                  FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

MERRILL LYNCH, PIERCE,                  
FENNER AND SMITH, INCORPORATED,
a corporation organized and
existing under the laws of the
State of Delaware with its
principal place of business in New
York, New York,
                  Plaintiff-Appellee,
                 v.
ENC CORPORATION; SUNTRUST
INVESTMENT CO., S.A., a
corporation organized and existing
under the laws of Switzerland with
an address at rue de Jargonnant 2,            No. 04-16401
P.O. Box 76, 1211 Geneva 6,                    D.C. No.
Switzerland; JOHN K. BURNS, a               CV-00-00595-MLR
citizen of the United States, with
an address at 300 Wacker Drive,
Suite, 900, Chicago, Illinois,
60606; THE ESTATE OF FERDINAND
E. MARCOS; IMELDA R. MARCOS;
FERDINAND R. MARCOS, JR.; MARIA
IMELDA MARCOS; IRENE MARCOS
ARANETA; FRONTIER RISK CAPITAL
MANAGEMENT, L.C.C., a limited
liability company organized and
existing under the laws of the
State of Nevada, with a registered
office at 6100 Neil Road, Suite
500, Reno, NV. 89511 and an
                                        

                             5025
5026            MERRILL LYNCH v. ARELMA, INC.


address at 300 Wacker Drive,           
Suite 900, Chicago, IL 60606;
GROSVENOR CAPITAL LTD., a
company organized and existing
under the law of the United
Kingdom, with an address at
Grosvenor Gardens House, Suite
117, 35-37 Grosvenor Gardens,
London SW1s W OBS, United
Kingdom; THE ESTATE OF ROGER
ROXAS; GOLDEN BUDHA
CORPORATION, a corporation
organized and existing under the
laws of the State of Georgia, with
a registered office at 710 West
First Street, Blue Ridge, Georgia
30513, and a mailing address at
260 Carrollton St., Buchanan, GA
                                       
30113,
                         Defendants,
                 and
ARELMA, INC., a corporation
organized and existing under the
laws of Panama with a permanent
address at Ave. Justo Alosemena y
Calle 41 Este, No. 40-59 Pte al
Colegio Immeculada, Panama 1.
Rep. de Panama, and a mailing
address at c/o Suntrust Investment
Co. S.A., rue de Jargonnant 2,
P.O. Box 76, 1211 Geneva 6,
Switzerland,
               Defendant-Appellant,
                                       
                MERRILL LYNCH v. ARELMA, INC.            5027


MARIANO J. PIMENTAL, on behalf of       
himself and all other persons
                                        
similarly situated;,
                Defendant-Appellee,
PHILIPPINE NATIONAL BANK,
               Defendant-Appellant.
                                        

MERRILL LYNCH, PIERCE,                  
FENNER AND SMITH, INCORPORATED,
a corporation organized and
existing under the laws of the
State of Delaware with its
principal place of business in New
York, New York,
                  Plaintiff-Appellee,
                 v.                           No. 04-16503
ENC CORPORATION; ARELMA, INC.,                 D.C. No.
a corporation organized and                 CV-00-00595-MLR
existing under the laws of Panama
with a permanent address at Ave.
Justo Alosemena y Calle 41 Este,
No. 40-59 Pte al Colegio
Immeculada, Panama 1. Rep. de
Panama, and a mailing address at
c/o Suntrust Investment Co. S.A.,
rue de Jargonnant 2, P.O. Box 76,
1211 Geneva 6, Switzerland;
                                        
5028           MERRILL LYNCH v. ARELMA, INC.


SUNTRUST INVESTMENT CO., S.A., a     
corporation organized and existing
under the laws of Switzerland with
an address at rue de Jargonnant 2,
P.O. Box 76, 1211 Geneva 6,
Switzerland; JOHN K. BURNS, a
citizen of the United States, with
an address at 300 Wacker Drive,
Suite, 900, Chicago, Illinois,
60606; THE ESTATE OF FERDINAND
E. MARCOS; IMELDA R. MARCOS;
FERDINAND R. MARCOS, JR.; MARIA
IMELDA MARCOS; IRENE MARCOS
ARANETA; FRONTIER RISK CAPITAL
MANAGEMENT, L.C.C., a limited
liability company organized and
existing under the laws of the       
State of Nevada, with a registered
office at 6100 Neil Road, Suite
500, Reno, NV. 89511 and an
address at 300 Wacker Drive,
Suite 900, Chicago, IL 60606;
GROSVENOR CAPITAL LTD., a
company organized and existing
under the law of the United
Kingdom, with an address at
Grosvenor Gardens House, Suite
117, 35-37 Grosvenor Gardens,
London SW1 W OBS, United
Kingdom; THE ESTATE OF ROGER
ROXAS; GOLDEN BUDHA
CORPORATION, a corporation
                                     
                MERRILL LYNCH v. ARELMA, INC.           5029


organized and existing under the        
laws of the State of Georgia, with
a registered office at 710 West
First Street, Blue Ridge, Georgia
30513, and a mailing address at
260 Carrollton St., Buchanan, GA
30113; PHILIPPINE NATIONAL BANK,
                         Defendants,
                 and
MARIANO J. PIMENTAL, on behalf of       
himself and all other persons
similarly situated,
                Defendant-Appellee,
REPUBLIC OF THE PHILIPPINES;
PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT, a government
agency of the Republic of the
Philippines,
              Defendants-Appellants.
                                        

MERRILL LYNCH, PIERCE,                  
FENNER AND SMITH, INCORPORATED,
a corporation organized and                   No. 04-16538
existing under the laws of the
State of Delaware with its
principal place of business in New
                                               D.C. No.
                                            CV-00-00595-MLR
York, New York,                                 OPINION
                  Plaintiff-Appellee,
                 v.
                                        
5030           MERRILL LYNCH v. ARELMA, INC.


ENC CORPORATION; ARELMA, INC., a     
corporation organized and existing
under the laws of Panama with a
permanent address at Ave. Justo
Alosemena y Calle 41 Este, No.
40-59 Pte al Colegio Immeculada,
Panama 1. Rep. de Panama, and a
mailing address at c/o Suntrust
Investment Co. S.A., rue de
Jargonnant 2, P.O. Box 76, 1211
Geneva 6, Switzerland; SUNTRUST
INVESTMENT CO., S.A., a
corporation organized and existing
under the laws of Switzerland with
an address at rue de Jargonnant 2,
P.O. Box 76, 1211 Geneva 6,
Switzerland; JOHN K. BURNS, a        
citizen of the United States, with
an address at 300 Wacker Drive,
Suite, 900, Chicago, Illinois,
60606; THE ESTATE OF FERDINAND
E. MARCOS; IMELDA R. MARCOS;
FERDINAND R. MARCOS, JR.; MARIA
IMELDA MARCOS; IRENE MARCOS
ARANETA; FRONTIER RISK CAPITAL
MANAGEMENT, L.C.C., a limited
liability company organized and
existing under the laws of the
State of Nevada, with a registered
office at 6100 Neil Road, Suite
500, Reno, NV. 89511 and an
address at 300 Wacker Drive,
Suite 900, Chicago, IL 60606;
                                     
                MERRILL LYNCH v. ARELMA, INC.   5031


GROSVENOR CAPITAL LTD., a              
company organized and existing
under the law of the United
Kingdom, with an address at
Grosvenor Gardens House, Suite
117, 35-37 Grosvenor Gardens,
London SW1 W OBS, United
Kingdom; PHILIPPINE NATIONAL
BANK; REPUBLIC OF THE PHILIPPINES;
PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT, a government
agency of the Republic of the
Philippines,
                        Defendants,
                 and                   
THE ESTATE OF ROGER ROXAS;
GOLDEN BUDHA CORPORATION, a
corporation organized and existing
under the laws of the State of
Georgia, with a registered office at
710 West First Street, Blue Ridge,
Georgia 30513, and a mailing
address at 260 Carrollton St.,
Buchanan, GA 30113,
             Defendants-Appellants,
MARIANO J. PIMENTAL, on behalf of
himself and all other persons
similarly situated,
                Defendant-Appellee.
                                       
5032             MERRILL LYNCH v. ARELMA, INC.
        Appeal from the United States District Court
                 for the District of Hawaii
         Manuel L. Real, District Judge, Presiding

                  Argued and Submitted
         March 14, 2005—San Francisco, California

                       Filed May 4, 2006

Before: John T. Noonan, Sidyney R. Thomas, Circuit Judges,
           and James L. Robart,* District Judge.

                   Opinion by Judge Noonan




 *The Honorable James L. Robart, United States District Judge for the
Western District of Washington, sitting by designation.
5034           MERRILL LYNCH v. ARELMA, INC.


                        COUNSEL

Stephen V. Bomse, San Francisco, California, for Republic of
the Philippines.

Jay R. Ziegler, Los Angeles, California, for Arelma, Inc. and
Philippine National Bank.

Daniel C. Cathcart, Los Angeles, California, for defendants-
appellants Golden Budha Corp. and Estate of Roxas.
                MERRILL LYNCH v. ARELMA, INC.             5035
Robert A. Swift, Philadelphia, Pennsylvania, for defendant-
appellee Mariano J. Pimental.


                         OPINION

NOONAN, Circuit Judge:

   In this interpleader action, appeal is made by the several
parties dissatisfied with the decision of the district court
awarding the funds in dispute to the Class of Human Rights
Victims represented by Mariano Pimental (Pimental). We
hold that the Republic of the Philippines and the Presidential
Commission on Good Government (the PCGG) (collectively,
the Republic) are not indispensable parties under Fed. R. Civ.
P. 19(b). We affirm the judgment of the district court as modi-
fied below.

              PARTIES AND PROCEEDINGS

   Interpleader was begun on September 21, 2000 by Merrill,
Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), the cus-
todian of the assets of Arelma, S.A. (Arelma), now amounting
to approximately $35 million. The Merrill Lynch account was
found by the district court to have been established in 1992
by a deposit of $2 million by Ferdinand E. Marcos, then the
president of the Republic. The shares of Arelma, a Panama-
nian corporation, are now held in escrow by the Philippine
National Bank, pending an ownership determination by the
Philippine courts.

   The Republic was made a defendant in the interpleader and
successfully asserted its sovereign immunity. In re Republic
of the Philippines, 309 F.3d 1143, 1149-52 (9th Cir. 2002).
The Republic now maintains that it is an indispensable party
inasmuch as the Republic asserts that the Arelma assets were
acquired by Marcos illegally and never lawfully belonged to
5036            MERRILL LYNCH v. ARELMA, INC.
him but from the beginning of his acquisition belonged to the
Republic. See An Act Declaring Forfeiture in Favor of the
State of Any Property Found to Have Been Unlawfully
Acquired by Any Public Officer or Employee and Providing
for the Proceeding Therefor, Republic Act No. 1379 (1955)
(Forfeiture Act). In the 2002 appeal here, we ruled that the
Republic was a necessary party but declined to rule that the
Republic was indispensable. We stayed the action. Republic
of the Philippines, 309 F.3d at 1153.

   Pimental is the representative of 9,539 persons who
brought suit against Marcos after his fall from power and in
1996 won a judgment against his estate of nearly $2 billion.
In re Estate of Ferdinand E. Marcos Human Rights Litiga-
tion, 103 F.3d 767 (9th Cir. 1996). This class, composed of
victims of a rough and rapacious ruler, who often exercised
arbitrary power, is a group whose sufferings naturally evoke
sympathy. The district court dissolved the stay and awarded
all the Arelma assets to them.

   Arelma, that is the corporation itself, and the Philippine
National Bank, the escrow holder of its stock, have filed a sin-
gle brief contending that Arelma is an indispensable party and
that the district court lacked jurisdiction over Arelma.

  The Estate of Roger Roxas and the Golden Budha (sic)
Corporation have similar interests. The Yamashita Treasure
was discovered by Roxas and stolen from Roxas by Marcos’s
men. Roxas was tortured and imprisoned, giving rise to
human rights claims valued at $6 million. Roxas formed a
corporation to which he assigned his rights in the treasure; the
corporation, for reasons connected with the warrants issued to
Roxas, carries a misspelled name. The Estate of Roger Roxas
and the corporation (collectively Roxas) won an initial judg-
ment against Imelda Marcos and the Estate of Ferdinand Mar-
cos. Roxas v. Marcos, 969 P.2d 1209 (Haw. 1998). The
Hawai’i Supreme Court has allowed Roxas’ judgment against
Imelda Marcos to stand, while holding that the Estate of Fer-
                MERRILL LYNCH v. ARELMA, INC.               5037
dinand Marcos could not be bound by that judgment. Id. at
1244. Roxas claims the Arelma assets both as a creditor of
Marcos and on the basis that the $2 million used by Marcos
to set up the Merrill Lynch account were most probably
derived from the Yamashita Treasure and can be traced to the
property stolen from Roxas.

  Other parties named in the caption of the case have not pur-
sued the appeal.

                          ANALYSIS

   [1] The case is governed by Fed. R. Civ. P. 19. The first
section of the rule speaks of “persons needed for just adjudi-
cation.” The Republic falls within this section because, as the
rule puts the matter, the Republic “claims an interest relating
to the subject of the action and is so situated that the disposi-
tion of the action in [its] absence may (i) as a practical matter
impair or impede [its] ability to protect that interest or (ii)
leave any of the persons already parties subject to a substan-
tial risk of incurring double, multiple, or otherwise inconsis-
tent obligations by reason of [its] claimed interest.” Such a
party should be joined to the action. Rule 19(a). The rule goes
on to prescribe what a court should do “whenever joinder is
not feasible.” In such a case, “the court shall determine
whether in equity and good conscience the action should pro-
ceed among the parties before it, or should be dismissed, the
absent person being thus regarded as indispensable. The fac-
tors to be considered by the court include: first, to what extent
a judgment rendered in the person’s absence might be prejudi-
cial to him or those already parties; second, the extent to
which, by protective provisions in the judgment, by the shap-
ing of relief, or other measures, the prejudice can be lessened
or avoided; third, whether a judgment rendered in the person’s
absence will be adequate; fourth, whether the plaintiff will
have an adequate remedy if the action is dismissed for non-
joinder.” Rule 19(b).
5038             MERRILL LYNCH v. ARELMA, INC.
   [2] We have determined that the Republic is a necessary
party in this proceeding. That determination appears to mean
that for a just disposition of the assets it is necessary that the
Republic participate. In ordinary speech, a necessary party
would be an indispensable party. Rule 19(b), however, distin-
guishes between necessary and indispensable parties. Rule
19(b) indicates that indispensability must meet a higher stan-
dard than necessity. Indispensability “can only be determined
in the context of particular litigation.” Provident Bank v. Pat-
terson, 390 U.S. 102, 118 (1968). In determining indispens-
ability, we apply the criteria supplied by Rule 19(b) itself:
equity and good conscience. Id. at 109. Only if equity and
good conscience require it is a necessary party also indispens-
able.

    In an appeal from the district court’s dissolution of the stay,
we came close to saying that the Republic was not indispens-
able. We said: “the district court . . . held a hearing and
entered findings of fact regarding the impact of the Philippine
litigation and the propriety of going forward in the absence of
necessary parties, i.e., the Republic and PCGG. We conclude
that [the] district court ultimately acted within the spirit of this
court’s mandate and properly exercised its discretion.” Merrill
Lynch v. Pimental, Nos. 03-16742, 03-16743, at 3-4 (9th Cir.
Feb. 20, 2004) (per curiam). Pimental argues that implicitly
our decision found no parties to be absent but indispensable.
We, however, were addressing only the decision to lift the
stay. Our decision does not have res judicata effect on the
question of indispensability here presented.

   The phrase “equity and good conscience” in our judicial
usage is coterminous with the first opinions of the United
States Supreme Court. See Hollingsworth v. Ogle, 1 U.S. 257
(1788). Undoubtedly in its earlier usage, equity brought to
mind a fairness sought by the chancery courts that tran-
scended statutory law and “good conscience” referred to an
interior moral arbiter regarded as the voice of God. As the
phrase has become domesticated and invoked in modern
                 MERRILL LYNCH v. ARELMA, INC.               5039
times, see, Montana v. Crow Tribe of Indians, 523 U.S. 696,
707 (1998), the distinction of its two elements has blurred,
and it has a secular rather than religious cast. Still, its unique
appearance in Rule 19 of the Federal Rules of Civil Procedure
emphasizes the flexibility that a judge may find necessary in
order to achieve fairness and the moral weighing that should
attend the judge’s choice of solutions, a choice to be marked
by “mercy and practicality.” Hecht v. Bowles, 321 U.S. 321,
329 (1944).

   [3] What do equity and good conscience now require here?
First, the general rule is that a sovereign need not forfeit its
immunity to protect its assertion of indispensability. In the
usual case of interpleader, the sovereign is immune and indis-
pensable and so can cause dismissal of the action. This gen-
eral rule has been developed in cases involving Indian tribes.
For example in, Makah Indian Tribe v. Verity, 910 F.2d 555
(9th Cir. 1990) we held that where the Makah Indian Tribe
sought a reallocation of fishing rights beyond the three-mile
limit, any reallocation would affect the rights of 23 other
Indian tribes whose sovereign immunity prevented them
being made parties. Prejudice to these tribes was inevitable;
no relief could be shaped and no adequate remedy could be
given that would remove the prejudice. In equity and good
conscience, the case had to be dismissed for want of indis-
pensable parties. Similarly, in Manybeads v. United States,
209 F.3d 1164 (9th Cir. 2000) a difficult controversy had been
settled by an Accommodation Agreement entered into by the
Hopi Tribe, the Navajo Nation and representatives of individ-
ual Navajos and by a Settlement Agreement reached between
the Hopi Tribe and the United States. A few Navajos who
were dissatisfied challenged the agreements in a suit directed
against the United States. We ended the litigation by holding
that the Hopi Tribe was an indispensable party because upset-
ting the agreement would inflict substantial monetary loss on
the Hopi Tribe and affect its peaceful relations with the Nav-
ajo Nation. As a sovereign, the Hopi Tribe could not be sub-
jected to the suit. Indispensable, it was absent and so put an
5040            MERRILL LYNCH v. ARELMA, INC.
end, in equity and good conscience, to the underlying litiga-
tion. A fortiori, when the sovereign is a foreign state, preju-
dice to it is a powerful consideration. However, under the
guidance of equity and good conscience, it is not the sole con-
sideration.

   [4] Second, the Republic’s right in the United States to
reclaim the spoils of office from Marcos has been unques-
tioned since Republic of the Philippines v. Marcos, 862 F.2d
1355 (9th Cir. 1988) (en banc). The Republic has set up the
PCGG to effect this end. It is now eighteen years since the
1988 decision and four years since we stayed this action. The
shares of Arelma have been since 1995 in escrow at the Phil-
ippine National Bank. In all this time, the Republic has not
obtained a judgment that the assets in dispute belong to it. We
do not hold the Republic guilty of laches, but we do note as
an equitable consideration that its failure to secure a judgment
affecting these assets is a factor to be taken into account.

   Any judgment entered in this action cannot bind the Repub-
lic because it is not a party to the action. See Idaho ex rel.
Evans v. Oregon, 444 U.S. 380, 386 (1980). Consequently, if
we act here, the Republic would remain free to sue for the
Arelma assets in a forum of its choice. True, unless it acts
with alacrity, the assets may be distributed after judgment
here and be beyond recapture. After the assets are distributed,
the Republic might seek the equivalent of the assets from their
holder, Merrill Lynch, in New York where they were
invested. But it would be confronted with the New York stat-
ute of limitations of six years for its underlying claim. See
Stafford v. International Harvester Co., 668 F.2d 142, 147 (2d
Cir. 1981); NY CPLR § 213 (misappropriation of public prop-
erty). Tolling by Marcos’ time in office would not help it. The
generous provision for recapture of the assets provided by the
new constitution of the Philippines would not trump New
York law. In practical effect, a judgment in this action will
deprive the Republic of the Arelma assets.
                MERRILL LYNCH v. ARELMA, INC.               5041
   [5] Third, we note the presence in this action of victims of
the former president of the Republic. The class represented by
Pimental has secured a judgment against Marcos of almost $2
billion, which the assets in dispute will scarcely satisfy. None-
theless, the symbolic significance of some tangible recovery
is not to be disregarded, and if the recovery is distributed pro
rata among the individuals, it will have monetary meaning for
the poor among them. The counter consideration, that most of
the victims are citizens of the Philippines and should find
redress from their own government, is outweighed by the fact
that the Republic has not taken steps to compensate these per-
sons who suffered outrage from the extra-legal acts of a man
who was the president of the Republic. In good conscience,
can we deny some small measure of relief to the class whose
members have been found to have been grievously injured
and who have the final judgment of a court assessing their
wrongs and fixing their remedy?

   Roxas was a victim, too. His injury was suffered before the
date used to determine the class. He, too, has a judgment
against Marcos, which resulted in an award of damages that
has been affirmed on appeal. Roxas v. Marcos, 109 Hawai’i
83 (2005) (unpublished). Should he, an early victim of Mar-
cos, recover more in this action than the victims comprising
the class? Roxas’s claim that the assets could be traced to the
Merrill Lynch account was not accepted by the district court.
But if it were accepted, we believe that equity could assign
him no more than the pro rata share due any class member;
it is fair to treat him as entitled to this much and no more.

  [6] A final consideration: the res is in the United States. It
cannot be finally disposed of except by the judgment of a
court in the United States. We have been instructed by the
example of the Supreme Court to envisage how a lawsuit
involving assets in dispute would play out in the light of the
decision made on interpleader. See Provident Bank, 390 U.S.
102 at 112-117. We do so now:
5042            MERRILL LYNCH v. ARELMA, INC.
   Scenario one: We dismiss this action. Roxas sues Merrill
Lynch in New York for the assets asserting conversion. The
Republic intervenes, asserting its claim. The New York court
holds the Republic barred by the six year statute of limita-
tions. The court rejects the Republic’s appeal to toll the stat-
ute when Marcos was in office, because Marcos left in 1986;
the court also finds that the post-Marcos constitution of the
Republic does not affect the New York limitation on actions.
Roxas takes the assets to the extent of his judgment. Scenario
two: The same, except the successful plaintiff in New York
is Pimental. Scenario three: The plaintiff is the Republic. The
Republic is time-barred. Pimental and Roxas intervene and
obtain their proportionate share of the assets. Realistically, we
cannot envisage a lawsuit in which the Republic will prevail.

   [7] In terms of the four factors set out by Rule 19(b) as
included among those “to be considered,” the Republic will
not be prejudiced because it has no practical likelihood of
obtaining the Arelma assets and so there is no need of lessen-
ing prejudice to it; judgment rendered in its absence will be
adequate; if we dismiss the action for nonjoinder of the
Republic, Pimental and Roxas will be required to sue again in
New York, a needless repetition that will not benefit the
Republic. No injustice is done it if it now loses what it can
never effectually possess.

   [8] As the district court has determined, Arelma is a shell
corporation, and the court may look through the corporate
form to Marcos, the owner of its assets. Chung v. Animal
Clinic, Inc., 636 P.2d 721, 723 (Haw. 1981). Accordingly,
neither Arelma itself nor the Philippine National Bank now
have an interest to be protected. Merrill Lynch risks being
sued again, but it has indicated no dissatisfaction with the
judgment.

  Accordingly, we AFFIRM the judgment of the district
court, modified to allot to Roxas a share of the assets no
greater than that of any class member.
