Merrill Lynch, Pierce, Fenner & Smith v. Enc Corp.

• Decision Date: 12 September 2006
• Docket Number: No. 04-16503.,No. 04-16401.,No. 04-16538.,04-16401.,04-16503.,04-16538.
• Parties: MERRILL LYNCH, PIERCE, FENNER AND SMITH, INCORPORATED, a corporation organized and existing under the laws of the State of Delaware with its principal place of business in New York, New York, Plaintiff-Appellee, v. ENC CORPORATION; Suntrust Investment Co., S.A., a corporation organized and existing under the laws of Switzerland with an address at rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; John K. Burns, a citizen of the United States, with an address at 300 Wacker Drive, Suite, 900, Chicago, Illinois, 60606; The Estate of Ferdinand E. Marcos; Imelda R. Marcos; Ferdinand R. Marcos, Jr.; Maria Imelda Marcos; Irene Marcos Araneta; Frontier Risk Capital Management, L.C.C., a limited liability company organized and existing under the laws of the States of Nevada, with a registered office at 6100 Neil Road, Suite 500, Reno, NV. 89511 and an address at 300 Wacker Drive, Suite 900, Chicago, IL 60606; Grosvenor Capital Ltd., a company organized and existing under the law of the United Kingdom, with an address at Grosvenor Gardens House, Suite 117, 35-37 Grosvenor Gardens, London SW1 W OBS, United Kingdom; The Estate of Roger Roxas; Golden Budha Corporation, a corporation organized and existing under the laws of the State of Georgia, with a registered office at 710 West First Street, Blue Ridge, Georgia 30513, and a mailing address at 260 Carrollton St., Buchanan, GA 30113, Defendants, and Arelma, Inc., a corporation organized and existing under the laws of Panama with a permanent address at Ave. Justo Alosemena y Calle 41 Este, No. 40-59 Pte al Colegio Immeculada, Panama 1.Rep.de Panama, and a mailing address at c/o Suntrust Investment Co.S.A., rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland, Defendant-Appellant, Mariano J. Pimentel, on behalf of himself and all other persons similarly situated, Defendant-Appellee, Philippine National Bank, Defendant-Appellant. Merrill Lynch, Pierce, Fenner and Smith, Incorporated, a corporation organized and existing under the laws of the State of Delaware with its principal place of business in New York, New York, Plaintiff-Appellee, v. ENC Corporation; Arelma, Inc., a corporation organized and existing under the laws of Panama with a permanent address at Ave. Justo Alosemena y Calle 41 Este, No. 40-59 Pte al Colegio Immeculada, Panama 1.Rep.de Panama, and a mailing address at c/o Suntrust Investment Co.S.A., rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; Suntrust Investment Co., S.A., a corporation organized and existing under the laws of Switzerland with an address at rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; John K. Burns, a citizen of the United States, with an address at 300 Wacker Drive, Suite, 900, Chicago, Illinois, 60606; The Estate of Ferdinand E. Marcos; Imelda R. Marcos; Ferdinand R. Marcos, Jr.; Maria Imelda Marcos; Irene Marcos Araneta; Frontier Risk Capital Management, L.C.C., a limited liability company organized and existing under the laws of the States of Nevada, with a registered office at 6100 Neil Road, Suite 500, Reno, NV. 89511 and an address at 300 Wacker Drive, Suite 900, Chicago, IL 60606; Grosvenor Capital Ltd., a company organized and existing under the law of the United Kingdom, with an address at Grosvenor Gardens House, Suite 117, 35-37 Grosvenor Gardens, London SW1 W OBS, United Kingdom; The Estate of Roger Roxas; Golden Budha Corporation, a corporation organized and existing under the laws of the State of Georgia, with a registered office at 710 West First Street, Blue Ridge, Georgia 30513, and a mailing address at 260 Carrollton St., Buchanan, GA 30113; Philippine National Bank, Defendants, and Mariano J. Pimentel, on behalf of himself and all other persons similarly situated, Defendant-Appellee, Republic of the Philippines; Presidential Commission on Good Government, a government agency of the Republic of the Philippines, Defendants-Appellants. Merrill Lynch, Pierce, Fenner and Smith, Incorporated, a corporation organized and existing under the laws of the State of Delaware with its principal place of business in New York, New York, Plaintiff-Appellee, v. ENC Corporation; Arelma, Inc., a corporation organized and existing under the laws of Panama with a permanent address at Ave. Justo Alosemena y Calle 41 Este, No. 40-59 Pte al Colegio Immeculada, Panama 1.Rep.de Panama, and a mailing address at c/o Suntrust Investment Co.S.A., rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; Suntrust Investment Co., S.A., a corporation organized and existing under the laws of Switzerland with an address at rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; John K. Burns, a citizen of the United States, with an address at 300 Wacker Drive, Suite, 900, Chicago, Illinois, 60606; The Estate of Ferdinand E. Marcos; Imelda R. Marcos; Ferdinand R. Marcos, Jr.; Maria Imelda Marcos; Irene Marcos Araneta; Frontier Risk Capital Management, L.C.C., a limited liability company organized and existing under the laws of the States of Nevada, with a registered office at 6100 Neil Road, Suite 500, Reno, NV. 89511 and an address at 300 Wacker Drive, Suite 900, Chicago, IL 60606; Grosvenor Capital Ltd., a company organized and existing under the law of the United Kingdom, with an address at Grosvenor Gardens House, Suite 117, 35-37 Grosvenor Gardens, London SW1 W OBS, United Kingdom; Philippine National Bank; Republic of the Philippines; Presidential Commission On Good Government, a government agency of the Republic of the Philippines, Defendants, and The Estate of Roger Roxas; Golden Budha Corporation, a corporation organized and existing under the laws of the State of Georgia, with a registered office at 710 West First Street, Blue Ridge, Georgia 30513, and a mailing address at 260 Carrollton St., Buchanan, GA 30113, Defendants-Appellants, Mariano J. Pimentel, on behalf of himself and all other persons similarly situated, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

464 F.3d 885

MERRILL LYNCH, PIERCE, FENNER AND SMITH, INCORPORATED, a corporation organized and existing under the laws of the State of Delaware with its principal place of business in New York, New York, Plaintiff-Appellee, v. ENC CORPORATION; Suntrust Investment Co., S.A., a corporation organized and existing under the laws of Switzerland with an address at rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; John K. Burns, a citizen of the United States, with an address at 300 Wacker Drive, Suite, 900, Chicago, Illinois, 60606; The Estate of Ferdinand E. Marcos; Imelda R. Marcos; Ferdinand R. Marcos, Jr.; Maria Imelda Marcos; Irene Marcos Araneta; Frontier Risk Capital Management, L.C.C., a limited liability company organized and existing under the laws of the States of Nevada, with a registered office at 6100 Neil Road, Suite 500, Reno, NV. 89511 and an address at 300 Wacker Drive, Suite 900, Chicago, IL 60606; Grosvenor Capital Ltd., a company organized and existing under the law of the United Kingdom, with an address at Grosvenor Gardens House, Suite 117, 35-37 Grosvenor Gardens, London SW1 W OBS, United Kingdom; The Estate of Roger Roxas; Golden Budha Corporation, a corporation organized and existing under the laws of the State of Georgia, with a registered office at 710 West First Street, Blue Ridge, Georgia 30513, and a mailing address at 260 Carrollton St., Buchanan, GA 30113, Defendants, and Arelma, Inc., a corporation organized and existing under the laws of Panama with a permanent address at Ave. Justo Alosemena y Calle 41 Este, No. 40-59 Pte al Colegio Immeculada, Panama 1.Rep.de Panama, and a mailing address at c/o Suntrust Investment Co.S.A., rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland, Defendant-Appellant Mariano J. Pimentel, on behalf of himself and all other persons similarly situated, Defendant-Appellee Philippine National Bank, Defendant-Appellant Merrill Lynch, Pierce, Fenner and Smith, Incorporated, a corporation organized and existing under the laws of the State of Delaware with its principal place of business in New York, New York, Plaintiff-Appellee, v. ENC Corporation; Arelma, Inc., a corporation organized and existing under the laws of Panama with a permanent address at Ave. Justo Alosemena y Calle 41 Este, No. 40-59 Pte al Colegio Immeculada, Panama 1.Rep.de Panama, and a mailing address at c/o Suntrust Investment Co.S.A., rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; Suntrust Investment Co., S.A., a corporation organized and existing under the laws of Switzerland with an address at rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; John K. Burns, a citizen of the United States, with an address at 300 Wacker Drive, Suite, 900, Chicago, Illinois, 60606; The Estate of Ferdinand E. Marcos; Imelda R. Marcos; Ferdinand R. Marcos, Jr.; Maria Imelda Marcos; Irene Marcos Araneta; Frontier Risk Capital Management, L.C.C., a limited liability company organized and existing under the laws of the States of Nevada, with a registered office at 6100 Neil Road, Suite 500, Reno, NV. 89511 and an address at 300 Wacker Drive, Suite 900, Chicago, IL 60606; Grosvenor Capital Ltd., a company organized and existing under the law of the United Kingdom, with an address at Grosvenor Gardens House, Suite 117, 35-37 Grosvenor Gardens, London SW1 W OBS, United Kingdom; The Estate of Roger Roxas; Golden Budha Corporation, a corporation organized and existing under the laws of the State of Georgia, with a registered office at 710 West First

Street, Blue Ridge, Georgia 30513, and a mailing address at 260 Carrollton St., Buchanan, GA 30113; Philippine National Bank, Defendants, and Mariano J. Pimentel, on behalf of himself and all other persons similarly situated, Defendant-Appellee Republic of the Philippines; Presidential Commission on Good Government, a government agency of the Republic of the Philippines, Defendants-Appellants. Merrill Lynch, Pierce, Fenner and Smith, Incorporated, a corporation organized and existing under the laws of the State of Delaware with its principal place of business in New York, New York, Plaintiff-Appellee, v. ENC Corporation; Arelma, Inc., a corporation organized and existing under the laws of Panama with a permanent address at Ave. Justo Alosemena y Calle 41 Este, No. 40-59 Pte al Colegio Immeculada, Panama 1.Rep.de Panama, and a mailing address at c/o Suntrust Investment Co.S.A., rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; Suntrust Investment Co., S.A., a corporation organized and existing under the laws of Switzerland with an address at rue de Jargonnant 2, P.O. Box 76, 1211 Geneva 6, Switzerland; John K. Burns, a citizen of the United States, with an address at 300 Wacker Drive, Suite, 900, Chicago, Illinois, 60606; The Estate of Ferdinand E. Marcos; Imelda R. Marcos; Ferdinand R. Marcos, Jr.; Maria Imelda Marcos; Irene Marcos Araneta; Frontier Risk Capital Management, L.C.C., a limited liability company organized and existing under the laws of the States of Nevada, with a registered office at 6100 Neil Road, Suite 500, Reno, NV. 89511 and an address at 300 Wacker Drive, Suite 900, Chicago, IL 60606; Grosvenor Capital Ltd., a company organized and existing under the law of the United Kingdom, with an address at Grosvenor Gardens House, Suite 117, 35-37 Grosvenor Gardens, London SW1 W OBS, United Kingdom; Philippine National Bank; Republic of the Philippines; Presidential Commission On Good Government, a government agency of the Republic of the Philippines, Defendants, and The Estate of Roger Roxas; Golden Budha Corporation, a corporation organized and existing under the laws of the State of Georgia, with a registered office at 710 West First Street, Blue Ridge, Georgia 30513, and a mailing address at 260 Carrollton St., Buchanan, GA 30113, Defendants-Appellants, Mariano J. Pimentel, on behalf of himself and all other persons similarly situated, Defendant-Appellee.

No. 04-16401.

No. 04-16503.

No. 04-16538.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 14, 2005.

Filed September 12, 2006.

COPYRIGHT MATERIAL OMITTED

Stephen V. Bomse, San Francisco, CA, for the Republic of the Philippines.

Jay R. Ziegler, Los Angeles, CA, for Arelma, Inc. and Philippine National Bank.

Daniel C. Cathcart, Los Angeles, CA, for defendants-appellants Golden Budha Corp. and Estate of Roxas.

Robert A. Swift, Philadelphia, PA, for defendant-appellee Mariano J. Pimentel.

Appeal from the United States District Court for the District of Hawaii; Manuel L. Real, District Judge, Presiding. D.C. No. CV-00-00595-MLR.

Before JOHN T. NOONAN, SIDNEY R. THOMAS, Circuit Judges, and JAMES L. ROBART,^* District Judge.

ORDER

NOONAN, Circuit Judge.

The opinion filed May 4, 2006, and amended May 9, 2006, is hereby WITHDRAWN. An amended opinion is filed concurrently with this order.

With the filing of the amended opinion, the panel has voted to deny the petition for rehearing. Judge Thomas has voted to deny the petition for rehearing en banc, and Judge Noonan and Judge Robart so recommend.

The full court has been advised of the petition for rehearing en banc, and no active judge has requested a vote whether to rehear the matter en banc. Fed. R.App. P. 35.

The petition for rehearing is DENIED. and the petition for rehearing en banc is DENIED.

OPINION

In this interpleader action, appeal is made by the several parties dissatisfied with the decision of the district court awarding the funds in dispute to the Class of Human Rights Victims represented by Mariano Pimentel (Pimentel). We hold that the Republic of the Philippines and the Presidential Commission on Good Government (the PCGG) (collectively, the Republic) are not indispensable parties under Federal Rule of Civil Procedure 19(b). We affirm the judgment of the district court.

PARTIES AND PROCEEDINGS

Interpleader was begun on September 21, 2000, by Merrill, Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), the custodian of the assets of Arelma, S.A. (Arelma), now amounting to approximately $35 million. The Merrill Lynch account was found by the district court to have been established in 1972 by a deposit of $2 million by Ferdinand E. Marcos, then the president of the Republic. The shares of Arelma, a Panamanian corporation, are now held in escrow by the Philippine National Bank, pending an ownership determination by the Philippine courts.

The Republic was made a defendant in the interpleader and successfully asserted its sovereign immunity. In re Republic of the Phil., 309 F.3d 1143, 1149-52 (9th Cir. 2002). The Republic now maintains that it is an indispensable party inasmuch as the Republic asserts that the Arelma assets were acquired by Marcos illegally and never lawfully belonged to him but from the beginning of his acquisition belonged to the Republic. See An Act Declaring Forfeiture in Favor of the State of Any Property Found to Have Been Unlawfully Acquired by Any Public Officer or Employee and Providing for the Proceeding Therefor, Rep. Act No. 1379 (1955) (Forfeiture Act). In the 2002 appeal here, we ruled that the Republic was a necessary party but declined to rule that the Republic was indispensable. We stayed the action. Republic of the Phil., 309 F.3d at 1153.

Pimentel is the representative of 9,539 persons who brought suit against Marcos after his fall from power and in 1996 won a judgment against his estate of nearly $2 billion. Hilao v. Estate of Marcos, 103 F.3d 767 (9th Cir.1996). This class, composed of victims of a rough and rapacious ruler, who often exercised arbitrary power, is a group whose sufferings naturally evoke sympathy. The district court dissolved the stay and awarded all the Arelma assets to them.

Arelma, that is the corporation itself, and the Philippine National Bank, the escrow holder of its stock, have filed a single brief contending that Arelma is an indispensable party and that the district court lacked...