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TIG Insurance Co. v. Republic of Argentina

United States District Court, District of Columbia

July 10, 2019




         Plaintiff TIG Insurance Company seeks to collect on default judgments against defendant Republic of Argentina by attaching an Argentinian property located at 2136 R St., NW, Washington, D.C. 20008. Before the Court are TIG's Motions for Emergency Relief, Attachment-Related Relief, and a Writ of Execution, Dkt. 2. For the reasons that follow, the Court will deny TIG's motions.

         I. BACKGROUND

         The facts are undisputed. In 2000 and 2017, TIG instigated arbitral proceedings and ultimately obtained default judgments against Argentina and its predecessor-in-interest, Caja Nacional. See TIG's Br. at 10, 12-13, Dkt. 2-1. Argentina's debt now totals $33, 666, 021.17, including interest and penalties, and TIG has yet to receive a single payment. Id. at 11, 13.

         TIG's motion was prompted by Argentina's recent decision to list a particular property in the District of Columbia for sale. Until the late 1990s, the property, which is located at 2136 R St., NW, was used as a diplomatic residence. TIG's Suppl. Br. at 9, Dkt. 9. Since then, it has fallen into disrepair and has become uninhabitable. Id. In 2003 and 2004, it was briefly listed for sale, but it was taken off the market before any sale was consummated. Id. at 3. It was then again listed for sale in the summer of 2018. Id. In response to this recent listing, TIG filed motions for emergency relief, attachment-related relief, and a writ of execution. TIG's Br. at 4- 6. But three days after TIG filed its emergency motions, and before this matter was assigned to the undersigned, Argentina took its property off the market.[1] TIG's Suppl. Br. at 4.

         Argentina originally appeared specially for the limited purpose of seeking dismissal for lack of personal jurisdiction and insufficient service of process. Argentina's Mot. to Dismiss at I, Dkt. 13. However, it later conceded both grounds for dismissal, see Argentina's Notice Regarding Mot. to Dismiss at 1, Dkt. 14, and the Court denied its motion as moot, see Nov. 30, 2018 Minute Order. Argentina now opposes TIG's motions, among other reasons, on the ground that the property enjoys execution immunity under the Foreign Sovereign Immunities Act (FSIA).


         The FSIA governs “claims of immunity in every civil action against a foreign state or its political subdivisions, agencies or instrumentalities.” Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 488 (1983). “[A]ny sort of immunity defense made by a foreign sovereign in an American court must stand on the Act's text.” Republic of Argentina v. NML Capital, Ltd., 573 U.S. 134, 141-42 (2014).

         Two types of immunity exist under the FSIA: jurisdictional and execution immunity. Id. at 142. First, foreign states are immune from the jurisdiction of United States courts “except as provided in sections 1605 to 1607.” 28 U.S.C. § 1604. Jurisdictional immunity is not at issue here. Second, execution immunity shields “property in the United States of a foreign state . . . from attachment[, ] arrest[, ] and execution, ” 28 U.S.C. § 1609, unless the property falls within a few enumerated exceptions codified in § 1610, see Rubin v. Islamic Republic of Iran, 138 S.Ct. 816, 822 (2018). Execution immunity is a “default presumption that the judgment creditor must defeat at the outset.” Weinstein v. Islamic Republic of Iran, 831 F.3d 470, 482 (D.C. Cir. 2016), abrogated on other grounds by Rubin, 138 S.Ct. 816. “When reviewing a plaintiff's unchallenged factual allegations to determine whether they are sufficient” to overcome immunity under the FSIA, courts “assume those allegations to be true.” Simon v. Republic of Hungary, 812 F.3d 127, 135 (D.C. Cir. 2016) (citation omitted).

         III. ANALYSIS

         To prevail on its motions, TIG must establish that the Argentinian property at issue falls within one of the narrow exceptions to execution immunity under the FSIA. The parties do not dispute that at least one of TIG's two judgments are arbitral awards that permit attachment under § 1610(a)(6).[2] Nor do they dispute that at the time TIG filed its motions, the property was “used for a commercial activity” within the meaning of § 1610(a). See, e.g., Argentina's Opp'n at 11- 12; TIG's Reply at 4. Both parties agree that the property was listed for sale when TIG first moved for relief and that Argentina withdrew the property from the market shortly after TIG filed its motions and before the matter was assigned to the undersigned.

         The parties' sole dispute is the relevant time for assessing execution immunity. TIG contends that a foreign state's property may be attached as long as it was “used for a commercial activity” at the time a motion for a writ of attachment was filed. Argentina, on the other hand, argues that the commercial activities exception applies if the property is “used for a commercial activity” at the moment a writ of attachment issues. Text, structure, history, and precedent support Argentina's reading: a property is immune from attachment unless it is “used for a commercial activity” at the time a writ of attachment issues.

         The Court begins with the text of the FSIA, mindful of its duty to narrowly construe exceptions to foreign immunity. Liber. E. Timber Corp. v. Gov't of Republic of Liber., 659 F.Supp. 606, 610 (D.D.C. 2003) (“The concept of ‘commercial activity' should be defined narrowly because sovereign immunity remains the rule rather than the exception and because courts should be cautious when addressing areas that affect the affairs of foreign governments.” (internal citation omitted)); see also Af-Cap, Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080, 1087 (9th Cir. 2007) (similar). The FSIA provides that “the property in the United States of a foreign state shall be immune from attachment[, ] arrest[, ] and execution except as provided in section[] 1610 . . . . ” 28 U.S.C. § 1609. The commercial activities exception provides that “[t]he property in the United States of a foreign state . . . used for a commercial activity in the United States, shall not be immune from attachment in aid of execution, or from execution, upon a judgment entered by a court of the United States, ” id. § 1610(a), if one of several enumerated provisions are satisfied, including if the movant holds a “judgment . . . based on an order confirming an arbitral award rendered against the foreign state, ” id. § 1610(a)(6).

         In § 1610(a), the word “used” is a past participle phrased in the present tense. Cf. Hamer v. City of Trinidad, 924 F.3d 1093, 1104 (10th Cir. 2019) (statute providing that no individual “shall . . . be excluded” is “phrased in the present tense (albeit in the passive voice), which suggests that a qualified individual who currently experiences discrimination . . . suffers an injury”). Implicit in the phrase “used for a commercial activity” is some form of the verb “to be.” See The American Heritage Book of English Usage 46 (1996) (passive voice formed by coupling a “to be” verb with a past participle). And here, that form of the verb “to be” is “is” and not “was.” As other courts have held, the § 1610(a) exception to executional immunity applies to property that is (as opposed to was) “used for a commercial activity.” Cf. FG Hemisphere Assocs. v. Congo, 455 F.3d 575, 591 (5th Cir. 2006) (“To apply the § 1610(a) exception to executional immunity, there must be a finding that the property is located in the United States and used for commercial activity in the United States.” (emphases omitted and added)). “The use of the present tense in a statute strongly suggests it does not extend to past actions.” Sherley v. Sebelius, 644 F.3d 388, 394 (D.C. Cir. 2011). And the statute's use of the phrase “is or was used” in the ...

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