Estate of Ferdinand Marcos Human Rights Litigation, In re, s. 94-16739

• Decision Date: 13 February 1995
• Docket Number: 95-15259,Nos. 94-16739,s. 94-16739
• Citation: 94 F.3d 539
• Parties: 96 Cal. Daily Op. Serv. 6256, 96 Daily Journal D.A.R. 10,256 In re ESTATE OF FERDINAND MARCOS HUMAN RIGHTS LITIGATION. Maximo HILAO, Class Plaintiffs, Plaintiffs-Appellees, v. ESTATE OF Ferdinand MARCOS, Defendant, Republic of the Philippines, a non-party specifically identified as subject to the preliminary injunction, Appellant. In re ESTATE OF FERDINAND MARCOS HUMAN RIGHTS LITIGATION. Maximo HILAO, Class Plaintiffs, Plaintiffs-Appellees, v. ESTATE OF Ferdinand MARCOS, Defendant, Republic of the Philippines, a non-party specifically identified as subject to the preliminary injunction, Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 539

94 F.3d 539

96 Cal. Daily Op. Serv. 6256, 96 Daily Journal

D.A.R. 10,256

In re ESTATE OF FERDINAND MARCOS HUMAN RIGHTS LITIGATION.

Maximo HILAO, Class Plaintiffs, Plaintiffs-Appellees, v. ESTATE OF Ferdinand MARCOS, Defendant,

Republic of the Philippines, a non-party specifically

identified as subject to the preliminary

injunction, Appellant.

In re ESTATE OF FERDINAND MARCOS HUMAN RIGHTS LITIGATION.

Maximo HILAO, Class Plaintiffs, Plaintiffs-Appellees, v. ESTATE OF Ferdinand MARCOS, Defendant,

Republic of the Philippines, a non-party specifically

identified as subject to the preliminary

injunction, Appellant.

Nos. 94-16739, 95-15259.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 13, 1995 in No. 94-16739.

Submitted June 18, 1996 ^* in No. 95-15259.

Decided Aug. 22, 1996.

Stephen V. Bomse, Heller, Ehrman, White & McAuliffe, San Francisco, California, for appellant in Nos. 94-16739, 95-15259.

Robert A. Swift, Kohn, Swift & Graf, Philadelphia, Pennsylvania, and Jon M. Van Dyke, Honolulu, Hawaii, for plaintiffs-appellees in Nos. 94-16739, 95-15259.

John Schnitker, United States Department of Justice, Washington, DC, for the amicus in No. 94-16739.

Appeals from the United States District Court for the District of Hawai'i, Manuel L. Real, District Judge, Presiding. D.C. No. MDL-840.

Before: FLETCHER, PREGERSON, and RYMER, Circuit Judges.

FLETCHER, Circuit Judge:

These appeals concern whether a United States court properly enjoined the Republic of the Philippines from entering into agreements with the Estate of former Philippine President Ferdinand Marcos to transfer to the Philippines assets of the Estate that the Republic asserts were looted from the Philippines treasury. The plaintiff class ("Hilao"), a group of 10,000 people who allege that they or their relatives were tortured or executed by Marcos, was awarded almost $2 billion in damages from the Estate in federal district court in Hawai'i. Hilao sought the injunction to protect the Estate's assets in order to enforce its judgment.

On appeal, the Republic claims sovereign immunity, asserts an Act of State defense, and contends that the district court erred in designating it an aider and abettor of the Estate.

We have jurisdiction over the appeal from the preliminary injunction under 28 U.S.C.

                §   1292(a) and over the appeal from the permanent injunction under 28 U.S.C. § 1291.  We hold that the Republic is entitled to sovereign immunity
                

BACKGROUND

Shortly after being deposed as president of the Philippines in February 1986, Ferdinand Marcos ("Marcos") and his wife Imelda fled to Hawai'i, taking with them dozens of crates filled with gold, jewelry, and cash. President Corazon Aquino, who replaced Marcos as president, created the Presidential Commission on Good Government, an official agency charged with recovering the assets of the Republic from the Marcos family and its associates.

These assets, which have never been comprehensively identified in any litigation, originally included U.S. and Philippine real estate holdings, valuable art works, cash and other property seized by U.S. Customs officials in Hawai'i, and funds in bank accounts in California and Switzerland. The Republic contends that the Marcoses and their associates obtained these assets through misuse of Marcos' official position, and Philippine law provides for the forfeiture to the national treasury of property unlawfully obtained by public officials.

A number of lawsuits were filed against the Marcos family in American courts. Among them were five suits filed in the Northern District of California and the District of Hawai'i by individuals alleging that they or their relatives had been arrested, tortured, or executed by military intelligence personnel acting pursuant to martial law declared by Marcos in 1971. Hilao v. Estate of Ferdinand Marcos (In re Estate of Ferdinand Marcos, Human Rights Litig.), 25 F.3d 1467, 1469 (9th Cir.1994) ("Estate II "), cert. denied, --- U.S. ----, 115 S.Ct. 934, 130 L.Ed.2d 879 (1995). The district courts dismissed all five suits on the ground that the Act of State doctrine precluded liability. Id.

In an appeal of those decisions to this court, the Republic filed an amicus curiae brief urging the U.S. courts to exercise jurisdiction over the human rights claims. This court reversed in two unpublished decisions. ¹ The human rights cases were subsequently consolidated in the district court in Hawai'i and certified as a class action suit against the Estate. 25 F.3d at 1469.

Meanwhile, in a separate action filed in the Central District of California, the Republic sued the Estate and Imelda Marcos, asserting RICO and pendent state law claims, and seeking the recovery of $1.55 billion allegedly plundered from the Philippines treasury. Republic of the Philippines v. Marcos, 818 F.2d 1473, 1476 (9th Cir.1987), reheard en banc, 862 F.2d 1355 (9th Cir.1988) (en banc), cert. denied, 490 U.S. 1035, 109 S.Ct. 1933, 104 L.Ed.2d 404 (1989). On 25 June 1986, the district court enjoined the Marcoses and their associates from disposing of any assets anywhere in the world. We affirmed the injunction. 862 F.2d at 1358.

The Republic's suit against the Estate was settled in October 1991 and dismissed on 4 November 1991. As part of the settlement, the Estate and Imelda Marcos agreed to transfer the Estate assets impounded by U.S. Customs officials in Hawai'i, ² except for some personal items and the cash in three accounts at a Los Angeles bank, ³ to the Republic. ⁴

The assets in Swiss banks were not transferred under the terms of the settlement, perhaps because the Swiss courts had frozen all Marcos assets in Switzerland in 1986 at the request of the Republic and had agreed that the assets would be returned to the Philippines if criminal prosecutions against the Marcos family in the Philippines succeeded. ⁵

The injunction freezing the Estate's assets was dissolved as part of the settlement. However, the district court in Hawai'i granted Hilao's request to have the injunction reinstated on 19 November 1991. Estate II, 25 F.3d at 1469. We upheld the injunction on 16 June 1994. Id. at 1468. In the meantime, Hilao had won a favorable liability verdict on 24 September 1992. Id. at 1469. On 23 February 1994, the jury awarded Hilao $1.2 billion in punitive damages. Id.

On 20 July 1994, Hilao filed a motion to modify the injunction to identify the Republic as an agent, representative, aider or abettor of the Estate subject to the injunction. Hilao contended that the Republic had seized assets of the Estate in the Philippines worth $672 million, as well as $2 million of the $409 million in cash that the Estate had deposited in Swiss banks. It claimed that the Republic had sold $481 million worth of stock, held in the Meralco Foundation for the benefit of the Estate, and had appropriated the proceeds to itself. It also asserted that the Republic and the Estate entered into two agreements on 26 June 1992, to transfer works of art ⁶ from the United States to the National Museum of the Philippines, and to divide the Estate's other assets between the Estate and the Republic.

On 12 September 1994, the district court heard argument on the motion; the Republic appeared specially and asserted its sovereign immunity. The district court the following day issued an order identifying the Republic as a "representative, agent, aider or abettor" of the Estate, and subjecting it to the injunction. On 23 September 1994, the Republic filed an appeal (No. 94-16739) from this order.

On 18 January 1995, a jury in Hawai'i awarded Hilao $766 million in compensatory damages. On 3 February 1995, the district court entered a final judgment, which included a permanent injunction against the Estate and its "aiders and abettors" and a finding that the Republic is an aider and abettor of the Estate. On 6 February 1995, the Republic filed a notice of appeal (No. 95-15259) from this final judgment.

STANDARDS OF REVIEW

We review a district court's grant of permanent injunctive relief for an abuse of discretion or application of erroneous legal principles. United States v. Yacoubian, 24 F.3d 1, 3 (9th Cir.1994). The existence of jurisdiction under the Foreign Sovereign Immunities Act is a question of law reviewed de novo. Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 706 (9th Cir.1992), cert. denied, 507 U.S. 1017, 113 S.Ct. 1812, 123 L.Ed.2d 444 (1993).

DISCUSSION

No. 94-16739

This interlocutory appeal by the Republic from the district court's preliminary injunction was argued and submitted in February 1995. While the appeal was pending, the Republic appealed, in No. 95-15259, from the permanent injunction issued by the court in its final judgment. The Republic then moved to consolidate the appeals, while Hilao moved to dismiss appeal No. 94-16739 as moot. On May 30, 1996, we ordered the appeals consolidated, and we now dismiss the appeal as moot.

"[W]here a permanent injunction has been granted that supersedes the original preliminary injunction, the interlocutory injunction becomes merged in the final decree and the appeal from the interlocutory preliminary order is properly dismissed." Continental Training Services, Inc. v. Cavazos, 893 F.2d 877, 880 (7th Cir.1990) (internal quotation marks, emendations, and citations omitted). See also Smith v. Illinois Bell Tel. Co., 270 U.S. 587, 588-89, 46 S.Ct. 408, 408-09, 70 L.Ed. 747 (1926) (appeal from interlocutory injunction dismissed where injunction became merged in final decree, appeal of which was also pending before Court); Burbank-Glendale-Pasadena Airport Auth. v. City of Los Angeles, 979 F.2d 1338, 1340 n. 1 (9th Cir.1992) ("Once an order of permanent injunction is entered, the preliminary injunction merges with it and appeal may be had only from the order of permanent injunction."); Securities and Exch. Comm'n v. Mount Vernon Memorial Park, 664 F.2d 1358, 1361-62 (9th Cir.), cert. denied, 456...