553 U.S. 851 (2008)
In 1972, Ferdinand Marcos incorporated Arelma, S.A. under Panamanian law and opened a brokerage account with Merrill Lynch, Pierce, Fenner & Smith Inc. in New York containing an initial deposit of $2 million that grew to approximately $35 million by 2000.1
After Marcos fled the Philippines in 1986, the Republic of the Philippines created the Presidential Commission on Good Governance to recover assets he had allegedly misappropriated.2 The Commission requested assistance from the Swiss Government, which froze assets including shares in Arelma.3 In 1991 the Commission asked the Sandiganbayan, a Philippine court of special jurisdiction over corruption cases, to declare forfeited to the Republic any property Marcos had obtained through misuse of his office, with that litigation still pending at the time of later proceedings.4
A class action by and on behalf of some 9,539 human rights victims of the Marcos regime was tried in the United States District Court for the District of Hawaii and resulted in a nearly $2 billion judgment for the class.5 The Pimentel class sought to enforce its judgment by attaching the Arelma assets held by Merrill Lynch.6 In a related action, the Estate of Roger Roxas and Golden Budha [*sic*] Corporation (the Roxas claimants) claim a right to execute against the assets to satisfy their own judgment against Marcos' widow, Imelda Marcos.7
Merrill Lynch, facing claims from Marcos creditors including the Pimentel class, filed an interpleader action under 28 U.S.C. § 1335 in the District of Hawaii in 2000 after being directed to do so by Judge Manuel Real.8 The named defendants included the Republic, the Commission, Arelma, the Philippine National Bank, and the Pimentel class.9 The Republic and the Commission asserted sovereign immunity under the Foreign Sovereign Immunities Act and moved to dismiss pursuant to Rule 19(b), as did Arelma and PNB.10
The District Court initially rejected the request to dismiss, but the Ninth Circuit reversed, holding the Republic and the Commission entitled to sovereign immunity and required parties under Rule 19(a), and entered a stay pending the Sandiganbayan outcome.11 After the District Court vacated the stay and awarded the assets to the Pimentel class, the Ninth Circuit affirmed, and the Supreme Court granted certiorari.12
Whether the Republic of the Philippines and the Commission, after being dismissed from the interpleader action on sovereign immunity grounds, had the right to appeal the District Court's determination that the action could proceed without them?13
No. The Court did not rule on whether the Republic and the Commission had the right to appeal because Arelma and PNB, who also moved to dismiss the action under Rule 19(b) and appealed the denial, provided an alternative basis for review of the Court of Appeals' judgment.16
The Court concluded that it need not decide the appeal rights of the Republic and the Commission.17
Whether Arelma and PNB have standing to seek review of the Court of Appeals' judgment affirming the District Court?18
A party that seeks to have a judgment vacated in its entirety on procedural grounds does not lose standing simply because the party does not petition for certiorari on the substance of the order.19
Yes. Although Arelma and PNB lost on the merits of their claims in the District Court and the Court of Appeals, they sought review of the Rule 19(b) procedural determination.2021 Dismissal under Rule 19(b) would vacate the judgment denying them the interpleaded assets, thereby giving them a concrete stake in the outcome of the proceedings.22
Arelma and PNB have standing to seek review of the Court of Appeals' judgment.23
Whether the interpleader action could proceed in the District Court without the Republic and the Commission as parties under Rule 19(b) of the Federal Rules of Civil Procedure?24
Under Rule 19(b), when a required party cannot be joined because of sovereign immunity, the court must consider factors including the prejudice to the absent sovereign, the ability to lessen prejudice, the adequacy of the judgment, and the availability of an alternative remedy.25 Where the sovereign's claims are not frivolous, the action must be dismissed to avoid infringement on foreign sovereign immunity.26
No. The Republic and the Commission are required parties whose interests in the Arelma assets would be impaired without their participation. Given their successful assertion of sovereign immunity, the Court of Appeals erred by reaching the merits of their claims and failing to give sufficient weight to the prejudice from allowing the action to proceed in their absence, as confirmed by analysis of all Rule 19(b) factors.27
The first factor concerning prejudice weighed heavily against proceeding because the absent sovereigns' claims were not frivolous and the lower courts improperly discounted them on statute of limitations grounds.28 The remaining factors likewise supported dismissal, as no alternative measures could lessen the prejudice, a judgment without the sovereigns would not bind them or fully resolve the dispute, and Merrill Lynch as stakeholder retained adequate protection through potential future dismissals even if the action ended without a merits ruling.29
The interpleader action could not proceed without the Republic and the Commission as parties.30
Related opinions on this issue
Justice Stevens joined the Court's holding on jurisdiction but dissented from the outright dismissal.31 He would have remanded for further proceedings or a stay pending the Sandiganbayan decision rather than ordering dismissal.32 The District Judge's impartiality could be questioned based on his personal involvement in directing the interpleader filing and sealing the file.33
The Republic's sovereign interests warrant less weight because it had participated in prior related proceedings without objection and must eventually litigate in United States courts anyway.34
Justice Souter joined all but Parts IV-B and V of the Court's opinion.35 He differed as to the relief because a conclusion of the matter pending before the Sandiganbayan may simplify the issues raised in this case and render one disposition or another more clearly correct.36 He would therefore vacate the judgment and remand for a stay of proceedings for a reasonable time to await a decree of the Philippine court.37
If it should appear later that no such decree can be expected, the Court of Appeals could decide on the next step in light of the Court's opinion.38 For reasons given by Justice Stevens, he would order that any further proceedings in the District Court be held before a judge fresh to the case.39