Court Opinion

ID: 4231484
Source: CourtListenerOpinion
Date Created: 2017-12-21 23:00:56.959735+00
Date Added: 2024-06-11T14:42:46.845346
License: Public Domain

UNITED STATES DISTRICT COURT
                                    FOR THE DISTRICT OF COLUMBIA

  MILLY MIKALI AMDUSO, et al.,
           Plaintiffs,
                   v.                                           Civil Action No. 08-1361 (JDB)
  REPUBLIC OF SUDAN, et al.,
           Defendants.

                                       MEMORANDUM OPINION

        Currently before the Court is [325] plaintiffs’ renewed motion to compel post-judgment

discovery from Sudan. For the reasons that follow, the motion will be granted as to the narrowed

set of requests laid out in plaintiffs’ reply brief and June 21, 2017 proposed order.

                                              I. BACKGROUND

        This discovery request stems from a default judgment issued against Sudan under the

terrorism exception to the Foreign Sovereign Immunities Act (FSIA). Six years ago, this Court

found Sudan liable for plaintiffs’ injuries in connection with the 1998 bombings of the U.S.

embassies in Kenya and Tanzania. Order of Nov. 28, 2011 [ECF No. 62] at 2. The Court entered

judgment in favor of plaintiffs for approximately $878 million in compensatory damages and

interest, Order of July 25, 2014 [ECF No. 254], part of a combined $5.9 billion damages award in

several consolidated cases that the D.C. Circuit has since upheld, see Owens v. Republic of Sudan,

864 F.3d 751, 767, 825 (D.C. Cir. 2017). 1 Plaintiffs now seek to collect on their judgment.

        Plaintiffs initially sought broad discovery of Sudan’s assets both here and abroad. Sudan

contended that discovery was unnecessary because records of all of its attachable assets may be

         1
           The Court also awarded $4.3 billion in punitive damages to the victims of the embassy bombings; however,
the D.C. Circuit vacated the punitive damages award. Owens, 864 F.3d at 767, 825.

                                                        1
obtained from the Treasury Department’s Office of Foreign Assets Control (OFAC). OFAC had

already agreed to produce its records regarding Sudan in a companion case, subject to a protective

order. See Protective Order, Wamai v. Republic of Sudan, No. 08-CV-1349 (JDB) (D.D.C. May

2, 2016) [ECF No. 287]. At a hearing held on November 18, 2016, the parties and the Court

reached an interim agreement under which the Court would modify the protective order in Wamai.

Representatives of Sudan would review OFAC’s production and determine whether OFAC’s

records contained a complete list of Sudan’s assets available for attachment; if Sudan’s

representatives determined during this review that OFAC’s records were incomplete, Sudan was

to supplement OFAC’s information.

       The Court proceeded to modify the Wamai protective order. See Amended Protective

Order, Wamai, No. 08-cv-1349 [ECF No. 290]. On March 28, 2017, the Governor of the Central

Bank of Sudan executed a declaration responding to and supplementing the resulting disclosures

from OFAC. Decl. of Hazem Abdel Kader Ahmad (“Ahmad declaration”) [ECF No. 324-3

*SEALED*]. The declaration stated that Sudanese officials looked only for assets owned directly

by the Sudanese government or central bank, and attempted without success to cross-reference

OFAC’s information with Sudanese governmental information. Id. ¶¶ 3, 5. The assets identified

by Sudan as currently in the United States are worth only $7 million, a mere fraction of plaintiffs’

judgment. Id. ¶ 5. Sudan now argues that the Ahmad declaration is all that it must provide under

Rule 69 of the Federal Rules of Civil Procedure, and that plaintiffs are not entitled to any further

discovery. Defs.’ Mem. in Opp’n to Pls.’ Renewed Mot. to Compel Post-J. Discovery (“Opp’n”)

[ECF No. 327] at 4–6. Plaintiffs, on the other hand, urge that the Ahmad declaration is woefully

insufficient, and have moved for discovery reaching back to 1997 from Sudan and its agencies and

                                                 2
instrumentalities. Pls.’ Renewed Mot. to Compel Rule 69 Discovery from the Republic of Sudan

(“Pls.’ Mot.”) [ECF No. 325] at 2–4.

                                           II. DISCUSSION

       Plaintiffs’ initial discovery requests sought financial information from a large number of

Sudanese entities stretching back over the last twenty years. See Pls.’ Req. for Produc. of Docs.

and Electronically Stored Information from J. Debtor Republic of Sudan (“Disc. Req.”) [ECF No.

325-1]. The parties have engaged in a spirited and largely uncompromising debate over the legality

of those requests. However, this debate has since lost much of its potency, because in their reply

brief plaintiffs considerably narrowed their initial discovery request. See Reply in Further Supp.

of Pls.’ Renewed Mot. to Compel Rule 69 Disc. From the Republic of Sudan (“Reply”) [ECF No.

328] at 19–20; accord Proposed Order [ECF No. 328-3]. Plaintiffs now ask for four categories of

information: (1) the identities of and principal points of contact for all regional and satellite banks

used by Sudan and BNP Paribas (BNPP) to make transfers or payment through the United States

after the implementation of U.S. sanctions in November 1997; (2) the identities of and principal

points of contact for Sudanese banks directed or instructed to use BNPP as their correspondent

bank in Europe after November 1997; (3) information regarding transactions through Sudanese

state-owned or controlled financial institutions from January 17, 2017 to the present that had

certain connections to the United States; and (4) the identities of and certain information about any

Sudanese governmental agencies and instrumentalities that have done business in the U.S. or with

U.S. persons since January 17, 2017 or that plan to do so in 2017 or 2018. Proposed Order at 1–

2. Plaintiffs also ask Sudan to produce one or more witnesses to testify as to each category of

information. Id. at 3. The Federal Rules of Civil Procedure allow plaintiffs to make these requests.

                                                  3
         As a general rule, legal victors may engage in broad post-judgment discovery. A judgment

creditor, “[i]n aid of the judgment or execution, . . . may obtain discovery from any person—

including the judgment debtor—as provided in [the Federal Rules of Civil Procedure] or by the

procedure of the state where the court is located.” Fed. R. Civ. P. 69. The Federal Rules allow

for discovery “regarding any nonprivileged matter that is relevant to any party’s claim or defense

and proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). Thus, the standards for

receiving post-judgment discovery “are quite permissive.” Republic of Argentina v. NML Capital,

Ltd., 134 S. Ct. 2250, 2254 (2014). That defendant here is a foreign government sued under the

Foreign Sovereign Immunities Act (FSIA), rather than a private party sued under some other legal

authority, does not alter these standards. See id. at 2256–58.

         Sudan raises four arguments in opposition to plaintiffs’ renewed motion to compel, but all

four are either fatally diminished in force by plaintiffs’ narrowing of their discovery request or are

otherwise unavailing. Sudan’s first—and farthest-reaching—claim is that the Ahmad declaration

gave plaintiffs all of the information to which they are legally entitled, and that plaintiffs are

precluded from seeking anything more. Opp’n at 4–11. That is not the case. The declaration

indicates that Governor Ahmad could not cross-reference any of the assets that OFAC listed as

blocked with Sudanese records, which itself suggests that Sudanese officials may not have

conducted a thorough investigation. Ahmad Decl. ¶¶ 3–4. 2 The declaration also states that the

Sudanese officials conducting the search looked only at assets owned directly by the Sudanese

government or its central bank—and not, therefore, at assets owned by the government’s agencies

and instrumentalities. Id. ¶ 5; see Opp’n at 6.

         2
           Sudan points out that this is because OFAC provides the current value of assets, whereas Sudan’s records
show the original value of the transactions at issue without factoring in interest. Ahmad Decl. ¶ 4. However, the fact
remains that Governor Ahmad’s search could not locate the transactions OFAC listed as blocked, rendering the search
itself incomplete.

                                                          4
       Perhaps most importantly, while Governor Ahmad asserts that he was asked to “identify

any assets located in the United States owned by the Sudanese government,” Ahmad Decl. ¶ 2, his

discussion of his ultimate findings mentioned only funds that were “blocked by banks in the United

States,” id. ¶ 5. Yet BNP Paribas has admitted to working with the Sudanese government to route

monetary transfers through the United States in defiance of sanctions. See Statement of Facts,

United States v. BNP Paribas, S.A., No. 14-CR-00460 (LGS) (S.D.N.Y. July 10, 2014) (Exh. J,

Pls.’ Mot. [ECF No. 325-10]) ¶ 14. Given that fact, plaintiffs are justified in their concern that

Governor Ahmad’s enumeration only of blocked assets—an enumeration that also does not include

assets owned by Sudanese government agencies—may not provide a full accounting of Sudan’s

assets in the United States. Nor does the declaration, which was signed on March 28, 2017,

account for any Sudanese assets that may have entered the United States in the intervening months,

now freed by the temporary lifting of sanctions on Sudan in January 2017 and the further,

permanent extension of that order in October 2017. See Exec. Order 13,761, 82 Fed. Reg. 5331

(Jan. 13, 2017); Notice Regarding Positive Actions by the Government of Sudan, 82 Fed. Reg.

47,287 (Oct. 11, 2017).

       Sudan responds that it has no duty to collect information about its agencies and

instrumentalities; that the Ahmad declaration, issued two months after the U.S. lifted sanctions,

would have taken into account any effect that change would have had on Sudanese assets in the

U.S.; and that plaintiffs cannot base discovery requests on the U.S. government’s Specially

Designated Nationals List (“SDN”), as plaintiffs suggest, because the SDN’s definition of agencies

and instrumentalities is broader than that used in the FSIA. See Opp’n at 6–10. These arguments

are unavailing. None of these objections apply to the first two categories of information plaintiffs

seek, which involve only the identities of banks Sudan and its central bank used to evade sanctions.

                                                 5
See Reply at 3. 3 And while Governor Ahmad may have been able to speak to any transactions

entered into as of late March, more than eight months have gone by since, and any transactions in

which Sudan or its agencies or instrumentalities may have engaged in the intervening time are

quite relevant to determining Sudan’s potentially attachable assets. It is reasonable to assume that

Sudanese entities may be engaging in such transactions now, even if they were not in March—

particularly since the United States recently made permanent what was originally temporary

sanctions relief, thereby reducing the risk that any money transferred into the United States would

become blocked by OFAC at a later date. See 82 Fed. Reg. 47287.

         The Federal Rules also allow plaintiffs to request discovery from Sudan regarding recent

and planned transactions by Sudan’s agencies and instrumentalities. Certainly Sudan cannot

complain about requests for discovery from any political subdivisions or government agencies that

are not separate juridical entities, or with whom Sudan enjoys a principal-agent relationship, since

these are considered to be part of the government of Sudan itself. See, e.g., McKesson Corp. v.

Islamic Republic of Iran, 185 F.R.D. 70, 78 (D.D.C. 1999).                            As to any other Sudanese

instrumentalities, plaintiffs ask Sudan only for any information it might have in its own

“possession, custody, or control” regarding those entities’ recent transactions in the United States.

Fed. R. Civ. P. 34(a)(1); see Reply at 7. If Sudan owns or controls a particular entity, any

documents in that entity’s possession are likely also within Sudan’s control and therefore subject

to discovery. See, e.g., Shcherbakovskiy v. Da Capo Al Fine, Ltd., 490 F.3d 130, 138 (2d Cir.

2007) (“[I]f a party has access and the practical ability to possess documents not available to the

         3
           Conversely, Sudan’s argument that it should not have to provide data on twenty years’ worth of transactions
with BNPP, see Opp’n at 10–11, now applies only to these first two categories of information, since plaintiffs have
narrowed their requests for information regarding financial transactions down to the period since January 17, 2017,
see Reply at 3. The only information plaintiffs now seek that stretches back to November 1997 is the identity of
certain banks that engaged in the evasion of sanctions. See id. This is a relatively un-intrusive request, and is designed
to uncover the location and amount of current attachable assets.

                                                            6
party seeking them, production may be required.”); DL v. District of Columbia, 251 F.R.D. 38, 46

(D.D.C. 2008) (“‘With regards to the term “control,” it has been well established that the test for

control is not defined as mere possession, but as the legal right to obtain such documents on

demand.’ . . . Defendant District of Columbia has such control with respect to documents in the

possession of its agencies . . . .” (citation omitted)); McKesson Corp., 185 F.R.D. at 78. If there

are responsive documents that are not within Sudan’s control—either because Sudan does not

exercise control over a particular entity, or because it has no “legal right to obtain [those]

documents on demand,” DL, 251 F.R.D. at 46—it can provide an explanation in lieu of the

documents.

        This is also why Sudan’s objection regarding plaintiffs’ use of the SDN as a guidepost is

out of place. It is reasonable for plaintiffs to rely on the SDN list as a preliminary assessment of

which entities may have Sudanese assets subject to attachment. Federal regulation imposed

sanctions on (1) the government of Sudan, including its subdivisions, agencies or instrumentalities;

(2) entities owned or controlled by the government of Sudan as so defined; and (3) people acting

on behalf of the foregoing. 31 C.F.R. § 538.305. This list well defines the set of entities that may

hold Sudanese government assets and over whose documents Sudan would be in a position to

exercise control. The regulation also looked to the SDN to provide a non-exhaustive list of entities

meeting those definitions. Id. § 538.305 note 2. Thus, Sudan can likely exercise control over

responsive documents that these entities possess.       Again, however, plaintiffs ask only for

documents that are actually within Sudan’s control, Reply at 7; Sudan may provide a reasoned

explanation as to why it does not exercise control over a given entity or set of documents in

response to plaintiffs’ discovery request. That request, particularly with its newly narrowed time

period, is well within the range of reasonable discovery in cases such as this one. See, e.g.,

                                                 7
Aurelius Capital Master, Ltd. v. Republic of Argentina, 589 Fed. App’x 16, 18 (2d Cir. 2014)

(allowing discovery against several hundred Argentinian entities that were legally separate from

Argentina because they “may nevertheless hold attachable assets on behalf of Argentina” or “may

possess information about Argentina’s assets, even if [they do] not own or hold those assets

[themselves]”). 4

         This principal argument resolved, Sudan’s remaining three assertions are more easily

dispatched. Sudan’s second argument is that plaintiffs have not made a sufficient showing that

they are entitled to worldwide discovery of Sudan’s assets. See Opp’n at 11–16. This objection

was questionable even as to plaintiffs’ original, more expansive discovery request. Plaintiffs did

not ask for information on all of Sudan’s “worldwide assets generally,” as Sudan claims, and as

the plaintiff did successfully in NML Capital. 134 S. Ct. at 2258. Rather, plaintiffs requested

information on transactions that had some nexus to the United States, even if the assets involved

are no longer located here. See Pls.’ Mot. at 2.

         Sudan states that plaintiffs may only seek information that will lead to attachable property

currently in the United States. See Opp’n at 12–13. “That argument, however, has already been

rejected by the Supreme Court.” Aurelius, 589 F. App’x at 17. Whether the FSIA itself only

permits attachment of property in the United States to enforce judgments under the statute’s

         4
            Sudan also object to plaintiffs’ use of the SDN because plaintiffs may not be able to execute against the
property of all of the entities on the list, Opp’n at 9, and because any assets these entities had in the United States will
have been blocked by OFAC, id. at 9–10. The Court has already explained above why the latter argument does not
hold water. As for the ultimate ability to attach property, the 2008 amendments to the FSIA greatly increased the set
of government instrumentalities to whom judgment creditors may look for the judgment debtor’s attachable assets.
See 28 U.S.C. § 1610(g). As long as the judgment debtor “has at least some ownership interest in” the property at
issue directly or through an instrumentality, Weinstein v. Islamic Republic of Iran, 831 F.3d 470, 483 (D.C. Cir. 2016),
as determined under the appropriate federal rule of decision, see Heiser v. Islamic Republic of Iran, 735 F.3d 934,
940–41 (D.C. Cir. 2013), then § 1610(g) allows attachment from an agency or instrumentality regardless of whether
it is the sovereign’s alter ego, see Estate of Heiser v. Islamic Republic of Iran, 885 F. Supp. 2d 429, 442 (D.D.C.
2012), aff’d sub nom. Heiser, 735 F.3d 934. Regardless, plaintiffs can seek discovery wider than the scope of what is
ultimately attachable, since they “do[] not yet know what property [Sudan] has and where it is, let alone whether it is
executable under the relevant jurisdiction’s law.” NML Capital, 134 S. Ct. at 2257.

                                                             8
terrorism exception is a question currently before the Supreme Court. See Rubin v. Islamic

Republic of Iran, No. 16-534 (U.S. argued Dec. 4, 2017). The D.C. Circuit appears to have decided

the question in the negative. See Weinstein, 831 F.3d at 483 (“Once a section 1605A judgment is

obtained, section 1610(g) strips execution immunity from all property of a defendant sovereign.”).

Whatever the FSIA ultimately allows plaintiffs to attach, however, it is not “unusual for the

judgment creditor to seek disclosure related to assets held outside the jurisdiction of the court

where the discovery request is made.” EM Ltd. v. Republic of Argentina, 695 F.3d 201, 208 (2d

Cir. 2012), aff’d sub nom. NML Capital, 134 S. Ct. 2250. District courts may order discovery

related to assets abroad, even though plaintiffs may have to seek execution on those assets from a

foreign court. See id.; see also FG Hemisphere Assocs., LLC v. Democratic Republic of Congo,

637 F.3d 373, 378 (D.C. Cir. 2011) (“Congress kept in place a court’s normal discovery apparatus

in FSIA proceedings.”). 5

        Unlike in the hypothetical posed by the Supreme Court in NML Capital, 134 S. Ct. at 2257,

plaintiffs do not ask solely for information about a set of assets that the FSIA and international law

render immune from attachment. Rather, like the plaintiff in NML Capital, plaintiffs here “do[]

not yet know what property [Sudan] has and where it is, let alone whether it is executable under

the relevant jurisdiction’s law.” Id. Their narrowed request now seeks information only on recent

transactions, and does so in a manner designed to discover assets that are in the United States or

that otherwise might be attachable. If Sudan ultimately believes some of the discovered assets are

immune from attachment, it will have the opportunity to make that argument at the execution stage.

        5
          The Supreme Court declined to decide whether, but cast some doubt on the argument that, Rule 69 prohibits
discovery of assets upon which United States courts cannot execute. See NML Capital, 134 S. Ct. at 2254–55 & n.2.

                                                        9
       Sudan’s third and fourth arguments—that plaintiffs’ requests are duplicative, unduly

burdensome, and disproportionate to the needs of the case, see Opp’n at 17–20, and that plaintiffs’

motion should be denied for the sake of international comity, see id. at 20–22—retain little force

in light of the narrowed discovery requests in plaintiffs’ reply brief. All of the proportionality

factors the court must consider favor broad discovery here: (1) the issue in this case—payment of

a judgment for involvement in destructive acts of terrorism—is of great importance; (2) the amount

in controversy ($878 million) is unusually high; (3) although plaintiffs have obtained some

information through third-party subpoenas, Sudan still has far greater access to its own history of

financial transactions than plaintiffs do; (4) Sudan, as a sovereign state, has significantly greater

resources than plaintiffs do; (5) since the Ahmad declaration points to only $7 million in attachable

assets, discovery is vital to determining whether plaintiffs can collect on their judgment; and (6)

particularly given the narrower scope of plaintiffs’ revised request, the burden on Sudan to comply

is outweighed by the benefit to plaintiffs’ effort to obtain relief. See Fed. R. Civ. P. 26(b)(1).

Sudan’s assertions that discovery would be duplicative and overbroad, meanwhile, rely on

arguments the Court has already rejected: that plaintiffs already have all the information they could

hope to get, and that Sudan would have to collect documents over which it may not have control.

Hence, Rule 26(b) supports rather than impedes the discovery request at issue. See, e.g., Cont’l

Transfert Technique Ltd. v. Fed. Gov’t of Nigeria, 308 F.R.D. 27, 37–38 (D.D.C. 2015).

       Finally, while courts “may appropriately consider comity interests and the burden that the

discovery might cause to the foreign state,” NML Capital, 134 S. Ct. at 2258 n.6, comity is only

one among many considerations that play into a district court’s discovery decisions. All other

relevant considerations weigh in favor of discovery here, and the relatively limited discovery

plaintiffs now seek demonstrates due respect for Sudan’s sovereignty. It is also relevant that

                                                 10
Congress has determined that limiting sovereign immunity for state sponsors of terrorism is worth

the potential disruption to international relations, see 28 U.S.C. § 1605A; NML Capital, 134 S. Ct.

at 2258, and that the United States has not filed any document in this Court suggesting that this

case “involves sensitive diplomatic considerations,” FG Hemisphere, 637 F.3d at 380. Nor does

Sudan provide any specific cause for international concern if the Court were to grant plaintiffs’

limited discovery request. “The broad, generic argument that [Sudan] offers here seems . . . to be

appropriately presented to Congress—not [this Court].” Id.

                                         CONCLUSION

        For the foregoing reasons, [325] plaintiffs’ motion to compel discovery, as amended in

[328] plaintiffs’ reply brief and [328-3] their new proposed order, is granted. A separate order will

issue on this date.

                                                                          /s/
                                                                 JOHN D. BATES
                                                             United States District Judge
Dated: December 21, 2017

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