Puricelli v. Republic of Argentina
797 F.3d 213
| 2d Cir. | 2015Background
- Argentina defaulted on large sovereign debt in 2001; multiple bondholder suits were filed, including eight class actions addressing different bond series.
- Plaintiffs initially sought classes defined as all holders of each bond series; the district court certified narrower "continuous-holder" classes (holders from filing through judgment) over Argentina's objections.
- The district court granted summary judgment for plaintiffs and entered aggregate classwide damage awards but did not explain calculations and acknowledged likely inflation.
- This Court in Seijas I vacated the aggregate awards as insufficiently tied to actual class losses and remanded to develop methods that "roughly reflect" losses.
- On remand the district court revised awards but still failed to account for bonds purchased on the secondary market after class start dates; Seijas II vacated again and expressly directed an evidentiary hearing to estimate post‑filing secondary‑market purchases or, if that failed, to adopt individualized damages.
- Instead of following the mandate, the district court declined the evidentiary hearing and recertified expanded "all-holder" classes; this appeal challenges that recertification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the district court comply with the appellate mandate in Seijas II? | Plaintiffs sought to expand classes to all holders and argued the evidentiary path was impractical. | Argentina argued the district court must follow Seijas II (hearings/individualized damages) and could not expand classes contrary to the mandate. | Court held the district court did not comply with the mandate and vacated the recertification. |
| Was an evidentiary hearing on post‑filing secondary‑market purchases required? | Plaintiffs argued such discovery would be inefficient and legally/logistically fraught. | Argentina argued Seijas II required an evidentiary hearing to estimate post‑filing purchases. | Court held Seijas II clearly required the hearing and the district court erred by not holding it. |
| Could the district court award aggregate damages without tying awards to continuous‑holder class membership? | Plaintiffs contended adjustments (e.g., for exchange offers) sufficed and expert evidence supported aggregate awards. | Argentina argued aggregate awards were speculative and not tied to the class’s actual losses. | Court reaffirmed that aggregate awards must "roughly reflect" class losses and previous awards were improper. |
| May a district court re‑certify an expanded class on remand when the mandate prescribes specific procedures? | Plaintiffs relied on Rule 23 discretion to amend certification. | Argentina argued the mandate limited district court discretion; it could not consider new class definitions that evaded the appellate instructions. | Court held the district court lacked authority to expand classes in conflict with the mandate. |
Key Cases Cited
- Seijas v. Republic of Argentina, 606 F.3d 53 (2d Cir. 2010) (affirming continuous‑holder certification but vacating aggregate damages)
- NML Capital, Ltd. v. Republic of Argentina, 699 F.3d 246 (2d Cir. 2012) (context on secondary‑market trading and bondholder acquisitions)
- McLaughlin v. Am. Tobacco Co., 522 F.3d 215 (2d Cir. 2008) (aggregate damage awards not reflecting actual harm run afoul of Rules Enabling Act principles)
- Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639 (2008) (addressing limits on precedents cited for other purposes)
- Ginett v. Computer Task Group, Inc., 11 F.3d 359 (2d Cir. 1993) (mandate rule: district courts must follow appellate mandates)
- Sompo Japan Ins. Co. of Am. v. Norfolk S. Ry. Co., 762 F.3d 165 (2d Cir. 2014) (mandate scope limits issues on remand)
- Briggs v. Pennsylvania R. Co., 334 U.S. 304 (1948) (an inferior court may not deviate from an appellate mandate)