493 F. App'x 156
2d Cir.2012Background
- Eight putative class actions were filed by holders of eight series of defaulted Argentine bonds and certificated by the district court on August 5, 2005.
- January 9, 2009 the district court entered judgments granting aggregate class-wide damages for all eight plaintiff classes.
- Argentina appealed, challenging class certification and the aggregate damages as potentially inflated, referencing Seijas v. Republic of Argentina (Seijas I).
- On remand, plaintiffs revised damages to deduct bonds tendered in debt exchanges, bonds held by opt-outs, and bonds pursued in other proceedings, but did not fully resolve post-2004 secondary-market purchases.
- At a May 9, 2011 hearing the district court deemed three bond series accelerated; on July 22, 2011 it entered final revised aggregate judgments by stipulation.
- The Second Circuit affirmed in part, vacated in part, and remanded for further proceedings to address remaining issues about secondary-market bondVolume and potential individualized damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are aggregate class-wide damages properly calibrated? | Plaintiffs contend aggregate damages reflect class losses per Adler’s analysis and existing data. | Argentina contends aggregation inflates damages by not accounting for post-2004 secondary-market holders. | Remand required to accurately reflect non-continuous holders; cure via evidentiary hearing. |
| Was acceleration of bond series proper under the FAA? | Class counsel validly accelerated as authorized by the FAA for defaulted bonds. | Acceleration notices by class counsel were improper and cannot bind absent members. | Acceleration notices deemed sufficient; acceleration affirmed. |
Key Cases Cited
- Seijas v. Republic of Argentina, 606 F.3d 53 (2d Cir. 2010) (vacated aggregate judgments; remand for proper damages method)
- McLaughlin v. American Tobacco Co., 522 F.3d 215 (2d Cir. 2008) (inflated aggregate damages violate Rules Enabling Act)
- Van Gemert v. Boeing Co., 553 F.2d 812 (2d Cir. 1977) (class action damages and representative capacity principles)
- In re Pharm. Indus. Average Wholesale Price Litig., 582 F.3d 156 (1st Cir. 2009) (aggregate damages principles in multi-party litigation)
- Arch Ins. Co. v. Precision Stone, Inc., 584 F.3d 33 (2d Cir. 2009) (measure of damages is a question of law, reviewed de novo)
- Bessemer Trust Co., N.A. v. Branin, 618 F.3d 76 (2d Cir. 2010) (de novo review of district court damage calculations)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008) (role of aggregation and procedures in damages (abrogation note))