1IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
IN RE AUSTRIAN AND GERMAN ) Master File No.
BANK HOLOCAUST LITIGATION ) 98 Civ. 3938 (SWK)
THIS DOCUMENT RELATES TO: )
ALL ACTIONS )
STATEMENT OF INTEREST OF THE UNITED STATES
The United States respectfully submits this Statement of Interest and attached Executive Agreement and Joint Statement for the purpose of attending to the interests of the United States in connection with these actions.1 Through this statement, the United States expresses both its foreign policy interests with regard to the German Foundation “Remembrance, Responsibility, and the Future” (the “Foundation”), which was created to make payments to former slave and forced laborers and other victims of the Nazi era and World War II, and the public interest in the cooperative resolution of claims for restitution and compensation arising out of the Holocaust. In this statement, the United States takes no position on the merits of the underlying legal claims or arguments advanced by plaintiffs or defendants. Of course, the Court need not resolve these legal issues in the context of a voluntary dismissal, so long as the requirements of Rule 23(e), Fed. R. Civ. P., are met. The United States believes that those requirements are met in this instance, and that analysis of the four questions posed by the Court in its Order of October 27, 2000, confirms that conclusion. In sum, because of the United States’ strong interests in the success of the Foundation, and because such success is predicated on the dismissal of this litigation, the United States recommends dismissal on any valid legal ground.
1. United States Policy on Holocaust Claims
The policy of the United States Government with regard to claims for restitution or compensation by Holocaust survivors and other victims of the Nazi era is motivated by the twin concerns of justice and urgency. See Declaration of Stuart E. Eizenstat ("Eizenstat Decl."), attached as Exh. 1, ¶¶ 3, 29. No price can be put on the suffering that the victims of Nazi atrocities endured. But the moral imperative remains to provide some measure of justice to the victims of the Holocaust, and to do so in their remaining lifetimes. Id. ¶ 3. Today, 55 years after the Holocaust, the survivors are elderly and are dying at an accelerated rate. Id. ¶ 29. The United States believes, therefore, that concerned parties, foreign governments, and non-governmental organizations should act to resolve matters of Holocaust-era restitution and compensation through dialogue, negotiation, and cooperation, rather than subject victims and their families to the prolonged uncertainty and delay that accompany litigation. Id. ¶ 3.
The creation of the German Foundation “Remembrance, Responsibility, and the Future” (the “Foundation”), in favor of which most parties now seek to have this litigation dismissed, is an example of the successful implementation of this United States policy. Id. ¶¶ 28-30. The history of the negotiations that led to the Foundation’s creation, a description of the benefits available through the Foundation and how the Foundation will operate, and the basis for the United States’ conclusion that it would be in the United States’ interests for the Foundation to be the exclusive remedy for all claims against German companies arising out of the Nazi era and World War II are set forth in this statement.
2. History of the Negotiations Leading to Creation of the Foundation
In the Fall of 1998, then-Under Secretary of State Stuart E. Eizenstat was asked by the German Government to help facilitate a resolution of class action lawsuits filed in U.S. courts arising from slave and forced labor during the Nazi era. Eizenstat Decl. ¶¶ 1, 5. During the subsequent year and a half, Eizenstat, who later became Deputy Treasury Secretary, co-chaired a series of formal and informal discussions among lawyers representing victims, lawyers for German companies, and the German Government on a proposed initiative to establish a foundation to make payments to victims of slave and forced labor and all others who suffered at the hands of German companies during the Nazi era. Id.
A number of other participants were involved in the negotiations, including the State of Israel, the governments of five Central and East European countries (Belarus, the Czech Republic, Poland, Russia, and Ukraine), and the Conference on Jewish Material Claims Against Germany, a non-governmental organization created to negotiate for and administer compensation for Nazi crimes to Jewish people around the world.2 Id. ¶ 6. Through these participants and the numerous plaintiffs’ attorneys, the victims’ interests – including those of both named and absent class members – were broadly and vigorously represented. Id.
The initiative was publicly announced on February 16, 1999, by the Chancellor of Germany, Gerhard Schroeder, and a group of German companies that conceived the initiative. Id. ¶ 7. Later that Spring, Eizenstat and German Chancellery Minister Bodo Hombach led the first of twelve formal conferences to discuss the initiative. Id. Minister Hombach was later replaced by Count Otto Lambsdorff, Special Representative of the Chancellor, who co-chaired the talks to their conclusion. Id.
In December 1999, following the personal involvement of the President of the United States and of Chancellor Schroeder, the negotiations reached a major breakthrough. Id. ¶ 8. The parties agreed on two key points: that the German Government and companies would establish a foundation, capitalized by DM 10 billion, to make payments to forced laborers and others who suffered at the hands of German companies during the Nazi era and World War II, and that, in exchange, the plaintiffs would voluntarily dismiss their lawsuits against German companies asserting claims arising out of the Nazi era and World War II. Id. The United States Government further agreed to support this effort by filing a Statement of Interest indicating its own foreign policy interests. Id.
The parties agreed on detailed eligibility requirements and other procedures to govern the Foundation’s operation. Id. ¶ 9. The parties also came to agreement on precise allocations of the Foundation capital to compensate various types of injuries, and on payment levels for individual victims, described below. Id. These agreements were incorporated into draft legislation being prepared by the German Government to establish the Foundation.
In July 2000, the German Parliament passed a law creating the Foundation. Id. ¶ 11. On July 17, 2000, the parties to the negotiations gathered in Berlin to sign a Joint Statement concluding the negotiations, and expressing their support for the Foundation. Id. ¶ 12 and Exh. A. Simultaneously the United States and Germany signed an Executive Agreement, in which Germany committed that the operation of the Foundation would be governed by principles agreed by the parties to the negotiations, and the United States committed to take certain steps to assist German companies in achieving “legal peace” in the United States for claims arising out of the Nazi era and World War II. Eizenstat Decl. ¶ 12 and Exh. B.
On August 12, 2000, the law creating the Foundation was promulgated and entered into effect. Eizenstat Decl. ¶ 13. On October 19, 2000, the United States and German Governments exchanged diplomatic notes stipulating, in accordance with Article 5 of the Executive Agreement, that the agreement entered into force on the date of the exchange of notes. Id. Exh. C.
The role played by the United States in this negotiation was unique. The Executive Agreement negotiated is not a government-to-government claims settlement agreement, see generally Eizenstat Decl. Exh. B, and the United States has not extinguished the claims of its nationals or anyone else. Instead, the intent of the United States’ participation was to bring together the victims’ constituencies on one side and the German Government and companies on the other to bring expeditious justice to the widest possible population of survivors, and to help facilitate legal closure. Eizenstat Decl. ¶ 14. Among these parties, the United States facilitated the essential arrangement by which the German side would establish a DM 10 billion foundation to compensate categories of Nazi era and World War II victims, and the class action representatives in pending United States litigation (as well as anyone else who received compensation through the Foundation) agreed to give up their claims, by voluntary dismissals with respect to plaintiffs in cases in United States courts. Id. The United States further contributed its own commitment to advise U.S. courts of its foreign policy interests, described in detail below, in the Foundation being treated as the exclusive remedy for World War II and Nazi era claims against German companies, and, concomitantly, in current and future litigation being dismissed. Id.
3. Benefits and Operation of the Foundation
As established under German law, the Foundation will make payments to persons who suffered at the hands of German companies during the Nazi era, as well as those who worked as slaves or forced laborers for the Nazi regime. Id. ¶ 15; see also Law on the Creation of a Foundation “Remembrance, Responsibility and the Future,” unofficial translation (“German Law”), attached as Exh. 2, at § 2(1). The DM 10 billion Foundation capital will be used for payments to all eligible recipients as follows. Payments to former slave laborers – those who were intended to be literally worked to death – will be DM 15,000. Eizenstat Decl. ¶ 16; see also German Law §§ 9(1), 11(1). The payments to other forced laborers – those for whom living conditions were somewhat less harsh – are expected to approach DM 5,000.3 Id. In total, just over DM 8 billion of the Foundation’s capital will be used for dignified payments to former forced and slave laborers. Eizenstat Decl. ¶ 16; German Law § 9(2).
Individuals who had property, including bank deposits or other bank assets, “aryanized” or otherwise stolen or damaged by German companies are also eligible to receive payments. Eizenstat Decl. ¶ 17; German Law § 11(1). DM 200 million were set aside for pro-rata payments for property claims, with an additional DM 300 million in a humanitarian fund for individuals unable to document specific claims. Eizenstat Decl. ¶ 17; German Law § 9(4). Property claims will be processed by a 3-person committee supervised by the International Organization for Migration. Eizenstat Decl. ¶ 27; German Law § 9(6). The committee will consist of one member appointed by the United States Government, a second appointed by the German Government, and a chair to be chosen by those two members. German Law § 9(6).
While many with property claims against Germany have received compensation over the years through one of several German restitution laws, the Foundation is designed to fill in the gaps in such laws and provide payments to those whose losses have not previously been compensated. See German Law § 11(1)(3). For example, some who lived in the former Soviet bloc, or who could not obtain evidence regarding their property because it was located in the former East Germany, will be able to obtain payments for the first time through the Foundation. Id. Similarly, individuals who lived in countries occupied by the Nazis and had bank deposits or other assets stolen, but could never prove such assets were taken to Germany, are now eligible for payments. Id. The mandate of the property committee will also allow it to consider other types of claims, see id., and to formulate its own procedures and rules where not specified in the German law. Id. at § 9(6). The committee is expected to complete processing of all applications and make payments on a pro-rata basis within one year from the close of the application period. Id.
The remainder of the Foundation’s capital will be devoted to payments to those with insurance losses and other purposes. DM 500 million, plus DM 150 million from interest and the Future Fund if needed, is set aside for payments to individuals whose insurance policies were unpaid or nationalized, as well as humanitarian payments. Eizenstat Decl. ¶ 17; German Law §§ 9(4), 9(7). The insurance payments will be made through the International Commission on Holocaust Era Insurance Claims, chaired by former Secretary of State Lawrence Eagleburger, which was established to address the issue of unpaid insurance policies issued to victims of the Holocaust. Eizenstat Decl. ¶ 18. DM 700 million will go into a Future Fund, the purposes of which will include to promote tolerance and Holocaust awareness, and to support projects that benefit the heirs of those forced and slave laborers who did not survive.4 Eizenstat Decl. ¶ 19; German Law §§ 2(2); 9(7). The remaining DM 200 million of the Foundation’s initial capital will be used for administration of the Foundation and for attorneys’ fees. Eizenstat Decl. ¶ 19.
A key point regarding the Foundation is that all victims who suffered injury at the hands of German companies, including German banks, or who performed forced or slave labor for German companies or the Nazi regime, are eligible to apply for its benefits. Eizenstat Decl. ¶ 20. This includes, by definition, the plaintiffs in this litigation.
The Foundation will be run by a Board of Trustees chaired by Dr. Dieter Kastrup, German Ambassador to the United Nations, and consisting of 26 other people, evenly divided between representatives of the German Government and companies on the one hand, and representatives of the victims and the United States on the other. Id. ¶ 21; German Law § 5. The Board of Trustees has selected a three-person Board of Directors to manage the Foundation’s day-to-day operations. Eizenstat Decl. ¶ 21; German Law § 6. Those aspects of the Foundation’s operation that are not mandated by the legislation creating it will be determined by these two bodies. Eizenstat Decl. ¶ 21. All Foundation operations will be transparent and the by-laws and similar procedures governing its operation will be made public. Eizenstat Decl. ¶ 22. The Foundation is subject to legal oversight by the German Government, and will also be audited by two agencies within the German Government. Id.; see also German Law § 8.
The Foundation will not make direct payments to individuals. Instead, the Foundation will work with seven “partner organizations,” which in turn are responsible for collecting and processing applications and making payments. Eizenstat Decl. ¶ 23; German Law § 2(1). The partner organizations include five geographically-based foundations in Central and Eastern Europe (to process applications from residents of those countries), the CJMC (which will handle applications of Jews in the rest of the world), and the International Organization for Migration (responsible for all other applications). Eizenstat Decl. ¶ 23; German Law § 9(2). Each of these organizations has been allocated specific funds, based on estimated numbers of applicants, to distribute. Id.
The Foundation has begun the process to ensure that all eligible applicants worldwide are notified of its existence and their opportunity to apply for benefits. Eizenstat Decl. ¶ 24. First, the Foundation’s creation in July 2000 received extensive publicity around the world. Second, the Foundation is working in conjunction with the partner organizations to create application forms that will be mailed to extensive, existing lists of potentially eligible individuals. Third, the Foundation Board has directed each partner organization to develop a plan for publicity designed to reach the maximum number of potentially eligible individuals. Id.
The application process will be short, simple, and non-bureaucratic. Id. ¶ 25. In most cases, applicants have until April 2001 to apply (although this period can be extended if the Board determines it to be necessary). Id. Determinations of eligibility are to be made on relaxed standards of proof, and the process will be non-adversarial. Id.; see also German Law § 11(2). Each partner organization must also set up an independent and free of charge appeals process. Eizenstat Decl. ¶ 25; German Law § 19.
The Foundation also permits expedited payments to victims. Once a slave laborer, for example, is determined to be eligible, the partner organization may immediately pay half of the expected total payment (i.e., up to DM 7,500), with the balance to be paid at the end of the claims period, once all applications have been processed. Eizenstat Decl. ¶ 26; German Law § 9(9). Similarly, a forced laborer may receive 35% of the expected total payment immediately upon application. Id. In addition, the Board of Trustees has specific authority to increase the amount of the first installment payments if it deems it appropriate. Id. In any case, under this system the Foundation’s goal is to begin payments to victims during calendar year 2000. Eizenstat Decl. ¶ 26.
4. This Litigation
The consolidated actions before the Court raise claims that the Defendant German banks “aryanized” and converted for their own profit the bank deposits and assets of Holocaust victims before and during World War II. Similar claims against Austrian banks were previously settled. Motions to dismiss all actions by the German bank Defendants are pending. Subsequent to the creation of the Foundation, however, many of the Plaintiffs have now moved, or will shortly move, to dismiss their claims voluntarily.5 Pursuant to this Court’s Order of October 27, 2000, those motions are now before the Court.
1. Dismissal of this Litigation Would Be in the United States’ Foreign Policy Interests
The President of the United States has concluded that it would be in the foreign policy interests of the United States for the Foundation to be the exclusive forum and remedy for the resolution of all asserted claims against German companies arising from their involvement in the Nazi era and World War II, including without limitation those relating to compensation for slave and forced labor, “aryanization” or other confiscation of, damage to, or loss of property (including banking assets and insurance policies), subjection to medical experimentation, placement in children's homes, and other cases of personal injury. See Letter of President Clinton to Chancellor Schroeder, Dec. 13, 1999 (attached as Exh. 3); see also Eizenstat Decl. ¶ 28 and Exh. B at Art. 1(1). Accordingly, the United States believes that all asserted claims should be pursued through the Foundation instead of the courts. The United States’ interests in supporting the Foundation are explained below.
First, it is an important policy objective of the United States to bring some measure of justice to Holocaust survivors and other victims of the Nazi era, who are elderly and are dying at an accelerated rate, in their lifetimes. Eizenstat Decl. ¶ 29. Over one hundred thousand Holocaust survivors, and tens of thousands of other Americans who were forced laborers during World War II, live in the United States. Id. As noted earlier, the United States believes the best way to accomplish this goal is through negotiation and cooperation.
The Foundation is an excellent example of how such cooperation can lead to a positive result. The Foundation will, without question, provide benefits to more victims, and will do so faster and with less uncertainty, than would litigation, with its attendant delays and legal hurdles. Moreover, the Foundation will employ standards of proof that are more relaxed than would be the case with litigation. Litigation, even if successful, could only benefit those who could prove that their property was taken by German banks or other German companies subject to the jurisdiction of U.S. courts. By contrast, the Foundation will benefit all who may have been injured by German banks or other companies, whether or not they still exist today. Indeed, as a result of the participation in the Foundation not only by the German Government and German companies that existed during the Nazi era, but also by German companies that did not exist during the Nazi era, the Foundation will be able to comprehensively cover slave and forced laborers and other victims of the Nazi era and World War II. Eizenstat Decl. ¶ 30.
It is true that no amount of money could truly compensate plaintiffs for the wrongs done to them. But the payments they will receive through the Foundation will serve as a recognition of their suffering and will enable them to live with less difficulty than would be the case without the payments. In addition, creation of the Foundation will allow creation of the Future Fund, which will be dedicated in part to efforts to ensure that crimes like the Holocaust never happen again, and will also fund projects that serve to benefit the heirs of victims that did not survive. Eizenstat Decl. ¶ 31; see also Statement of Secretary of State Madeleine K. Albright (“Albright Statement”), attached as Exh. 4, at ¶ 9.
The United States, together with the participating lawyers for the victims and all other parties to the negotiations, therefore believes that the Foundation is the best means to quickly bring some measure of justice to the plaintiffs before this Court. Indeed, the United States hopes that the creation of the Foundation will serve as an example to other nations and in other cases where resolution of claims by victims of the Nazi era for restitution and compensation has not yet been achieved.
Second, “establishment of this Foundation will strengthen the ties” between the United States and its important European ally and economic partner, Germany. Albright Statement ¶ 4; see also Eizenstat Decl. ¶ 33. One of the most important reasons the United States took such an active role in facilitating a resolution of the issues raised in this litigation is that it was asked by the German Government to work as a partner in helping to make the Foundation initiative a success. Eizenstat Decl. ¶ 33. Since 1945, the United States has sought to work with Germany to address the consequences of the Nazi era and World War II through political and governmental acts, beginning with the first compensation and restitution law in post-war Germany that was passed by U.S. occupation forces. In recent years, German-American cooperation on these and other issues has been very close, and the joint effort to develop the Foundation has helped solidify the close relationship between the two countries, a relationship which is “central to American interests in Europe.” Albright Statement ¶ 4.
Germany today is a key to the security and prosperity of the broader North Atlantic Community. Eizenstat Decl. ¶ 34. Germany has been a partner of the United States in promoting and defending democracy for the last fifty years, and is vital to both the security and economic development of Europe. Germany has been a leader in efforts to create stability in Europe through expansion of NATO to include the former communist countries of Central Europe, and through the building of bridges between NATO and Russia. Germany has also been a leader in supporting integration of the European Union, and in the effort to assure that the former communist countries of Central and Eastern Europe continue their democratic development within a market economy. Our continued partnership with Germany is important to helping achieve these United States interests.
Third, the Foundation helps further the United States’ interest in maintaining good relations with Israel and with Western, Central, and Eastern European nations, from which many of those who suffered during the Nazi era and World War II come. Eizenstat Decl. ¶ 35. As a result of the close cooperation between the United States and the participating Central and Eastern European governments, a large percentage of the money allocated will go to the too-long forgotten “double victims” of Nazism and Communism. Albright Statement ¶ 6. Some one million citizens of Central and Eastern Europe were forced into labor by the Nazis, and then lived for over four decades under the iron rule of Communist governments and were denied compensation from Germany until recent years. Eizenstat Decl. ¶ 35. The Foundation represents the first comprehensive effort to assist surviving laborers in these former Iron Curtain countries, and, indeed, in other European countries.
The Government of Israel, which also was directly involved in the negotiations to create the Foundation, will see many of its citizens benefit from the Foundation’s programs and has recognized and indicated its appreciation for U.S. efforts in support of the Foundation. Moreover, “by bringing together the Central and Eastern European states and the State of Israel, the Foundation will begin a new relationship among nations and peoples who suffered so severely under Nazi terror.” Albright Statement ¶ 7.
Fourth, as the President has said, dismissal of this litigation, which touches on the foreign policy interests of the United States, would be in the foreign policy interests of the United States. See Exh. 3 at 2. The overwhelming majority of plaintiffs, the defendants, victims’ representatives, and various concerned governments are united in seeking dismissal of this litigation in favor of the remedy provided by the Foundation, and the United States strongly supports this position. The alternative to the Foundation would be years of litigation whose outcome would be uncertain at best, and which would undoubtedly last beyond the expected life span of the large majority of survivors. Ongoing litigation could lead to conflict among survivors’ organizations and between survivors and industry, conflicts into which the United States and German governments would inevitably be drawn. There would likely be threats of political action, boycotts, and legal steps against corporations from Germany and other nations, setting back European-American economic cooperation. Eizenstat Decl. ¶ 36; see also Albright Statement ¶ 8.
In addition, although the resolution of this litigation is not part of a “settlement” in name, the German companies have insisted on dismissal of all pending litigation in the United States in which Nazi era and World War II claims are asserted against German companies as a precondition to allowing the Foundation to make payments to victims. Eizenstat Decl. ¶ 37. The United States strongly supports the creation of the Foundation, and wants its benefits to reach victims as soon as possible. Therefore, in the context of the Foundation, it is in the enduring and high interest of the United States to vindicate that forum by supporting efforts to achieve dismissal of (i.e., “legal peace” for) all Nazi era and World War II claims against German companies. Id.
Fifth, and finally, the Foundation is a fulfillment of a half-century effort to complete the task of bringing justice to victims of the Holocaust and victims of Nazi persecution. “[I]t is in the foreign policy interests of the United States to take steps to address the consequences of the Nazi era, to learn the lessons of, and teach the world about, this dark chapter in Germany’s history and to seek to ensure that it never happens again.” Albright Statement ¶ 9. Since its founding, the Federal Republic of Germany has made compensation and reconciliation for wrongs committed during the Nazi era an important part of its political agenda. Although no amount of money will ever be enough to make up for Nazi-era crimes, the German Government has created significant compensation, restitution, and pension programs for Nazi-era acts that have resulted in payments of nearly $100 billion in today’s dollars. The Foundation adds another $4.3 billion to that total, and complements these prior programs. Eizenstat Decl. ¶ 38.
The United States does not suggest that these policy interests described above in themselves provide an independent legal basis for dismissal. Moreover, in this Statement, the United States takes no position on the merits of the underlying legal claims or arguments advanced by plaintiffs or defendants. Because of the United States’ strong interests in the success of the Foundation, however, and because such success is predicated on the dismissal of this litigation, the United States recommends dismissal on any valid legal ground. In the context of a voluntary dismissal, the Court need not ultimately resolve the validity of the underlying claims and arguments advanced by the parties. As we explain in the next section, it is sufficient if the Court concludes that the requirements of Rule 23(e) of the Federal Rules of Civil Procedure are satisfied.
2. The Foundation Provides a Fair Remedy For Victims of the Nazi Regime and German Companies during the Nazi Era and World War II
Because many of the cases pending before the Court were filed as class actions, they may not be dismissed without the approval of the Court. See Fed. R. Civ. P. 23(e). As the Court has already noted, see Order dated Oct. 27, 2000, at 3, before approving the dismissal, the Court is to “inquire into the terms and circumstances” of the dismissal and “ensure that it is not collusive or prejudicial.” Diaz v. Trust Territory, 876 F.2d 1401, 1408 (9th Cir. 1989). Because no class has yet been certified, however, the court need not “perform the kind of substantive oversight required when reviewing a settlement binding on the class.” Id. Rather, Rule 23(e) is satisfied if absent class members are provided such notice of the impending dismissal so as to avoid the potential prejudice from having relied on the pendency of a class action to protect their rights, and if the Court is satisfied that the interests of the class have not been conceded in order to further the interests of class representatives or counsel. Id. at 1408-09.
The Court has framed this inquiry in four questions. With respect to the first, as noted earlier, dismissal of Plaintiffs’ claims is a condition placed by German companies on creation of the Foundation. See Eizenstat Decl. ¶ 37 and Exh. A at 5. But this applies only to the claims of named plaintiffs. No claims of absent class members have been compromised.
As to the second question, the United States believes strongly that the named Plaintiffs and class counsel have not used the class action device for their private benefit or to the detriment of absent class members. One of the main reasons the United States supports the Foundation is that it will allow for potential payments to all class members, each of whom is eligible to apply under the same criteria as are any other applicants, including named class representatives. This is one manifestation of the vigorous representation of the interests of absent class members during the negotiations leading to creation of the Foundation. See Eizenstat Decl. ¶ 20. Indeed, far from sacrificing the interests of absent class members for their own, the class representatives are in fact sacrificing their own interests for the absent class members. While the class representatives and their counsel have been instrumental in helping to create a Foundation to which absent class members have equal opportunity to apply for payments, only the named representatives in the cases before this Court must dismiss their claims with prejudice before applying to the Foundation. See Joint Statement (Eizenstat Decl. Exh. A) at 6. Other claimants, including absent class members, need not waive their claims until they receive a payment from the Foundation. See German Law § 16(2).
Third, as noted before, this Court need take no action with respect to the claims of absent class members for the Foundation to come into being. Moreover, most such class members have already learned, or will soon learn, of the Foundation. In the Executive Agreement, the German Government committed to ensure that the Foundation provides appropriately extensive publicity. See Executive Agreement (Eizenstat Decl. Exh. B) Art. 1(2). This provision, which commits the Foundation to broad public notice of its existence, objectives, and the availability of funds, was created with the requirements of Rule 23(e) in mind. The Foundation has already begun taking steps to ensure that such publicity is provided. See Eizenstat Decl. ¶ 24.
Finally, with respect to the fourth question, there is no evidence to support a conclusion that absent class members’ interests were sacrificed to collusive efforts. The United States, as a facilitator of the deal, is uniquely qualified to speak objectively to this issue. As the head of the United States negotiating team has stated, the negotiations to create the Foundation were “extremely difficult,” hard fought, and long. See Eizenstat Decl. ¶ 10. The Plaintiffs and Defendants did not see eye to eye on any issue, and the negotiations, as a result, were the very definition of “arms length.” The Court should find, therefore, that dismissal under Rule 23(e) is proper.6
Although substantive consideration of the fairness of the dismissal is not required, see Diaz, 876 F.2d at 1408, the United States, together with all other participants in the Foundation negotiations, has reached the conclusion that the results of the negotiations as embodied in the Foundation are fair under all the circumstances. See Joint Statement (Eizenstat Decl. Exh. A) at 4. The circumstances that lead the United States to this conclusion are described below.
Given the advancing age of the plaintiffs, it is of the highest importance that their claims are resolved quickly, non-bureaucratically, and with minimum expenditures on litigation. As noted earlier, survivors are dying at an accelerated rate, and the Foundation offers the victims of Nazi atrocities who are represented in this case a measure of justice for their past suffering, without additional time-consuming litigation that could delay any recovery beyond many class members' remaining lifetimes. Judge Edward Korman recently reached the same conclusion in approving a settlement between Holocaust survivors and Swiss banks. See In re Holocaust Victim Assets Litigation, 105 F. Supp.2d at 149. This is the very sort of outcome that U.S. policy seeks to achieve in matters of unresolved Holocaust-era claims.
Other criteria important in evaluating the Foundation include its level of funding, allocation of its funds, payment system, and eligibility criteria. As to the level of funding, the words of a Holocaust survivor who spoke in favor of the Swiss Bank settlement, cited by Judge Korman in approving that settlement, have equal force here:
I have no quarrel with the settlement. I do not say it is fair, because fairness is a relative term. No amount of money can possibly be fair under those circumstances, but I’m quite sure it is the very best that could be done by the groups that negotiated for the settlement. The world is not perfect and the people that negotiated I’m sure tried their very best, and I think they deserve our cooperation and . . . that they be supported and the settlement be approved.
In re Holocaust Victim Assets Litigation, 105 F. Supp.2d at 141.
The allocation of funds was the subject of extensive negotiation, and was approved by all parties to the negotiations. See Joint Statement (Eizenstat Decl. Exh. A) at 4 and Annex B. Similarly, the parties have pledged that Foundation payments should be made quickly and in a non-bureaucratic manner, id. at 4, and under relaxed standards of proof. Finally, through extensive effort, the parties to the negotiations ensured that the Foundation will provide a potential remedy for all who suffered at the hands of German companies during the Nazi era and World War II. See Eizenstat Decl. ¶ 20. With these agreements, the Foundation will be able to make speedy, dignified payments to many deserving victims – indeed, as noted earlier, many more than could possibly recover through litigation.
In considering the fairness of the Foundation, it is also important to consider the difficult legal hurdles faced by plaintiffs and the uncertainty of their litigation prospects. Although the United States takes no position here on the merits of the underlying legal claims advanced by the parties, and the Court need not ultimately resolve those questions in the context of a voluntary dismissal, it is beyond dispute that Plaintiffs in these cases face numerous legal hurdles in the defenses raised against their claims, such as justiciability, international comity, statutes of limitation, jurisdictional issues, and forum non conveniens, as well as difficulties of proof inherent in claims originating more than 50 years ago and the various potential practical and legal obstacles to certification of a class of heirs.7 Recovery in litigation is therefore by no means assured. Cf. In re Holocaust Victim Assets Litigation, 105 F. Supp.2d at 148-49; In re Austrian and German Bank Holocaust Litigation, 80 F. Supp.2d 164, 177 (S.D.N.Y. 2000).
The Foundation not only fulfills the foreign policy interests of the United States, but also provides benefits to the public interest that reach beyond the scope of any single litigation. In other countries, claims for restitution and compensation arising out of Nazi-era atrocities have yet to be resolved. The successful compromise reached in these negotiations, like the Swiss Bank settlement, can be expected to serve as an example of the advantages for all concerned when the legal and moral claims of Nazi-era victims are dealt with through dialogue, negotiation, and cooperation, instead of prolonged litigation and controversy.
Dated: November 8, 2000 Respectfully submitted,
DAVID W. OGDEN
Assistant Attorney General
DAVID J. ANDERSON (DA4138)
DAVID O. BUCHHOLZ (DB0874)
United States Department of Justice
Federal Programs Branch
901 E Street, N.W., Room 952
Washington, DC 20530
Attorneys for the United States
CERTIFICATE OF SERVICE
I hereby certify that on this 8th day of November, 2000, the attached Statement of Interest of United States was served by first class mail on all persons on the attached service list.
David O. Buchholz