Hilao v. Estate of Marcos
| Decision Date | 17 December 1996 |
| Docket Number | Nos. 95-16487,95-16145,s. 95-16487 |
| Citation | 103 F.3d 762 |
| Parties | , 96 Cal. Daily Op. Serv. 9098, 96 Daily Journal D.A.R. 15,077 Maximo HILAO, Class Plaintiffs, Plaintiff-Appellee, v. ESTATE OF Ferdinand MARCOS, Defendant, and Imelda R. Marcos; Ferdinand R. Marcos, Representatives of the Estate of Ferdinand Marcos, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
B.J. Rothbaum, Jr., Linn & Helms, Oklahoma City, Oklahoma, for defendants-appellants.
Robert A. Swift, Kohn, Swift & Graf, P.C., Philadelphia, Pennsylvania, for plaintiff-appellee.
Appeals from the United States District Court for the District of Hawaii, Manuel L. Real, Chief District Judge, Presiding. D.C. Nos. MDL 840 and 00840.
Before: FLETCHER, PREGERSON and RYMER, Circuit Judges.
Imelda R. Marcos and Ferdinand R. Marcos, substituted under Rule 25 as representatives of the Defendant Estate of Ferdinand E. Marcos ("the Appellants"), appeal from orders of the district court holding them in contempt. We affirm.
This appeal arises out of post-judgment orders in a case involving nearly 10,000 class plaintiffs (referred to hereinafter collectively as "Hilao") who suffered (or are family members of those who suffered) torture, "disappearance", and summary execution during Ferdinand E. Marcos' tenure as president of the Philippines. In 1991, anticipating that Hilao would succeed on the merits, the district court entered a preliminary injunction prohibiting the Defendant Estate, and its agents, representatives, aiders and abettors from disposing of any assets of the Estate. 1 Hilao subsequently obtained a verdict of liability and an award of nearly $2 billion in damages. The district court's final judgment of February 3, 1995 made the preliminary injunction permanent. 2
In January of 1995, Hilao moved for contempt, claiming that agreements made in 1992 between the Republic of the Philippines and Imelda Marcos and Ferdinand R. Marcos, on behalf of the Estate of Ferdinand E. Marcos and themselves as heirs, violated the preliminary injunction by (1) agreeing to transfer artworks beneficially owned by the Defendant Estate from the United States to the Philippines; and (2) agreeing to divide all The district court ordered Hilao to conduct discovery regarding the allegations in the contempt motion. Depositions of Imelda Marcos and Ferdinand R. Marcos were scheduled for March 16 and 17, 1995. Deponents were instructed to produce all agreements with the Republic (including but not limited to the 1992 agreements) at their deposition, but they failed to appear and to produce the documents, and Hilao moved for sanctions.
assets owned by the Estate between the Republic and the Appellants. 3
In April 1995, additional agreements between Appellants and the Republic were publicly revealed. These agreements had been signed in 1993 and provided more specifically for the division of the Marcos Estate: 75 percent would go to the Republic, and 25 percent to Appellants, with Appellants receiving their share free of Philippine taxes.
Hilao filed a Supplemental Motion for Contempt identifying the 1993 agreements as additional violations. Hearings were held in April and May 1995. As a sanction for Appellants' failure to appear, testify, and produce documents at their depositions, the Court deemed established Plaintiffs' factual allegations in their contempt motions, and further found that those facts were substantiated by evidence produced by Plaintiffs.
With the facts in Hilao's motions deemed established, the Court concluded that those facts constituted a violation of the injunction. The Order Granting Plaintiffs' Motion for Contempt was filed May 26, 1995.
A hearing on additional sanctions was held in June of 1995 resulting in an order granting additional relief for the contempt. The additional relief consisted of requiring Appellants to execute an assignment to the Plaintiffs of enumerated Swiss bank accounts containing Estate assets.
Appellants appeal from the orders of contempt, denying that Imelda Marcos and Ferdinand R. Marcos are appropriate subjects of a contempt motion and denying that any violation of the Injunction occurred.
The district court in Hawai'i had jurisdiction over the class action that resulted in the nearly $2 billion judgment under 28 U.S.C. § 1350. See Trajano v. Marcos (In re Estate of Ferdinand E. Marcos Human Rights Litigation), 978 F.2d 493, 501-03 (9th Cir.1992) ("Estate I "), cert. denied, 508 U.S. 972, 113 S.Ct. 2960, 125 L.Ed.2d 661 (1993); Estate II, 25 F.3d at 1472-74. In its final judgment, the district court expressly retained continuing jurisdiction over the motion for contempt, the permanent injunction and other matters. The post-judgment orders of contempt appealed here are within this court's jurisdiction under 28 U.S.C. § 1291 as final and appealable orders. Shuffler v. Heritage Bank, 720 F.2d 1141, 1145 (9th Cir.1983) ().
A district court's civil contempt order is reviewed for an abuse of discretion. Reebok Int'l Ltd. v. McLaughlin, 49 F.3d 1387, 1390 (9th Cir.1995). The imposition of discovery sanctions pursuant to Rule 37 of the Federal Rules of Civil Procedure is also reviewed for an abuse of discretion. Commodity Futures Trading Comm'n v. Noble Metals Int'l, Inc., 67 F.3d 766, 771 (9th Cir.1995).
Following Appellants' failure to appear for their depositions and to produce documents, Hilao moved for sanctions under Rule 37 of the Federal Rules of Civil Procedure. Failure to appear for a deposition may be sanctioned by "[a]n order that ... designated In arguing against the motion for contempt, Appellants basically ignore the effect of this sanction. They repeatedly claim that no evidence supports the allegations in Hilao's motion, as if the sanction had not occurred and the facts had not been deemed established.
facts shall be taken to be established ...". Fed.R.Civ.P. 37(b)(2)(A), (d). In the Order Granting Plaintiffs' Motion for Contempt, the district court sanctioned the Appellants' failure to appear by deeming the factual allegations in Hilao's motion for contempt to be established. 4
Even if we assume, without deciding, that Appellants have appealed the discovery sanction, 5 the district court did not abuse its discretion. The sanction imposed is one explicitly authorized by Rule 37 for failure to appear at a deposition, and Appellants do not contest their failure to appear. For a sanction this severe, we have required that the party's failure must have been willful or in bad faith. Commodity Futures Trading Comm'n, 67 F.3d at 771. The fact that Appellants have made no attempt to explain or excuse their failure to appear suggests that the failure was deliberate. We conclude that the district court did not err in deeming the allegations of Hilao's motions for contempt to be established.
Appellants argue that Hilao has shown no evidence that Ferdinand E. Marcos had an estate; no evidence of any assets belonging to any such "estate"; no evidence that Appellants have any control over any such assets; and no evidence of an agreement between the Republic of the Philippines and Imelda Marcos and Ferdinand R. Marcos on behalf of either such an estate or themselves. Appellants deny that any such facts have been established and argue that without evidence of such facts, there can be no finding of contempt.
All of those facts, however, are established either through the findings of the district court contained in the final judgment granting the permanent injunction or through the Rule 37 sanction imposed by the district court in the contempt proceedings. In its final judgment, the district court made the following finding of fact:
There is a probability that the Estate has assets other than the foreign bank accounts identified by the Estate's legal representatives.
Although the Estate has appealed from this final judgment, in that appeal it has not challenged the findings of fact made by the district court in granting the permanent injunction.
By operation of the discovery sanctions in the contempt proceedings, the following additional facts were established:
Even after entry of the Injunction Imelda Marcos and Ferdinand R. Marcos, on behalf of themselves and the Estate, continued a course of conduct aimed at preventing Plaintiffs and the Class from recovering on an ultimate judgment.
...
Imelda Marcos and Ferdinand R. Marcos, on behalf of the defendant Estate and themselves as heirs, and the Republic of the Philippines entered into two agreements on June 26, 1992 which [ ]:
a. agree[d] to transfer art works beneficially owned by the defendant Estate from the United States to the Philippines; and
b. agree[d] to divide all assets owned by the defendant Estate between the Republic and the heirs of the Estate.
...
The division of assets will effectively divest the Estate of any assets upon which Plaintiffs and the Class can execute, while giving hundreds of million of dollars of assets to Imelda Marcos and Ferdinand R. Marcos tax free ....
In late January 1995 Ferdinand R. Marcos publicly admitted that he had travelled to Switzerland in July 1994 as part of a deal with the Republic to transfer and split the Estate assets.
....
On April 5, 1995 Philippine counsel for the contemnors filed with a court in the Philippines a Petition seeking dismissal of all legal proceedings against them, their family members and the Estate as a result of two agreements entered into on December 28, 1993 between the contemnors and the Republic....
The December 28, 1993 agreements provide, inter alia:
a. the Republic and the Estate will divide all assets of...
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