Supreme Court rules for Philippines in Marcos assets case.


In June 2008, the U.S. Supreme Court decided Republic of the Philippines v. Pimentel, (1) a case that involved competing claims of the Philippines and the Philippine Presidential Commission on Good Government, versus more than 9500 successful plaintiffs in past class action litigation, to about $35 million in assets misappropriated by former Philippine president Ferdinand Marcos. The ruling grew out of an interpleader action filed by Merrill Lynch to determine entitlement to the assets. The Court of Appeals for the Ninth Circuit found that the Philippines and the commission were "required" parties under Rule 19(b) of the Federal Rules of Civil Procedure and that they could not be sued because of their sovereign immunity. Nevertheless, on remand the district court proceeded without the Philippines and the commission, awarding the assets to the class action plaintiffs. The Ninth Circuit affirmed, on the theory that, although the Philippines and the commission were required parties, their claim had so little likelihood of success that the case could proceed. (2) The Philippines and the commission, supported by the U.S. government, sought Supreme Court review. (3)

The Supreme Court reversed, remanding the case and ordering that it be dismissed. Seven justices joined in the majority opinion by Justice Kennedy, which addressed the application of Rule 19 of the federal procedural rules, a complex rule requiring that multiple case-specific factors be weighed in determining whether a case can continue if a required party cannot be joined. The majority indicated that, where states have sovereign immunity from suit, courts must give substantial weight to their positions and interests in determining whether a case may proceed.

The Court of Appeals erred in not giving the necessary weight to the absent entities' assertion of sovereign immunity. The court in effect decided the merits of the Republic and the Commission's claims to the [disputed] assets. Once it was recognized that those claims were not frivolous, it was error for the Court of Appeals to address them on their merits when the required entities had been granted sovereign immunity. The court's...

To continue reading