Daniel Wise of the New York Law Journal has an interesting article out today on a recent New York state court decision involving a complex dispute over assets of former Philippines dictator, Ferdinand Marcos, being held by Merrill Lynch in New York. The court ordered that the funds be paid to satisfy part of a $2 billion judgment awarded to class members in a successful class action filed in federal court in Hawaii under the Alien Tort Claims Act, on behalf of individuals injured by human rights abuses committed by the Marcos regime. The current government of the Philippines claims entitlement of the funds, claiming that it has a sovereign interest.
The same funds were the subject of a federal interpleader action filed by the brokerage to resolve issues over various competing claims to the funds. The United States Supreme Court dismissed that action in 2007 after concluding that the Philippine government and a Philippine commission, who had sovereign immunity from having to participate in the interpleader proceeding, were indispensible parties. The state court faced a similar issue, but interpreting the state joinder rule, it found that the two entities were necessary, but not indispensible parties, which meant that the case could go forward without them.
The cases reflect an intriguing and complicated interplay between a variety of private and governmental interests. The individual class members claim entitlement to a personal remedy for injuries caused by human rights violations of the former Philippine government. The current Philippine government has a sovereign interest in being free from having its rights determined by foreign courts, and it wants to use the assets to fund public programs. The State of New York has an interest in making decisions about disputed funds held within its borders, but one of its courts disagrees with the analysis of the nation’s highest court about the importance of the sovereign interests of a foreign nation over those same funds. In the middle of it all is a bank who probably just doesn’t want to get sued again for giving the money to the wrong party.
Something tells me that there will be much more to this story…