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Quaak v. Klynveld Peat Marwick Goerdler Bedrijfsrevisoren
United States Court of Appeals for the First Circuit
361 F.3d 11 (1st Cir. 2004)
Klynveld Peat Marwick Goerdler Bedrijfsrevisoren (KPMG-B) (defendant) was a Belgian auditing firm that audited for the publicly traded company Lernout & Hauspie Speech Services, Inc. (Lernout). After Lernout collapsed, many securities-fraud cases were brought in the United States against KPMG-B. KPMG-B became the subject of a Belgian criminal investigation. Plaintiffs in an American case (the American litigants) (plaintiffs) initiated pretrial discovery and served requests for KPMG-B’s auditing work records. KPMG-B refused to turn over the records and asserted that complying would violate Belgian secrecy law. The American litigants sought and received an order from the magistrate court compelling KPMG-B to produce the requested documents. KPMG-B filed an action in Belgian court asking that the court enjoin the American litigants from advancing the discovery process and impose high penalties for violation of the injunction. The American litigants requested an antisuit injunction in federal district court to bar KPMG-B from proceeding with the Belgian claim. The district court granted the antisuit injunction. KPMG-B appealed.
Rule of Law
Holding and Reasoning (Selya, J.)
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