Republic of the Philippines v. Marcos 862 F.2d 1355, 1369 (9th Cir.

1988)

FACTS:

The Republic of the Philippines (the Republic) brought a civil suit against former president, Ferdinand Marcos,
and his wife Imelda (the Marcoses), asserting claims under the Racketeer Influenced and Corrupt Organizations
Act (RICO) and other applicable law. The Republic sought an injunction preventing the Marcoses from
disposing their assets until after trial.

District court: Granted preliminary injunction.

Appeal:
Panel of circuit court (2nd circuit court): Reversed (injunction barred by act of state doctrine)
En banc (this case 9th circuit court): Affirmed with the District Court (failure to prove acts as covered by act
of state doctrine)

Republic's claims are predicated on its allegation that the former president Marcos stole public money during its
incumbency and used position of power and authority to convert and cause to be converted to his use and that of
his friends, family, and associates, money, funds, and property belonging to the Philippines and its people.

The Republic alleged that the Marcoses:

1. were engaged in mail fraud, wire fraud, and the transportation of stolen property in the foreign or interstate
commerce of the United States which are acts punishable under USC laws (Non-RICO claims);
2. those acts are repeated, forming a pattern of predicate acts under RICO thereby giving rise to civil liability.

Marcoses' contend that:

1. their acts are insulated because they were acts of state NOTreviewable by the circuit (US) courts;
2. any adjudication of these acts would involve the investigation of political questions beyond US courts'
competence.

ISSUE:

Whether or not the acts being alleged against the Marcoses are considered Acts of State therefore not subject to
judicial review of the Circuit Court?

HELD:

No. The Marcoses offered NO evidence to support the classification of their acts as acts of state. The burden of
proving acts of state rested upon them.

ACT OF STATE DOCTRINE:

Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one
country will not sit in judgment on the acts of the government of another, done within its own territory. Redress
of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign
powers as between themselves.
The classification of certain acts as "acts of state" with the consequence that their validity will be treated
as beyond judicial review is a pragmatic device, not required by the nature of sovereign authority and
inconsistently applied in international law.

The "continuing vitality" of the doctrine depends on "its capacity to reflect the proper distribution of functions
between the judicial and political branches of the Government on matters bearing upon foreign relations."
Consequently, there are "constitutional underpinnings" to the classification. A court that passes on the validity
of an "act of state" intrudes into the domain of the political branches.

As a practical tool for keeping the judicial branch out of the conduct of foreign affairs, the classification of "act
of state" is not a promise to the ruler of any foreign country that his conduct, if challenged by his own country
after his fall, may not become the subject of scrutiny in our courts. No estoppel exists insulating a deposed
dictator from accounting. No guarantee has been granted that immunity may be acquired by an ex-chief
magistrate invoking the magic words "act of state" to cover his or her past performance.

The act of state doctrine is supple, flexible, ad hoc. The doctrine is meant to facilitate the foreign relations of
the United States, not to furnish the equivalent of sovereign immunity to a deposed leader.

CONCLUSION:

Not all acts of foreign government are free from the court scrutiny under the act of state doctrine. The doctrine
prevents inquiry into public, governmental acts but not into private or commercial conduct. Officials are shielded
only when they act in their SOVEREIGN CAPACITY FOR THE PUBLIC INTEREST. Moreover, the doctrine
is particularly inappropriate in cases in which the government invoking the doctrine is no longer in power.

Both “official acts” and “foreign policy interference” requirements prevent the use of act of state defense by
government (and government officials) that are no longer recognized as sovereign.