Republic of Argentina v. NML Capital, Ltd.

Summarized by:

  • Court: United States Supreme Court
  • Area(s) of Law: Sovereign Immunity
  • Date Filed: June 16, 2014
  • Case #: 12-842
  • Judge(s)/Court Below: Scalia, J., Delivered the opinion of the Court, in which Roberts, C.J., and Kennedy, Thomas, Breyer, Alito, and Kagan, JJ., joined. Ginsburg, J., filed a dissenting opinion. Sotomayor, J., took no part in the decision of the case.
  • Full Text Opinion

The Federal Sovereign Immunities Act does not protect sovereign debtors against postjudgment discovery.

When Argentina defaulted on its external debt in 2001, most of its creditors agreed to restructure the debt. Petitioner did not. After winning eleven collection actions in U.S. courts, Petitioner attempted to execute those judgments against Argentina's property within the United States. However, when Petitioner attempted to subpoena Argentina's American banks to learn the whereabouts of Argentinean assets, Argentina moved to quash the subpoenas, claiming sovereign immunity.

The district court denied Argentina's motion to quash, and the court of appeals affirmed. The appellate court held that "because the Discovery Order involves discovery, not attachment of sovereign property, and because it is directed at third-party banks, not at Argentina itself, Argentina's sovereign immunity is not infringed." EM Ltd. V. Republic of Argentina, 695 F.3d 201, 205 (2012).

Because sovereign immunity is a matter of foreign relations and not a Constitutional mandate, the Court has always deferred to the political branches' policies. Originally, the decision was made by the Executive, but in 1976, "Congress abated the bedlam" that was our sovereign immunity doctrine at the time. They comprehensively reformed our sovereign immunity law with the Foreign Sovereign Immunities Act. Since, claims of sovereign immunity have lived or died by that act alone. As it is silent regarding postjudgment discovery, the judgment is affirmed; there is no immunity from postjudgment discovery.

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