Friday, May 5, 2006
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Marcos Torture Victims Entitled to Millions, Ninth Circuit Says
Republic of the Phillipines Not an Indispensable Party to Human Rights Action in U.S. Courts, Panel Rules
From Staff and Wire Service Reports
The Republic of the Philippines and a commission set up by it to recover funds former Philippine President Ferdinand Marcos set up in accounts throughout the world are not indispensable parties to an interpleader action in which victims of human rights violations by the late dictator claimed compensation, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
The ruling allows a class of 9,539 victims who obtained a $2 billion judgment against Marcos to recover about $35 million being held by Merrill Lynch, Pierce, Fenner and Smith, Inc. in an account set up by a Marcos corporation, Arelma, Inc. The brokerage firm had filed an interpleader action in the U.S. District Court for the Central District of California.
The plaintiffs filed a class-action lawsuit against the Marcos estate in 1986, the year he was deposed as president after ruling for 20 years. Marcos and his family fled to Hawaii, where he died in exile in 1989.
In 1995, using a two-century-old U.S. law, a federal district court jury in Honolulu awarded the group $2 billion after finding Marcos responsible for summary executions, disappearances and torture. So far, none of the award has been distributed, as it has been tied up by foreign banks and the Philippine government claiming ownership.
The original award is nearing $4 billion with interest.
Last Year’s Ruling
Last year, the Ninth Circuit ruled that the 9,500 plaintiffs have no right to recover $683 million in Marcos assets that were transferred from a Swiss account to the Philippine government, which claimed ownership of the money.
The plaintiffs also are pursuing other avenues to collect the judgment. They are trying to seize $22 million in Marcos assets located in a bank in Singapore, and other properties in various countries.
Also claiming a right to the funds in the interpleader action was the estate of Filipino treasure hunter Roger Roxas, who won a $13 million judgment for the conversion of an 800-pound gold Buddha. The statue, Roxas claimed, was forcibly taken by agents of Marcos along with other artifacts found in a dig around Baguio City.
Roxas claimed that he was also tortured and imprisoned, giving rise to a human rights claim valued at $6 million, and the panel held that he is entitled to a pro rata share of the money in the Arelma account.
The republic claimed that it was an “indispensable party’ to the action, arguing that the funds were acquired by Marcus illegally, and have always belonged to the republic.
Necessary, Not Indispensable
The Court of Appeals previously held that the republic and commission were necessary parties to the suit, but were protected by sovereign immunity. Thus, a ruling that they were indispensable parties would have compelled dismissal of the suit.
In holding that they were not indispensable parties under Federal Rules of Civil Procedure, Rule 19, the court concluded that “equity and good conscience” allowed the suit to continue without them.
Senior Judge John T. Noonan Jr., writing for the court, acknowledged that the practical effect of its the ruling would be to deprive the republic of the Arelma funds, and that prejudice to a sovereign foreign state is a powerful consideration.
But the position of position of the victims is also compelling, the judge said.
He wrote:
“[T]he symbolic significance of some tangible recovery [for the human rights victims] is not to be disregarded, and if the recovery is distributed pro rata among the individuals, it will have monetary meaning for the poor among them. The counter consideration, that most of the victims are citizens of the Philippines and should find redress from their own government, is outweighed by the fact that the Republic has not taken steps to compensate these persons who suffered outrage from the extra-legal acts of a man who was the president of the Republic. In good conscience, can we deny some small measure of relief to the class whose members have been found to have been grievously injured and who have the final judgment of a court assessing their wrongs and fixing their remedy?”
Noonan also noted the court noted that the account is in the United States and cannot be finally disposed of except by the judgment of a court in the U.S.
The opinion was joined by Judge Sidney Thomas and by U.S. District Judge James L. Robart of the Western District of Washington, sitting by designation.
Stephen V. Bomse of San Francisco represented the Republic of the Philippines. Jay R. Zeigler of Los Angeles represented Arelma, Inc. Daniel C. Cathcart of Los Angeles represented the Estate of Roxas estate. Robert A. Swift of Philadelphia represented the other human-rights victims.
The case is Merrill Lynch, Pierce, Fenner and Smith, Inc. v. Arelma, Inc., 04-16401.
Copyright 2006, Metropolitan News Company