NML v. Argentina: Ne Exeat!

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In the latest twist in the Argentine debt saga, NML Capital has sought to enjoin Cesar Guido Forcieri, a former Argentine government official and World Bank director, from departing as planned from the United States. NML claims that he failed to comply with a subpoena and that immediate relief was necessary in light of his imminent and apparently permanent departure from the country.

The judge denied the motion without much comment (though he did call the proposed relief “draconian”). This piqued my interest because of the similarity of the relief sought to the writ of ne exeat. Ne exeat was an equitable writ directed to the sheriff commanding him to commit the defendant to prison until the prison gave security not to leave the jurisdiction without the court’s permission. You may say that’s old-fashioned nonsense, but check out, for example, Mass. R. Civ. P. 4.3(c):

An order of arrest may be entered upon motion with or without notice when the plaintiff has obtained a judgment or order requiring the performance of an act, the neglect or refusal to perform which would be punishable by the court as a contempt, and where the defendant is not a resident of the Commonwealth or is about to depart therefrom, by reason of which nonresidence or departure there is danger that such judgment or order will be rendered ineffectual. The motion shall be accompanied by an affidavit showing that the plaintiff is entitled to the relief requested. The court may fix such terms as are just, and shall in any event afford the defendant an opportunity to obtain his release by the giving of an appropriate bond. In this rule the words “plaintiff” and “defendant” mean respectively the party who has obtained the judgment or order and the person whose arrest is sought.

Note that while at common law the writ had to be directed to the defendant, the Massachusetts rule is broader, allowing an order of arrest of anyone against whom an order has entered if disobedience to the order could be punished as a contempt. Now, I can’t say I’ve ever seen this used in practice, though I have been tempted once or twice to try.

NML cites some cases for the proposition that the court has the power to enjoin Forcieri in this way. Now, it could be that such a remedy is available under applicable state law and thus arguably available to the federal court under FRCP 69. But this is problematic, since the Grupo Mexicano case—a case that I think was wrongly decided but that well expresses Justice Scalia’s philosophy of judging—teaches that the federal court’s equitable powers are no broader today than they were in 1789.

Under Grupo Mexicano, does the federal court have the power to issue an injunction in the nature of a ne exeat against someone other than the defendant? In light of the judge’s denial of NML’s motion, the court won’t reach that question, but it seems to me the answer is no.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

2 thoughts on “NML v. Argentina: Ne Exeat!

    1. Basically, yes, that’s the suggestion. In Grupo Mexicano, the issue was whether a court could enjoin transfer, encumberance, etc. of property that was not specifically at issue in the underlying lawsuit while the action was still pending. The Court held that such a preliminary injunction was improper because historically a creditor’s bill couldn’t be brought until a debt was reduced to a money judgment. To me Justice Scalia seems to be saying that new equitable remedies are not permitted in federal courts.

      Now, maybe Justice Scalia was doing bad legal history (there’s some suggestion in the case that there may have been exceptions to the rule even in the historical practice), and if I’m wrong, then most likely it’s because there’s an old English case I don’t know about that says you can do what NML tried to do here. Bad legal history is an occupational hazard.

      I do think Justice Scalia’s approach is wrongheaded. I mean, we received the common law as well as equity from England, but no one says that the old forms of action should rule us from their graves. But his approach is consistent with his whole judicial philosophy. I remember attending a Tanner Lecture he gave when I was an undergraduate in which he said (as I recall) that judges should treat the Constitution as civil law judges treat a code, not as common law judges approach the common law. But at least codes are subject to revision by the legislature. We can’t do anything now to change the historical practice of the English Court of Chancery in 1789. (I suppose someone could propose an amendment to the Constitution that would increase the equity jurisdiction of the federal courts, but what are the chances?)

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