King v. Habib Bank Limited

Background

The plaintiffs sought an order requiring Habib Bank Limited (HBL) to produce inspection and regulatory records from the State Bank of Pakistan and the Central Bank of the United Arab Emirates. The requested records included final reports, findings, notifications of findings, and internal communications concerning HBL’s anti-money-laundering, customer-identification, counterterrorism-financing, and transaction-monitoring practices.

At an earlier discovery conference, the court directed HBL to ask the foreign regulators for permission to disclose the records. The court also directed supplemental briefing on the records’ relevance and whether principles of international comity supported compelling production despite foreign bank-secrecy laws.

Relevance and Control

The court rejected HBL’s argument that the records were not discoverable because they were not HBL’s property. Under the discovery rules, control can include the practical ability to obtain documents, and the court found that HBL had actual possession of the reports.

The court also found the reports relevant to the plaintiffs’ claims that HBL knowingly provided substantial assistance to a Taliban-led syndicate. The reports could help show systematic compliance failures, whether HBL was on notice that its accounts were being used to fund terrorism, and whether its services were provided in an unusual way. The court found that the reports were not shown to be overly broad, unreasonably duplicative, or disproportionate to the needs of the case.

International Comity

International comity is a court’s consideration of the laws and interests of foreign countries when a case involves conduct or information connected to those countries. The court assumed, for purposes of its analysis, that producing the reports could violate United Arab Emirates law and accepted that Pakistani law also restricted disclosure.

The court applied seven comity factors. The importance of the records, the specificity of the request, and the lack of effective alternative ways to obtain the records favored the plaintiffs. The fact that the records originated outside the United States favored HBL. The hardship factor slightly favored HBL because of the possible penalties under foreign law, but the court found HBL’s evidence of enforcement risk speculative. The competing-interests factor favored production because the United States had a strong interest in combating terrorism and compensating victims, and the court found that interest outweighed the confidentiality interests identified by HBL. The good-faith factor favored neither side because the evidence was insufficient to find that either party acted in bad faith.

Ruling

After weighing the factors, Magistrate Judge Ona T. Wang held that the comity analysis favored compelling production despite the foreign bank-secrecy laws. The court granted the plaintiffs’ motion to compel and directed HBL to produce the foreign regulators’ reports by April 14, 2025.

Disposition

Plaintiffs’ motion to compel: GRANTED.