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Keywords

lawsuitplaintiffdefendantdamagesdiscoverymotioncivil procedure
plaintiffdefendantdamagessubpoenadiscoverymotion

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Freeman v. HSBC Holdings PLC

Facts

In November 2014, American citizens affected by terrorist attacks in Iraq filed a lawsuit against multiple banking institutions, including HSBC, seeking damages under the ATA as amended by JASTA. This case, Freeman v. HSBC Holdings PLC, was part of a series of related actions, including Freeman I and Freeman II, which were consolidated. The procedural history includes multiple dismissals and stays, with the court ultimately allowing the plaintiffs to file an amended complaint while addressing issues related to discovery materials from another case, Bartlett.

In November 2014, a group of American citizens killed or injured by terrorist attacks in Iraq between 2004 and 2011, and/or their families, filed an action, Freeman v. HSBC Holdings PLC, No. 14-CV-6601 (PKC) (CLP) ("Freeman I"), against ten banking institutionsHSBC Holdings, PLC; HSBC Bank PLC; HSBC Bank Middle East Limited; HSBC Bank USA, N.A.; Barclays Bank PLC; SCB; Royal Bank of Scotland, N.V.; Credit Suisse AG; Bank Saderat PLC; and Commerzbank AGas well as John Does 1-50, seeking damages pursuant to the ATA, as amended by JASTA.

Issue

The main legal issues were whether the plaintiffs could file an unredacted version of the Second Amended Complaint and whether the defendants' motion to quash the discovery request should be granted.

Presently before the Court are: (i) Plaintiffs' motion to file under seal an unredacted version of the Second Amended Complaint; and (ii) the motion of the defendants who have appeared in this case (the "Appearing Defendants") to quash the discovery request and subpoena served, respectively, on Defendant Standard Charter Bank ("SCB") and non-party KBC Bank.

Rule

The court applied the legal standards governing amendments to complaints under Federal Rules of Civil Procedure, particularly Rule 15(a)(2), which allows for amendments with the opposing party's consent or the court's leave, and the principles surrounding discovery requests.

Courts "consistently den[y] discovery requests [that] are lodged for the purpose of obtaining extra information prior to amending a complaint." K.A. v. City of New York, No. 16-CV-4936 (LTS) (KNF), 2021 U.S. Dist. LEXIS 237997, 2021 WL 5889254, at *2 (S.D.N.Y. Dec. 13, 2021) (collecting cases).

Analysis

The court found that the plaintiffs' request to file an unredacted complaint was improper due to their reliance on discovery materials from the Bartlett case, which were subject to a protective order. The court emphasized that discovery requests aimed solely at bolstering an amended complaint are generally not permitted, and since the plaintiffs were not entitled to use the information from Bartlett, their arguments for discovery were deemed insufficient.

Although Plaintiffs' service of the same subpoenas used in Bartlett, in itself, is not prohibited by the Bartlett protective order, the Court nonetheless finds that those subpoenas are improper in this case because Plaintiffs are not entitled to discovery solely for the purpose of amending their complaint.

Conclusion

The court granted the defendants' motion to quash the discovery requests and denied the plaintiffs' request to file an unredacted version of the Second Amended Complaint, ordering them to file a third amended complaint instead.

Accordingly, the Court grants the Appearing Defendants' motion to quash and directs that "SCB and KBC need not respond to Plaintiffs' discovery requests."

Who won?

The defendants prevailed in this case as the court granted their motion to quash the discovery requests and denied the plaintiffs' request to file an unredacted complaint, emphasizing the improper use of protected discovery materials.

The court granted the Appearing Defendants' motion to quash and denied Plaintiffs' request to file an unredacted version of the Second Amended Complaint, instead ordering Plaintiffs to file a third amended complaint that does not contain allegations based on the discovery materials discussed infra.

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