Position Paper
Re: Article 5, Part III Of The Comprehensive Agreement On Respect For Human Rights And International Humanitarian Law Between the Government of the Republic of the
Philippines (GRP) and the National Democratic Front of the Philippines (NDFP) (the "Agreement") Viz-A-Viz Legal Representation Based On Final Judgment
Article 5, Part III, ("Respect for Human Rights") of the Agreement states that:
The parties hereby respect and support the rights of the victims of human rights violations during the Marcos regime, taking into
consideration the final judgment of the United States Federal Court System in the Human Rights Litigation Against Marcos; Senate Resolution 1640; Swiss Supreme Court
Decision of 10 December 1997; and pertinent provisions of the UN. Covenant on Civil and Political Rights and the 1984 UN. Convention Against Torture.
Should there be any settlement, the GRP shall also execute with the duly authorized representatives of the victims a written
instrument to implement this Article and guide the satisfaction of the claims of said victims, with regard to the amount and mode of compensation, which shall be
the most direct and quickest possible to every victim or heir in accordance with the relevant Swiss Supreme Court decisions.
In case of settlement outside of U.S. jurisdiction, all or the majority of said victims shall determine their representation by power
of attorney.
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The last paragraph should be scrapped. Its contradictory provisions violate the Final Judgment (MDL 840, Marcos Human Rights Litigation),
the Permanent Injunction and the standing Orders of the U.S. District Court of Hawaii.
By itself, Article 5 has contradictory provisions. For one, while it provides that:
…the Parties hereby respect and support the rights of the victims of human rights violations during the Marcos regime, taking into
consideration the final judgment of the United States Federal Court System in the Human Rights Litigation Against Marcos…
it nevertheless violates its own provision that:
…In case of any settlement outside of U.S. jurisdiction, all or the majority of said victims shall determine their representation by
power of attorney…
The above paragraph is grossly violative of and repugnant to Paragraph 10 of said U.S. District Court's Final Judgment which the GRP and the
NDFP have professed to "hereby respect and support."
Paragraph 10 of the Final Judgment provides that:
…Any monies collected by settlement or execution on judgments entered in any of the MDL 840 cases against the defendant Estate shall
be held and disbursed as directed by the Court…
Both the defendant Estate of Marcos (represented by Ms. Imelda Romualdez Marcos and Ferdinand R. Marcos, Jr.) and the 10,000 class plaintiffs
cannot be legally compelled to violate the injunction embodied in the Final Judgment that permanently enjoins and restrains them—including their attorneys—from
directly or indirectly:
…transferring, conveying, encumbering, dissipating, converting, concealing or otherwise disposing of in any manner any funds, assets,
claims or other property or assets owned actually, equitably or beneficially by, or in the possession or custody of or held by or in any way on behalf of or for
the benefit of the Estate of Ferdinand E. Marcos…
The pertinent portions of the Final Judgment thus state that:
…Plaintiffs' Motion for Entry of a Permanent Injunction is granted.
a. The Court finds, based upon all evidence submitted in this litigation:
(1) Plaintiffs have succeeded on the merits of this litigation and the judgment herein exceeds the assets of the defendants
Estate, both the amount admitted by the defendant and the amount proved by the plaintiffs.
(2) Beginning as early as 1968, Ferdinand E. Marcos and Imelda R. Marcos established secret bank accounts under alias
names and the use of Liechtenstein foundations in various countries with banking secrecy laws, including Switzerland.
(3) Ferdinand and Imelda Marcos engaged in a sophisticated pattern and practice of secreting their assets, periodically
laundering those assets in various countries, and redepositing the monies in Swiss bank accounts in the names of multiple Liechtenstein foundations.
(4) Federal courts have twice enjoined the transfer of Marcos assets finding a pattern and practice of secreting their assets,
and the courts of appeals have thrice affirmed the injunctions.
The Agreement further violates the explicit provisions of the Pre-Trial Order No.8: Case Management entered on July 19, 1994 in the
same MDL No.840, that:
…The Court will not recognize any special power of attorney obtained by SELDA from a Class member. No one is empowered to negotiate a
settlement on behalf of the Plaintiff Class and its individual members except Class Counsel appointed by the Court.
Admittedly, Robert A. Swift, Esq., is the lead counsel and Sherry P. Broder, Esq., is the liaison counsel of the class plaintiffs. This is
embodied in the Pre-Trial Order No.1: Case Management, entered in the records of the same case on January 07, 1991. The functions
of said lead and liaison lawyers are also contained in the same Order, thus:
…Prosecution on behalf of plaintiffs shall he managed and directed by the above-appointed (Swift and Broder). All Specific assignments
to perform tasks in this litigation shall be apportioned by lead counsel among the members of the below appointed plaintiffs' counsel executive committee in such
a manner as to lead to the orderly and efficient prosecution of the litigation and avoid duplicative or unproductive effort. The above-appointed plaintiffs'
liaison counsel shall coordinate the filing and submission of papers for plaintiffs, and shall accept service of pleadings and papers on behalf of plaintiffs…
Later in the proceedings, Filipino lawyers Jose Man Velez, Rod C. Domingo, Jr. and Ruben 0. Fruto entered their appearance as co-counsel of
Robert Swift and Sherry Broder. After his tenure as a Senator (which prevented him from entering his formal appearance before the U.S. District Court), lawyer Rene
A.V. Saguisag ably represented the 10,000 victims in all cases before the Philippine court and public hearings in the Senate and House of Representatives.
Similarly, the appearance of Atty. Romeo Capulong, as co-counsel for direct action plaintiffs Jose Ma. Sison, et. al. was entered. Capulong,
up to the finality of the U.S. Court Judgment for almost $2.0B, did NOT appear nor did he represent the 10,000 class plaintiffs as he has always refused to be a
co-counsel of Swift.
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The implementation of the last (third) paragraph of Article 5 is contrary to existing laws and jurisprudence on class actions.
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Unless the appointment of Mr. Robert Swift as lead counsel of the 10,000 victims of the Marcos human rights violations is revoked, withdrawn
or set aside by the U.S. District Court, the NDFP, SELDA, Capulong Powers of Attorney can NOT be given even a semblance of validity.
Representation in a class suit is always determined by the court where the litigation is pending. Due to the sheer number of plaintiffs or
defendants in a class action—which is the reason for its being certified as a "class"—court approval is required in almost every stage of the proceeding,
particularly in the approval of a compromise agreement between or among the parties. In such a way, the lawyers of one or all the parties are better protected since
consultations with the class members (as here where the plaintiff victims are 10,000, more or less). In fact, the class members are bound by any judgment or
settlement approved by the court. They have no option to withdraw from the litigation.
It is thus important for the proponents of a case to determine who is capable to finance the expenses of the litigation. It is moreover
imperative to choose a class counsel who is sufficiently qualified and experienced to intelligently prosecute the action to a favorable conclusion.
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Rightful representation of the class is already fully determined and recognized by the Philippine government.
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The Philippine government has already acknowledged that Mr. Robert Swift is the rightful legal representative of the class plaintiffs.
In a Memorandum of Agreement executed and signed on September 13, 1995 by and between Chairman Magtanggol C. Gunigundo of the PCGG,
representing the Republic of the Philippines, and Mr. Robert A. Swift, representing the class members, the Philippine government expressly acknowledged the authority
of Mr. Swift to represent said plaintiffs.
The Philippine government cannot now therefore claim that:
…In case of settlement outside of U.S. jurisdiction, all or the majority of said victims sha1l determine their representation by power
of attorney…
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SELDA, Capulong and his Public Interest Law Center (PILC) offered pro bono services but solicit fees in the guise of "voluntary donations of 15%" of actual recovery.
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While lawyer Romeo Capulong and PILC were never authorized by the U.S. District Court or lead counsel Robert Swift to represent the victims,
Capulong had started during the last quarter of 1992 to solicit "voluntary donations" in the maximum of 15% of any amount awarded contingent on actual
recovery.
But on the same breath, he stated that "SELDA and Public Interest Law Center (PILC) have undertaken the responsibility of representing
and assisting the victims and class members on a pro bono basis.
The letter of Atty. Romeo Capulong, dated October 18, 1992, to incumbent Judge Priscilla C. Mijares of the Regional Trial Court of Pasay
City, Branch 108, is a classic example of this undeniable fact. The reply of Judge Priscilla C. Mijares, dated October 22, 1992, whereby she expressed "conformity to
donate fifteen (15%) per cent of any amount awarded to my family, contingent on actual recovery" demonstrates the kind of "pro bono style" of Atty. Capulong.
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Capulong misrepresented that the U.S. District Court1 presided by Judge Manuel L. Real, had lost jurisdiction in MDL 840 over the 10,000
martial law victims by virtue of a U.S. Ninth Circuit Court of Appeals decision.
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Atty. Romeo Capulong cited the "act of state doctrine" in the Opinion (Decision) of the U.S. Ninth Circuit Court of Appeals in
Credit Swisse and Swiss Bank Corp. vs. U.S. District Court for Central District of California, Loretta Ann Rosales and Hilda Narciso, Real Parties in Interest, which
dismissed the Rosales case (No. CV - 96-6419) and directed "the district court to refrain from taking any further action in the Rosales action or any other case
involving any or all of the Real Parties in Interest and any assets of the Estate of Ferdinand E. Marcos held or claimed to be held by the Banks."
By virtue of the this ruling, Atty. Capulong argued that the U.S. District Court of Hawaii, presided by Judge Manuel L. Real, and is now
barred from exercising jurisdiction or participating in settlement discussions in MDL No. 840 (specifically referring to the Final Judgment), having concluded that
"in case of settlement outside of U.S. jurisdiction," the "act of state doctrine" will now apply.
In other words, following this line of argument, as long as the settlement is negotiated and concluded in the Philippines (which is outside
the U.S. jurisdiction), the NDFP, SELDA, Capulong and the PILC can now violate the provision of the Final Judgment rendered by the U.S. District Court of Hawaii and
affirmed by the Ninth Circuit Court of Appeals and the U.S. Supreme Court, namely:
…Any monies collected by settlement or execution on judgments entered in any of the MDL 840 cases against the defendant Estate shall
be held and disbursed as directed by the Court.." (Para. 10, Final Judgment)
But Atty. Capulong, being co-counsel of direct action plaintiffs Jose Ma. Sison, et. al., knew—or ought to know, but deliberately concealed
the fact—that a clarificatory Order was entered on December 23, 1997, in the same case of Credit Suisse vs. Rosales, (No. 97-70193, 9th Circuit Court, Dec. 3, 1997)
stating that:
…Real Parties in interest filed a motion to modify this court's opinion, Credit Suisse V. Rosales, No. 97- 70193 (9th Cir. Dec. 3,
1997). Specifically, Real Parties in interest allege that the opinion restricts and limits the district court from participating in settlement discussions or
exercising its duties under Fed. R. civ. R 23 in the case of In re Estate of Ferdinand E. Marcos Human Rights Litigation, MDL No.840. Our opinion does not
restrict the district court from participating in settlement discussions or exercising its Rule 23 duties in MDL No. 840. Our opinion restricts the district
court only from:
(1) taking any further action in the Rosales action: and
(2) taking any further action in any other case involving the Real Parties in Interest and assets of the Estate of Ferdinand F.
Marcos ("Marcos Assets") held or claimed to be held by Credit Suisse and/or Swiss Bank corporation ("the banks").
The district court may thus perform its Rule 23 and/or settlement duties in MDL No. 840 so long as such duties do not involve an
attempt to reach Marcos assets held or claimed to be held by the banks, and as long as such duties do not involve taking any further action in the Rosales action.
Real Parties in Interest's motion to modify this Court's opinion, Credit Suisse V. Rosales, No. 97-70193 (9th Cir. Dec. 3,1997) is
DENIED.
Otherwise stated, Judge Manuel L. Real of the U.S. District Court of Hawaii still maintains jurisdiction and full control of MDL 840.
Clearly, the GRP Panel have become innocent unsuspecting victims being inveigled and misled by people with dubious motives who will stop at
nothing to attain political stature and financial gains.
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Former Chairman Magtanggol Gunigundo of PCGG acted in bad faith and in concert with the NDF and the SELDA-Capulong group.
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1. On February 13, 1998, lawyers Robert Swift and Rod Domingo, Jr. wrote a letter to then Sec. Bello III of the Department of Justice
expressing serious concern on the media reports that the Philippine government and NDF are using compensation for the Judgment Messrs. Swift and Domingo obtained on behalf
of the class as fodder for the (GRP-NDFP) treaty.
We received NO reply.
2. On March 10, 1998, Rod Domingo, Jr. wrote another letter to PCGG Chairman Magtanggol C. Gunigundo reiterating the fact that only
lead counsel Robert Swift is "the U.S. Court-appointed counsel for the class plaintiffs" and that "your goodself (Chairman Gunigundo) has already
acknowledged expressly and in writing that Mr. Swift is in fact the only authorized person to act in behalf of and/or to represent the class plaintiffs." It was
moreover stated that "any action of the Philippine government disregarding said judgment will have international repercussions" and that "any
agreement with the NDF on the matter, without the participation of the court-appointed counsel (Robert Swift) and the subsequent approval thereof by the U.S.
District Court will never settle the judgment."
We received NO answer either from Chairman Gunigundo.
3. Counsels Atty. Rod Domingo, Jr. and Atty. Ruben 0. Fruto conferred with Chairman Gunigundo at the latter's office on March 11, 1998. They
were shown a draft of Art. 5 of the Agreement and were categorically assured that the third (last) paragraph with the provision on "representation by power of
attorney" will be deleted or omitted from the Agreement. Chairman Gunigundo even wrote on the side of that paragraph the word "omit" and acknowledged
Mr. Swift and his co-counsels to be the duly appointed lawyers for the class plaintiffs in MDL 840.
On March 16,1998, the GRP-NDF Agreement was signed.
4. On March 31, 1998, we again wrote a letter to Chairman Gunigundo expressing disbelief and shock that the questioned last (third)
paragraph thereof was never removed and made part of Article 5.
Again, Chairman Gunigundo did NOT bother to reply.
Incidentally, during our previous meeting with Chairman Gunigundo on March 11, 1998, he admitted that Art. 5 was drafted after consultations
and meeting between him and Atty. Romeo Capulong.
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Erroneous payment to the wrong party will NOT satisfy the U.S. District Court Judgment and result in NO release of liability of the Marcos
Estate and its representatives.
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As earlier discussed, if the Philippine government pushes through with a compromise settlement with the NDF, SELDA and/or Atty. Romeo
Capulong sans the U.S. District Court's approval, said instrument will not settle or satisfy the judgment and the Marcos Estate's more than $2.0B liability will
remain outstanding. The judgment will furthermore continue to be enforced throughout the world.
Lastly, any payment derivative of Marcos assets or the Marcos Swiss accounts will violate the permanent injunction and result in civil and
criminal contempt against those who are responsible therefor or who participated therein.
More importantly, the $570M deposited in escrow at the Philippine National Bank (PNB) in Manila can NOT be LEGALLY WITHDRAWN because it will
violate the specific provisions thereof.
A criminal contempt proceeding against Ms. Imelda R. Marcos and Ferdinand Marcos, Jr. is pending before the U.S. District Court of Hawaii.
The malicious assertions that Messrs. Swift and Domingo will receive 40% of the proposed settlement sum of $150M is a fallacy.
It should likewise be emphasized that the pretentious and misleading statements of the SELDA-Capulong tandem that attorney's fees and cost of
litigation amount to forty per cent (40%) of the total award of the proposed compromise figure of $150M are entirely baseless and farthest from the truth. At most,
this is speculative and borne out of sheer ignorance of the fact that attorney's fees and cost of litigation are determined solely by the Court:
…Pursuant to FRCP 23, the Court retains continuing jurisdiction over the Motion for Contempt, the Permanent Injunction, settlement,
the distribution of monies collected by settlement or execution, the determination of counsel fees, and any other matters as may properly come before the
Court" (Para. E, Final Judgment)
CONCLUSION
Accordingly, class plaintiffs strongly suggest and recommend that the last (3rd) paragraph of Article 5, Part III of the Comprehensive
Agreement on Respect for Human Rights and International Humanitarian Law Between the GRP and the NDFP be scrapped and deleted altogether.
The Republic of the Philippines, through the Philippine Commission on Good Government (PCGG), must therefore deal, negotiate and conclude an
agreement only with Mr. Robert A. Swift, lead counsel of the 10,000 martial law victims, as has been the standing practice of the Philippine government in the past.
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