Tuesday, December 4, 2007
Yesterday, the Supreme Court granted certiorari in Republic of the Philippines v. Pimentel, No. 06-1204. The case is a proceduralist's dream and anyone else's nightmare: the intersection of interpleader, class action, and compulsory party joinder. The primary issue before the Supreme Court concerns Rule 19(b): "Whether a foreign government that is a 'necessary' party to a lawsuit under Rule 19(a) and has successfully asserted sovereign immunity is, under Rule 19(b), an 'indispensable' party to an action brought in the courts of the United States to settle ownership of assets claimed by that government."
Pimentel is the class representative for a Rule 23(b)(3) class of 9,539 persons with claims against Ferdinand Marcos for human rights abuses; the class won a judgment of nearly $2 billion. That was the case affirmed as Hilao v. Marcos (In re Estate of Marcos Human Rights Litigation (9th Cir. 1996), and notable to mass tort litigators not only as an example of a class action used to address human rights abuses, but also for its use of statistical sampling methods to award damages.
Then comes the interpleader. Merrill Lynch was custodian of an account, opened by Ferdinand Marcos, containing $35 million. The district court in the class action had awarded those assets to the plaintiff class. But the Republic of the Philippines claimed ownership of the assets on the ground that Marcos had taken the money illegally. Other claimants asserted an interest as well. Perfect occasion for interpleader. Merrill Lynch interpleads Pimentel as representative of the class, the Philippines, and other claimants.
The problem: the Philippines successfully asserted sovereign immunity, gaining a dismissal. The big question is whether, in the absence of the Philippines, the court must dismiss. The court held that the country was a necessary party under Rule 19(a), but declined to dismiss under Rule 19(b). The Philippines argues on appeal (another issue before the Supreme Court is whether a dismissed party has a right to appeal the Rule 19(b) decision) that in its absence the case must be dismissed.