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Republic of Argentina v. NML Capital, Ltd.

United States Supreme Court

June 16, 2014

Republic of Argentina, Petitioner
v.
NML Capital, Ltd

Argued April 21, 2014

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Affirmed.

SYLLABUS

[134 S.Ct. 2251] After petitioner, Republic of Argentina, defaulted on its external debt, respondent, NML Capital, Ltd. (NML), one of Argentina's bondholders, prevailed in 11 debt-collection actions that it brought against Argentina in the Southern District of New York. In aid of executing the judgments, NML sought discovery of Argentina's property, serving subpoenas on two nonparty banks for records relating to Argentina's global financial transactions. The District Court granted NML's motions to compel compliance. The Second Circuit affirmed, rejecting Argentina's argument that the District Court's order transgressed the Foreign Sovereign Immunities Act of 1976 (FSIA or Act).

[134 S.Ct. 2252] Held : No provision in the FSIA immunizes a foreign-sovereign judgment debtor from postjudgment discovery of information concerning its extraterritorial assets. Pp. 4-12.

(a) This Court assumes without deciding that, in the ordinary case, a district court would have the discretion under Federal Rule of Civil Procedure 69(a)(2) to permit discovery of third-party information bearing on a judgment debtor's extraterritorial assets. Pp. 4-5.

(b) The FSIA replaced an executive-driven, factor-intensive, loosely common-law-based immunity regime with " a comprehensive framework for resolving any claim of sovereign immunity." Republic of Austria v. Altmann, 541 U.S. 677, 699, 124 S.Ct. 2240, 159 L.Ed.2d 1. Henceforth, any sort of immunity defense made by a foreign sovereign in an American court must stand or fall on the Act's text. The Act confers on foreign states two kinds of immunity. The first, jurisdictional immunity (28 U.S.C. § 1604), was waived here. The second, execution immunity, generally shields " property in the United States of a foreign state" from attachment, arrest, and execution. § § 1609, 1610. See also § 1611(a), (b)(1), (b)(2). The Act has no third provision forbidding or limiting discovery in aid of execution of a foreign-sovereign judgment debtor's assets. Far from containing the " plain statement" necessary to preclude application of federal discovery rules, Societe Nationale Industrielle Aerospatiale v. United States Dist. Court for Southern Dist. of Iowa, 482 U.S. 522, 539, 107 S.Ct. 2542, 96 L.Ed.2d 461, the Act says not a word about postjudgment discovery in aid of execution.

Argentina's arguments are unavailing. Even if Argentina were correct that § 1609 execution immunity implies coextensive discovery-in-aid-of-execution immunity, the latter would not shield from discovery a foreign sovereign's extraterritorial assets, since the text of § 1609 immunizes only foreign-state property " in the United States." The prospect that NML's general request for information about Argentina's worldwide assets may turn up information about property that Argentina regards as immune does not mean that NML cannot pursue discovery of it. Pp. 5-10.

695 F.3d 201, affirmed.

Jonathan I. Blackman argued the cause for petitioner.

Edwin S. Kneedler argued the cause for the United States, as amicus curiae, by special leave of court.

Theodore B. Olson argued the cause for respondent.

SCALIA, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, BREYER, ALITO, and KAGAN, JJ., joined. GINSBURG, J., filed a dissenting opinion. SOTOMAYOR, J., took no part in the decision of the case.

OPINION

[134 S.Ct. 2253] Scalia Justice

We must decide whether the Foreign Sovereign Immunities Act of 1976 (FSIA or Act), 28 U.S.C. § § 1330, 1602 et seq., limits the scope of discovery available to a judgment creditor in a federal ...


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