Our April 1, 2010 blog entry discussed the March 8, 2010 Order in Gucci Amer., Inc. v. Curveal Fashion, No. 09 Civ. 8458 (S.D.N.Y.) (the “Order”), compelling the third-party U.S. parent (the “U.S. Parent”) of a foreign bank, to produce documents located at its subsidiary, despite claims that such production was illegal under Malaysian banking secrecy laws.  The entry concluded by noting that:

This opinion illustrates the no-win situation that foreign corporations continue to be placed in by the tension between U.S. courts and foreign law, and underscores the importance of raising foreign-law based discovery objections as early and in as detailed a manner as possible in order to maximize the chances of successfully navigating this conflict.

Id. Subsequent history in this matter further illustrates the seriousness of this predicament.

On April 26, 2010, as the U.S. Parent allegedly had not complied with the Order, Plaintiffs requested that the U.S. Parent be held in contempt, further asking for the imposition of compensatory sanctions, a daily coercive fine, and an award of incurred legal fees. See Certification of Facts for Contempt Proceeding (the “Certification”) at 2. On May 13, 2010, Magistrate Theodore Katz issued the Certification, recommending that “the District Court hold [the U.S. Parent] in civil contempt and impose daily coercive fine, in an amount to be set by the District Court, until [the U.S. Parent] complies with the Subpoena as directed in the Order.” Certification at 2-3.

In recommending coercive sanctions of “$5000 to $10000 per day appropriate to demand compliance,” the Court noted that it is:

[M]indful of the difficult situation in which [the U.S. Parent] finds itself. If [it] complies with the Order, it must neglect BAFIA; if [it] refuses disclosure because of BAFIA, it violates the Order. But it is this very conundrum that brought the parties before this Court nearly six months ago to resolve their discovery dispute. After hearing the arguments of the parties, this Court ordered disclosure. [The U.S. Parent], however, has yet to comply with the Order for the same reason it refused to comply with the Subpoena in November 2009 – a justification that this Court rejected in the Order [it] now finds itself facing contempt ‘due to its having chosen to do business in jurisdiction in which the laws are at odds with those of its home jurisdiction. In this situation the bank must either surrender to one sovereign or the other in return for the privileges it receives or alternatively . . . accept the consequences.’

Id. at 14-16, n.4 (citations omitted). While noting the U.S. Parent’s efforts to obtain permission for the ordered disclosure from the Malaysian Central Bank, the Magistrate found that “[w]hile disclosure with consent of the Central Bank would serve to alleviate [the U.S. Parent’s] concerns about its obligations under BAFIA, the Court must only consider [its] good faith efforts to comply with the Order, not Malaysian law.” Id. at 13. Neither did the Court credit the U.S. Parent’s compromise offer to not oppose Plaintiff if it filed a proceeding in Malaysian Courts – which could potentially result in a permissible disclosure of the sought-after records. Id. at 14.

In the U.S. Parent’s favor, as it had “attested to the preservation of the Malaysian banking records and the freezing of Defendants’ accounts at [the Malaysian branch],” the Court declined to order the requested compensatory sanctions and attorney’s fees. Id. at 16-17.

It is interesting to note that the Certification makes no mention of the possibility of the U.S. Parent’s executives suffering criminal punishment as a result of the ordered production, even though this concern was raised again by counsel in a letter preceding the Certification. See Letter from Nicholas Donovan, Esq. to Hon. Theodore Katz, dated April 12, 2010. It is unclear whether this omission was unintentional, or whether it reflects a continuation of the Court’s prior-stated view that such penalties were unlikely. See Gucci Amer., Inc. v. Curveal Fashion, 2010 WL 808639, at *7 (S.D.N.Y. March 8, 2010) (“[the bank’s New York branch] has provided no information that would assist the Court in determining the likelihood that it would be prosecuted for disclosing the requested information, let alone any indication that the maximum penalty would be imposed. While the penalties are not insignificant, the Court cannot conclude that the prospect of significant hardship is anything more than mere speculation.”).

In response to the certification, District Judge Richard Sullivan ordered the U.S. Parent to show cause in writing why “it should not be held in contempt as outlined in Judge Katz’s recommendation.” May 14, 2010 Order. The U.S. Parent submitted its brief as ordered, and is scheduled to appear before Judge Sullivan on May 27, 2010. See id.

The U.S. Parent’s continued plight highlights the need for organizations to take seriously third-party subpoenas, including the retention of appropriate expertise, so that cross border issues can be identified early and managed.

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Photo of Nolan Goldberg Nolan Goldberg

Nolan M. Goldberg is a partner in the Litigation Department, co-head of the Data Privacy and Cybersecurity Litigation Group, and a member of the Patent Law Group. His practice focuses on technology-centric litigation, arbitration (including international arbitrations), investigations and counseling, covering a range…

Nolan M. Goldberg is a partner in the Litigation Department, co-head of the Data Privacy and Cybersecurity Litigation Group, and a member of the Patent Law Group. His practice focuses on technology-centric litigation, arbitration (including international arbitrations), investigations and counseling, covering a range of types of disputes, including cybersecurity, intellectual property, and commercial.  Nolan’s understanding of technology allows him to develop defenses and strategies that might otherwise be overlooked or less effective and enhances the “story telling” that is critical to bringing a dispute to a successful conclusion.

Nolan is a registered patent attorney before the U.S. Patent & Trademark Office; and an International Association of Privacy Professionals (IAPP) Certified Information Privacy Professional, United States (US CIPP) and Certified Information Privacy Technologist (US CIPT).


Nolan’s electrical engineering background, coupled with a litigation and risk management-centric focus, allows him to assist companies in all phases of incident response. Nolan often acts as a bridge between the technical and legal response teams (both inside and outside forensic consultants). Nolan uses this deep familiarity with the company and its systems to defend the company in litigations, arbitrations and regulatory investigations, including before the Federal Communications Commission (FCC); Federal Trade Commission (FTC) and before various State’s Attorneys General, including Multi-State investigations.

Nolan has worked on incidents that range from simple phishing attacks on e-mail accounts by cyber-criminals to intrusions by (formerly) trusted inside employees to complex technical breaches of hosted systems by state-sponsored advanced persistent threats (APTs). These incidents have involved both client systems, and systems of a vendor of a client that hosted its data.

It is often the case (both in response to an incident and for other reasons) that a company will want to undertake an assessment of its security posture, but has concerns about the discoverability of any such analysis.  Accordingly, Nolan also frequently assists companies’ scope and conduct privileged security assessments, including “dual purpose” assessments where privileged analysis are also used for ordinary-course purposes.

Commercial Disputes

Nolan also assists companies with commercial disputes, particularly in cases where there is a technology component, including disputes arising from hosted software agreements; outsourcing and managed services agreements; software and technology development agreements and the dissolution of joint ventures.  When these disputes cannot be amicably resolved, Nolan has litigated them in State and Federal Court and in arbitrations, including international arbitrations.

Intellectual Property

Nolan’s work has included numerous patent and trade secret litigations and negotiations, primarily in cases involving computer and network-related technologies. In particular, the litigations have involved at least the following technologies: hosted software; telecommunications, computer networking; network and computer-related security hardware and software; microprocessors, voice-over Internet protocol (“VoIP”); bar code scanners  financial business methods and software, including securities settlement, fail management and trade execution and reporting software; data compression; handheld computers; pharmaceuticals; cardiac electro-stimulatory devices and prosthetics.

Nolan also has experience prosecuting patent applications before the U.S. Patent and Trademark Office in encryption, CMOS, HDTV, virtual private networks (“VPN”), e-commerce, XML/XSL, financial instruments, semiconductor electronics, medical device technology, inventory control and analysis, cellular communications, Check 21 and business methods. Nolan also has conducted numerous freedom-to-operate searches, written opinions, and counseled clients in the areas of bar code scanners, imaging, book publishing, computer networking, business methods, Power Over Ethernet (“PoE”), and digital content distribution.

He has assisted in evaluating patents for inclusion in patent pools involving large consumer electronics and entertainment companies concerning CD and DVD technology.

Computer Forensics and Electronic Discovery

Nolan is often called upon to develop e-discovery strategies to be used in all types of litigations, with a particular focus on selecting appropriate tools, developing proportionate discovery plans, cross border electronic discovery, managing the overall burden and cost of the electronic discovery process, and obtaining often overlooked electronic evidence, including computer forensics. He also assists clients to develop and implement information management programs to reduce expense and risk, meet compliance obligations, and tame e-discovery burdens.

Thought Leadership

Nolan has authored numerous articles and given numerous presentations on emerging issues and trends in both technology and law, and has often been called upon to comment on various media outlets including Business Week, IPlaw360, IT Business Edge, CIO.com, Forbes, and The National Law Journal.

Prior to practicing law, Nolan was a computer specialist at Underwriters Laboratories (UL).