56 F. Supp. 3d 598
S.D.N.Y.2014Background
- Defendant Bank of China (BOC) withheld >10,000 documents as confidential under SAR (Suspicious Activity Report) regulations after plaintiffs requested them in discovery.
- Relevant statute/regulation: 31 U.S.C. § 5318(g)(2)(A)(iii) and implementing regs (e.g., 12 C.F.R. § 21.11(k)) bar disclosure of SARs and information that would "reveal the existence of a SAR," but expressly permit disclosure of "the underlying facts, transactions, and documents upon which a SAR is based."
- BOC argued investigatory materials created during its internal suspicious-activity review process are covered by SAR confidentiality, relying on regulatory interpretive text suggesting confidentiality may extend to investigatory materials in "appropriate circumstances."
- Plaintiffs argued those investigatory documents do not reveal whether a SAR was filed and fall within the permitted category of underlying facts/documents.
- The Court conducted an ex parte review of samples and found the documents generally did not indicate whether a SAR was actually filed and did not disclose SAR existence.
- The Court concluded investigatory materials that do not reveal existence or contents of a SAR must be produced; evaluative documents generated at the decisionmaking stage that explicitly reveal SAR deliberations may be withheld for in camera review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SAR-regulation confidentiality bars production of bank investigatory documents generated while probing suspicious activity | Investigatory documents do not reveal whether a SAR was filed and are thus discoverable as "underlying facts, transactions, and documents" | SAR confidentiality covers investigatory materials prepared during the SAR process, citing agency interpretive text and policy favoring broad confidentiality | Court: Investigatory documents that do not reveal existence/contents of a SAR are not protected and must be produced |
| Whether evaluative/decisionmaking materials about SAR filing (e.g., committee deliberations) are protected | Plaintiffs: narrow protection only for materials that would reveal an SAR; evaluative materials that reveal SAR existence are not discoverable | BOC: deliberative/evaluative materials are part of the SAR process and should be confidential | Court: Evaluative documents that specifically reference SAR requirements or reveal the decision to file a SAR may be withheld; BOC should submit such documents for in camera review |
Key Cases Cited
- Auer v. Robbins, 519 U.S. 452 (deference to agency interpretation of its regulations)
- United States v. Holihan, 248 F. Supp. 2d 179 (supporting disclosure of supporting documentation that does not reveal that an SAR was filed)
- Weil v. Long Island Sav. Bank, 195 F. Supp. 2d 383 (compelling production of supporting documentation not revealing SAR existence or contents)
- Wiand v. Wells Fargo Bank, N.A., 981 F. Supp. 2d 1214 (distinguishing ordinary monitoring reports from evaluative reports created to comply with reporting requirements)
- Norton v. U.S. Bank Nat. Ass'n, 324 P.3d 693 (state-court decision favoring broader SAR protection)
- Union Bank of Cal., N.A. v. Superior Court, 29 Cal. Rptr. 3d 894 (state-court decision supporting broader confidentiality)