Hilao v. Estate of Marcos

393 F.3d 987, 2004 WL 2985245
CourtCourt of Appeals for the Ninth Circuit
DecidedDecember 28, 2004
DocketNo. 03-16934
StatusPublished
Cited by28 cases

This text of 393 F.3d 987 (Hilao v. Estate of Marcos) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hilao v. Estate of Marcos, 393 F.3d 987, 2004 WL 2985245 (9th Cir. 2004).

Opinion

GRABER, Circuit Judge:

The Republic of the Philippines appeals from two orders issued by the district court, even though the Republic is not a party to this litigation. The first “Memorandum and Order” reinstates a 1999 settlement agreement between the Estate of Ferdinand E. Marcos and a class of plaintiffs who had sued the Estate for violations of their human rights. The second “Order Directing Compliance” facilitates the first order by enjoining foreign banks from transferring certain assets that could be used to fund the settlement. The Republic asks us to vacate both orders. But, be[989]*989cause the Republic is neither a party to the settlement agreement nor a person or banking institution bound by the Order Directing Compliance, we dismiss its appeal for lack of standing.

BACKGROUND

Before turning to the present dispute, we pause to place it in its historical context.

A. The Hilao Litigation and the Abandoned Settlement Agreement

Ferdinand Marcos and his family fled to Hawaii in 1986. Almost immediately, several lawsuits were filed on behalf of individuals who had been arrested, tortured, executed, or dis-appeared during Marcos’ 15-year tenure as President of the Philippines. Hilao v. Estate of Marcos (In re Estate of Ferdinand Marcos, Human Rights Litig.) (Estate II), 25 F.3d 1467, 1469 (9th Cir.1994). The Judicial Panel on Multi-District Litigation consolidated all those cases in the District of Hawaii; the consolidated case was later certified as a class action. Id. Ferdinand Marcos died three years after the litigation commenced. In February 1995, the district court entered a final judgment in the class action, approving jury awards of $1.2 billion in exemplary damages and $766 million in compensatory damages against the Marcos Estate. Hilao v. Estate of Ferdinand Marcos (Hilao II), 103 F.3d 767, 772 (9th Cir.1996). We affirmed that judgment. Id. at 787.

Collecting that judgment proved exceedingly difficult for the Hilao plaintiff class (who are Plaintiffs in this case) because of two developments. First, to settle a separate suit by the Republic against the Marcos Estate, the Estate agreed to transfer to the Republic the bulk of the portion of the Estate’s assets that had been impounded by United States customs officials in Hawaii. Hilao v. Estate of Marcos (In re Estate of Ferdinand Marcos, Human Rights Litig.) (Estate III), 94 F.3d 539, 542 (9th Cir.1996). Although the district court tried to enjoin the Republic from participating in that transfer, we vacated the injunction to the extent that it purported to enjoin the Republic directly, on the ground of foreign sovereign immunity. Id. at 548.

Second, in August 1995 the Republic asked Switzerland’s federal government to transfer frozen Estate assets, which were held in Swiss banks, to a Philippine National Bank (“PNB”) escrow account. The request was somewhat unusual in that the Republic sought an “early transfer” of assets before a final Philippine-court adjudication of the ownership of those assets. But the Swiss Federal Supreme Court confirmed orders approving the Republic’s request in December 1997.

Those two developments brought the bulk of the Estate’s assets under the Republic’s control. Yet Plaintiffs were owed almost $2 billion. As a result of this dilemma, Plaintiffs and the Estate entered into an “Agreement and Compromise” in December 1998 under which the Estate would pay Plaintiffs $150 million to satisfy all claims. To fund the settlement, it was agreed that “[a]ll parties shall make efforts to obtain all necessary consents to trigger release and transfer of the US$150 million from the [PNB] Escrow of the Settlement Fund and shall execute all documents necessary to accomplish the release and transfer.”

The Republic did not sign, and was not a party to, the settlement agreement. Nonetheless, the chairman of the Philippine Presidential Commission on Good [990]*990Government (“PCGG”),1 Magdangal Elma, signed a February 1999 “Undertaking” under which the PCGG would seek to transfer $150 million from the PNB escrow account to the settlement fund. The Undertaking conditioned that transfer on “the approval of the Sandiganbayan2 and other competent court, and the President of the Republic of the Philippines.” On April 29, 1999, the district court granted final approval of the settlement agreement between the Estate and Plaintiffs.

In a July 27, 1999, decision, the Sandi-ganbayan rejected the PCGG’s request to transfer $150 million to the settlement fund because, among other reasons, the Sandiganbayan concluded that the settlement was not in Plaintiffs’ best interests. That decision left no viable source of funding for the settlement agreement. In light of the parties’ failure to acquire settlement funds, the district court terminated the settlement agreement in January 2001.

B. The District Court’s Past Efforts to Preserve Estate Assets in Connection with the Hilao Litigation

Both before and after the parties’ attempt to settle the Hilao litigation, the district court took a number of measures to secure funding for the sizable judgment against the Estate. Plaintiffs first moved for a preliminary injunction in November 1991 to prevent the Estate from transferring or secreting any of its assets. We upheld that injunction against a challenge from the Estate. Estate II, 25 F.3d at 1480. When the Estate later settled its dispute with the Republic by agreeing to transfer certain assets to the Republic, the district court modified the injunction to bring the Republic within its scope. We agreed with the Republic that, under the Foreign Sovereign Immunities Act of 1976,3 it was immune from the district court’s jurisdiction. So, as noted above, we vacated the injunction insofar as it purported to enjoin the Republic. Estate III, 94 F.3d at 548.

The district court next ordered several Swiss banks to deposit into the court registry “as an interpleader proceeding all [Estate] assets in the possession of the BANKS that are the subject matter of this proceeding.” Hilao v. Estate of Marcos (Hilao I), 95 F.3d 848, 851 (9th Cir.1996). We vacated that order, holding that “neither California law nor[Federal Rule of Civil Procedure] 69(a) gave the district court the authority to order the Banks to deposit the contested funds into the court registry.” Id. at 856.

Undeterred, the district court next entered an identical order, sua sponte, against the Swiss banks in connection with an action that Plaintiffs’ lawyer had filed against those banks in Rosales v. Credit Suisse & Swiss Bank Corp., No. CV 96-6419 (C.D.Cal.). The Swiss banks petitioned for a writ of mandamus. We granted the writ in Credit Suisse v. United States District Court, 130 F.3d 1342 (9th Cir.1997).

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Bluebook (online)
393 F.3d 987, 2004 WL 2985245, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hilao-v-estate-of-marcos-ca9-2004.