Forgive my fascination with the saga of the defaulted Argentina bonds, but the Second Circuit has again weighed in with a new opinion out yesterday.
The opinion is of limited significance in itself, dealing only with affirming the specific remedy ordered by the District Court and enabling this aspect of the case to advance, should Argentina so choose, to a cert petition to the Supreme Court. Given that this decision is based just about entirely on state law of contracts, I wouldn't view Supreme Court review as very likely at all. (Although don't forget that there is a cert petition already out there, arising out of last fall's Second Circuit decision, and purporting to raise at least some issue, however thin, out of the Foreign Sovereign Immunities Act.)
But what I find interesting is the fundamental difference in view of the world between the Second Circuit in this decision and the U.S. amicus brief submitted in the context of last fall's briefing. The U.S. amicus brief is signed by U.S. Attorney for the Southern District of New York Preet Bharara, Principal Deputy Assistant Attorney General Stuart Delery, Legal Advisor to the State Department (and former Yale Law School Dean) Harold Koh, and others -- Official High Muckety-Mucks of Obama Administration Justice and of Elite Progressive Legal Wisdom. In expressing the interest of the United States in weighing in on the matter, they state one view of how the world works:
[T]he decision could harm U.S. interests in promoting issuers’ use of New York law and preserving New York as a global financial jurisdiction. See Allied Bank v. Banco Credito Agricola, 757 F.2d 516, 521 (2d Cir. 1985) (“The United States has an interest in maintaining New York’s status as one of the foremost commercial centers in the world.”). The decision could encourage issuers to issue debt in non-U.S. currencies in order to avoid the U.S. payments system, causing a detrimental effect on the systemic role of the U.S. dollar.
The Second Circuit's opinion comes from Barrington Parker, Rosemary Pooler, and Reena Raggi. They say:
We believe that the interest—one widely shared in the financial community—in maintaining New York’s status as one of the foremost commercial centers is advanced by requiring debtors, including foreign debtors, to pay their debts.
Well, both can't be right. I'll go with the Second Circuit, thank you. Congratulations to Judges Parker, Pooler and Raggi on bucking progressive groupthink at least on this one not-so-small point.