Court Opinion

ID: 8979990
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:17:05.555413+00
Date Added: 2024-06-11T17:10:38.813445
License: Public Domain

EASTERBROOK, Circuit Judge,
concurring.
Events have overtaken this case. Romania adopted a strict code of secrecy out of fear that sunlight would jeopardize the regime. Under Romanian law, anything that is not a “State secret” is a “Service secret” —in other words, everything is a secret. The regime fell nonetheless, and not because of loose lips. Revolution in Romania means that yesterday’s secrecy laws are of little moment. What the Securitate kept under covers, its successors broadcast.
We have not heard from Romania’s lawyer, perhaps because he has no idea who speaks for his client. I therefore join the court’s opinion, which observes that the plaintiff may return to the district court for a fresh decision under contemporary law. The court applies a balancing approach that the parties agree is apt. Given this agreement, we have no occasion to decide whether to follow the Restatement (3d) of Foreign Relations § 442 (1987), to the extent we may create a federal common law of privileges.
If we were free of the parties’ agreement, I would be most reluctant to accept an approach that calls on the district judge to throw a heap of factors on a table and then slice and dice to taste. Although it is easy to identify many relevant considerations, as the ALI’s Restatement does, a court’s job is to reach judgments on the basis of rules of law rather than to use a different recipe for each meal.
Two sources of law dominate here. The first is Fed.R.Evid. 501, which says that when state law supplies the rule of decision (as Illinois law does in this case), it also supplies the law with respect to privileges. Fed.R.Civ.P. 69, which governs this enforcement action, also directs the court to follow state law. Does (would?) Illinois follow the Restatement of Foreign Relations in deciding whether documents held abroad are privileged? The parties do not discuss the question.
The other rules come from the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602-11. Defendant in this case (“AAS”), an arm of the Romanian government, is open to suit under § 1605(a)(2) because the claim is based on its commercial activity within the United States. With a default judgment in hand, plaintiff seeks to discover AAS’s assets. AAS invokes Romania’s secrecy laws, which forbid it to disclose any information in its hands, even information about assets located outside Romania. Their effect is that no judgment against Romania may be collected. I doubt that general interest-balancing principles of the sort discussed in the Restatement may countermand the decision of Congress that courts of the United States may impose liability. The FSIA provides that a prevail*1284ing party may execute against the foreign government’s assets except to the extent the statute creates exceptions, see §§ 1609-11. This catalog of what is, and is not, available to satisfy a judgment eclipses any attempt by the foreign defendant to create its preferred list by using its domestic secrecy law. If we allow foreign states to exempt themselves after the fashion of (the old) Romania, we might as well forget about the FSIA.
Even the Restatement is no longer as favorable to foreign defendants as it once was. The catalog of relevant interests in § 442(l)(c) of the Third Restatement is not to be used generally to assess demands for information. It is designed to inform the discretionary decision whether to impose one of the sanctions mentioned in Fed.R. Civ.P. 37 and § 442(l)(b), such as contempt of court or a default judgment. As a rule, parties are entitled to seek information and, without regard to balancing national interests, the foreign party must make a good faith effort to secure its release, § 442(2)(a) and (b). If release is not forthcoming, then
a court or agency may, in appropriate cases, make findings of fact adverse to a party that has failed to comply with the order for production, even if that party has made a good faith effort to secure permission from the foreign authorities to make the information available and that effort has been unsuccessful.
§ 442(2)(c). In other words, the party seeking the information obtains its equivalent despite foreign secrecy rules. The balancing approach of § 442(l)(c) in conjunction with the adverse inference under § 442(2)(c) means that the party caught between inconsistent obligations to two nations with equal sovereign authority is not subject to extra penalty, such as imprisonment or fines exceeding the stakes of the ease. A party may lose no more than the case — and then only if the law favors the adverse party once the facts have been deemed admitted under § 442(2)(c). Such an approach is a careful accommodation of the legitimate interests of the parties and the nations alike, all without authorizing unconfined “balancing” of the “importance” of the nations’ policies.
If I thought we had to do such balancing, I would be at sea. If I knew how to balance ineommensurables, I would be hard pressed to agree with courts saying (as the district judge did) that a suit by the government is “more important” than private litigation. In a capitalist economy enforcement of contracts is a subject of the first magnitude. The gravity of the nation’s interest is no less when it decides to enforce vital rules through private initiative. A court would need to know the “importance” of the substantive rule, which is not well correlated with the enforcement mechanism. (The antitrust laws are “more important” than the littering laws, although the former are largely enforced by private suits and the latter by public prosecutions.)
Section 442(2)(c) breaks down in a case such as this one in which the judgment has been rendered and the prevailing party seeks to discover assets. This problem, which the Restatement does not discuss, is closer in principle to the rule of § 442(2)(c) than to that of § 442(1). Ascertaining assets under Rule 69 is not a “sanction” for misconduct. A prevailing party is entitled to relief; so much has been determined by the judgment. At this point resort to secrecy laws does nothing but nullify the rendering nation’s substantive law. Because the FSIA does not contemplate such a step, foreign secrecy laws are not sufficient to block disclosures under Rule 69.