In these cases, we examine the extent to which federal and state privacy laws restrict the ability of the federal government and banks to assist investigations in foreign countries. Plaintiffs appeal from judgments of the District Court for the Southern District of New York (John F. Keenan, Judge) dismissing these actions pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim for relief. We affirm in the case against the United States Department of Justice and modify the judgment in the case against Chemical Bank.
BACKGROUND
Appellants Sybil Young, a British citizen, and her husband Roderick, a citizen of Bermuda, operated several businesses in Bermuda. Sometime around 1981, Mrs. Young opened a checking account at a branch of Chemical Bank (“Chemical”) in New York City. From 1981 to 1986, she regularly deposited large amounts of cash and traveler’s checks in her Chemical account by registered mail. Chemical’s management became suspicious of the size and frequency of these deposits but a background check on Mrs. Young failed to disclose any criminal history.
The deposits continued to arrive and Chemical continued to process them for some time, despite its concerns. Chemical finally refused to accept any more deposits after an incident in August 1986, when Mr. Young personally appeared at the bank with approximately $36,000 in traveler’s checks for deposit to his wife’s account. A Chemical officer told Mr. Young that Chemical would not accept the deposit. The discussion turned into an argument, *635 and Mr. Young left the bank. That night he placed the checks in the night deposit slot. Chemical did not process the checks when they were discovered the next day. Instead, it mailed them back to Mrs. Young in Bermuda.
Sometime during the next two or three months, Sol Froomkin, the Attorney General of Bermuda, received information from an informant that the Youngs were violating Bermuda’s currency control laws. The identity of the informant has not been revealed but the Youngs allege that it was a representative of Chemical. In any event, on the basis of this tip, Froomkin initiated an investigation into the Youngs’ banking activities with Chemical.
In connection with the investigation, representatives from Froomkin’s office asked Chemical for information pertaining to Mrs. Young’s account. They were told that Chemical would provide it only if compelled by subpoena. Froomkin telephoned the Office of the United States Attorney for the Southern District of New York for help and was referred to David Denton, the Executive Assistant United States Attorney. Denton eventually applied for, and was granted, an order from the District Court for the Southern District of New York appointing him a commissioner empowered to obtain evidence relevant to Froomkin’s investigation. Under this authority, Denton obtained the account information with a court-ordered subpoena. He provided this evidence, along with other material acquired pursuant to his commission, to Froomkin, who used it to obtain an indictment against the Youngs. Eventually, the Youngs both pleaded guilty to numerous violations of Bermuda law.
After their convictions, the Youngs initiated separate actions against the United States Department of Justice (the “Government”) and Chemical, claiming that each had violated the Right to Financial Privacy Act, 12 U.S.C. §§ 3401-22 (1983 & Supp. 1988) (“RFPA” or the “Act”) by failing to comply with certain provisions that the Youngs assert should have regulated the release of Mrs. Young’s account information to the Government. In the action against Chemical, the Youngs also asserted claims based on confidentiality theories. The district court dismissed both lawsuits. It held that the Government was merely serving as a “conduit” for the Bermuda government when it obtained the account information and was, therefore, not a “government authority” within the meaning of the Act. The court also found, as a matter of New York State law, that appellants had no cause of action against Chemical arising from an alleged breach of confidentiality. The Youngs appeal from both dismissals.
DISCUSSION
A. Applicability of the RFPA to Court-Appointed, Commissioners
Persons involved in foreign legal proceedings, who seek evidence located in the United States, may obtain it using letters rogatory or less-cumbersome requests for court-appointed commissioners, the ancient tools of international litigation.
See United States v. Mosby,
1. Scope of the RFPA
The RFPA provides, in pertinent part:
[N]o Government authority may have access to or obtain copies of, or [sic] the information contained in the financial records of any customer from a financial institution unless ... such customer has authorized such disclosure ... [or] such financial records are disclosed in response to a judicial subpena which meets the requirements of ... this title_
12 U.S.C. § 3402. The RFPA defines a “government authority” as “any agency or department of the United States, or any officer, employee, or agent thereof.” Id. § 3401(3). Were there no other circumstances for us to consider, we would have to find that Denton, as a Justice Department employee, fell within this definition. The district court found, however, that Denton was not specifically acting in that capacity when he obtained this information from Chemical. The specific question before us, therefore, is whether the RFPA applies when persons who would otherwise qualify as “government authorities” under the RFPA are appointed commissioners and, in that capacity, seek to obtain information from financial institutions with court-ordered subpoenas. We hold that it does not.
Initially, we note that Congress never considered the question before us when it enacted the RFPA. For example, the Act does not contain a single reference to commissioners or letters rogatory, and nothing in the legislative history suggests that Congress weighed the possible impact of the Act on either of these procedures. Our determination of how broadly to construe the RFPA is made somewhat difficult by the absence of a clearly articulated purpose behind it. Certainly, a significant motivating factor for Congress was the Supreme Court’s decision in
United States v. Miller,
Nevertheless, it would be reading too much into the Act to conclude that Congress intended to cloak bank records with an impenetrable veil of privacy in all contexts. As the House Report explains:
[The Act] is intended to protect the customers of financial institutions from unwarranted intrusion into their records while at the same time permitting legitimate law enforcement activity. Therefore, [it] seeks to strike a balance between customers’ right of privacy and the need of law enforcement agencies to obtain financial records pursuant to legitimate investigations.
H. Rep. at 33,
reprinted in
Code News at 9305. Congress determined that the best way to protect financial records from unwarranted governmental intrusion without crippling legitimate criminal investigations was to regulate the government’s access. Yet, it observed that grand jury subpoenas, the mechanism of disclosure in
Miller,
have always been subject to judicial review. It
*637
exempted them from the Act after it decided the safeguards already in place would adequately protect against abuse.
See
12 U.S.C. § 3413(i); H. Rep. at 35,
reprinted in
Code News at 9307;
id.
at 228,
reprinted in
Code News at 9358;
In re Grand Jury Subpoena Duces Tecum,
Therefore, we believe Congress intended the RFPA to regulate the release of customer information from financial institutions in circumstances where adequate controls did not already exist. The subpoena served on Chemical, “so-ordered” by a district court, was not in this category because it was subject to judicial review even before it was served. 2 It thus received the same, if not higher, level of scrutiny given grand jury subpoenas. Construing the Act so as not to apply in such circumstances would be consistent with congressional intent.
Such an interpretation would also further related congressional goals. Congress has long recognized the freedom of individuals to provide information voluntarily for use in foreign proceedings. See 28 U.S.C. § 1782(b). The Act reveals Congress’ objective of encouraging voluntary cooperation with law enforcement agencies. For example, Congress specifically exempted “tips” to law enforcement authorities by banks that suspect a customer of engaging in criminal activity. 12 U.S.C. § 3403(c). 3 In fact, it felt so strongly about encouraging voluntary cooperation that it subsequently added a provision preempting any other state or federal law to the contrary. Id. § 3403(c) (Supp.1988). In addition, it declined to adopt certain provisions that would have restricted the ability of government authorities to share information acquired under the Act with other agencies. It did so, in part, out of concern that the provisions would also restrict the ability of law enforcement groups to share evidence of criminal activity with foreign governments. See Hearings on S. 2096 Before the Subcomm. on Financial Institutions, 95th Cong., 2d Sess., 235-36 (1978) (statement of Hon. Harold M. Williams, Chairman of the Securities and Exchange Commission).
In 1964, Congress amended the statute governing foreign requests to enable the government to take a greater role in rendering assistance to foreign governments with the objective of stimulating reciprocal aid.
See
S.Rep. No. 1580, 88th Cong., 2d Sess. 7,
reprinted in
1964 U.S.Code Cong. & Admin. News 3782, 3788;
In re Letter of Request From the Crown Prosecution Service of the United Kingdom,
In addition, we do not understand how appellants can claim that their interpretation of the Act would provide any additional protection. If the Government had not been able to obtain the account information in this case, Bermuda would simply have turned to a private commissioner, and the Youngs would still have been indicted and convicted. 5 Moreover, restricting the opportunity for representatives of the Government to serve as commissioners would not necessarily prevent it from obtaining financial records without complying with the RFPA. If Bermuda had chosen a private commissioner, nothing would have prevented it from sending copies of the account information to the Government on its own initiative or even upon the request of the Government. The impact on the. Young’s privacy interests in the account records would thus have been the same regardless of whether the information had been transmitted to Bermuda by a federal employee or a private commissioner.
Appellants argue that our decision will, nonetheless, increase the potential for Government abuse. They claim that it will provide a method for the Government to obtain information from banks when it cannot meet the requirements of the RFPA. We are aware that were it not for Bermuda’s request for assistance, the Government might not have been able to obtain the Youngs’ account information from Chemical.
6
The actual risk of abuse, however, is quite low. The Government’s opportunity for manipulation is limited by the fact that a representative may apply for a commission only upon the request of a foreign party, and then only when the requesting party can adequately establish that the evidence sought will be used in a foreign tribunal.
See In re Doe,
Nor do we find the precedent they cite persuasive. Their primary support is a footnote in an Eleventh Circuit opinion, which, in dictum, did no more than note that the commissioner involved would comply with the RFPA.
See Trinidad and Tobago,
In conclusion, we hold that the RFPA does not apply to court-appointed commissioners, who would otherwise qualify as “government authorities” under the RFPA, when they seek information from financial institutions with court-ordered subpoenas.
2. Judicial Estoppel
Appellants assert that the Government should be precluded under the judicial estoppel doctrine from arguing that the Act does not apply. During discussions with Denton, Chemical indicated that, absent a court order to the contrary, it would ordinarily notify Mrs. Young that it had received a subpoena pertaining to her account. When informed of this, Froomkin told Denton that any such disclosure would jeopardize the ongoing investigation in Bermuda. Denton decided to seek an order preventing Chemical’s planned notification of Mrs. Young. The trouble is, the Government believed then, as it argues now, that the RFPA did not apply to its activities on behalf of Bermuda. Nevertheless, Denton applied for, and was granted, the order under section 3409 of the RFPA, which provides authority for a court to delay the notification otherwise required under the Act. See 12 U.S.C. § 3409(a). Appellants urge that, in light of the Government’s affirmative use of this favorable provision, it cannot claim now that the Act does not apply.
Since appellants did not assert the judicial estoppel argument before the district court, we would not ordinarily consider the claim.
See Fleming v. New York University,
In general, the judicial-estoppel doctrine, where it is recognized, may prevent a party who benefits from the assertion of a certain position, from subsequently adopting a contrary position.
See generally Hal David v. Showtime/The Movie Channel,
In light of the
ex parte
nature of the Government’s application, appellants do not, and could not, assert that they somehow relied to their detriment on the Government’s initial position.
Cf. id.
§ 4477 at 780-81 (“Given the great freedom permitted by modem federal procedure to assert inconsistent positions in a single action, and to amend pleadings to advance inconsistent positions for the first time during the course of suit, reliance on positions initially taken by an adversary is not well advised.”). Similarly, the reliance of the court that issued the delay order, on the Government’s implicit representation that the RFPA applied, was not the type that would warrant application of the doctrine. What occurred here is quite different from a situation in which a party has obtained favorable relief with an implicit but misleading representation to a court that he would not subsequently switch po
*640
sitions.
See Sperling v. United States,
We find no evidence that Denton intended to mislead or deceive the court when he applied for the delay order under the RFPA. Although the Government did not believe the Act generally applied, there was certainly room for a difference of opinion. Chemical apparently felt it applied, so it was reasonable for the Government to acquiesce in that view if it believed it could avoid litigating the issue and still protect the integrity of Froomkin’s investigation. We will leave for another day the determination of whether the court would have had the power, absent the provision in the RFPA, to order Chemical not to notify Mrs. Young of the existence of the subpoena. We do observe, though, that the question is not a trivial one.
8
Since the Government’s application was
ex parte,
it should have, at the very least, alerted the court to the possibility that the Act did not apply.
See Matter of Grand Jury Applications for Court-Ordered Subpoenas and Nondisclosure Orders
— December
1988 Term,
Despite our belief that the Government should have been more candid in its application, this is not the type of conduct the judicial estoppel doctrine seeks to deter. Moreover, in light of our conclusion that the RFPA does not apply to court-appointed commissioners, we do not see how the judicial-estoppel doctrine could affect the outcome of this case. If certain conduct falls outside a statute, the subsequent actions of an attorney cannot put it within its scope, especially where the consequence would be to subject the United States to liability for damages. For all of these reasons, we reject the claim of judicial estop-pel.
B. Chemical’s Alleged Breach of Confidentiality
Appellants’ state-law claims essentially allege a breach of a confidential relationship between Mrs. Young and Chemical. At the outset, we note that Chemical’s compliance with a judicially-authorized subpoena would immunize it from liability for any required disclosures.
See, e.g., Suburban Trust Co. v. Waller,
Breach of confidence is a relative newcomer to the tort family. Like the law of privilege, it is rooted in the concept that the law should recognize some relationships as confidential to encourage uninhibited discussions between the parties involved.
See Doe v. Roe,
Since it is in its infancy, the breach-of-confidence cause of action is still experiencing growing pains. In recognizing it, “[m]ost courts have resorted to a confused tangle of legal theories, including invasion of privacy, implied term of contract, implied private cause of action in statute, and tortious breach of confidence....” Note at 1437 (footnotes omitted);
see also Doe,
Recovery in contract, unlike recovery in tort, allows only for economic losses flowing directly from the breach.
Tighe,
We perceive that New York’s courts have been rather conservative in recognizing causes of action for damages in the privacy field.
See, e.g., Arrington v. New York Times Co.,
Even in the context of the physician-patient relationship, New York courts have recognized that the individual right of confidentiality is limited by broader societal concerns. In
MacDonald v. Clinger,
for example, the court stated that “although public policy favors ... confidentiality [in the physician-patient context], there is a countervailing public interest to which it must yield in appropriate circumstances.”
Like the district court, we have difficulty articulating any rationale upon which to extend the breach-of-confidence cause of action to banking relationships.
11
Mutual trust is, to be sure, a worthwhile goal in all relationships, but we do not see any reason to put discussions between banks and their depositors in the same class as those between physicians and patients. The type of disclosure encouraged in that context is hardly necessary for the bank-depositor relationship to function effectively. That is undoubtedly why courts have not recognized a banker-client testimonial privilege.
See Rosenblatt v. Northwest Airlines,
Nevertheless, we have no doubt that most depositors believe banks will keep their banking activities confidential. At
*643
the very least, banks have fostered that impression. The American Bankers Association counsels its members that customer account information should generally be kept confidential,
see Milohnich v. First Nat’l Bank of Miami,
Therefore, we are not surprised that courts in several jurisdictions have applied the breach-of-confidence doctrine in banking contexts.
See Barnett Bank of West Florida v. Hooper,
Although we might be inclined to hold that the breach-of-confidence cause of action should not be extended to banking relationships, we recognize that such a decision could have serious repercussions for the New York banking community. We are particularly concerned that if we found no duty requiring New York banks to keep account information confidential, some customers might be inclined to transfer their business from institutions in this jurisdiction, home to one of the world’s financial capitals, to banks in “confidential” jurisdictions. We feel that a New York court would be in the best position to assess that possible impact on the local banking industry.
Considering the still-developing nature of the breach-of-confidence doctrine, the lack of New York precedent and the local policy issues involved, our prediction of what a state court would do with this question
*644
would be little more than a guess. If we turned out to be wrong, subsequent state-court action, or legislation, “overruling” our decision, might not occur for several years — possibly too late to reverse any resultant damage to the banking community. In a related context, the Supreme Court has cautioned that federal courts should avoid providing “a tentative answer which may be displaced tomorrow by a state adjudication.”
Railroad Comm’n of Texas v. Pullman Co.,
Alluding to these considerations, appellants have asked us to exercise our power to abstain and to dismiss the staté-law claims without prejudice, so they may be pursued in state court.
See
Brief for Appellants (Young v. Chemical) at 11-12. Chemical has not expressed any views on the abstention issue. In
Colorado River Water Conservation District v. United States,
Abstention from the exercise of federal jurisdiction is the exception, not the rule. “The doctrine of abstention ... is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it. Abdication of the obligation to decide cases can be justified under this doctrine only in the exceptional circumstances where the order to the parties to repair to the State court would clearly serve an important countervailing interest.”
Id.
at 813,
Our decision in this case is also guided by the principle that federal courts should leave for state court determination “difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar.”
Colorado River,
The abstention issue was also not raised before the district court and we have considered it only because of the potentially serious repercussions that might accompany an affirmance.
Id.
at 29,
CONCLUSION
The judgment of the district court dismissing the action against the Government is affirmed. The judgment of dismissal in the case against Chemical is modified as described above.
Notes
. The procedures governing such appointments are now codified in 28 U.S.C. § 1782(a) (1983), which provides:
The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. By virtue of his appointment, the person appointed has power to administer any necessary oath and take the testimony or statement.
See also 22 C.F.R. § 92.67 (1988).
. We need not decide whether the subpoena was validly issued. The issues raised by appellants concerning the validity of the subpoena do not vitiate Denton’s status as a commissioner.
. The information that may be disclosed is limited to the customer’s identity or account number and the nature of the suspected illegal activity. 12 U.S.C. § 3403(c) (Supp.1988).
. At one point, Froomkin expressed some frustration over the delay in Denton’s appointment as a commissioner. He wrote:
This matter is becoming somewhat embarrassing for me, since officials here are quer-ing [sic] why we cannot get prompt assistance from the U.S., when in fact we in Bermuda invariably give requests from the U.S. the highest priority.
Letter from Sol M. Froomkin, Q.C., to David W. Denton, Esq., dated December 24, 1986 (Jt. App. (Young v. Department of Justice) 26).
. Since the issue is not before us, we express no opinion on whether a lawful prosecution could or should be recognized as an "injury.”
. The record does not reveal any violations of United States law by the Youngs. Therefore, it is possible that the Government could not have obtained Mrs. Young’s account information through the grand jury process.
. The Government presently retains the account information in a special file and has stated that it has no present interest in investigating the Youngs. Jt. App. (Young v. Chemical Bank) 119-20. If it later changed its mind, however, we recognize that it would be far easier for investigators to open a file drawer than to use other methods to obtain this information. In light of that possibility, it might be appropriate for district courts to include in orders granting commissions to representatives of the Government a provision requiring the commissioner to seal all retained copies of applicable bank records as soon as they are transmitted to the requesting party or, at the latest, upon the expiration of the commission.
. Prior to its amendment,
see
12 U.S.C. § 3413(i), several federal courts decided that the RFPA did not provide any authority for delayed-notification orders concerning grand-jury subpoenas and struggled to find independent grounds upon which to issue them.
See, e.g., In re Grand Jury Subpoena Duces Tecum,
. For those who did not foresee the need to remember the Hadley case, it established that damages in contract actions are limited to those that “may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.” Hadley, 9 Ex. at 354, 156 Eng. Rep. at 151.
. This occurs, for example, when a patient clearly presents a danger to others, contracts a reportable disease, uses controlled substances or sustains a gunshot wound.
MacDonald,
. The district court noted that New York courts have consistently followed the Supreme Court’s holding in
Miller
that customers have no standing to challenge subpoenas directed at their bank records.
See, e.g. Doe v. Blumenkopf,
. We, along with at least one other court in this circuit, have alluded to a bank’s duty in New York to keep customer information confidential, citing
Graney. See Aaron Ferer & Sons, Ltd. v. Chase Manhattan Bank,