Case of the Day: Strauss v. Credit Lyonnais

The case of the day, Strauss v. Credit Lyonnais, S.A. (E.D.N.Y. 2011), raises issues we have not previously considered. The plaintiffs were American victims of terrorist attacks carried out in Jerusalem by Hamas, and members of their family. They sued Credit Lyonnais under the Anti-Terrorism Act of 1992, alleging that the bank had provided material support to Hamas.

Today’s opinion involved the confidentiality of documents produced in discovery. The bank had previously produced documents containing financial information about one of its customers, the Comité de Bienfaisance et de Secours aux Palestiniens, which the US government designated as a “Specially Designated Global Terrorist” in 2003, and had designated the documents as “confidential” or “highly confidential”. In addition to bank account records, the documents included declarations that the bank had filed concerning CBSP with Traitement du renseignement et action contre les circuits financiers clandestins, part of the French Ministry of Finance that fights money laundering, and notes of an interview a bank official gave to a police commander in Nancy in connection with a preliminary investigation of CBSP.
There was no question about the propriety of the confidentiality designations for purposes of pre-trial discovery, but should the parties be able to file the documents with the court under seal in support of their motions for summary judgment? After all, there is a presumption of public access to court records that has both a common law and a constitutional dimension. On the other hand, French bank secrecy law prohibits disclosure of the documents that the plaintiffs obtained in discovery Both the the TRACFIN documents and the police interview were produced in discovery pursuant to a letter of request to the French authorities under the Hague Evidence Convention, and similar records would ordinarily be privileged or otherwise non-public under US law. The court therefore concluded that there was a compelling reason, based in part on considerations of comity, for permitting the documents to be filed under seal, or with the truly confidential portions of the documents redacted.

The judge’s decision is thoughtful and appropriately sensitive to comity concerns. It would be unfortunate indeed if a French defendant produced documents protected from disclosure by French law with the understanding that they would be treated confidentially, and then subjected to a “bait-and-switch” when the time comes for the documents to be submitted to the court. On the other hand, perhaps courts should not be so ready to assume, as a judge was in an earlier stage of this case, that a protective order aimed at protecting documents in pre-trial discovery provides a sufficient basis for ordering production of documents notwithstanding a foreign blocking statute or bank secrecy law.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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