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

Strauss v Credit Lyonnais, S.A. 242 F.R.D. 199 (E.D.N.Y. 2007). Parties. Plaintiffs: Individuals and estates, survivors and heirs of individuals who were injured or killed in thirteen separate terrorist attacks Defendants: Credit Lyonnais is a financial institution incorporated in France.

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

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

  2. Parties • Plaintiffs: Individuals and estates, survivors and heirs of individuals who were injured or killed in thirteen separate terrorist attacks • Defendants: Credit Lyonnais is a financial institution incorporated in France

  3. FACTS • Credit Lyonnais maintains bank accounts for Le Comite de Bienfaisance et de Secours aux Palestinians (CBSP) • CBSP claims to be a charitable organization • CBSP is part of HAMAS’s fundraising infrastructure and a member of the Union of Good • HAMAS – Islamic Resistance Movement • Union of Good is an org. established by the Muslim Brotherhood and is the fundraising mechanism for HAMAS • Plaintiffs argue that CBSP supports HAMAS • Credit Lyonnais has transferred money to HAMAS through CBSP and assisted in the commission of acts of terrorism • Plaintiffs claim Credit Lyonnais is civilly liable for damages pursuant to 18 U.S.C. § 2333(a) • Providing “material support and resources” to a Specially Designated Global Terrorist and providing or collecting funds ‘with the knowledge that such funds are to be used” to support terrorism

  4. Discovery Dispute • Plaintiff’s Request • 6-30-10 requested documents. There were issues with request nos. 1-3, 11-13, and 15 • Account records • Communications concerning CBSP • Documents regarding decision to close CBSP’s accounts • Documents regarding the actual closing of CBSP’s account • Documents regarding CBSP’s anti-money laundering efforts • Internal documents related to account procedures • Defendant’s Objections • Violate Article 1 of French Law which prohibits disclosure in connection with a foreign judicial proceeding. Should follow the Hague Convention • Hague Convention – provides internationally agreed upon discovery guidelines • Violation of French laws prohibiting disclosure of information relating to a criminal investigation • Violation of French bank secrecy obligations *CL requested CBSP to release them from its secrecy obligations 2x and received no response * CL requested guidance from the French Government and received no response

  5. eDiscovery Legal Framework • Restatement of Foreign Relations Law of the United States § 442(1)(c) • Factors to consider when determining whether to compel production of documents located abroad from foreign parties • Factors • Importance of documents to the litigation • Degree of specificity of the request • Whether the information originated in the US • Availability of alternative means of securing the information • Extent to which noncompliance with the request would undermine important interests of the US • Competing interests of the nations whose laws are in conflict • Hardship of compliance on the party from who discovery is sought

  6. Analysis • 1 – Requested information is crucial to the litigation • Relevant and important to the claims and defenses • 2 – The discovery requests are narrowly tailored • Focused on vital issues • Ex: whether CL knowingly provided material support to Specially Designated Terrorist Organizations • 3 – Information did not originate in the US • 4 – Availability of alternative methods: plaintiffs not required to seek discovery initially or exclusively through the Hauge Convention • May seek an order compelling discovery

  7. Analysis • 5 – Mutual interests of the US and France is combating terrorism outweigh the French interest regarding the disputed discovery • Both the US and France participate in task forces and treaties that dispute terrorist financing • Both signatories to the United Nations International Convention for the Suppression of the Financing of Terrorism • Parties cannot refuse a request for mutual legal assistance on the grounds of bank secrecy • 6 – Credit Lyonnais will not face substantial hardship by complying with plaintiffs’ requests • Plaintiffs goals are consistent with the French Government’s objectives • No evidence that CL will be sued in civil court or charged with a crime for compliance • 7 – Credit Lyonnais acted in good faith • Made attempts to contact CBSP and the French Ministry

  8. Issues • Applicability of French Civil and Criminal Laws • Whether French laws apply to documents located in the United States? • French civil and criminal laws are not rendered inapplicable by plaintiff’s possession of documents and information in the United States

  9. CONCLUSION • The factors weight in favor of the plaintiffs • Credit Lyonnais is ordered to produce all documents responsive to plaintiff’s Document Request

  10. Class Discussion • Which do you think is more important: the interest of the court/litigant or the privacy interest? • Currently the US Discovery Rules trump French law and the Hague Convention. Do you think this is fair or should the Hague Convention (or any other treaty) be upheld?

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