Source: https://www.law.cornell.edu/supremecourt/text/12-842
Timestamp: 2016-07-24 11:11:08
Document Index: 495693888

Matched Legal Cases: ['§1604', '§1609', '§1611', '§1609', '§1609', '§1602', '§1605', '§1605', '§1608', '§5223', '§1330', '§1610']

REPUBLIC OF ARGENTINA v. NML CAPITAL, LTD. | US Law | LII / Legal Information Institute
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(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. 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, Société Nationale Industrielle Aérospatiale v. United States Dist. Court for Southern Dist. of Iowa,
482 U. S. 522, 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.
NML brought 11 actions against Argentina in the Southern District of New York to collect on its debt, and prevailed in every one.
It is owed around $2.5 billion, which Argentina has not paid. Having been unable to collect on its judgments from Argentina, NML has attempted to execute them against Argentina’s property. That postjudgment litigation “has involved lengthy attachment proceedings before the district court and multiple appeals.” EM Ltd. v. Republic of Argentina, 695 F. 3d 201, 203, and n. 2 (CA2 2012) (referring the reader to prior opinions “[f]or additional background on Argentina’s default and the resulting litigation”).
The meaning of those rules was much discussed at oral argument. What if the assets targeted by the discovery request are beyond the jurisdictional reach of the court to which the request is made? May the court nonetheless permit discovery so long as the judgment creditor shows that the assets are recoverable under the laws of the jurisdictions in which they reside, whether that be Florida or France? We need not take up those issues today, since Argentina has not put them in contention. In the Court of Appeals, Argentina’s only asserted ground for objection to the subpoenas was the Foreign Sovereign Immunities Act. See 695 F. 3d, at 208 (“Argentina argues . . . that the normally broad scope of discovery in aid of execution is limited in this case by principles of sovereign immunity”). And Argentina’s petition for writ of certiorari asked us to decide only whether that Act “imposes [a] limit on a United States court’s authority to order blanket post-judgment execution discovery on the assets of a foreign state used for any activity anywhere in the world.” Pet. for Cert. 14. Plainly, then, this is not a case about the breadth of Rule 69(a)(2).
We thus assume without deciding that, as the Government conceded at argument, Tr. of Oral Arg. 24, and as the Second Circuit concluded below, “in a run-of-the-mill execution proceeding . . . the district court would have been within its discretion to order the discovery from third-party banks about the judgment debtor’s assets located outside the United States.” 695 F. 3d, at 208. The single, narrow question before us is whether the Foreign Sovereign Immunities Act specifies a different rule when the judgment debtor is a foreign state.
To understand the effect of the Act, one must know something about the regime it replaced. Foreign sovereign immunity is, and always has been, “a matter of grace and comity on the part of the United States, and not a restriction imposed by the Constitution.” Verlinden B. V. v. Central Bank of Nigeria,
. Accordingly, this Court’s practice has been to “defe[r] to the decisions of the political branches” about whether and when to exercise judicial power over foreign states. Ibid. For the better part of the last two centuries, the political branch making the determination was the Executive, which typically requested immunity in all suits against friendly foreign states. Id., at 486–487. But then, in 1952, the State Department embraced (in the so-called Tate Letter) the “restrictive” theory of sovereign immunity, which holds that immunity shields only a foreign sovereign’s public, noncommercial acts. Id., at 487, and n. 9. The Tate Letter “thr[ew] immunity determinations into some disarray,” since “political considerations sometimes led the Department to file suggestions of immunity in cases where immunity would not have been available under the restrictive theory.” Republic of Austria v. Altmann,
(internal quotation marks omitted). Further muddling matters, when in particular cases the State Department did not suggest immunity, courts made immunity determinations “generally by reference to prior State Department decisions.” Verlinden, 461 U. S., at 487. Hence it was that “sovereign immunity decisions were [being] made in two different branches, subject to a variety of factors, sometimes including diplomatic considerations. Not surprisingly, the governing standards were neither clear nor uniformly applied.” Id., at 488.
Congress abated the bedlam in 1976, replacing the old executive-driven, factor-intensive, loosely common-law-based immunity regime with the Foreign Sovereign Immunities Act’s “comprehensive set of legal standards governing claims of immunity in every civil action against a foreign state.” Ibid. The key word there—which goes a long way toward deciding this case—is comprehensive. We have used that term often and advisedly to describe the Act’s sweep: “Congress established [in the FSIA] a comprehensive framework for resolving any claim of sovereign immunity.” Altman, 541 U. S., at 699. The Act “compre-hensively regulat[es] the amenability of foreign nations to suit in the United States.” Verlinden, supra, at 493. This means that “[a]fter the enactment of the FSIA, the Act—and not the pre-existing common law—indisputably governs the determination of whether a foreign state is entitled to sovereign immunity.” Samantar v. Yousuf,
560 U. S. 305,
. As the Act itself instructs, “[c]laims of foreign states to immunity should henceforth be decided by courts . . . in conformity with the principles set forth in this [Act].”
28 U. S. C. §1602 (emphasis added). Thus, any sort of immunity defense made by a foreign sovereign in an American court must stand on the Act’s text. Or it must fall.
That is the last of the Act’s immunity-granting sections. There is no third provision forbidding or limiting discovery in aid of execution of a foreign-sovereign judgment debtor’s assets. Argentina concedes that no part of the Act “expressly address[es] [postjudgment] discovery.” Brief for Petitioner 22. Quite right. The Act speaks of discovery only once, in an subsection requiring courts to stay discovery requests directed to the United States that would interfere with criminal or national-security matters, §1605(g)(1). And that section explicitly suspends certain Federal Rules of Civil Procedure when such a stay is entered, see §1605(g)(4). Elsewhere, it is clear when the Act’s provisions specifically applicable to suits against sovereigns displace their general federal-rule counterparts. See, e.g., §1608(d). Far from containing the “plain statement” necessary to preclude application of federal discovery rules, Société Nationale Industrielle Aérospatiale v. United States Dist. Court for Southern Dist. of Iowa,482 U. S. 522,
539 (1987)
, the Act says not a word on the subject.
Argentina would have us draw meaning from this silence. Its argument has several parts. First, it asserts that, before and after the Tate Letter, the State Department and American courts routinely accorded absolute execution immunity to foreign-state property. If a thing belonged to a foreign sovereign, then, no matter where it was found, it was immune from execution. And absolute immunity from execution necessarily entailed immunity from discovery
in aid of execution. Second, by codifying execution immunity with only a small set of exceptions, Congress merely “partially lowered the previously unconditional barrier to post-judgment relief.” Brief for Petitioner 29. Because the Act gives “no indication that it was authorizing courts to inquire into state property beyond the court’s limited enforcement authority,” ibid., Argen-tina contends, discovery of assets that do not fall within an exception to execution immunity (plainly true of a foreign state’s extraterritorial assets) is forbidden.
But what of foreign-state property that would enjoy execution immunity under the Act, such as Argentina’s diplomatic or military property? Argentina maintains that, if a judgment creditor could not ultimately execute a judgment against certain property, then it has no business pursuing discovery of information pertaining to that prop-erty. But the reason for these subpoenas is that NML does not yet know what property Argentina has and where it is, let alone whether it is executable under the relevant jurisdiction’s law. If, bizarrely, NML’s subpoenas had sought only “information that could not lead to executable assets in the United States or abroad,” then Argentina likely would be correct to say that the subpoenas were unenforceable—not because information about nonexecutable assets enjoys a penumbral “discovery immunity” under the Act, but because information that could not possibly lead to executable assets is simply not “relevant” to execution in the first place, Fed. Rule Civ. Proc. 26(b)(1); N. Y. Civ. Prac. Law Ann. §5223.
But of course that is not what the subpoenas seek. They ask for information about Argentina’s worldwide assets generally, so that NML can identify where Argentina may be holding property that is subject to execution. To be sure, that request is bound to turn up information about property that Argentina regards as immune. But NML may think the same property not immune. In which case, Argentina’s self-serving legal assertion will not automatically prevail; the District Court will have to settle the matter.
Today’s decision leaves open what Argentina thinks is a gap in the statute. Could the 1976 Congress really have meant not to protect foreign states from postjudgment discovery “clearinghouses”? The riddle is not ours to solve (if it can be solved at all). It is of course possible that, had Congress anticipated the rather unusual circumstances of this case (foreign sovereign waives immunity; foreign sovereign owes money under valid judgments; foreign sovereign does not pay and apparently has no executable assets in the United States), it would have added to the Act a sentence conferring categorical discovery-in-aid-of-execution immunity on a foreign state’s extraterritorial assets. Or, just as possible, it would have done no such thing. Either way, “[t]he question . . . is not what Congress ‘would have wanted’ but what Congress enacted in the FSIA.” Republic of Argentina v. Weltover, Inc.,
504 U. S. 607,
618 (1992)
Nonetheless, Argentina and the United States urge us to consider the worrisome international-relations consequences of siding with the lower court. Discovery orders as sweeping as this one, the Government warns, will cause “a substantial invasion of [foreign states’] sovereignty,” Brief for United States as Amicus Curiae 18, and will “[u]ndermin[e] international comity,” id., at 19. Worse, such orders might provoke “reciprocal adverse treatment of the United States in foreign courts,” id., at 20, and will “threaten harm to the United States’ foreign relations more generally,” id., at 21. These apprehensions are better directed to that branch of government with author-ity to amend the Act—which, as it happens, is the same branch that forced our retirement from the immunity-by-factor-balancing business nearly 40 years ago.
6 Although this appeal concerns only the meaning of the Act, we have no reason to doubt that, as NML concedes, “other sources of law” ordinarily will bear on the propriety of discovery requests of this nature and scope, such as “settled doctrines of privilege and the discretionary determination by the district court whether the discovery is warranted, which may appropriately consider comity interests and the burden that the discovery might cause to the foreign state.” Brief for Respondent 24–25 (quoting Société Nationale Industrielle Aérospatiale v. United States Dist. Court for Southern Dist. of Iowa,
482 U. S. 522–544, and n. 28 (1987)). TOP
The Foreign Sovereign Immunities Act of 1976, 28 U. S. C. §§1330, 1602 et seq., if one of several conditions is met, permits execution of a judgment rendered in the United States against a foreign sovereign only on “property in the United States . . . used for a commercial activity.” §1610(a). Accordingly, no inquiry into a foreign sovereign’s property in the United States that is not “used for a commercial activity” could be ordered; such an inquiry,as the Court recognizes, would not be “ ‘relevant’ to execution in the first place.” Ante, at 10 (citing Fed. Rule Civ. Proc. 26(b)(1)). Yet the Court permits unlimited inquiry into Argentina’s property outside the United States, whether or not the property is “used for a commercial activity.” By what authorization does a court in the United States become a “clearinghouse for information,” ante,at 3 (internal quotation marks omitted), about any and all property held by Argentina abroad? NML may seek such information, the Court reasons, because “NML does not yet know what property Argentina has [outside the United States], let alone whether it is executable under the relevant jurisdiction’s law.” Ante, at 10. But see Société Nationale Industrielle Aérospatiale v. United States Dist. Court for Southern Dist. of Iowa,
482 U. S. 522,
542 (1987)
(observing that other jurisdictions generally allow much more limited discovery than is available in the United States).