[00:00:01] Speaker 03: Case number 19-7014, El-Sayed Daman, Appellate versus Embassy of the State of Qatar at El. [00:00:09] Speaker 03: Ms. [00:00:09] Speaker 03: Walensky for the appellate. [00:00:10] Speaker 03: Ms. [00:00:11] Speaker 03: Lopez for the appellate. [00:00:18] Speaker 03: Good morning, Your Honors. [00:00:20] Speaker 03: May I please the court? [00:00:21] Speaker 03: Sylvia Walensky on behalf of the appellate. [00:00:25] Speaker 03: Appellate Mr. El-Sayed Daman raised four issues on appeal. [00:00:29] Speaker 03: all sounding in abusive discretion, reversible error by application of the wrong rule, and application of the wrong standard. [00:00:38] Speaker 03: And the issues on appeal are properly before the court based on the Salazar case, 602 F3rd at 437 of this circuit, with regard to the plain error rule. [00:00:50] Speaker 03: Appellants assert, asserted below, that the [00:00:58] Speaker 03: Rule 60 should be applicable for vacating the partial default judgment. [00:01:05] Speaker 03: However, on the plain face of the rule, that rule was inapplicable and it was error for the lower court to entertain... Why is it an enormous error since if 55 or 54 were used, it would have been an easier standard? [00:01:22] Speaker 03: Your Honor, it had to do with regard to the posture of where the case was. [00:01:27] Speaker 03: Rule 55C [00:01:28] Speaker 03: says at the default stage. [00:01:31] Speaker 03: Rule 60 says at the final judgment stage. [00:01:34] Speaker 03: In these proceedings below, we were in the middle, and both appellant and the lower court concede that it was in a unique procedural posture and the timing of their entrance into the... Suppose it's in a unique procedural posture, why wouldn't the judge have inherent authority to re-examine the default judgment? [00:01:56] Speaker 03: for two reasons. [00:01:57] Speaker 03: One, based on strict rule construction, Your Honor, 55C, 54B, as suggested by appellant, and 60 are unavailable at that moment in time. [00:02:07] Speaker 03: We're beyond default. [00:02:08] Speaker 03: We don't have a judgment yet. [00:02:10] Speaker 03: And additionally, there are still outstanding issues with regard to damages and with regard to punitive damages. [00:02:20] Speaker 03: And we were to hear they entered their appearance a day or two before [00:02:26] Speaker 03: the hearing on damages issues. [00:02:29] Speaker 03: And the other issue, Your Honor, is that the tardiness with which the appellees appeared put the case in the posture in which it was. [00:02:42] Speaker 00: So I'm not completely following this, because even if the rules that Judge Silverman mentioned don't strictly apply, and I'm not sure about that, but let's just assume they don't, [00:02:55] Speaker 00: I don't think you'd take the position that the district judge just was without authority at all to revisit the default, right? [00:03:02] Speaker 00: I mean, the district judge could have realized, I made a mistake on the default or I now knew information with respect to the default, so I'm not going to reconsider whether it was appropriate to enter the default. [00:03:14] Speaker 00: And if the district judge does have authority either under a rule or under inherent authority to do that, then it seems like the standard would be less than the standard under 60B. [00:03:25] Speaker 00: And so it seems harmless if the district judge erroneously pinned his ruling on Rule 60 instead of on whatever other source of authority would allow him to reconsider the entry of the default. [00:03:38] Speaker 03: Well, no, Your Honor. [00:03:41] Speaker 03: First of all, we have rules in place that particularly point to points in time when a rule can be used and not used. [00:03:51] Speaker 03: I think that's a critical factor here. [00:03:55] Speaker 03: what the court failed to give proper consideration to was the delay of appellee's appearance in the case. [00:04:04] Speaker 03: They sat on their hands, they appeared at the eleventh hour, and there are five circuits across the nation, the second, third, fourth, seventh, and tenth, which specifically say in three circumstances, which we have here, when an appellee fails to appear [00:04:24] Speaker 03: and default judgment is entered, they had notice, fair justice doesn't apply, then their argument is forfeited. [00:04:33] Speaker 03: And that is an overriding factor. [00:04:37] Speaker 01: What's the standard of review on that? [00:04:39] Speaker 01: It's abuse of discretion, isn't it? [00:04:41] Speaker 03: Abuse of discretion with regard to the five circuits? [00:04:49] Speaker 03: I don't recall, frankly. [00:04:51] Speaker 01: I think it would have to be abuse of discretion. [00:04:55] Speaker 01: And is it relevant at all that we're dealing with and that the judge was dealing with a sovereign entity? [00:05:05] Speaker 03: Yes, and I don't think that they should be given special consideration merely because they are a sovereign. [00:05:10] Speaker 03: This issue applies to sovereigns as it does to all parties. [00:05:14] Speaker 03: And if you purposefully choose, they're a wealthy nation, they had notice of the proceedings, they were properly served, they knew the default. [00:05:25] Speaker 01: But if I'm right, that was up to the discretion of the district judge, and you would have to conclude it was an abuse of discretion for him to allow the issue to be reopened. [00:05:36] Speaker 03: Well, no, Your Honor, because if there's a standard that's been established in other circuits to make specific application [00:05:44] Speaker 03: of a three-pronged test, that is not a discretionary element. [00:05:49] Speaker 03: That is an element of emphatic test application. [00:05:54] Speaker 03: And if the test application has the three prongs and they're met in this case, then appellee's delay necessarily forfeits their opportunity to present a form nonconvenience argument based on an arbitration clause, which is contested. [00:06:12] Speaker 03: And that is another fact as well, that with regard to the court failing to conduct an evidentiary hearing on the contested factual issues, which were laid forth below, and the appellees at this juncture come in and [00:06:35] Speaker 03: in their brief, it's integratively inconsistent, because on one hand, they want the arbitration clause to apply certain provisions of it, and on the other hand, they're putting forth arguments that make it inapplicable. [00:06:51] Speaker 01: Is this your strongest argument that the judge used the long rule on the federal rules? [00:07:00] Speaker 03: I think the strongest argument is that there is strict construction of the rules and that if it's not raised below, 55C and 54B were not raised below at all. [00:07:12] Speaker 03: They filed the wrong motion and they had to do that because they were late on their 59E motion, which had 28 days to do. [00:07:20] Speaker 03: They didn't show up until eight months later. [00:07:22] Speaker 03: And if we're going to have rules, I would beg the court to have strict construction of the rules because [00:07:29] Speaker 03: Otherwise, the party below could file wrong motions. [00:07:33] Speaker 03: Courts could entertain it in a procedurally incorrect posture, which both the court in its memorandum and the Pellies can see in their brief. [00:07:41] Speaker 03: It is inappropriate for Rule 60 to be inapplicable at this juncture by the plain language of the rule. [00:07:47] Speaker 03: And therefore, I think it behooves the court and argued to the court that [00:07:53] Speaker 03: strict rule construction should be applicable. [00:07:55] Speaker 04: Do donor precedents suggest that foreign sovereigns should be treated differently in these types of contexts? [00:08:02] Speaker 04: Like what about practical concepts? [00:08:05] Speaker 03: Only to the extent that they have an argument that is viable to be entertained. [00:08:17] Speaker 03: And the court addressed that when the default judgment was entertained in terms of [00:08:23] Speaker 03: jurisdiction and subject matter jurisdiction based on the FSIA, based on the Al-Haddad versus the United Arab Emirate case, which I successfully argued twice before this court. [00:08:35] Speaker 03: And therefore, we were beyond that point. [00:08:38] Speaker 03: And there is nothing in the precedent to say that simply because you're a foreign sovereign, your compliance with the rules or the standards and tests that apply [00:08:51] Speaker 03: in this jurisdiction or across the circuits should be inapplicable. [00:08:56] Speaker 03: And they failed on both of those fronts. [00:09:04] Speaker 03: I reserve the remainder of my time. [00:09:14] Speaker ?: Thank you, Counsel. [00:09:15] Speaker 02: Thank you, Your Honors. [00:09:15] Speaker 02: May it please the Court? [00:09:18] Speaker 02: I agree [00:09:21] Speaker 02: 100% with Judge Silberman's point that it is harmless error, to the extent there was, as Your Honor pointed out, an error at all. [00:09:30] Speaker 01: I should remind you, what I said was a question, not a statement. [00:09:35] Speaker 02: Absolutely, Your Honor. [00:09:36] Speaker 02: My apologies. [00:09:38] Speaker 01: I'm not part of your argument on this case. [00:09:42] Speaker 01: I'm a judge. [00:09:43] Speaker 02: Absolutely, Your Honor. [00:09:44] Speaker 02: My apologies. [00:09:46] Speaker 02: In any event, I do believe that it was harmless error to the extent there was error at all in the application of the standard. [00:09:53] Speaker 02: And to answer a question that was posed to Ms. [00:09:55] Speaker 02: Rulinski, Your Honor asked about the standard of review for a Rule 60B ruling. [00:10:01] Speaker 02: And we cited in our brief, and I believe they cited in their brief, the Salazar case, which says a Rule 60B ruling for abuse of discretion and less rooted in legal error, in which case review is de novo. [00:10:16] Speaker 00: So how was it not error at least to rely on Real 60B because there wasn't a final judgment as of yet? [00:10:24] Speaker 02: Right. [00:10:24] Speaker 02: Well, we made the point in our brief that we were acting out of an abundance of caution given the body of case law which says that a ruling on immunity is sufficiently final for purposes of bringing it to an interlocutory appeal. [00:10:40] Speaker 02: We were very cautious. [00:10:41] Speaker 02: We wanted to do the highest standard possible. [00:10:44] Speaker 02: I think that the lower standards could have been applied, but if it was in fact more appropriate to use Rule 54b or Rule 55, then we would have had to satisfy a lesser standard. [00:10:59] Speaker 02: So I don't see what remand to satisfy a lesser standard would, it would be wasteful to do that. [00:11:06] Speaker 02: Similarly, I want to reiterate the point about practical concepts. [00:11:11] Speaker 01: We could have relied on all three. [00:11:13] Speaker 02: Absolutely. [00:11:14] Speaker 02: We sure could have. [00:11:16] Speaker 02: Practical concepts versus Bolivia, that is practically, not entirely, practically on all fours with this case, where a default judgment was entered and then the foreign state came in and argued both immunity and an arbitration clause, which the court [00:11:35] Speaker 02: allowed, this court allowed, even despite the fact that the foreign sovereign had entered after the default judgment. [00:11:44] Speaker 02: As far as Ms. [00:11:46] Speaker 02: Rolinski's point regarding the evidentiary hearing, none was requested below, and an evidentiary hearing presupposes that there's evidence to away. [00:11:55] Speaker 02: There was no evidence submitted by Ms. [00:11:57] Speaker 02: Rolinski and Mr. Dochman regarding [00:12:04] Speaker 02: what the supposed unfairness and [00:12:07] Speaker 02: inconvenient nature of the arbitral forum would be. [00:12:11] Speaker 02: So the court did not err by not holding an evidentiary hearing because A, none was requested, and there was no evidence to weigh. [00:12:18] Speaker 04: Ms. [00:12:18] Speaker 04: Silvis, can I ask you about the forum nonconvenience argument? [00:12:22] Speaker 04: I mean, do you think, I mean, is there any limit to when a foreign sovereign can raise a forum nonconvenience argument? [00:12:30] Speaker 04: I mean, it is an equitable doctrine. [00:12:33] Speaker 04: And I guess the question is, you know, [00:12:38] Speaker 04: why should equitable considerations allow a foreign sovereign to bring a claim so late? [00:12:43] Speaker 04: I mean, is there any limit to when such a claim can be brought? [00:12:46] Speaker 02: I think there probably is a limit. [00:12:48] Speaker 02: I don't think this case suggests the limit. [00:12:50] Speaker 02: But I think, you know, in the Zuckerman versus Spader case, which is not a foreign sovereign case, but in that case, it talked about when it's too late to raise an arbitration clause, for example. [00:13:01] Speaker 02: And so in that case, there would have been lots of litigation. [00:13:05] Speaker 02: the party had appeared and acted as if it was fine to litigate the case in a court. [00:13:11] Speaker 02: In this case it's different because to the extent the embassy appeared in the EEOC proceeding, the arbitration clause was raised. [00:13:19] Speaker 02: I raised it in my first filing with the court where I mentioned it. [00:13:24] Speaker 02: I reserved the right in my first appearance with the court to raise any and all defenses. [00:13:30] Speaker 02: I had just been retained for a week so I didn't have my [00:13:33] Speaker 02: arms wrapped around the whole case. [00:13:35] Speaker 02: And then when we filed our Rule 60B motion, we raised Rule 60B-4 for sovereign immunity and Rule 60B-6 for the arbitration clause. [00:13:43] Speaker 02: So this case certainly does not pose the limit or demark the line. [00:13:55] Speaker 02: Finally, I wanted to point out that we did not concede anything with regard to the rules, the standard, and anything regarding Rule 60B. [00:14:12] Speaker 02: If Your Honors wanted to hear more about the arbitration clause, I'd be happy to address that otherwise. [00:14:20] Speaker 02: Thank you, Your Honors, for your time. [00:14:23] Speaker 02: Thank you. [00:14:35] Speaker 03: With regard to legal error, the review for the court is de novo, and we assert that the court below made legal error in considering and entertaining the Rule 60 motion at all. [00:14:49] Speaker 03: It should have been denied as premature and not applicable. [00:14:53] Speaker 03: They could have, as the court pointed out, filed any number of things. [00:14:58] Speaker 03: As I said before, they were out of time on their 59E. [00:15:01] Speaker 03: They failed to raise 55, which also is inapplicable. [00:15:05] Speaker 03: and 54B as well. [00:15:09] Speaker 03: And there are, because of the outstanding tests, the ruling of the court was inappropriate. [00:15:15] Speaker 03: We would assert that this is a quintessential case for the court to remand and have the partial default judgment reinstated because of failure of rule construction, but also because of [00:15:33] Speaker 03: the determinations of other circuits regarding when it is too late, and particularly the three-pronged test which states that the actions of the defendant, of the appellee, make their assertions before the court in such an untimely manner. [00:15:50] Speaker 01: What do you do about the Olivia case? [00:15:56] Speaker 03: That matter was after the Rule 60 [00:16:03] Speaker 03: was determined. [00:16:04] Speaker 03: There was a final judgment in that matter and there was consideration. [00:16:09] Speaker 03: I think the biggest difference is that in that case there were no contested facts, whereas here we have contested facts. [00:16:20] Speaker 03: Is the agreement in place or isn't it? [00:16:22] Speaker 03: Did it expire on its plain face or didn't it? [00:16:26] Speaker 03: Did the arbitration clause, was it applicable or not? [00:16:30] Speaker 03: Had there been an evidentiary hearing [00:16:32] Speaker 03: The court would have heard this discrepancy between the Arabic language not having the arbitration, but the English having it. [00:16:38] Speaker 01: The evidentiary hearing argument is you never proposed any evidence for which the court would have a hearing. [00:16:47] Speaker 03: Well, we made our argument. [00:16:49] Speaker 03: It is true that we did not submit an affidavit to that effect, but we did ask for argument, and it was anticipated that at that time we would present [00:17:00] Speaker 03: are evidence, or the courts could have done what the Southern District of New York does, and that is to say, put all your evidence in at this stage, and if an additional hearing is required, we will conduct one. [00:17:14] Speaker 03: But to simply, the case law is such that if you merely allow the defendant, the appellee, to come in at such a late stage with profound prejudice, financial and otherwise too, the appellant, then they should not be [00:17:30] Speaker 03: a plaintiff should be given every opportunity to be heard on the contested facts. [00:17:36] Speaker 03: And that did not occur in this case. [00:17:40] Speaker 03: And we deem that to be reversible error. [00:17:45] Speaker 00: Thank you, counsel. [00:17:46] Speaker 00: Thank you, counsel. [00:17:48] Speaker 00: The case is submitted. [00:17:49] Speaker 03: Thank you.