## Facts

- First American Corporation and related entities pursued civil fraud claims in federal court in Washington, D.C., alleging that Bank of Credit and Commerce International (BCCI) secretly infiltrated and controlled them through nominees and offshore entities.
- To obtain audit-related materials for that litigation, First American served subpoenas in the Southern District of New York on Price Waterhouse LLP (U.S.), seeking documents concerning BCCI and related entities held by Price Waterhouse firms abroad.
- Price Waterhouse U.S. was a Delaware limited liability partnership headquartered in New York; Price Waterhouse U.K. was an English partnership operating principally in the United Kingdom; other foreign Price Waterhouse firms were organized under separate national laws.
- Beginning in 1987, Price Waterhouse U.K. acted as BCCI’s worldwide auditor and coordinated audits across the BCCI group, including work involving the U.S. firm.
- First American argued that Price Waterhouse held itself out as a single worldwide organization through marketing materials and that the U.S. firm should be treated as part of a unified enterprise with the U.K. firm for discovery purposes.
- First American did not show that it relied on those marketing representations in deciding to deal with any Price Waterhouse entity.
- The record included evidence of cross-border cooperation on the BCCI engagement, including involvement in New York by a U.K. partner working with the U.S. firm during relevant periods.

## Issues

1. Whether the U.S. and U.K. Price Waterhouse firms (and other foreign firms) could be treated as one “worldwide” partnership or enterprise for subpoena enforcement under theories such as partnership by estoppel or apparent authority.
2. Whether the U.S. firm had “possession, custody, or control” of audit documents held abroad by the U.K. firm such that the U.S. firm could be compelled to produce them under Rules 45 and 37.
3. Whether any compelled production should extend beyond the U.K. firm to other foreign Price Waterhouse firms named in the subpoena.

## Decision

- The court granted the petition to compel in part and denied it in part.
- The court compelled production, through the U.S. firm as subpoena recipient, of certain BCCI-related audit materials of the U.K. firm that were within the U.S. firm’s control for Rule 45 purposes.
- The court denied relief as to other foreign Price Waterhouse firms and as to an asserted “Price Waterhouse Worldwide” entity due to an insufficient basis to treat them as a single firm with the U.S. partnership or to find comparable control by the U.S. firm over their records.
- The court rejected using global marketing descriptions, without proof of reliance, to collapse legally separate firms into one partnership for broad discovery reach.

## Legal Principles

- For subpoena enforcement, “control” under the federal discovery rules extends beyond physical possession and includes the legal right or practical ability to obtain documents upon demand.
- Separate legal organization of affiliated professional firms weighs against treating them as a single partnership absent evidence supporting an agency or estoppel theory.
- Partnership by estoppel and apparent authority generally require a holding out, reasonable reliance by the party invoking the doctrine, and resulting change of position or detriment.
- A court may limit discovery against foreign affiliates to the scope justified by the relationship to the specific engagement and the demonstrated ability of the subpoenaed party to obtain the requested materials.

## Conclusion

The court required limited production of U.K. audit documents tied to the BCCI engagement because the U.S. Price Waterhouse firm had sufficient practical control to obtain them, but it refused to treat the global Price Waterhouse network as a single partnership for discovery purposes absent proof of reliance and denied relief as to other foreign firms lacking a comparable control showing.


First Am. Corp. v. Price Waterhouse LLP, 988 F. Supp. 353 (S.D.N.Y. 1997)