Eton Park Capital Management L.P. v. Argentine Republic
- Loretta Preska
- 1:16-cv-08569
- U.S. District Court · Southern District of New York
- 10
In Petersen v. Argentine Republic, Judge Preska granted in part and denied in part the Republic’s request to reconsider an earlier summary-judgment decision.
The ruling affected the Argentine Republic, YPF S.A., Petersen Energía Inversora, S.A.U., Petersen Energía, S.A.U., Eton Park Capital Management, L.P., Eton Park Master Fund, Ltd., and Eton Park Fund, L.P. It limited the evidence the Republic could submit before the damages-related trial and left the earlier summary-judgment rulings otherwise in place.
What happened
Petersen Energía Inversora, S.A.U. and Petersen Energía, S.A.U., along with Eton Park Capital Management, L.P. and related funds, sued the Argentine Republic and YPF S.A. after previously owning stakes in YPF. The court had earlier granted YPF summary judgment, partly granted and partly denied the Republic’s summary-judgment motion, and granted the plaintiffs summary judgment on liability against the Republic while denying judgment on damages.
The Republic asked the court to reconsider that decision. It argued that the court should have held a live hearing on experts’ disagreements about Argentine law and should consider a later legal opinion and arguments about prejudgment interest. The court rejected those requests, finding that the Republic had not shown the kind of obvious error required for reconsideration and had raised some arguments or evidence too late.
Judge Loretta A. Preska granted in part and denied in part the Republic’s reconsideration motion. She allowed the Republic to submit evidence about whether it acquired control of YPF shares by May 7, 2012, because the precise control date would require a trial, but barred evidence that the Republic acquired control after May 7, 2012. She also denied the Republic’s request for oral argument as moot.
The detailed version
- Eton Park Capital Management L.P. v. Argentine Republic · No. 1:16-cv-08569
- Loretta Preska
- May 24, 2023
Background
The plaintiffs were Petersen Energía Inversora, S.A.U., Petersen Energía, S.A.U., Eton Park Capital Management, L.P., Eton Park Master Fund, Ltd., and Eton Park Fund, L.P. They previously owned stakes in YPF S.A. and sued YPF and the Argentine Republic.
On March 30, 2023, the court issued an earlier opinion and order. It granted YPF’s motion for summary judgment. It granted the Republic’s motion for summary judgment on the plaintiffs’ claim for breach of the duty of good faith and fair dealing, but otherwise denied the Republic’s motion. It granted the plaintiffs’ motion for summary judgment against the Republic as to liability, but denied it as to damages.
The Republic then moved for reconsideration. Reconsideration is an extraordinary remedy generally available only when there has been a change in controlling law, new evidence, or a need to correct a clear error or prevent obvious injustice. The court explained that reconsideration cannot be used to present new arguments or evidence or to relitigate issues already decided.
Arguments and analysis
The Republic argued that it was unfair for the court to decide questions of Argentine law without live testimony from the parties’ legal experts. The court rejected that argument. The Republic had not requested a live hearing during the summary-judgment briefing and had previously argued that disagreements between experts about foreign law did not prevent summary judgment. The court concluded that the Republic could not take the opposite position only after receiving an unfavorable ruling.
The court also held that the argument failed on its merits. Determining foreign law is a legal question, and Federal Rule of Civil Procedure 44.1 permits, but does not require, the court to consider testimony. The court had received translated statutes and cases, expert opinions, depositions, and rebuttal reports. It found no authority requiring a live hearing on foreign law.
The Republic also relied on a legal opinion by Judge Villanueva. The court declined to reconsider its decision based on that opinion because the Republic had requested it, submitted it for the first time in its reply, and used it as a new attack on the court’s ruling. The court characterized it as newly created expert testimony responding to the ruling, rather than newly discovered evidence that could support reconsideration.
The court also rejected the Republic’s argument concerning the prejudgment-interest rate. The Republic relied on what an Argentine court would typically do, but the court concluded that this did not show that the court had abused its discretion or made an obvious error.
Ruling
The court granted in part and denied in part the Republic’s motion for reconsideration. It allowed the Republic to submit evidence showing that it did not acquire control of YPF’s shares, or temporarily occupy those shares, until May 7, 2012. The court reserved judgment on whether the Republic’s interpretation of its answer was plausible and stated that the precise date of control would require a trial.
The court would not allow the Republic to introduce evidence that it acquired control after May 7, 2012, because the YPF Expropriation Law plainly provided for Republic control by its effective date, as the court had already found.
The court also denied the Republic’s letter motion for oral argument as moot. It directed the clerk to close the open motions and directed counsel to confer and report whether their positions on how to proceed had changed in light of the decision.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.