Case Digest (G.R. No. 207246) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In G.R. No. 207246, decided November 22, 2016 and rendered by the En Banc Supreme Court in Manila, petitioner Jose M. Roy III assailed Securities and Exchange Commission Memorandum Circular No. 8, Series of 2013 (“SEC MC No. 8”), which set out guidelines to determine compliance with Filipino-foreign ownership limits in nationalized or partly nationalized industries under Section 11, Article XII of the 1987 Constitution. Roy argued that SEC MC No. 8 flouted the Court’s earlier rulings in Gamboa v. Finance Secretary Teves—the June 28, 2011 Decision (the Gamboa Decision) and the October 9, 2012 Resolution (the Gamboa Resolution)—which defined “capital” as shares entitled to vote in director elections and held that the 60% Filipino ownership requirement must apply separately to each class of shares, including preferred nonvoting shares entitled to vote on eight key corporate matters. Respondents SEC, its Chairperson Teresita J. Herbosa, and PLDT Co. moved to dismiss, questioning pro Case Digest (G.R. No. 207246) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Gamboa Ruling
- June 28, 2011 Decision (Gamboa Decision)
- Defined “capital” in Article XII, Section 11 of the 1987 Constitution as shares entitled to vote in director elections.
- Directed the SEC to apply this definition to determine foreign ownership in PLDT.
- October 9, 2012 Resolution (Gamboa Resolution)
- Denied motions for reconsideration with finality.
- Clarified that the 60-40 Filipino-foreign ownership rule applies separately to each class of shares, whether voting or non-voting.
- SEC Guidelines and Public Consultation
- November 2012–January 2013: SEC drafted guidelines, conducted public dialogues; received comments including from Roy.
- May 20, 2013: SEC issued Memorandum Circular No. 8, series of 2013 (MC No. 8), prescribing:
- 60% Filipino ownership must apply to (a) all outstanding voting shares; and (b) all outstanding shares, whether voting or not.
- Filing of Petitions and Interventions
- June 10, 2013: Roy filed petition for certiorari under Rule 65 seeking to annul MC No. 8.
- July 30, 2013: Gamboa, et al. granted leave to intervene, filed matching petition-in-intervention.
- September 2013–June 2016: SEC, PLDT, PSE and Sharephil filed comments and interventions opposing the petitions.
Issues:
- Procedural
- Is certiorari under Rule 65 the proper remedy to challenge MC No. 8?
- Does direct resort to the Supreme Court violate the hierarchy of courts?
- Do petitioners have the requisite standing to invoke judicial review?
- Did petitioners fail to join indispensable parties (other public utilities and their shareholders)?
- Substantive
- Did the SEC gravely abuse its discretion in issuing MC No. 8 by omitting the requirement that the 60-40 rule apply to each share class?
- Is MC No. 8 consistent with the Gamboa Decision and Resolution?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)