Kashef v. BNP Paribas SA

Background

The plaintiffs are described as victims of the genocide in Sudan. They allege that the French and American branches of BNP Paribas facilitated the genocide by processing financial transactions for Sudanese entities in violation of U.S. sanctions. The opinion states that the Department of Justice and the New York District Attorney’s Office pursued a criminal case and that BNP Paribas pleaded guilty to sanctions violations in 2014. The civil case was filed in 2016.

The order resolves several discovery disputes. Discovery is the pretrial exchange of relevant information and documents. The first dispute involved 37 documents that BNP Paribas had produced to the Department of Justice during its criminal investigation and later produced to the plaintiffs in heavily redacted and pseudonymized form. Pseudonymization means replacing identifying information with substitutes. The plaintiffs sought the identities behind the pseudonyms, the key used to match pseudonyms to identities, and communications between BNP Paribas and the Department of Justice about the redactions and pseudonymization.

The other disputes involved 17 documents that BNP Paribas had provided to government investigators but had not produced to the plaintiffs. BNP Paribas asserted attorney-client privilege, which generally protects confidential communications for legal advice, and work-product protection, which generally protects materials prepared for litigation. The plaintiffs argued that BNP Paribas waived those protections by producing the documents to the government. They also argued in the alternative that the documents contained relevant and inaccessible factual work product or fell within the crime-fraud exception.

De-pseudonymization

The court denied the motion to compel de-pseudonymization. BNP Paribas argued that French, Swiss, and European laws restricted disclosure, while the plaintiffs argued that the pseudonyms interfered with their ability to identify and question relevant witnesses. At the hearing, the parties agreed that Swiss law no longer applied to this issue, so the court analyzed French and European law.

The court held that BNP Paribas adequately showed a conflict between U.S. discovery requirements and French bank-secrecy law, which protects customer information held by French banks. The court also found a conflict with the European Union’s General Data Protection Regulation because, in the court’s view, the regulation requires an additional necessity analysis beyond the relevance and proportionality requirements of the Federal Rules of Civil Procedure.

The court then applied a comity analysis. Comity is the process of balancing U.S. interests against the interests and laws of another country. The court concluded that the first three factors weighed against compelling disclosure because the plaintiffs had not shown that wholesale unmasking was important, had not clearly specified the identities sought, and the documents did not originate in the United States. The court also concluded that France and the European Union had strong privacy interests, that requiring disclosure could expose BNP Paribas and producing entities to potential liability, and that BNP Paribas was acting in good faith. The Hague Convention was identified as an alternative way to seek the information.

The court therefore denied the December 1 letter motion to compel. It also directed BNP Paribas to provide a method for reconciling inconsistent pseudonyms across documents, to use an approach allowing witnesses to meaningfully engage with pseudonymized documents, and to provide a witness’s pseudonymized identifier when the plaintiffs identified that witness for deposition.

Documents Claimed to Be Privileged

The court found that BNP Paribas waived the asserted privilege by voluntarily disclosing the 17 documents to the government during a criminal investigation. Relying on Second Circuit precedent, the court explained that disclosure to an adversary generally waives work-product protection as to other parties. The court recognized that disclosure to the government does not always result in waiver, including when the producing party and the government share a common interest or have an explicit agreement that the government will keep the materials confidential.

The court found neither circumstance present. BNP Paribas had not provided direct evidence of an explicit agreement made when the documents were produced. Statements from prior proceedings referred to an implied assurance, an understanding, or a general umbrella of confidentiality, but the court concluded that these statements did not establish the required explicit agreement. The court also noted that the government and BNP Paribas were legally antagonistic during the investigation and prosecution.

Because it found waiver, the court did not decide the plaintiffs’ alternative arguments concerning fact work product or the crime-fraud exception. The court granted in part the plaintiffs’ January 5 and March 14 letter motions, to the extent they sought production of documents previously provided to the investigating agencies. It ordered BNP Paribas to produce the 17 documents by noon on May 25, 2022.

Correspondence with the Department of Justice

The plaintiffs also sought correspondence explaining the pseudonyms used in the initial government production. At the hearing, the plaintiffs agreed that a sworn declaration summarizing the important information in the correspondence would serve the same purpose. The court therefore denied the motion to compel the correspondence and left BNP Paribas free to provide the information through voluntary production, an interrogatory response, or a sworn declaration.

Disposition

The court denied the request to de-pseudonymize the 37 documents and denied the request to compel the Department of Justice correspondence. It granted in part the requests for production of the 17 documents over which BNP Paribas asserted privilege. The court also directed the clerk to terminate the specified letter motions. The order was issued by United States Magistrate Judge Jennifer E. Willis.