Credit Suisse v. U.S. Dist. Court for Cent. Dist. of California
| Citation | 130 F.3d 1342 |
| Decision Date | 03 December 1997 |
| Docket Number | No. 97-70193,97-70193 |
| Parties | 97 Cal. Daily Op. Serv. 9042, 97 Daily Journal D.A.R. 14,617 CREDIT SUISSE; Swiss Bank Corporation, Petitioners, v. UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, Respondent, Loretta Ann Rosales; Hilda Narciso, Real Parties in Interest. |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
Michael H. Rauch, Fried, Frank, Harris, Shriver & Jacobson, New York City, for petitioner Credit Suisse; Paul J. Bschorr, Dewey Ballantine, New York City, and Matthew M. Walsh, Dewey Ballantine, Los Angeles, California, for petitioner Swiss Bank.
Robert A. Swift, Kohn, Swift & Graf, Philadelphia, Pennsylvania, and Jon M. Van Dyke, Honolulu Hawaii, for real parties in interest.
Stephen E. Becker, Shaw, Pitman, Potts & Trowbridge, Washington, DC, for amicus.
Petition for Writ of Mandamus to the United States District Court for the Central District of California. D.C. No. CV-96-06419.
Before: HALL, and T.G. NELSON, Circuit Judges, and WINMILL, * District Judge.
Credit Suisse and Swiss Bank Corporation (the "Banks") petition this court for a writ of mandamus, prohibition or other appropriate extraordinary relief from the district court's denial of the Banks' motion to dismiss the action Rosales et al. v. Credit Suisse and Swiss Bank Corp., No. CV 96-6419 (C.D.Cal.) (Real, J.) ("Rosales action"). We have jurisdiction pursuant to 28 U.S.C. § 1651(a). Because the relief sought in the Rosales action would violate the act of state doctrine, we grant the petition.
In Multi-District Litigation ("MDL") Case No. 840 (D.Hawaii), 9,539 victims of human rights violations won a $1,964,005,859.90 judgment against the Estate of Ferdinand E. Marcos ("Estate" or "Marcos Estate"). The judgment included an injunction restraining the Estate and its agents, representatives and aiders and abettors from transferring or otherwise conveying any funds or assets held on behalf of or for the benefit of the Estate pending satisfaction of the judgment.
In an attempt to collect on the judgment, the plaintiffs in the MDL case registered their judgment in the Central District of California. See Hilao v. Estate of Marcos, 95 F.3d 848, 850 (9th Cir.1996). Writs of execution and notices of levy were thereafter delivered to the Banks' offices in California. 1 The notices of levy purported to levy against deposit accounts in the name of Ferdinand E. Marcos or twenty-six of his alleged aliases or pseudonyms. Id. None of these deposit accounts were maintained at the California offices of either Bank. Id.
After the plaintiffs indicated that they were seeking assets and information from the Banks' offices in Switzerland, both Banks filed motions to vacate and quash the notices of levy. Id. The district court denied the Banks' motions and sua sponte entered an order directing the Banks to deposit into the Registry of the United States District Court for the Central District of California "as an interpleader proceeding all assets in the possession of the BANKS that are the subject matter of this proceeding." Id. at 851. The Banks appealed and we reversed. Id. at 856.
We first held that, pursuant to Fed.R.Civ.P. 69(a), 2 the post-judgment enforcement proceeding had to comply with California law. Id. at 853. California law requires "personal service" of a notice of levy on a deposit account to be made at the branch or office of the financial institution at which the account is actually carried. Id. Because none of the Estate's assets were held in deposit accounts located in California, the service of the notice of levy at the Banks' California offices was ineffective. Id. at 853-54. The district court should have therefore granted the Banks' motions to vacate and quash the levies. Id. at 854.
Second, we held that because Rule 69(a) "essentially limits a district court's mechanism for enforcement of a money judgment to a writ of execution, the court had no authority to order the Banks to deposit the contested funds into the court registry." Id. at 856. In coming to this conclusion, we noted that although the Banks had previously been found to be "agents and representatives" of the Marcos Estate, the significance of this finding was "outweighed by the fact that the Banks were not parties before the court in the case in which the finding was made." Id. at 855.
Following our decision in Hilao, counsel for the plaintiffs 3 filed the Rosales action directly against the Banks, seeking the following relief: (1) an injunction restraining the Banks from transferring or otherwise conveying any funds or assets held by the Banks on behalf of the Marcos Estate, except as ordered by the district court; and (2) a declaration that the Chinn assignment 4 is valid and binding on the Banks.
The Banks filed a motion to dismiss the Rosales action pursuant to Fed.R.Civ.P. 12(b) on the ground that, among other things, the injunctive and declaratory relief sought in the action would violate the act of state doctrine. The district court denied the Banks' motion to dismiss, and the Banks' subsequent motion for certification for interlocutory appeal. 5 The Banks then filed the present petition, requesting this court to issue a writ of mandamus compelling the district court to vacate its denial of the motion to dismiss, and directing the district court to dismiss the action.
A writ of mandamus "has traditionally been used in the federal courts only to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so." Bauman v. United States Dist. Court, 557 F.2d 650, 654 (9th Cir.1977) (quotations omitted). "[O]nly exceptional circumstances amounting to a judicial usurpation of power will justify the invocation of this extraordinary remedy." Id. (quotations omitted). Before a writ will issue, this court must be "firmly convinced that the district court has erred and that the petitioner's right to the writ is clear and indisputable." Valenzuela-Gonzalez v. United States Dist. Court, 915 F.2d 1276, 1279 (9th Cir.1990) (citation and quotations omitted).
In determining whether a writ should issue, this court looks to five specific guidelines, known as the "Bauman guidelines":
(1) The party seeking the writ has no other adequate means, such as a direct appeal, to attain the relief he or she desires. (2) The petitioner will be damaged or prejudiced in a way not correctable on appeal. (This guideline is closely related to the first.) (3) The district court's order is clearly erroneous as a matter of law. (4) The district court's order is an oft-repeated error, or manifests a persistent disregard of the federal rules. (5) The district court's order raises new and important problems, or issues of law of first impression.
Bauman, 557 F.2d at 654-55 (citations omitted). None of these guidelines is determinative and all five guidelines need not be satisfied at once for a writ to issue. Valenzuela-Gonzalez, 915 F.2d at 1279. In fact, rarely will a case arise where all these guidelines point in the same direction or where each guideline is even relevant or applicable. Bauman, 557 F.2d at 655.
The Banks argue applicability of only the first three Bauman guidelines. We will limit our review to those three guidelines, since the remaining guidelines do not affect our analysis.
The district court's denial of the Banks' motion to dismiss is not a "final decision" within the meaning of 28 U.S.C. § 1291, 6 and it is therefore not immediately reviewable. See Catlin v. United States, 324 U.S. 229, 236, 65 S.Ct. 631, 635, 89 L.Ed. 911 (1945). Furthermore, because the district court denied the Banks' motion for certification for interlocutory appeal under 28 U.S.C. § 1292(b), permissive interlocutory appeal is not available. The Banks thus have no other means of obtaining immediate review of the denial of their motion to dismiss. See Valenzuela-Gonzalez, 915 F.2d at 1279 (); Christensen v. United States Dist. Court, 844 F.2d 694, 696 (9th Cir.1988) ().
The district court issued an order, stayed by this court, compelling the Banks to respond to the plaintiffs' discovery requests. These discovery requests include interrogatories seeking detailed information about accounts purportedly located in Switzerland and requests to produce a wide variety of documents maintained at the Banks' Switzerland offices. It is undisputed that provision of the requested information, and production of the requested documents, would violate Swiss banking secrecy and other laws which carry criminal penalties. The district court's order compelling the Banks to respond to the discovery requests therefore places the Banks in the position of having to choose between being in contempt of court for failing to comply with the district court's order, or violating Swiss banking secrecy and penal laws by complying with the order. Requiring the Banks to choose between being in contempt of court and violating Swiss law clearly constitutes severe prejudice that could not be remedied on direct appeal.
The classic statement of the act of state doctrine is found in Underhill v. Hernandez, 168 U.S. 250, 252, 18 S.Ct. 83, 84, 42 L.Ed. 456 (1897), where Justice Fuller stated for the Court:
Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not...
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