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Amduso v. Republic of Sudan

United States District Court, District of Columbia

December 21, 2017

MILLY MIKALI AMDUSO, et al., Plaintiffs,
v.
REPUBLIC OF SUDAN, et al., Defendants.

          MEMORANDUM OPINION

          JOHN D. BATES, United States District Judge

         Currently before the Court is [325] plaintiffs' renewed motion to compel post-judgment discovery from Sudan. For the reasons that follow, the motion will be granted as to the narrowed set of requests laid out in plaintiffs' reply brief and June 21, 2017 proposed order.

         I. BACKGROUND

         This discovery request stems from a default judgment issued against Sudan under the terrorism exception to the Foreign Sovereign Immunities Act (FSIA). Six years ago, this Court found Sudan liable for plaintiffs' injuries in connection with the 1998 bombings of the U.S. embassies in Kenya and Tanzania. Order of Nov. 28, 2011 [ECF No. 62] at 2. The Court entered judgment in favor of plaintiffs for approximately $878 million in compensatory damages and interest, Order of July 25, 2014 [ECF No. 254], part of a combined $5.9 billion damages award in several consolidated cases that the D.C. Circuit has since upheld, see Owens v. Republic of Sudan, 864 F.3d 751, 767, 825 (D.C. Cir. 2017).[1] Plaintiffs now seek to collect on their judgment.

         Plaintiffs initially sought broad discovery of Sudan's assets both here and abroad. Sudan contended that discovery was unnecessary because records of all of its attachable assets may be obtained from the Treasury Department's Office of Foreign Assets Control (OFAC). OFAC had already agreed to produce its records regarding Sudan in a companion case, subject to a protective order. See Protective Order, Wamai v. Republic of Sudan, No. 08-CV-1349 (JDB) (D.D.C. May 2, 2016) [ECF No. 287]. At a hearing held on November 18, 2016, the parties and the Court reached an interim agreement under which the Court would modify the protective order in Wamai. Representatives of Sudan would review OFAC's production and determine whether OFAC's records contained a complete list of Sudan's assets available for attachment; if Sudan's representatives determined during this review that OFAC's records were incomplete, Sudan was to supplement OFAC's information.

         The Court proceeded to modify the Wamai protective order. See Amended Protective Order, Wamai, No. 08-cv-1349 [ECF No. 290]. On March 28, 2017, the Governor of the Central Bank of Sudan executed a declaration responding to and supplementing the resulting disclosures from OFAC. Decl. of Hazem Abdel Kader Ahmad (“Ahmad declaration”) [ECF No. 324-3 *SEALED*]. The declaration stated that Sudanese officials looked only for assets owned directly by the Sudanese government or central bank, and attempted without success to cross-reference OFAC's information with Sudanese governmental information. Id. ¶¶ 3, 5. The assets identified by Sudan as currently in the United States are worth only $7 million, a mere fraction of plaintiffs' judgment. Id. ¶ 5. Sudan now argues that the Ahmad declaration is all that it must provide under Rule 69 of the Federal Rules of Civil Procedure, and that plaintiffs are not entitled to any further discovery. Defs.' Mem. in Opp'n to Pls.' Renewed Mot. to Compel Post-J. Discovery (“Opp'n”) [ECF No. 327] at 4-6. Plaintiffs, on the other hand, urge that the Ahmad declaration is woefully insufficient, and have moved for discovery reaching back to 1997 from Sudan and its agencies and instrumentalities. Pls.' Renewed Mot. to Compel Rule 69 Discovery from the Republic of Sudan (“Pls.' Mot.”) [ECF No. 325] at 2-4.

         II. DISCUSSION

         Plaintiffs' initial discovery requests sought financial information from a large number of Sudanese entities stretching back over the last twenty years. See Pls.' Req. for Produc. of Docs. and Electronically Stored Information from J. Debtor Republic of Sudan (“Disc. Req.”) [ECF No. 325-1]. The parties have engaged in a spirited and largely uncompromising debate over the legality of those requests. However, this debate has since lost much of its potency, because in their reply brief plaintiffs considerably narrowed their initial discovery request. See Reply in Further Supp. of Pls.' Renewed Mot. to Compel Rule 69 Disc. From the Republic of Sudan (“Reply”) [ECF No. 328] at 19-20; accord Proposed Order [ECF No. 328-3]. Plaintiffs now ask for four categories of information: (1) the identities of and principal points of contact for all regional and satellite banks used by Sudan and BNP Paribas (BNPP) to make transfers or payment through the United States after the implementation of U.S. sanctions in November 1997; (2) the identities of and principal points of contact for Sudanese banks directed or instructed to use BNPP as their correspondent bank in Europe after November 1997; (3) information regarding transactions through Sudanese state-owned or controlled financial institutions from January 17, 2017 to the present that had certain connections to the United States; and (4) the identities of and certain information about any Sudanese governmental agencies and instrumentalities that have done business in the U.S. or with U.S. persons since January 17, 2017 or that plan to do so in 2017 or 2018. Proposed Order at 1- 2. Plaintiffs also ask Sudan to produce one or more witnesses to testify as to each category of information. Id. at 3. The Federal Rules of Civil Procedure allow plaintiffs to make these requests.

         As a general rule, legal victors may engage in broad post-judgment discovery. A judgment creditor, “[i]n aid of the judgment or execution, . . . may obtain discovery from any person- including the judgment debtor-as provided in [the Federal Rules of Civil Procedure] or by the procedure of the state where the court is located.” Fed.R.Civ.P. 69. The Federal Rules allow for discovery “regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). Thus, the standards for receiving post-judgment discovery “are quite permissive.” Republic of Argentina v. NML Capital, Ltd., 134 S.Ct. 2250, 2254 (2014). That defendant here is a foreign government sued under the Foreign Sovereign Immunities Act (FSIA), rather than a private party sued under some other legal authority, does not alter these standards. See id. at 2256-58.

         Sudan raises four arguments in opposition to plaintiffs' renewed motion to compel, but all four are either fatally diminished in force by plaintiffs' narrowing of their discovery request or are otherwise unavailing. Sudan's first-and farthest-reaching-claim is that the Ahmad declaration gave plaintiffs all of the information to which they are legally entitled, and that plaintiffs are precluded from seeking anything more. Opp'n at 4-11. That is not the case. The declaration indicates that Governor Ahmad could not cross-reference any of the assets that OFAC listed as blocked with Sudanese records, which itself suggests that Sudanese officials may not have conducted a thorough investigation. Ahmad Decl. ¶¶ 3-4.[2] The declaration also states that the Sudanese officials conducting the search looked only at assets owned directly by the Sudanese government or its central bank-and not, therefore, at assets owned by the government's agencies and instrumentalities. Id. ¶ 5; see Opp'n at 6.

         Perhaps most importantly, while Governor Ahmad asserts that he was asked to “identify any assets located in the United States owned by the Sudanese government, ” Ahmad Decl. ¶ 2, his discussion of his ultimate findings mentioned only funds that were “blocked by banks in the United States, ” id. ¶ 5. Yet BNP Paribas has admitted to working with the Sudanese government to route monetary transfers through the United States in defiance of sanctions. See Statement of Facts, United States v. BNP Paribas, S.A., No. 14-CR-00460 (LGS) (S.D.N.Y. July 10, 2014) (Exh. J, Pls.' Mot. [ECF No. 325-10]) ¶ 14. Given that fact, plaintiffs are justified in their concern that Governor Ahmad's enumeration only of blocked assets-an enumeration that also does not include assets owned by Sudanese government agencies-may not provide a full accounting of Sudan's assets in the United States. Nor does the declaration, which was signed on March 28, 2017, account for any Sudanese assets that may have entered the United States in the intervening months, now freed by the temporary lifting of sanctions on Sudan in January 2017 and the further, permanent extension of that order in October 2017. See Exec. Order 13, 761, 82 Fed. Reg. 5331 (Jan. 13, 2017); Notice Regarding Positive Actions by the Government of Sudan, 82 Fed. Reg. 47, 287 (Oct. 11, 2017).

         Sudan responds that it has no duty to collect information about its agencies and instrumentalities; that the Ahmad declaration, issued two months after the U.S. lifted sanctions, would have taken into account any effect that change would have had on Sudanese assets in the U.S.; and that plaintiffs cannot base discovery requests on the U.S. government's Specially Designated Nationals List (“SDN”), as plaintiffs suggest, because the SDN's definition of agencies and instrumentalities is broader than that used in the FSIA. See Opp'n at 6-10. These arguments are unavailing. None of these objections apply to the first two categories of information plaintiffs seek, which involve only the identities of banks Sudan and its central bank used to evade sanctions. See Reply at 3.[3] And while Governor Ahmad may have been able to speak to any transactions entered into as of late March, more than eight months have gone by since, and any transactions in which Sudan or its agencies or instrumentalities may have engaged in the intervening time are quite relevant to determining Sudan's potentially attachable assets. It is reasonable to assume that Sudanese entities may be engaging in such transactions now, even if they were not in March- particularly since the United States recently made permanent what was originally temporary sanctions relief, thereby reducing the risk that any money transferred into the United States would become blocked by OFAC at a later date. See 82 Fed. Reg. 47287.

         The Federal Rules also allow plaintiffs to request discovery from Sudan regarding recent and planned transactions by Sudan's agencies and instrumentalities. Certainly Sudan cannot complain about requests for discovery from any political subdivisions or government agencies that are not separate juridical entities, or with whom Sudan enjoys a principal-agent relationship, since these are considered to be part of the government of Sudan itself. See, e.g., McKesson Corp. v. Islamic Republic of Iran, 185 F.R.D. 70, 78 (D.D.C. 1999). As to any other Sudanese instrumentalities, plaintiffs ask Sudan only for any information it might have in its own “possession, custody, or control” regarding those entities' recent transactions in the United States. Fed.R.Civ.P. 34(a)(1); see Reply at 7. If Sudan owns or controls a particular entity, any documents in that entity's possession are likely also within Sudan's control and therefore subject to discovery. See, e.g., Shcherbakovskiy v. Da Capo Al Fine, Ltd., 490 F.3d 130, 138 (2d Cir. 2007) (“[I]f a party has access and the practical ability to possess documents not available to the party seeking them, production may be required.”); DL v. District of Columbia, 251 F.R.D. 38, 46 (D.D.C. 2008) (“‘With regards to the term “control, ” it has been well established that the test for control is not defined as mere possession, but as the legal right to obtain such documents on demand.' . . . Defendant District of Columbia has such control with respect to documents in the possession of its agencies . . . .” (citation omitted)); McKesson Corp., 185 F.R.D. at 78. If there are responsive documents that are not within Sudan's control-either because Sudan does not exercise control over a particular entity, or because it has no “legal right to obtain [those] documents on demand, ” DL, 251 F.R.D. at 46-it can provide an explanation in lieu of the documents.

         This is also why Sudan's objection regarding plaintiffs' use of the SDN as a guidepost is out of place. It is reasonable for plaintiffs to rely on the SDN list as a preliminary assessment of which entities may have Sudanese assets subject to attachment. Federal regulation imposed sanctions on (1) the government of Sudan, including its subdivisions, agencies or instrumentalities; (2) entities owned or controlled by the government of Sudan as so defined; and (3) people acting on behalf of the foregoing. 31 C.F.R. § 538.305. This list well defines the set of entities that may hold Sudanese government assets and over whose documents Sudan would be in a position to exercise control. The regulation also looked to the SDN to provide a non-exhaustive list of entities meeting those definitions. Id. § 538.305 note 2. Thus, Sudan can likely exercise control over responsive documents that these entities possess. Again, however, plaintiffs ask only for documents that are actually within Sudan's control, Reply at 7; Sudan may provide a reasoned explanation as to why it does not exercise control over a given entity or set of documents in response to plaintiffs' discovery request. That request, particularly with its newly narrowed time period, is well within the range of reasonable discovery in cases such as this one. See, e.g., Aurelius Capital Master, Ltd. v. Republic of Argentina, 589 Fed. ...


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