## Facts

- The Republic of the Philippines and National Power Corporation (NPC) sued Westinghouse Electric Corporation, Westinghouse International Projects Company, and Burns & Roe Enterprises, Inc. over contracts for the Philippine Nuclear Power Plant (PNPP), a 600-megawatt facility built over roughly a decade beginning in 1976.
- Plaintiffs alleged defendants obtained PNPP contracts through bribery and deceit, specifically by bribing President Ferdinand E. Marcos and thereby interfering (and conspiring to interfere) with fiduciary duties he allegedly owed to the Philippine people and NPC.
- The litigation initially asserted numerous tort and contract theories; most claims were sent to ICC arbitration in Geneva, leaving two tort counts for trial in federal court: tortious interference with fiduciary duties and conspiracy to commit that interference.
- During the New Jersey jury trial on the two remaining tort claims, plaintiffs moved to permit submission of punitive damages to the jury.
- Defendants opposed punitive damages, including based on New Jersey standards, plaintiffs’ status as a foreign sovereign, and concerns related to due process, comity, and the parallel arbitration.

## Issues

1. Whether New Jersey law permits punitive damages for tortious interference claims premised on alleged bribery of a head of state and interference with public fiduciary duties.
2. Whether a foreign sovereign plaintiff is categorically barred, or otherwise limited, from recovering punitive damages in a U.S. court against private defendants.
3. Whether due process, international comity, or the existence of related ICC arbitral proceedings required the court to withhold the punitive-damages question from the jury.

## Decision

- The court granted plaintiffs’ application to present punitive damages to the jury on the two tortious-interference claims.
- Applying New Jersey law, the court held the alleged conduct—if proven—could satisfy the elevated culpability required for punitive damages (actual malice or wanton and willful disregard).
- The court rejected a categorical rule barring punitive damages because the plaintiff is a foreign sovereign, emphasizing the award would run against private defendants, not against a sovereign.
- The court held that due process and proportionality concerns were to be handled through instructions and post-verdict judicial review, not by precluding punitive damages as a matter of law.
- The court declined to treat the related arbitral finding on bribery (in the arbitration-clause context) as a basis to prevent submission of punitive damages on the distinct tort claims tried to the jury.

## Legal Principles

- Under New Jersey law, punitive damages require proof of egregious conduct amounting to actual malice or wanton and willful disregard, and serve punishment and deterrence objectives.
- At the pre-submission stage, the court’s function is to decide whether punitive damages are legally available on the pleaded and tried tort theory; the jury determines the underlying facts and whether the standard is met.
- A plaintiff’s status as a foreign sovereign does not, by itself, bar punitive damages where the defendant is a private party and state law otherwise allows such relief.
- Constitutional and fairness limits on punitive damages are addressed through trial management, jury instructions, and post-verdict review rather than categorical exclusion.
- Parallel arbitral proceedings do not automatically preclude litigation of distinct tort claims or associated remedies when not treated as claim- or issue-preclusive in the judicial action.

## Conclusion

The district court permitted the Republic and NPC to submit punitive damages to the jury on their remaining New Jersey tort claims alleging bribery-based interference with Marcos’s fiduciary duties, holding punitive damages were legally available and that sovereign status, due process concerns, and related arbitration did not justify withholding the issue from the factfinder.


Republic of the Phil. v. Westinghouse Elec. Corp., 821 F. Supp. 292 (D.N.J. 1993)