IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS. Plaintiff, Class Action. Defendants.

Transcription

1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS ROMULO DEL PRADO, on behalf of himself and a Class of Judgment Creditors of the Estate of Ferdinand E. Marcos, Civil Action No. 4-05CV -234-Y v. Plaintiff, Class Action B.N. DEVELOPMENT COMPANY, INC.; ELLESMERE INVESTMENT CORPORATION, INC.; JASON DEVELOPMENT COMPANY, INC.; LANGLEY INVESTMENT CORPORATION, INC.; PENDER INVESTMENT CORPORATION, INC.; REVELSTOKE INVESTMENT CORPORATION, INC.;: and VERNON INVESTMENT CORPORATION, INC., ORAL ARGUMENT REQUESTED Defendants. PLAINTIFF'S REPLY MEMORANDUM IN SUPPORT OF MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT Plaintiff Romulo Del Prado submits this Reply Memorandum to rebut certain facts and legal arguments in defendants' Opposition Brief. The thrust of defendants' opposition is that a second amended complaint - to allow plaintiff and the Class to rely upon any valid judgment against the Estate of Ferdinand E. Marcos - would be futile. But amendment would not be futile since plaintiff has recently registered judgments in favor of the Class and against the Estate in this Court and Tarrant County Court. Pursuant to 28 U.S.C. 1738, this Court must give full faith and credit to those judgments. 1 While admitting that the 1997 Illinois judgment is a "live" 1 The Illinois judgment was registered in this District on October 7, 2008 pursuant to 28 U.S.C See Exhibit 2 to main brief. It was also registered on October 10, 2008 as a foreign 1

2 judgment, defendants contend that it was never a true judgment of the Illinois court and could not be registered in a Texas court. Defendants ask this Court to ignore both statutory authority and Supreme Court precedent while citing no countervailing authority of their own. Defendants' claims that plaintiffs Motion is dilatory and barred by Texas law also fail. I. The Illinois Judgment Was Properly Revived Pursuant to Illinois Law and Registered in this Court and the Tarrant County Court The 1995 judgment entered in Hawaii for almost $2 billion was registered as a judgment of the Illinois federal court on January 23, The Illinois judgment was derivative of the Hawaii judgment, but was entered as an independent judgment of the Illinois court. The judgment entered in the Illinois federal court was revived by that court on September 4, 2008 and registered in this Court and the Tarrant County Court in early October The procedures followed were regular and proper in every respect. Judge Gettleman, the original presiding judge, examined the Class' Petition to Revive the Judgment, scheduled and held oral argument, and requested Class Counsel to submit a proposed order for the court's approval. The judgment was revived pursuant to Illinois law. The Clerk of the federal court, at the order of Judge Gettleman, entered the revived judgment as a judgment pursuant to FRCP 58- leaving no doubt that the judgment is a judgment of the Illinois federal court. Also, the revived judgment differs from the 1997 judgment in two respects. The amount of the revived judgment, per Illinois law, 735 ILCS 5/2-1602(b), deducts amounts collected on the judgment. The revived judgment, per the same Illinois statute, corrected the date for inception of interest - December 6, judgment in Tarrant County Court pursuant to Texas Civil Practice & Remedies Code See Exhibit 3 to main brief. 2

3 later than the February 3, 1995 date originally recorded in the 1997 judgment. This was fully consistent not only with Illinois state practice, but also federal practice: "... when a prior judgment consisting of both principal and interest is not paid, a court renewing the judgment may award interest on the entire amount due." United States v. Hannon, 728 F.2d 142, 145 (2d Cir. 1984); Dorey v. Dorey, 609 F.2d 1128, 1133 (5 th Cir. 1980). Per Illinois law, the revived judgment was a continuation of the 1997 judgment which included interest. II. Illinois Law Is Determinative of the Attributes of an Illinois Judgment Under the Federal Rules, a judgment is a judgment is a judgment. There are not semijudgments and full-judgments, fat-judgments and thin-judgments, tall-judgments and shortjudgments. There is only one class of federal judgments. Federal clerks of court understand that and enter foreign judgments as judgments of the district where registered. In the Illinois federal court, the Hawaii judgment was registered and indexed as a judgment of the Illinois court. The revived judgment was specifically entered pursuant to Rule 58. A. Illinois Law Furnishes the Rule of Decision The federal registration statute, 28 U.S.C. 1963, provides that "[a] judgment so registered shall have the same effect as a judgment of the district court of the district where registered..." Pursuant to the Rules Decision Act, 28 U.S.C. 1652, Illinois law provides the rule of decision for determining the attributes of a foreign judgment filed in an Illinois federal court. Both the applicable Illinois statute and Illinois case law explicitly state that a foreign judgment is treated as an Illinois judgment. See ILSC 5/12-652( a); Revolution Portfolio, LLC v. Beale, 332 Ill.App.3d 595, 774 N.E.2d 14, appeal denied, 202 Il1.2d 662,787 N.E.2d 169 Was not entered until December 2 February 3, 1995 was the date the Hawaii court ordered judgment in the class case, but a Rule 58 final judgment in all the consolidated cases was not entered by the Clerk of the Court until December 6,

4 (2002). "A judgment so filed has the same effect and is subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a judgment of a circuit court for any county of this State and may be enforced or satisfied in like manner." Under Illinois law, the date of the Illinois judgment is the date it is registered in Illinois. Light v. Light, 12 Il1.2d 502, 147 N.E.2d 34 (1958); Logemann Holding, Inc. v. Lieber, 341 Ill.App.3d 689, 793 N.E.2d 135 (Ill.App. 2003). Like any other Illinois judgment, the 1997 judgment may be revived or transferred to another state. 3 B. Section 1963 Means What It Says Despite overwhelming authority to the contrary, defendants contend the 1997 Illinois judgment never became a judgment of the Illinois federal court but always retained its status as a Hawaii judgment. Yet defendants do not state what that status is or what provision of the Federal Rules and federal statutes defines the status of the registered judgment. Defendants neither cite to nor distinguish Illinois law which does define the status of a foreign judgment registered in Illinois. Rather, they parse the language of 1963 to make it appear that a registered foreign judgment is a cripple limited to issuing writs of execution. Defendants wish to corrupt the literal meaning of 1963 which states: "A judgment so registered shall have the same effect as a judgment of the district court of the district where registered and may be enforced in 3 Defendants contend -- without citing any authority -- that successive or re-registrations of a judgment are not permitted. As pointed out in plaintiffs main brief, the United States Supreme Court endorsed re-registration in Watkins v. Conway, 385 U.S. 188, (1966) and successive transfers in Roche v. McDonald, 275 U.S. 449 (1928). Section 1963 places no limit on re-registration or successive transfers of judgments. In fact, successive registration of judgments are common in states which permit a federal judgment to be transferred to a state court of the same state via a transcript of the federal judgment. See e.g. N.Y. C.P.L.R. 5018(b). Thus, a judgment creditor transferring a foreign judgment to federal court in New York commonly files a transcript of the New York federal judgment with the state court to create a state court judgment. 4

5 like manner." Defendants would change the final clause to read but only for enforcement purposes. Defendants' contention that the legislative history of 1963 and other statutes evinces a construction different from the plain meaning of the sentence at issue is contrived. "[S]tatutory construction 'must begin with the language of the statute itself,' and '[a]bsent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive. '" Bread Political Action Committee v. FEC, 455 U.S. 577, 580 (1982) (citations omitted). "When confronted with a statute which is plain and unambiguous on its face, we ordinarily do not look to legislative history as a guide to its meaning." TVA v. Hill, 437 U.S. 153, 184, n. 29 (1978). "Going behind the plain language of a statute in search of a possibly contrary congressional intent is a step to be taken cautiously even under the best of circumstances." American Tobacco Co. v. Patterson, 456 U.S. 63, 75 (1982). C. Defendants Fail to Distinguish Plaintiff's Authorities Defendants also contend the Illinois judgment was not a "new" or independent judgment of that court without distinguishing the many authorities to the contrary cited by plaintiff including the Fifth Circuit's decision in Home Port Rentals, Inc. v. International Yachting Group, Inc., 252 F.3d 399, (5th Cir. 2001) which stated that registration "is the equivalent of a new judgment" and assigning the judgment a new date of enforcement in the registration district. Defendants almost singular reliance on United States v. Kellum, 523 F.2d 1284 (5th Cir. 1975) is misplaced. Kellum involved the transfer and registration of a judgment from one Mississippi federal district to another on the seventh anniversary of the entry of the judgment. Mississippi law prevented execution on a judgment after seven years unless the judgment was 5

6 revived. "The crucial point is that the same seven year period for enforcement applied in both districts." Id. at Because the judgment was registered "in the same state" (emphasis in the original) as originally entered and subject to the same state sunsetting law, the court ruled the newly registered judgment was not enforceable after the seven years expired absent revival. There was no new judgment as would have been obtained in a plenary action duly filed. Neither did the registration renew or revive the [originally entered] judgment. Id. The court went on to rule that the registered judgment became enforceable again once the lower court revived it. The Fifth Circuit later distinguished Kellum in Home Port Rentals, Inc. v. International Yachting Group, Inc., supra., 252 F.3d at 406 n. 12, as involving an intrastate transfer of a judgment where the "question ultimately presented... was whether registration 'renewed or revived' the judgment of the rendering court which was no longer 'live' there." Another way of describing the holding in Kellum is that an intrastate transfer of a judgment does not extend the enforceable life of the judgment under the Mississippi sunsetting statute. This is so because the pertinent holding in Home Port Rentals was: [We] modify that court's declaration of enforceability in the Western District of Louisiana by changing the commencement date of the applicable period of limitation (Louisiana's 10-year liberative prescription for enforcement of judgments)from April 2, 1992 (the date that the 1989 judgment was affirmed by the Fourth Circuit) to March 17, 1999, the date it was registered in the registration court;... Id. at 402. Defendants also rely on dicta in Juneau Spruce Corp. v. International Longshoremen's & Warehousemen's Union, 128 F.Supp. 697 (D.Hawaii 1955) that a registered judgment is not a "new" judgment. But that court was simply differentiating - as the Kellum court did -- between a 1963 registration and a separate suit on a judgment. Defendants fail to quote the Juneau court's conclusion: 6

7 It has the same effect as a judgment of the local forum. Therefore, although different from a suit upon a judgment, registration is designed to achieve the same result and the legal principles of a suit upon a judgment are generally applicable to problems that may arise from registration. Id. at 700 (citation omitted). D. The Ninth Circuit Ruling Does Not Undermine the Illinois Judgment Finally, defendants erroneously contend that the Ninth Circuit ruled that the Illinois judgment was not a new judgment. Opp. Br. at relying on In re Estate of Ferdinand E. Marcos Human Rights Litig., 536 F.3d 980 (9 th Cir. 2008). To the contrary, the Ninth Circuit was explicit in ruling that "registering a judgment under 1963 is the functional equivalent of obtaining a new judgment of the registration court.,,4 Id. at 989. That court's additional ruling -- that registration of the Illinois judgment did not extend the life of the Hawaii judgment -- supports plaintiff s position that the Illinois judgment was independent since sunsetting of the Hawaii judgment had no effect on the continued validity or life of the Illinois judgment. The Illinois judgment has a new start date of 1997 and a new 20 year life under Illinois law. III. This Court Must Accord Full Faith and Credit to the Illinois Judgment As plaintiff pointed out in his main brief, pursuant to federal law, 28 U.S.C. 1738, every federal judgment is entitled to "full faith and credit in every court within the United States." Stoll v. Gottlieb, 305 U.S. 165, (1938); Hancock National Bank v. Farnum, 176 U.S. 640, (1900); cf. Semtek International Inc. v. Lockheed Martin Corporation, 531 U.S. 497, (2001). 4 The phrase "functional equivalent" is a way of denoting that while the underlying case was not tried to a judge or jury in Illinois, it nonetheless has all the attributes of a judgment originally entered in that court. 7

8 Without distinguishing 1738 or the Supreme Court precedent cited by plaintiff, defendants contend that the decision of the Fifth Circuit in Harper MacLeod Solicitors v. Kealy & Kealy, 260 F.3d 389 (5 th Cir. 2001) exempts from the statute registered foreign judgments from other district courts. The full quote from Harper MacLeod states: We decline to extend full faith and credit principles to cases like this one involving the enforcement of a federal judgment by another federal court. Id. at 389 (emphasis added). In the same paragraph, the Fifth Circuit explained what it meant: that ajudgment debtor, who did not appear in the first court and was defaulted, could still contest whether the first court had jurisdiction notwithstanding A year later in Jackson v. Fie Corporation, 302 F.3d 515, (5 th Cir. 2002)(ftnts omitted) the Fifth Circuit explained its narrow holding in Harper MacLeod: As we clarified last year in Harper MacLeod, when a state rule of preclusion would operate to undermine a federal default-judgment defendant's ability to contest personal jurisdiction in federal enforcement proceedings, the state rule must yield to Rule 60(b)(4). In Harper MacLeod we rejected a judgment creditor's assertion of Texas law, holding that Texas law did not control: The principle that a party may silently suffer a default and later challenge personal jurisdiction is a "foundational principle of federal jurisdictional law." Thus, the Fifth Circuit did not invalidate 1738, it simply carved out a defense applicable to registered default judgments consistent with longstanding federal law. This is consistent with decisions in other circuits. See, e.g., Williams v. Ocean Transport Lines, Inc., 425 F.2d 1183 (3d Cir. 1970) (second federal court must give full faith and credit to judgment of first federal court pursuant to 1738). Here, the Class' judgments registered in Texas are not default judgments and they are not being contested by the judgment debtor. But even were the Fifth Circuit quote given the expansive meaning urged by defendants, the Class' registered judgments would still be entitled to full faith and credit in this Court. This 8

9 Court, sitting in diversity, must give the same full faith and credit to the Class' judgment entered in the Tarrant County Court as a Texas court would. In Sutton v. Lieb, 342 U.S. 402 (1952) the Supreme Court held that a federal court in Illinois sitting in diversity must give the same force and effect to a New York state decree as an Illinois state court would under The Fifth Circuit did not purport to overrule Sutton. Under applicable Texas law, a foreign judgment registered in a Texas court is treated "in the same manner as a judgment of the court in which the foreign judgment is filed." Texas Civ. Prac. & Rem. Code With regard to the Class' judgment entered in this Court, this Court would look to general federal common law. Baldwin v. Iowa Traveling Men's Association, 283 U.S. 522 (1931 )(second federal court was required to give preclusive effect to first federal court judgment under general federal common law). General federal common law would follow 1738 which requires a court to accord full faith and credit to a foreign judgment. See Restatement (Second) of Judgments 87, comment a (1982)("It has been long established that the judgments of the federal courts are to be accorded full faith and credit when a question of their recognition arises in a state court or in another federal court.") Alternatively, this Court would apply federal principles of comity and res judicata to give preclusive effect to the judgment of a brother federal court. IV. Section (b) Is No Bar to Enforcement of the Class' Judgment by Plaintiff For the first time since this litigation was commenced in 2005, defendants contend that (b) of the Texas Civil Practice & Remedies Code bars the judgment since all defendants have been "residents" of Texas for more than 10 years. 5 Section (b) reads: 5 Texas law defines a "foreign judgment" as a judgment "of a court of the United States or of any other court that is entitled to full faith and credit," Tex. Civ. Prac. & Rem. Code , so 9

10 An action against a person who has resided in this state for 10 years prior to the action may not be brought on a foreign judgment rendered more than 10 years before commencement of the action in this state. Of course, as defendants point out in their Opposition Brief at 9, plaintiff did not file an "action" on a foreign judgment. Therefore, (b) does not apply to the registration of the Illinois judgment pursuant to 1963 and Tex. Civ. Prac. & Rem. Code A. Section (b) Is Unconstitutional Assuming defendants qualify as having resided in Texas for more than 10 years, which they do not, the statute violates the Privileges and Immunities Clause of Article IV, 2 and 1 of the Fourteenth Amendment by discriminating in favor of residents and against non-residents. The Clause in Article IV states: "The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States." Del Prado is a citizen of New Jersey whereas defendants claim to be residents of Texas. For purposes of the Privileges and Immunities Clause, "citizen" and "resident" are "essentially interchangeable," Austin v. New Hampshire, 420 u.s. 656, 662, n. 8, (1975); United Building and Construction Trades Council v. Camden, 465 u.s. 208, 218 (1984); Supreme Court oj Virginia v. Friedman, 487 U.S. 59,64 (1988). The Supreme Court has regularly struck down as violative of the Privileges and Immunities Clause state statutes which discriminate in favor of the residents of that state. See United Building and Construction Trades Council v. Camden, supra. (Camden (NJ) law giving preference for construction jobs on city construction); Supreme Court oj Virginia v. Friedman, supra. (Virginia statute requiring only nonresidents to take bar exam); Doe v. Bolton, 410 U.S. 179 (1973) (Georgia statute permitting only residents to secure abortions). by invoking (b) defendants are conceding that the Illinois judgment registered in this Court and Tarrant County is entitled to full faith and credit. 10

11 There is no question as to whether (b) places a burden on plaintiffs right to seek enforcement of the Illinois judgment. In McKnett v. St. Louis &s. F. Railway Co., 292 U.S. 232, 233 (1934) the Supreme Court held that "[t]he privileges and immunities clause requires a state to accord to citizens of other states substantially the same right of access to its courts as it accords to its own citizens." The statute limits how long a resident may be subject to an "action" on a foreign judgment, but does not limit the period for non-residents. Nor is the disparity in treatment "closely related to the advancement of a substantial state interest." Supreme Court oj Virginia v. Friedman, supra. Here, where the plaintiff exercising due diligence did not learn until the fall of 2004 that property beneficially owned by the Marcos Estate was located in Texas, the statute has an especially chilling effect on the federal interest in enforcing a federal judgment for victims of jus cogens human rights violations. B. Defendants Are Not 10 Year Residents of Texas Assuming, arguendo, that the each of the defendant corporations is a "person", only two could be deemed "residents" of Texas. Defendants B.N. Development Company, Inc. and Jason Development Company, Inc. were each incorporated in Texas in December However, their residency is now less than 7 years old, so the statute does not apply to them. Although they are alleged to be "successors,,6 to other corporations which held title to the real estate before them, they cannot benefit from that. The remaining five defendants, Ellesmere, Langley, Pender, Revelstoke and Vernon, are incorporated in Delaware and have their principal places of business in Vancouver, British 6 The Court should be aware that these defendants denied that they were successors to other corporations in paragraphs 6 and 8 of their Answer to the Amended Complaint (ECF Doc. # 81 filed 8/18/06). 11

12 Columbia. See Declaration of Robert A. Swift, Exhibit" "hereto. All the officers and directors of these defendants reside outside the United States. Their accounting and tax preparation takes place in Larkspur, California. Each qualified to do business in Texas in 1987 or None have stated the street address of their alleged Texas residence and, as far as plaintiff can determine, they have none. Therefore, it would be a total fiction to ascribe to these defendants a Texas "residence." Qualification to do business in Texas does not establish residency for purposes of (b). Defendants reliance on National Truckers Service, Inc. v. Aero Systems, Inc., 480 S.W.2d 455 (Tex. App. 1972) is misplaced. National Truckers Service simply held that for jurisdictional purposes under article 2031 b, V.A.T.S., a foreign corporation qualified to do business in Texas would be deemed a Texas resident. The court stated: A corporation's residence, in legal contemplation, is the place where it maintains its office and transacts its business - its principal place of business. Id. at 458 (emphasis added). The evidence in the case established that the plaintiff, National Truckers Service, maintained its "only corporate offices and its principal place of business in Fort Worth, Tarrant County, Texas. It does not maintain offices at any place other than Fort Worth, Tarrant County, Texas." By contrast, none of the five defendants maintains an office or place of business in Texas, and none has a principal place of business in Texas. v. Plaintiff Did Not Delay in Seeking Leave to Amend The record is clear that, following the July 31, 2008 ruling of the Ninth Circuit, the Plaintiff moved quickly to register the Illinois judgment in Texas. Defendants moved to dismiss the amended complaint on August 8, 2008 based on the Ninth Circuit ruling. The Illinois judgment was revived by the Class after oral argument in federal court in Illinois on September 12

13 4,2008. The Illinois clerk of court entered judgment the same day. The Class requested and obtained leave to serve the judgment debtor in the Philippines via Federal Express. As soon as 30 days expired (as required by 1963), the revived Illinois judgment was registered in this District. Notice of the registered judgment was given via to defense counsel the next day as well as a proposed second amended complaint. Two days later the Illinois judgment was registered in Tarrant County via Texas Civil Practice & Remedies Code Four days later, plaintiff filed the instant Motion for leave to file a second amended complaint. Defendants fault plaintiff for not anticipating the Ninth Circuit's novel ruling in While much is expected of attorneys practicing before this Court, clairvoyance is not one of the expectations. Accordingly, there was no undue delay in seeking leave to file a second amended complaint. VI. Conclusion For all the reasons above stated, this Court should grant plaintiff leave to file his Second Amended Complaint in the form attached to his Motion. November,2008 lsi Patrick Woodson Patrick Woodson State Bar No WOODSON LAW FIRM 2800 S. Hulen, Suite 115 Fort Worth, Texas Tel: Robert A. Swift KOHN, SWIFT & GRAF, P.C. One South Broad Street, Suite 2100 Philadelphia, PA (215)

14 Of Counsel: SHERRY P. BRODER Attorney at Law - A Law Corporation Davies Pacific Center 841 Bishop Street, Suite 800 Honolulu, Hawaii (808) JON M. VAN DYKE 2515 Dole Street Honolulu, HI (808) Attorneys for Plaintiff Romulo Del Prado and the Plaintiff Class 14

15 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS ROMULO DEL PRADO, on behalf of himself and a Class of Judgment Creditors of the Estate of Ferdinand E. Marcos, Civil Action No. 4-05CV -234-Y v. Plaintiff, Class Action B.N. DEVELOPMENT COMPANY, INC.; ELLESMERE INVESTMENT CORPORATION, INC.; JASON DEVELOPMENT COMPANY, INC.; LANGLEY INVESTMENT CORPORATION, INC.; PENDER INVESTMENT CORPORATION, INC.; REVELSTOKE INVESTMENT CORPORATION, INC.;: and VERNON INVESTMENT CORPORATION, INC., ORAL ARGUMENT REQUESTED Defendants. PLAINTIFF'S REPLY MEMORANDUM IN SUPPORT OF MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT Plaintiff Romulo Del Prado submits this Reply Memorandum to rebut certain facts and legal arguments in defendants' Opposition Brief. The thrust of defendants' opposition is that a second amended complaint - to allow plaintiff and the Class to rely upon any valid judgment against the Estate of Ferdinand E. Marcos - would be futile. But amendment would not be futile since plaintiff has recently registered judgments in favor of the Class and against the Estate in this Court and Tarrant County Court. Pursuant to 28 U.S.C. 1738, this Court must give full faith and credit to those judgments. I While admitting that the 1997 Illinois judgment is a "live" I The Illinois judgment was registered in this District on October 7, 2008 pursuant to 28 U.S.C See Exhibit 2 to main brief. It was also registered on October 10, 2008 as a foreign 1

16 judgment, defendants contend that it was never a true judgment of the Illinois court and could not be registered in a Texas court. Defendants ask this Court to ignore both statutory authority and Supreme Court precedent while citing no countervailing authority of their own. Defendants' claims that plaintiffs Motion is dilatory and barred by Texas law also fail. I. The Illinois Judgment Was Properly Revived Pursuant to Illinois Law and Registered in this Court and the Tarrant County Court The 1995 judgment entered in Hawaii for almost $2 billion was registered as a judgment of the Illinois federal court on January 23, The Illinois judgment was derivative of the Hawaii judgment, but was entered as an independent judgment of the Illinois court. The judgment entered in the Illinois federal court was revived by that court on September 4, 2008 and registered in this Court and the Tarrant County Court in early October The procedures followed were regular and proper in every respect. Judge Gettleman, the original presiding judge, examined the Class' Petition to Revive the Judgment, scheduled and held oral argument, and requested Class Counsel to submit a proposed order for the court's approval. The judgment was revived pursuant to Illinois law. The Clerk of the federal court, at the order of Judge Gettleman, entered the revived judgment as a judgment pursuant to FRCP 58- leaving no doubt that the judgment is a judgment of the Illinois federal court. Also, the revived judgment differs from the 1997 judgment in two respects. The amount of the revived judgment, per Illinois law, 735 ILCS 5/2-1602(b), deducts amounts collected on the judgment. The revived judgment, per the same Illinois statute, corrected the date for inception of interest - December 6, judgment in Tarrant County Court pursuant to Texas Civil Practice & Remedies Code See Exhibit 3 to main brief. 2

17 later than the February 3, 1995 date originally recorded in the 1997 judgment. This was fully consistent not only with Illinois state practice, but also federal practice: "... when a prior judgment consisting of both principal and interest is not paid, a court renewing the judgment may award interest on the entire amount due." United States v. Hannon, 728 F.2d 142, 145 (2d Cir. 1984); Dorey v. Dorey, 609 F.2d 1128, 1133 (5 th Cir. 1980). Per Illinois law, the revived judgment was a continuation of the 1997 judgment which included interest. II. Illinois Law Is Determinative of the Attributes of an Illinois Judgment Under the Federal Rules, a judgment is a judgment is a judgment. There are not semijudgments and full-judgments, fat-judgments and thin-judgments, tall-judgments and shortjudgments. There is only one class of federal judgments. Federal clerks of court understand that and enter foreign judgments as judgments of the district where registered. In the Illinois federal court, the Hawaii judgment was registered and indexed as a judgment of the Illinois court. The revived judgment was specifically entered pursuant to Rule 58. A. Illinois Law Furnishes the Rule of Decision The federal registration statute, 28 U.S.C. 1963, provides that "[a] judgment so registered shall have the same effect as a judgment of the district court of the district where registered..." Pursuant to the Rules Decision Act, 28 U.S.C. 1652, Illinois law provides the rule of decision for determining the attributes of a foreign judgment filed in an Illinois federal court. Both the applicable Illinois statute and Illinois case law explicitly state that a foreign judgment is treated as an Illinois judgment. See ILSC 5/12-652(a); Revolution Portfolio, LLC v. Beale, 332 Ill.App.3d 595, 774 N.E.2d 14, appeal denied, 202 Il1.2d 662, 787 N.E.2d 169 Was not entered until December 2 February 3, 1995 was the date the Hawaii court ordered judgment in the class case, but a Rule 58 final judgment in all the consolidated cases was not entered by the Clerk of the Court until December 6,

18 (2002). "A judgment so filed has the same effect and is subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a judgment of a circuit court for any county of this State and may be enforced or satisfied in like manner." Under Illinois law, the date of the Illinois judgment is the date it is registered in Illinois. Light v. Light, 12 Il1.2d 502, 147 N.E.2d 34 (1958); Logemann Holding, Inc. v. Lieber, 341 Ill.App.3d 689, 793 N.E.2d 135 (Ill.App. 2003). Like any other Illinois judgment, the 1997 judgment may be revived or transferred to another state. 3 B. Section 1963 Means What It Says Despite overwhelming authority to the contrary, defendants contend the 1997 Illinois judgment never became a judgment of the Illinois federal court but always retained its status as a Hawaii judgment. Yet defendants do not state what that status is or what provision of the Federal Rules and federal statutes defines the status of the registered judgment. Defendants neither cite to nor distinguish Illinois law which does define the status of a foreign judgment registered in Illinois. Rather, they parse the language of 1963 to make it appear that a registered foreign judgment is a cripple limited to issuing writs of execution. Defendants wish to corrupt the literal meaning of 1963 which states: "A judgment so registered shall have the same effect as a judgment of the district court of the district where registered and may be enforced in 3 Defendants contend -- without citing any authority -- that successive or re-registrations of a judgment are not permitted. As pointed out in plaintiffs main brief, the United States Supreme Court endorsed re-registration in Watkins v. Conway, 385 U.S. 188, (1966) and successive transfers in Roche v. McDonald, 275 U.S. 449 (1928). Section 1963 places no limit on re-registration or successive transfers of judgments. In fact, successive registration of judgments are common in states which permit a federal judgment to be transferred to a state court of the same state via a transcript of the federal judgment. See e.g. N.Y. C.P.L.R. 5018(b). Thus, a judgment creditor transferring a foreign judgment to federal court in New York commonly files a transcript of the New York federal judgment with the state court to create a state court judgment. 4

19 like manner." Defendants would change the final clause to read but only for enforcement purposes. Defendants' contention that the legislative history of 1963 and other statutes evinces a construction different from the plain meaning of the sentence at issue is contrived. "[S]tatutory construction 'must begin with the language of the statute itself,' and '[a]bsent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive. '" Bread Political Action Committee v. FEC, 455 U.S. 577,580 (1982) (citations omitted). "When confronted with a statute which is plain and unambiguous on its face, we ordinarily do not look to legislative history as a guide to its meaning." TVA v. Hill, 437 U.S. 153, 184, n. 29 (1978). "Going behind the plain language of a statute in search of a possibly contrary congressional intent is a step to be taken cautiously even under the best of circumstances." American Tobacco Co. v. Patterson, 456 U.S. 63, 75 (1982). c. Defendants Fail to Distinguish Plaintiff's Authorities Defendants also contend the Illinois judgment was not a "new" or independent judgment of that court without distinguishing the many authorities to the contrary cited by plaintiff including the Fifth Circuit's decision in Home Port Rentals, Inc. v. International Yachting Group, Inc., 252 F.3d 399, (5 th Cir. 2001) which stated that registration "is the equivalent of a new judgment" and assigning the judgment a new date of enforcement in the registration district. Defendants almost singular reliance on United States v. Kellum, 523 F.2d 1284 (5 th Cir. 1975) is misplaced. Kellum involved the transfer and registration of a judgment from one Mississippi federal district to another on the seventh anniversary of the entry of the judgment. Mississippi law prevented execution on a judgment after seven years unless the judgment was 5

20 revived. "The crucial point is that the same seven year period for enforcement applied in both districts." Id. at Because the judgment was registered "in the same state" (emphasis in the original) as originally entered and subject to the same state sunsetting law, the court ruled the newly registered judgment was not enforceable after the seven years expired absent revival. There was no new judgment as would have been obtained in a plenary action duly filed. Neither did the registration renew or revive the [originally entered] judgment. Id. The court went on to rule that the registered judgment became enforceable again once the lower court revived it. The Fifth Circuit later distinguished Kellum in Home Port Rentals, Inc. v. International Yachting Group, Inc., supra., 252 F.3d at 406 n. 12, as involving an intrastate transfer of a judgment where the "question ultimately presented... was whether registration 'renewed or revived' the judgment of the rendering court which was no longer 'live' there." Another way of describing the holding in Kellum is that an intrastate transfer of a judgment does not extend the enforceable life of the judgment under the Mississippi sunsetting statute. This is so because the pertinent holding in Home Port Rentals was: [We] modify that court's declaration of enforceability in the Western District of Louisiana by changing the commencement date of the applicable period of limitation (Louisiana's 10-year liberative prescription for enforcement of judgments).from April 2, 1992 (the date that the 1989 judgment was affirmed by the Fourth Circuit) to March 17, 1999, the date it was registered in the registration court;... Id. at 402. Defendants also rely on dicta in Juneau Spruce Corp. v. International Longshoremen's & Warehousemen's Union, 128 F.Supp. 697 (D.Hawaii 1955) that a registered judgment is not a "new" judgment. But that court was simply differentiating - as the Kellum court did -- between a 1963 registration and a separate suit on a judgment. Defendants fail to quote the Juneau court's conclusion: 6

21 It has the same effect as a judgment of the local forum. Therefore, although different from a suit upon a judgment, registration is designed to achieve the same result and the legal principles of a suit upon a judgment are generally applicable to problems that may arise from registration. Id. at 700 (citation omitted). D. The Ninth Circuit Ruling Does Not Undermine the Illinois Judgment Finally, defendants erroneously contend that the Ninth Circuit ruled that the Illinois judgment was not a new judgment. Opp. Br. at relying on In re Estate of Ferdinand E. Marcos Human Rights Litig., 536 F.3d 980 (9 th Cir. 2008). To the contrary, the Ninth Circuit was explicit in ruling that "registering a judgment under 1963 is the functional equivalent of obtaining a new judgment of the registration court.,,4 Id. at 989. That court's additional ruling -- that registration of the Illinois judgment did not extend the life of the Hawaii judgment -- supports plaintiffs position that the Illinois judgment was independent since sunsetting of the Hawaii judgment had no effect on the continued validity or life of the Illinois judgment. The Illinois judgment has a new start date of 1997 and a new 20 year life under Illinois law. III. This Court Must Accord Full Faith and Credit to the Illinois Judgment As plaintiff pointed out in his main brief, pursuant to federal law, 28 U.S.C. 1738, every federal judgment is entitled to "full faith and credit in every court within the United States." Stoll v. Gottlieb, 305 U.S. 165, (1938); Hancock National Bank v. Farnum, 176 U.S. 640, (1900); cf. Semtek International Inc. v. Lockheed Marlin Corporation, 531 U.S. 497, (2001). 4 The phrase "functional equivalent" is a way of denoting that while the underlying case was not tried to a judge or jury in Illinois, it nonetheless has all the attributes of a judgment originally entered in that court. 7

22 Without distinguishing 1738 or the Supreme Court precedent cited by plaintiff, defendants contend that the decision of the Fifth Circuit in Harper MacLeod Solicitors v. Kealy & Keaty, 260 F.3d 389 (5 th Cir. 2001) exempts from the statute registered foreign judgments from other district courts. The full quote from Harper MacLeod states: We decline to extend full faith and credit principles to cases like this one involving the enforcement of a federal judgment by another federal court. Id. at 389 (emphasis added). In the same paragraph, the Fifth Circuit explained what it meant: that a judgment debtor, who did not appear in the first court and was defaulted, could still contest whether the first court had jurisdiction notwithstanding A year later in Jackson v. Fie Corporation, 302 F.3d 515, (5 th Cir. 2002)(ftnts omitted) the Fifth Circuit explained its narrow holding in Harper MacLeod: As we clarified last year in Harper MacLeod, when a state rule of preclusion would operate to undermine a federal default-judgment defendant's ability to contest personal jurisdiction in federal enforcement proceedings, the state rule must yield to Rule 60(b)(4). In Harper MacLeod we rejected a judgment creditor's assertion of Texas law, holding that Texas law did not control: The principle that a party may silently suffer a default and later challenge personal jurisdiction is a "foundational principle of federal jurisdictional law. " Thus, the Fifth Circuit did not invalidate 1738, it simply carved out a defense applicable to registered default judgments consistent with longstanding federal law. This is consistent with decisions in other circuits. See, e.g., Williams v. Ocean Transport Lines, Inc., 425 F.2d 1183 (3d Cir. 1970) (second federal court must give full faith and credit to judgment of first federal court pursuant to 1738). Here, the Class' judgments registered in Texas are not default judgments and they are not being contested by the judgment debtor. But even were the Fifth Circuit quote given the expansive meaning urged by defendants, the Class' registered judgments would still be entitled to full faith and credit in this Court. This 8

23 Court, sitting in diversity, must give the same full faith and credit to the Class' judgment entered in the Tarrant County Court as a Texas court would. In Sutton v. Lieb, 342 U.S. 402 (1952) the Supreme Court held that a federal court in Illinois sitting in diversity must give the same force and effect to a New York state decree as an Illinois state court would under The Fifth Circuit did not purport to overrule Sutton. Under applicable Texas law, a foreign judgment registered in a Texas court is treated "in the same manner as a judgment of the court in which the foreign judgment is filed." Texas Civ. Prac. & Rem. Code With regard to the Class' judgment entered in this Court, this Court would look to general federal common law. Baldwin v. Iowa Traveling Men's Association, 283 U.S. 522 (1931 )(second federal court was required to give preclusive effect to first federal court judgment under general federal common law). General federal common law would follow 1738 which requires a court to accord full faith and credit to a foreign judgment. See Restatement (Second) of Judgments 87, comment a (1982)("1t has been long established that the judgments of the federal courts are to be accorded full faith and credit when a question of their recognition arises in a state court or in another federal court~") Alternatively, this Court would apply federal principles of comity and res judicata to give preclusive effect to the judgment of a brother federal court. IV. Section (b) Is No Bar to Enforcement of the Class' Judgment by Plaintiff For the first time since this litigation was commenced in 2005, defendants contend that (b) of the Texas Civil Practice & Remedies Code bars the judgment since all defendants have been "residents" of Texas for more than 10 years. 5 Section (b) reads: 5 Texas law defines a "foreign judgment" as a judgment "of a court of the United States or of any other court that is entitled to full faith and credit," Tex. Civ. Prac. & Rem. Code , so 9

24 -- - University Of Hawaii School of Law Library - Jon Van Dyke Archives Collection An action against a person who has resided in this state for 10 years prior to the action may not be brought on a foreign judgment rendered more than 10 years before commencement of the action in this state. Of course, as defendants point out in their Opposition Brief at 9, plaintiff did not file an "action" on a foreign judgment. Therefore, (b) does not apply to the registration of the Illinois judgment pursuant to 1963 and Tex. Civ. Prac. & Rem. Code A. Section (b) Is Unconstitutional Assuming defendants qualify as having resided in Texas for more than 10 years, which they do not, the statute violates the Privileges and Immunities Clause of Article IV, 2 and 1 of the Fourteenth Amendment by discriminating in favor of residents and against non-residents. The Clause in Article IV states: "The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States." Del Prado is a citizen of New Jersey whereas defendants claim to be residents of Texas. For purposes of the Privileges and Immunities Clause, "citizen" and "resident" are "essentially interchangeable," Austin v. New Hampshire, 420 U.S. 656, 662, n. 8, (1975); United Building and Construction Trades Council v. Camden, 465 U.S. 208,218 (1984); Supreme Court o/virginia v. Friedman, 487 U.S. 59,64 (1988). The Supreme Court has regularly struck down as violative of the Privileges and Immunities Clause state statutes which discriminate in favor of the residents of that state. See United Building and Construction Trades Council v. Camden, supra. (Camden (NJ) law giving preference for construction jobs on city construction); Supreme Court 0/ Virginia v. Friedman, supra. (Virginia statute requiring only nonresidents to take bar exam); Doe v. Bolton, 410 U.S. 179 (1973) (Georgia statute permitting only residents to secure abortions). by invoking (b} defendants are conceding that the Illinois judgment registered in this Court and Tarrant County is entitled to full faith and credit. 10

25 There is no question as to whether (b) places a burden on plaintiff s right to seek enforcement of the Illinois judgment. In McKnett v. St. Louis &8. F. Railway Co., 292 U.S. 232, 233 (1934) the Supreme Court held that "[t]he privileges and immunities clause requires a state to accord to citizens of other states substantially the same right of access to its courts as it accords to its own citizens." The statute limits how long a resident may be subject to an "action" on a foreign judgment, but does not limit the period for non-residents. Nor is the disparity in treatment "closely related to the advancement of a substantial state interest." Supreme Court of Virginia v. Friedman, supra. Here, where the plaintiff exercising due diligence did not learn until the fall of 2004 that property beneficially owned by the Marcos Estate was located in Texas, the statute has an especially chilling effect on the federal interest in enforcing a federal judgment for victims of jus cogens human rights violations. B. Defendants Are Not 10 Year Residents of Texas Assuming, arguendo, that the each of the defendant corporations is a "person", only two could be deemed "residents" of Texas. Defendants B.N. Development Company, Inc. and Jason Development Company, Inc. were each incorporated in Texas in December However, their residency is now less than 7 years old, so the statute does not apply to them. Although they are alleged to be "successors,,6 to other corporations which held title to the real estate before them, they cannot benefit from that. The remaining five defendants, Ellesmere, Langley, Pender, Revelstoke and Vernon, are incorporated in Delaware and have their principal places of business in Vancouver, British 6 The Court should be aware that these defendants denied that they were successors to other corporations in paragraphs 6 and 8 of their Answer to the Amended Complaint (ECF Doc. # 81 filed 8/18/06). 11

26 Columbia. See Declaration of Robert A. Swift, Exhibit" "hereto. All the officers and directors of these defendants reside outside the United States. Their accounting and tax preparation takes place in Larkspur, California. Each qualified to do business in Texas in 1987 or None have stated the street address of their alleged Texas residence and, as far as plaintiff can determine, they have none. Therefore, it would be a total fiction to ascribe to these defendants a Texas "residence." Qualification to do business in Texas does not establish residency for purposes of (b). Defendants reliance on National Truckers Service, Inc. v. Aero Systems, Inc., 480 S. W.2d 455 (Tex. App. 1972) is misplaced. National Truckers Service simply held that for jurisdictional purposes under article 2031 b, V.A. T.S., a foreign corporation qualified to do business in Texas would be deemed a Texas resident. The court stated: A corporation's residence, in legal contemplation, is the place where it maintains its office and transacts its business - its principal place of business. Id. at 458 (emphasis added). The evidence in the case established that the plaintiff, National Truckers Service, maintained its "only corporate offices and its principal place of business in Fort Worth, Tarrant County, Texas. It does not maintain offices at any place other than Fort Worth, Tarrant County, Texas." By contrast, none of the five defendants maintains an office or place of business in Texas, and none has a principal place of business in Texas. v. Plaintiff Did Not Delay in Seeking Leave to Amend The record is clear that, following the July 31, 2008 ruling of the Ninth Circuit, the Plaintiff moved quickly to register the Illinois judgment in Texas. Defendants moved to dismiss the amended complaint on August 8, 2008 based on the Ninth Circuit ruling. The Illinois judgment was revived by the Class after oral argument in federal court in Illinois on September 12

27 4, The Illinois clerk of court entered judgment the same day. The Class requested and obtained leave to serve the judgment debtor in the Philippines via Federal Express. As soon as 30 days expired (as required by 1963), the revived Illinois judgment was registered in this District. Notice of the registered judgment was given via to defense counsel the next day as well as a proposed second amended complaint. Two days later the Illinois judgment was registered in Tarrant County via T~xas Civil Practice & Remedies Code Four days later, plaintiff filed the instant Motion for leave to file a second amended complaint. Defendants fault plaintiff for not anticipating the Ninth Circuit's novel ruling in While much is expected of attorneys practicing before this Court, clairvoyance is not one of the expectations. Accordingly, there was no undue delay in seeking leave to file a second amended complaint. VI. Conclusion F or all the reasons above stated, this Court should grant plaintiff leave to file his Second Amended Complaint in the form attached to his Motion. November,2008 lsi Patrick Woodson Patrick Woodson State Bar No WOODSON LAW FIRM 2800 S. Hulen, Suite 115 Fort Worth, Texas Tel: Robert A. Swift KOHN, SWIFT & GRAF, P.C. One South Broad Street, Suite 2100 Philadelphia, P A (215)