National Security Concerns as a “Burden” in Discovery Disputes

How should U.S. national security concerns be weighed in discovery disputes in cases that do not directly involve the U.S. government?  That question is under consideration in Pao Taftneft v. Ukraine, a case currently before the U.S. District Court for the District of Columbia, in which Russian investors seek to enforce a foreign arbitral award against Ukraine. The U.S. government recently filed a Statement of Interest arguing that the “discovery process in this case risks being misused for non-litigation purposes that undermine Ukraine’s national security and the foreign policy and national security interests of the United States.”  Unfortunately, the Statement of Interest is not very helpful in clarifying how courts should approach the question.

Background

Many cases seeking to enforce large arbitral awards against sovereigns involve decades of litigation in courts around the world.  Tatneft is no exception. A 2014 arbitral award ordered Ukraine to pay $173 million in a dispute involving an agreement to operate Ukraine’s largest oil refinery. Efforts then commenced in various courts to enforce the award. In the United States, the award was confirmed in 2020 by a federal court in the District of Columbia. The subsequent enforcement litigation, which involved the creditors’ efforts to locate asset through discovery, was put on hold after Russia’s 2022 invasion of Ukraine pursuant to a motion by both parties.  Tatneft subsequently changed its position, however, and now argues that the litigation should go forward despite the ongoing war.  The case is pending before Judge Colleen Kollar-Kotelly, who asked the U.S. government for its views on whether the stay should be continued. Separate litigation in New York involves subpoenas to third parties, including law firms and banks.

Lifting the Stay

The U.S. government’s Statement, filed on May 13, 2026, argues for continuing the stay. If the stay is lifted, the United States requests a reconsideration of “the appropriate scope of post-judgment discovery.”

The Statement argues that the contested discovery seeks sensitive Ukrainian “military and economic information,” including disclosure related to the work of military contractors and other entities that play a vital role in military defense. Ukraine argues that the discovery efforts are actually designed to reveal military intelligence, including the identity and location of important suppliers. A protective order would be insufficient to address such concerns, the statement says, citing the close relationship between the judgment creditors and the Russian government.

In terms of how these concerns are related to U.S. national security – as opposed to how they affect Ukraine – the Statement argues that the United States and its allies “have been committed to Ukraine’s sovereignty and have provided substantial economic and security assistance to Ukraine” and that “information related to Ukraine’s economic links to the outside world would ‘reveal in exacting detail the sources and nature of the world’s support for Ukraine.’” Disclosures “could also impact active peace negotiations between the parties.”

The U.S. government’s submission makes two kinds of factual assertions.  First, it supports or “credits” detailed declarations presented by Ukraine about the potential effects of discovery disclosures on Ukrainian military operations.  Second, it presents very general statements about U.S. national security.  It appears that the U.S. government presented no declarations or affidavits of its own.  In general, it is appropriate for courts to give significant weigh to the government’s statements when presented with factual questions on which the government offers substantial expertise.  In my view, however, in this case the court should afford limited to weight to the U.S. government’s statements about U.S. national security because they are expressed in very general terms and are unsubstantiated.  Perhaps a bit more weight should be afforded to the U.S. corroboration of representations made by Ukrainian official, because it merely lends support to those other representations, which are relatively specific.

Discovery if the Stay is Lifted

The U.S. Statement goes on to argue in favor of limited discovery if the stay is lifted.  Unfortunately, the arguments in this section are poorly presented.

For example, the Statement includes sentences that are at best unhelpful and at worst suggest a lack of understanding about how discovery works.  Consider this:

Further, the burdens imposed by this type of discovery are significant and unique to foreign states, making discovery covering these assets even more immaterial, especially given the irrelevance of the information to the execution of the Judgment.

The sentence is hard to parse. If, as the last clause says, the information is “irrelevant,” then it may not be discovered. Full stop. The rest of the sentence would be entirely superfluous.  The first part of the sentence is also fundamentally flawed.  It argues that the “burdens” of the discovery make the discovery “even more immaterial.”  But discovery in federal courts requires judges to determine whether “the burden or expense of the proposed discovery outweighs its likely benefit.”  The extent to which the discovery is “material” is therefore weighed against the burdens of producing it.  The burden of discovery does not “mak[e]” the discovery material or “more immaterial.” This sentence (and others in the brief) would receive a failing grade in my civil procedure class.

Second, the Statement confuses several distinct issues.  Federal courts enforce and execute judgments against a foreign sovereign pursuant to Federal Rule of Civil Procedure (“FRCP”) 69, which directs the application of state procedural rules. The Foreign Sovereign Immunities Act (“FSIA”) does not provide the general enforcement authority – it simply limits that authority with respect to certain property of foreign sovereigns.  The government’s Statement also suggests in places that foreign sovereign property that is not located in the United States is immune from execution under the FSIA, but that is incorrect. The FSIA does not apply to property located abroad and thus does not confer immunity on it.

Similarly, sentences like this are difficult to parse: “Discovery into foreign State property that is broadly not in the United States and used for commercial activity, including categories of assets that are excluded from the exception to execution immunity under the FSIA, also implicates foreign policy concerns.”  If the property is not in the United States, it does not matter whether it used for a commercial purpose, and the special categories of assets excluded from exceptions to immunity do not depend on whether the asset is used for a commercial purpose.

In the end, the overall approach advocated by the U.S. government seems to be that the judgment-creditors need to show that their discovery requests pertain only to property in the United States that would not be immune from measures of execution. The Supreme Court rejected this line of reasoning in NML Capital v. Argentina (2014) in which Justice Scalia wrote (citations omitted):

Argentina maintains that, if a judgment creditor could not ultimately execute a judgment against certain property, then it has no business pursuing discovery of information pertaining to that property. But the reason for these subpoenas is that NML does not yet know what property Argentina has and where it is, let alone whether it is executable under the relevant jurisdiction’s law. If, bizarrely, NML’s subpoenas had sought only “information that could not lead to executable assets in the United States or abroad,” then Argentina likely would be correct to say that the subpoenas were unenforceable—not because information about nonexecutable assets enjoys a penumbral “discovery immunity” under the Act, but because information that could not possibly lead to executable assets is simply not “relevant” to execution in the first place. But of course that is not what the subpoenas seek. They ask for information about Argentina’s worldwide assets generally, so that NML can identify where Argentina may be holding property that is subject to execution. To be sure, that request is bound to turn up information about property that Argentina regards as immune. But NML may think the same property not immune. In which case, Argentina’s self-serving legal assertion will not automatically prevail; the District Court will have to settle the matter.

Conclusion

The U.S. government is right to argue for limited and very carefully crafted discovery in this case, if the court decides to lift the stay. District court judges have broad discretion under FRCP 26(b)(2) to consider factors such as the “importance of the issues at stake in the action” and whether the overall burden or expense of the proposed discovery outweighs its likely benefit. Even considering only the costs to Ukraine (and not the United States), being forced to reveal military information during a deadly war seems to present a very, very heavy “burden.”  That the discovery also involves the sovereign assets of Ukraine only increases that burden, as the United States points out. The stakes are high here. And so, one might have hoped for better-crafted arguments from the U.S. government.