Case of the Day: TIG Insurance v. Argentina
Posted on September 8, 2020
The case of the day is TIG Insurance Co. v. Republic of Argentina (D.C. Cir. 2020). I last wrote about the case a year ago. Here was my description of the case from the prior post:
TIG had an arbitral award against Argentina and a default judgment confirming the award that, with interest and penalties, was in the amount of $33.66 million. In 2018, Argentina decided to list real property in Washington for sale. The property had previously been used as a diplomatic residence but had fallen into disrepair. TIG moved for writs of attachment and execution, but Argentina immediately thereafter took the property off the market. The question was whether the property had immunity from execution under the FSIA.
The district court held that the property was immune from execution, because it would not be used for commercial purposes at the time the writ of attachment would issue. I criticized the court’s reasoning, which focused on an arid and unprofitable parsing of the grammar of the statute that didn’t seem to yield a clear result to me anyway.
The DC Circuit wisely refused to adopt the district court’s easily evaded rule on timing and opted instead for a rule making the time of filing the motion for a writ of attachment. There is a long discussion of the text of the statute and the textual warrants for the parties’ positions that I am not going to cover here. Read it if your are interested! But the timing question is not the only question. How do you decide whether a property is used for commercial purposes, once you know the time as of which you need to know the answer to that question? The court held that you look at the totality of the circumstances. This is a reasonable test that doesn’t favor judgment creditors or sovereign judgment debtors across the board. In the court’s example, suppose a state uses an airplane to ferry its officials from place to place, but very occasionally uses it for commercial trips. If the plaintiff files a motion for an attachment at precisely the time when the plan is being used for a commercial purpose, does it make sense to ignore the totality of the circumstances? Probably not. And the same would be true if the facts were reversed: a plane that is ordinarily used for commercial flights probably shouldn’t be treated as exempt if, at the time of filing, the foreign state happens to be using it to transport an official.
The ultimate outcome of the case is still to be decided on remand, but I think the decision is a victory for common-sense readings of statutes. Really, it was the parsing of the grammar of the word “used,” in the lower court decision, that irked me. Of course when it is clear, the plain meaning of a statute generally controls. But when you find yourself thinking hard about the tense of the participle “used” in the phrase “used for a commercial activity,” you probably are on the wrong path.