SCOTUS Decides Important Foreign Sovereign Immunity Case

by Julian Ku

Did the Supreme Court decide anything else last week besides Boumediene and Munaf? Well, there was that important case involving foreign sovereign immunity, Philippines v. Pimentel. Luckily for us, Vincent Vitowsky of Edwards Angell Palmer & Dodge LLP in New York offers this summary and analysis via a Federalist Society podcast.

In Philippines v. Pimentel, the Supreme Court issued a strong pronouncement in favor of sovereignty. Its 7-2 ruling accepted the view that US courts should defer to the courts of other nations on matters concerning the vital interests of those other nations.

The government of the Philippines had been dismissed, on grounds of sovereign immunity, from an interpleader action concerning entitlement to a Merrill Lynch account containing assets allegedly stolen by the late dictator, Ferdinand Marcos. The Supreme Court held that as a result of the dismissal of the Philippines, a lower court could not distribute the assets to a class of human rights victims who had prevailed in a US action against Marcos.

The Philippines contended that the status of the assets should be determined by its own anti-corruption court, the Sandiganbayan. The Supreme Court agreed, even though it recognized that (1) the decision would impair the human rights victims interest in receiving compensation, and (2) it would deprive Merrill Lynch of the opportunity to limit its liability to competing claimants. The Court found that the Philippines had a unique interest in resolving the ownership of the assets and in determining if, and how, they should be used to compensate victims of the Marcos regime. It wrote: “The dignity of a foreign state is not enhanced if other nations bypass its courts without right or good cause.” Even the two Justices dissenting in part recognized the important role of the Philippines courts in resolving these issues.

This holding may have implications in the pending cases in the US against corporations for their alleged support of the South African Apartheid regime. Those cases have been objected to by both the South African and US governments, and the courts hearing them may find support in this decision for the view that they should defer to those objections.

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