In Re Estate of Ferdinand Marcos, Human Rights Litigation. Maximo Hilao, Class Vicente Clemente, Class Jaime Piopongco, Class v. Estate of Ferdinand Marcos
Docket: 92-15526
Court: Court of Appeals for the Ninth Circuit; June 16, 1994; Federal Appellate Court
The Estate of Ferdinand Marcos appeals a district court's order that preliminarily enjoins it from transferring, secreting, or dissipating its assets pending litigation. The Estate raises multiple challenges, including objections to the district court's subject matter jurisdiction under the Foreign Sovereign Immunities Act and the Alien Tort Act, claims that the plaintiffs lack a valid cause of action, and assertions that any cause of action ended with Marcos' death. The court affirms its jurisdiction and the injunction.
The background highlights that during Marcos' presidency in the Philippines, up to 10,000 individuals were reportedly tortured, executed, or went missing due to actions by military intelligence linked to Marcos. Following Marcos' escape to Hawaii in 1986, numerous lawsuits were filed against him and others by victims and their families, which were initially dismissed on the grounds of 'act of state' defense but were later reversed by the Ninth Circuit.
Subsequently, all cases were consolidated in Hawaii, certified as a class action, and a consolidated complaint was filed against the Estate. Additionally, a default judgment was entered against Imee Marcos-Manotoc, which was upheld by the appeals court after her motions for dismissal were denied. On November 1, 1991, plaintiffs sought a preliminary injunction to protect the Estate’s assets due to concerns about potential transfers, referencing an earlier injunction related to a separate action against Marcos, which had been affirmed on appeal. The district court granted the plaintiffs' motion to continue the injunction.
Pending an interlocutory appeal regarding a preliminary injunction, a trial on liability proceeded, resulting in a jury verdict on September 24, 1992, in favor of the plaintiffs, except for one named plaintiff, Wilson Madayag. The Estate's motion for judgment notwithstanding the verdict (JNOV) was denied, leading to a judgment for the plaintiffs. On November 16, 1993, the preliminary injunction was modified to include the jury's liability verdict and required the Estate's representatives to respond fully to interrogatories about estate assets, disclose Swiss bank accounts linked to the Marcoses, and allow discovery on these assets. Subsequently, on February 23, 1994, the jury awarded $1.2 billion in exemplary damages, with plans for a future jury reconvening to decide on compensatory damages.
The Foreign Sovereign Immunities Act (FSIA) establishes the exclusive basis for jurisdiction over foreign states and their entities, contingent upon exceptions to immunity. The Estate contends that the case does not meet any FSIA exceptions, particularly arguing under 28 U.S.C. § 1605(a)(5) that it is immune from damages for personal injury or death occurring outside the U.S. However, precedent indicates that acts of torture and execution by foreign officials do not receive FSIA immunity if performed outside their official authority. Previous rulings have established that actions taken outside the scope of a government agent's authority are deemed personal rather than sovereign actions, as was the case with Imee Marcos-Manotoc. The court emphasized that, in determining dismissal, allegations in the complaint are accepted as true, suggesting that Marcos' actions should also be viewed as beyond official mandate. The court had already rejected the notion that Marcos' actions could be classified as "official" acts under the 'act of state' doctrine, reinforcing that such acts did not fall within the protections of the FSIA.
Marcos-Manotoc's actions are determined not to have been performed under an official mandate, aligning with a previous ruling that dismissed similar claims against former President Marcos as nonjusticiable 'acts of state.' In the case of Republic of the Philippines, it was established that Marcos' alleged illegal actions were not official acts executed under his presidential authority. The court clarified that, despite Marcos being a controversial ruler with extensive powers, he did not possess absolute authority and was subject to the law. The distinction was made between legal actions of a deposed leader and personal profit-driven actions, which remain adjudicable. A relevant comparison was drawn to the case of former Venezuelan dictator Jimenez, where the court rejected claims of sovereign immunity for crimes committed for personal gain, emphasizing that only actions taken in an official capacity by sovereign officials are protected under the 'act of state' doctrine. The excerpt also distinguishes this case from Siderman, where the Foreign Sovereign Immunities Act (FSIA) applied to actions against the state of Argentina, noting that FSIA does not extend to individual officials acting outside their authority.
The interpretation aligns with the Foreign Sovereign Immunities Act (FSIA), which adopts a 'restrictive' principle of sovereign immunity, limiting foreign state immunity to governmental acts while excluding suits based on commercial actions. Immunity is only granted to individuals acting on behalf of a state, as actions against them can be viewed as direct suits against the sovereign. A lawsuit against a foreign official outside their authority does not invoke foreign diplomatic concerns. The Philippine government supports the lawsuit against Ferdinand Marcos, asserting that he can be liable for unlawful acts committed during his presidency, such as torture, which do not warrant state immunity. The government also filed an amicus curiae brief affirming that U.S. relations would not be harmed if these human rights claims were adjudicated. Consequently, Marcos' actions, including torture and extrajudicial killings, are deemed outside his official capacity and thus not covered by FSIA.
Regarding subject matter jurisdiction, the Alien Tort Act (28 U.S.C. § 1350) grants U.S. district courts jurisdiction over civil actions by aliens for torts violating international law or U.S. treaties. The court upheld a default judgment against Marcos-Manotoc, affirming that claims of wrongful death due to torture fall under this jurisdiction. The Estate argued against jurisdiction based on the 'Arising Under' Clause, but the court noted that while a jurisdictional statute alone does not confer jurisdiction, there is applicable federal substantive law governing the dispute, allowing for federal subject matter jurisdiction even if FSIA does not apply.
Marcos-Manotoc's actions were determined not to represent the Republic of the Philippines in terms of sovereign immunity, yet the court established that subject-matter jurisdiction under the FSIA was satisfied. The argument by the Estate that international law does not support federal court jurisdiction under Sec. 1350 was dismissed; the court recognized the prohibition against official torture as a jus cogens norm, thus validating jurisdiction based on this violation. It was affirmed that international law is integrated into federal common law, which courts are obliged to recognize and apply. The Estate contended that international law principles do not create substantive rights or defenses in U.S. courts, referencing the case of United States v. Davis. In that case, it was clarified that compliance with international law does not restrict Congress's ability to apply statutes extraterritorially, provided that Congress explicitly intends such application and it does not violate the Fifth Amendment's due process clause. Moreover, the court indicated that while international law is not binding on Congress in statute enactment, courts should avoid unnecessary interpretations that conflict with international law. The Estate also challenged the federal jurisdiction over cases between aliens regarding foreign injuries as unconstitutional under Article III, but the court previously indicated that the 'Arising Under' Clause was intended to cover all cases involving foreigners. The Estate's reliance on early judicial interpretations concerning the Diversity Clause was noted but found insufficient against the broader understanding of federal jurisdiction.
The 11th section of the judiciary act must be interpreted in a manner consistent with the Constitution. While it states that the circuit court has jurisdiction over suits involving an alien, this jurisdiction is limited to cases between citizens and foreigners. The argument that section 9 necessitates one party to be a citizen was rejected by the Supreme Court in *Verlinden*, which affirmed that the 'Arising Under' Clause of Article III allows for federal jurisdiction in cases brought by foreign plaintiffs under the Act. The Court referenced *Osborn v. Bank of United States* to support a broad interpretation of 'arising under' jurisdiction, indicating that cases involving foreign states under the Foreign Sovereign Immunities Act (FSIA) inherently raise federal law questions, thus qualifying for federal jurisdiction regardless of party diversity or the presence of a federal question.
Furthermore, the action concerning torts committed by military intelligence officials through torture violates international law and falls within the jurisdictional parameters of Section 1350, adhering to Article III. The Estate's claim that the Alien Tort Act is solely a jurisdictional statute without providing a cause of action is countered by the distinction that, unlike section 1331, section 1350 only requires a violation of the law of nations to establish a cause of action, without necessitating that the action arise under international law. It is sufficient for the violation to be of a norm that is specific, universal, and obligatory, as outlined in precedents like *Filartiga* and *Tel-Oren*. The required actionable violations must be universally condemned, maintaining a standard that is definable and obligatory.
The interpretation of Section 1350 is supported by the Torture Victim Protection Act of 1991, which establishes that allegations of torture meet the standards of universal and obligatory international law, specifically that torture violates jus cogens. The text emphasizes that the right to be free from official torture is fundamental and universally recognized, describing various forms of torture and denouncing them as severe violations of human dignity. It references several cases and legal principles affirming that torture is prohibited under customary international law and is recognized by multiple international treaties and conventions, including the Convention Against Torture. The Second Circuit's conclusion aligns with the assertion that the Alien Tort Act enables a cause of action for breaches of these international human rights standards, affirming the plaintiffs' claim.
Additionally, the Estate contends that tort claims for personal injuries or wrongful death cease upon the death of either party, citing Heikkila v. Barber, where the court ruled that claims similar to unlawful imprisonment do not survive a plaintiff's death, as common law tort actions typically do not continue after death unless explicitly provided by statute. The court concluded that federal causes of action follow common law principles regarding survival unless Congress specifies otherwise.
The choice of law inquiry emphasizes fairness, with plaintiffs' claims under the Alien Tort Act being closely aligned with Eighth Amendment violations related to cruel and unusual punishment. Torture, as prohibited by the Eighth Amendment, remains actionable even after the defendant's death, and claims under the Alien Tort Act can be analogized to those under 42 U.S.C. Sec. 1983, which also survive a party's death. The plaintiffs' claims against Ferdinand Marcos's estate are thus valid posthumously.
Regarding the authority to grant a preliminary injunction to prevent the estate from transferring or dissipating assets, such an injunction can be issued if the lower court did not abuse its discretion or apply an incorrect legal standard. While the estate contends that the court overstepped by granting an injunction in a case limited to monetary damages, case law supports the district court's ability to issue a preliminary injunction when equitable relief is sought. The court previously upheld a similar injunction in a case against the Marcoses, allowing preservation of assets to ensure potential equitable remedies. Although some precedents suggest that final equitable relief must accompany preliminary injunctive relief, any language implying limitations on issuing injunctions solely for monetary damages is considered non-binding.
Support exists in case law for issuing preliminary injunctions even when only money damages are sought. In *Flynt Distributing Co. v. Harvey*, the Ninth Circuit reversed a preliminary injunction because evidence showed that the purchasing company would indemnify the defendant against the plaintiff's claim, thus offering adequate protection for potential money damages. The reversal was based on the lack of a finding that money damages were an inadequate remedy, reinforcing that the criteria for a preliminary injunction include irreparable harm and the inadequacy of legal remedies.
The Supreme Court has not definitively ruled on this issue, but its precedent implies that a preliminary injunction may be justified if assets are at risk of dissipation. In *De Beers Consolidated Mines, Ltd. v. United States*, the Court denied a preliminary injunction sought to freeze assets for potential contempt sanctions, arguing that it would set a broad precedent allowing injunctions based on mere beliefs about asset dissipation. However, the actual ruling in *De Beers* is narrower; it was deemed inappropriate not due to the pursuit of money damages but because the plaintiff could not recover any damages at all. The Third Circuit clarified that the injunction’s denial was based on the inadequacy of the plaintiff's claim rather than the nature of the relief sought.
The De Beers Court determined that the preliminary injunction in question addressed matters outside the suit's issues, distinguishing it from cases where an injunction pertains to a fund or property relevant to a final decree. In Deckert v. Independence Shares Corp., the Supreme Court sanctioned a preliminary injunction to maintain the status quo due to the defendant's likely insolvency, emphasizing that the injunction was a reasonable measure pending final determination and necessary to prevent asset dissipation. The Court's authority to grant such an injunction was based not only on the request for equitable relief but also on the inadequacy of legal remedies in light of the defendant's financial condition.
In United States v. First National City Bank, the Supreme Court upheld a preliminary injunction freezing assets in a tax-related suit, affirming that once personal jurisdiction is established, the District Court can order asset freezes regardless of their location. The injunction was deemed appropriate to prevent asset dissipation and protect potential money judgments, aligning with the reasoning in Deckert.
Most circuits, including the Third and First Circuits, support the use of preliminary injunctions in cases seeking monetary damages under extraordinary circumstances, such as a risk of the defendant's insolvency before judgment. Hoxworth affirmed this principle, rejecting claims that courts lack the authority to protect future monetary remedies through asset encumbrance. Similarly, in Teradyne Inc. v. Mostek Corp., the First Circuit ruled that a district court could enjoin asset disposal to safeguard against potential insolvency prior to judgment, rejecting the argument against injunctive relief when only monetary damages are sought.
A preliminary injunction may be warranted when a plaintiff seeks only damages, under specific circumstances where irreparable harm and inadequate legal remedy merge. The court in Roland Machinery Co. v. Dresser Industries identified four scenarios where damages might be inadequate: (1) a delayed award could jeopardize the plaintiff's business; (2) the plaintiff may lack the funds to pursue the lawsuit without business revenue; (3) the defendant's potential insolvency could hinder recovery of damages; and (4) the difficulty in calculating the nature of the plaintiff's loss. The Seventh Circuit, along with several other circuits, supports the issuance of a preliminary injunction to prevent the defendant from frustrating a potential judgment by transferring assets out of jurisdiction. This principle is reinforced in cases where the defendant's insolvency and asset depletion are at risk, affirming the trial court's authority to preserve an adequate remedy. Conversely, the Fifth and Eleventh Circuits have ruled against the ability to freeze a defendant's unrelated assets for potential future judgments.
The court reviewed the De Beers decision and determined that a claim for money damages was not "related to" the underlying litigation since the plaintiffs were not seeking the return of a specific asset or fund that violated a statute. The court aligned with the majority of circuits in recognizing that a district court can issue a preliminary injunction when plaintiffs demonstrate that money damages would be inadequate due to the defendant's imminent insolvency or a history of concealing assets to evade judgment. This authority for injunctions is limited to extraordinary cases where equitable relief is not requested, avoiding the broad implications seen in De Beers regarding plaintiffs seeking asset sequestration in any damage action.
In support of the preliminary injunction, the district court found a substantial likelihood of the plaintiffs succeeding on the merits, as they later won at trial and were awarded significant exemplary damages. The court identified potential irreparable injury to the plaintiffs, concluding that without the injunction, there was a considerable risk that the defendants would transfer or hide their assets, undermining the plaintiffs' recovery efforts. The findings included: (1) the anticipated judgment could exceed $320 million; (2) the Estate had approximately $320 million in assets in Swiss and Hong Kong banks; (3) the Trajano plaintiffs struggled to collect a $4.4 million judgment against Imee Marcos-Manotoc; (4) prior federal injunctions against the Marcoses were based on a pattern of asset concealment through foreign accounts; and (5) no probate proceedings had been initiated for Ferdinand Marcos. The district court concluded that the Estate would not suffer harm from the injunction, as it could not distribute assets until claims were resolved, and the balance of hardships favored the injunction's issuance. The Estate did not contest these findings. The court affirmed that the district court acted within its discretion in preliminarily enjoining the Estate from transferring or concealing its assets, based on evidence of asset dissipation to avoid judgment. Section 1330 confirms that U.S. district courts have original jurisdiction over claims against foreign states under certain conditions, while Section 1604 outlines the general immunity of foreign states from U.S. court jurisdiction, except as specified in sections 1605-1607.
Sections 1604 and 1330(a) of the Foreign Sovereign Immunities Act (FSIA) establish the jurisdictional framework concerning foreign states. Section 1604 prohibits federal and state courts from exercising jurisdiction when a foreign state is immune, while Section 1330(a) provides jurisdiction for cases involving U.S. citizens or aliens against foreign states that are not entitled to immunity. Section 1603(b) defines "agency or instrumentality" of a foreign state, which may include individuals acting in their official capacities.
Section 1605 outlines exceptions to this immunity, specifically stating that a foreign state is not immune from lawsuits seeking damages for personal injury, death, or property loss occurring within the U.S. due to tortious acts committed by the state or its officials acting within the scope of their employment. The complaint alleges that former Philippine President Marcos, through military and intelligence forces, systematically violated human rights, leading to arbitrary arrests, torture, prolonged detention, and summary executions of class members, all of which are claimed to violate both international law and Philippine law.
While the court found no probable cause for murder charges against Marcos, it acknowledges the concept of jus cogens norms—peremptory norms of international law that cannot be derogated from. The plaintiffs assert that the Philippines waived its sovereign immunity, which would extend to Marcos' immunity as well. However, the Estate counters that there is no explicit waiver in the documents provided and argues against one official waiving another's immunity. The court determined it unnecessary to address the waiver issue, concluding that FSIA does not protect illegal conduct by government officials, and rejected the Estate's argument regarding the scope of individual accountability under international law.
A determination that Marcos' alleged actions were beyond his official authority implies no violation of international law occurred. An official, while acting under color of authority but outside their official mandate, may violate international law, losing FSIA immunity. Paraguay's renouncement of torture as state policy does not negate the tort's classification as an international law violation if committed under governmental authority. The FSIA does not establish a basis for "arising under" jurisdiction under 28 U.S.C. § 1331 but does not alter substantive liability law. The "Arising Under" Clause in Article III is interpreted more broadly than in § 1331. Plaintiffs may assert claims for municipal law violations, as claims can link wrongful death statutes to international law. A connection between international torts and domestic tort law can provide jurisdiction and cause of action, particularly for universal crimes and torts by U.S. citizens abroad. Heikkila's claim is based on federal statutes for damages from contempt. While the U.S. Constitution does not apply to aliens with claims outside the U.S., it can be analogically referenced. The class action complaint seeks an injunction to prevent asset transfer to satisfy a potential judgment, without requesting final equitable relief. The court justified the injunction as necessary to maintain the status quo for a future judgment, though the Fifth Circuit has shown inconsistency on whether an injunction can secure a legal remedy. Irreparable injury from difficulty in collecting damages may justify such an injunction, even if the remedy is limited to damages.
