I have this guest post at Opinio Juris on Republic of Argentina v. NML Capital, the foreign sovereign immunity case argued to the U.S. Supreme Court on Monday.
There are many aspects to this case but a central one is a test of the Court’s commitment to a strongly textual approach to the Foreign Sovereign Immunities Act (FSIA). In a simplified description (the Opinio Juris post goes into more details), NML won a judgment against Argentina for Argentina's default on its bonds (Argentina waived its immunity). Argentina is refusing to pay and NML is trying to enforce the judgment. NML asked the district court to order discovery from two New York banks regarding the location of Argentina's assets; the court (acting under Rule 69 of the Federal Rules of Civil Procedure) agreed, and the court of appeals affirmed.
At the Supreme Court, Argentina (supported by the U.S. executive branch) claims that the FSIA prevents the discovery. But its text clearly doesn't. The FSIA (Section 1609) protects some foreign sovereign assets from “attachment arrest and execution.” It says nothing about discovery. And discovery in support of execution is obviously important, even as to arguably immune assets, to find out what assets may be available to satisfy the judgment.
In past cases, the Court has been admirably textual in its approach to the FSIA, even where strong policy arguments exist on the other side – especially in the 2010 case Samantar v. Yousuf, but also key older cases such as Dole Food Co. v. Patrickson and Republic of Argentina v. Weltover (the latter involving a prior Argentinian bond default). In the NML case, Argentina argues that the Court should go beyond the text because it’s too intrusive upon foreign sovereigns to order disclosure of, for example, diplomatic or military property. (In a similar case, Rubin v. Islamic Republic of Iran, the Seventh Circuit accepted this argument as the basis of limiting discovery of foreign sovereign assets). And as Lyle Denniston reports, this contention seemed to gain some traction with the Justices toward the end of oral argument (transcript here), even though here the only diclosures required are of financial assets.
This concern shouldn’t be enough to pull the Court away from its textualist approach to the FSIA. The FSIA doesn’t say anything about the burden of disclosing assets (once immunity from suit is overcome), except to say (in Section 1606) that a non-immune foreign sovereign "shall be liable in the same manner and to the same extent as a private individual under like circumstances.”
Thus, the governing law should be FRCP Rule 69, which in ordinary cases gives the trial court quite a bit of discretion to order (or not order) disclosure of assets after judgment. Here the lower court presumably considered Argentina’s sovereign status in making its order, and the court of appeals found that the trial court didn’t abuse its discretion. In future cases, truly overreaching discovery requests can be limited by trial courts under Rule 69. And if it turns out that trial courts are being too aggressive, Congress can amend the FSIA to fix the problem. There’s no need for the Court to make the FSIA say something it doesn’t. As a result, the case is an important further test of the Courts textualist trend in cases involving the FSIA and related matters.
(Disclosure: I previously wrote an analysis of the NML case for the Judicial Education Project, making these points in longer form, for which I was compensated. I also previously worked with the attorney who won the Rubin v. Iran case at the Seventh Circuit – establishing the opposite proposition – on some of that client’s matters, though not on the Rubin case itself.).
Posted at 2:31 PM