Capital v. Spaceport Sys. Int'l

• Decision Date: 25 May 2011
• Docket Number: No. CV 11–03507 SJO (RZx).,CV 11–03507 SJO (RZx).
• Citation: 788 F.Supp.2d 1111
• Court: U.S. District Court — Central District of California
• Parties: NML CAPITAL, LTD., Plaintiff,v.SPACEPORT SYSTEMS INTERNATIONAL, L.P., a Delaware limited partnership; The Republic of Argentina, a foreign state; and does 1–10, Defendants.

788 F.Supp.2d 1111

NML CAPITAL, LTD., Plaintiff,

v.SPACEPORT SYSTEMS INTERNATIONAL, L.P., a Delaware limited partnership; The Republic of Argentina, a foreign state; and does 1–10, Defendants.

No. CV 11–03507 SJO (RZx).

United States District Court, C.D. California.

May 25, 2011.

Anthony P. Alden, Bruce E. Van Dalsem, Harold A. Barza, Quinn Emanuel Urquhart and Sullivan LLP, Jaime W. Marquart, Baker Marquart LLP, Los Angeles, CA, Eric C. Kirsch, Robert Allen Cohen, Dechert LLP, New York, NY, for Plaintiff.John A O'Malley, Stephanie Anne Stroup, Fulbright and Jaworski LLP, Carl L. Grumer, Donald R. Brown, Manatt Phelps and Phillips LLP, Los Angeles, CA, Carmine D. Boccuzzi, Jonathan I. Blackman, Sara A. Sanchez, Cleary Gottlieb Steen & Hamilton LLP, New York, NY, for Defendants.

ORDER DENYING PLAINTIFF'S EX PARTE APPLICATION FOR TEMPORARY PROTECTIVE ORDER, TEMPORARY RESTRAINING ORDER, AND ORDER TO SHOW CAUSE [Docket No. 2]

S. JAMES OTERO, District Judge.

This matter is before the Court on Plaintiff NML Capital, Ltd.'s (“Plaintiff”) Ex Parte Application for Temporary Protective Order, Temporary Restraining Order, and Order to Show Cause (“Application”), filed on April 25, 2011. (Docket No. 2.) Defendants Republic of Argentina (“Argentina”) and Spaceport Systems International, L.P. (“Spaceport”) (collectively, “Defendants”) submitted Oppositions to Plaintiff's Application on May 2, 2011, and May 5, 2011, respectively. Plaintiff filed Replies to Defendants' Oppositions on May 2, 2011, and May 6, 2011.¹ The United States lodged a Statement in opposition to Plaintiff's Application as an interested party. The Court granted permission for Plaintiff to file a Response to the United States' Statement. The Court found this matter suitable for disposition without oral argument. See Fed.R.Civ.P. 78(b). For the following reasons, Plaintiff's Application is DENIED.

I. FACTUAL AND PROCEDURAL BACKGROUND

In the parties' colorful words, this suit is between “an offshore ‘vulture’ hedge fund” and a “scofflaw,” “serial debt defaulter.” (Appl. 2:16, 17:11; Argentina's Opp'n 1:13.) The parties do not dispute most of the facts of the instant action. Plaintiff is a limited liability corporation organized under Cayman Islands law and headquartered in the Cayman Islands. (Compl. ¶ 2.) Defendant Spaceport is a limited partnership organized under Delaware law and with a principal place of business in Lompoc, California. ( Id. ¶ 3.) Defendant Argentina is a foreign state. ( Id. ¶ 4.)

In December 2001, Defendant Argentina suspended interest and principal payments to holders of $80 billion in public external debt. (Appl. Mem. P. & A. 2:10–11; Argentina's Opp'n 4:15–20.) Plaintiff, as a holder of the bonds, brought suits against Defendant Argentina. (Appl. Mem. P. & A. 2:20–22; Argentina's Opp'n 5:9–11 (“NML has pursued aggressive attachment and execution efforts against the Republic both inside and outside the United States....”).) Plaintiff obtained five judgments against Defendant Argentina. (Decl. of Bruce E. Van Dalsem in Supp. of Appl. (“Van Dalsem Decl.”) ¶¶ 5, 6.) One of those judgments pertains to NML Capital, Ltd. v. Republic of Argentina, Case No. 03–CIV–8845, which has no pending appeals. ( Id. Ex. C.) In that case, Plaintiff obtained a money judgment in the amount of $284,184,632; approximately $66,570,917.36 in post-judgment interest has accrued on the judgment. ( Id. ¶ 5.) On April 25, 2011, Plaintiff registered that judgment against Plaintiff with the Court. (Appl. Mem. P. & A. 3:4–5.)

Defendant Argentina established the Argentine Comisión Nacional de Actividades Espaciales (Argentine National Space Activities Commission (“CONAE”)) in 1991 through a presidential decree. (Van Dalsem Decl. Ex. E.) CONAE is obligated “to undertake, design, execute, control, manage and administer space projects and undertakings ... for peaceful purposes.” ( Id.) CONAE and the United States' National Aeronautics and Space Administration (NASA) entered into an international Memorandum of Understanding (the “MOU”) in March 2004 to jointly develop and implement a project called Aquarius. (Decl. of Eric E. Ianson in Supp. of the United States' Statement (“Ianson Decl.”) ¶¶ 8, 11.) The objective of the Aquarius project is to launch the Aquarius/Satélite de Aplicaciones Cientificas (Scientific Applications Satellite) (“Aquarius/SAC–D Satellite”),² which will “make pioneering space-based measurements of Sea Surface Salinity (SSS) with the precision, resolution, and coverage needed to characterize salinity variations and investigate the linkage between ocean circulation, the Earth's water cycle, and climate variability.” ( Id. ¶ 5.) Other important goals of the mission are to “[m]onitor[ ]natural disasters, fires, volcanic events, agriculture, land use, and other environmental variables” and to learn “[t]he relationship between regional soil moisture and essential climate variables ... on the appearance and spread of diseases.” (Van Dalsem Decl. Ex. M at 3.) Data collected by the Aquarius/SAC–D Satellite “will be analyzed ... for up to six months after launch, at which time the data products will be released to the general science community.” ( Id. Ex. M at 4.)

The Aquarius/SAC–D Satellite is comprised of instruments contributed by CONAE, NASA, the Agenzia Spaziale Italiana of Italy, the Centre National d'Etudes Spatiales of France, and the Canadian Space Agency of Canada. (Decl. of Donald R. Brown in Supp. Argentina's Opp'n (“Brown Decl.”) Ex. A at 6; Ianson Decl. ¶ 13.) Pursuant to the MOU, CONAE provided the spacecraft bus, which supplies the power and communications to all instruments in the satellite. (Ianson Decl. ¶ 12; Decl. of Keith J. Volkert in Supp. of Reply (“Volkert Decl.”) ¶ 8.) NASA contributed the rocket and the Aquarius instrument that will measure the sea surface salinity. (Ianson Decl. ¶ 12.) NASA has expended approximately $250,000,000 on the Aquarius project. The Aquarius/SAC–D Satellite is currently at the Vandenberg Air Force Base undergoing final tests and preparation for a launch scheduled on June 9, 2011. ( Id. ¶¶ 16–20.) NASA can support a delay in the launch up to July 15, 2011, after which the Aquarius/SAC–D Satellite cannot be launched until February 2012. ( Id. ¶ ¶ 20, 21.) Were the launch to be delayed until February 2012, NASA estimates that it will incur a direct cost of $30,000,000 to $40,000,000. ( Id. ¶ 22.) Moreover, NASA represents that interference, at this stage, may frustrate its relationship with other foreign space agencies on future collaborative efforts. ( Id. ¶ 27.)

On April 25, 2011, Plaintiff filed a Complaint for Creditor's Suit. Simultaneously, Plaintiff submitted an Ex Parte Application for Temporary Protective Order (“TPO”), Temporary Restraining Order (“TRO”), and Order to Show Cause. Plaintiff asks the Court to place a temporary lien on the Aquarius/SAC–D Satellite and to prevent Defendants and the United States from transferring or launching the Aquarius/SAC–D Satellite for at least 40 days. (Appl. 2:6–23.)

II. DISCUSSIONA. Legal Standards

1. Temporary Protective Order

Federal Rule of Civil Procedure (“Rule”) 64 states: “[E]very remedy is available that, under the law of the state where the court is located, provides for seizing a person or property to secure satisfaction of the potential judgment.” Fed.R.Civ.P. 64. Therefore, Rule 64 “permits state seizure provisions to be used in federal courts.” Reebok Int'l, Ltd. v. Marnatech Enters., Inc., 970 F.2d 552, 558 (9th Cir.1992). Pursuant to California law, “[a]t the time of applying for a right to attach order ... the plaintiff may apply ... for a temporary protective order.” Cal.Code Civ. Proc. § 486.010 (2006). A court may issue a TPO on an ex parte basis only if it finds the following: (1) the claim is one upon which an attachment may be issued; (2) the plaintiff has established the probable validity of the claim; (3) the order is not sought for a purpose other than the recovery of the claim; and (4) the plaintiff will suffer great or irreparable injury if the TPO is not issued. Id. § 486.020. “ ‘Probable validity’ requires the plaintiff to ‘show that it is more likely than not it will obtain a judgment against the defendant.’ ” Rose v. Abraham, No. CIV–F–08–606, 2008 WL 2275573, at *3 (E.D.Cal. May 21, 2008).

2. Temporary Restraining Order

“The standard for issuing a temporary restraining order is identical to the standard for issuing a preliminary injunction.” Lockheed Missile & Space Co. v. Hughes Aircraft Co., 887 F.Supp. 1320, 1323 (N.D.Cal.1995) (applying standard to a request for a TRO); see also Arcamuzi v. Cont'l Air Lines, Inc., 819 F.2d 935, 937 (9th Cir.1987) (applying the same standard for a preliminary injunction); Lee v. U.S. Taekwondo Union, 331 F.Supp.2d 1252, 1261 (D.Haw.2004) (“The standard for granting a temporary restraining order ... is identical to that for a preliminary injunction.”). In Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 374, 172 L.Ed.2d 249 (2008), the Supreme Court held that a plaintiff seeking a preliminary injunction must establish that: (1) it is likely to succeed on the merits; (2) it is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in its favor; and (4) an injunction is in the public interest. “Under Winter, plaintiffs must establish that irreparable harm is likely, not just possible, in order to obtain a preliminary injunction.” Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir.2011).³ In the Ninth Circuit, “ ‘serious questions going to the merits' and a hardship balance that tips sharply toward the plaintiff can [also] support issuance of an injunction, assuming the other two elements of the Winter test are also met.” Id. at 1132, 1135 (holding that the “sliding scale” test remains viable “so long as the plaintiff also shows that there is a likelihood of irreparable...