910 F. Supp. 2d 548
S.D.N.Y.2012Background
- This suit arises from the 2006 Tel Aviv bombing that killed Daniel Wultz and injured Yekutiel Wultz; plaintiffs allege ATA terrorism claims and related negligence and vicarious liability against Bank of China (BOC).
- Plaintiffs moved to compel production of documents in BOC’s control, some of which implicate a Hague Convention Letter of Request to Chinese authorities.
- BOC asserted bank secrecy laws and asked the court to await the Hague process; the court previously issued a Letter of Request on August 31, 2011, with no response for over thirteen months.
- BOC produced 639 pages from its New York branch but no emails or electronic records; the court’s scheduling order required production by October 31, 2012.
- The court applies the Second Circuit comity framework (Aérospatiale) to determine whether to compel production in contravention of foreign law, and grants the motion with limits to the scope of certain requests.
- The court orders the parties to narrow requests 7-9 and to confer on a swift revised discovery schedule, allowing for continued cross-border discovery balancing interests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court should compel production despite foreign bank secrecy laws | Wultz argues for broad discovery to curb terrorism funding. | BOC contends secrecy laws and Hague process are essential and may block broad disclosure. | Comity factors weigh in favor of compelled production, with limits. |
| Appropriateness of the scope and specificity of requests 7-9 | Requests target regulatory examinations, penalties, and AML communications. | Requests are overbroad and contain sensitive regulatory documents. | Requests 7-9 require narrowing; production allowed for narrowed, relevant items. |
| Viability of Hague Convention as sole alternative means to obtain documents | Hague process is too slow/uncertain and not a reliable alternative. | Hague process should be pursued to respect sovereignty and avoid conflict with Chinese law. | Hague Convention not deemed a reliable sole path; comity analysis favors U.S. discovery. |
| Balancing U.S. and Chinese interests in cross-border discovery | U.S. interest in disrupting terrorist financing outweighs Chinese secrecy concerns. | Chinese bank secrecy and sovereignty protect confidential information. | U.S. interests prevail; discovery permitted with narrowing of scope. |
| Whether confidential Chinese regulatory documents may be ordered production | Some regulatory docs could be relevant to case. | Such documents risk sovereign intrusion and are not clearly enumerated. | Not ordered; these documents require separate briefing and careful analysis. |
Key Cases Cited
- Société Nationale Industrielle Aérospatiale v. United States Dist. Ct. for the S. Dist. of Iowa, 482 U.S. 522 (1987) (optional Hague process; comity requires case-specific analysis of interests)
- Weixing Li, 2011 WL 6156936 (S.D.N.Y. 2011) (comity factors for discovery against foreign banks in contravention of local laws)
- Forbse, 2012 WL 1918866 (S.D.N.Y. 2012) (multi-factor comity analysis; sanctions concern and scope of discovery against foreign entity)
- Qi Andrew, 276 F.R.D. 143 (S.D.N.Y. 2011) (Hague Convention limits; discussion of direct connections and enumerated requests)
- Midanes v. Madanes, 186 F.R.D. 279 (S.D.N.Y. 1999) (comity/factors framework cited in cross-border discovery)