Opinion ID: 1353980
Heading Depth: 1
Heading Rank: 3

Heading: Application of the Law of International Agreements

Text: In setting forth our analysis, we reiterate that we do so only to the extent necessary to supplement the well-reasoned analysis of the district court. Below, we first confirm the district court's turn to the law of international agreements as providing the legal framework for examining the Joint Statement. Next, applying those principles, we expand on some additional points which warrant further discussion here.
At the outset, Appellants contend that Judge Debevoise erred by applying treaty law as opposed to federal common law. But we do not see merit in this argument. The events leading to the Berlin Accords evince an unprecedented diplomatic effort to create an international agreement establishing a forum for the resolution of certain reparation claims and also to dispose of the pending legal actions. As Judge Debevoise noted, July 17, 2000, was the occasion of one of the most remarkable diplomatic achievements since the end of World War II. Gross III, 499 F.Supp.2d at 608. It was on that day that eight sovereign nations, a consortium representing numerous German companies, an international organization devoted to Nazi-era claims, and U.S. plaintiffs' attorneys together signed the Joint Statement of the Berlin Accords. Appellants cannot reasonably dispute the significant political nature of the talks leading to the Accords. Granted, one objective was to settle then-pending U.S. litigation between the plaintiffs and the defendant German companies, but we weigh that private aspect of the resolution against the Berlin Accords' political, diplomatic, and historical significance. The creation of the Berlin Accords was more than a mere settlement; it was a profound expiation by the Federal Republic of Germany and German companies. Indeed, from the start of the negotiations, Deputy Secretary Eizenstat, the lead U.S. negotiator, was determined that the responsible foreign government [i.e., Germany], not just private companies, would have to be directly involved and directly engaged through a senior official who would be [Eizenstat's] counterpart. Stuart E. Eizenstat, Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II 215 (2003). We recognize that the Joint Statement is not a formal treaty; nevertheless, it constitutes part of the understanding reached among sovereign nations and private parties. Negotiations occurred during plenary sessions comprising high-level executives of foreign nations. The signatories of the Joint Statement itself includes the representatives of eight different nations. Further, the Joint Statement has meaning only in the context of the entire Berlin Accords. Indeed, the Joint Statement by itself is incomplete, as it talks of the Foundation, but understanding what the Foundation is requires resort to the Foundation Law. In sum, the Joint Statement appears to be a unique document, the objectives of which are to memorialize the efforts of the diplomatic talks resolving both political and legal issues. Thus, for at least these reasons, we agree with the district court that the law of international agreements provides the appropriate jurisprudential guidance in the analysis of whether the Joint Statement creates a private cause of action.
To ascertain whether an international agreement creates a private cause of action, we first look to the text of the agreement. See United States v. Alvarez-Machain, 504 U.S. 655, 663, 112 S.Ct. 2188, 119 L.Ed.2d 441 (1992) (In construing a treaty, as in construing a statute, we first look to its terms to determine its meaning.). At the same time, however, a court has greater leeway to look beyond the words of an international agreement. See, e.g., Air France v. Saks, 470 U.S. 392, 397, 105 S.Ct. 1338, 84 L.Ed.2d 289 (1985) (`[T]reaties are construed more liberally than private agreements, and to ascertain their meaning we may look beyond the written words to the history of the treaty, the negotiations, and the practical construction adopted by the parties.' ( quoting Choctaw Nation of Indians v. United States, 318 U.S. 423, 431-32, 63 S.Ct. 672, 87 L.Ed. 877 (1943))). Moreover, the public acts and proclamations of [foreign] governments, and those of their publicly recognized agents, in carrying into effect th[e] treaties, though not made its in th[e] cause, are historical and notorious facts, of which the court can take regular judicial notice. United States v. Reynes, 50 U.S. (9 How.) 127, 147-48, 13 L.Ed. 74 (1850); see also El Al Israel Airlines, Ltd. v. Tseng, 525 U.S. 155, 167, 119 S.Ct. 662, 142 L.Ed.2d 576 (1999). In general, a court's role is limited to giving effect to the intent of the [t]reaty parties. Sumitomo Shoji Am., Inc. v. Avagliano, 457 U.S. 176, 185, 102 S.Ct. 2374, 72 L.Ed.2d 765 (1982). Thus, clear language controls unless it `effects a result inconsistent with the intent or expectations of its signatories.' Id. at 180 (quoting Maximov v. United States, 373 U.S. 49, 54, 83 S.Ct. 1054, 10 L.Ed.2d 184 (1963)). In line with this precedent, and regardless of whether we apply any presumption for or against private enforceability, our duty is to ascertain whether the signatories of the Joint Statement intended to permit a private cause of action against the German companies. Our examination of the text of the Joint Statement and the entire Berlin Accords supports the district court's rationale and conclusion. We discern a strong intent on the part of the participants to enter into an agreement that is not enforceable through a private cause of action. First, the Joint Statement, along with the Berlin Accords as a whole, aspires to something other than simply the creation of a private, bargained-for exchange. One specific objective was to send a conclusive, humanitarian signal, out of a sense of moral responsibility, solidarity and self-respect. Joint Statement, pmbl. ¶ 5. Another clear purpose was for the German companies to receive all-embracing and enduring legal peace. See Executive Agreement, pmbl. ¶ 10, and arts. 2(1), 2(2), 3(1); Joint Statement, pmbl. ¶ 13, and ¶ 4(b); Foundation Law, pmbl. ¶ 6. Even without any presumptive approach, this language strongly connotes an intent not to create a right of private action for only some of the Joint Statement's participants. Second, as the district court noted, the Joint Statement uses language that is generally consistent with a non-binding political document. The signatories of the Joint Statement refer to themselves as participants, not as parties. Joint Statement ¶¶ 1-4. The participants declare rather than agree or undertake. Id. ¶ 1. The title of the document itself suggests a non-binding arrangement. See Staff of S. Comm. on Foreign Relations, 106th Cong., Print No. 106-71, Treaties and Other International Agreements: The Role of the United States Senate 60 (Comm. Print 2001) (Joint statements of intent are not binding agreements unless they meet the requirements of legally binding agreements, that is, that the parties intend to be legally bound.). Each of these textual clues points towards a document without privately enforceable rights. It is true, as Appellants point out, that some language of the Joint Statement can be read as suggesting binding obligations. For instance, Paragraph 4(d) does use the terms will and shall when describing the steps that the German companies intend to take. Appellants argue that such language should be read as imposing legally enforceable obligations on the German companies. But these few examples cannot overcome the contrary language indicating a non-binding nature. The Joint Statement contains insufficient rights-granting language to confer on Appellants a private cause of action. Appellants also rely too much on textual hairsplitting between shall and will, as used in the Joint Statement. Specifically, Gross argues that shall is used with judicially enforceable acts and will with unenforceable acts. Thus, their argument goes, things that will be done are not privately enforceable, but things that shall be done are enforceable. We disagree with the alleged subtlety. For example, Paragraph 4(d) uses both shall and will in referring to the intended actions of the German companies: the DM 5 billion contribution of the German companies shall be due; [t]he German companies will make available reasonable advanced funding; German company funds will continue to be collected. Joint Statement ¶ 4(d) (emphases added). The Joint Statement also uses shall and will interchangeably with the German government and the German companies. Id. ¶¶ 4(a), 4(d). Even if a clear difference in meaning exists between shall and willand we are not convinced there always is, see Hewitt v. Helms, 459 U.S. 460, 471, 103 S.Ct. 864, 74 L.Ed.2d 675 (1983) (characterizing shall, will, and must as language of an unmistakably mandatory character)the distinction is not borne out in the Joint Statement's text. [3] Appellants also propose that the district court erred by not severing the last sentence of Paragraph 4(d) from the rest of the Joint Statement. According to their argument, severability permits that sentence to be the grant of private enforceability. Without doubt, treaties and international agreements can include sections that are privately enforceable amidst sections not privately enforceable. See Lidas, Inc. v. United States, 238 F.3d 1076, 1080 (9th Cir.2001) (holding that the United States-France Income Tax Treaty's exchange of information provisions ... are severable from the double taxation provisions); United States v. Postal, 589 F.2d 862, 884 n. 35 (5th Cir.1979) (A treaty need not be wholly self-executing or wholly executory.); see also Restatement (Third) Foreign Relations Law of the United States § 111 cmt. h (1986) (Some provisions of an international agreement may be self-executing and others non-self-executing.). And we do not ignore these precedents. The test here is not, however, an overly formalistic application of any particular doctrinal rule. Rather, our charge is to remain true to what the participants envisioned as their intended outcome, as shown through interpretative methods discussed above. In this case, the Joint Statement's language does not lend itself to the dichotomous approach urged by Appellants. Excision of a single sentence from the body of the Joint Statement, and from the entire Berlin Accords, invites departure from the participants' intentions. At oral argument, Appellants' counsel repeated their contention that it would have been an act of temporary insanity for experienced counsel to have agreed to dismiss sixty cases with prejudice prior to payment, without the existence of a judicially enforceable means of insuring compliance. But we think this assertion is tenuous and overstates the situation. As the district court recognized, Appellants' counsel were not dismissing the actions with only the slim hope or gamble that the German companies might proceed with their payments. Counsel dismissed the complaints, in part, because the Joint Statement had the support and backing of the governments of both the United States and the Federal Republic of Germany. Indeed, but for the actions of President Clinton and Chancellor Schroeder, it is questionable whether the negotiations would have been fruitful. See Imperfect Justice 243-58 (describing the critical involvement of President Clinton and Chancellor Schroeder during the negotiations in December 1999). Had the German companies opted to not complete their payments to the Initiative, serious political consequences and executive discomfiture would have resulted. Moreover, despite Gross's argument to the contrary, the district court did not find that Appellants' only recourse rests exclusively with the German Ministry of Finance. The assertion runs counter to the undisputed fact that Appellants always retained the option to reopen litigation through Federal Rule of Civil Procedure 60(b). Indeed, Appellants could have utilized that procedure, but, to avoid jeopardizing the entire, politically sensitive resolution and the payment of the DM 10 billion to the victims, claimants declined to move to reopen litigation under Rule 60(b). See In re Nazi Era Cases Against German Defendants Litig., 213 F.Supp.2d 439, 442 (D.N.J.2002). Instead, they asked the court to define and enforce the defendants' interest obligation. On July 23, 2002, the district court declined to do so, holding that jurisdiction to enforce the Joint Statement was absent. Id. at 450-51. Appellants chose not to appeal that decision. What the district court in the present case concluded was that, given the Foundation's procedure and the option under Rule 60(b), the participants to the Joint Statement exhibited, through the text and structure of the Berlin Accords, an intent not to legally bind other participants by a contractual right enforceable through U.S. litigation. In our view, the district court correctly construed the terms of the Joint Statement and the arduous negotiations leading to the Joint Statement as manifestations of all participants' intentions to implement a non-judicial procedure for resolving further disputes.
Appellants urge us to consider the litigious context in which the Joint Statement was drafted. In this context of settling class action lawsuits, Gross argues, the Joint Statement must be viewed as a quasi-settlement fashioned after a settlement agreement pursuant to Federal Rule of Civil Procedure 23. We are cognizant of the drafting environment, but we remain convinced that the manifested intentions of the participants were to create a document that set forth the objectives of the negotiations without granting privately enforceable contractual rights, other than any provided by the Foundation Law. If the contextual evidence does anything, it strengthens our belief that the participants to the Joint Statement did not contemplate an agreement which would require further legal wrangling in courts. To the extent that the district court considered the history of the Berlin Accords, we agree with the court's reliance on the general approach set forth in Frolova v. Union of Soviet Socialist Republics, 761 F.2d 370, 373 (7th Cir.1985). Although Frolova concerns a formal treaty, the factors listed are just as applicable here in analyzing whether the historical context surrounding the Joint Statement evinces an intent to confer privately enforceable rights.
We also briefly address Gross's position that the Supreme Court has implicitly rejected the district court's approach in assessing the private enforceability of the Joint Statement. Gross relies upon Medellin v. Texas, ___ U.S. ___, 128 S.Ct. 1346, 170 L.Ed.2d 190 (2008), and its analysis of whether the Vienna Convention's Optional Protocol Concerning the Compulsory Settlement of Disputes, the United Nations Charter, and the International Court of Justice Statute were self-executing treaties. In Appellants' view, Medellin does away with any presumption against self-execution of treaties. An overly strict reliance on the concept of self-executing versus non-self-executing treaties may be misleading in this case. A self-executing treaty is one which do[es] not require domestic legislation to give [it] the full force of law. Renkel v. United States, 456 F.3d 640, 643 (6th Cir. 2006) ( citing Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 252, 104 S.Ct. 1776, 80 L.Ed.2d 273 (1984)). By itself, the status of self-executing does not answer the question of whether a document creates a private right of enforcement. See Restatement (Third) of Foreign Relations Law of the United States § 111 cmt. h (1986) (Whether a treaty is self-executing is a question distinct from whether the treaty creates private rights or remedies.); see also United States v. Li, 206 F.3d 56, 68 (1st Cir.2000) ( en banc ) ([T]he self-executing character of a treaty does not by itself establish that the treaty creates private rights.). Thus, even if we were faced with a treaty, Medellin 's self-execution discussion does not complete the picture. As we see it, Medellin does not undermine the district court's analysis. The Supreme Court recognized that, [e]ven when treaties are self-executing in the sense that they create federal law, the background presumption is that `[i]nternational agreements, even those directly benefiting private persons, generally do not create private rights or provide for a private cause of action in domestic courts.' Medellín, 128 S.Ct. at 1357 n. 3 ( quoting Restatement (Third) of Foreign Relations Law of the United States § 907, cmt. a (1986)). We have agreed with this approach, see Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287, 1298 (3d Cir.1979), as have several of our sister courts. See, e.g., United States v. Emuegbunam, 268 F.3d 377, 389-90 (6th Cir. 2001); Garza v. Lappin, 253 F.3d 918, 924 (7th Cir.2001) ([A]s a general rule, international agreements, even those benefiting private parties, do not create private rights enforceable in domestic courts.); United States v. Jimenez-Nava, 243 F.3d 192, 195 (5th Cir.2001); United States v. Li, 206 F.3d 56, 60-61 (1st Cir.2000) ( en banc ); Goldstar (Panama) S.A. v. United States, 967 F.2d 965, 968 (4th Cir.1992); Canadian Transport Co. v. United States, 663 F.2d 1081, 1092 (D.C.Cir.1980). Thus, when determining the intent of the Joint Statement's participants, we keep in mind the accepted approach that, [w]hen no [privately enforceable] right is explicitly stated, courts look to the treaty as a whole to determine whether it evidences an intent to provide a private right of action. Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 808 (D.C.Cir.1984) (Bork, J., concurring). Again, we emphasize that we do not apply a strict presumption in this case. Rather, we draw from the state of international agreement law to understand better what the text of the Joint Statement teaches about the intentions of the signing participants. Being sophisticated negotiators and litigants, the participants worked not in a vacuum but in the international negotiating arena. International agreement law therefore acts as a useful judicial prism through which to view the textual evidence of the participants' intentions.
Finally, we note that the issue of whether the interest provision is a privately enforceable contractual right can be seen from another vantage point, which we believe confirms that the dispute here is not based on a privately enforceable right. Appellants have characterized the present interest claim as being completely distinct from a claimant's application for restitutionary funds. Framed as such, the pending lawsuit does not appear to be asking for a larger restitutionary payment for Elly Gross or the other plaintiffs. This seems the right strategy because, if the claim were for an explicit request for a larger restitution-based payment, the case would surely fail. Such a claim would be covered exclusively by the process set forth in the Foundation Law. When we look closer, however, and consider the potential result had Appellants been successful, the requested relief reveals itself as a request for increased restitutionary funds for Ms. Gross and the other plaintiffs. As we see it, Appellants' contention is that each plaintiff has not received the appropriate amount of money under plaintiffs' interpretation of the Joint Statement because the German companies have not paid enough interest. We recognized as much in our prior opinion. See Gross II, 456 F.3d at 380 (It is true that a judgment for the claimants would require payment to the Foundation, translating to increased payments to victims.). Viewing the pending suit from this perspective further confirms the district court's analysis and conclusion that the signing participants of the Joint Statement did not intend for the interest provision to confer a privately enforceable contractual right on only some of the signatories. To the extent Appellants read Gross II as effectively deciding the issue before us today, that is error. The issue in Gross II was only whether the case was justiciable. Justiciability involves, for the most part, concerns of separation of powers. Nixon v. United States, 506 U.S. 224, 252-53, 113 S.Ct. 732, 122 L.Ed.2d 1 (1993) (Souter, J., concurring) ([T]he political question doctrine is `essentially a function of the separation of powers,' existing to restrain courts `from inappropriate interference in the business of the other branches of Government....' (citation omitted) ( quoting United States v. Munoz-Flores, 495 U.S. 385, 394, 110 S.Ct. 1964, 109 L.Ed.2d 384 (1990))). The question we decide today, on the other hand, is one grounded in the intentions of the signatories to the Joint Statement. See Sumitomo, 457 U.S. at 185, 102 S.Ct. 2374 (Our role is limited to giving effect to the intent of the [t]reaty parties.). Thus, a particular claim may be justiciable, in that it is not best reserved for the Executive Branch, but may nevertheless lack a foundational cause of action because that is what the participants contemplated.