Strauss v. Credit Lyonnais, S.A. 242 F.R.D. 199 ( E.D.N.Y. 2007)

1. Strauss v. Credit Lyonnais, S.A.242 F.R.D. 199 (E.D.N.Y. 2007) Chris Cambridge 03/08/2010

2. PLAINTIFFS • A class of U.S. Individuals and Estates • Survivors of Alleged Terrorist Attacks by the Islamic Resistance Movement • 13 Attacks occurred in Israel between March 2002 & August 2003.

3. DEFENDANT • Credit Lyonnais, S.A. is a French incorporated bank • Credit Lyonnais also does business in the U.S. with an office in Miami, Florida.

4. MISCELLANEOUS PARTIES • (“HAMAS”) Islamic Resistance Movement • (“CBSP”) Le Comite de Bienfaisance ed de Secours aux Palestinians • Supposedly a charitable organization • Plaintiff alleged CBSP is a member of the Union of Good, an organization that funds HAMAS (terrorist group)

5. PLAINTIFFS CLAIMS • Credit Lyonnais violated Anti-Terrorist Statutes For: • Aiding and abetting the serious injury of Americans outside the U.S. • Knowingly providing support to a terrorist organization • Financing acts of terrorism. • First Claim Was Dismissed in 2006

6. PLAINTIFF ARGUMENTS • Credit Lyonnais maintained accounts for the CBSP for over 13 years. • CBSP is linked to several organizations that provide fundraising to HAMAS • The court should apply U.S. law because French laws do not apply to documents located in the U.S.

7. DISCOVERY REQUEST • At issue are document requests the Plaintiffs made regarding Credit Lyonnais and CBSP. • ALL account records between Credit Lyonnais and CBSP • ALL internal communications/investigations undertaken by Credit Lyonnais into CBSP • ALL correspondence between the bank and regulatory authorities in the U.S., France, and the European Union. • ALL documents related to the 2002 closure of CBSP’s account. • ALL documents relating to Credit Lyonnais’ anti-money laundering efforts. “Know Your Customer” • ALL documents related to Credit Lyonnais’ internal procedures in certain departments.

8. DEFENDANT ARGUMENTS • Credit Lyonnais objected to ALL document requests, citing several arguments. • Disclosure would violate French laws and they would be exposed to liability for interfering with a foreign judicial proceeding • Plaintiffs must follow the Hague Convention procedures of Discovery Requests • Disclosure would violate French bank and anti-money laundering laws.

9. DISCOVERY ISSUE • Whether French laws should be considered in compelling production of documents located abroad from foreign parties? If not, then what factors should a court address in compelling such documents?

10. RULE APPLIED • Courts in the Second Circuit consider the following factors of the Restatement (Third) of Foreign Relations Law of the United States §442(1)(c): • The importance of the requested information to the litigation • The degree of specificity of the request • Where the information originated; U.S. or abroad? • Alternative means of gathering the information • The effect compliance or non-compliance would have on either country • Competing interests of the nations whose laws conflict • Hardship of compliance on the party from whom discovery is sought.

11. RESTATEMENT FACTORS APPLIED • The court held the documents sought by plaintiffs were RELEVANT and CRUCIAL to the claims that Credit Lyonnais provided financial services to CBSP for more than 13 years in connection to supporting terrorists • The discovery request was specifically focused on whether and to what extent Credit Lyonnais knowingly supported a terrorist organization.

12. RESTATEMENT FACTORS APPLIED • The documents were NOT created in the U.S. • There were no alternative methods for the plaintiffs to obtain the documents because the accounts were controlled either by the Bank or CBSP. • The Hague Convention was another method the Plaintiffs could have used however, they were NOT REQUIRED TO. • The U.S. and France have mutual interests in combating terrorism as evidenced by the strong initiatives both countries have taken in the war on the terror. This far outweighs any interest France has in this discovery dispute.

13. RESTATEMENT FACTORS APPLIED • France and the U.S. have similar objectives to preventing and eliminating the financing of terrorism. Therefore, there is no “competing” or “conflicting” interest at stake.

14. RESTATEMENT FACTORS APPLIED • Credit Lyonnais failed to show they would be sanctioned by the French Government or that they would be pursued civilly. • CBSP never objected to the delivery request Credit Lyonnais made. • Credit Lyonnais’s reputation would suffer more harm for associating with terrorists than it would for disclosing this type of information.

15. RESTATEMENT FACTORS APPLIED • The Second Circuit also considers a “Good Faith” factor in determining whether or not they will compel discovery. • Credit Lyonnais attempted to get CBSP’s consent to the discovery requests. • Credit Lyonnais also sought guidance from the French Ministry of Justice. • The court held these WERE good faith attempts, but they were not enough to tip the scales in Credit Lyonnais’s favor.

16. CONCLUSION • Credit Lyonnais was compelled to produce the documents. • Even though some factors of the Restatement approach were in favor of the Bank, the majority of the factors were not.

17. QUESTION #1 • Factors to consider for this question: • Credit Lyonnais made “good-faith” attempts to secure discovery of the documents. • This only consisted of 2 letters to CBSP asking for consent. • Two letters and a phone message to the French Ministry. • Some of these attempts were only made after a court order. • Question: Is that really a “good-faith” attempt? Especially considering that CBSP has terrorist ties.

18. QUESTION #2 • Factors to considers for this question: • This case stemmed from alleged terrorist attacks that occurred less than a year after the 9/11/2001 World Trade Center attacks. • The opinion is clearly focused on the war on terror and the financing of terrorist activity. • The amount of documents seems like it would be enormous (13 years of every single transaction and internal procedures). • Question: Would the outcome be the same if the case was not rooted in terrorism?