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The Republic of Argentina v. NML Capital, Ltd. (No.

12-842): Why Both Sides Are Wrong


By Alexis Haller

TABLE OF CONTENTS TABLE OF AUTHORITIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii TABLE OF SHORT CITATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi I. II. III. IV. INTRODUCTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 RELEVANT FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 RELEVANT STATUTORY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ARGENTINA AND THE UNITED STATES ARE WRONG. . . . . . . . . . . . . . . . . . . . . . . 5 A. Under Section 1609s Plain Language, the FSIAs Presumption of Execution Immunity Does Not Extend to Foreign Assets. . . . . . . . . . . . . . . . . . . 6 Because the FSIAs Presumption of Execution Immunity Does Not Cover Foreign Assets, Argentinas Claim of FSIA Immunity from Discovery Fails. . . . . . 9 Because the FSIAs Presumption of Execution Immunity Does Not Cover Foreign Assets, Argentinas Waiver Argument Fails.. . . . . . . . . . . . . . . . . 10

B.

C.

V.

NML IS WRONG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 A. NMLs Textual Argument is Wrong with Regard to Foreign State Property in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 NML Fails to Undertake the Requisite Comity Analysis With Respect to Foreign State Property Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

B.

VI.

THE CORRECT ANALYSIS UNDER SOCIT NATIONALE INDUSTRIELLE AROSPATIALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 A. B. C. D. E. The Importance of the Documents Requested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Degree of Specificity of the Request. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Whether the Information Originated in the United States. . . . . . . . . . . . . . . . . . . . 16 Availability of Alternate Means. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Balance of Sovereign Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

VII.

CONCLUSION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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TABLE OF AUTHORITIES CASES Aero Union Corp. v. Aircraft Deconstructors Intl LLC, 1:11-CV-00484-JAW, 2012 WL 3679627 (D. Me. Aug. 24, 2012).. . . . . . . . . . . . . . . . . 13 Af-Cap, Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080 (9th Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Alpha Therapeutic Corp. v. Nippon Hoso Kyokai, 199 F.3d 1078 (9th Cir. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 n.20 Anderson v. Creighton, 483 U.S. 635 (1987).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Arriba Ltd. v. Petroleos Mexicanos, 962 F.2d 528 (5th Cir. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 n.20 Ashcroft v. Iqbal, 556 U.S. 662 (2009).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Autotech Technologies LP v. Integral Research & Dev. Corp., 499 F.3d 737 (7th Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 n.12,9 n.14 Butler v. Sukhoi Co., 579 F.3d 1307 (11th Cir. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-13 Conn. Bank of Commerce v. Republic of Congo, 309 F.3d 240 (5th Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,13 Crawford-El v. Britton, 523 U.S. 574 (1998).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Crist v. Republic of Turkey, 995 F. Supp. 5 (D.D.C. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 n.20 Demarest v. Manspeaker, 498 U.S. 184 (1991).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Doe v. Holy See, CV 02-430-MO, 2011 WL 1541275 (D. Or. Apr. 21, 2011). . . . . . . . . . . . . . . . . . . 13 n.20 Doe v. Roman Catholic Diocese of Galveston-Houston, 408 F. Supp. 2d 272 (S.D. Tex. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 n.25

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EM Ltd. v. Republic of Argentina, 473 F.3d 463 (2d Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 EM Ltd. v. Republic of Argentina, 695 F.3d 201 (2d Cir. 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,3,4,8,9 n.14,10,13 n.21 FBI v. Abramson, 456 U.S. 615 (1982).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Fed. Ins. Co. v. Richard I. Rubin & Co., 12 F.3d 1270 (3d Cir. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 FG Hemisphere Associates, LLC v. Democratic Republic of Congo, 637 F.3d 373 (D.C. Cir. 2011).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 n.14 Fid. Partners, Inc. v. Philippine Exp. & Foreign Loan Guarantee Corp., 921 F. Supp. 1113 (S.D.N.Y. 1996).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 n.14 First Natl City Bank v. Banco Para el Comercio Exterior de Cuba (Bancec), 462 U.S. 611 (1983).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Gibbons v. Udaras na Gaeltachta, 549 F. Supp. 1094 (S.D.N.Y. 1982).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 n.3 Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F.2d 445 (6th Cir. 1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Guar. Trust Co. of New York v. United States, 304 U.S. 126 (1938).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Hansen v. PT Bank Negara Indonesia (Persero), TBK, 601 F.3d 1059 (10th Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Harlow v. Fitzgerald, 457 U.S. 800 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1 (2000).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Hilton v. Guyot, 159 U.S. 113 (1895).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Howland v. Hertz Corp., 431 F. Supp. 2d 1238 (M.D. Fla. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 n.20

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Idas Res. N.V. v. Empresa Nacional de Diamantes de Angola E.P., No. 06-00570 (ESH), 2006 WL 3060017 (D.D.C. Oct. 26, 2006). . . . . . . . . . . . . . 13 n.20 Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841 (5th Cir. 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909 (D.C. Cir. 1984).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Mitchell v. Forsyth, 472 U.S. 511 (1985).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 NML Capital, Ltd. v. Republic of Argentina, 03 CIV. 8845 TPG, 2011 WL 3897828 (S.D.N.Y. Sept. 2, 2011). . . . . . . . . . . . . . . . . . . . 3 Permanent Mission of India to the United Nations v. City of New York, 551 U.S. 193 (2007).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Phoenix Consulting Inc. v. Republic of Angola, 216 F.3d 36 (D.C. Cir. 2000).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Raccoon Recovery, LLC v. Navoi Mining & Metallurgical Kombinat, 244 F. Supp. 2d 1130 (D. Colo. 2002).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 n.20 Readco, Inc. v. Marine Midland Bank, 81 F.3d 295 (2d Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 n.15 Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468 (9th Cir. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Rubin v. The Islamic Republic of Iran, 637 F.3d 783 (7th Cir. 2011). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 n.14,13,16 n.23,17 Rush-Presbyterian-St. Lukes Med. Ctr. v. Hellenic Republic, 877 F.2d 574 (7th Cir. 1989) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Sandifer v. U.S. Steel Corp., U.S. , 134 S. Ct. 870 (2014). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Sebelius v. Cloer, U.S. , 133 S. Ct. 1886 (2013). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 n.13 Siegert v. Gilley, 500 U.S. 226 (1991).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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Socit Internationale Pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197 (1958).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Socit Nationale Industrielle Arospatiale v. USDC, 482 U.S. 522 (1987).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,14-15,19 United States v. Brown, 333 U.S. 18 (1948).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Walters v. Peoples Republic of China, 672 F. Supp. 2d 573 (S.D.N.Y. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 n.14 STATUTES 28 U.S.C. 1603(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,7 n.8,7 n.10,8 28 U.S.C. 1604. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,12 28 U.S.C. 1605(a)(1).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,4-5,10 28 U.S.C. 1606. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,14 n.22 28 U.S.C. 1609. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 n.4,5,6-7,7 n.10,8,9,11,12 28 U.S.C. 1610(a)(1).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,8,11 OTHER AUTHORITIES Chamlongrasdr, FOREIGN STATE IMMUNITY AND ARBITRATION (2007). . . . . . . . . . . . . . . . . 17 n.24 Dellapenna, SUING FOREIGN GOVERNMENTS AND THEIR CORPORATIONS (2d ed. 2003). . . . . 8 n.12 Denza, DIPLOMATIC LAW (3d ed. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 n.24 Fox, THE LAW OF STATE IMMUNITY (2d ed. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 n.24 RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW 442(1)(c) (1987). . . . . . . . . . . . . . . . . . . 15 VIENNA CONVENTION ON DIPLOMATIC RELATIONS, Apr. 18, 1961, 23 U.S.T. 3227, 500 U.N.T.S. 96. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Watts, The Legal Position in International Law of Heads of State, Heads of Governments and Foreign Ministers, 247 RECUEIL DES COURS 9 (1994). . . . . . . . . . . . . . . 18 n.25 Yang, STATE IMMUNITY IN INTERNATIONAL LAW (2012). . . . . . . . . . . . . . . . . . . . . . . . . 11,17 n.24

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TABLE OF SHORT CITATIONS Abbreviation Arg. Br. Arg. App. Br. Arg. App. Reply Argentina BNA BOA FSIA JA NML NML App. Br. NML Br. U.S. Br. Full Name Brief for Petitioner on the Merits (No. 12-842), filed Feb. 24, 20141 Corrected Brief of Defendant-Appellant The Republic of Argentina (2d Cir. Case No. 11-4065-cv(L)), filed Nov. 18, 2011 Corrected Reply Brief of Defendant-Appellant The Republic of Argentina (2d Cir. Case No. 11-4065-cv(L)), filed Nov. 18, 2011 Republic of Argentina Banco de la Nacin Argentina Bank of America Foreign Sovereign Immunities Act, 28 U.S.C. 1602 et seq. Joint Appendix on Appeal (2d Cir. Case No. 11-4065-cv(L)), filed Nov. 15, 2011 NML Capital, Ltd. Response Brief of Plaintiff-Appellee NML Capital, Ltd. (2d Cir. Case No. 11-4065-cv(L)), filed Dec. 7, 2011 Brief for Respondent on the Merits (No. 12-842), filed Mar. 26, 2014 Brief for the United States as Amicus Curiae in Support of Petitioner (No. 12-842), filed Mar. 3, 2014

Copies of the Supreme Court briefs can be found at http://www.americanbar.org/ publications/preview_ home/12-842.html. The decision of the Second Circuit can be found at http:// www2.bloomberglaw.com/public/desktop/document/EM_Ltd_v_Republic_of_Argentina_695_F 3d_201_2d_Cir_2012_Court_Opin. The appellate briefs and the joint appendix can be downloaded through the Second Circuits online Pacer system.

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The Republic of Argentina v. NML Capital, Ltd. (No. 12-842): Why Both Sides Are Wrong
By Alexis Haller2 I. INTRODUCTION

NML, a Cayman Islands hedge fund, obtained numerous federal judgments against Argentina arising out of Argentinas default on payment of its public debt. Argentina refuses to satisfy any of the judgments. Because NML has had little success in finding Argentinian assets in the United States subject to execution under the Foreign Sovereign Immunities Act (FSIA), the district court granted NML broad discovery from non-party banks relating to Argentinas assets overseas. The discovery dispute between NML and Argentina is currently pending in the United States Supreme Court, with oral argument scheduled for April 21, 2014. The FSIA has been called a statutory labyrinth with many deliberately vague provisions.3 While that characterization may hold true regarding certain sections of the FSIA, the statute is a model of clarity and simplicity with respect to the threshold issue in this case: whether foreign assets are accorded a statutory presumption of immunity from execution. Section 1609 provides that only a foreign states property in the United States is presumptively immune from execution. Nowhere does the FSIA confer presumptive immunity on a foreign states assets held outside the United States. Notwithstanding section 1609s plain language, the central contention advanced in the Supreme Court by Argentina and the United States (as amicus) is that Argentinas assets overseas are entitled to presumptive statutory immunity and, as a result, are immune from discovery under the FSIA. Because Argentina and the United States argument cannot be squared with section 1609 itself, it is wrong as a matter of law.

Alexis Haller is a trial and appellate attorney with over thirteen years of litigation experience under the Foreign Sovereign Immunities Act (FSIA). Mr. Haller has won numerous dismissals in FSIA actions and has successfully litigated FSIA discovery issues in courts throughout the United States. He regularly provides commentary on FSIA jurisprudence on the website FSIA Law (www.fsialaw.com). This article solely reflects the views of the author based upon publicly-available information. The article is subject to the disclaimer found at www.fsialaw.com/disclaimer/.
3

Gibbons v. Udaras na Gaeltachta, 549 F. Supp. 1094, 1105 (S.D.N.Y. 1982).

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Since the FSIA does not accord presumptive sovereign immunity upon a foreign states assets overseas, the discovery dispute between Argentina and NML should not be analyzed under the FSIA. Instead, the Supreme Courts decision in Socit Nationale Industrielle Arospatiale v. USDC, 482 U.S. 522 (1987), controls. The district court and the Second Circuit should have reviewed NMLs discovery requests under the comity analysis set forth in Socit Nationale, which is broad enough to accommodate all of the interests and policy considerations raised by the parties and the United States. With regard to NMLs main argument in the Supreme Court, NML fails to recognize the protections afforded by immunity under United States law. NML contends that because the text of the FSIA does not mention discovery, the FSIA does not limit the discovery available to plaintiffs in post-judgment proceedings. With respect to domestic assets, NMLs contention is contrary to settled law. Under Supreme Court and circuit precedent, protection from discovery inheres in the very concept of immunity itself. Moreover, with regard to foreign assets, NML does not undertake the comity analysis required under the Supreme Courts decision in Socit Nationale. In the end, while the discovery dispute between NML and Argentina may be of critical importance to the parties, this case does not belong in the Supreme Court. There is no circuit split with regard to the threshold issue, namely whether foreign assets are protected from execution under the FSIA. Instead, the NML case simply involves the lower courts erroneous failure to apply the Socit Nationale comity analysis to NMLs discovery requests targeting Argentinas assets overseas. To avoid issuing an unnecessary decision in the sensitive area of foreign sovereign immunity law, the Supreme Court should consider remanding the matter with instructions to analyze the requested discovery under Socit Nationale. II. RELEVANT FACTS The following facts are relevant to the legal analysis below: In December 2001, Argentina defaulted on payment of its external debt. EM Ltd. v. Republic of Argentina, 695 F.3d 201, 203 (2d Cir. 2012) cert. granted, 134 S. Ct. 895 (2014). The underlying debt instruments contained Argentinas broad waiver of immunity from jurisdiction and execution, as follows: To the extent the Republic [of Argentina] or any of its revenues, assets or properties shall be entitled . . . to any immunity from suit, . . . from attachment prior to judgment, . . . from execution of a judgment or from any other legal or judicial process or remedy, . . . the Republic has irrevocably agreed not to claim and has irrevocably waived such immunity to the fullest extent permitted by the laws of such jurisdiction (and consents generally for the purposes of the Foreign Sovereign Immunities Act to the giving of any relief or the

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issue of any process in connection with any Related Proceeding or Related Judgment). . . . JA 1127. NML purchased Argentinian debt on the secondary market. Arg. Br. 10; see also NML Br. 36 n.3. NML filed eleven actions against Argentina in the United States District Court for the Southern District of New York to recover the face value of the defaulted debt. EM Ltd., 695 F.3d at 203; Arg. Br. 11. NML established jurisdiction over Argentina under the FSIAs waiver exception to sovereign immunity. EM Ltd., 695 F.3d at 203; U.S. Br. 5; see also 28 U.S.C. 1605(a)(1). NML obtained five valid and enforceable judgments against Argentina totaling $1.6 billion. The district court has also granted summary judgment to NML in the remaining six actions, in which NMLs claims total $900 million. EM Ltd., 695 F.3d at 203. Argentina has not satisfied any of the judgments. EM Ltd., 695 F.3d at 203. The parties have been litigating execution issues for over a decade. See, e.g., January 15, 2004 Hearing, JA 1801-02.4 Argentina has little or no assets in the United States that would be subject to execution under the FSIA. See, e.g., The Republic of Argentinas Responses and Objections to Plaintiffs First Set of Interrogatories, dated Dec. 19, 2003, JA 756 (the Republic states that it has no property located in the United States and used for a commercial activity in the United States); see also NML Capital, Ltd. v. Republic of Argentina, 03 CIV. 8845 TPG, 2011 WL 3897828, at *1 (S.D.N.Y. Sept. 2, 2011) affd sub nom. EM Ltd. v. Republic of Argentina, 695 F.3d 201 (2d Cir. 2012) (The efforts of plaintiffs to attach and execute upon assets in the United States have thus far met with very limited success.). The district court ordered that NML should be permitted to discover information from Bank of America (BOA) and Banco de la Nacin Argentina (BNA) two non-party banks regarding Argentinian property in the United

For the sake of convenience, this article will refer to execution instead of attachment in aid of execution or execution. Cf. 28 U.S.C. 1609.

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States and overseas in order to conduct a forensic exercise to uncover assets and gain an understanding of Argentinas global financial circulatory system. August 30, 2011 Hearing, JA 1870; EM Ltd., 695 F.3d at 203. The subpoenas covered, inter alia, information related to the property of Argentinas diplomatic corps, military, and sitting head of state. EM Ltd., 695 F.3d at 204; U.S. Br. at 10-11; see also BOA Subpoena, JA 663-80; BNA Subpoena, JA 900-909. Although served on BOA and BNA in New York, the subpoenas sought information that was located at least in significant part overseas. See Declaration of Miguel Angel Mandrile 8, JA 1594; see also August 30, 2011 Hearing, JA 1883 (attorney for BNA stating that [i]nformation about accounts and documents in New York, that has all been provided. So we are only talking here about extraterritorial information.). The only active issue on appeal related to the subpoenas requests for information regarding Argentinas assets outside the United States. See EM Ltd., 695 F.3d at 207 n.6; see also id. at 206 n.5.5

III.

RELEVANT STATUTORY PROVISIONS 28 U.S.C. 1603(c): The United States includes all territory and waters, continental or insular, subject to the jurisdiction of the United States. 28 U.S.C. 1604: [A] foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter. 28 U.S.C. 1605(a)(1): (a) A foreign state shall not be immune from the jurisdiction of courts of the United States . . . in any case-(1) in which the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver[.]

Assets in Argentina were specifically excluded. See August 30, 2011 Hearing, JA 1883-84.

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28 U.S.C. 1606: As to any claim for relief with respect to which a foreign state is not entitled to immunity under section 1605 or 1607 of this chapter, the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances[.] 28 U.S.C. 1609: [T]he property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611 of this chapter. 28 U.S.C. 1610(a)(1): (a) The property in the United States of a foreign state, . . . used for a commercial activity in the United States, shall not be immune from attachment in aid of execution, or from execution, upon a judgment entered by a court of the United States . . . , if-(1) the foreign state has waived its immunity from attachment in aid of execution or from execution either explicitly or by implication, notwithstanding any withdrawal of the waiver the foreign state may purport to effect except in accordance with the terms of the waiver[.] IV. ARGENTINA AND THE UNITED STATES ARE WRONG

Argentina and the United States contend that Argentinas foreign assets are presumptively immune from execution under the FSIA. Based upon this asserted presumptive immunity, Argentina and the United States argue that broad discovery related to Argentinas assets overseas violates the FSIA. In addition, Argentina and the United States claim that Argentinas waiver of execution immunity does not undermine its presumptive statutory immunity from discovery regarding foreign assets. Argentina and the United States are wrong. Under section 1609s plain language, the FSIA does not accord Argentinas foreign assets with presumptive immunity from execution. Since Argentinas property overseas is not presumptively immune under the FSIA, the FSIA does not provide such property with protection from discovery. Moreover, the FSIA does not control whether Argentina has waived its immunity with regard to assets overseas.

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Under Section 1609s Plain Language, the FSIAs Pre sumption of Execution Immunity Does Not Extend to Foreign Assets

Argentina and the United States contend that all property of a foreign state irrespective of its location is presumptively immune from execution under the FSIA. See, e.g., Arg. Br. 6 (A foreign states property is immune from attachment arrest and execution except as provided in sections 1610 and 1611. See 28 U.S.C. 1609.); id. (Foreign-state property here is . . . immune from post-judgment proceedings in aid of execution, as is foreign-state property outside the United States.); id. at 21 (Under the Act, even where a sovereign is subject to the jurisdiction of U.S. courts, its property remains presumptively immune from judgment enforcement unless it is both located in the United States and used for a commercial activity here.);6 see also U.S. Br. 12 ([T]he property of a foreign state is immune from attachment, arrest, or execution unless an exception to that distinct rule of execution immunity applies.); id. at 18 (Congress provided foreign states with an independent entitlement to immunity in connection with litigation to enforce a judgment, even if they are subject to the courts jurisdiction and attendant discovery for purposes of adjudicating the merits of the underlying suit.). Argentina and the United States contention cannot be squared with section 1609s plain language. In discerning the meaning of the FSIA, the Supreme Court begin[s], as always, with the text of the statute. Permanent Mission of India to the United Nations v. City of New York, 551 U.S. 193, 197 (2007).7 The role of the Supreme Court is to apply the statute as it is written even if we think some other approach might accord with good policy. Sandifer v. U.S. Steel Corp., U.S. , 134 S. Ct. 870, 878 (2014). [W]hen [a] statutes language is plain, the sole function of the courts at least where the disposition required by the text is not absurd is to enforce it according to its terms. Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6 (2000). Section 1609 plainly states that the property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611 of this

Argentina advanced similar arguments on appeal. See, e.g., Arg. App. Br. 30 (It is indisputable that sovereign property is immune from attachment and execution unless it is both in the United States and used for a commercial activity there. See 28 U.S.C. 1609, 1610(a).) (emphasis in original); Arg. App. Br. 31 (Because the [discovery order] is targeted at assets indisputably located outside the United States there is no factual question to address: the property at which the Order is directed is immune from the post-judgment jurisdiction of United States courts.) (emphasis in original). Emphasis is added, and internal citations and quotations are omitted, throughout this article, except as otherwise indicated.
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chapter. 28 U.S.C. 1609.8 Section 1609 is silent regarding the status of a foreign states foreign assets. Because section 1609 only provides that a foreign sovereigns assets in the United States are afforded a presumption of execution immunity, no statutory presumption of immunity attaches to a foreign states assets overseas.9 While Argentina did not address this issue in its opening Supreme Court brief, Argentina argued on appeal that an interpretation of section 1609 that excludes foreign assets would be absurd because it would grant United States courts broader power over sovereign assets outside the United States than they have over those in the United States. Arg. App. Reply 15. To the extent that Argentina attempted to invoke the rule that a statutes plain language should not be followed where it would yield absurd results, that principle of statutory construction applies only where the language would lead to patently absurd consequences United States v. Brown, 333 U.S. 18, 27 (1948), that Congress could not possibly have intended. FBI v. Abramson, 456 U.S. 615, 640 (1982) (OConnor, J., dissenting); see also, e.g., Demarest v. Manspeaker, 498 U.S. 184, 190 (1991) (When we find the terms of a statute unambiguous, judicial inquiry is complete except in rare and exceptional circumstances.). There is nothing patently absurd about Congresss refusal to confer presumptive statutory immunity over a foreign states assets all over the world.10 Section 1609 simply reflects Congresss decision to leave the status of foreign assets to foreign courts and foreign law, which courts (and Argentina) have recognized is appropriate. See, e.g., Arg. App. Reply 17-18 (agreeing that the immunity of foreign assets is a question of foreign law, to be decided by foreign

The FSIA defines United States to comprise only territory and waters, continental or insular, subject to the jurisdiction of the United States. 28 U.S.C. 1603(c). Both Argentina and the United States occasionally rely on section 1609 in their briefs without quoting the key in the United States language. See , e.g. , Arg. Br. 6 (A foreign states property is immune from attachment arrest and execution except as provided in sections 1610 and 1611. See 28 U.S.C. 1609.); Arg. Br. 1-2 (The statute provides that all property of a foreign state is presumptively immune from the authority of U.S. courts, unless it is both located in and used for a commercial activity in the United States. 28 U.S.C. 1609-1611.); see also Arg. Br. 25, 28; Arg. App. Br. 30 (It is indisputable that sovereign property is immune from attachment and execution unless it is both in the United States and used for a commercial activity there. See 28 U.S.C. 1609, 1610(a).) (emphasis in original); U.S. Br. 12 (the property of a foreign state is immune from attachment, arrest, or execution unless an exception to that distinct rule of execution immunity applies. See 28 U.S.C. 1609-1611.). In fact, the opposite is true: it would be absurd to conclude that the FSIA confers presumptive immunity sub silentio over assets that are neither within the territorial jurisdiction of the United States (cf. 28 U.S.C. 1603(c), 1609) nor necessarily even entitled to immunity under the laws of the foreign jurisdiction in which the assets are located.
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tribunals);11 see also, e.g., NML Br. 9 (By their terms, neither Section 1609 nor Section 1610 extends attachment immunity to property outside the United States. Instead, the immunity from attachment (if any) of such assets is a question of foreign law, to be decided by foreign tribunals.); JA 1528-32 (foreign court decision under foreign law relating to NMLs attempt to execute on Argentinas foreign assets). Nor does section 1609 confer courts with broader power over sovereign assets outside the United States than they have over those in the United States. Arg. App. Reply 15. In fact, all parties and the lower courts agree that section 1609 confers on U.S. courts no powers to execute upon assets held overseas. See, e.g., Arg. Br. 25 (Sections 1609 through 1611 of the FSIA address the enforcement of judgments against foreign states, and provide that the only property over which a U.S. court may exercise its authority is property used for a commercial activity in the United States.); Arg. App. Reply 18 (Execution over foreign assets by United States courts is clearly not permitted by the FSIA); April 30, 2008 Hearing, JA 1658 (district court stating I have no jurisdiction over property that is solely in a foreign country. I just dont, period.); EM Ltd., 695 F.3d at 208 (We recognize that a district court sitting in Manhattan does not have the power to attach Argentinian property in foreign countries.).12 Because it applies solely to property in the United States, section 1609 neither provides immunity to foreign property nor empowers U.S. courts to order execution against assets held abroad. 28 U.S.C. 1609; see also 28 U.S.C. 1603(c), 1610(a). The United States, for its part, claims that the statutes exclusive focus on property located within the United States simply confirms the fundamental proposition that it would be unthinkable for a U.S. court . . . to presume to order the attachment of or execution against property of a foreign sovereign abroad and that [b]roader discovery of extraterritorial foreign-state assets that are not subject to execution under the FSIA would be irreconcilable with the principles of comity and reciprocity embodied in the statute. U.S. Br. 25-26. The first proposition is true but irrelevant. A United States court does not have the power to order the execution of foreign property, but that does not mean that the FSIA itself confers a presumptive immunity over all foreign state property throughout the world. It only means that U.S. courts do not have territorial jurisdiction over property held overseas hardly a controversial conclusion. See supra at 7-8; see also 28 U.S.C. 1603(c). With regard to the United States second contention, the fact that foreign assets lack presumptive

This concession alone undermines Argentinas argument, since it cannot explain how foreign assets can at the same time be both covered by the FSIAs presumption of execution immunity and not subject to United States law. See also, e.g., Autotech Technologies LP v. Integral Research & Dev. Corp., 499 F.3d 737, 751 (7th Cir. 2007) (If assets exist in another country, the person seeking to reach them must try to obtain recognition and enforcement of the U.S. judgment in the courts of that country.); Dellapenna, SUING FOREIGN GOVERNMENTS AND THEIR CORPORATIONS 744 (2d ed. 2003) (nothing in the Immunities Act authorizes a court in the United States to order execution against property located outside the United States).
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immunity does not necessarily mean that a plaintiff can seek boundless discovery against such assets. In fact, the required comity analysis may result in discovery roughly analogous to that permitted against presumptively immune property in the United States. See infra at 18. Moreover, the correct analysis would require courts to consider the very principles of comity and reciprocity identified by the United States but such principles would be evaluated through application of the doctrine of international comity, and not under the FSIA. See infra at 17-18.13 The bottom line is that section 1609 expressly does not confer presumptive immunity over a foreign states assets overseas. 28 U.S.C. 1609. Neither Argentina nor the government identifies any other provision of the FSIA that does so, and the case law does not support such a major expansion of the execution immunity conferred by the statute.14 With regard to foreign assets, this discovery dispute cannot be resolved under the FSIA. B. Because the FSIAs Presumption of Exe cution Immunity Does Not Cover Foreign Assets, Argentinas Claim of FSIA Immunity from Discovery Fails

Argentinas claim of immunity from discovery relies upon the presumptive immunity supposedly conferred by section 1609. Because section 1609 nowhere confers presumptive immunity upon foreign assets, Argentina and United States discovery argument fails. Argentina and the United States both explicitly base their discovery argument upon the notion that Argentina enjoys presumptive immunity with regard to its foreign assets. See, e.g., Arg.

In addition, under established rules of statutory construction, the policy considerations identified by the United States do not justify disregard of the FSIAs plain language. See, e.g., Sebelius v. Cloer, U.S. , 133 S. Ct. 1886, 1895-96 (2013) (stating that rules of thumb in statutory construction give way when the words of a statute are unambiguous); see also Sandifer v. U.S. Steel Corp., 134 S. Ct. at 878 (stating that a courts conclusions regarding good policy does not trump a statutes plain language). A single district court case which nowhere cited or quoted section 1609 stated eighteen years ago that [u]nder the FSIA, assets of foreign states located outside the United States retain their traditional immunity from execution to satisfy judgments entered in United States courts. Fid. Partners, Inc. v. Philippine Exp. & Foreign Loan Guar. Corp., 921 F. Supp. 1113, 1119 (S.D.N.Y. 1996). While the Fid. Partners courts unsupported conclusion has twice been quoted in other cases (Autotech Technologies LP, 499 F.3d at 750; Walters v. Peoples Republic of China, 672 F. Supp. 2d 573, 574 (S.D.N.Y. 2009)), no circuit court has ever adopted that view. In fact, both the D.C. Circuit and the Second Circuit have expressly declined to reach the issue. See FG Hemisphere Associates, LLC v. Democratic Republic of Congo, 637 F.3d 373, 379 (D.C. Cir. 2011); EM Ltd., 695 F.3d at 208. The Seventh Circuits decision in Rubin v. The Islamic Republic of Iran, 637 F.3d 783 (7th Cir. 2011) the main case relied upon by Argentina and the United States did not involve foreign assets. The lack of a circuit split regarding the issue at the heart of this case raises the question of whether the Supreme Court granted certiorari improvidently.
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Br. 29-30 (stating that circuit courts have afforded discovery protections to sovereigns [i]n light of the presumption of immunity codified in the FSIA); U.S. Br. 9 (Broad, general discovery into presumptively immune foreign-state property would impose the very costs and burdens that the immunity is intended to shield against in the first place.); id. at 15 ([D]iscovery must be tailored in a manner that respects the general rule of immunity from execution set forth in Section 1609.); see also id. at 17. However, as discussed above, Argentina enjoys no presumptive immunity with regard to its foreign assets under section 1609. Moreover, Argentina long ago lost its presumptive immunity from suit under section 1604, since jurisdiction in the district court was based upon Argentinas waiver of immunity under 28 U.S.C. section 1605(a)(1). EM Ltd., 695 F.3d at 203; U.S. Br. 5. As a result, contrary to Argentina and the United States central argument, there is no statutory presumptive immunity that limits discovery regarding Argentinas foreign assets. Absent presumptive immunity conferred by the FSIAs provisions, the argument that Argentina is statutorily immune from discovery fails. C. Because the FSIAs Presumption of Exe cution Immunity Does Not Cover Foreign Assets, Argentinas Waiver Argument Fails

The lack of presumptive immunity over Argentinas foreign assets undermines Argentina and the United States waiver argument. Argentina and the United States argue that Argentinas waiver of execution immunity did not operate to remove section 1610(a)s two prerequisites for execution against foreign state property in the United States. See, e.g., U.S. Br. 30 n.14 (the FSIA makes clear that waiver does not alone suffice to lift immunity from execution; a waiver of such immunity is effective only with respect to property present in the United States and used for a commercial activity.); Arg. Br. 19 (A waiver of immunity accordingly opens the door to the limited universe of property defined in the preceding text of Section 1610(a); it does not expand that universe.).15 It is indeed true that a waiver of execution immunity does not remove section 1610(a)s requirement that property subject to execution by a United States court must be (a) in the United States and (b) used in a commercial activity. See 28 U.S.C. 1610(a); see also, e.g., Conn. Bank of Commerce v. Republic of Congo, 309 F.3d 240, 247 (5th Cir. 2002) (Even when a foreign state completely waives its immunity from execution, courts in the U.S. may execute only against property that meets these two statutory

Argentina and the United States also argue that NML waived the waiver argument by failing to raise it below. See Arg. Br. 19 n.15; U.S. Br. 30 n.14. That procedural issue, which is unrelated to the FSIA, is not addressed here. However, given that the facts relating to Argentinas waiver appear to be undisputed and that the effect of its waiver is a purely legal question, it is doubtful whether Argentina and the United States waiver of the waiver argument is meritorious. See, e.g., Readco, Inc. v. Marine Midland Bank, 81 F.3d 295, 302 (2d Cir. 1996) (stating that an issue raised for the first time on appeal may be considered if it is purely legal and there is no need for additional fact-finding).

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criteria.). While true, Argentina and the United States waiver argument is also a red herring vis--vis Argentinas foreign assets. Since Argentinas foreign assets are not covered by general immunity conferred by section 1609, such assets are also not governed by the exceptions to that immunity set forth in section 1610. See 28 U.S.C. 1609; see also 28 U.S.C. 1610(a) (discussing exceptions to immunity for property in the United States). Once again, as Argentina concedes (see supra at 7-8), the immunity of foreign assets is governed by foreign law. As a result, the effect of Argentinas broad waiver of immunity at least with regard to those foreign assets constitutes an issue of foreign law. See, e.g., JA 1530-31 (decision of French court discussing effect of Argentinas waiver upon property in France); Yang, STATE IMMUNITY IN INTERNATIONAL LAW 190 (2012). Contrary to the position taken by Argentina and the United States, nothing in the FSIA governs whether such a waiver is effective with regard to foreign assets.16 The effect of Argentinas waiver upon the execution of foreign assets is a matter that would properly be considered in the comity analysis discussed below. See infra at 18. It is not, however, an issue that can be resolved under the FSIA. In sum, the central thesis of Argentina and the United States argument that the FSIA confers presumptive immunity over foreign assets, and therefore controls whether discovery is appropriate and whether Argentinas waiver is effective fails ab initio. Under the plain language of section 1609, the FSIA does not confer presumptive immunity upon Argentinas foreign assets. At least with respect to foreign assets, this discovery dispute is controlled by Socit Nationale Industrielle Arospatiale and not by the FSIA. See infra at 14-19. V. NML IS WRONG

While NML is right about section 1609 and foreign assets,17 the central analysis of its brief which argues that foreign sovereigns are not entitled to any discovery protections under the FSIA in post-judgment proceedings fails under settled law.18

Even with respect to Argentinas assets in the United States, the question is not whether Argentina waived execution immunity for property that failed to meet section 1610(a)s two statutory prerequisites. Instead, the issue is whether Argentinas waiver of immunity from any . . . legal or judicial process or remedy and consent to the giving of any relief or the issue of any process effectuated a waiver of immunity from discovery and other burdens of litigation. See JA 1127. NML raises the section 1609 argument (see NML Br. 9, 46, 52; NML App. Br. 54), but it is not the focus of its Supreme Court brief. NML Br., passim. NMLs argument is also largely irrelevant, since post-judgment discovery relating to foreign assets is not even governed by the FSIA. See supra at 5-10. However, since the textual argument is central to NMLs brief and would, if accepted by the Supreme Court, largely eviscerate
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A.

NMLs Textual Argument is Wrong with Regard to Foreign State Property in the United States

NMLs basic argument is that the FSIA does not mention discovery, and that therefore nothing in the FSIA limits post-judgment discovery. See, e.g., NML Br. 1 (the statute says nothing about post-judgment discovery); id. at 2 (The statutory text alone . . . compels the conclusion that the FSIA does not limit post-judgment discovery.); id. (nowhere does the FSIA displace the ordinary rules for post-judgment discovery under the Federal Rules of Civil Procedure); id. at 18 ([T]he FSIA contains no language limiting post-judgment discovery.). According to NML, the FSIA provides no hint about the scope of, or limitations on, any immunity from post-judgment discovery. NML Br. 26 (emphasis in original). While NMLs argument focuses on post-judgment discovery, and although NML makes a cursory attempt to distinguish discovery at the jurisdictional stage (NML Br. 43-44), NMLs argument logically extends to jurisdictional discovery as well. After all, the FSIA nowhere mentions discovery with regard to jurisdiction either,19 and NMLs strict textual analysis if accepted by the Supreme Court could effectively preclude an assertion of immunity from discovery at the initial stages of FSIA litigation. Contrary to NMLs contention, the FSIA in fact contains much more than a mere hint that the statute limits discovery against foreign sovereigns. The FSIA provides that foreign sovereigns are presumptively immune from suit and that a foreign states property in the United States is presumptively immune from execution. 28 U.S.C. 1604, 1609. Under established precedent, the term immunity includes immunity from all of the burdens of litigation, including discovery. See, e.g., Ashcroft v. Iqbal, 556 U.S. 662, 685 (2009) (The basic thrust of the qualified-immunity doctrine is to free officials from the concerns of litigation, including avoidance of disruptive discovery.); Crawford-El v. Britton, 523 U.S. 574, 598 (1998) (discussing the need to resolve immunity without unnecessary and burdensome discovery or trial proceedings); Anderson v. Creighton, 483 U.S. 635, 646 n.6 (1987) (stating that immunity seeks to protect public officials from broad-ranging discovery); Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982) (Until th[e] threshold immunity question is resolved, discovery should not be allowed); see also, e.g., Siegert v. Gilley, 500 U.S. 226, 231 (1991); Mitchell v. Forsyth, 472 U.S. 511, 526 (1985); compare Guar. Trust Co. of New York v. United States, 304 U.S. 126, 134 and n.2 (1938) (stating that a foreign sovereign who sues as a plaintiff abandons its immunity from suit and must give discovery). As circuit courts have held for over a quarter century, the same holds true under the FSIA as well. See, e.g., Hansen v. PT Bank Negara Indonesia (Persero), TBK, 601 F.3d 1059, 1063 (10th Cir. 2010) (The immunity provided under the FSIA protects foreign sovereigns from all the burdens of litigation, including the general burden of responding to discovery requests.); Butler v. Sukhoi Co., 579 F.3d 1307, 1314 (11th Cir. 2009) (discussing a foreign sovereigns legitimate claim to

sovereigns immunity protections it is worth addressing here. The statute mentions discovery in the context of terrorism cases, but that is inapplicable here. Cf. 28 U.S.C. 1605(g).
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immunity from discovery); Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 849 (5th Cir. 2000) (FSIA immunity is immunity not only from liability, but also from the costs, in time and expense, and other disruptions attendant to litigation.); Phoenix Consulting Inc. v. Republic of Angola, 216 F.3d 36, 39 (D.C. Cir. 2000) (stating that foreign sovereign immunity is an immunity from trial and the attendant burdens of litigation, and not just a defense to liability on the merits); Fed. Ins. Co. v. Richard I. Rubin & Co., 12 F.3d 1270, 1284 n.11 (3d Cir. 1993) (discovery and fact-finding should be limited to the essentials necessary to determining the preliminary question of jurisdiction); Rush-Presbyterian-St. Lukes Med. Ctr. v. Hellenic Republic, 877 F.2d 574, 576 n.2 (7th Cir. 1989) (sovereign immunity is an immunity from trial and the attendant burdens of litigation); Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F.2d 445, 451 (6th Cir. 1988), abrogated on other grounds by Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (1992) (extensive discovery and other extended proceedings at this stage may frustrate the significance and benefit of entitlement to immunity from suit).20 In other words, the FSIA did not need to use the term discovery because immunity from discovery inheres in the very concept of immunity itself. By reading the protection against discovery out of the statute, NML seeks to redefine immunity in a manner directly contrary to established Supreme Court and circuit precedent. NML cannot escape this conclusion by claiming a different rule in the post-judgment context. As noted above, with regard to domestic assets, section 1609 provides presumptive immunity from execution. There may be certain differences between section 1604 immunity and section 1609 immunity, but presumptively immune property in the United States should be protected from discovery given the basic principle underlying all immunity doctrines. See supra at 12-13. That is, in fact, what most courts have concluded. See, e.g., Rubin, 637 F.3d at 799; Af-Cap, Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080, 1095-96 (9th Cir. 2007); Conn. Bank of Commerce, 309 F.3d at 261 n.10; Aero Union Corp. v. Aircraft Deconstructors Intl LLC, 1:11-CV-00484-JAW, 2012 WL 3679627, at *8 (D. Me. Aug. 24, 2012).21 Nothing in NMLs textual analysis an analysis that ignores the meaning of the term immunity undercuts the principle that the FSIA limits

See also, e.g., Alpha Therapeutic Corp. v. Nippon Hoso Kyokai, 199 F.3d 1078, 1088 (9th Cir. 1999), withdrawn on other grounds in 237 F.3d 1007 (9th Cir. 2001); Arriba Ltd. v. Petroleos Mexicanos, 962 F.2d 528, 534-37 (5th Cir. 1992); Doe v. Holy See, CV 02-430-MO, 2011 WL 1541275, at *2 (D. Or. Apr. 21, 2011); Idas Res. N.V. v. Empresa Nacional de Diamantes de Angola E.P., No. 06-00570 (ESH), 2006 WL 3060017, at *11 (D.D.C. Oct. 26, 2006); Howland v. Hertz Corp., 431 F. Supp. 2d 1238, 1244-45 (M.D. Fla. 2006); Raccoon Recovery, LLC v. Navoi Mining & Metallurgical Kombinat, 244 F. Supp. 2d 1130, 1141 (D. Colo. 2002); Crist v. Republic of Turkey, 995 F. Supp. 5, 12 (D.D.C. 1998). In this regard, the Second Circuits conclusion that the FSIA does not limit post-judgment discovery at least when applied to a foreign states assets in the United States was in error. See EM Ltd., 695 F.3d at 208-10. Moreover, for the reasons identified by the United States, the Second Circuits holding that a foreign states immunity is unaffected by third party discovery also lacks merit. Id. at 210; see also U.S. Br. 11, 29-30, 32-33.
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discovery related to a foreign states property in the United States.22 B. NML Fails to Undertake the Requisite Comity Analysis With Respect to Foreign State Property Overseas

NMLs argument fails in another respect. While NML concedes that comity considerations apply with regard to post-judgment discovery involving foreign sovereigns, NML Br. 24-25, NML never undertakes such an analysis to defend the district courts discovery order. As set forth below, the discovery order entered by the district court gives rise to serious comity concerns on a number of fronts. See infra at 17-18. By failing to address the comity implications of the district courts order, NML does not explain how the district courts order is justifiable under applicable Supreme Court precedent. VI. THE CORRECT ANALYSIS UNDER SOCIT NATIONALE INDUSTRIELLE AROSPATIALE

The absence of presumptive immunity under section 1609 does not leave Argentina unprotected from discovery in United States courts with respect to its foreign assets. As NML concedes (NML Br. 24-25), and as required under Supreme Court precedent, United States courts must examine any discovery request targeting a foreign sovereign under principles of international comity. Comity refers to the spirit of cooperation in which a domestic tribunal approaches the resolution of cases touching the laws and interests of other sovereign states. Socit Nationale Industrielle Arospatiale, 482 U.S. at 544 n.27; see also Hilton v. Guyot, 159 U.S. 113, 164 (1895). Comity serves our international system like the mortar which cements together a brick house. No one would willingly permit the mortar to crumble or be chipped away for fear of compromising the entire structure. Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909, 937 (D.C. Cir. 1984). The Supreme Court has held that comity concerns must inform a courts treatment of any foreign discovery request: American courts, in supervising pretrial proceedings, should exercise special vigilance to protect foreign litigants from the danger that unnecessary, or unduly burdensome, discovery may place them in a disadvantageous position. Judicial

NML indicates that discovery in the post-judgment context is not limited because section 1606 provides that, if a foreign sovereign is not immune under section 1604, the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances. 28 U.S.C. 1606; see also NML Br. 43-44. However, section 1606 addresses a foreign states liability which is not contested here and nowhere addresses post-judgment proceedings under the FSIA.

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supervision of discovery should always seek to minimize its costs and inconvenience and to prevent improper uses of discovery requests. When it is necessary to seek evidence abroad, . . . the district court must supervise pretrial proceedings particularly closely to prevent discovery abuses. . . . Objections to abusive discovery that foreign litigants advance should therefore receive the most careful consideration. In addition, we have long recognized the demands of comity in suits involving foreign states, either as parties or as sovereigns with a coordinate interest in the litigation. American courts should therefore take care to demonstrate due respect for any special problem confronted by the foreign litigant on account of its nationality or the location of its operations, and for any sovereign interest expressed by a foreign state. Socit Nationale, 482 U.S. at 546. The Socit Nationale Court identified the test in the R ESTATEMENT (THIRD) OF FOREIGN R ELATIONS LAW (1987) (RESTATEMENT) as setting forth factors relevant to any comity analysis[:] (1) the importance to the . . . litigation of the documents or other information requested; (2) the degree of specificity of the request; (3) whether the information originated in the United States; (4) the availability of alternative means of securing the information; and (5) the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located. Socit Nationale, 482 U.S. at 544 n. 28; see also RESTATEMENT 442(1)(c); Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1474-75 (9th Cir. 1992). Given the complexity of the multi-factor test and the fact-intensive nature of the inquiry, this article will not attempt to resolve the comity analysis with respect to the BOA and BNA subpoenas. However, with regard to the discovery dispute in the NML case, the comity test is broad enough to accommodate the interests of all parties including the interests of the foreign sovereign itself. Socit Nationale, 482 U.S. at 546. To show how the comity analysis set forth in Socit Nationale represents a satisfactory method to resolve the discovery dispute at issue, the article will identify arguments that both sides could raise under each factor. A. The Importance of the Documents Requested

With regard to the first factor, NML could argue as it did below that the documents requested are essential to its efforts to collect on valid judgments. Years of litigation have yielded

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little or no tangible results, and the BOA/BNA subpoenas represent NMLs best chance to locate Argentinian assets overseas that could be subject to execution under foreign law. Argentina would likely counter that the breadth of the documents requested and NMLs contention that it seeks to a forensic analysis of Argentinas entire financial circulatory system demonstrate that the subpoenas are nothing more than a fishing expedition. See August 30, 2011 Hearing, JA 1879. B. Degree of Specificity of the Request

Both sides would also have plausible arguments regarding the specificity of the subpoenas. NML can point to the fact that the subpoenas list the specific entities whose account information is sought, as well as the type of account information requested (such as account balance, transaction history, and Customer Relationship Management (CRM) information). Argentina, on the other hand, could argue that the large number of target entities and the breadth of certain requests such as a request for information relating to assets or property of any kind directly or indirectly owned by Argentina and all related entities reveal the lack of specificity in NMLs requests.23 C. Whether the Information Originated in the United States

The subpoenas initially requested a significant amount of information in the United States, but it is unclear to what extent such information remains outstanding. See, e.g., August 30, 2011 Hearing, JA 1883. If NML can show that a substantial portion of the requested information originated or is held in the United States, this factor could help NML argue in favor of the discovery. However, given the focus on foreign assets, it appears that this factor may weigh against the discovery requested. D. Availability of Alternate Means

In light of the decade-long effort to execute upon Argentinas property, NML would likely be in a position to argue that it has tried alternate means of gathering the information it needs to locate Argentinian assets. In fact, NML already made that contention in the district court, when it stated that NML had sought to attach assets in the United States for seven years through attempts to get discovery from Argentina and that such efforts have gone almost nowhere. December 17, 2010 Hearing, JA 1021. NMLs position would appear to be strengthened by the prior conclusions of the district court. The lower court recognized over a decade ago that in the absence of centralized discovery in the forum that issued the judgments, NML would be placed in the position of having to scout around blindfolded in foreign countries, and thats just an impossible situation. January 15, 2004 Hearing, JA 1801-02. The district court also found that the discovery was justified as a result of Argentinas own conduct, which again would weigh in NMLs favor. See, e.g., August 30, 2011 Hearing, JA 1880 (district court asking Argentina counsel What do you expect these people

The specificity factor in the comity analysis would provide Argentina with the opportunity to raise similar specificity arguments that are available under the FSIA with regard to domestic property. Cf. Rubin, 637 F.3d at 785.

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to do? They have to engage in these maneuvers because of your clients behavior.); December 17, 2010 Hearing, JA-1042 ([W]hen you stand up and say what difficulties, the difficulties are really caused by the Republic of Argentina, and thats it. Really, they are not caused by these plaintiffs. They are not caused by the Bank of America. They are caused by the Republic.); see also February 2, 2005 Conference, JA 766. Argentina could, however, contend that NML has alternative means to discover the information abroad, either through legal proceedings instituted in other countries or through its own investigation. Cf. Rubin, 637 F.3d at 798 (stating that judgment creditors can use private means to identify potentially attachable assets of foreign states located in the United States). E. Balance of Sovereign Interests

The balance of sovereign interests will be the critical factor in determining whether the discovery sought is appropriate. NMLs argument would likely focus on the United States strong interest in having valid judgments entered by its courts respected and satisfied by a defendant, and in not permitting a defendant to use a variety of affirmative means to avoid payment. In support of its contention, NML could rely on the district courts repeated findings over years of litigation with regard to Argentinas conduct. See, e.g., August 30, 2011 Hearing, JA 1897 (We have a party that is trying in every way possible to avoid paying its debts. . . . It is an abnormal situation, not a normal situation.); December 17, 2010 Hearing, JA 1051 (district court assuming that Argentina has taken steps to avoid paying these judgments, that they avoid having deposits of money in New York banks, and that they engage in transactions with a very strong purpose, to not have money flowing into the United States which could possibly get applied to the judgments); May 28, 2009 Conference, JA 986 ([Argentina is] doing everything [it] can to resist paying legitimate judgment debts.); February 2, 2005 Conference, JA 765 ([T]he Republic was trying to avoid paying these judgements, period. . . . And they have certainly done their best.). Given that Argentina has failed to satisfy valid and enforceable judgments in the United States, and that it may have taken affirmative steps to avoid execution, NML will have a strong argument that the sovereign interests of the United States weigh in favor of the discovery. However, there are also compelling sovereign interests against the discovery requested. For example, the discovery seeks information related to diplomatic and military assets. In light of fundamental principles of international law as demonstrated by, for example, the VIENNA CONVENTION ON DIPLOMATIC RELATIONS, Apr. 18, 1961, 23 U.S.T. 3227, 500 U.N.T.S. 96 such assets could be beyond the scope of legitimate discovery.24 Similarly, the requests seek account and other financial information regarding Argentinas sitting head of state an individual who is

Arg. Br. 43; see also, e.g., Yang, STATE IMMUNITY IN INTERNATIONAL LAW 407-10, 417; Fox, THE LAW OF STATE IMMUNITY 639-45 (2d ed. 2008); Denza, DIPLOMATIC LAW 156-59, 197-99 (3d ed. 2008); Chamlongrasdr, FOREIGN STATE IMMUNITY AND ARBITRATION 270-98 (2007).

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protected by the doctrine of head-of-state immunity under international law and who should be immune from any discovery.25 The requests seek information regarding a wide range of separate juridical entities; in the absence of a showing that such entities are agents or alter egos of Argentina under First Natl City Bank v. Banco Para el Comercio Exterior de Cuba (Bancec), 462 U.S. 611 (1983), Argentina can contend that the entities should be protected from discovery. See Bancec, 462 U.S. at 626-27; see also, e.g., EM Ltd. v. Republic of Argentina, 473 F.3d 463, 479 (2d Cir. 2007). Moreover, as set forth above, the question of whether foreign assets are immune is a question of foreign law. To the extent that targeted assets are immune under foreign law and that such immunity has not been waived, or if the requested information is otherwise confidential under foreign law, that should be taken into consideration in evaluating the propriety of the discovery requests. Cf. Socit Internationale Pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 20406 (1958). Argentina will also be able to argue that countervailing interests of the United States itself weigh against disclosure. The United States has filed a brief supporting Argentina that identifies significant comity, reciprocity and foreign relations concerns that are negatively impacted by the district courts discovery order. See, e.g. , U.S. Br. 18-19, 24. While such considerations do not weigh in favor of applying the FSIA in a manner directly contrary to its plain language (see supra at 9), they should be accorded substantial weight in determining whether discovery is appropriate under Socit Nationale.26 In short, the policy arguments raised by Argentina, the United States and NML in their Supreme Court briefs can simply be addressed in a comity analysis. Socit Nationale is flexible enough to accommodate consideration of the interests of both parties and the United States. It is, of course, unclear how a court would resolve the careful balancing required by Socit Nationale in this case. A proper comity analysis may yield a result similar to that already adopted by the district court and the Second Circuit, or it may result in far narrower discovery. What is troubling, however, is that neither court below ever appears to have undertaken the comity analysis required under Socit Nationale.27 Broad discovery requests targeting a foreign sovereigns

Ar. Br. 43; see also, e.g., Doe v. Roman Catholic Diocese of Galveston-Houston, 408 F. Supp. 2d 272, 277-79 (S.D. Tex. 2005) (discussing head-of-state immunity principles); Watts, The Legal Position in International Law of Heads of State, Heads of Governments and Foreign Ministers, 247 RECUEIL DES COURS 9 (1994). Argentina could also argue that other foreign states i.e., the foreign countries in which the assets are located have strong interests in controlling discovery relating to property within their jurisdiction. It is hard to blame the lower courts for their failure to engage in the requisite comity analysis, since neither party appears to have cited Socit Nationale below. See Arg. App. Br., passim; NML App. Br., passim; Arg. App. Reply, passim; see also Memorandum of Law in Support
27 26

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sensitive financial information should be justifiable under the factors set forth in Socit Nationale, and it is the courts duty to undertake the relevant analysis. Socit Nationale, 482 U.S. at 546. In light of the lower courts failure to do so, and given that this discovery dispute is not controlled by the FSIA, the Supreme Court should consider remanding with instructions to evaluate the discovery requested under its holding in Socit Nationale. VII. CONCLUSION

With regard to foreign assets, this is a relatively straightforward discovery dispute governed by Socit Nationale. The main risk for the Supreme Court is that the parties briefs will entice it to rule in a manner that impacts the sensitive area of foreign sovereign immunity law. This case does not merit such a ruling. The argument of Argentina and the United States is contrary to the FSIAs plain language, and the argument proffered by NML is largely irrelevant with respect to foreign assets. The lower courts erred in failing to apply the requisite comity analysis, but there is no circuit split either with respect to the status of foreign assets under the FSIA or with regard to the application of Socit Nationale to discovery relating to foreign assets. The Supreme Court should avoid being lured by the parties into a far-reaching FSIA decision, and should instead remand with instructions to undertake the analysis required by its existing precedent. That is all that this discovery dispute warrants.

of Defendant The Republic of Argentinas Motion to Quash Subpoena, Dist. Ct. No. 03 Civ. 8845 (TPG), Docket No. 308, passim; Plaintiff NML Capital, Ltd.s Memorandum of Law in Opposition to Defendant The Republic of Argentinas Motion to Quash, Dist. Ct. No. 03 Civ. 8845 (TPG), Docket No. 315, passim; Reply Memorandum of Law in Support of Defendant The Republic of Argentinas Motion to Quash Subpoena, Dist. Ct. No. 03 Civ. 8845 (TPG), Docket No. 320, passim; Supplemental Memorandum of Law of the Republic of Argentina in Support of Motions to Quash and in Opposition to Motions to Compel Subpoenas, Dist. Ct. No. 03 Civ. 8845 (TPG), Docket No. 400, passim; Plaintiffs Consolidated Reply Memorandum Regarding Motions to Quash and to Compel, Dist. Ct. No. 03 Civ. 8845 (TPG), Docket No. 412, passim.

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