## Facts

- A federal grand jury in the Southern District of New York investigated possible antitrust violations involving certain customers of First National City Bank of New York (Citibank).
- The grand jury served Citibank with a subpoena duces tecum seeking records relating to specified entities, including documents held in New York and at Citibank’s Frankfurt, Germany branch.
- Citibank produced responsive documents located in New York but refused to produce, or even determine the existence of, responsive documents held in Frankfurt.
- Citibank’s vice president, William T. Loveland, asserted that producing Frankfurt-branch documents could expose the bank to civil liability and economic harm in Germany based on German bank secrecy obligations.
- The district court heard expert testimony that German bank secrecy was primarily contractual/professional (not a penal prohibition), operated for the customer’s benefit and could be waived, and that the consequences of compelled disclosure were uncertain and potentially limited.
- The district court ordered compliance, held Citibank and Loveland in civil contempt for continued noncompliance, fined the bank $2,000 per day, and ordered Loveland jailed for 60 days unless compliance occurred.

## Issues

1. Whether a U.S. court with personal jurisdiction over a domestic bank may compel production, via grand jury subpoena, of documents held by the bank’s foreign branch.
2. Whether potential foreign civil liability and business harm arising from foreign bank secrecy obligations is a sufficient ground to refuse compliance with a valid grand jury subpoena.
3. Whether civil contempt sanctions (daily fines and incarceration of an officer) are appropriate to coerce compliance where the asserted foreign-law conflict is uncertain.

## Decision

- The Second Circuit affirmed the district court’s enforcement of the subpoena and the civil contempt orders.
- The court held that a domestic bank subject to the court’s personal jurisdiction can be compelled to produce documents held by its foreign branch when the bank has possession, custody, or control over the records.
- The court concluded that the asserted risk of German civil liability and economic harm was speculative and did not justify noncompliance, particularly where German law did not impose criminal penalties for disclosure and offered potential defenses.
- The court treated foreign-law conflict and comity concerns as relevant to reasonableness but not an automatic bar to enforcement of federal compulsory process.
- The contempt sanctions were upheld as proper coercive measures in light of the bank’s categorical refusal, including its failure to make any inquiry into the existence of responsive Frankfurt documents.

## Legal Principles

- A federal court’s compulsory process may require a party within its jurisdiction to produce documents located abroad if they are within the party’s possession, custody, or control.
- Foreign legal restrictions may be considered in assessing the reasonableness of enforcing a subpoena, but they do not categorically excuse noncompliance.
- Potential foreign civil liability and business consequences, when uncertain and avoidable or mitigable, ordinarily do not defeat enforcement of a valid grand jury subpoena, especially where no foreign criminal sanction is shown.
- Good faith matters in evaluating resistance to compulsory process; blanket refusal and failure to investigate responsiveness can support contempt and the rejection of foreign-law objections.
- Civil contempt remedies, including escalating fines and incarceration to coerce compliance, remain available absent a clear and unavoidable foreign-law prohibition.

## Conclusion

The Second Circuit required Citibank to comply with a federal grand jury subpoena for records held at its Frankfurt branch, holding that speculative exposure to foreign civil liability under bank secrecy norms did not excuse noncompliance and that coercive civil contempt sanctions were proper to enforce federal investigative process.


United States v. First Nat'l City Bank, 396 F.2d 897 (2d Cir. 1968)