The Foreign Sovereign Immunities Act of 19761 (FSIA) immunizes foreign state property in the United States from attachment in U.S. courts,2 except in the case of certain assets “used for a commercial activity in the United States.”3 Last term, in Republic of Argentina v. NML Capital, Ltd.,4 the Supreme Court held that the FSIA does not also restrict the discovery of a foreign state’s extraterritorial assets in aid of postjudgment attachment.5 NML is consistent with the Roberts Court’s generally formalistic approach to statutory interpretation in foreign relations law cases. However, in some recent cases the Roberts Court has considered the potential international consequences of its rulings. By contrast, the NML Court refused to consider such consequences, suggesting that its reasoning was not simply a reflection of recent trends in the Court’s jurisprudence, but also owed much to the particular nature, text, and history of the FSIA.
In December 2001, the Argentine government, facing economic collapse, ceased paying its external debt.6 NML Capital, Ltd. (NML), a holder of Argentine bonds, filed suit in the Southern District of New York to collect on its bonds.7 Since 2003, the district court has ruled in favor of NML in several actions involving claims totaling more than $2.5 billion.8 Argentina has refused to comply with the court’s rulings and instead has transferred significant assets out of the United States to avoid attachment in U.S. courts.9 NML in response has launched an extraordinary effort to attach Argentine assets both in the United States and around the world through lawsuits in U.S. and foreign courts respectively.10 These attempts have even included the dramatic temporary seizure of an Argentine naval vessel in Ghana and failed plans to seize Argentina’s presidential plane.11 In 2010, NML served subpoenas on Bank of America (BOA) and Banco de la Nación Argentina (BNA), asking for information on assets or accounts owned by Argentina without any territorial limitation.12
Argentina and both banks filed objections to the subpoenas with the district court.13 The district court ultimately compelled compliance with the subpoenas; while it approved the subpoenas “in principle,” it expected the parties to limit discovery to those assets “reasonably calculated to lead to attachable property.”14 After the subpoenas were narrowed, BOA, but not BNA, began complying.15 The district court subsequently issued a second order requiring BNA to comply.16 Argentina appealed the court’s first order to the Second Circuit, arguing that it violated the FSIA.17
The Second Circuit affirmed the order.18 Writing for the panel, Judge Walker19 held that the order did not infringe upon Argentina’s sovereign immunity.20 The court first established its jurisdiction to review Argentina’s appeal.21 Then, noting that “the district court’s power to order discovery . . . does not derive from its ultimate ability to attach the property in question,” the court considered whether the FSIA overrode ordinary federal procedural rules, which it viewed as authorizing extraterritorial discovery.22 It ultimately determined that the FSIA did not provide for immunity against discovery orders.23 The panel also emphasized that the subpoenas were not directed against Argentina itself but against commercial banks, which could not assert immunity.24
The Supreme Court affirmed.25 Writing for the Court, Justice Scalia26 held that the FSIA does not immunize foreign sovereigns against discovery orders in postjudgment execution proceedings, and thus ordinary discovery rules apply.27 Assuming without deciding that the discovery NML had requested was within the scope of discovery ordinarily authorized by federal procedural rules, the Court focused on the narrow question of “whether the Foreign Sovereign Immunities Act specifies a different rule when the judgment debtor is a foreign state.”28
Before answering this question directly, the Court summarized the history of the U.S. sovereign immunity regime. For nearly two centuries, the Court deferred to sovereign immunity decisions made by the Executive on a case-by-case basis.29 However, in 1952 the State Department changed its approach, endorsing the “‘restrictive’ theory of sovereign immunity,” which only immunizes “a foreign sovereign’s public, noncommercial acts.”30 Under that doctrine, which the Court described as “thr[owing] immunity determinations into some disarray,”31 both courts and the Executive were involved in defining the scope of sovereign immunity.32 In 1976 the FSIA, which enacted the present sovereign immunity regime, “abated the bedlam”33 by establishing a “comprehensive set of legal standards governing claims of immunity in every civil action against a foreign state.”34 The comprehensive nature of the FSIA’s approach meant, the Court said, that questions of foreign sovereign immunity must be examined purely in light of the FSIA’s text.35 As Justice Scalia stated, that text guaranteed, with specified exceptions, two forms of immunity to foreign states: immunity from the jurisdiction of U.S. courts, which Argentina waived in its bond agreement, and immunity from attachment of assets in the United States.36 There was, the Court emphasized, “no third provision forbidding or limiting discovery in aid of execution of a foreign-sovereign judgment debtor’s assets.”37 Without a “plain statement” to the contrary, the Court held, the FSIA’s text should not be understood to preclude ordinary federal discovery rules.38
The Court then considered and rejected Argentina’s argument that the FSIA impliedly limited discovery to only assets also subject to execution in U.S. courts. It did so for three reasons: First, the Court rejected Argentina’s historical argument. Argentina had argued that pre-FSIA, the assets of foreign states were entitled to absolute execution and discovery immunity.39 The FSIA, Argentina asserted, only modified this immunity with respect to the limited exceptions to execution immunity codified in the Act, none of which apply to a foreign state’s extraterritorial assets.40 Justice Scalia emphasized that Argentina failed to cite a single case supporting the existence of historical absolute execution immunity over a foreign state’s extraterritorial assets.41 Second, the Court stated that even if the FSIA’s grant of execution immunity “implie[d] coextensive discovery-in-aid-of-execution immunity,”42 Argentina’s argument would still fail because the FSIA only granted execution immunity to assets “in the United States.”43 Third, the Court stressed that “NML does not yet know what property Argentina has”44 and the FSIA should not be understood to prohibit an order ultimately aimed at assisting NML in “identify[ing] where Argentina may be holding property that is subject to execution.”45
Finally, the Court rejected the claim that Congress could not have intended to allow for “postjudgment discovery ‘clearinghouses’” for foreign states’ assets.46 Justice Scalia did not consider relevant the assertion, made by both Argentina and the United States (in an amicus brief), that doing so would have “worrisome international-relations consequences.”47 The question of Congress’s purpose, along with the potential foreign relations consequences of such broad discovery orders, were, he argued, a “riddle not [the Court’s] to solve.”48
Justice Ginsburg dissented. She found that a broader discovery inquiry “would not be ‘relevant to execution in the first place,’”49 and would have limited the scope of discovery “to property used here or abroad ‘in connection with . . . commercial activities.’”50 With respect to property in the United States, the FSIA bars the execution of noncommercial property.51 As for property outside the United States, Justice Ginsburg argued that unless NML could prove “that other nations would allow unconstrained access to Argentina’s assets,” U.S. courts should not “indulge the assumption that . . . the sky may be the limit for attaching a foreign sovereign’s property.”52
The decision in NML represents the apotheosis of the Roberts Court’s formalist approach to matters of foreign relations law. The Roberts Court has marked its approach to foreign relations law matters with a focus on statutory text and the application of clear-cut and inflexible rules, as opposed to a functionalist understanding that emphasizes case-by-case analysis, statutory purpose, and the needs of the Executive Branch. Yet the Roberts Court’s relative formalism compared to its predecessors has not prevented it from sometimes addressing the potential foreign affairs consequences of its decisions. In NML, however, the Court chose to leave such policy concerns to the political branches. This seeming inconsistency is best explained by the Court’s view of the FSIA as establishing a comprehensive foreign sovereign immunity regime, which is informed by the FSIA’s history and text, and has often led the Court to interpret the FSIA in a more formalist mode than it interprets other foreign relations law statutes or provisions.
The NML Court’s formalist, text-focused analysis of the FSIA, executed with little deference to the Executive Branch, echoes the Court’s recent approach to other cases bearing on issues of foreign relations. The Roberts Court has overseen the normalization of foreign relations law,53 moving away from the Supreme Court’s once largely flexible and functionalist approach.54 For example, the Roberts Court has used ordinary statutory canons in cases that touched upon issues of international law,55 has restricted the use of the flexible and standard-based political question doctrine,56 and has applied a similarly rigorous textual analysis to an international treaty as it would to an act of Congress.57 Furthermore, the Roberts Court has shown little deference to the Executive in cases that implicate national security and foreign policy.58 In that same vein, the Court in NML showed little deference to the position of the U.S. government59 and situated the terms of the debate firmly within the four walls of the FSIA’s text, rejecting an approach founded in the common law presumptive immunity of foreign states.60
But in its treatment of the foreign policy concerns raised by Argentina and the United States, the Court in NML went even further with its formalist reasoning than it has done in these similar decisions. Despite its embrace of formalism, the Roberts Court has remained sensitive to the global impact of its rulings.61 In NML, the Court acknowledged the U.S. government’s concern for the potentially “worrisome international-relations consequences” of expansive global discovery orders,62 emphasizing that district courts are free to exercise their discretion under law other than the FSIA and take into account “comity interests and the burden that the discovery might cause to the foreign state” when determining whether discovery is warranted in a particular case.63 But the Court flatly refused to consider these policy concerns a second time as part of its statutory interpretation of the FSIA, instead referring the parties to the “branch of government with authority to amend the Act.”64
In contrast, the Roberts Court has taken similar foreign policy considerations more directly into account in two recent cases, Kiobel v. Royal Dutch Petroleum Co.65 and Daimler AG v. Bauman.66 In Kiobel, the Roberts Court applied the presumption against extraterritoriality to the Alien Tort Statute67 (ATS), restricting the jurisdiction of U.S. courts over certain international law claims that lack a significant U.S. nexus.68 As in NML, the Court chose not to completely defer to the position of the U.S. government.69 However, the Kiobel Court was more willing to take note of the foreign policy implications of its ruling.70 Notably, unlike in NML where it found that existing doctrines at the district court level already served to constrain overly expansive discovery, the Court in Kiobel chose not to accept the invitation of the United States in its amicus brief to merely apply doctrines such as exhaustion and forum non conveniens with “special vigor in ATS cases.”71 Instead, it found foreign policy concerns directly applicable to its statutory interpretation analysis. These concerns animated the Court’s decision to apply the presumption against extraterritoriality, which has traditionally been applied only to statutes regulating extraterritorial conduct, to the ATS, a purely jurisdictional statute.72
Daimler, another recent case, restricted the scope of general personal jurisdiction over foreign defendants under the Due Process Clause.73 Here too, in addition to applying its previous personal jurisdiction precedents, the Roberts Court took note of the “risks to international comity” posed by an “expansive view of general jurisdiction,” warning that highly expansive U.S. jurisdictional rules could reduce the willingness of foreign nations to recognize American judgments.74
Kiobel, Daimler, and NML have a number of similarities. The cases all plausibly implicated U.S. foreign relations interests. The expansive discovery orders at issue in NML might have conflicted with foreign laws,75 invited reciprocal behavior from other nations aimed at the United States,76 or given rise to foreign resentment.77 These harms are not obviously less serious than those in Kiobel — where there was a risk of “diplomatic strife” associated with authorizing suits in U.S. courts over “conduct occurring in the territory of another sovereign,”78 — or those in Daimler — where there was a risk of conflict with foreign doctrines of limited personal jurisdiction.79 The three cases also all involved private plaintiffs, which the Court has acknowledged pose a particular risk of foreign policy harm.80 Nevertheless, while the Kiobel and Daimler Courts viewed the foreign policy harms as integral to their interpretive analysis, the NML Court saw them primarily as a discretionary factor for the district courts to consider.81
The Court’s different approach in NML is best explained by examining the FSIA’s text and history. In contrast to the Due Process Clause and the ATS, which are seventeen82 and thirty-three words83 respectively, the FSIA is a detailed eight-page statute.84 For this reason, the Court is engaged more heavily in the process of judicial lawmaking when it formulates rules of personal jurisdiction or federal common law claims under the ATS than when it applies the law of foreign sovereign immunity.85 And it is precisely the foreign policy consequences of these kinds of judicial, as opposed to congressional, actions that most worry the Court.86 By contrast, the Court sees itself as implementing a regime of purely congressional design when it interprets the FSIA; any harmful consequences of that regime are, therefore, a “riddle” for Congress “to solve.”87
This explanation is reinforced by the history of the U.S. foreign sovereign immunity regime, which the Court took pains to highlight in NML. Justice Scalia characterized the FSIA as replacing the “bedlam” of the historically politicized process of determining sovereign immunity with an approach that was “comprehensive,” a term that the Court has used “often and advisedly to describe the Act’s sweep.”88 This understanding was evident in Verlinden B.V. v. Central Bank of Nigeria,89 the first time the Court interpreted the FSIA, where the Act was described as “free[ing] the Government from . . . case-by-case diplomatic pressures [and] clarify[ing] the governing standards.”90 Since Verlinden, the Court has repeatedly endorsed a narrow, text-based interpretation of the Act’s provisions.91 Further, although it may have previously “‘consistently . . . deferred to the decisions of the . . . Executive Branch . . . on whether to take jurisdiction’ over particular actions against foreign sovereigns,”92 the Court showed little concern for the views of the U.S. government in FSIA cases even before the Roberts Court’s recent turn toward formalism.93 It seems likely, therefore, that in light of the FSIA’s history and purpose, the Court views its text as particularly controlling.94
NML, then, can be seen as an example both of the Roberts Court’s recent shift toward foreign affairs formalism and of a longer trend of rejecting any role for possible foreign affairs consequences in interpreting the FSIA. Lower courts and commentators should therefore be wary of ascribing too much significance to the NML Court’s ultra-textualist approach outside the specific FSIA context.