King v. Habib Bank Limited

Background

The plaintiffs disputed tens of thousands of Habib Bank Limited’s (HBL’s) privilege-log entries. A privilege log is a list describing documents withheld from discovery because a party claims they are protected from disclosure. The court previously required the parties to agree on a sampling method and submitted sample entries for private, or in camera, review.

The plaintiffs sought production of documents associated with several categories of allegedly deficient entries. The court reviewed the submitted samples and addressed the parties’ arguments under the federal discovery rules, the court’s local rules, attorney-client privilege, the work-product doctrine, and the rules governing suspicious activity reports.

Rulings

Identification of counsel. The plaintiffs argued that HBL had not identified which people listed in its privilege log were attorneys for more than 10,000 entries. The court found that HBL’s entries did not clearly identify counsel, but concluded that the failure was not sufficiently serious to eliminate the claimed privilege. The plaintiffs’ motion was denied in part as to these entries. HBL was directed to provide an exhaustive list of its lawyers and revise the privilege log to identify which person on each entry was counsel.

Work-product protection. The plaintiffs challenged 9,023 entries withheld as attorney work product. Work-product protection generally covers materials prepared by or for a party or its representative because of anticipated litigation. The court found that the sampled documents appeared related to regulatory investigations and were covered by work-product protection. The court also declined to remove that protection as a remedy for the loss of former employee Sima Kamil’s custodial files, finding that the plaintiffs had not shown that such a remedy was appropriate or that the destruction was done with the required intent. The plaintiffs’ motion was denied without prejudice as to these documents, and the parties were directed to meet and confer about the loss of Kamil’s documents and possible remedies.

Suspicious activity reports. The plaintiffs challenged 4,808 entries involving redactions or withholding based on the privilege protecting suspicious activity reports. The court explained that the Bank Secrecy Act and related regulations protect suspicious activity reports and information that could reveal their existence, but do not protect the underlying facts, transactions, and documents on which a report is based. After reviewing the samples, the court found that HBL’s redactions concerned the reports themselves or information that could identify them, rather than merely underlying factual material. The plaintiffs’ motion was denied as to these documents.

Communications with third parties. The plaintiffs challenged HBL’s privilege claims concerning communications with five third parties.

- Institute of Business Administration–Karachi: HBL relied on the Kovel doctrine, which can extend attorney-client privilege to a third party assisting an attorney in providing legal advice. The sampled communications appeared administrative, such as scheduling, rather than assisting or clarifying legal advice. The plaintiffs’ motion was granted as to these communications, and HBL was ordered to produce them. - Ernst & Young: The court found that the sampled communications with Ernst & Young were made to clarify or facilitate legal advice. The plaintiffs’ motion was denied as to these communications. - Alvarez and Marsal and Accume Partners: HBL relied on the functional-equivalent doctrine, which may protect communications with certain outside consultants who function like company employees for purposes related to legal advice. The court found that HBL had not shown that either consultant performed a key corporate job, possessed information unavailable within HBL, or had authority to make decisions for HBL. The plaintiffs’ motion was granted as to these communications, and HBL was ordered to produce them. - Aga Khan Development Network: HBL argued that communications from its general counsel to Shaffiq Dharamshi, a board member who also held a role at Aga Khan, were privileged. The court found that the sampled communications did not appear to provide or relate to legal advice and that HBL’s conclusory assertions were insufficient. The plaintiffs’ motion was granted as to these communications, and HBL was ordered to produce them.

Other privilege-log information. The plaintiffs challenged 15,616 entries for allegedly missing authors, senders, or recipients, and 7,196 entries for allegedly inadequate descriptions of communications or attachments. Because the samples did not cover these categories and the parties agreed that private review was unnecessary, the plaintiffs’ motion was denied without prejudice as to these entries. HBL was directed to review and revise its logs to include the required information. The court emphasized that an attachment is not privileged merely because it was attached to a privileged email; the attachment itself must contain or refer to legal advice.

Disposition

The court stated that the plaintiffs’ motion was granted as to communications with the Institute of Business Administration–Karachi, Aga Khan Development Network, Alvarez and Marsal, and Accume Partners, and denied in all other respects. HBL was ordered to produce the communications previously withheld on privilege grounds, revise the specified privilege-log entries, and continue meeting and conferring with the plaintiffs about the revised logs and additional production.