Anwar et al v. Fairfield Greenwich Limited et al

Filing 1216

DECISION AND ORDER: Accordingly, the Citco Defendants' privilege objections are denied and that order is affirmed (Signed by Judge Victor Marrero on 11/8/2013) (js)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------

PASHA S. ANWAR 1 et al'

DOC#:

----X

l

09 Civ. 0118 (VM)
Plaintiffs

l

-againstFAIRFIELD GREENWICH LIMITED
et al. 1

1

DECISION AND ORDER

Defendants.
---- ----------- X

VICTOR MARRERO, United States District Judge.

On July 8 1
this

case

2013 1

was

Magistrate Judge Frank Maas

referred

for

supervision

to whom

l

of

proceedings 1 issued a discovery order (the "Orderll)

pretrial
a copy

1

of which is attached and incorporated to this Decision and
Order

by

l

granting a request by Plaintiffs to compel testimony

Renger

lawyer at

Boonstra

("Boonstra"),

Citco Bank Nederland,

attorney-client

privilege

Citco

Inc.,

Citco Global Custody N.V.,
Branch,

(collectively,
Anwar v.

Services

and
the

Citco
"Citco

unlicensed

(Europe)

Fund

B.V.,

The

Citco

Citco

(Canada)

Services
or

(Bermuda)

Ltd.

"Citco").

See

("Discovery Order"),

09 Civ. 0118, 2013 WL 3369084 (S.D.N.Y. July 8, 2013).
1

Group

Citco Bank Nederland N.V.

Defendants"

Fairfield Greenwich Ltd.

in-house

and overruling claims of

defendants

Ltd.,

Dublin

Fund

by

an

No.

Before

the

Defendants,
Procedure

Court

filed
72 (a),

are

the

pursuant
to

the

objections

to

Order.

The

the

Citco

Rule

Federal

of

of

Civil

relevant

facts

and

prior proceedings are discussed in Magistrate Judge Maas's
decision, familiarity with which is assumed.
at *1.

See Discovery

Order,

2013 WL 3369084,

below,

the Citco Defendants' objections are denied and the

For the reasons discussed

Order is affirmed.
I.

STANDARD OF REVIEW

A district court evaluating a magistrate judge's order
with respect

to a

defense

adopt

may

conclusions

as

matter not
the

long

dispositive of

magistrate

as

the

judge's

factual

and

a

claim or

findings
legal

and
bases

supporting the ruling are not clearly erroneous or contrary
to

See

law.

72(a)

28

U.S.C.

Thomas v. Arn,

i

discovery

§

636(b) (1) (A)

those

2013)
F.

6441,

(quoting Eisai Ltd. v.

Supp.

after
accept,

2013 WL 3481350,

2d 341,

342

considering
set aside,

Dr.

(S.D.N.Y.

any

at

*5

(S.D.N.Y.

Reddy's Labs.,

2005)).

objections

or modify,

regarding
Gruss v.

issues, are nondispositive matters.'"
09 Civ.

R.

474 U.S. 140, 149 (1985).
'including

matters,

Fed.

i

by

in whole

Civ.

P.

"Pretrial
privilege
Zwirn, No.
July 10,
Inc.,

406

A district judge,
the
or

parties,

may

in part,

the

findings and recommendations of the magistrate judge with
2

regard to such matters. See Fed. R. Civ. P. 72(a); see also
DeLuca v. Lord, 858 F. Supp. 1330, 1345 (S.D.N.Y. 1994).
"Magistrate
resolving

judges

discovery

privilege.

given

disputes,

Gruss,

II

are

2013

WL

broad

latitude
questions

including
3481350,

in
of

at

*5

(quoting

Thompson v. Keane, No. 95 Civ. 2442, 1996 WL 229887, at * 1
(S.D.N.Y.

May

6,

1996)).

"[T]hat

reasonable

minds

may

differ on the wisdom of granting [a party's] motion is not
sufficient

to

overturn

a

magistrate

judge's

decision."

Tiffany & Co. v. Costco Wholesale Corp., No. 13 Civ. 1041,
2013

WL 5677020,

at

*1

alteration in original)
"Thus,

Oct.

18,

2013)

(second

(internal quotation marks omitted).

[t]he party seeking to overturn a magistrate judge's
. carries a heavy burden.

decision .
Inc.

(S.D.N.Y.

v.

2946380,

Greenberg Traurig LLP,
at

original)

(S.D.N.Y.

(internal

defendants'
judge's

*1

July

quotation

Rule 72(a)

No.

II

Leviton Mfg. Co.,

09 Civ.

14,

2011)

marks

08083,

2011 WL

(alteration

omitted)

in

(denying

objections and affirming magistrate

determination

on

attorney-client

privilege

and

document production) .
II.
The
Defendants'
Plaintiffs'

Court

has

objections

DISCUSSION

reviewed
(Dkt.

the
Nos.

response to the objections
3

Citco

Order,

the

1160,

1198) ,

(PIs.'

Mem.

and

of Law

in

Opp'n

to

Magistrate

the

Judge

under seal,

Citco

Defs.'

Maas'

see Dkt.

July

No.

Rule

8,

1182),

72(a)

2013

Disc.

Objections
Order,

to

filed

as well as the documents

accompanying the parties' submissions regarding this matter
and

the

amicus

Association

of

letter

Corporate

submitted
Counsel

on

(Dkt.

behalf
No.

of

the

1194).1

The

Court is not persuaded that the Order is clearly erroneous
or

contrary

law,

to

and

therefore

accords

it

the

substantial deference due to a magistrate judge'S discovery
orders.
F.2d

See Thomas E.

522,

affirms

525
the

reasoning,

(2d
Order

and

Cir.

Hoar,

Inc.

1990>.

based

controlling

on

v.

Sara Lee Corp.,

Accordingly,
the

authority

pertinent
upon

the

900

Court

findings,

which

it

is

grounded.

The Court received Plaintiffs' letter (Dkt. No. 1202)
in
response to the September 18, 2013 amicus letter and the Citco
Defendants' reply brief, as well as the Citco Defendants' letter
dated October 11, 2013 in response to Plaintiffs' letter.
The
Court notes that Plaintiffs' letter is a sur-reply filed without
permission of the Court and does not identify new controlling
law, and therefore will not be considered.
See Indiv. Practices
of U.S. Dist. Ct. J. Victor Marrero, S.D.N.Y., at 3 {"Sur-reply
memoranda will not be accepted without prior permission of the
Court and then only in the rare
instances
in which new
controlling law is promulgated after the filing of the reply
papers."}.
Additionally,
the Court received and considered
letters from Plaintiffs and the Citco Defendants, dated October
28, 2013 and November 4, 2013, respectively, concerning Judge
Scheindlin's recent opinion in Wultz v. Bank of China Ltd., No.
11 Civ. 1266, 2013 WL 5797114 (S.D.N.Y. Oct. 25, 2013).
4

A.

CHOICE OF LAW ANALYSIS

In granting

testimony,
privilege

Plaintiffs'

motion

to

compel

Boonstra's

Magistrate Judge Maas properly rejected Citco's
assertions

See Discovery Order,

under
2013

need to resolve th[e]
communications
Netherlands

touch

"because

United

WL 3369084,

question"

same

and

at *1

Dutch

the

Boonstra's

United States

result

law.

("There is no

of whether Mr.

base with
the

States

or the

obtains whether the

communications 'touch base' here or in the Netherlands.").
Judge

Maas

properly

stated

the

applicable

legal

standard for determining which country's law to apply to a
privilege

foreign

See Discovery Order,

communications.

attorney-client
WL 3369084,

2013

In making such a choice of law determination,

*1.

in

involving

dispute

this

Circuit

communications

consider

"touch
("Gucci

the

country

base."

with

See

Gucci

F.R.D.

58,

Am.,

at

courts

which

the

Inc.

v.

Guess?,

Inc.

2010) .

In this analysis, a court should "apply the law of

I"),

271

64-65

(S.D.N.Y.

the country that has the predominant or the most direct and
compelling interest in whether

[the]

communications should

remain confidential, unless that foreign law is contrary to
the

public

Andrx

policy of

Pharms.,

Inc.,

this
208

forum."
F.R.D.

(internal quotation marks omitted).
5

Astra Aktiebolag v.

92,

98

(S.D.N.Y.

2002)

"The jurisdiction with

the

predominant

interest

is

either

the

place

where

the

allegedly privileged relationship was entered into or the
place in which that relationship was centered at the time
the communication was sent."
omitted) .

Id.

(internal quotation marks

Communications concerning legal proceedings

in

the united States or advice regarding United States law are
typically governed by United States privilege
communications
foreign
law.

law

relating

are

to

foreign

generally

governed

legal
by

law,

while

proceedings

foreign

or

privilege

See Gucci I, 271 F.R.D. at 65.
Judge

finding

Maas's

that

ruling

Boonstra's

was

not

clearly

communications

erroneous

could

touch

in
base

with either the United States or the Netherlands and that
the result would be the same in either case. 2

Based on the

Magistrate
Judge
Maas
stated
that
"Mr.
Boonstra's
communications likely 'touch base' with the United States because
they are related to legal issues arising out of the Citco
Defendants' role in the administration of key feeder funds
involved in the Madoff scheme."
Discovery Order, 2013 WL
3369084, at *1.
However, Magistrate Judge Maas also stated his
conclusion that \\ [i) f the Plaintiffs are correct that Dutch law
applies, the Boonstra communications plainly are not privileged."
Id. at *2.
Under the choice of law rules in Gucc
which
Magistrate Judge Maas clearly considered, a statement that Dutch
law
applies
is
equivalent
to
a
determination
that
the
communications at issue touch base with the Netherlands.
Thus,
while the Order does not state explicitly that the communications
might touch base with the Netherlands, the decision's alternative
grounds based on Dutch law makes clear that Magistrate Judge Maas
considered the possibility that the communications touched base
with the Netherlands.

2

6

record
Maas

before

could

in

law"

portion of

the

Court

correctly

proceedings
American

it,

the

the

conclude,

United

prong

finds

of

that

under

States"

the

Gucci

communications

Magistrate

either

or
I

the

"advice

test I

Judge
\\legal

regarding

at

least

touch base with

the

some

United

States because some of Boonstra's communications could have
concerned United States-based litigation stemming from the
Madoff
2000

scheme.

See,

and 2008,

rendered)

~,

was asked to provide

I

~

Boonstra Decl.
(and,

("Between

5

in response,

legal advice on a variety of issues regarding the

Fairfield funds.").
At
Judge

the

same

time,

could

Maas

"communications

the

Court

to

foreign

foreign law" prong of the Gucci I

was asked to provide

(and,

legal

test,

touched base with the Netherlands.
I

See,

wi th respect

provisions of

[several legal agreements] -

Maas

law. 1/) •

with

the

terms

Furthermore,

could corectly conclude

country

the

that

predominant

proceedings

I

id.

the

or

(\\.

rendered)

legal

obligations and
each of which is
Magistrate

the Netherlands

or

the

under

~I

in response,

to

Magistrate

the communications

advice

governed by Dutch

that

conclude,

correctly

relating

finds

most

Judge
is

direct

the
and

compelling interest in whether the communications at issue
should

remain

confidential.

The
7

Netherlands

is

the

jurisdiction where

the

relationship

between

Boonstra and

his employer was entered into and the place in which that
relationship was centered at the time of the communications
at issue.

See id. ,

served

an

as

in-house

banking company,
("Today,

3 ("For the past sixteen years, I have
attorney

in Amsterdam,

for

Citco

Bank,

a

Dutch

The Netherlands."); id.

,

4

I am the most senior lawyer at Ci tco Bank.

In this capacity, I provide various legal services to Citco
Bank,

including

advice

on

issues

commercial

involving

law.").

determination
considered

to

States

that

the

or

responding

have

Dutch

Therefore,
the

to

banking,

Netherlands

base
was

with

not

at

for

legal

contract

Magistrate

communications

touched

requests

Judge

issue

either

clearly

and

Maas's

could be

the

United

erroneous

or

contrary to law.
B.

PRIVILEGE ANALYSIS
The Court does not find clearly erroneous or contrary

to law the Magistrate Judge's

ruling

that

if

indeed the

communications at issue touched base with the United States
and

therefore

United

States

law

governs

privilege,

the

communications with Boonstra are not privileged and must be
disclosed to
States

law

Plaintiffs.
is

that

The
only

general

rule

communications

under Uni ted
between

a

represented party and that party's licensed attorneys are
8

subject to attorney-client privilege.
Bank of China Ltd., No.
*3

(S.D.N.Y.

assertion

25,

Oct.

of

the

See,

~,

11 Civ. 1266, 2013 WL 5797114, at
2013)

("In order

attorney-client

to prevail on an

privilege

invoking the privilege must show that:
to whom communication was made
of a

court,

Dooney
at *17
no

or his

Bourke,

&

(a)

subordinate")

Inc.,

No.

to

the

the

party

(2) the person

is a member of the bar
i

04 Civ.

(S.D.N.Y. Nov. 30,2006)

protection

Wultz v.

see also Malletier v.
5316,

2006 WL 3476735,

("American law

communications

of

an

. gives
unlicensed

attorney. ") .
The parties here agree that Boonstra is not a licensed
attorney.

Citco Defendants,

however,

between

and

though

Boonstra
Boonstra

belief"

that

was

Citco

that

the

attorney

licensed attorneys,

are

unlicensed,

Boonstra

9;

Pls.'

Mem.

at 1.

The

contend that the communications

was

Judge Maas properly stated,
rule

~

See Deckers Decl.

its

privileged

because,

Citco

a

"reasonable

As

Magistrate

had

attorney.

even

\\ en] otwithstanding the general

client

courts have

privilege

applies

only to

found communications with

non-attorneys to be privileged in limited circumstances in
which the client
to

whom

the

attorney. ' "

'reasonab [ly]

communications
Discovery

believe [s]
were

Order,
9

made

2013

WL

that the person
was

in

3369084,

fact

an

at

*2

(alterations

in

Guess? 1 Inc.

("Gucci Ip/)1 No.

at *2

original)

(S.D.N.Y.

Jan.

31

Subpoena Duces Tecum

(quoting

Inc.

l

v.

09 Civ. 4373 1 2011 WL 9375,

2011));
112

l

Am'

Gucci

see also In re Grand Jury

F. 3d

910,

923

(8th Cir.

1997)

(collecting cases in which a party's reasonable mistake of
fact

provides

exception

communications with a
party

are

covered

States v. Rivera

l

to

general

rule

that

only

licensed attorney representing that

by

attorney-client

privilege)

United

i

837 F. Supp. 565, 568 n.1 (S.D.N.Y. 1993)

("It is common ground among the parties that the attorney­
client

privilege

attaches

to

confidential

made to an individual in the genuine

communications

but mistaken

1

l

belief

that he is an attorney,fI) .
Magistrate
facts

of

Gucci

Judge
II,

previously admitted

Maas

adequately

concerning
to

the

bar

an

distinguished

attorney

but

whose

who

2011 WL 9375

the facts in the present case.

Boonstra is not

1

at *2,
1

licensed in any jurisdiction and has

held himself out to be a

been

bar membership

status had lapsed, see Gucci II,

never been,

had

the

from

and has
neither

licensed attorney nor performed

acts suggesting to his employer that he was admitted to the
Netherlands bar.
*2.

See Discovery Order

l

2013 WL 3369084, at

The Court finds ample evidence to support Magistrate

Judge Maas's conclusion that the Citco Defendants could not
10

credibly claim a reasonable mistake as to Boonstra's status
as a

licensed attorney.

The Order notes

the affirmative

obligation under Dutch law that the employer of a licensed
in-house

attorney

sign a

professional

charter

committing

the employer to honor its attorney's independence.
re

X/Stichting

[Supreme

H9

Court

BY6101 (Neth.)

of

Invest,
the

Hoge

Raad

Netherlands],

der

15

See In

Nederlanded

Mar.

2013,

LJN

(citing Art. 3 (3) of the Practicing In-House

Regulation of Nov.

27,

Magistrate

Maas's

Judge

1996).

The Court finds persuasive

conclusion

that

"the

Citco

Defendants cannot credibly argue that they were reasonably
mistaken as to Mr. Boonstra's licensure status."

Discover

Order, 2013 WL 3369084, at *2.
Nor does the Court find clearly erroneous or contrary
to

law

the

Magistrate

alternative,

the

Judge/s

communications

ruling
at

that

issue

if,

in

touch base

the
with

the Netherlands and therefore Dutch law governs privilege,
the communications with Boonstra are still not privileged
and

nonetheless

objecting to

the

must

be

Order,

disclosed
the

to

Plaintiffs.

Citco Defendants

In

acknowledge

that "it is true that The Netherlands does not recognize as
privileged communications between a Dutch company and its
unlicensed

in-house

Notwithstanding

such

legal

counsel.

admission,
11

II

Citco

Deckers

Decl.

essentially

~

9.

argues

that the documents sought are protected from discovery not
as the result of attorney-client privilege,
the

basis

that

restricted"
Deckers

~

9

obligation

documents

law

provides

document discovery.

Decl.

general

Dutch

for

for

purposes

("Compulsory

Netherlands,
.")

only

See Dkt.

for
No.

("Under Dutch law,
parties
of

what

jurisdictions as discovery.")
10

but rather,

document

on

"severely
1198 at

there

3i

is

no

to

disclose

unspecified

is

known

Common

in

Law

(emphasis in original); id.

disclosure

is

available

in

~

The

but only under very limited circumstances

(emphas is

these arguments

in original).
and finds

The

Court has

them unpersuasi ve

considered

for

the

same

reasons that they failed to convince Magistrate Judge Maas.
The Court finds that the Order was not clearly erroneous or
contrary to law in determining that the documents should be
disclosed.
Plaintiffs argue

credibly that

the

Netherlands

does,

in fact,

have an active document production culture which

creates

the

corporation and unlicensed,
be disclosed.
Decl.

~

56.

that

possibility

between

a

in-house counsel will have

See Eij sbouts
Plaintiffs

documents

7,
.

Decl.

support

their

to

Koppenol-Laforce
assertion

with

Netherlands statutes and cases that demonstrate a developed
procedure

for

requesting and ordering
12

document production

on vast quantities of documents covering broad time periods
and subjects.
(citing

See Koppenol-Laforce Declo

numerous

articles

and

~~

statutes).

20-25,
In

39-44

addition,

Plaintiffs present articles to the Court, including a piece
written

by

partner,

Citco's

which

expert,

confirm

Michel

that

Deckers,

document

and

production

accepted part of litigation in the Netherlands.
Michel

Deckers

Netherlands,
211,

214

in

Berth

&

1

Dispute

(Practical

Law

Brouwer,

Compo

ed.,

is

an

The

Q&A:

Handbook
2009),

law

See,~,

Country

Resolution

his

2008-2009

available

at

http://www.boekel.com/media/92762/plc%20dispute%20
resolution%20handbook%202008-2009.pdf

("It is also possible

for parties involved to order inspection of,
of,

certain

relationship

in which

copies

involved.")
Through

available

the

Frederieke

i

Private

-

documents

at

Leeflang,

Antitrust

house counsel and,
company

legal

a

predecessors
Getting

Litigation

86,

the
88

are
Deal

(2010),

http://www.boekel.com/media/88792/getting%20

the%20deal%20through%20def .pdf

the

concerning

party or his

J.

or identical

("Communications between in­

for example,

they work

for,

the board of directors of

may have

to be

disclosed

in

civil proceedings.") .
A variety of provisions
Proceedings

("DCCP")

of

the Dutch Code of

and Dutch Civil Code
13

("DCC")

Civil

require

document disclosure in specific situations.
Laforce Decl.

Dee

and

rule

"

Deep

21-24

(listing specific provisions of the

compelling document disclosure).

stated

extracts

the

Deep

is

interest

legitimate

See Koppenol-

in

may

demand

of

certain

that

"[a] ny

The general

person

inspection,

documents

a

copies

concerning

relationship in which he or his predecessors

with

a

or

legal

is involved

from any person who has such documents in his control or
possession."

Article

Declo , 25.

843a(1)

DCePi

see

Koppenol-Laforce

Furthermore, a party who does not comply with

a court's document production order is subject to monetary
See Art.

penalties.
27.

611a Deep;

In such an instance,

adverse

inferences

Koppenol Laforce Declo

,

the court is entitled to draw

against

the non-complying party.

See

Art. 22 DCCP; Koppenol-Laforce Decl. , 26.
Indeed,

Dutch
The

disclosure.

law

DCCP

allows

requires

wide-ranging
that

the

party

document
seeking

disclosure describe its request with "sufficient clarity"
but

does

not

necessitate

detailed

name,

date,

843ai

Koppenol-Laforce Decl.

identification

or contents of requested documents.
,

37.

of

the

See Art.

In keeping with this

requirement, Dutch courts have ordered production of broad
categories,

such as

"minutes of

Pryford Inv. /Center Parcs N. V. ,
14

various
[Dist.

board meetings I"
Ct.

Rotterdam],

3

Oct.

1996,

JOR

1996,

~

122

5.10-5.11

(Neth.) ,

"all

documents regarding plaintiff's contractual relations with
the

company,

Jonkman/Dekker,
2003,

102 ,

6

suppliers,

[Dist.

Ct.

(Neth.),

Groningen],

2013,

the
22

~

3.8.2

Nov.

2002{

NJ

Hoge Raad der Nederlanden

[Supreme Court of the Netherlands],
220

defendant,"

and "all correspondence, /' Theodoor

Gilissen Bankiers { 2012: BW9244 /
[HR]

or

(Neth.).

Moreover,

26 Oct.

2012/

document production

is not strictly limited by quantity or time period.
~,

Koppenol-Laforce Decl.
Defendants
allowed

in

contend

the

NJ

See

45-46.
that

pre-trial

Netherlands,

discovery

citing

the

is

not

Netherlands

accession to Article 23 of the Convention on the Taking of
Evidence

Abroad

in

Civil

or

Commercial

("Article 23") to support its position.
However,

although Article

disregard
"pre trial

Hague
fl

23

Requests

discovery

from

a

the

foreign
person

from its use

1972
~

Netherlands

countries

in

id., the meaning of the phrase "pre-trial
differs

of

Deckers Decl.

permits

from

Matters

the
fl

9.
to

seeking

Netherlands,

in that context

in the American legal

system.

The

Supreme Court of the Netherlands dispelled confusion over
the

definition

of

the

American

phrase

clarifying that,

in the Netherlands,

time

proceeding

before

a

is
15

"pre-trial

"pre-trial

commenced.

fl

fl

by

means the

See

Kilbarr

Corp. /Holland

l

Hoge Raad der Nederladen [HR]

of the Netherlands],
3.4;

11 March 1994,
~~

Koppenol-Laforce Declo

Article

23

should

Netherlands

not

forbids

be

NJ 1995
Thus

32-33.

construed

document

[Supreme Court

to

(Neth.),
the

I

suggest

disclosure

once

3 ,

text of
that

a

case

the
is

filed.
In

light

of

the

extensive

evidence mentioned above,

Magistrate Judge Maas could correctly conclude that Dutch
law provides
Plaintiffs

for

document

have

disclosure

compellingly

in

an

active

demonstrated

case.

that

an

environment of regular and extensive unprivileged document
production exists in the Netherlands.

Therefore

is not persuaded that in discrediting Citco s
l

the Court

I

claims that

Dutch discovery rules are much more limited than those of
the

United

States

l

with

Boonstra/s

communications

disclosure,

Magistrate

the

result

would

Judge

Cit co

be

Maas's

seeks

that

protected

ruling

was

from
clearly

erroneous or contrary to law.
For
authority

the

reasons

cited

by

stated

above

Magistrate

dismisses the Citco Defendants

I

and

Judge

on
Maas

basis
l

the

of

Court

objections to the Order.

16

the

III.

ORDER

For the reasons stated above t it is hereby
ORDERED

Group

Ltd.

(Canada)
Nederland
(Bermuda)

that

t

Inc.

the

Citco
t

N.V.
Ltd.

obj ections

Fund

Citco

Services

Global

Dublin

of

Branch

defendants
(Europe)

Custody
t

and

B.V.t

N.V.t

Citco

The

Citco

Fund

Citco
Bank

Services

to the Discovery Order of Magistrate Judge

Maas dated July 8 t

2013 (Dkt. No. 1160) are DENIED and that

Order is AFFIRMED.

SO ORDERED.

Dated:

ci tco

New York t New York
8 November 2013

VICTOR MARRERO
U.S.D.J.

17

PASHA S. ANWAR, et al.

v.

FAIRFIELD GREENWICH LTD, et al.

09 CN. 118

Report and Recommendation of

Magistrate Judge Frank Maas

dated July 8, 2013

Attachment to the Court's

Decision and Order

dated November 8, 2013

!::.~~-.-

USDCSDNY
pOCUMENT
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

----------------------------------------------------------]{

ELECTRONICALLY FILED
DOC#: ______~---DATEFILED: 1'1 ~ J 'PoJ?

PASHA S. ANWAR, et aI.,
Plaintiffs,

DISCOVERY ORDER

-against09 Civ. 118 (VM) (FM)
FAIRFIELD GREENWICH LTD, et aI.,

----------:::::-1

Defendants.
This document relates to the
Citco Cases

----------------------------------------------------------]{
FRANK MAAS, United States Magistrate Judge.
This multi-district litigation consolidates numerous actions brought by
investors against various funds, administrators, intermediary banks, and auditors in an
attempt to recover losses arising out of the now-infamous Bernard Madoffinvestment
scandal. On April 25, the Plaintiffs deposed Renger Boonstra, a senior in-house lawyer at
Citco Bank Nederland, one of several defendant banks alleged to have provided financial
account services for the Fairfield Greenwich "feeder" funds. During the deposition,
counsel for the Citco Defendants instructed Mr. Boonstra not to answer certain questions,
apparently on the theory that the Plaintiffs' inquiries related to matters protected by the
attorney-client privilege.
Mr. Boonstra is a lawyer by education, but he is not a licensed attorney.
Although licensure is not a requirement for serving as in-house counsel in the
Netherlands, Dutch law does not recognize an attorney-client privilege for
communications with unlicensed in-house lawyers. Accordingly, the Plaintiffs have

"

\

. !

I

requested an order overruling the Citco Defendants' privilege objections. In addition, the
Plaintiffs seek to compel disclosure of several ofMr. Boonstra's email communications
that the Citco Defendants have withheld on privilege grounds.
The Citco Defendants have a rather different view of the matter. They
argue that American - not Dutch -law governs the dispute. As a consequence, the Citco
Defendants contend that their communications with Mr. Boonstra are privileged even if
he was unlicensed because Citco had a "reasonable belief' that Mr. Boonstra was its
attorney.
In determining which country's law applies to a privilege dispute involving
foreign attorney-client communications, courts in this Circuit consider the country with
which the communications "touch base." Gucci Americal Inc. v. Guess?, Inc. ("Gucci
1"),271 F.R.D. 58,64-65 (S.D.N.Y. 2010). Under this analysis, the Court applies "the
law of the country that has the 'predominant' or 'the most direct and compelling interest'
in whether [the] communications should remain confidential, unless that foreign law is
contrary to the public policy of this forum." Astra Aktiebolag v. Andrx Pharmaceuticals,
Inc., 208 F.R.D. 92,98 (S.D.N.Y. 2002) (quoting Golden Trade, S.r.L. v. Lee Apparel
Co., 143 F.R.D. 514,522 (S.D.N.Y. 1992)). "The jurisdiction with the 'predominant
interest' is either 'the place where the allegedly privileged relationship was entered into'
or 'the place in which that relationship was centered at the time the communication was
sent.'" Id. Thus, American law typically applies to communications concerning "legal
proceedings in the United States" or "advice regarding American law," while

2

communications relating to "foreign legal proceeding [s] or foreign law" are generally
governed by foreign privilege law. Gucci I, 271 F.R.D. at 65.
Mr. Boonstra's communications likely "touch base" with the United States
because they are related to legal issues arising out of the Citco Defendants' role in the
administration of key feeder funds involved in the Madoff scheme. I say "likely" because
the communications at issue were not provided to me for in camera review, and my
understanding of their contents is therefore based solely on the general descriptions set
forth in the parties' letters. There is no need to resolve this question, however, because
the same result obtains whether the communications "touch base" here or in the
Netherlands.
If the Plaintiffs are correct that Dutch law applies, the Boonstra
communications plainly are not privileged. Although Dutch law affords a "legal
professional privilege" to licensed in-house counsel, there is no recognized Dutch
privilege for unlicensed lawyers. In re X v. Stichting H9 Invest, HR Mar. 15,2013, LJN

°

BY61 1. Nor does there appear to be any exception to that rule in circumstances where a
client reasonably believes that its conversations are privileged.
If, on the other hand, the Citco Defendants are correct that American law
governs, Mr. Boonstra's communications still are not privileged. In the United States, the
attorney-client privilege generally applies only to communications with attorneys who are
licensed to practice law. In re Grand Jury Subpoenas Dated January 20, 1998,995 F.
Supp. 332,337 (E.D.N.Y. 1998) (Raggi, l). Since Mr. Boonstra is unlicensed, no
privilege could attach to his communications with the Citco Defendants.
3

Notwithstanding the general rule that the attorney client privilege applies
only to licensed attorneys, courts have found communications with non-attorneys to be
privileged in limited circumstances in which the client "reasonab[ly] believe[s] that the
person to whom the communications were made was in fact an attorney." Gucci
America, Inc. v. Guess?, Inc. ("Gucci II"), No. 09 Civ. 4373 (SAS), 2011 WL 9375, at *2
(S.D.N.Y. Jan. 3,2011). In Gucci II, for example, the court applied this exception to the
communications of a Gucci in-house lawyer in California who, despite having been
admitted to the bar in California and two other jurisdictions, was unauthorized to practice
law in California because his bar membership status there was "inactive." Id. at *4-5. To
support its privilege claim, Gucci submitted, among other things, six declarations from its
present and former executives stating that they considered the in-house lawyer to be an
attorney. In addition, Gucci adduced evidence that the lawyer routinely appeared in court
and before administrative agencies, and that it had paid his California bar membership
fees throughout his tenure as in-house counsel. Id. at *5. Based upon this evidence, the
court concluded that Gucci had demonstrated that it reasonably believed its lawyer was a
licensed attorney, thus enabling it to assert privilege with respect to its communications
with him. Id.
The facts here are not at all comparable to those in Gucci II. At the outset,
it is undisputed that Mr. Boonstra is not - and never has been

licensed in any

jurisdiction. Second, there is no evidence that Mr. Boonstra ever held himself out as a
licensed attorney or performed tasks (such as appearing in court) that would have
suggested that he was admitted to the Netherlands bar. Third, although in-house counsel
4

must be admitted to the bar in order to practice in the United States, in-house lawyers in
the Netherlands are permitted to be, and frequently are, unlicensed. Moreover, Dutch law
requires that the employer of a licensed in-house attorney sign a professional charter
committing the employer to honor its attorney's independence. See In re X v. Stichting
H9 Invest, HR Mar. 15,2013, LJN BY6101 (citing Art. 3(3) of the Practicing In-House
Regulation of Nov. 27, 1996). Given that affirmative obligation, the Citco Defendants
cannot credibly argue that they were reasonably mistaken as to Mr. Boonstra's licensure
status.
Finally, even if the Citco Defendants mistakenly believed that Dutch law
protected their communications with an unlicensed in-house attorney, the reasonable
belief exception would not apply. Such an argument necessarily is predicated upon a
mistake of law, but the reasonable belief exception applies only in situations where the
client makes an "excusable mistake of fact." A.LA. Holdings, S.A. v. Lehman Bros.,
Inc., No. 97 Civ. 4978 (LMM) (HBP), 2002 WL 31385824, at *4 (S.D.N.Y. Oct. 21,
2002). Indeed, a "client's beliefs, subjective or objective, about the law of privilege [do
not] transform an otherwise unprivileged conversation into a privileged one." In re Grand
Jury Subpoena Duces Tecum, 112 F.3d 910,923-24 (8th Cir. 1997). The Citco
Defendants' erroneous views on Dutch privilege law therefore cannot form the basis for
the relief they presently seek.

5

Accordingly, the Citco Defendants' privilege objections are overruled and
the motion to compel is GRANTED.
SO ORDERED.
Dated:

New York, New York
July 8, 2013

fRANKMAAS
United States Magistrate Judge

Copies to:
Hon. Victor Marrero
United States District Judge
All counsel (via ECF)

6