Chris Cambridge03/08/2010

PLAINTIFFSA 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.

DEFENDANTCredit Lyonnais, S.A. is a French

incorporated bank

Credit Lyonnais also does business in the U.S. with an office in Miami, Florida.

MISCELLANEOUS PARTIES(“HAMAS”) Islamic Resistance Movement

(“CBSP”) Le Comite de Bienfaisance ed de Secours aux PalestiniansSupposedly a charitable organizationPlaintiff alleged CBSP is a member of the

Union of Good, an organization that funds HAMAS (terrorist group)

PLAINTIFFS CLAIMSCredit Lyonnais violated Anti-Terrorist

Statutes For:1. Aiding and abetting the serious injury of

Americans outside the U.S.2. Knowingly providing support to a terrorist

organization3. Financing acts of terrorism.

First Claim Was Dismissed in 2006

PLAINTIFF ARGUMENTSCredit 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.

DISCOVERY REQUESTAt issue are document requests the Plaintiffs made

regarding Credit Lyonnais and CBSP.1. ALL account records between Credit Lyonnais and

CBSP2. ALL internal communications/investigations

undertaken by Credit Lyonnais into CBSP3. ALL correspondence between the bank and regulatory

authorities in the U.S., France, and the European Union.

4. ALL documents related to the 2002 closure of CBSP’s account.

5. ALL documents relating to Credit Lyonnais’ anti-money laundering efforts. “Know Your Customer”

6. ALL documents related to Credit Lyonnais’ internal procedures in certain departments.

DEFENDANT ARGUMENTSCredit Lyonnais objected to ALL document

requests, citing several arguments.

1. Disclosure would violate French laws and they would be exposed to liability for interfering with a foreign judicial proceeding

2. Plaintiffs must follow the Hague Convention procedures of Discovery Requests

3. Disclosure would violate French bank and anti-money laundering laws.

DISCOVERY ISSUEWhether 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?

RULE APPLIEDCourts in the Second Circuit consider the following

factors of the Restatement (Third) of Foreign Relations Law of the United States §442(1)(c):

1. The importance of the requested information to the litigation

2. The degree of specificity of the request

3. Where the information originated; U.S. or abroad?

4. Alternative means of gathering the information

5. The effect compliance or non-compliance would have on either country

6. Competing interests of the nations whose laws conflict

7. Hardship of compliance on the party from whom discovery is sought.

RESTATEMENT FACTORS APPLIED1. 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

2. The discovery request was specifically focused on whether and to what extent Credit Lyonnais knowingly supported a terrorist organization.

RESTATEMENT FACTORS APPLIED3. The documents were NOT created in the U.S.4. 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.

5. 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.

RESTATEMENT FACTORS APPLIED6. 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.

RESTATEMENT FACTORS APPLIED7. 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.

RESTATEMENT FACTORS APPLIEDThe 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.

CONCLUSIONCredit 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.

QUESTION #1Factors to consider for this question:

1. Credit Lyonnais made “good-faith” attempts to secure discovery of the documents.

2. This only consisted of 2 letters to CBSP asking for consent.

3. Two letters and a phone message to the French Ministry.

4. 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.

QUESTION #2Factors to considers for this question:

1. This case stemmed from alleged terrorist attacks that occurred less than a year after the 9/11/2001 World Trade Center attacks.

2. The opinion is clearly focused on the war on terror and the financing of terrorist activity.

3. 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?