Fondos Buitre: Rechazan Embargar Activos Del Banco Central
Fondos Buitre: Rechazan Embargar Activos Del Banco Central
Fondos Buitre: Rechazan Embargar Activos Del Banco Central
EMLtd.etal.v.BancoCentraldelaRepblicaArgentinaetal.
In the
AUGUSTTERM2014
No.133819cv(L)
No.133821cv(CON)
EMLTD.,NMLCAPITAL,LTD.,
PlaintiffsAppellees,
v.
BANCOCENTRALDELAREPBLICAARGENTINA,
REPUBLICOFARGENTINA,
DefendantsAppellants.
AppealfromtheUnitedStatesDistrictCourtforthe
SouthernDistrictofNewYork.
No.1:06cv7792ThomasP.Griesa,Judge.
ARGUED:DECEMBER10,2014
DECIDED:AUGUST31,2015
Before:CABRANES,WESLEY,andHALL,CircuitJudges.
JOSA.CABRANES,CircuitJudge:
InDecember2001,inthemidstofaseverefinancialcrisis,the
Republic of Argentina (Argentina or the Republic) declared a
moratorium on principal and interest payments for more than $80
billioninsovereigndebt,includingbondsthatwereissuedundera
Fiscal Agency Agreement (FAA). Pursuant to two exchange
offers in 2005 and 2010, Argentina restructured over 91% of the
thenexistingFAAbonds.1
Debtrestructuringisaprocessthatallowscorporationsandsovereign
nationsfacingfinancialdistresstoreduceandrenegotiatetheirdebts.SeeDavid
L.Scott,WallStreetWords:AnAtoZGuidetoInvestmentTermsforTodaysInvestor
97 (3d ed. 2003) (Creditors having difficulty making interest and/or principal
paymentsoftenrestructuretheirdebttoreducethesizeoftheinterestpayments
and to extend debt maturity.). We previously described Argentinas
restructuringasfollows:
1
Asaninstrumentalityofasovereignstate,BCRAisordinarily
immune from lawsuits in American courts under the Foreign
Sovereign Immunities Act, 28 U.S.C. 1330, 1602 et seq. (FSIA).2
Accordingly, BCRA moved to dismiss the TAC for lack of subject
matter jurisdiction on sovereignimmunity grounds, as well as for
lack of personal jurisdiction and for failure to state a claim upon
which relief can be granted. On September 26, 2013, the United
StatesDistrictCourtfortheSouthernDistrictofNewYork(Thomas
P.Griesa,Judge)issuedanorderdenyingBCRAsmotion.
Relevant to this appeal, the District Court concluded that
BCRA had waived its sovereign immunity under two statutory
exceptions. First, the District Court held that the FAAs express
waiver of sovereign immunity also waived BCRAs immunity
28U.S.C.1603provides,inpertinentpart,thefollowing:
(a)Aforeignstate...includesapoliticalsubdivisionof
aforeignstateoranagencyorinstrumentalityofaforeign
stateasdefinedinsubsection(b).
(b) An agency or instrumentality of a foreign state
meansanyentity
(1) which is a separate legal person, corporate or
otherwise,and
(2)whichisanorganofaforeignstateorpolitical
subdivision thereof, or a majority of whose shares
or other ownership interest is owned by a foreign
stateorpoliticalsubdivisionthereof....
In1994,Argentinabeganissuingdebtsecuritiespursuanttoa
EM Ltd. v. Republic of Argentina, 473 F.3d 463, 466 n.2 (2d Cir. 2007)
(BCRAI);seealsoid.(recordingArgentinasmanycontributionstothelawof
foreigninsolvencythroughitsnumerousdefaultsonitssovereignobligations,as
wellasthrough...adiplomacyofdefault).
5
principalandinterestpaymentsonmorethan$80billionofforeign
debt,includingtheFAAbonds.8Sincethen,Argentinahasnotmade
principal or interest payments on these bonds. In 2005 and 2010,
Argentina successfully restructured over 91% of its debt by
launching global exchange offers, pursuant to which creditors
holdingthedefaultedbondscouldexchangethemfornewsecurities
with modified terms that substantially reduced their value.9
PlaintiffsEMandNMLownFAAbondsthatwerenotrestructured.
Argentinaconcedesthatinthe[FAA]governingthedebtinstruments
owned by plaintiffs it clearly and unambiguously waived its right to assert its
sovereign immunity from suit in claims regarding those instruments. NML
Capital,Ltd.v.BancoCentraldelaRepblicaArgentina,652F.3d172,176n.3(2dCir.
2011)(BCRAII).
7
Seeid.at175.
Id.at176&n.4.
didnotdisputethatitssovereignimmunityhadbeenwaivedinthe
FAA. Plaintiffs eventually obtained numerous final judgments
against Argentina, which now total approximately $2.4 billion.10
Thesejudgmentsremainunpaid.
II.LitigationAgainstBCRA
Id.at176&n.6.
10
Id.at468(quotingDecree1599/2005art.1,J.A.at581).
13
Id.
14
Id. at 469. On January 3, 2006, the BCRA paid Argentinas debt to the
IMF out of the BCRAs funds. The FRBNY funds that were subject to the
restrainingnoticeswerenotusedinconnectionwiththatpayment,althoughthe
parties disputed whether the funds might have been used for this purpose in
theabsenceofthecourtorderedrestraintsonthetransferofthefunds.Id.
15
OnJanuary12,2006,theDistrictCourtvacatedthetemporary
restrainingorders.16PlaintiffsappealedtheDistrictCourtsdecision,
maintaining that the Decrees amounted to an expropriation by
ArgentinaofBCRAsassetsinordertopayArgentinasdebttothe
IMF, and that, consequently, the funds in BCRAs FRBNY account
hadbecomeArgentinasproperty.
affirmedtheDistrictCourtsorder,holdingthattheDecreesdidnot
alterpropertyrightswithrespecttotheFRBNYFundsbecausethey
did not create an attachable interest on the part of [Argentina] in
theFRBNYFunds.17Althoughwethusrejectedplaintiffstransfer
ofownership argument, we noted the difference between two
theories of attachment(1) that the Decrees transferred to the
RepublicownershiporcontrolovertheassetsofBCRA;and(2)that
ArgentinacontrolledBCRAitselfi.e.,thatBCRAwasArgentinas
alter ego.18 We concluded that plaintiffs had not established that
BCRAs funds were transferred to Argentina, but we noted that
plaintiffs allegations regarding Argentinas misdeeds ... might
have lent some credence to the alterego theory.19 That is, we
suggestedthatplaintiffscouldpotentiallyarguethatBCRAwasso
extensivelycontrolledby[Argentina]thatarelationshipofprincipal
Id.at470.
16
Id.at472.
17
Id.at475(emphasisintheoriginal).
18
Id.at480.
19
10
andagentiscreated,orthatrecognizingBCRAsseparatejuridical
statuswouldworkfraudorinjustice20andthat,ifsuccessful,this
claimwouldsubjectallofBCRAsassetstopotentialattachmentby
Argentinasjudgmentcreditors.
11
Thisorderwasappealedandin2011,inBCRAII,wevacated
the attachment on the sole ground that the funds held in BCRAs
FRBNY
account
were
immune
from
execution
under
Onremand,plaintiffsfiledtheTACtheoperativecomplaint
22
Id.at18788.
23
Id.at196n.24.
24
SeeJ.A.at302683(filedAugust31,2012).
25
12
declaratoryjudgmentitseekswouldestablish:(1)thatBCRAisthe
alteregoofArgentina;and(2)thatBCRAisthusliableforanyand
all of Argentinas debts.26 Plaintiffs stated purpose for seeking this
judgment is to enable them to attach any asset held by BCRA
anywhere in the world in satisfaction of their judgments against
Argentina.27 This option was arguably left open by BCRA II, which
foreclosed the possibility of attaching assets deposited in BCRAs
own accounts in the United States, but did not otherwise address
plaintiffsabilitytoreachBCRAassetselsewhere.
J.A.at3027(TAC1).
26
SeeSpecialApp.(SPA)at4(9/25/13Tr.3:2123)(Wewouldliketobe
able to have a judgment that holds BCRA liable for the judgments entered
against Argentina that we may enforce as a judgment if we find assets
anywhere.);id.at1013(9/25/13Tr.9:1012:15)(arguingthatplaintiffscouldtake
the declaratory judgment to California, Switzerland, or Germany and use it to
attachBCRAsassetsheldinthosejurisdictions).
27
Seeid.at2728(9/25/13Tr.26:2427:1).
28
13
Indenyingthemotiontodismiss,theDistrictCourtexplicitly
adoptedplaintiffsargumentsforjurisdiction.Initsbenchorder,the
DistrictCourtstated:
What Im going to do this afternoon is to
deny the motions to dismiss the [TAC]. I
believe there is jurisdiction in the way
[plaintiffs counsel] Mr. Cohen describes
jurisdiction which makes it appropriate to
entertain the action; and considering the
provisions of the Foreign Sovereign
Immunities Act, I believe that there is an
implied waiver here and I believe theres
commercial activity so that the provisions
of 28 U.S.C. 1605(a)(1) and (a)(2) are
applicable.
Thisreallyis,denyingamotiontodismiss,
exactly what would emerge from a
litigation that has problems. The plaintiffs
position has problems, as Ive indicated.
But I think those problems do not require
thedismissaloftheaction.
AndIwanttorepeatsomethingwhichIm
sure Ive said maybe more than once this
afternoon; and that is, we dont have a
Seeid.at2931(9/25/13Tr.28:130:2).
29
14
republicwhichisactinginanormalwayas
far as its debts. We dont have a situation
[where] there is a completely regular
dealing between the [R]epublic and BCRA
thewaythatImsurewouldexistwiththe
Bank of England or the Central Bank of
Germany or France or certainly with the
Federal Reserve Bank. We dont have that.
Wehaveirregularities.
The reason that I believe theaction should
be held open is I think there is a very
legitimate claim by the plaintiffs here that
for certain purposes BCRA is the alter ego
ofthe[R]epublic.
Inthepapersbeforeme,theplaintiffshave
madeaverypowerfulcaseofthat,andIso
held in my earlier decision, and that
holdingwasnotwhatwasdisturbedbythe
Court of Appeals. So, theres a very good
caseofalterego.
IbelievethattheCourtshouldentertainthe
ideathatitwouldbedesirabletohavethis
Court with its experience in this case and
itsbackgroundinthiscasemakesomekind
offormalrulingofalteregowhichcouldbe
legitimately used in a proceeding in
another state or a foreign country so that
theplaintiffsdonothavetogototheother
state or the foreign country and start in
again, once again, and maybe more than
15
Id.at3234(9/25/13Tr.31:1933:7).
30
28U.S.C.1291.
32
See MasterCard Intl Inc. v. Visa Intl Serv. Assn, 471 F.3d 377, 383 (2d
Cir.2006).
33
16
Adenialofforeignsovereignimmunitygenerallysatisfiesthe
LibertySynergisticsInc.v.Microflo Ltd.,718F.3d138,146(2dCir.2013)
(citingCohenv.BeneficialIndus.LoanCorp.,337U.S.541,546(1949)).
34
Whiting v. Lacara, 187 F.3d 317, 320 (2d Cir. 1999) (quoting Coopers &
Lybrandv.Livesay,437U.S.463,468(1978))(internalquotationmarksomitted).
35
See Blue Ridge Invs., L.L.C. v. Republic of Argentina, 735 F.3d 72, 80 (2d
Cir.2013)(collectingcases);KensingtonIntlLtd.v.Itoua,505F.3d147,153(2dCir.
2007);seealsoGuptav.ThaiAirwaysIntl,Ltd.,487F.3d759,763n.6(9thCir.2007)
([E]achofoursistercircuitsthathasconsideredwhetheradenialofamotionto
dismiss on grounds of foreign sovereign immunity is an appealable collateral
orderha[s]unanimouslyheldthatitis.)(collectingcases).
36
162F.3d748,75556(2dCir.1998).
37
17
Notwithstandingthecollateralorderdoctrine,plaintiffsassert
that
Theseargumentsareunpersuasive.Wehaveconsistentlyheld
the
threshold
sovereignimmunity
determination
is
Insoarguing,plaintiffsprincipallyrelyontwocasesfromthisCircuit,
neither of which concerned motions to dismiss based on sovereign immunity. In
White v. Frank, 855 F.2d 956 (2d Cir. 1988), we denied interlocutory review of a
failed absoluteimmunity defense, because immunity turned on whether
defendants were liable for the constitutional tort of malicious prosecution. In
Grp. Health Inc. v. Blue Cross Assn, 793 F.2d 491 (2d Cir. 1986), we similarly
denied appellate review where absolute immunity turned on whether the
defendantactedwithinthescopeofitsauthority.
40
18
immediatelyreviewableunderthecollateralorderdoctrine.41Infact,
this case is similar to U.S. Fidelity & Guaranty Co. v. Braspetro Oil
Services Co.,42 in which we also reviewed the denial of a motion to
dismissbroughtbyapurportedforeignstatealterego,andinwhich
weheldthatacourtreviewingadistrictcourtssovereignimmunity
decision must assess whether plaintiffs have made a sufficient
showing[ofalterego]atthispointinthelitigation.43AstheSupreme
Courthasheld,aquestionofimmunityisseparatefromthemerits
of the underlying action . . . even though a reviewing court must
considertheplaintiffsfactualallegationsinresolvingtheimmunity
issue.44
Atthisstageinthecase,wemust(1)assumethetruthofthe
41
199F.3d94(2dCir.1999).
42
Id.at98(emphasissupplied).
43
Mitchell v. Forsyth, 472 U.S. 511, 52829 (1985); see also Johnson v. Jones,
515 U.S. 304, 314 (1995) (a claim of immunity is immediately appealable even
though it is sometimes practically intertwined with the merits); cf. Ashcroft v.
Iqbal, 556 U.S. 662, 67275 (2009) (jurisdiction proper over qualified immunity
appeal concerning legal sufficiency of pleadings because [e]valuating the
sufficiency of a complaint is not a fact based question of law); Cowan ex rel.
EstateofCooperv.Breen,352F.3d756,76061(2dCir.2003)(existenceofqualified
immunityunderplaintiffsversionofthefactsturnsonanissueoflawandis
thusimmediatelyappealable).
44
19
Accordingly,weconcludethatwehavejurisdictionunderthe
See Republic of Philippines v. Pimentel, 553 U.S. 851, 865 (2008) (the
foreignsovereignimmunity doctrine is designed to give foreign states and
theirinstrumentalitiessomeprotectionfromtheinconvenienceofsuit.(quoting
DoleFoodCo.v.Patrickson,538U.S.468,479(2003))).
45
BecauseweconcludethattheTACfailstoestablishthatBCRAwaived
itssovereignimmunity,seepostSectionII,weneednotanddonotreachtheissue
ofwhetherwehaveappellatejurisdiction(orpendentappellatejurisdiction)over
BCRAs other asserted grounds for dismissal, which the District Court also
rejected. These grounds include: (1)that plaintiffs lack Article III standing,
because it is speculative whether the declaratory judgment sought by plaintiffs
would redress their injury (i.e., permit them to recover funds in other
jurisdictions); and (2)that the TAC fails to state a plausible claim thatBCRA is
Argentinas alter ego. As to the first ground, we take no position on whether a
declaratoryjudgmentofthetypesoughtherewouldsatisfytherequirementsof
ArticleIII.Astothesecondground,plaintiffsRule12(b)(6)argumentoverlaps
substantially with our discussion of sovereign immunity, but we decline to
exercise pendent appellate jurisdiction to review the District Courts denial of
plaintiffs12(b)(6)motion.Rather,asweexplainindetailbelow,theTACistobe
dismissedsolelyonsovereignimmunitygrounds.
46
20
II.SovereignImmunity
Movingtothemeritsofthisappeal,thesoleissueweconsider
Weaddresseachexceptioninturn.
SeeAureliusCapitalPartners,LPv.RepublicofArgentina,584F.3d120,129
(2dCir.2009)(Wereviewdenovolegalconclusionsdenying[FSIA]immunityto
aforeignstateoritsproperty.).
47
See Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 485 n.5 (1983)
([I]f none of the exceptions to sovereign immunity set forth in the [FSIA]
applies, the District Court lacks both statutory subject matter jurisdiction and
personaljurisdiction.TheDistrictCourtsconclusionthatnoneoftheexceptions
to the Act applied therefore signified an absence of both competence and
personaljurisdiction.).
48
21
A.AlterEgo
1.LegalStandards
sovereignstatebecomesthealteregoofthatstateisFirstNational
City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611
(1983)known as Bancec. In Bancec, the Supreme Court created a
presumption that government instrumentalities established as
juridical entities distinct and independent from their sovereign
shouldnormallybetreatedassuch.49AccordingtotheCourt,
[f]reely ignoring the separate status of
government instrumentalities would result
in substantial uncertainty over whether an
instrumentalitys assets would be diverted
tosatisfyaclaimagainstthesovereign,and
might thereby cause third parties to
hesitate before extending credit to a
government instrumentality without the
governments guarantee. As a result, the
efforts of sovereign nations to structure
their governmental activities in a manner
deemed necessary to promote economic
development and efficient administration
wouldsurelybefrustrated.50
Bancec,462U.S.at62627.
49
Id.at626(footnoteomitted).
50
22
legislativehistoryof28U.S.C.1610(b),51theprovisionoftheFSIA
addressing the circumstances in which a judgment creditor may
executeupontheassetsofaforeigngovernmentsinstrumentality:
Section 1610(b) [of the FSIA] will not
permit execution against the property of
one agency or instrumentality to satisfy a
judgment against another, unrelated
agency or instrumentality. There are
compellingreasonsforthis.IfU.S.lawdid
not respect the separate juridical identities
ofdifferentagenciesorinstrumentalities,it
might encourage foreign jurisdictions to
disregard the juridical divisions between
different U.S. [public] corporations or
betweenaU.S.[public]corporationandits
28U.S.C.1610(b)reads,inpertinentpart,asfollows:
51
23
foreigngovernmentsdeterminationthatitsinstrumentalityistobe
accorded separate legal status will be honored.53 But this
presumption of separateness may be rebutted by evidence
establishing an alterego relationship between the instrumentality
andthesovereignstatethatcreatedit.Specifically,thepresumption
maybeovercomeandanalteregorelationshipestablishedif:(1)the
instrumentality is so extensively controlled by its owner that a
relationshipofprincipalandagentiscreated;or(2)therecognition
ofaninstrumentalitysseparatelegalstatuswouldworkafraudor
injustice.54 As we previously noted, both Bancec and the FSIA
legislative history caution against too easily overcoming the
presumptionofseparateness.55
Bancec, 462 U.S. at 62728 (quoting H.R. Rep. No. 941487, at 2930
(1976),reprintedin1976U.S.C.C.A.N.6604,662829).
52
Id.at628.
53
Letelier, 748 F.2d at 795; see also Seijas v. Republic of Argentina, 502 F.
Appx19,22(2dCir.2012)(nonprecedentialsummaryorder)(Bancecsetsfortha
strongpresumptionthataninstrumentalityhasaseparatelegalidentity).
55
24
2.Analysis
UnderBancec,wearethusrequiredtopresumethatBCRAis
Forthereasonsthatfollow,neitherprongofthistesthasbeen
25
waiverofsovereignimmunityintheFAAdoesnotapplytoBCRA,
plaintiffsrelianceonthe1605(a)(1)exceptionnecessarilyfails.
a.ExtensiveControl
measuringthelevelofcontrolexercisedoveraninstrumentalitybya
foreign sovereign is factintensive, courts have articulated several
indicia to guide the inquiry.57 Among the factors that have been
deemed relevant are whether the sovereign nation: (1) uses the
instrumentalitys
property
as
its
own;
(2)ignores
the
See,e.g.,McKessonCorp.v.IslamicRepublicofIran,52F.3d346,352(D.C.
Cir.1995);HesterIntlCorp.v.Fed.RepublicofNigeria,879F.2d170,178(5thCir.
1989).
58
26
BCRAwasfoundedin1935asArgentinasCentralBank.60By
statute,itisaselfadministeredinstitution,whichischargedwith
acting as Argentinas agent and depository before international
monetary,banking,andfinancialentities,aswellaswithregulating
the Argentine banking system and financial sector.61 BCRAs
primary responsibility is to maintain the value of legal tender in
Argentinaaccordingly, it shall exclusively issue banknotes and
coinsintheArgentineNation,andinvestaportionofitsexternal
See LNS Invs., Inc. v. Republic of Nicaragua, 115 F. Supp. 2d 358, 363
(S.D.N.Y.2000)(alteregotestrequiresashowingthatthegovernmentexercises
extensive control over the instrumentalitys daily operations and abuses the
corporateform),affdsubnom.LNCInvs.,Inc.v.BancoCentraldeNicaragua,228
F.3d 423 (2d Cir. 2000) (affirming for substantially the reasons stated by the
district court); Seijas, 502 F. Appx at 22 (Bancec requires extensive control of
subsidiarys daytoday activities or abuse of the corporate form.); First Inv.
Corp. of the Marshall Islands v. Fujian Mawei Shipbuilding, Ltd., 703 F.3d 742, 753
(5th Cir. 2012) ([W]e look to the ownership and management structure of the
instrumentality,payingparticularlycloseattentiontowhetherthegovernmentis
involvedindaytodayoperations,aswellastheextenttowhichtheagentholds
itself out to be acting on behalf of the government. (internal quotation marks
omitted)); Doe v. Holy See, 557 F.3d 1066, 1080 (9th Cir. 2009) (Bancec requires
allegations of daytoday control in order to overcome the presumption of
separatejuridicalstatus).
59
BCRA II, 652 F.3d at 177 (citing Law No. 24,144/92, ch. I, 1 (Oct. 22,
1992, as amended) (BCRA Charter)). An English translation of the BCRA
CharterisprovidedintheJ.A.at27862800.
60
BCRACharter,arts.1,34(J.A.at278687);seealsoid.arts.1718,2122,
25&2829(J.A.at279195).
61
27
assetsindepositsorotherinterestbearingtransactionswithforeign
banking institutions.62 Moreover, BCRA is managed by an
independent Board of Directors appointed by the National
Executive Power with the consent of the national Senate.63 BCRA
hastheauthoritytopurchaseandsellproperty,holdaccounts,and
sueandbesuedincourtsunderitsownname.64
governmentinstrumentalityentitledtoseparatelegalstatus.
However,plaintiffsargue,andtheDistrictCourtpresumably
accepted,thatBCRAsformalindependenceisbeliedbyArgentinas
extensive control over BCRAs daytoday operations. Plaintiffs
attempt to buttress this conclusion with three categories of factual
allegations.Nonetheless,evenifweassumethetruthofallofthem,
these facts do not support a claim of extensive control, because
whatever control Argentina exerted was not tied to BCRAs dayto
dayoperations.
62
SeeBCRAI,473F.3dat479n.15.
63
Id.
64
28
branch.65Butcourtshaveconsistentlyrejectedtheargumentthatthe
appointmentorremovalofaninstrumentalitysofficersordirectors,
standingalone,overcomestheBancecpresumption.66Thehiringand
firingofboardmembersorofficersisanexerciseofpowerincidental
to ownership, and ownership of an instrumentality by the parent
stateisnotsynonymouswithcontrolovertheinstrumentalitysday
today operations. Governments commonly exercise some measure
ofcontrolovertheirinstrumentalities,muchlikeparentcorporations
commonly control certain aspects of otherwise independent
subsidiaries.Missingfromplaintiffsallegationsareanyclaimsthat
Argentinas appointment of board members then caused it to
interfere in and dictate BCRAs daily business decisions. Ensuring
thataboardofdirectorsofaninstrumentalitysharesthesovereigns
goalsandpolicies for the instrumentality is not, by itself, extensive
control. The sovereign must instead use its influence over these
directors in order to interfere with the instrumentalitys ordinary
businessaffairs.
SeeJ.A.at305666(TAC7696).
65
29
68 In BCRA II, we did not reach the District Courts earlier holding that
BCRAwas Argentinasalterego.However,theUnitedStateswhichappeared
as amicus in BCRA II in support of the position of BCRAargued in the
alternativethattheDistrictCourts analysisofthealteregoissueinthatearlier
case was flawed. The amicus brief of the United States from BCRA II has been
includedintherecordforthisappeal.SeeJ.A.at35433573.
69J.A.at3569;seealsoid.at3552([T]heUnitedStatesurgestheCourtto
clarify that the BCRAs involvement in repaying the IMF does not support
disregardingtheBCRAsseparatejuridicalstatus.).
30
71
31
72
SeeJ.A.at306676(TAC97113).
74
32
theUnitedStatesinBCRAIIcentralbanksordinarilyhaveahigh
degreeofinteractionwiththeirparentforeigngovernments,andas
such, courts should give significant deference to a foreign
governments conduct visvis its central bank.76 The alleged
coordination of monetarypolicy actions between Argentina and
BCRAissimplynotsufficienttoestablishextensivecontrol.
Consideredcumulatively,theseallegationscertainlyestablish
thattheRepublicsoughttheassistanceofBCRAinrespondingtoan
extremelyseveredebtcrisis,andthatArgentinatookstepstoensure
that BCRA shared its policies and goals during this time. They do
not establish, however, that the Republic so extensively controlled
BCRAs daytoday operations as to transform BCRA into the
Republics alter ego. Most of the actions allegedly taken by BCRA
are governmental functions performed by most central banksi.e.,
payinganationscreditors,controllingcurrencyflows,andkeeping
foreign exchange deposits. Plaintiffs have not sufficiently alleged
that these actions, or any others, were the result of Argentinas
substantialcontroloverthebusinessdecisionsordailyfunctionsof
BCRA.77 Thus, these actions, standing alone, are not the type of
Id.at357071n.*.
76
33
exercisedextensivecontroloverBCRAsdaytodayoperations,the
firstprongoftheBancectesthasnotbeenmet.
b.FraudorInjustice
ThesecondprongoftheBancecalteregotestaskswhetherthe
Letelier,748F.2dat794.
79
462U.S.at61516,632.
80
34
Thecommonthreadinthesecasesisthatthesovereignstates
atissueabusedthecorporateform.InBancec,Cubasoughtreliefina
courtoftheUnitedStateswhilesimultaneouslytryingtoshielditself
from liability by asserting its claim through its dissolved
instrumentality.InBridas,Turkmenistantransferredassetsfromone
447F.3dat417.
81
No.03Civ.4578(LAP),2007WL1032269(S.D.N.Y.Mar.30,2007).
82
Id.at*9.
83
35
BCRAII,652F.3dat19697(citing28U.S.C.1611(b)(1)).
85
36
apracticalmatter,BCRAwasonlyguiltyofmovingfundsfromone
attachmentproofaccounttoanother.
presumptionthatBCRAandArgentinaarelegallyseparateentities,
BCRA does not constitute Argentinas alter ego for the purposes
of this suit. Argentinas express waiver of its own sovereign
immunity in the FAA, therefore, may not be imputed to BCRA.
Accordingly, we conclude that the express waiver exception
1605(a)(1)doesnotapplytothiscase.86
37
B.CommercialActivity
theDistrictCourtisthecommercialactivityexceptioncodifiedat
28 U.S.C. 1605(a)(2), which, in relevant part, provides that a
foreignstateisnotimmuneinanactionbaseduponacommercial
activitycarriedonintheUnitedStates.Thisexceptionappliesonly
whenthereexistsadegreeofclosenessbetweenthegravamenof
plaintiffscomplaintandthecommercialactivitiesengagedinbythe
foreignstateorinstrumentality.87
Here,thegravamenoftheTACisthatBCRA,asArgentinas
Kensington Intl Ltd. v. Itoua, 505 F.3d 147, 156 (2d Cir. 2007) (internal
quotationmarksomitted);seealsoSaudiArabiav.Nelson,507U.S.349,357(1993)
(inorderforasuittobebaseduponcommercialactivitycarriedonintheUnited
States,thatcommercialactivitymustformthefoundationforthoseelementsof
a claim that, if proven, would entitle [the] plaintiff to relief under his theory of
thecase);Reissv.SocitCentraleDuGroupeDesAssurancesNationales,235F.3d
738, 747 (2d Cir. 2000) (To sustain jurisdiction on this basis, there must be a
significantnexus...betweenthecommercialactivityinthiscountryuponwhich
the exception is based and a plaintiffs cause of action.) (citation and internal
quotationmarksomitted);TransatlanticShiffahrtskontorGmbHv.ShanghaiForeign
Trade Corp., 204 F.3d 384, 390 (2d Cir. 2000) (the FSIAs commercial activity
exception requires a degree of closeness between the acts giving rise to the
cause of action and those needed to establish jurisdiction that is considerably
greaterthancommonlawcausationrequirements).Seealsoantenote4.
87
Asstatedabove,theTACsclaimonthemeritsisthattheBCRAisthe
alter ego of Argentina and, therefore, BCRAs funds should be generally
attachable to satisfy Argentinas debts. Separately, plaintiffs have invoked
88
38
notapartytotheFAAandwasnotinvolvedinArgentinasdecision
to cease making principal and interest payments on FAA bonds.
Therefore,thegravamenofplaintiffsclaimonthemeritsisbasedon
aseriesofactionstakenbyBCRAafter2001.
BCRAs alter ego status as a basis for waiving BCRAs sovereign immunity.
Accordingly, the facts underlying plaintiffs merits and jurisdictional claims
overlap significantly. This opinion concerns only the basis for jurisdictioni.e.,
thewaiverofBCRAssovereignimmunitynotthemeritsofplaintiffsrequest
foradeclaratoryjudgment.
See28U.S.C.1605(a)(2)(statinginrelevantpartthataforeignstateis
notimmunefromanyactionbaseduponacommercialactivitycarriedoninthe
UnitedStates)(emphasissupplied).
89
39
AsinKensington,theclaimherealsolacksanynexusbetween
91
Id.at15658.
92
40
complaint(thealteregoclaim,whichturnsonloansmadebyBCRA
to Argentina in Argentina). It is similarly incidental that BCRA
purchased these dollars using an account in the United States.
Whatever adverse consequences plaintiffs allegedly suffered from
theBCRAsloanstoArgentina,theywouldhavesufferedthesame
consequenceshadBCRAusedanyotherbankaccountintheUnited
Statesorabroad.
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Insummary,weholdthefollowing:
(1)Wehavejurisdictionunderthecollateralorderdoctrineto
(2)FirstNationalCityBankv.BancoParaElComercioExteriorde
Cuba, 462 U.S. 611 (1983) (Bancec) sets a high bar for when an
instrumentalitywillbedeemedanalteregoofitssovereignstate.On
these facts, neither prong of the Bancec test is satisfiedArgentina
doesnotexercisesufficientlyextensivecontroloverBCRAsdayto
day operations, and recognizing BCRAs separate status would not
constitute a fraud or injustice within the meaning of Bancec.
Accordingly, Argentinas sovereignimmunity waiver in the FAA
may not be imputed to also waive BCRAs independent sovereign
immunity.
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