Bainbridge Fund Ltd. v. Republic of Arg.
| Decision Date | 22 June 2022 |
| Docket Number | Docket Nos. 21-37,21-38,August Term 2021 |
| Citation | 37 F.4th 847 |
| Parties | BAINBRIDGE FUND LTD., Plaintiff-Appellant, v. The REPUBLIC OF ARGENTINA, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Second Circuit |
Anthony J. Constantini (David T. McTaggart, on the brief), Duane Morris LLP, New York, NY, for Plaintiff-Appellant.
Carmine D. Boccuzzi, Jr. (Rahul Mukhi, Rathna J. Ramamurthi, Abigail K. Gotter-Nugent, on the brief), Cleary Gottlieb Steen & Hamilton LLP, New York, NY, for Defendant-Appellee.
Before: Walker, Leval, and Park, Circuit Judges.
Plaintiff Bainbridge Fund Ltd. is the beneficial owner of bonds issued by the Republic of Argentina. Argentina defaulted on these bonds back in 2001, but Bainbridge didn't sue to recover on them until 2016. The United States District Court for the Southern District of New York (Preska, J. ) dismissed Bainbridge's claims as untimely under New York's six-year statute of limitations for contract actions, see N.Y. C.P.L.R. § 213, our nonprecedential decisions in Lucesco Inc. v. Republic of Argentina , 788 F. App'x 764 (2d Cir. 2019), and Bison Bee LLC v. Republic of Argentina , 778 F. App'x 72 (2d Cir. 2019). Bainbridge appeals, asking us to reconsider those decisions. Specifically, Bainbridge argues that (1) the twenty-year statute of limitations for recovery on certain bonds under N.Y. C.P.L.R. § 211(a) applies to its claims against Argentina; and (2) even if the six-year limitations period for contract actions applies, it was tolled under N.Y. Gen. Oblig. Law § 17-101 because Argentina "acknowledged" this debt when it publicly listed the bonds in its quarterly financial statements (the "Quarterly Reports").
We reject these arguments. First, the twenty-year statute of limitations does not apply to claims on Argentine bonds because a foreign sovereign is not a "person" under N.Y. C.P.L.R. § 211(a). Second, tolling under N.Y. Gen. Oblig. Law § 17-101 is inapplicable because the Quarterly Reports did not "acknowledge" the debt at issue in a way that reflected an intention to pay or seek to influence the bondholders’ behavior. To the contrary, Argentina repeatedly stated that the bonds "may remain in default indefinitely." Bainbridge's claims are thus time-barred, and we affirm the judgments of the district court.
Bainbridge is the beneficial owner of seven bonds issued by Argentina between 1990 and 1999.1 In 2001, Argentina "declared a moratorium on the payment of principal and interest with respect to all of its foreign debt," including the bonds at issue here. See, e.g. , App'x at 22. In 2005, as part of its debt restructuring, Argentina offered its debtholders the opportunity to participate in a bond exchange (the "Exchange"). Argentina issued a prospectus, notifying creditors that "[e]xisting defaulted bonds eligible for exchange that are not tendered may remain in default indefinitely" and that Argentina "has announced that it has no intention of resuming payment on any bonds eligible to participate in [the] exchange offer." Id. at 1075 (alteration in original). In 2010, Argentina again invited debtholders to participate in the Exchange. Argentina issued another prospectus, stating that "[e]ligible [s]ecurities in default that are not exchanged pursuant to the" 2010 offer "may remain in default indefinitely." Id. at 26. As with the 2005 exchange offer, Argentina announced that if a holder of defaulted debt "elect[s] not to tender" its debt "pursuant to the [2010 Exchange,] there can be no assurance that [the debtholder] will receive any future payments or be able to collect through litigation."2 Id. (emphasis omitted). Bainbridge did not participate in either exchange offer. Around the time of these exchange offers, between 2007 and 2015, Argentina's Finance Secretariat of the Tax and Economy Ministry published quarterly statements reflecting its total national debt (the "Quarterly Reports"). The reports listed numerous bonds—including the six at issue on appeal—within the category "Bonds Not Submitted to the Exchange." Id. at 468–70, 472–73.
In November 2016, Bainbridge filed two complaints against Argentina in the United States District Court for the Southern District of New York, seeking recovery on seven Argentine bonds issued in the 1990s, all but one of which had matured between 2002 and 2005.3 At the time of filing, two cases were pending in the district court that raised the same issues and claims as Bainbridge. See Lucesco, Inc. v. Republic of Argentina , 16-CV-7638, 2018 WL 9539167 (S.D.N.Y. Sept. 10, 2018) ; Bison Bee LLC v. Republic of Argentina , 18-CV-3446, 2018 WL 8058126 (S.D.N.Y. Oct. 22, 2018). The district court concluded in those cases that the six-year statute of limitations under N.Y. C.P.L.R. § 213 applied to claims based on Argentina's defaulted bonds and that the limitations period was not tolled based on the Quarterly Reports. See Lucesco, Inc. v. Republic of Argentina, 16-CV-7638, 2018 WL 9539167 (S.D.N.Y. Sept. 10, 2018) ; Bison Bee LLC v. Republic of Argentina , 18-CV-3446, 2018 WL 8058126 (S.D.N.Y. Oct. 22, 2018). The district court stayed Bainbridge's actions pending appeal of these decisions.
We resolved both appeals by summary order, concluding that the plaintiffs’ claims on Argentine bonds were barred by New York's six-year statute of limitations. We rejected the plaintiffs’ reliance on N.Y. C.P.L.R. § 211(a) and N.Y. Gen. Oblig. Law § 17-101. See Lucesco Inc. , 788 F. App'x at 767–69 ; Bison Bee , 778 F. App'x at 73. Bainbridge then moved for partial summary judgment on its one claim that was timely under the six-year statute of limitations. Bainbridge agreed that Lucesco and Bison Bee "foreclose[d]" its claims on the remaining bonds and stipulated "to a proposed order and judgment" disposing of these claims, while "retain[ing] any rights it has to appeal ... to ask the Second Circuit to reconsider its prior interpretation of New York law." App'x at 631. On December 1, 2020, the district court entered judgments dismissing these claims. Bainbridge filed timely notices of appeal, and we consolidated the cases on appeal.
Bainbridge argues that its claims against Argentina are timely for two reasons. First, the twenty-year statute of limitations in N.Y. C.P.L.R. § 211(a) applies to its claims. Second, even if New York's six-year statute of limitations for breach of contract applies, this limitations period was tolled because Argentina "acknowledged" its debt under N.Y. Gen. Oblig. Law § 17-101. We review the district court's "interpretation and application of a statute of limitations" de novo . Muto v. CBS Corp. , 668 F.3d 53, 56 (2d Cir. 2012).
The statute of limitations for breach of contract claims in New York is generally six years. N.Y. C.P.L.R. § 213(2). Section 211(a) allows a twenty-year statute of limitations for a limited class of actions seeking to recover on certain bonds issued by "the state of New York or ... any person, association or public or private corporation." N.Y. C.P.L.R. § 211(a).4 Bainbridge argues that its claims fall under this provision because Argentina is a "person" for purposes of section 211(a). We disagree and conclude that section 211(a) does not apply to claims against foreign sovereigns.
First, the ordinary meaning of "person" is a natural person. See Butterworth v. O'Brien , 23 N.Y. 275, 280 (1861) (). The Supreme Court has explained that the common usage of the term "persons" does "not include the sovereign, and statutes employing it will ordinarily not be construed to do so." United States v. United Mine Workers , 330 U.S. 258, 275, 67 S.Ct. 677, 91 L.Ed. 884 (1947) ; see also Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 273 (2012) ("[T]he word person traditionally excludes the sovereign" given "a ‘longstanding interpretive presumption’ to that effect." (quoting Vt. Agency of Nat. Res. v. United States ex rel. Stevens , 529 U.S. 765, 780, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000) ). New York courts similarly presume that "[t]he word person does not, in its ordinary or legal signification, embrace a State or government." In re Fox , 52 N.Y. 530, 535 (1873), aff'd sub nom. United States v. Fox , 94 U.S. 315, 24 L.Ed. 192 (1876).5
Second, the ordinary interpretation of "person" gives meaning to each term in the provision. By contrast, Bainbridge's interpretation of "person" in section 211(a) to encompass "any being whom the law regards as capable of rights or duties," Appellant's Br. at 23 (quoting Person , Black's Law Dictionary (11th ed. 2019)), would render much of the surrounding language meaningless. Specifically, Bainbridge's proposed interpretation would render superfluous the language specifying that section 211(a) applies to debt issued by "the state of New York" and "any ... association or public or private corporation." N.Y. C.P.L.R. § 211(a) ; see Mestecky v. City of New York , 30 N.Y.3d 239, 243, 66 N.Y.S.3d 207, 88 N.E.3d 365 (2017) ; see also N.Y. Stat. Law § 231 ().
Finally, Bainbridge's reliance on the broad interpretation New York courts have given the term "person" in other contexts is misguided. The statutes Bainbridge relies on—rules concerning intervention, joinder, interpleader, and actions against multiple parties, see N.Y. C.P.L.R. §§ 1001, 1002, 1006, 1007, 1013, 3002 —are procedural rules of general...
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