REPUBLIC OF PHILIPPINES et al. v.

PIMENTEL, Supreme Court of the United States

No. 061204.Argued March 17, 2008Decided June 12, 2008
Facts:
The case involves competing claims over a Merrill Lynch account particularly S.A Arelma, a company
incorporated by Marcos in New York which Marcos created while in power that has since grown from $ 2
million to more than $35 million. Pimentels group, a class of human rights victims previously awarded
some $2 billion against Marcos estate, sought to attach the assets of Merrill Lynch. Roger Roxas, a nowdeceased Philippine locksmith, seeking recovery claims that Marcos originally set up the account with
proceeds from the legendary Yamashita Treasure stolen from him, the Philippine government and the
PCGG charged with recovering the funds against Marcos estate each laid claim to the money. Facing
claims from various claimants, Merrill Lynch filed an interpleader to settle all of the claims in one case.The
Republic and the Commission moved to dismiss the interpleader pursuant to Federal Rule of Civil
Procedure 19(b). The District Court refused, but the Ninth Circuit reversed, holding that the Republic and
the Commission are entitled to sovereign immunity and are required parties under Rule 19(a) thereby
entering a stay pending the outcome of Sandiganbayan litigation. Finding that litigation could not
determine entitlement, the District Court vacated the stay and ultimately awarded the assets to the
Pimentel class. The Ninth Circuit affirmed. Hence the appeal to the Supreme Court of the United States.
Issue:
Whether or not the U.S. Court of Appeals for the Ninth Circuit err in approving the award of assets to
creditors of former Philippine President Ferdinand Marcos when the Philippine government, claiming
rightful ownership of the assets, excluded itself from the proceedings based on sovereign immunity?
Ruling:
Yes it did. The Court's opinion was unanimous in finding that the Philippine government was a required
party to the case under Rule 19(b). Such a required party must be joined to the suit if it is "feasible," and
the Court ruled that the government's inclusion was feasible in this case. The Court sent the case back to
the district court with instructions to dismiss the interpleader action. Justice Anthony Kennedy delivered
the opinion of the Court in which Justices John Paul Stevens and David Souter concurred in part and
dissented in part.

The US Supreme Court concluded that the Court of Appeals gave insufficient weight to the foreign
sovereign status of the Republic and the Commission, and that the court further erred in reaching and
discounting the merits of their claims.
The judgment of the Court of Appeals for the Ninth Circuit is reversed, and the case is remanded with
instructions to order the District Court to dismiss the interpleader action.