NO IN THE SUPREME COURT OF THE STATE OF HA WAI'I

Transcription

1 NO IN THE SUPREME COURT OF THE STATE OF HA WAI'I Maximo Hilao (per Celsa Hilao et ai., Class Plaintiffs, Plaintiffs-Appellants, vs. ESTATE OF FERDINAND E. MARCOS; IMELDA R. MARCOS and FERDINAND R. MARCOS, Representatives of the Estate of Ferdinand E. Marcos, Defendants-Appellees. ORIGINAL PRECEDING PLAINTIFFS-APPELLANTS' OPENING BRIEF; CERTIFICATE OF SERVICE PLAINTIFFS-APPELLANTS OPENING BRIEF SHERRYP. BRODER #1880 JON M. VAN DYKE 841 Bishop Street, Suite 800 Honolulu, Hawaii Telephone No.: ( Attorneys for Plaintiffs-Appellants

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii I. INTRODUCTION... 1 II. CONCISE STATEMENT OF THE CASE... 1 III. CONCISE STATEMENT OF THE POINTS OF ERROR... 4 IV. STANDARD OF REVIEW... 4 V. ARGUMENT... 4 A. The Contempt Order Lacks the Attributes of a Final Judgment... 5 B. The Purpose of a Contempt Order Is Different from the Purpose of a Judgment... 6 C. No Rule 58 Judgment Was Entered on the Contempt Order... 8 D. The Contempt Order was Not a Final Judgment Subject to HRS E. Ongoing Monetary Sanctions Are Not Judgments Within the Meaning of H.R.S VI. CONCLUSION... 11

3 T ABLE OF AUTHORITIES STATE CASES Hawaii Public Employment Relations Board v. Hawaii State Teachers Association, 55 Haw. 386, 520 P.2d 422 ( Kukui Nuts of Hawaii, Inc. v. R. Baird & Co., Inc., 6 Haw. App. 431, 726 P.2d 268 ( LeMay v. Leander, 92 Hawaii 614, 994 P.2d 546 ( :... 6, 7 Leslie v. Estate of Tavares, 109 Hawaii 8, 122 P.3d 803 (Hawai'i, Matter of2003 and 2007 Ala Wai Blvd, City and County of Honolulu, 85 Hawaii 398, 944 P.2d 1341 (Hawaii App., Siangco v. Kasadate, 77 Hawaii 157, 883 P.2d 78 ( FEDERAL CASES Chadwick v. Janecka, 312 F.3d 597 (3d Cir Ex parte Robinson, 19 Wall. 505,86 U.S. 505,22 L. Ed. 205 ( HUao v. Estate of Marcos, 910 F. Supp (D. HI , 10 HUao v. Estate of Marcos, 103 F.3d 762 (9th Cir , 10 HUao v. Estate of Marcos, 536 F.3d 980 (9th Cir cert. denied sub nom HUao v. Revelstoke, 129 S.Ct. 1993,173 L.Ed.2d 1085 ( Huene v. United States, 743 F.2d 703 (9th Cir ii

4 In re Estate of Ferdinand E. Marcos Human Rights Litigation, 25 F.3d 1467 (9th Cir., eert. denied 513 U.S ( In re Ferdinand E. Marcos Human Rights Litigation, 910 F. Supp (D.Hawaii Penn Terra Ltd. v. Department of Environmental Resources, Com. of Pa., 733 F.2d 267 (3d Cir Shuffler v. Heritage Bank, 720 F.2d 1141 (9th Cir u.s. Catholic Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 72 ( U.S. Fidelity & Guaranty Co. v. Ft. Misery Highway District, 22 F.2d 369 (9th Cir United States v. Indrelunas, 411 U.S. 216 ( Willy v. Coastal Corp., 503 U.S. 131 ( Young v. United States ex rei. Vuitton et Fils S.A., 481 U.S. 787, 95 L. Ed. 2d 740 ( STATE AND FEDERAL STATUTES AND RULES H.R.S H.R.S , 4, 5, 9, 10, 11 H.R.S U.S.C , 10 H.R.C.P. 54(b... 8, 9 H.R.C.P , 9 111

5 .. F.R.C.P F.R.C.P. 54(b... 8, 9 F.R.C.P , 9 1

6 The Class of 9,539 Filipino Human Rights Victims, represented by Celsa Hilao (for Maximo Hilao, deceased, Danilo De la Fuente, Renato Pineda, Adora DeVera, Rodolfo Benosa, Jose Duran, Josefina Forcadilla, Artura Revilla, and Christopher Soria, and through their undersigned attorneys, submit this Opening Brief to this Honorable Court. I. INTRODUCTION This Honorable Court, by Order dated June 17, 2009, agreed to answer the following question of Hawaii law certified to it by the United States District Court for the District of Hawaii: Does H.R.S , which references only a "judgment or decree," apply to a contempt order (which specifies monetary sanctions and conditions for purging the contemnors' contempt issued before the entry of a final money judgment thereon for a sum certain where the contempt order is separate from and not included in any final judgment on the merits of the litigation? ER 19. Plaintifffs-Appellants believe that this Court should answer the question in the negative since a contempt order, which is not merged into a final judgment and which lacks a final sum certain which is due and owing, is not a judgment within the meaning ofh.r.s II. CONCISE STATEMENT OF THE CASE Members of the Class of Human Rights Victims were tortured, summarily executed or disappeared at the direction of Ferdinand E. Marcos during the martial law period in the Philippines. After nine years of hard-fought litigation and a trifurcated jury trial in the Honolulu federal court, the U.S. District Court for the District of Hawaii issued an Order on February 3, 1995 providing judgment of almost $2 billion to the Class against the Estate of Ferdinand E. Marcos (Marcos had died in Hi/ao v. Estate of Marcos, 910 F.Supp (D. HI 1995, aff'd 103 F.3d 767 (9 th Cir The judgment also included a permanent injunction barring the Marcos Estate's representatives from dissipating or transferring the assets of the Estate,

7 which mirrored an earlier preliminary injunction which had been in effect since See ER 6; In re Estate of Ferdinand E. Marcos Human Rights Litigation, 25 F.3d 1467 (9 th Cir., cert. denied 513 U.S ( In the first quarter of 1995, evidence came to light showing that the legal representatives of the Estate had flagrantly violated both the preliminary and permanent injunction. Following four hearings, the federal court found the representatives of the Estate of Ferdinand E. Marcos, Imelda R. Marcos and Ferdinand R. Marcos, in civil contempt after it was disclosed that they had entered into secret deals with the Republic of the Philippines to transfer and divide all assets of the defendant Estate. ER 6. The secret agreements were discovered only after contemnors willfully refused to appear for deposition and produce documents. ER 5. The division of the Estate's assets between contemnors and the Republic was intended to render the Estate judgment-proof and the Class's judgment uncollectible. ER 7. In addition, the court found that contemnors and the Republic had sold valuable artwork in which the defendant Estate had a beneficial interest. Imelda R. Marcos received no less than $700,000 from this sale. ER 6. The court also found that contemnors had willfully failed to appear at their depositions to answer questions about the Estate's assets. ER 5. 1 The numerous appellate opinions issued during the course of this litigation have been widely cited by other courts and in the law review literature, and this case has been recognized as promoting and fulfilling the commitment of our country and the world community to address and resolve human rights abuses, as is required by many international human rights treaties. Among the many law review articles focusing on this case are Joan Fitzpatrick, The Future of the Alien Tort Claims Act of 1989: Lessons from In re Marcos Human Rights Litigation, 67 St. John's L. Rev. 491 (1993; Ralph Steinhardt, Fulfilling the Promise of Filartiga: Litigating Human Rights Claims against the Estate of Ferdinand Marcos, 20 Yale J. Int'l L. 65 (1995; Anita Ramasastry, Secrets and Lies? Swiss Banks and International Human Rights, 31 Vand. 1. Trans. Law 325 (1998; Riza Dejesus, Retroactive Application of the Torture Victim Protection Act to Redress Philippine Human Rights Violations, 2 Pac. Rim Law & Pol (1993. The methodology for compensatory damages in In re Marcos Human Rights Litigation, 910 F.Supp (D.Hawaii 1995, has been cited by both the Fifth and Eleventh Circuits and the many appellate opinions rendered during this protracted litigation have been cited by many other courts. 2

8 The court first issued an order requiring contemnors to purge their contempt by, inter alia, (1 renouncing the agreements with the Republic and (2 depositing the proceeds from the sale of the artwork with the Court. ER 7. When contemnors refused, the Court fined contemnors $100,000 per day to coerce compliance. ER 8. Thereafter contemnors refused to renounce the secret agreements, continued to implement the agreements, and even petitioned a court in the Philippines to enforce the agreements. The contemnors failed to appear for deposition despite their depositions being re-noticed again in 1999 and The legal representatives of the Estate appealed the Contempt Order to the Ninth Circuit Court of Appeals. The Court of Appeals affirmed the Contempt Order on December 17, Hi/ao v. Estate of Marcos, 103 F.3d 762 (9 th Cir The contemnors continued to defy the court's permanent injunction by signing powers of attorney in 1998 and 1999 on behalf of the Estate empowering a banker to locate and transfer assets of the Estate to their personal accounts, including a $35 million securities trading account at Merrill Lynch. Ex. 2 to Dkt. # The contemnors also refused to obey an Order requiring that they sign waivers of foreign banking privileges. ER 2. The Class petitioned the court multiple times to terminate the sanction and enter judgment. The Class filed its first motion to terminate the Contempt Order and enter judgment against the contemnors for a sum certain in ER 10. In 1998, 2006 and 2009 the Class amended and renewed its motion. ER The Court held a series of hearings on the motions, continuing the motions "each time with the expectation that contemnors would purge their contempt." See Order of May 29, ER 20 at ~ 5. The contemnors neither purged their 2 The sole exception is that Ferdinand R. Marcos appeared for deposition in Del Prado v. BN Development Company, Inc., No (N.D. Tex. after letters rogatory were issued by the court. However, his testimony was limited to the Texas real estate at issue in that case. 3

9 contempt nor paid the daily fine. In response to the Class's 2009 motion, the contemnors, for the first time, allege that "the Contempt Order was a 'judgment' which is no longer enforceable under H.R.S because more than 10 years has passed since the Contempt Order was entered." ER 20 at ~ 7. III. CONCISE STATEMENT OF THE POINTS OF ERROR Because the Certified Question is not an appeal from a lower court, there are no "points of error" in the usual sense of that term. The Class of Human Rights Victims urges this Honorable Court to rule that a contempt order, which is not merged into a final judgment and which lacks a final sum certain which is due and owing, is not a judgment within the meaning of H.R.S IV. STANDARD OF REVIEW The Question quoted above was certified to this Honorable Court by the U.S. District Court pursuant to Rule 13 of the Rules of Appellate Procedure. Because this Court is asked to interpret a provision in the Hawaii Revised Statutes, the standard of review is de novo. V. ARGUMENT The Hawaii sunsetting statute, H.R.S , is only applicable to judgments and decrees: Unless 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. No action shall be commenced after the expiration of ten years from the date a judgment or decree was rendered or extended. No extension of a judgment or decree shall be granted unless the extension is sought within ten years of the date the original judgment or decree was rendered. A court shall not extend any judgment or decree beyond twenty years from the date of the original judgment or decree. No extension shall be granted without notice and the filing of a non-hearing motion or a hearing motion to extend the life of the judgment or decree. 4

10 By specifying "judgments and decrees" eight times, there can be no question but that the legislature did not intend to expand the statute to include orders of a court which are not judgments or decrees. As will be shown herein, a contempt order which lacks specification of a sum certain is not ajudgment or decree within the meaning ofh.r.s A. The Contempt Order Lacks the Attributes ora Final Judgment The Contempt Order cannot be a final judgment because it lacks specification of a sum certain which can then be executed upon. The Contempt Order here specified a continuing sanction until contemnors purged their contempt. The federal court retained the power to modify or terminate the sanction. Until that court either found contemnors purged their contempt or terminated the sanction (if it concluded that the sanction was no longer useful, no sum certain could be ascertained. The Class never executed on the Contempt Order nor could it have since no judgment was entered for a sum certain. The irony of contemnors' position is that for their gross disobedience to the Order of the court, they claim the Class could neither execute on it nor reduce it to judgment. Hawai'i only recognizes money judgments where a sum certain is specified. See Matter of 2003 and 2007 Ala Wai Blvd, City and County of Honolulu, 85 Hawai'i 398, 944 P.2d 1341, 1354 (Hawai'i App.,1997. The statutory procedure for execution in Hawai'i requires that a sum certain be specified. See H.R.S Without a final judgment for a sum certain, the Class was unable to execute on the Contempt Order. Nor was the Class able to transfer the Contempt Order to other jurisdictions. Likewise, Hawaii does not recognize an order as final unless all claims have been resolved. See Matter of2003 and 2007 Ala Wai Blvd., 944 P.2d at This is fully consistent with the law in the Ninth Circuit and other Circuits which have held that a money judgment is not created until a sum certain is specified. u.s. Fidelity & Guaranty Co. v. 5

11 Ft. Misery Highway Dist., 22 F.2d 369, 372 (9 th Cir The Third Circuit Court of Appeals has stated the attributes of a money judgment: In common understanding, a money judgment is an order entered by the court or by the clerk, after a verdict has been rendered for plaintiff, which adjudges that the defendant shall pay a sum of money to the plaintiff. Essentially, it need consist of only two elements: (1 an identification of the parties for and against whom judgment is being entered, and (2 a definite and certain designation of the amount which plaintiff is owed by defendant. Penn Terra Ltd. v. Department of Environmental Resources, Com. of Pa., 733 F.2d 267, 276 (3d Cir "[A] traditional money judgment requires liquidated damages, i.e. a sum certain, and one cannot liquidate damages which have not yet been suffered due to conduct not yet committed." Id. at 277. Federal Rule of Civil Procedure 58(b(I(B requires that money judgments be for a "sum certain." Here, the federal court could not enter a final judgment for a sum certain until it assessed the conduct of contemnors and concluded that contemnors had purged their contempt or the Contempt Order no longer served any useful purpose. Moreover, the Contempt Order was separate from the final judgment on the merits and never merged with it. B. The Purpose Behind a Contempt Order Is Different from that of a Judgment Civil contempt orders serve a different judicial function than judgments. The power to issue contempt sanctions is an inherent power of the trial courts to do those things necessary for the proper administration of justice. Kukui Nuts of Hawaii, Inc. v. R. Baird & Co., Inc., 6 Haw.App. 431, 436, 726 P.2d 268, 271 (1986. The power of civil contempt is principally to compel obedience to court orders with the incidental effect of vindicating the power of the court. See LeMay v. Leander, 92 Hawai'i 614, 621, 994 P.2d 546 (2000. Thus, contempt preserves a court's ability to effect its decrees and orders. The contempt power is "essential to the 6

12 preservation of order in judicial proceedings, and to the enforcement of the judgments, orders, and writs of the courts." Ex parte Robinson, 19 Wall. 505, 86 U.S. 505, 510, 22 L.Ed. 205 (1873. "The ability to punish disobedience to judicial orders is regarded as essential to ensuring that the Judiciary has a means to vindicate its own authority without complete dependence on other Branches." Young v. United States ex rei. Vuitton et Fils S.A., 481 U.S. 787, 796, 95 L.Ed.2d 740 (1987. "Civil ~s distinguished from criminal contempt is a sanction to enforce compliance with an order of the court or to compensate for losses or damages sustained by reason of noncompliance and may be imposed for prohibited acts irrespective of intent." Hawaii Public Employment Relations Board v. Hawaii State Teachers Association, 55 Haw. 386, 392, 520 P.2d 422, 427 (1974. Depending on the circumstances, contempt orders may stay in effect for more than a decade. For example, a divorced spouse was imprisoned by a Pennsylvania court for 14 years for civil contempt after failing to comply with a distribution order. Chadwick v. Janecka, 312 F.3d 597 (3d Cir. 2002; Schaefer, "Man Jailed 14 years for Divorce Contempt Freed," Phi/a. Inquirer, A-I (July 10, In the instant case, the dissipation of assets and refusal to testify by the Marcos Estate's legal representatives has continued for 14 years notwithstanding the daily fines. The district court's ability to compel compliance, modify its order or reduce the totality of the fines is essential to preserve its power. This Court noted in LeMay that "civil contempt is often associated with a purge provision." LeMay, supra. The district court's control in this respect continues to this day since the Class is still engaged in litigation to enforce its judgment. 3 3 Although the Court of Appeals has ruled that the Class's judgment is no longer enforceable in Hawai'i, the judgment is enforceable in other jurisdictions. Hi/ao v. Estate of Marcos, 536 F.3d 980 (9 th Cir cert. denied sub nom Hi/ao v. Revelstoke, 129 S.Ct. 1993, 173 L.Ed.2d 1085 (

13 C. No Rule 58 Judgment Was Entered on the Contempt Order Rule 58 of the Hawaii Rules mirrors Rule 58 of the Federal Rules of Civil Procedure. Under the Federal Rules, just as under the Hawaii Rules, a judgment is not final until judgment is entered by the clerk on a "separate document" which he signs. 4 Rule 58 of the Federal Rules of Civil Procedure was amended in 1963 to make mandatory the procedure for a separate document signed and entered by the Clerk. United States v. Indrelunas, 411 U.S. 216, 222 (1973 (ruling that the amendment made entry of final judgment mechanical and not subjective. The clerk of the federal court entered a final judgment pursuant to FRCP 58 as to the Class's $2 billion judgment on December 6,1995. See Order of September 26,2008 (ECF Doc. # But the contempt proceeding was separate from the underlying action, and no Rule 58 judgment was ever entered by the judge or the clerk on the Contempt Order. See Order of May 29, 2009 at ~ 4. The docket entries are bereft of any entry of final judgment by the clerk for contempt. In the federal courts, just like in the courts of Hawai'i, no final judgment can be entered until disposition of all claims in the same proceeding. Both Hawai'i Rule 58 and Federal Rule 58 are expressly subject to Rule 54(b. Federal Rule 54(b provides in pertinent part:... any order... that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties rights and liabilities. (emphasis added. Both Hawai'i Rule 54(b and Federal Rule 54(b provide that:... the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. 4 The current wording of Federal Rule 58(c(2 provides that a judgment is deemed entered 150 days after a court's order for judgment even if the clerk fails to sign and enter a separate document for judgment. However, the ISO-day provision was not added until 2002 and did not become effective until December 1,2002. Amendments to the Federal Rules are not retroactive. 8

14 The Class has a claim to the accumulated sanctions and until the Court terminates the sanction, Rule 54(b cannot be satisfied unless the Court were to enter a certification. No Rule 54(b certification was ever entered in MDL No In both Hawai'i and the Ninth Circuit, compliance with Rule 54(b is a sine qua non for entry of final judgment under Rule 58. Huene v. United States, 743 F.2d 703, 705 (9 th Cir See also Leslie v. Estate of Tavares, 109 Hawai'i 8, 13, 122 P.3d 803, 808 (Hawai'i, 2005 (specifically adopting the rule in Huene. D. The Contempt Order was Not a Final Judgment Subject to HRS The contemnors did not regard the Contempt Order as a judgment until they took that position in a brief filed on April 10, In their 1995 appellate brief filed 14 years earlier, the contemnors referred to the Contempt citation as "post-judgment Orders," not a judgment. Appellants' Br. (10/23/95 at 2. The contemnors argued that the Court of Appeals had jurisdiction over the appeal of the Contempt Order pursuant to 28 U.S.C based on the Supreme Court decision in U.S. Catholic Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 72, 76 (1988. In that case, the Supreme Court held: The order finding a nonparty witness in contempt is appealable notwithstanding the absence of a final judgment in the underlying action. (emphasis added; see also Willy v. Coastal Corp., 503 U.S. 131, 138 (1992(reaffirming holding in u.s. Catholic Conference. In its 1996 ruling, the Court of Appeals addressed its appellate jurisdiction finding: The post-judgment orders of contempt appealed here are within this court's jurisdiction under 28 U.S.C as final and appealable orders. Shuffler v. Heritage Bank, 720 F.2d 1141, 1145 (9th Cir.1983 (a post-judgment civil contempt order imposing sanctions 9

15 acquires the "operativeness and consequence" necessary to finality under Hi/ao v. Estate of Marcos, 103 F.3d at 764 (emphasis added. At no time did the Court of Appeals refer to the Contempt Order as a "judgment." This is consistent with federal jurisprudence which created an exception under 1291 to permit the appeal of contempt orders imposing sanctions even when they are not final judgments. Only where a contempt order is reduced to judgment for a sum certain does it become a judgment. Cf Siangco v. Kasadate, 77 Hawaii 157, 162, 883 P.2d 78, 83 (1994 (a sanction order that does not specify the exact amount of fees owed is not appealable. E. Ongoing Monetary Sanctions Are Not Judgments Within the Meaning och.r.s Section necessitates that a judgment bear a date specific for the ten year period to start running. A contempt order which contains a daily sanction - and not a fixed final sum -- would start the ten year period each day until the sanction was terminated. Thus, if the Contempt Order herein were deemed a ''judgment'' under 657-5, each day the sanction continued would start the ten year period anew for that day's sanction. Applying this construction - which would create daily mini-judgments -- only daily sanctions under the Contempt Order entered in 1999 or earlier would be expiring under the ten year period. And each daily sanction would be subject to an extension of the ten year period. Yet that construction of would lead to practical difficulties. The total of the daily sanction of $100,000 would be subject to execution by the Sheriff, but the total would change every day creating a conflict with which requires designation of a sum certain for execution. If the Sheriff seized property worth more than the total, he would be in a quandary as to what property he could levy upon and sell. 10

16 VI. CONCLUSION F or all the foregoing reasons, this Court should answer the certified question in the negative and rule that a contempt order which does not contain a final sum certain subject to execution is not a judgment or decree within the meaning ofh.r.s Respectfully submitted, Sherry P. Broder #1880 Jon M. VanDyke 841 Bishop Street, Suite 800 Honolulu, Hawaii Attorneys for Plaintiffs-Appellants 11

17 CERTIFICATE OF SERVICE The undersigned certifies that a copy of the foregoing Plaintiffs-Appellants Opening Brief and a copy of the Excerpts of Record will be served upon each of the following individuals by U.S. Mail, postage prepaid, this day of September, 2009: James P. Linn, Esquire 1601 NW Expressway Street Oklahoma City, Ok John Bartko, Esquire Bartko, Zankel & Tarrant & Miller 900 Front Street, Suite 300 San Francisco, Ca Lex R. Smith, Esquire Kobayashi Sumita & Goda 999 Bishop St., 26 th FIr. Honolulu, Hi

18 .. TABLE OF CONTENTS TAB DOCUMENT DATE 1 List of Record Filings re: Contempt Proceedings 2 Order Granting Plaintiff s Motion for Contempt 5/26/95 3 Plaintiffs' Motion for Supplemental Relief for Civil Contempt 8/6/96 4 Amended Notice of Motion of Plaintiffs Motion for Supplemental Relief for 3/2/98 Civil Contempt 5 Memorandum in Support of Plaintiff s Motion for Supplement Relief for Civil 7/10/00 Contempt 6 Plaintiff Class' Renewed Motion for Entry of Final Judgment for Civil 11/6/06 Contempt 7 Plaintiff Class' Second Renewed Motion for Entry of Judgment for Civil 3/2/09 Contempt 8 Order re: Certified Question from the United States District Court 5/29/09 9 Order on Certified Question from the Supreme Court of the State of Hawaii 6/17/09