Anwar et al v. Fairfield Greenwich Limited et al, No. 1:2009cv00118 - Document 1216 (S.D.N.Y. 2013)
Court Description: 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) (Entered: 11/08/2013)
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·L.!S,{)C SD~Y DOCl'l\!L.\T Anwar et al v. Fairfield Greenwich Limited et al ELECTRO:\lC,\LLY FfLf2D UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------- PASHA S. ANWAR 1 et al' Doc. 1216 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 Group (Canada) Citco Bank Nederland N.V. Services Defendants" Fairfield Greenwich Ltd. in-house and overruling claims of defendants Ltd., Dublin Fund by an or (Bermuda) Ltd. "Citco"). See ("Discovery Order"), No. 09 Civ. 0118, 2013 WL 3369084 (S.D.N.Y. July 8, 2013). 1 Dockets.Justia.com Before the Defendants, Procedure Court filed 72 (a), are the pursuant to the objections to Federal Order. The of the Citco Rule 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 including 3481350, latitude in questions 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 the or responding that 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 extracts (listing specific provisions of the compelling document disclosure). stated legitimate 21-24 See Koppenol- in the Deep is interest 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
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