Barragan

Defendant Banco BCH appeals from a default judgment in favor of plaintiffs Roberto and Aida Barragan, two former depositors. Stated in this way there is little to distinguish Banco BCH’s appeal from the routine appeals from default judgments frequently reviewed by this court. However, this case is unique in at least two ways. First, Banco BCH is a nationalized Mexican bank raising issues of foreign sovereign immunity and the act of state doctrine. Second, the default judgment totals $3 million— $1 million compensatory damages and $2 million punitive damages. The magnitude of the judgment, however, cannot be used as the basis for our decision. The amount is irrelevant. Every appeal from a default judgment touches upon the integrity of the judicial process and the due process right of the nonappearing defendant. Accordingly, careful appellate scrutiny is required in all cases regardless of the amount in controversy. After examining this case according to principles which govern all default judgments, we conclude the default was properly entered. We decide, however, the compensatory damages must be reduced to $500,000, the amount set forth in the prayer for relief. In…