Federal Judge Declines to Dismiss Holocaust-Reparations Suit

The New York Times, 8 March 2001

A federal judge in New York, presiding over Holocaust litigation against German banks, yesterday refused to dismiss a class-action lawsuit that stands in the way of a multibillion-dollar settlement of the Nazi-era claims.

Judge Shirley Wohl Kram, in the United States District Court in Manhattan, concluded that it would be unjust to dismiss the lawsuit even though some lawyers have said a dismissal would allow more than one million individuals who had been slave laborers during World War II to be paid from a compensation fund approved by the banks.

Judge Kram noted that the compensation would be distributed by a yet-to-be-financed German foundation set up as the exclusive forum for the resolution of all labor and property claims against German entities.

The judge said she could not dismiss the lawsuit without assurance that the foundation had money and that the claims of people who could not yet appear before the court would be handled fairly. “Many of the absent plaintiffs in this case,” Judge Kram noted, “have waited decades to receive compensation for their property claims, and it would be unjust to divert their claims to a forum whose funding remains in question.”

“Granting the instant motion,” the judge continued, “would effectively block absent class members from pursuing any remedy other than the foundation, which is not yet fully funded.”

The lawsuit, though filed as a class action, has not been formally certified and all the potential plaintiffs have not yet been notified.

The plaintiffs had asked that their lawsuit be dismissed because of an out-of-court settlement setting up the $4.6 billion fund to compensate people enslaved by the Nazis. The money is to be provided in equal parts by German industry and the German government.

“I don't have any comment at this time. I have to absorb it,” said Burt Neuborne, a lawyer for the plaintiffs.

Volker Beck, one of the compensation fund's trustees, said the decision “costs time that we don't have.” He said he was bitter about Judge Kram's ruling. “The American government must act now,” said Mr. Beck in a statement from Germany. “It promised comprehensive legal peace for German companies in the United States. Now it must keep its word.”

Richard Dolan, a lawyer representing a committee designated to distribute money to Austrian Holocaust survivors, said, “The key words in this decision were `at this time.' It is an open invitation for the people who should solve this problem to solve this problem.”

The State Department had urged Judge Kram to dismiss the lawsuit, which was brokered with American government representatives.

[Reuters reported that the Bush administration had asked Stuart E. Eizenstat, the Clinton administration's negotiator on Holocaust reparations, to resolve outstanding issues including Judge Shirley Wohl Kram's decision. Mr. Eizenstat, formerly deputy secretary of the treasury and now a lawyer in Washington, said, “The Bush administration has made it clear it is as committed as the Clinton administration to legal peace for German companies and discussions are being held with lawyers on all sides to determine the most expeditious course of action.”]

More than one million people who had been forced to work by the Nazis, most of them Central and Eastern Europeans, are expected to be eligible for payments. The fund will also be used to compensate people subjected to Nazi medical experiments and some with other Holocaust-related claims.