Rule 19 | Legal Information Institute

Philippines v. Pimentel

Issues

1. If a federal district court grants a foreign sovereign's motion to dismiss it from an interpleader action on sovereign immunity grounds, but denies the sovereign's concurrent motion to dismiss the entire interpleader action on the ground that the sovereign is an indispensable party, may the sovereign appeal?

2. If a foreign sovereign has in interest in assets that are the subject of a federal interpleader action, and the court dismisses the sovereign from the action on sovereign immunity grounds, must the court then dismiss the entire action?

Court below

United States Court of Appeals for the Ninth Circuit

Federal Rule of Civil Procedure 19(b) requires a federal court to dismiss a civil action if an unavailable party is indispensable, that is, if the court could not in good conscience proceed without that party. Foreign sovereigns can make themselves unavailable by asserting their sovereign immunity from suit. The Supreme Court will consider the interaction between these two doctrines in this interpleader action to resolve the ownership of property claimed by the Republic of the Philippines ("Philippines") and by Mariano Pimentel ("Pimentel"). The Philippines successfully asserted its sovereign immunity, and now argues that the action cannot proceed in its absence. Pimentel responds that foreign sovereigns cannot stop an interpleader action merely by claiming an interest in the property at issue and then asserting sovereign immunity. The Court's decision in this case will impact courts' ability to adjudicate title to assets claimed by foreign sovereigns. This issue is likely to become increasingly important as sovereigns make ever-greater investments in private sector assets.

Questions as Framed for the Court by the Parties

1. Whether the Republic of the Philippines and its Presidential Commission on Good Government (PCGG), having been dismissed from the interpleader action based on their successful assertion of sovereign immunity, had the right to appeal the district court's determination that they were not indispensable parties under Federal Rule of Civil Procedure 19(b); and whether the Republic of the Philippines and its PCGG have the right to seek this court's review of the Court of Appeals's opinion affirming the district court.

2. 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.

In 1972, Ferdinand Marcos, then President of the Republic of the Philippines ("Philippines"), established Arelma, S.A., a Panamanian corporation, to hold $2 million of his assets. Merrill Lynch, Pierce, Fenner & Smith v. Arelma, Inc., 2004 WL 5326929, at *1-2 (D. Haw. Jul. 12, 2004); Brief for Petitioner at 1-2, 5. Arelma invested the assets with Merrill, Lynch, Pierce, Fenner, and Smith, Inc.

Additional Resources

http://www.scotuswiki.com/index.php?title=Republic_of_the_Philippines_v._Pimentel

http://topics.law.cornell.edu/wex/Federal_courts

http://topics.law.cornell.edu/wex/Civil_procedure

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