Societe Internationale pour Participations Industrielles et Commerciales, S. A. v. Rogers

PETITIONER: Societe Internationale pour Participations Industrielles et Commerciales, S. A.
LOCATION: Wolverine Tube, Inc.

DECIDED BY: Warren Court (1957-1958)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 357 US 197 (1958)
ARGUED: May 01, 1958
DECIDED: Jun 16, 1958

Facts of the case


Media for Societe Internationale pour Participations Industrielles et Commerciales, S. A. v. Rogers

Audio Transcription for Oral Argument - May 01, 1958 in Societe Internationale pour Participations Industrielles et Commerciales, S. A. v. Rogers

Earl Warren:

-- United States.

Mr. Wilson.

John J. Wilson:

Mr. Chief Justice, may it please the Court.

The complaint in this case was dismissed with prejudice by the District Court at the pre-trial stage, the failure to comply with the discovery order in a situation in which due to no cause in the part of the petitioner, the petitioner was unable to comply with the order.

I should like to discuss a few of the procedural facts first before I come to the principles of law which I think are controlling here.

This petitioner is a Swiss Holding Corporation which filed suit in 1948 under the Trading with the Enemy Act to recover most of the stock of General Aniline & Film Corporation, an American Company.

The respondents filed answers in which they alleged that the petitioner was "enemy tainted" and did not own the property.

The requirements being that the petitioner was holding the property as "for IG Farben of Germany".

Shortly after the complaint was instituted, cross motions were filed for discovery.

And the Court -- the District Court required the custodian to disclose to the petitioner a quantity of some 23,000 relevant documents in its -- his possession.

At the same time, the respondents had moved not only for the discovery of the petitioner's own records and those of a wholly owned subsidiary but the records of a private Swiss bank known as Sturzenegger & Company in Basel, Switzerland with which the petitioner had close business relations.

It was the position of the petitioner that its records were relevant.

It made no resistance to the motion for the production of its own records.

It resisted vigorously the request that it produced the records of the Swiss bank upon the ground that it did not have possession, custody or control of those records as required by Rule 34 of the Federal Rules of Civil Procedure.

We also raised the point with the Court invoking the exercise of a benign discretion that due to the banking secrecy laws of Switzerland, it would be difficult if not impossible even should the bank voluntarily produce -- would be willing to give up the records for us to obtain them for inspection.

We also resisted the imposition of this discovery order as far as the Sturzenegger Bank was concerned upon the ground of an inadequate designation of the records.

And so it happens that this element of control, which we say was never properly resolved against us and the proper designation of the records to be produce are basic difficulties here that appointed us throughout in this whole case.

Judge Laws heard arguments in our position to the production of the Sturzenegger records.

Now, Sturzenegger who was the managing partner of this private Swiss bank is one of the principal directors of the petitioner.Now, I think that had a great influence with the district judge in imposing upon the petitioner a requirement that it produce not only its own records but the records of this private Swiss bank.

Now, prior to the institution of our suit, an agency of the Swiss government known as the Swiss Compensation Office had made an investigation into the national character of both Sturzenegger and the petitioner and several reports were issued in which it was determined that these companies were Swiss in character.

The principal reason I believe why the respondents urge the Court to include in its discovery order against us, the requirement that we produce, the records of the private Swiss bank partnership, was because this business relationship which the petitioner had with the Swiss bank was not only that of having the Swiss bank as its house bank but it also had a participation in the partnership of this bank.

Now, the bank was a -- had two partners and the participation of the petitioner in this case, not the Sturzenegger.

It was the unlimited partner, the general managing partner was a small Swiss Franc investment.

A corporation known as "Industry Bank," which was not a bank but a Swiss corporation, was a limited partner with a large Swiss Franc investment.

And the petitioner in this case had what is known as a "sleeping participation,” a thing which is unknown to Anglo-Saxon law but has its roots perhaps in German law.

And we have maintained throughout that it is more akin to that of an investment than it is to a sound partner or any kind of a partner.

Now fortunately for us, we did not have to rely upon oral testimony as to the terms of the so-called partnership agreements.There were successively three or four, they have been before the Court, they had written out great detail.

No one has suggestion -- suggested that they are any wise not genuine.

And those agreements spell out this very limited participation of the petitioner, practically no say in the management, a veto on certain kinds of unusual loans.

And upon the point of the ability to see the books and records of the partnership, a very unusual provision exists and that is it provides that the delegates of the respective participants, Industry Bank, the limited partner on the one hand, the petitioner with the participation on the other.