NML Capital, Ltd. v. Republic of Argentina
695 F.3d 201
| 2d Cir. | 2012Background
- Argentina defaulted on external debt in December 2001, leading to multiple money judgments totaling about $1.6 billion in NML Capital, Ltd. v. Argentina, with further judgments exceeding $900 million in related actions.
- NML sought discovery to locate Argentina’s assets abroad by serving subpoenas on non-party banks Bank of America and Banco de la Nación Argentina.
- Subpoenas requested broad account and transfer information, including SWIFT messages, defining Argentina to include its agencies, instrumentalities, and state entities.
- After negotiations, the district court granted discovery, limiting requests to information reasonably tied to attachable assets and entered a protective order.
- Argentina appealed the district court’s discovery order, arguing it violated sovereign immunity under the FSIA, while banks supported compliance with modified subpoenas.
- The court held that the discovery order, directed at third-party banks and not at Argentina’s sovereign assets or property, did not infringe sovereign immunity, and affirmed the order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does discovery from banks infringe sovereign immunity? | NML. | Argentina | No; discovery of third-party assets does not infringe sovereign immunity. |
| Whether post-judgment asset discovery is allowed to aid collection of judgments against a foreign sovereign | NML argues broad discovery to locate assets abroad. | Argentina contends FSIA immunizes immune assets. | District court may order discovery to aid collection; not barred by FSIA when directed at third parties. |
| Whether the district court had jurisdiction to order asset discovery after judgment | Jurisdiction exists to enforce judgments via post-judgment proceedings. | Immunity could bar such discovery. | Jurisdiction exists; Rafidain II supports discovery to aid collection against a sovereign. |
| Did the order impermissibly attach sovereign assets or burden Argentina’s immunity | Discovery is non-binding and not an attachment; no burden on immunity. | Discovery could disclose immune assets. | Not an attachment; remains subject to privilege protections and future immunity analyses if assets are pursued. |
Key Cases Cited
- Rafidain Bank v. Rafidain II, 281 F.3d 54 (2d Cir. 2002) (founding post-judgment asset discovery can reach debtor assets abroad)
- Rafidain Bank v. Rafidain I, 150 F.3d 172 (2d Cir. 1998) (balancing discovery against sovereign immunity when jurisdiction uncertain)
- EM Ltd. v. Republic of Argentina, 473 F.3d 463 (2d Cir. 2007) (attachment focus; discovery context discussed in FSIA framework)
- First City, Texas-Houston, N.A. v. Rafidain Bank, 150 F.3d 172 (2d Cir. 1998) (post-judgment discovery and sovereign immunity balance)
- Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949) (collateral order interpretation and finality standards for appeals)