31 July 2018
On July 10, 2018, the Second Circuit ruled that a U.S.-based law firm was not required to turn over documents it had obtained from an overseas client to defend that client in U.S. litigation that was ultimately dismissed for lack of subject matter jurisdiction. The decision reversed the district court, which had granted a petition for the documents by a plaintiff preparing to sue the client in the Netherlands. The Second Circuit agreed with the district court that it had jurisdiction over client documents in a law firm's possession. But the district court's order failed to recognize, the Second Circuit held, that requiring disclosure would impede clients' ability to engage in open communication with their attorneys and undermine confidence in protective orders. While U.S.-based counsel can take some comfort in the protection the ruling affords to documents placed in their hands by foreign clients, such documents should be kept confidential and, to the extent possible, only be produced under confidentiality orders, lest the protection be lost.