NML Capital, Ltd. v. Republic of Argentina

11-4248-cv(L)
NML Capital, Ltd. v. Republic of Argentina, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of
4 New York, on the 20th day of September, two thousand twelve.
5
6 PRESENT: BARRINGTON D. PARKER,
7 RICHARD C. WESLEY,
8 Circuit Judges
9 JOHN GLEESON,*
10 District Judge.
11
12
13
14 NML CAPITAL, LTD., 11-4248-cv (L)
15 11-4250-cv (Con)
16 Plaintiff-Appellant, 11-4252-cv (Con)
17 11-4257-cv (Con)
18 v. 11-4272-cv (Con)
19 11-4273-cv (Con)
20 THE REPUBLIC OF ARGENTINA, 11-4280-cv (Con)
21 11-4281-cv (Con)
22 Defendant-Appellee 11-4284-cv (Con)
23 11-4285-cv (Con)
24 11-4286-cv (Con)
25
26 EMPRESA ARGENTINA DE SOLUCIONES SATELITALES, S.A.
27
28 Interested Non-Party-Appellee
29
30
*
Judge John Gleeson, of the United States District Court
for the Eastern District of New York, sitting by designation.
1 FOR APPELLANT: MATTHEW D. MCGILL, Gibson, Dunn &
2 Crutcher LLP, Washington D.C. (Theodore
3 B. Olson, Gibson, Dunn & Crutcher,
4 Washington D.C.; Robert A. Cohen, Dennis
5 H. Hranitzky, Eric C. Kirsh, Dechert LLP,
6 New York, NY, on the brief).
7
8
9 FOR APPELLEE: JONATHAN I. BLACKMAN (Carmine Boccuzzi,
10 on the brief), Cleary Gottlieb Steen &
11 Hamilton LLP, New York, NY.
12
13 FOR INTERESTED STEVEN M. HECHT, (Kevin M. Brennan, on
14 NON-PARTY- the brief), Lowenstein Sandler PC, New
15 APPELLEE: York, NY.
16
17
18
19 Appeal from the United States District Court for the
20 Southern District of New York (Griesa J.).
21
22 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
23 AND DECREED that this appeal is DISMISSED as MOOT and the
24 judgment of the United States District Court for the
25 Southern District of New York is VACATED. The case is
26 REMANDED to the district court with directions to DISMISS
27 NML’s motion to confirm and the Republic’s and AR-SAT’s
28 cross-motion to vacate the attachment.
29 Plaintiff-Appellant NML Capital, Ltd (“NML”) appeals
30 from the opinion of the United States District Court for the
31 Southern District of New York (Griesa, J.), denying NML’s
32 motion for confirmation of an order of attachment and
33 granting the cross-motion of Defendant-Appellee Republic of
2
1 Argentina (“Republic”) and Interested Non-Party-Appellee
2 Empresa Argentina de Soluciones Satelitales, S.A. (“AR-SAT”)
3 to vacate the attachment. NML moved for reconsideration,
4 and the district court ordered a hearing on the motion.
5 Prior to that hearing, the property was removed from the
6 country. We assume the parties’ familiarity with the
7 underlying facts, the procedural history, and the issues
8 presented for review.
9 An appeal becomes moot “when the issues presented are
10 no longer ‘live’ or the parties lack a legally cognizable
11 interest in the outcome.” Murphy v. Hunt, 455 U.S. 478, 481
12 (1982) (per curiam) (internal quotation marks omitted).
13 Mootness defeats subject matter jurisdiction, and thus is a
14 defect that cannot be waived. Fox v. Bd. of Trs. of State
15 Univ. of N.Y., 42 F.3d 135, 140 (2d Cir. 1994). Here, the
16 property that NML sought to attach is no longer attachable;
17 it was removed from the country. Accordingly, this case no
18 longer “admit[s] of specific relief through a decree of a
19 conclusive character.” Preiser v. Newkirk, 422 U.S. 395,
20 401 (1975) (internal quotation marks omitted). In the words
21 of the district court at oral argument on NML’s motion for
22 reconsideration, “the relief which might be granted would be
3
1 the reinstatement of the attachment, but now there is
2 nothing to attach.” (JA 1591.) Because NML cannot get any
3 specific relief from this appeal, the case is moot and this
4 Court lacks jurisdiction to address its merits. Any
5 decision from this Court as to the underlying merits of the
6 attachment would amount to nothing more than an advisory
7 opinion.
8 The standard disposition when a federal civil case
9 becomes moot while on appeal is to vacate the judgment of
10 the district court and remand with a direction to dismiss
11 the case. U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship,
12 513 U.S. 18, 22 (1994); United States v. Munsingwear, Inc.,
13 340 U.S. 36, 39 & n.2 (1950). “The rationale is that a
14 judgment from which litigants have the right of appeal
15 should not be accorded preclusive effect when events beyond
16 their control prevent them from exercising that right.”
17 Penguin Books USA Inc. v. Walsh, 929 F.2d 69, 73 (2d Cir.
18 1991). This is especially true when the winning party below
19 voluntarily moots the case. See id. Indeed, “when actions
20 of winning litigants serve to deny their adversaries the
21 opportunity to appeal[,] . . . it may amount to an abuse of
22 discretion not to vacate the lower court order.” Id. In
4
1 other words, “vacatur must be granted where mootness results
2 from the unilateral action of the party who prevailed in the
3 lower court.” U.S. Bancorp, 513 U.S. at 23. “Were it
4 otherwise, appellees could deliberately moot cases on
5 appeal, thereby shielding erroneous decisions from reversal.
6 Approval of such a strategy would render the bizarre result
7 that judgments mooted on appeal would have greater
8 preclusive effect than cases susceptible to review.”
9 Penguin Books, 929 F.2d at 73 (internal citations omitted).
10 Because AR-SAT mooted this case pending appeal by
11 intentionally removing from the country the satellite parts
12 sought to be attached, the appropriate disposition is to
13 vacate the district court’s judgment and remand with
14 instructions to dismiss the case.
15 AR-SAT and the Republic attempt to avoid this result on
16 three grounds. First, they contend that this case fits
17 within the narrow “capable of repetition, yet evading
18 review” exception to the mootness doctrine. We disagree.
19 The challenged action in this case is not inherently too
20 short in duration to permit review. See, e.g., Fox, 42 F.3d
21 at 143. Even if AR-SAT satisfied the “capable of
22 repetition” prong by showing a “demonstrated probability
5
1 that the same controversy will recur involving the same
2 complaining party,” Murphy, 455 U.S. at 482 (internal
3 quotation marks omitted), the attachment action would evade
4 review only to the extent that AR-SAT again voluntarily
5 removed the subject property from the jurisdiction. This is
6 not an intrinsic limit on the duration of the live
7 controversy.
8 Second, AR-SAT and the Republic argue that NML has
9 waived its right to vacatur by failing to seek a stay of the
10 district court’s order pending reconsideration and appeal.
11 This argument is misplaced. The Supreme Court has
12 recognized that vacatur is not justified where “the party
13 seeking relief from the judgment below caused the mootness
14 by voluntary action.” U.S. Bancorp, 513 U.S. at 24. For
15 example, when a losing party settles with its adversary
16 before the resolution of the appeal, it has “voluntarily
17 forfeited [its] legal remedy . . . of appeal.” Id. at 25.
18 In such a situation, the party “surrender[s] [its] claim to
19 the equitable remedy of vacatur” because “[t]he judgment is
20 not unreviewable, but simply unreviewed by [its] own
21 choice.” Id.22
6
1 AR-SAT and the Republic urge the Court to conclude that
2 NML surrendered its claim to vacatur because it voluntarily
3 forfeited its right to appeal by failing to seek a stay of
4 the district court’s order pending appeal. This is not the
5 kind of voluntary forfeiture the Supreme Court had in mind.
6 NML has continuously pursued its rights in this case by
7 timely appealing and timely moving for reconsideration of
8 the district court’s order. The voluntary action that
9 prevented review on appeal was AR-SAT’s removal of the
10 property–not NML’s failure to seek a stay to prevent AR-SAT
11 from removing the property. While courts have recognized
12 that a party waives its right to vacatur for failing to
13 appeal or to follow statutory obligations in pursuit of an
14 appeal, see U.S. Bancorp, 513 U.S. at 24-25; Mahoney v.
15 Babbitt, 113 F.3d 219, 221-22 (D.C. Cir. 1997); In re Motors
16 Liquidation Co., No. 09-CIV-7794, 2010 WL 3565494, at *2-3
17 (S.D.N.Y. Sept. 10, 2010), this Court has never held that a
18 party forfeits its right to vacatur of an order simply by
19 failing to file a motion to stay the effect of that order
20 while timely pursuing reconsideration and appeal.
21 Finally, AR-SAT and the Republic ask us to affirm the
22 order of the district court because the order still has
7
1 great “practical significance” and AR-SAT would like to
2 “invoke the court’s decision in the future.” This argument
3 highlights the very reason why vacatur is the appropriate
4 result in this case. Only final judgments are accorded
5 preclusive effect. Arizona v. California, 530 U.S. 392, 414
6 (2000), supplemented, 531 U.S. 1 (2000). Where a party is
7 frustrated from seeking review of an adverse ruling, that
8 party “ought not in fairness be forced to acquiesce in the
9 judgment.” U.S. v. Bancorp, 513 U.S. at 25. Vacating the
10 judgment below properly “clears the path for future
11 relitigation of the issues between the parties.”
12 Munsingwear, 340 U.S. at 40.
13 Accordingly, because the voluntary actions of the
14 winning party below have prevented this Court from reviewing
15 the merits of the district court’s decision, vacatur of the
16 lower court’s judgment is the appropriate remedy in this
17 case.
18 We have considered the Republic and AR-SAT’s remaining
19 arguments and, after a thorough review of the record, find
20 them to be without merit.
21 For the foregoing reasons, the appeal is DISMISSED as
22 MOOT, and the district court judgment is hereby VACATED.
8
1 The case is REMANDED to the district court with directions
2 to DISMISS NML’s motion to confirm and the Republic’s and
3 AR-SAT’s cross-motion to vacate the attachment.
4
5 FOR THE COURT:
6 Catherine O’Hagan Wolfe, Clerk
7
8
9