discovery and international comity principles, especially in ATA terrorism cases. VTB opposed, arguing Russian law and the act of state doctrine bar production.
- The Court was required to determine: (1) the extent to which Russian law blocked disclosure, and (2) whether comity or the act of state doctrine require deference to Russian law on these facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Russian law bar VTB's compliance with U.S. discovery? | VTB’s view of Russian law is overbroad and fails the burden of specificity; alternative interpretations exist. | Russian bank secrecy, counter-sanctions, and personal data laws prohibit compliance absent regulatory approval. | Court finds Russian law bars production of most requested documents, except personal data requests, where VTB fails its burden. |
| Is the act of state doctrine a bar to compelling discovery? | Doctrine is inapplicable because court is not sitting in judgment on validity of Russian governmental acts, just enforcing U.S. discovery. | Doctrine applies because court would be second-guessing Russian sovereign decisions on disclosure refusals. | Doctrine does not apply; the comity analysis, not the act of state doctrine, governs here. |
| Does comity require denial of motion to compel under Restatement factors? | U.S. interest in combating terrorism and enforcing the ATA outweighs Russian bank secrecy and regulatory interests; discovery is critical to claims. | Russian blocking statutes and regulatory interests outweigh; U.S. should not compel violations of Russian law. | Comity strongly favors U.S. discovery; court grants motion to compel as most factors favor plaintiffs. |
| Are the document requests overly broad or non-specific? | Discovery requests are tailored, list specific persons/entities, seek relevant evidence. | Requests are overbroad, vague, and burdensome. | Requests are sufficiently specific; breadth is justified by necessity for claim. |
Key Cases Cited
- Société Nationale Industrielle Aérospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522 (U.S. 1987) (sets out comity analysis and establishes U.S. courts can order production even if it violates foreign law)
- Linde v. Arab Bank, PLC, 706 F.3d 92 (2d Cir. 2013) (authorizes compelling discovery over foreign bank secrecy laws in terrorism cases, applies comity factors)
- W.S. Kirkpatrick & Co. v. Env’t Tectonics Corp., Int’l, 493 U.S. 400 (U.S. 1990) (act of state doctrine applies only where case outcome turns on the validity of foreign sovereign acts)
- Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (U.S. 1964) (core explanation of act of state doctrine)