From Casetext: Smarter Legal Research

NML Capital, Ltd. v. Republic of Argentina

United States District Court, S.D. New York
Mar 19, 2010
03 Civ. 8845 (TPG), 05 Civ. 2434 (TPG), 06 Civ. 6466 (TPG), 07 Civ. 1910 (TPG), 07 Civ. 2690 (TPG), 07 Civ. 6563 (TPG), 08 Civ. 2541 (TPG), 08 Civ. 3302 (TPG), 08 Civ. 6978 (TPG), 09 Civ. 1707 (TPG), 09 Civ. 1708 (TPG), 03 Civ. 2507 (TPG) (S.D.N.Y. Mar. 19, 2010)

Opinion

03 Civ. 8845 (TPG), 05 Civ. 2434 (TPG), 06 Civ. 6466 (TPG), 07 Civ. 1910 (TPG), 07 Civ. 2690 (TPG), 07 Civ. 6563 (TPG), 08 Civ. 2541 (TPG), 08 Civ. 3302 (TPG), 08 Civ. 6978 (TPG), 09 Civ. 1707 (TPG), 09 Civ. 1708 (TPG), 03 Civ. 2507 (TPG).

March 19, 2010


OPINION


Plaintiffs EM and NML move to confirm this court's November 24, 2008 attachment and restraining orders and writs of execution directed to certain Argentine pension fund property held in the United States. In the alternative, plaintiffs move for new attachment and restraining orders and new writs of execution directed to the same assets.

The motions are denied.

Facts

Beginning October 29, 2008, this court signed orders permitting numerous creditors of Argentina, including plaintiffs, to serve attachments and restraints directed to pension property held by eight Administradoras de Fondos de Jubilaciones y Pensiones ("AFJPs") because the Argentine government had proposed legislation to nationalize Argentina's private pension system and transfer the AFJPs' property (the "Nationalized Property") to its political subdivision, ANSES.

On November 24, 2008, NML obtained from this court an order of attachment and EM and NML together obtained a restraining order and writs of execution directed to the Nationalized Property. At the same time, the court signed another order providing that plaintiffs were required to wait to serve these orders until "publication in the Argentine Official Gazette of the final text of Argentine Bill No. 1732/2008, by which official ownership of the [pension fund assets] will transfer to [ANSES]."

On December 9, 2008, Argentine Bill No. 1732/2008 was published in the Official Gazette, thereby transferring title to the Nationalized Property to ANSES. Later that day, the November 24 orders were served in accordance with the court's order.

On December 11, 2008, the court issued an opinion affirming the propriety of the pre-nationalization orders and finding ANSES to be a political subdivision of Argentina. The footnote at the end of this opinion stated:

On November 24, 2008 the court signed ex parte orders regarding execution, attachment and restraint in the 10 cases brought by NML Capital and EM. These were directed to assets which would be transferred to ANSES when the new law became effective. The court is informed that, now that the new law is in effect, appropriate service of this process has been made. Although the present opinion may well have implications regarding the new NML Capital and EM proceedings, such proceedings are not before the court and are not covered by the ruling in the present opinion.

A motion to confirm the November 24 orders was filed on December 19, 2008, but the court never addressed that motion.

The distinction between the orders referred to as being signed "beginning October 29, 2008" and the orders of November 24, 2008 needs to be made clear. The former group were permitted to be served prior to the actual nationalization of December 9, 2008. The purpose of the later November 24, 2008 orders was to have service made after the nationalization had taken place. Thus, the parties refer to the first group of orders as the "Pre-Nationalization Orders" and to the second group as the "Post-Nationalization Orders."

On March 4, 2009, the court issued a further order which confirmed certain pre-nationalization attachment orders and authorized service of pre-nationalization writs of execution.

On October 15, 2009, the Second Circuit reversed this court's December 11, 2008 opinion and vacated "all of the associated orders." Aurelius Capital Partners, LP v. Republic of Argentina, 584 F.3d 120, 132 (2d Cir. 2009). On November 10, 2009, the Second Circuit summarily denied plaintiffs' petition for rehearing. On March 1, 2010, the Supreme Court denied certiorari. The following day, the Second Circuit issued its mandate.

Plaintiffs EM and NML argue that, because of the footnote to the December 11 opinion, the Post-Nationalization Orders were not before the Second Circuit on the appeal. Therefore, plaintiffs argue, this court should now decide their December 19 motion and confirm the Post-Nationalization Orders. Alternatively, plaintiffs argue, this court should issue new orders of attachment and restraint and new writs of execution directed to the same Nationalized Property.

However, it must be noted that the Republic included the Post-Nationalization Orders within the scope of its appeal. See Notice of Appeal, filed Dec. 16, 2008 (Republic appeal of, inter alia, "the orders of the District Court dated November 24, 2008"). Further, in the course of the appeal, EM and NML raised all of the issues they raise in this latest application, including the argument that the Post-Nationalization Orders were separately situated from the orders entered in approximately 70 other actions addressed by the Second Circuit decision. In fact, EM and NML devoted the entirety of their merits brief in the Court of Appeals to the supposed uniqueness of the Post-Nationalization Orders. See EM/NML Opp. Appeal Br. at p. 2 (which states that, because the other plaintiffs-appellees would address the Pre-Nationalization Orders, NML and EM would focus in their brief on the validity of the later-issued orders that they served after the nationalization law took effect).

After the Second Circuit reversed the December 11 opinion, EM and NML then raised their same arguments in a rehearing petition, which the Second Circuit summarily denied. See EM/NML Reh'rg Pet. at p. 5 (arguing that the rationale of the Panel's opinion did not extend to the Post-Nationalization Orders). Thus, the issues that plaintiffs now present to this court were squarely presented to the Court of Appeals twice and rejected both times.

Discussion

Plaintiffs argue first that the Second Circuit did not consider the November 24, 2008 orders in its decision. Plaintiffs point to the first paragraph of that opinion, which notes that the orders of attachment and execution on appeal "were confirmed in the district court's opinion and order dated December 11, 2008." That paragraph concludes stating: "We reverse the decision of the district court and vacate the orders." Plaintiffs argue that the Second Circuit's decision by its own terms vacated only the orders confirmed by this court on December 11, 2008, and since the November 24, 2008 orders were expressly omitted from this court's December 11 decision, those orders were not vacated by the Second Circuit. Plaintiffs further argue that no conclusions may be drawn from the Second Circuit's summary order on plaintiffs' petition for rehearing, which is subject to that court's discretion and could be denied for a variety of reasons, or no reason at all. The summary denial, they argue, is therefore not inconsistent with their position that the Second Circuit's order to vacate did not apply to the November 24, 2008 orders.

It is a fundamental rule that "where issues have been explicitly or implicitly decided on appeal, the district court is obliged, on remand, to follow the decision of the appellate court." United States v. Minicone, 994 F.2d 86, 89 (2d Cir. 1993). This court is obliged to interpret the Second Circuit opinion as vacating the November 24, 2008 orders. It would be difficult to say that the Court of Appeals intended to leave these orders out of the holding, since they were appealed from and subject to argument on appeal. Moreover, the reasoning of the ruling surely covers the Post-Nationalization Orders. The latter orders were served on December 9, 2008, only a few hours after the nationalization of the assets. The Court of Appeals held that, even as of December 11, a full two days after nationalization, "[t]he only activity that the Republic had engaged in with regard to the funds . . . was the adoption of a law transferring legal control of the funds from the private corporations to [ANSES]." Aurelius, 584 F.3d at 131. The court further held that "a sovereign's mere transfer to a governmental entity of legal control over an asset does not qualify the property as being `used for a commercial activity,'" as required under the Foreign Sovereign Immunities Act. Id. This reasoning applies to both the Pre-Nationalization Orders and the Post-Nationalization Orders, the latter having been served immediately after the nationalization.

As for the "new" orders requested by plaintiffs, granting such a request would be in derogation of the Court of Appeals ruling.

Conclusion

Plaintiffs' motion to confirm this court's November 24, 2008 attachment and restraining orders and writs of execution is denied since they have been vacated by the Court of Appeals ruling properly interpreted. Plaintiffs' motion for new attachment and restraining orders and new writs of execution directed to the same assets is also denied.

SO ORDERED.


Summaries of

NML Capital, Ltd. v. Republic of Argentina

United States District Court, S.D. New York
Mar 19, 2010
03 Civ. 8845 (TPG), 05 Civ. 2434 (TPG), 06 Civ. 6466 (TPG), 07 Civ. 1910 (TPG), 07 Civ. 2690 (TPG), 07 Civ. 6563 (TPG), 08 Civ. 2541 (TPG), 08 Civ. 3302 (TPG), 08 Civ. 6978 (TPG), 09 Civ. 1707 (TPG), 09 Civ. 1708 (TPG), 03 Civ. 2507 (TPG) (S.D.N.Y. Mar. 19, 2010)
Case details for

NML Capital, Ltd. v. Republic of Argentina

Case Details

Full title:NML CAPITAL, LTD., Plaintiff, v. THE REPUBLIC OF ARGENTINA, Defendant. EM…

Court:United States District Court, S.D. New York

Date published: Mar 19, 2010

Citations

03 Civ. 8845 (TPG), 05 Civ. 2434 (TPG), 06 Civ. 6466 (TPG), 07 Civ. 1910 (TPG), 07 Civ. 2690 (TPG), 07 Civ. 6563 (TPG), 08 Civ. 2541 (TPG), 08 Civ. 3302 (TPG), 08 Civ. 6978 (TPG), 09 Civ. 1707 (TPG), 09 Civ. 1708 (TPG), 03 Civ. 2507 (TPG) (S.D.N.Y. Mar. 19, 2010)