Nuremberg in America: Litigating the Holocaust in United States Courts Michael J
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University of Richmond Law Review Volume 34 | Issue 1 Article 3 2000 Nuremberg in America: Litigating the Holocaust in United States Courts Michael J. Bazyler Follow this and additional works at: http://scholarship.richmond.edu/lawreview Part of the Litigation Commons Recommended Citation Michael J. Bazyler, Nuremberg in America: Litigating the Holocaust in United States Courts, 34 U. Rich. L. Rev. 1 (2000). Available at: http://scholarship.richmond.edu/lawreview/vol34/iss1/3 This Article is brought to you for free and open access by the Law School Journals at UR Scholarship Repository. It has been accepted for inclusion in University of Richmond Law Review by an authorized editor of UR Scholarship Repository. For more information, please contact [email protected]. ARTICLE NUREMBERG IN AMERICA: LITIGATING THE HOLOCAUST IN UNITED STATES COURTS Michael J. Bazyler * TABLE OF CONTENTS I. Introduction ...................................... 5 II. Litigating Holocaust Claims before 1996 .............. 19 A. GeneraliInsurance Litigation .................... 19 B. Bernstein Cases ............................... 20 C. Handel v. Artukovic ............................ 22 D. Princz Litigation .............................. 23 E. Cases against the Claims Conference .............. 25 F. Early Nazi-Stolen Art Cases ..................... 28 III. Claims against the Swiss .......................... 31 A. Federal Class Action against Swiss Banks .......... 31 1. Plaintiffs' Claims ........................... 33 a. Dormant Account Claims .................. 33 b. Looted-Assets Claims ..................... 37 c. Slave Labor Claims ...................... 38 2. Defendant Banks' Defenses ................... 39 * Professor of Law, Whittier Law School; Research Fellow, Holocaust Educational Trust, London, U.K; Associate, Davis Center for Russian Studies, Harvard University. B.A., 1974, University of California, Los Angeles; J.D., 1978, University of Southern California Law Center. Portions of this article were delivered on April 12,1999 at the Seventh Annual Austin Owen Lecture at the University of Richiond School of Law, Richmond, Virginia. See Michael J. Bazyler, Litigatingthe Holocaust, 33 U. RICH. L. REV. 601 (1999). This article is dedicated to the members of The "1939" Club, that heroic group of Holocaust survivors who, with their youthful energy and passion, provided me with the inspiration and motivation for this project. UNIVERSITY OF RICHMOND LAW REVIEW [Vol. 34:1 a. Defendant Banks' Procedural Grounds for Dismissal ........................... 40 (i) Existence of Alternative Resolution Mechanisms ............. 40 (ii) Lack of Standing ................... 42 (iii) Lack of Subject Matter Jurisdiction ....................... 43 (a) Lack of Diversity Jurisdiction ................. 43 (b) Lack of Federal Question Jurisdiction ................. 44 (c) Lack of Jurisdiction under the Alien Tort Claims Act ...... 46 (iv) Forum Non Conveniens ............. 47 (v) Failure to Join Necessary Parties ........................... 48 (vi) Need for Stay for Discovery .......... 49 b. Defendant Banks' Substantive Grounds for Dismissal .................... 49 (i) Choice of Law ..................... 49 (ii) Failure to State Causes of Action ..... 50 (a) Dormant Account Claims ...... 50 (b) Looted-Assets Claims ......... 55 (c) Slave Labor Claims ........... 57 B. Other Actions against the Swiss Banks ............ 58 1. Action in California State Court ............... 58 2. Action against the Swiss National Bank ........ 60 C. Factors Leading to Settlement of the Swiss Bank Litigation: The Sapir Settlement, the Meili Episode, and the Power of Sanctions ...... 61 1. Settlement with Estelle Sapir ................. 62 2. The Meili Episode .......................... 64 3. The Power of Sanctions: September 1, 1998 Sanctions Deadline ......................... 65 D. The August 1998 Settlement ..................... 68 1. Parties Paying the $1.25 Billion ............... 72 2. Parties Released from Further Litigation ................................. 74 3. Distribution Issues ......................... 76 a. Claimants to the Settlement Proceeds ....... 77 20001 INTRODUCTION b. Distribution System for the Settled Funds ................................. 87 c. Payment of Attorneys' Fees ................ 88 IV. Claims against the European Insurance Companies ...................................... 93 A. The Claims against the European Insurance Companies .......................... 93 1. Factual Background of the Insurance Claim s ................................... 93 2. Litigation against the European Insurers ................................. 101 a. Federal Litigation ...................... 102 (i) Cornell v. Generali ................... 102 (ii) Winters v. Generali ................... 106 (iii) Stahl v. Victoria Holding AG .......... 109 b. State Court Litigation ................... 123 (i) Stern v. Generali ..................... 123 (ii) Other California Insurance Cases ....... 134 B. Defenses Presented by the European Insurers ..... 136 1. Substantive Defenses ....................... 137 a. Nationalization of Local Offices ............ 137 b. Failure to Pay Premiums ................. 140 c. Policies Became Worthless ............... 140 d. Sufficient Proof Lacking to Make Payment .. 142 e. Claimants Already Received Payment ...... 144 2. Procedural Defenses ....................... 144 a. Lack of Jurisdiction ..................... 144 b. Forum Non Conveniens .................. 146 c. Choice-of-Forum Clause .................. 148 C. The Power of Sanctions: The International Commission on Holocaust Era Insurance Claim s ..................................... 149 V. Stolen Art Claims ............................... 161 A. Goodman v. Searle ............................ 166 B. Rosenberg v. Seattle Art Museum ................ 171 C. The Museum of Modern Art ("MOMA")! Schiele Litigation ............................. 176 D. Warin v. Wildenstein ......................... 181 E. The Failure of Litigation ....................... 183 VI. Slave Labor Claims .............................. 191 A. Background ................................. 191 UNIVERSITY OF RICHMOND LAW REVIEW [Vol. 34:1 B. The German Fund Proposal and Fear of American Litigation ........................... 194 C. Suits Filed to Date ............................ 203 1. Iwanowa v. Ford Motor Co................... 203 2. Other Slave Labor Actions .................. 207 D. The Dismissal of the Iwanowa and Degussa/ Siemens Lawsuits ............................ 209 1. The Dismissal of the Iwanowa Action .......... 209 a. Iwanowa's Claims under International Law .................................. 210 (i) Subject Matter Jurisdiction under the Alien Tort Claims Act ("ATCA") ....................... 210 (ii) Treaties with Postwar Germany and Private Rights of Action ........ 212 (iii) Postwar Treaties and Statute of Limitations .................... 216 b. Iwanowa's Claims under U.S. Law ......... 218 c. Iwanowa's Claims under German Law ....... 219 d. Nonjusticiability ........................ 222 2. The Dismissal of the Degussa/Siemens Actions .................................. 226 3. Effect of the Dismissal of the Actions ........... 232 VII. Miscellaneous Cases ............................. 237 A. Claims against Non-Swiss Banks ................ 237 1. Claims against the German and Austrian Banks ................................... 237 2. Claims against the French Banks ............. 243 B. Claims against Bayer and other German Pharmaceutical Firms ......................... 249 C. Claims against Volkswagen for Maintaining a "Nazi Nursery"............................. 256 D. Claims against American Companies ............. 259 VIII. Conclusion ...................................... 263 Appendix A ........................................ 265 Appendix B ........................................ 272 20001 INTRODUCTION "The Holocaust was not only the greatest murder, it was the greatest theft in history." -Deborah Senn, Washington State Commissioner of Insurance and former chair of the Working Group on Holocaust and Insurance Issues of the National Association of Insurance Commissioners.' "There can be no moral closure on the worst crime of this century, of this millennium andpossibly of all world history. There can only be an effort to make some moral recompense to do imperfect justice to those who still survive." -Stuart E. Eizenstat, U.S. Deputy Treasury Secretary and Special Representative of the President and the Secretary of State for Holocaust Issues.2 I. INTRODUCTION The phrase "opening the floodgates of litigation" connotes a pejorative meaning in American legal argument. Most often, it is used by courts as a reason not to allow a certain case to proceed for fear that it would overburden both courts and society with a new class of lawsuits.3 1. Alan Abrahamson, HolocaustVictims' Kin Urged to PursueAssets, L.A- TIMES, July 14, 1998, at A3. See generally RIcHARD Z. CHESNOFF, PACK OF THIEVES: How HITLER AND EUROPE PLUNDERED THE JEWS AND COMITED THE GREATEST THEFT IN HISTORY (1999). 2. On the Record Briefing on Talks to Discuss Compensation for Forced and Slave Labor, U.S. Dep't of State (Oct. 7, 1999). 3. See, e.g., Rose v. Lundy, 455 U.S. 509, 547 (1982) (noting the "flood of litigation); Radovich v. NalI Football League, 352 U.S. 445,450 (1957) (noting the "flood of litigation"); Shell Offshore, Inc. v. Dep't of Interior, 997 F. Supp. 23, 34 (D.D.C. 1998) (noting "the floodgates of litigation will be left ajar");