NML Capital, Ltd. v. Republic of Argentina, No. 11-4065 (2d Cir. 2012)
Annotate this Case
Justia Opinion Summary
Want to stay in the know about new opinions from the Second Circuit US Court of Appeals?
Sign up for free summaries delivered directly to your inbox. Learn More ›
You already receive new opinion summaries from Second Circuit US Court of Appeals. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here.
The Republic of Argentina appealed from an order of the district court granting NML Capital's motion to compel non-parties Bank of America and Banco de la Nacion Argentina to comply with subpoenas duces tecum and denying Argentina's motion to quash the subpoena issued to Bank of America. Argentina argued that the banks' compliance with the subpoenas would infringe on its sovereign immunity. The court concluded, however, that because the district court ordered only discovery, not the attachment of sovereign property, and because that discovery was directed at third-party banks, Argentina's sovereign immunity was not affected. Accordingly, the court affirmed the district court's order.
Download PDF
11-4065-cv(L) NML Capital, Ltd. v. Republic of Argentina 1 2 UNITED STATES COURT OF APPEALS 3 FOR THE SECOND CIRCUIT 4 August Term 2011 5 6 7 8 9 10 11 12 13 (Argued: April 23, 2012 Docket Nos. 11-4065-cv(L), 11-4077-cv(CON), 11-4082-cv(CON), 10-4100-cv(CON), 11-4102-cv(CON), 11-4117-cv(CON), 11-4118-cv(CON), 11-4133-cv(CON), 11-4153-cv(CON), 11-4165-cv(CON), 11-4182-cv(CON) -----------------------------------------------------x EM LTD., Plaintiff, NML CAPITAL, LTD., Plaintiff-Appellee, 14 15 16 17 18 19 20 21 Decided: August 20, 2012) -- v. -REPUBLIC OF ARGENTINA, Defendant-Appellant, ADMINISTRACION NACIONAL DE SEGURIDAD SOCIAL, UNION DE ADMINISTRADORAS DE FONDOS DE JUBILACIONES Y PENSIONES, ARAUCA BIT AFJP S.A. CONSOLIDAR AFJP S.A., FUTURA AFJP S.A., MAXIMA AFJP S.A., MET AFJP S.A., ORIGENES AFJP S.A., PROFESION AUGE AFJP S.A., 22 Defendants, 23 BANK OF AMERICA, N.A., 24 Intervenor. 25 -----------------------------------------------------x 26 B e f o r e : 27 WALKER, McLAUGHLIN and CABRANES, Circuit Judges. Defendant-Appellant the Republic of Argentina appeals from the 28 September 2, 2011 order of the District Court for the Southern 29 District of New York (Thomas P. Griesa, Judge) granting Plaintiff1 1 Appellee NML Capital, Ltd. s motion to compel non-parties Bank of 2 America and Banco de la Nación Argentina to comply with subpoenas 3 duces tecum, and denying Argentina s motion to quash the subpoena 4 issued to Bank of America. 5 compelling compliance with the subpoenas does not infringe on 6 Argentina s sovereign immunity. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 We hold that the district court s order AFFIRMED. THEODORE B. OLSON, Gibson, Dunn & Crutcher LLP, Washington, DC (Robert A. Cohen, Dennis H. Hranitzky, Eric C. Kirsch, Dechert LLP, New York, NY, Matthew D. McGill, Gibson, Dunn & Crutcher LLP, Washington, DC, on the brief), for Plaintiff-Appellee. JONATHAN I. BLACKMAN (Carmine D. Boccuzzi, Christopher P. Moore, on the brief), Clearly Gottlieb Steen & Hamilton LLP, New York, NY, for Defendant-Appellant. JOHN M. WALKER, JR., Circuit Judge: 23 In these consolidated appeals, we consider the scope of 24 discovery available to a plaintiff in possession of a valid money 25 judgment against a foreign sovereign. 26 order of the District Court for the Southern District of New York 27 (Thomas P. Griesa, Judge) compelling two non-party banks to comply 28 with subpoenas duces tecum seeking information about Argentina s 29 assets located outside the United States. 30 the banks compliance with the subpoenas would infringe on its 31 sovereign immunity. 32 district court ordered only discovery, not the attachment of Specifically, we review an Argentina argues that We conclude, however, that because the 2 1 sovereign property, and because that discovery is directed at 2 third-party banks, Argentina s sovereign immunity is not affected. 3 BACKGROUND 4 In December 2001, Defendant-Appellant the Republic of 5 Argentina defaulted on payment of its external debt. 6 Argentina s bondholders agreed to voluntary restructurings in 2005 7 and 2010, others, including Plaintiff-Appellee NML Capital, Ltd. 8 ( NML ), did not. 9 the Southern District of New York to collect on its defaulted While most of Beginning in 2003, NML filed eleven actions in 10 Argentinian bonds. 11 on Argentina s broad waiver of sovereign immunity in the bond 12 indenture agreements.1 13 judgments in NML s favor totaling (with interest) approximately 14 $1.6 billion. 15 remaining six actions, in which NML s claims total (with interest) 16 more than $900 million. 17 judgments and NML has thus attempted to execute them against Jurisdiction in the district court was premised The district court has entered five money It has also granted summary judgment to NML in the Argentina has not satisfied these 1 The waiver states, in part, To the extent the Republic [of Argentina] or any of its revenues, assets or properties shall be entitled . . . to any immunity from suit, . . . from attachment prior to judgment, . . . from execution of a judgment or from any other legal or judicial process or remedy, . . . the Republic has irrevocably agreed not to claim and has irrevocably waived such immunity to the fullest extent permitted by the laws of such jurisdiction (and consents generally for the purposes of the Foreign Sovereign Immunities Act to the giving of any relief or the issue of any process in connection with any Related Proceeding or Related Judgment) . . . . Joint Appendix 1127. 3 1 Argentina s property. 2 attachment proceedings before the district court and multiple 3 appeals to this court.2 4 to the instant appeals. 5 This litigation has involved lengthy Here we will recite only the facts relevant NML has pursued discovery concerning Argentina s property 6 located in the United States since 2003. 7 locate Argentina s assets and accounts, learn how Argentina moves 8 its assets through New York and around the world, and accurately 9 identify the places and times when those assets might be subject to In 2010, [i]n order to 10 attachment and execution (whether under [U.S. law] or the law of 11 foreign jurisdictions), NML served the subpoenas at issue in these 12 appeals on two non-party banks, Bank of America ( BOA ) and Banco 13 de la Nación Argentina ( BNA ). 14 sought in these subpoenas, NML hoped to gain an understanding of 15 Argentina s financial circulatory system. 16 1021. 17 NML Br. at 9. From the materials Joint Appendix ( JA ) NML served the first subpoena, directed at BOA, on March 10, 18 2010. 19 maintained by or on behalf of Argentina without territorial 20 limitation. 21 sufficient to identify the opening and closing dates of Argentina s The subpoena seeks documents relating to all BOA accounts JA 672. In particular, it requests documents 2 For additional background on Argentina s default and the resulting litigation, see, for example, NML Capital, Ltd. v. Republic of Argentina, 680 F.3d 254, 256 & n.4 (2d Cir. 2012); NML Capital, Ltd. v. Banco Central de la República Argentina, 652 F.3d 172, 17576 (2d Cir. 2011); Aurelius Capital Partners, LP v. Republic of Argentina, 584 F.3d 120, 124-27 (2d Cir. 2009); EM Ltd. v. Republic of Argentina, 473 F.3d 463, 466 & n.2 (2d Cir. 2007). 4 1 accounts, current balances, and transaction histories from 2009 2 through the production date. 3 BOA documents relating to electronic fund transfers sent through 4 the SWIFT system.3 5 broadly to include Argentina s agencies, ministries, 6 instrumentalities, political subdivisions [and] employees, as well 7 as Argentina s current president, Cristina Fernández de Kirchner, 8 and her late husband, former president Néstor Carlos Kirchner. 9 666, 674. 10 JA 667, 672. JA 672-73. It also requests from The BOA subpoena defines Argentina JA NML served the second subpoena on BNA, an Argentinian bank 11 with a branch in New York City, on June 14, 2010. 12 BNA subpoena requests documents relating to any assets or accounts 13 maintained at BNA by Argentina or for Argentina s benefit, any 14 debts owed by BNA to Argentina, and transfers into or out of 15 Argentina s accounts, including documents identifying the transfer 16 counterparties. 17 to include its agencies, instrumentalities, ministries, political 18 subdivisions, representatives, State Controlled Entities . . . , 19 and all other Persons acting or purporting to act for or on behalf 20 of Argentina. 21 any entity controlled or more than 25% owned by Argentina. 22 04. JA 908-09. JA 900-09. The Again, Argentina is broadly defined A State Controlled Entity is defined to include 3 JA 903- SWIFT (which stands for Society for Worldwide Interbank Financial Telecommunication) is an electronic messaging system that provides instructions to banks, brokerages, and other financial institutions for money transfers. Most transactions denominated in dollars are routed through banks in New York. JA 667, 1874-76. 5 1 After the subpoenas were served, Argentina, later joined by 2 BOA, moved to quash the BOA subpoena. 3 objections to the subpoenas, and NML moved to compel their 4 compliance. 5 motions, NML agreed to modify its subpoenas, including by allowing 6 BOA to exclude lower-level Argentinian officials from searches of 7 SWIFT messages. 8 that would permit the banks to designate documents as confidential 9 and require that those documents receive confidential treatment by Both banks then set forth Before the district court ruled on the objections and NML also agreed to enter into a protective order 10 all parties. 11 September 2, 2011 order (the Discovery Order ), the district court 12 denied the motion to quash and granted the motions to compel. 13 1881, 1900-01, 1915-16. 14 approved the subpoenas in principle, indicating that it had made 15 its final determination that extraterritorial asset discovery did 16 not infringe on Argentina s sovereign immunity, and reaffirmed that 17 it intended to serve as a clearinghouse for information in NML s 18 efforts to find and attach Argentina s assets. 19 district court stated, however, that it expected the parties to 20 negotiate further on the specific production requests contained in 21 the subpoenas, saying that the subpoenas must include some 22 reasonable definition of the information being sought. 23 For example, the district court noted that there is no use getting 24 information about something that might lead to attachment in 25 Argentina because that would be useless information as no At an August 30, 2011 hearing, and in a subsequent JA At the hearing, the district court 6 JA 1868, 1881. The JA 1868. 1 Argentinian court would allow sovereign property to be attached 2 within the country. 3 to discovery of assets abroad, sought to limit the subpoenas to 4 discovery that was reasonably calculated to lead to attachable 5 property. 6 JA 1868. Thus, the district court, while open Following the district court s ruling, NML and BOA negotiated 7 further modifications to the subpoenas, including by designating 8 search keywords.4 9 subpoena. BOA has begun producing documents pursuant to the With respect to the BNA subpoena, NML agreed to limit 10 the requested individuals to the current and most recent former 11 president, and to exclude all documents relating to assets or 12 transfers exclusively within Argentina. 13 to NML, BNA neither engaged in negotiations nor complied with the 14 subpoena. 15 compliance with the modified subpoena by January 6, 2012. 16 Order, NML Capital, Ltd. v. Republic of Argentina, No. 03-cv-8845 17 (S.D.N.Y. Dec. 14, 2011), ECF No. 452. JA 1932, 1940. According On December 14, 2011, the district court ordered BNA s 4 See On December 2, 2011, NML moved this court to supplement the record on appeal with communications among it, the banks, and the district court reflecting negotiations that occurred after September 2, 2011, the date the district court entered the Discovery Order. See Mot. to Supplement the Record, No. 11-4065-cv(L) (2d Cir. Dec. 2, 2011), ECF No. 112. Because we have sufficient information to decide these appeals based on the materials in the record and the district court dockets, of which we take judicial notice, the motion to supplement the record is DENIED. See Fed. R. App. P. 10(e); Jeffreys v. United Techs. Corp., 357 F. App x 370, 372-73 (2d Cir. 2009); Salinger v. Random House, Inc., 818 F.2d 252, 253 (2d Cir. 1987). 7 1 2 Argentina, but not the banks, appealed the district court s September 2, 2011 Discovery Order. 3 DISCUSSION 4 Argentina challenges the Discovery Order s legal premise that 5 compliance with the subpoenas does not infringe on Argentina s 6 sovereign immunity. 7 compelling disclosure about Argentinian assets abroad, violates the 8 Foreign Sovereign Immunities Act ( FSIA ), 28 U.S.C. § 1602 et 9 seq., which provides the sole source of federal court jurisdiction It argues that the Discovery Order, by 10 over foreign nations, see Argentine Republic v. Amerada Hess 11 Shipping Corp., 488 U.S. 428, 434-35 (1989). 12 the Discovery Order involves discovery, not attachment of sovereign 13 property, and because it is directed at third-party banks, not at 14 Argentina itself, Argentina s sovereign immunity is not infringed. 15 The district court therefore did not abuse its discretion in 16 ordering BOA and BNA to comply with NML s subpoenas. 17 I. We hold that because Jurisdiction 18 Before turning to the merits, we first address NML s 19 contention that we lack subject matter jurisdiction to consider 20 these appeals because the Discovery Order is not a final decision 21 under 28 U.S.C. § 1291. 22 supplemental post-judgment proceedings instituted by NML to 23 facilitate the execution of its judgments against Argentina. 24 Fed. R. Civ. P. 69(a). The issue arises here in the context of See In post-judgment litigation, the final 8 1 decision is not the underlying judgment that the plaintiff is 2 attempting to enforce, but the subsequent judgment that concludes 3 the collection proceedings. 4 Asbestos Litig., 22 F.3d 755, 760 (7th Cir. 1994). 5 Order is not a final decision in this sense because it does not 6 terminate NML s collection proceedings against Argentina. 7 the collateral order doctrine, however, a decision is final if it 8 (1) conclusively determines a disputed question; (2) resolves an 9 important issue completely separate from the merits of the action; 10 and (3) is effectively unreviewable on appeal from final judgment. 11 Lora v. O Heaney, 602 F.3d 106, 111 (2d Cir. 2010); see Cohen v. 12 Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949) 13 (enumerating same three requirements). 14 discovery are not final decisions because they are effectively 15 reviewable on appeal from a final judgment, see Mohawk Indus., Inc. 16 v. Carpenter, 130 S. Ct. 599, 606 (2009), or by an appeal from a 17 contempt citation after the target of a subpoena resists the 18 challenged order, see Church of Scientology of Cal. v. United 19 States, 506 U.S. 9, 18 n.11 (1992); In re Air Crash at Belle 20 Harbor, N.Y. on Nov. 12, 2001, 490 F.3d 99, 106-07 (2d Cir. 2007). See In re Joint E. & S. Dists. The Discovery Under Most orders granting 21 Under the particular circumstances of this appeal, however, 22 the district court s decision granting discovery is a collateral 23 order that is immediately appealable. 24 requirements are easily met. 25 that the Discovery Order represented its final determination that Cohen s first two First, the district court indicated 9 1 extraterritorial asset discovery did not infringe on Argentina s 2 sovereign immunity.5 3 NML is separate from the merits issue of whether NML can execute 4 against a particular asset to satisfy its judgments. 5 Second, the scope of discovery available to Cohen s third factor is satisfied because Argentina will be 6 unable to obtain effective review in a United States court of the 7 Discovery Order through a later appeal of a final judgment. 8 Because the Discovery Order grants NML discovery respecting foreign 9 assets, any future attachment or collection proceeding would be 10 conducted in a foreign court.6 11 opportunity to challenge the Discovery Order in this or any other 12 United States court. 13 jurisdictions where any attachable property is located, NML may be 14 able to levy Argentina s foreign assets directly, without Argentina would have no further Moreover, depending on the laws of the 5 We consider the Discovery Order to be district court s final word despite its direction that NML and the banks continue to negotiate the details of the subpoenas. See JA 1907, 1946-47. Argentina s appeal concerns only the central legal issue of whether obtaining discovery from a third party of a foreign sovereign s assets outside the United States infringes on sovereign immunity, and not the parameters of the document requests. See Trans. of Oral Argument on Mot. to Stay at 4, NML Capital, Ltd. v. Republic of Argentina, No. 11-4065-cv(L) (2d Cir. Nov. 1, 2011), in JA 1943, 1946 (counsel for Argentina stating that the subpoenas were subject to modification on the details and that its appeal did not concern the details ). 6 NML argues that the subpoenas may allow it to discover the location of Argentinian assets in the United States, as well as assets held abroad. However, NML has already obtained discovery on Argentina s assets in the United States, and so the new information it will receive pursuant to the Discovery Order relates only to Argentina s assets abroad. NML s speculation that it might uncover assets in the United States that were somehow missed by its earlier discovery requests is too remote to alter our jurisdictional analysis. 10 1 instituting a separate proceeding, rendering the Discovery Order 2 unreviewable by any court. 3 994 F.2d 1221, 1225 (7th Cir. 1993) (recognizing that an order 4 granting discovery may be a final, appealable order where the sole 5 object of [a post-judgment] proceeding is discovery of the judgment 6 debtor s assets and the assets discovered may then be levied 7 without a court order). 8 not direct compliance from Argentina itself, Argentina cannot 9 obtain review through disobedience and contempt. See Resolution Trust Corp. v. Ruggiero, Finally, because the Discovery Order does See Church of 10 Scientology, 506 U.S. at 18 n.11; Arista Records, LLC v. Doe 3, 604 11 F.3d 110, 116 (2d Cir. 2010). 12 silent on BNA s compliance (or lack thereof), that BOA has begun 13 production suggests that it would rather comply than risk being 14 held in contempt of court. 15 Although the record before us is In sum, because the Discovery Order conclusively resolves the 16 discovery issue, is separate from the merits, and will be 17 unreviewable through a later appeal in the United States, we have 18 jurisdiction to consider Argentina s appeal. 19 II. 20 Merits Turning to the merits, Argentina argues that the Discovery 21 Order violates the FSIA by requiring disclosure about assets 22 Argentina claims are immune from attachment. 23 We review the district court s order for abuse of discretion. 24 See Brandi-Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76, 79 25 (2d Cir. 2012); United States v. Rigas, 583 F.3d 108, 125 (2d Cir. 11 1 2009). 2 ruling on an erroneous view of the law or on a clearly erroneous 3 assessment of the evidence, or rendered a decision that cannot be 4 located within the range of permissible decisions. 5 534 F.3d 117, 132 (2d Cir. 2008) (citations, alterations, and 6 internal quotation marks omitted). 7 latitude to determine the scope of discovery and to manage the 8 discovery process. 9 Litig., 517 F.3d 76, 103 (2d Cir. 2008). 10 A district court has abused its discretion if it based its In re Sims, A district court has broad See, e.g., In re Agent Orange Prod. Liab. At the outset, we note that broad post-judgment discovery in 11 aid of execution is the norm in federal and New York state courts. 12 Post-judgment discovery is governed by Federal Rule of Civil 13 Procedure 69, which provides that [i]n aid of the judgment or 14 execution, the judgment creditor . . . may obtain discovery from 15 any person--including the judgment debtor--as provided in these 16 rules or by the procedure of the state where the court is located. 17 Fed. R. Civ. P. 69(a)(2). 18 69(a)(2) is constrained principally in that it must be calculated 19 to assist in collecting on a judgment. 20 26(b)(1) (allowing a court to order discovery of any matter 21 relevant to the subject matter involved in the action ); First 22 City, Texas-Houston, N.A. v. Rafidain Bank, 281 F.3d 48, 54 & n.3 23 (2d Cir. 2002) ( Rafidain II ); Libaire v. Kaplan, 760 F. Supp. 2d 24 288, 293 (E.D.N.Y. 2011). 25 procedures, made applicable to proceedings in aid of execution by The scope of discovery under Rule See id.; Fed. R. Civ. P. New York state s post-judgment discovery 12 1 Federal Rule 69(a)(1), have a similarly broad sweep. 2 Civil Practice Law and Rules provides that a judgment creditor may 3 compel disclosure of all matter relevant to the satisfaction of the 4 judgment. 5 Practice § 509 (5th ed. 2011) (describing § 5223 as a broad 6 criterion authorizing investigation through any person shown to 7 have any light to shed on the subject of the judgment debtor s 8 assets or their whereabouts ). 9 relating to discovery, the district court has broad discretion to The New York N.Y. C.P.L.R. § 5223; see David D. Siegel, New York Of course, as in all matters 10 limit discovery in a prudential and proportionate way. 11 Civ. P. 26(b)(2); see, e.g., Crawford-El v. Britton, 523 U.S. 574, 12 598-99 (1998). 13 See Fed. R. It is not uncommon to seek asset discovery from third parties, 14 including banks, that possess information pertaining to the 15 judgment debtor s assets. See Fed. R. Civ. P. 69(a)(2) (permitting 16 discovery from any person ); see, e.g., G-Fours, Inc. v. Miele, 17 496 F.2d 809, 810-12 (2d Cir. 1974) (upholding contempt citation 18 against judgment debtor s wife and debtor s wholly-owned 19 corporation for failing to respond to a discovery request pursuant 20 to Rule 69); Magnaleasing, Inc. v. Staten Island Mall, 76 F.R.D. 21 559, 561 (S.D.N.Y. 1977) (permitting discovery against the judgment 22 debtor s bank insofar as it relates to the existence or transfer 23 of [the judgment debtor s] assets ); ICD Grp., Inc. v. Israel 24 Foreign Trade Co. (USA) Inc., 638 N.Y.S.2d 430, 430 (1st Dep't 25 1996) (permitting discovery from debtor s accountant, citing the 13 1 rule allowing discovery from any third person with knowledge of 2 the debtor s property ); see also 12 Charles A. Wright & Arthur R. 3 Miller, Federal Practice and Procedure § 3014 (2d ed. 2012) (third 4 persons may be examined about the assets of the judgment debtor so 5 long as the motive is not to harass the third party). 6 Nor is it unusual for the judgment creditor to seek disclosure 7 related to assets held outside the jurisdiction of the court where 8 the discovery request is made. 9 judgment creditor is entitled to discover the identity and location See Rafidain II, 281 F.3d at 54 ( A 10 of any of the judgment debtor s assets, wherever located. ) 11 (quoting Nat l Serv. Indus., Inc. v. Vafla Corp., 694 F.2d 246, 250 12 (11th Cir. 1982)); Eitzen Bulk A/S v. Bank of India, 827 13 F. Supp. 2d 234, 238-39 (S.D.N.Y. 2011) (subpoena on New York 14 branch of Indian bank reaches all responsive materials within the 15 corporation s control, even if those materials are located outside 16 New York ); Raji v. Bank Sepah-Iran, 529 N.Y.S.2d 420, 423-24 (Sup. 17 Ct. 1988) (allowing discovery into judgment debtor s foreign 18 assets). 19 no doubt that the district court would have been within its 20 discretion to order the discovery from third-party banks about the 21 judgment debtor s assets located outside the United States. 22 Thus, in a run-of-the-mill execution proceeding, we have Argentina argues, however, that the normally broad scope of 23 discovery in aid of execution is limited in this case by principles 24 of sovereign immunity. 25 abroad is categorically immune from attachment, and that the Argentina maintains that its property 14 1 district court cannot order discovery into those assets. 2 reaching the unanswered question of whether the FSIA extends 3 immunity to property held outside the United States, we reject 4 Argentina s argument for two reasons. 5 Without First, the Discovery Order does not implicate Argentina s 6 immunity from attachment under the FSIA. 7 attach Argentina s property, or indeed have any legal effect on 8 Argentina s property at all; it simply mandates BOA and BNA s 9 compliance with subpoenas duces tecum. It does not allow NML to We recognize that a 10 district court sitting in Manhattan does not have the power to 11 attach Argentinian property in foreign countries. 12 district court s power to order discovery to enforce its judgment 13 does not derive from its ultimate ability to attach the property in 14 question but from its power to conduct supplementary proceedings, 15 involving persons indisputably within its jurisdiction, to enforce 16 valid judgments. 17 Johnson Cnty., 73 U.S. 166, 187 (1867) ( Process subsequent to 18 judgment is as essential to jurisdiction as process antecedent to 19 judgment, else the judicial power would be incomplete and entirely 20 inadequate to the purposes for which it was conferred by the 21 Constitution. ). 22 foreign state [of sovereign immunity], rendering it a party to an 23 action, is broad enough to sustain the court s jurisdiction through 24 proceedings to aid collection of a money judgment rendered in the 25 case, including discovery pertaining to the judgment debtor s However, the Rafidain II, 281 F.3d at 53-54; cf. Riggs v. Thus in Rafidain II we held that a waiver by a 15 1 assets. 2 China, Ltd., 651 F.3d 280, 297 (2d Cir. 2011); 3 Hemisphere Assocs., LLC v. Democratic Republic of Congo, 637 F.3d 4 373, 380 (D.C. Cir. 2011) (upholding contempt sanctions against 5 foreign sovereign for failing to comply with general asset 6 discovery order); Richmark Corp. v. Timber Falling Consultants, 959 7 F.2d 1468, 1477-78 (9th Cir. 1992) (holding that an instrumentality 8 of a foreign nation must respond to discovery about its worldwide 9 assets and that it could not use the FSIA to conceal its assets 281 F.3d at 53-54; Walters v. Indus. & Commercial Bank of see also FG 10 from the district court). 11 immune from attachment must be determined separately under the 12 FSIA, but this determination does not affect discovery. 13 hurdles NML will face before ultimately attaching Argentina s 14 property abroad (and we have no doubt there will be some), it need 15 not satisfy the stringent requirements for attachment in order to 16 simply receive information about Argentina s assets. 17 Whether a particular sovereign asset is Whatever The Seventh Circuit came to a different conclusion in Rubin v. 18 Islamic Republic of Iran, 637 F.3d 783 (7th Cir. 2011), holding 19 that the FSIA requires a judgment creditor to identify specific 20 non-immune assets before it is entitled to further discovery about 21 those assets. 22 Seventh Circuit to the extent it concluded that the district 23 court s subject matter jurisdiction over a foreign sovereign was 24 insufficient to confer the power to order discovery from a person 25 subject to the court s jurisdiction that is relevant to enforcing a Id. at 796. We respectfully disagree with the 16 1 judgment against the sovereign. 2 the FSIA and is in conflict with our holding in Rafidain II that a 3 district court s jurisdiction over a foreign sovereign extends to 4 proceedings to enforce a valid judgment. 5 EM, 473 F.3d 463, cited by the Seventh Circuit, support the result 6 in Rubin. 7 court denied a discovery request after determining that the 8 judgment creditor made no showing of a reasonable basis to assume 9 jurisdiction over the entity against whose funds it wished to Such a result is not required by Nor does our holding in In EM, a case primarily about attachment, the district 10 execute a judgment. 11 district court s discretion to limit discovery where the plaintiff 12 had not demonstrated any likelihood that the discovery it sought 13 related to attachable assets. 14 discovery request would violate the FSIA. 15 Id. at 486. That ruling was well within the But EM did not hold that the The Discovery Order, moreover, does not infringe on any 16 immunity from the district court s jurisdiction that Argentina 17 otherwise might enjoy. 18 that the district court lacked subject matter or personal 19 jurisdiction over it because Argentina expressly waived any claim 20 to immunity in the bond agreements. 21 v. Republic of Argentina, 680 F.3d 254, 257 (2d Cir. 2012); EM Ltd. 22 v. Republic of Argentina, 473 F.3d 463, 481 & n.18 (2d Cir. 2007). 23 Once the district court had subject matter and personal 24 jurisdiction over Argentina, it could exercise its judicial power 25 over Argentina as over any other party, including ordering third- Argentina does not (and could not) argue 17 See, e.g., NML Capital, Ltd. 1 party compliance with the disclosure requirements of the Federal 2 Rules. 3 172, 177 (2d Cir. 1998) ( Rafidain I ). 4 that the district court had jurisdiction over it or that the 5 judgments against it are valid and enforceable; it therefore cannot 6 dispute that the district court has jurisdiction to order discovery 7 designed to aid in enforcing those judgments. First City, Texas-Houston, N.A. v. Rafidain Bank, 150 F.3d Argentina does not dispute 8 In this vein, it is important to distinguish discovery 9 requests made before a court conclusively has jurisdiction over a 10 foreign sovereign from those made after such jurisdiction has been 11 ascertained. 12 the court has subject matter jurisdiction over a sovereign, 13 discovery and immunity are almost invariably intertwined. 14 Rafidain I, 150 F.3d at 174-76 (noting that the district court must 15 engage in a delicate balancing between permitting discovery to 16 substantiate exceptions to statutory foreign sovereign immunity and 17 protecting a sovereign s or sovereign agency s legitimate claim to 18 immunity from discovery where it was unclear if the defendant had 19 a claim to jurisdictional immunity) (quoting Arriba Ltd. v. 20 Petroleos Mexicanos, 962 F.2d 528, 534 (5th Cir. 1992)). 21 sovereign immunity protects a sovereign from the expense, 22 intrusiveness, and hassle of litigation, a court must be 23 circumspect in allowing discovery before the plaintiff has 24 established that the court has jurisdiction over a foreign 25 sovereign defendant under the FSIA. Where a plaintiff seeks to initially establish that 18 Id. at 176-77. See Because But NML seeks 1 discovery from a defendant over which the district court 2 indisputably had jurisdiction. 3 Rafidain I are not present and our precedents relating to 4 jurisdictional discovery are inapplicable. 5 Thus, the concerns voiced in The second principal reason for holding that the Discovery 6 Order does not infringe on Argentina s sovereign immunity is that 7 the subpoenas at issue were directed at BOA and BNA--commercial 8 banks that have no claim to sovereign immunity, or to any other 9 sort of immunity or privilege. Thus, the banks compliance with 10 subpoenas will cause Argentina no burden and no expense. 11 at 177 (holding that discovery requests directed at non-immune 12 party did not infringe on the sovereign immunity of a third party, 13 even if the third party retained a colorable claim of immunity). 14 To the extent Argentina expresses concern that the subpoenas will 15 reveal sensitive information, it is asserting a claim of privilege 16 and not a claim of immunity. 17 privilege. 18 handle claims of privilege using the existing procedures under the 19 Federal Rules. 20 [FSIA] does not attempt to deal with questions of discovery. 21 Existing law appears to be adequate in this area. . . . [If] a 22 private plaintiff sought the production of sensitive governmental 23 documents of a foreign state, concepts of governmental privilege 24 would apply. ). 25 with the banks, see NML Br. at 21 n.6, and Argentina and the banks See id. The FSIA says nothing about Indeed it appears that Congress intended for courts to See H.R. Rep. No. 94 1487, at 23 (1976) ( The NML has agreed to enter into a protective order 19 1 can avail themselves of the other protections contained in the 2 Federal Rules and our precedents as necessary to protect any 3 confidential information.7 4 will provide Argentina all the protection to which it is entitled. 5 And, if and when NML moves past the discovery stage and attempts to 6 execute against Argentina s property, Argentina will be protected 7 by principles of sovereign immunity in this country or in others, 8 to the extent that immunity has not been waived. 9 Order at issue here, however, does nothing to endanger Argentina s 10 The Discovery sovereign immunity. 11 CONCLUSION 12 13 We are confident that these mechanisms For the foregoing reasons, the district court s order is AFFIRMED. 7 To the extent Argentina is attempting to keep sensitive data about its finances away from NML--i.e., to prevent NML from collecting on its judgments--its concerns are entitled to no weight. 20
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
