## Facts

- After Ferdinand Marcos was removed from power in 1986, the Republic of the Philippines pursued litigation in multiple jurisdictions to recover assets it alleged were public property wrongfully taken and controlled by the Marcoses and related entities.
- The Republic filed a civil action in the Central District of California asserting civil RICO and related claims against Ferdinand and Imelda Marcos and others.
- The complaint alleged that, over Marcos’s presidency, defendants diverted Philippine public funds and assets for personal benefit and laundered and invested them through transactions involving the United States.
- The alleged racketeering pattern consisted of predicate acts including mail fraud, wire fraud, and transportation of stolen property in interstate and foreign commerce.
- The district court issued a preliminary injunction freezing defendants’ assets, allowing only payment of attorney fees and ordinary living expenses, to prevent dissipation while the case proceeded.
- A Ninth Circuit panel reversed the injunction, but the court granted rehearing en banc to review the injunction and defendants’ jurisdictional and justiciability objections.

## Issues

1. Whether a foreign sovereign government qualifies as a “person” entitled to sue under civil RICO.
2. Whether the act of state doctrine barred adjudication because the alleged conduct was tied to actions taken while Marcos led the Philippine government.
3. Whether the political question doctrine made the dispute nonjusticiable due to foreign relations sensitivities and the involvement of a former head of state.
4. Whether the district court abused its discretion in issuing a preliminary injunction freezing assets pending adjudication.

## Decision

- The en banc Ninth Circuit held the Republic is a “person” under RICO and may bring a civil RICO action.
- The court held the act of state doctrine did not bar the suit because the claims targeted alleged theft and self-enrichment, not the validity of sovereign governmental acts.
- The court held the dispute did not present a nonjusticiable political question; the claims were conventional statutory causes of action with manageable judicial standards, and adjudication did not conflict with executive-branch foreign policy.
- Applying ordinary equitable factors, the court concluded the district court did not abuse its discretion in freezing assets to prevent dissipation.
- The en banc court affirmed the preliminary injunction and reinstated it after the panel’s reversal.

## Legal Principles

- A foreign sovereign can be a civil RICO plaintiff as a “person” within the statute’s coverage.
- The act of state doctrine does not bar claims alleging a foreign official’s private misappropriation of public assets for personal gain, even if the alleged misconduct occurred while the official held power.
- Foreign relations sensitivity alone does not convert statutory civil claims into nonjusticiable political questions where courts can apply established legal standards and judicial action does not contradict political-branch positions.
- A court may issue a preliminary asset-freeze injunction to preserve the status quo and prevent dissipation of disputed property when the plaintiff shows a sufficient likelihood of success and a substantial risk of irreparable harm.

## Conclusion

The Ninth Circuit en banc permitted the Republic to proceed as a civil RICO plaintiff, rejected act of state and political question defenses aimed at insulating alleged personal corruption, and upheld a preliminary injunction freezing assets to preserve potential recovery pending trial.


Republic of the Phil. v. Marcos, 862 F.2d 1355 (9th Cir. 1988) (en banc)