The Class of Human Rights Victims files this Petition for Rehearing and Rehearing En Banc pursuant to Rules 35 and 40 of the Federal Rules of Appellate Procedure because the Panel’s opinion rigidly applying a state procedural provision to determine the continuing validity of a federal judgment based on a federal cause of action is, in counsel’s judgment, in direct contradiction of Article III and the Supremacy Clause of the Constitution, the language in Rules 69(a) and 82 of the Federal Rules of Civil Procedure, and this Circuit’s longstanding caselaw, e.g., Duchek v. Jacobi, 646 F.2d 415 (9th Cir. 1981), raising questions of national importance regarding the ability of federal courts to enforce their judgments.
The Panel’s decision is also in error, in counsel’s judgment, because the Panel applied state rather than federal law in determining when a federal judgment is “rendered” (although, as explained below, it is not clear that the Panel properly applied Hawaii law because the Hawaii courts have never interpreted the term “rendered”). The Panel thus erroneously ruled that the time limits applicable to enforcement statutes begin before the appellate process is completed, in direct contradiction with decisions of the Supreme Court and other Circuits, including Borer v. Chapman, 119 U.S. 587 (1887); Home Port Rentals, Inc. v. International Yachting Group, Inc., 252 F.3d 399 (5th Cir. 2001); and Andrews v. Roadway Express Inc., 473 F.3d 565 (5th Cir. 2006).
In addition, the Panel’s decision, in counsel’s judgment, rests on a fundamental error of law (or grave factual misunderstanding) regarding the judgment, because the Panel erroneously assumed that the district court’s Order of February 3, 1995 constituted the “Judgment” triggering the capacity for recovery. The Panel’s assumption is a clear error, because Rule 58(a) of the Federal Rules of Civil Procedure states that a judgment occurs when the court clerk issues a “separate document” indicating that the matter is concluded for all parties, which occurred on December 6, 1995, after the claims of all plaintiffs had been resolved, the motions filed by opposing counsel had been addressed, and the district court had issued its published opinion. The Panel’s error is important because the Class of Victims registered their judgment in the Northern District of Texas on April 5, 2005, well within ten years after the December 6, 1995 judgment entered by the Clerk.
These concerns, and the national impact of the Panel’s decision, certainly mandate reconsideration. But if this Honorable Circuit believes that federal judgments based on federal questions are subject to state sunsetting laws, a question should, in the alternative, be certified to the Hawaii Supreme Court regarding when, under Hawaii Revised Statute (H.R.S.) § 657-5, a judgment is “rendered.” This certification is necessary because, in counsel’s judgment, the Panel’s opinion rests on an interpretation of an ambiguous term in a Hawaii statute that has never been interpreted by the Hawaii Supreme Court, and is inconsistent with the interpretation of a similar statute in Andrews v. Roadway Express, Inc., 473 F.3d 565 (5th Cir. 2006).
STATEMENT OF FACTS
1. After nine years of hard-fought litigation and a trifurcated jury trial, the district court issued an Order on Feb. 3, 1995 providing judgment of almost $2 billion to the Class of 9,539 Filipinos who had been tortured, summarily executed, or “disappeared” during the 1972-86 martial law regime of Ferdinand E. Marcos. Excerpts of Record (ER) 1, Tab 1.
2. The Class case had been consolidated with other cases brought by individual claimants, and other orders styled as “Final Judgment” were entered later, including an order on August 11, 1995, and certain claims were reinstated on July 24, 1995. See Docket Sheet, attached hereto, Appendix B at 56, 58.
3. On November 30, 1995, the district court issued its opinion addressing all legal issues. In re Estate of Ferdinand E. Marcos Human Rights Litigation, 910 F.Supp. 1460 (D.Hawaii 1995). This opinion concludes by stating that “[j]udgment shall be entered for plaintiffs,” and it was followed on December 6, 1995 by the formal entry by the Clerk, Walter Chinn, recorded as follows:
JUDGMENT – entered pursuant to the ‘Opinion and ORDER, filed on November 30, 1995 (cc: all parties) [Relates to ALL Actions] CHINN/NAKAMURA.
Docket Sheet, at 60. This entry records the “separate document” required for all judgments under Rule 58(a).
4. On December 17, 1996, this Court affirmed the November 30, 1995 opinion. Hilao v. Estate of Marcos, 103 F.3d 767 (9th Cir. 1996). This Court returned its mandate to the district court on January 8, 1997. ER 196, Tab 16.
5. Because the Marcoses followed a practice of secreting their assets, Hilao v. Estate of Marcos, 25 F.3d 1467, 1480 (9th Cir. 1994), the Class of Victims sought to pursue and freeze certain assets during the pendency of the appeal, but no effective recovery was possible until the appeal process was completed.
6. The Class registered their judgment in the Northern District of Illinois on January 23, 1997 and in the Northern District of Texas on April 5, 2005 pursuant to 28 U.S.C. § 1963. The Class also filed actions in the Philippines in May 1997 and Singapore on February 11, 2005 for recognition of their judgment.
7. After this Court’s affirmance, the Class actively pursued collection efforts recovering about $1,500,000. The Class also sought to collect $35 million as described in Merrill Lynch, Pierce, Fenner and Smith, Inc. v. ENC Corp., 464 F.3d 885 (9th Cir. 2006), vacated sub nom. Republic of Philippines v. Pimentel, 128 S.Ct. 2180 (2008).
8. In April 2005, the Class filed an action in the Northern District of Texas claim seeking 4,000 acres beneficially owned by the Marcos Estate titled in the names of Revelstoke and six other corporations. ER 43, Tab 8. On May 8, 2006, the Texas federal court certified the Class pursuant to Rule 23. Selected Excerpts of Record (SER) 5, Tab 3.
9. On June 27, 2006, the Hawaii federal court extended the judgment of the Class of Victims for ten years, with supporting findings and conclusions of law. ER 115, Tab 12.
REASONS FOR GRANTING REHEARING
A. Federal Judgments and Decrees Based on Federal Causes of Action Are Not Subject to State Sunsetting Statutes. The Panel Does Not Cite to a Single Case Ruling Otherwise. Its Opinion Ignored Rule 82 and the Full Language of Rule 69(a), and Is Inconsistent with Decisions of the Supreme Court, This Circuit, and Other Circuits That Have Held that Federal Courts Have Authority to Enforce Their Judgments and Should Not Follow State Laws in a “Hypertechnical” Manner.
The $2 billion judgment at issue here, against the estate of a authoritarian ruler who “caused tremendous harm to many people,” Hilao v. Estate of Marcos, 103 F.3d 767, 788 (9th Cir. 1996) (Rymer, J., concurring and dissenting in part), is a federal judgment rendered on a federal cause of action pursuant to federal statutes establishing jurisdiction.1 The Panel did not cite any other decision eliminating this type of a federal judgment, and the Class has not found any precedent for such a holding.
The consequences of the Panel’s holding cannot be overstated. It is contrary to important principles of federalism and will jeopardize longstanding federal judgments and decrees. If every federal court ruling in Hawaii is to be governed by H.R.S. § 657-5, which forbids enforcement of every “judgment and decree” “rendered” more than “ten years” ago, unless extended, then every antitrust, civil rights, environmental, housing, prisoner, school desegregation and Medicaid consent decree would become unenforceable in Hawaii. A comparable result would occur in all states with similar statutes.
Such an outcome is completely inconsistent with the law in this and other Circuits. Numerous decisions demonstrate that the Supreme Court and this Court regularly enforce old consent decrees on federal causes of action, which are regarded by federal law as “judgments.” See United States v. Swift & Co., 286 U.S. 106 (1932); Jeff D. v. Kempthorne, 365 F.3d 844, 850 (9th Cir. 2004). In Swift, the Supreme Court, per Justice Cardozo, rejected an attempt to modify a consent judgment that was more than ten years old, stating that the decree continued “forever” unless modified or vacated. 286 U.S. at 116. “What was then solemnly adjudged as a final composition of an historic litigation will not lightly be undone at the suit of the offenders, and the composition held for nothing.” Id. at 120.
In Kempthorne, involving a consent decree more than 20 years old requiring expenditures for community-based health programs, this Court ruled that consent decrees are considered to be final judgments, 365 F.3d at 850, and that they continue indefinitely until vacated, explaining that “[o]nce the decree was entered, the district court retained jurisdiction to enforce it,” because of “the strong federal interest in ensuring that the judgments of federal courts are meaningful and enforceable.” Id. at 853 (emphasis added).
Few cases address this issue explicitly,2 because the importance of federal court autonomy is firmly grounded in Article III and the Supremacy Clause (Article VI, para. 2) of the Constitution, along with the language in Rules 69(a)(1) and 82 of the Federal Rules of Civil Procedure, which protect federal judgments against arbitrary termination by state legislatures. The Panel purported to rely upon Rule 69(a)(1), but never quoted the full text of the second sentence, which says that the procedure on execution should follow state law “but a federal statute governs to the extent it applies.” Rule 82 says that “[t]hese rules shall not be construed to extend or limit the jurisdiction of the United States district courts…” Taken together, as this Court explained in Duchek v. Jacobi, 646 F.2d 415, 418 (9th Cir. 1981), these Rules mean that federal courts should follow state procedural mechanisms (giving notice, posting a bond, etc.), but that federal law controls the continued validity and enforceability of the judgment. “Rule 69(a) cannot be read to authorize a direct restriction on the federal district court’s jurisdiction to enforce its judgments,” because of the language in Rule 82, and that state procedures must not be elevated “to the status of substantive abridgments on the federal district court’s jurisdiction to enforce its judgments.” Id.
The Panel dismissed Duchek as “inapposite,” slip op. at 9767, arguing that Duchek involved an effort to curtail federal jurisdiction, while the present case involves a right to enforce a judgment. But this attempted distinction is not supported by the Duchek facts, which did involve an attempt to curtail the ability of a federal court to exercise jurisdiction to enforce its judgment and thus addressed the same issue as the present case. The Duchek opinion quoted from Railway Co. v. Whitton’s Administrator, 80 U.S. (13 Wall.) 270, 286 (1871), to explain that whenever “property or personal rights, or injuries to either, is established by State legislation, its enforcement by a Federal court in a case between proper parties is a matter of course, and the jurisdiction of the [Federal] court in such a case, is not subject to State limitation.” 646 F.2d at 419 (emphasis added).
Duchek goes on to say that the importance of a federal court retaining ability to enforce its judgment is even greater in cases based on federal questions. Although its facts involved diversity jurisdiction, Duchek explained that a rule requiring federal courts to follow state procedures “in a hypertechnical manner,” id. at 418, would have a grave impact on “federal question cases because it would eliminate jurisdiction to enforce judgments regardless of the underlying causes of action or its jurisdictional predicate.” Id. at 419. Clearly referring to “jurisdiction to enforce judgments,” Duchek then provides the constitutional underpinning for the conclusion that federal court ability to enforce judgments cannot be eliminated by state statutes:
In determining jurisdiction, district courts of the United States must look to the sources of their power, Article III of the United States Constitution and Congressional statutory grants of jurisdiction, not to acts of state legislatures. However extensive their power to create and define substantive rights, the states have no power directly to enlarge or contract federal jurisdiction.
Id. (emphasis added; citations omitted).
This language in Duchek is firmly based on Supreme Court decisions. Byrd v. Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525, 537 (1958), said that even in diversity cases federal courts must identify “affirmative countervailing” federal interests and balance them against state procedural rules. “The federal system is an independent system for administering justice to litigants who properly invoke its jurisdiction.” Id.
Felder v. Casey, 487 U.S. 131 (1988), ruled that a Wisconsin notice-of-claim statute could not block a claim brought in state court based on 42 U.S.C. § 1983, because that would frustrate the protection of congressionally-created substantive rights:
[I]n actions brought in federal courts, we have disapproved the adoption of state statutes of limitation that provide only a truncated period of time within which to file suit, because such statutes inadequately accommodate the complexities of federal civil rights litigation and are thus inconsistent with Congress’ compensatory aims.
487 U.S. at 139-40. A state sunsetting provision cannot therefore be invoked to block the enforcement of a federal-question judgment, especially when the judgment creditors have been diligently seeking to collect on their judgment.
The Panel characterized the position of the Class as “that a federal judgment is free of state limitations and can be enforced forever.” Slip op. at 9766. But, in oral argument, Class counsel responded to the Panel’s question by saying that the doctrine of laches governs. Federal courts can invoke laches where creditors have not actively pursued possible sources of funding, but this doctrine cannot be applied here, because the Class has been diligently pursuing all possible sources of Marcos assets.
B. The Panel’s Opinion Directly Contradicts Decisions of the Supreme Court and Other Circuits Holding That a Time Period Restricting Enforcement Should Not Commence Until the Ability to Recover the Judgment Begins.
This basic common-sense principle has been part of governing federal law since at least 1887, when the Supreme Court decided Borer v. Chapman, 119 U.S. 587 (1887), discussed in the Class’s Appellate Brief at 19-21. The Panel’s opinion purports to distinguish Borer, but its own summary of the holding provides the principle that precisely supports the position of the Class of Victims. The Panel explained that the Supreme Court in Borer “concluded that the statute of limitations did not begin to run until the judgment was in a form to be enforced.” Slip op. at 9769. This principle requires the conclusion that any time limitation on the enforcement of judgments cannot begin until the appellate process has been completed and recovery becomes possible.
The Panel’s treatment of Home Port Rentals, Inc. v. International Yachting Group, Inc., 252 F.3d 399 (5th Cir. 2001), is equally remarkable, acknowledging the principle enunciated by that court (which fully supports the position of the Class) but then dismissing it as dicta by saying that the Home Port “court does not purport to adopt a rule that would be pertinent here.” Slip op. at 9769. But Home Port directly addressed the issues central to the present case and unambiguously supported the position of the Class of Victims that any time period regarding enforcement of a judgment can begin only after the time for appeal has ended. The magistrate judge in that case made an explicit recommendation to the district judge, which the district judge “adopted,” stating that the judgment should be considered to be enforceable until ten years after the return of the appellate court’s mandate (on April 2, 1992), thus rejecting the proposal that the ten-year period should start to run when the district judge entered its judgment (on March 20, 1989). 252 F.3d at 402. More significantly, the Fifth Circuit concluded that the argument that a limitation period should begin “after entry of the 1989 judgment, i.e., on March 20, 1999, and not ten years after it was affirmed on appeal-is thus clearly specious.” Id. at 406 (emphasis added). It would be impossible to come up with a phrase designed more clearly to reject an argument, but, nonetheless, the Panel adopted the very view that the Fifth Circuit characterized as “clearly specious.” Such a complete and utter contradiction between the views of the Panel and another Circuit requires en banc review.
Another opinion holding that time limitations on the enforcement of judgments do not begin until the appellate process is complete is Andrews v. Roadway Express Inc., 473 F.3d 565 (5th Cir. 2006) (a diversity case decided after briefing was completed), which was brought to the attention of the Panel in a Rule 28(j) Letter, but ignored by the Panel. Referring to two Texas statutes governing enforcement, Andrews stated that “[t]he time-limit for enforcement began to run when the Supreme Court denied review of the judgment. See John F. Grant Lumber Co. v. Bell, 302 S.W.2d 714 (Tex.Civ.App.-Eastland 1957).” Thus, the ten-year enforcement period began after the appellate process was completed, not when the trial court issued its ruling. What makes the Andrews analysis particularly cogent is that the Texas statutes use the word “rendition,” which has the same root as the word “rendered” used in H.R.S. § 657-5. As explained by the Texas Court of Civil Appeals in John F. Grant Lumber Co., supra, the two relevant Texas statutes (articles 3773 and 5532, Vernon’s Ann.Civ.St., since repealed) required enforcement “within ten years after ‘rendition’ and ‘date’ of a judgment.” 302 S.W.2d at 715. The Texas court explained that this “date” or “rendition” occurred when the creditor “was allowed to procure an execution,” which was the day “when its motion for rehearing of its petition for writ of error was overruled,” i.e., when the appellate process was completed. Id. at 716.
Applying this interpretation to the word “rendered” in H.R.S. § 657-5 requires the conclusion that the “rendition of final judgment” did not occur until December 17, 1996, when this Court affirmed the judgment on appeal, or when the mandate was returned on January 8, 1997, or perhaps on the date when the time period to file a petition of certiorari to the U.S. Supreme Court expired. The extension of the judgment by the district court on June 27, 2006 was thus within ten years after the judgment was “rendered.”
C. The Panel Committed a Fundamental Error of Law (or Grave Factual Misunderstanding) in Assuming that the District Court’s February 3, 1995 Order Was the “Final Judgment,” Rather Than the Clerk’s Entry of the Judgment on December 6, 1995.
Even if this Circuit were to depart from the view of the Supreme Court and other Circuits and to adopt the view that a sunsetting period begins when proceedings are complete at the trial level, it must reconsider and reverse the Panel’s decision because the Panel committed a fundamental error of law (or gravely misunderstood the facts) in treating the February 3, 1995 Order as the final judgment, rather than Judgment recorded pursuant to Rule 58(a) by Court Clerk Walter Chinn on December 6, 1995. After the time for post-judgment motions had passed, the trial court issued its published opinion on November 30, 1995, and then, on December 6, 1996, the Clerk entered “JUDGMENT” in the “separate document” required by Rule 58(a). If completion at the trial level were to be found as the trigger for a sunsetting period, the operative date in the present case cannot be earlier than December 6, 1995. See, e.g., Stephanie-Cordona LLC v. Smith’s Food and Drug Center, Inc., 476 F.3d 701, 703 (9th Cir. 2007) (explaining the requirements of Rule 58); Taylor v. United States, 181 F.3d 1017, 1018 (9th Cir. en banc 1999) (“the December 22, 1972 order (regardless of its label) was interlocutory and disappeared when the final judgment was entered October 19, 1973″); Balla v. Idaho State Bd. of Corrections, 869 F.2d 461, 468 (9th Cir. 1989) (explaining that a final judgment is one that adjudicates all claims for all parties and identifying the district court’s final opinion resolving all issues as the final judgment).
With this proper understanding of the judgment, the Panel’s concerns disappear, because the Panel acknowledged that “registering a judgment under § 1963 is the functional equivalent of obtaining a new judgment in the registration court.” Slip op. at 9768. The Class of Victims registered their judgment in the Northern District of Texas on April 5, 2005, well within ten years after the December 6, 1995 entry of judgment by the District Court Clerk and thus had the equivalent of a “new judgment” in the Texas court.
The Panel Erred in Viewing the Hawaii Statute (H.R.S. 657-5) as Having Been “Authoritatively” Interpreted by the Hawaii Supreme Court. If This Case Is Ultimately to Turn on the Interpretation of the Hawaii Statute, Then the Question of When a Judgment is “Rendered” Must Be Certified to the Hawaii Supreme Court for Resolution.
H.R.S. § 657-5 says that “[u]nless an extension is granted, every judgment and decree of any court of the State shall be presumed to be paid and discharged at the expiration of ten years after the judgment or decree was rendered.” The Panel stated that:
The Hawaii Supreme Court has authoritatively declared that the burden is on the judgment creditor to seek judicial extension of the judgment prior to expiration of the ten-year period, and that if she fails to secure an extension within the ten years, ‘the judgment and all the rights and remedies appurtenant to that judgment terminate.’ Wiig, 921 P.2d at 119.
Slip op. at 9765. The opinion in International Savings & Loan Ass’n v. Wiig, 921 P.2d 117 (Haw. 1996), does not, however, address or resolve the question of when a judgment is “rendered.” The original judgment issued in favor of International Savings against Wiig was never appealed, and so the issues raised in the present case regarding the effect of an appeal on a judgment’s enforceability were not raised in that case.
The Andrews and John F. Grant Lumber Co. decisions, discussed supra in section B, make it clear, at a minimum, that the proper interpretation and application of H.R.S. § 657-5 to the present facts is ambiguous, and therefore that if this statute is to be dispositive, this Court must turn to the Hawaii Supreme Court for guidance.
Rule 13(a) of the Hawaii Rules of Appellate Procedure authorizes the Hawaii Supreme Court to respond to a certified question from a federal district or appellate court when “a question concerning the law of Hawaii … is determinative of the cause and [when] there is no clear controlling precedent in the Hawaii judicial decisions.” This procedure has been utilized frequently, including Kinoshita v. Canadian Pacific Airlines, Ltd., 803 F.2d 471 (9th Cir. 1986); Smith v. Cutter Biological, Inc. 911 F.2d 374, 376 (9th Cir. 1990); and Allstate Ins. Co. v. Alamo Rent-A-Car, Inc., 137 F.3d 634 (9th Cir. 1998). Certification of questions to state courts is particularly appropriate when “[t]he unsettled law is outcome determinative,” 17A Moore’s Federal Practice, § 124.22[c] (Matthew Bender 3d ed.), as it was under the Panel’s approach.
This Court has certified questions to the Hawaii Supreme Court without a motion by the parties, because “[w]e do not think it is appropriate to substitute our judgment on the interpretation of a Hawaii statute for the judgment of the Hawaii Supreme Court.” Allstate Ins. Co., supra, 137 F.3d at 636 (quoting from Smith, supra, 911 F.2d at 375). See also Broad v. Mannesmann Anlagenbau AG, 196 F.3d 1075, 1076 (9th Cir. 1999) (ruling that an appellate court can properly consider a request for certification even though the request was first made on appeal).
For the reasons stated herein, a rehearing or rehearing en banc must be granted, or, in the alternative, if the Hawaii enforcement statute is to be given a dispositive effect, the interpretation of this statute must be certified to the Hawaii Supreme Court for resolution.
Dated: August 12, 2008
Robert A. Swift
KOHN SWIFT & GRAF, PC
One South Broad Street, Suite
Philadelphia, PA 19107
Sherry P. Broder
Jon M. Van Dyke
841 Bishop Street, Suite 800
Honolulu, HI 96813
Attorneys for Celsa Hilao
and the Class of Human rights Victims
CERTIFICATE OF COMPLIANCE
I certify that pursuant to Ninth Circuit Rules 35-4(a) and 40-1(a), the attached petition for panel rehearing or rehearing en banc is proportionately spaced, has a type face of 14 points, and contains 4118 words of text.
Sherry P. Broder
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing document was served on this 12th day of August 2008 by email, fax, and/or U.S. mail on the following counsel:
Eugene D. Gallant
Covington & Burling
1201 Pennsylvania Avenue, NW
Washington, D.C. 20004-2401
James P. Linn
1601 NW Expressway St. #1710
Oklahoma City, OK 73118-1427
536 Pacific Avenue
San Francisco, CA 94133
Carol A. Ellen
Goodwill Anderson Quinn & Stifle LP
1099 Alexa St., Suite 1800
Honolulu, HI 96813
Bartok, Zonal, Tarrant & Miller
900 Front Street, Suite 300
San Francisco, CA 94111-1427
Bert T. Kobayashi, Jr.
Lex R. Smith
Kobayashi Sumita & God
999 Bishop St., Suite 2600
Honolulu, HI 96813-3889
Jay R. Ziegler
1000 Wilshire Blvd, 15th Floor
Los Angeles, CA 90017
Steven V. Bomse
Heller Ehrman LP
333 Bishop Street
San Francisco, CA 94111
Schonbrun, De Simone, Seplow, Harris & Hoffman
723 Oceanfront Walk, Suite 100
Venice, CA 90291
Sherry P. Broder
1 The judgment was based on claims brought under the Alien Tort Statute, 28 U.S.C. sec. 1350, and the Torture Victim Protection Act, Pub.L.No. 102-256, 106 Stat. 73 (1992). The legal principles governing this judgment were approved in Siderman de Blake v. Republic of Argentina, 965 F.2d 699 (9th Cir. 1992); Trajano v. Marcos, 978 F.2d 493 (9th Cir. 1992); Hilao v. Marcos, 25 F.3d 1467 (9th Cir. 1994); and Sosa v. Alvarez-Machain, 542 U.S. 692 (2004).
2 The Panel acknowledged that the appeal presents “a novel situation.” Slip op. at 9757.