Opinion ID: 2945
Heading Depth: 2
Heading Rank: 2

Heading: This Court’s August 6, 2003 Summary Order

Text: We heard this appeal on April 15, 2003, and, in light of a supervening and controlling decision by another panel of our Court in Abrams v. Société Nationale Des Chemins De Fer Francais, 332 F.3d 173 (2d Cir. 2003), we entered a summary order on August 6, 2003, (1) vacating the District Court’s June 5, 2002 discovery order; and (2) denying Austria’s petition for a writ of mandamus to compel the District Court to decide the pending motion to dismiss, see Garb, 72 Fed. Appx. at 855. Relying on Abrams, we stated that this case “raise[d] the threshold questions whether and on what terms the federal courts have jurisdiction under the [FSIA] to adjudicate the liability of sovereign states for conduct occurring prior to the statute’s enactment [in 1976].” Id. at 853. We explained, bound as we then were by Abrams, that whether the FSIA could be retroactively applied depended upon whether doing so would have an “impermissible ‘retroactive effect’—that is, whether applying the FSIA would ‘impair rights a party possessed when he acted, increase a party’s 6 The Garb case w ill be decided in a separate opinion by this Cou rt. 8 liability for past conduct, or impose new duties with respect to transactions already completed.’” Id. (quoting Abrams, 332 F.3d at 180-81). As required by Abrams, we remanded this case to the District Court to determine “the Department of State’s policy prior to [the enactment of the] FSIA with respect to sovereign immunity for . . . Austria in the circumstances presented in” this case. Id. at 854. Austria then moved for a stay of the issuance of our mandate pending its petition to the Supreme Court for a writ of certiorari; we granted this motion on September 10, 2003. On June 14, 2004, the Supreme Court granted Austria’s petition for writ of certiorari, vacated our judgment, and remanded this case to us “for further consideration in light of Republic of Austria v. Altmann, 541 U.S. [677], 124 S. Ct. 2240 [] (2004).” Republic of Austria v. Whiteman, 124 S. Ct. 2835 (2004). III. Participation of the United States Government Since the Supreme Court’s remand, the parties and various amici curiae, including the United States, have filed supplemental letter briefs with this Court with respect to a post-Altmann disposition of this appeal. The United States, as amicus curiae, has filed a letter brief, supplementing a Statement of Interest it submitted to the District Court, and restating its view that there are no principles of international law that proscribe or regulate the taking by States of the property of their own nationals. See Letter of Gregory G. Katsas, Deputy Assistant Attorney General, Department of Justice, and William H. Taft, IV, The Legal Adviser, Department of State, at 8-12 (Sept. 9, 2004) (“United States Supplemental Letter”).7 The United States also participated “to inform the Court of 7 We n ote that both the Un ited States Statement of Interest and the U nited States Supplemental Letter were submitted jointly by the United States Department of Justice and the Department of State, thus representing the considered views of both Departments—indeed, of the Executive Branch of the Government—that “the foreign policy interests of the United States support dismissal of plaintiffs’ claims.” United States Supplemental Letter, at 1. 9 its foreign policy interests with regard to claims for restitution or compensation by Holocaust survivors and other victims of the Nazi era,” id. at 2 (emphasis added), and urged us to dismiss this case in deference to these interests. See id. at 1, 3-8. Underscoring that “[n]o price can be put on the suffering that these victims endured[,]” and concluding that “the moral imperative remains to provide some measure of justice and to do so in the victims’ remaining lifetimes[,]” the United States asserted its foreign policy interest that “matters of Holocaust-era restitution and compensation . . . be resolved through negotiation and cooperation, rather than subjecting victims and their families to the prolonged uncertainty and delay of litigation.” Id. at 2. Accordingly, the United States has informed the Court that [i]n January 2001, after facilitating multilateral negotiations involving governments, companies, and victims’ representatives, the United States and Austria concluded an executive agreement that led to the creation of the General Settlement Fund [“GSF”], a fund to be capitalized with $210 million plus interest to make payments to Austrian victims of Nazi-era persecutions. Approximately 20,000 claims have already been submitted to the GSF, but full funding of the GSF awaits dismissal of this litigation. . . . ... [I]t is in the foreign policy interests of the United States for this action to be dismissed on any valid legal ground. The United States and Austria have entered into an executive agreement, which led to the establishment of [the GSF] to make payments to certain victims of the Nazi era whose property was confiscated, including members of the proposed plaintiff class. It would be in the interests of the United States for the GSF to be the exclusive remedy for all such claims, and our foreign policy interests favor an all-embracing and enduring legal peace for Austria and Austrian companies with respect to claims such as plaintiffs’. Payments under the GSF will not begin until all prior litigation pending in United States courts has been dismissed. This is the final case remaining. The continued pendency of plaintiffs’ claims thus impedes the success of this important foreign policy initiative, and threatens the foreign policy interests of the United States. United States Supplemental Letter, at 2, 6 (emphases added) (citation omitted). 10 a. Negotiations and International Agreements Leading to the Creation of the General Settlement Fund The expressed views of the United States must be understood against the backdrop of over fifty years of diplomatic negotiations with the government of Austria regarding the settlement of Nazi-era claims. In Article 26 of the State Treaty for the Re-Establishment of an Independent and Democratic Austria (“Austrian State Treaty”)—a multilateral treaty ratified by the President of the United States on June 24, 1955 and that entered into force on July 27, 1955—Austria agreed to provide restitution for property that it had confiscated “on account of the racial origin or religion of the owner” during the Holocaust and Second World War. See State Treaty for the Re-Establishment of an Independent and Democratic Austria, May 15, 1955, art. 26, 6 U.S.T. 2369, 2435-36. Soon thereafter, in 1958, the United States agreed that it “would no longer intervene diplomatically on behalf of claimants under Article 26” if Austria acted to settle victims’ claims in good faith. See IX Foreign Relations of the United States, 1958-1960, at 769-70 (Glenn W. LaFantasie ed., 1993). This understanding was then memorialized in a May 1959 exchange of diplomatic notes, which constituted an executive agreement between the United States and Austria that entered into force on May 22, 1959.8 See Settlement of Certain Claims Under Article 26 of the Austrian State Treaty, 10.2 U.S.T. 1158. In February 2000, partly in response to class action litigation in United States courts, negotiations involving the government of Austria and attorneys representing Holocaust victims commenced under the active leadership of the United States Government. See Declaration of Stuart E. Eizenstat, Deputy Secretary of the Treasury and Special Representative of the President and Secretary of State on Holocaust Issues ¶ 5 (Jan. 19, 2001) (“Eizenstat Declaration”) (text reproduced 8 Plaintiffs allege that “Austria has failed an d refu sed to live up to its State Treaty obligation s to effectuate restoration, or even the alternative Treaty obligation of recompense where restoration is impossible.” Compl. ¶ 21. 11 at Supp. App. at 1039-54 and in United States Department of State, Digest of United States Practice in International Law for 2001, available at http://www.state.gov/documents/organization/16561.pdf.) Over the next nine months, negotiations focused principally “on a proposed initiative to establish a fund to make payments to victims of slave and forced labor (and certain others) during World War II and the Nazi era.” Id. According to Deputy Secretary of the Treasury Stuart E. Eizenstat, the co-chair of these negotiations, “[t]he parties . . . anticipated that at the conclusion of an agreement concerning the establishment of a fund for Nazi-era forced and slave laborers who worked on the territory of the present-day Republic of Austria, the parties would commence negotiations concerning the establishment of a similar fund for those who suffered from aryanization, theft, or destruction of property on the territory of the present-day Republic of Austria during this same time period.” Id. ¶ 6. Indeed, “as a pre-condition . . . to concluding an agreement concerning forced and slave labor claims . . . , Austria committed $150 million to cover certain property claims.” Id. ¶ 7. On October 24, 2000, as the parties to the negotiations signed a Joint Statement expressing their support for the Austrian “Reconciliation Fund” as the exclusive remedy for all Nazi-era forced and slave labor claims against Austria, the governments of the United States and Austria entered into an executive agreement. Agreement Between the Austrian Federal Government and the Government of the United States of America Concerning the Austrian Fund “Reconciliation, Peace and Cooperation,” Oct. 24, 2000, 40 I.L.M. 523 (2001) (“Reconciliation Fund Agreement”). In the Reconciliation Fund Agreement, “Austria committed that the operation of the Reconciliation Fund would be governed by principles agreed [to] by the parties to the negotiations, and the United States committed to take certain steps to assist Austria and Austrian companies in achieving ‘legal peace’ in the United States with respect to forced and slave labor claims arising out of the Nazi era and World 12 War II (and any other claims covered by the Reconciliation Fund).” Eizenstat Declaration ¶ 8. Moreover, the United States undertook to “take appropriate steps to oppose any challenge to the sovereign immunity of Austria with respect to . . . other claims arising out of the National Socialist era or World War II for which Austria and the United States agree that a suitable potential remedy has been provided.” Reconciliation Fund Agreement, 40 I.L.M. at 525 (emphasis added). The Reconciliation Fund Agreement entered into force by exchange of diplomatic notes on December 1, 2000, in the final months of the administration of President William J. Clinton. See Eizenstat Declaration ¶ 8. In October 2000, negotiations also commenced concerning the creation of the General Settlement Fund (“GSF”) “to address all property/aryanization claims against Austria and/or Austrian companies arising out of the Nazi era and World War II, and all other Nazi-era claims against Austria and/or Austrian companies not covered by the Reconciliation Fund.” Id. ¶ 9. Again co-chaired by Eizenstat, these negotiations “included the United States, the Austrian Federal Government, Austrian companies, and the representatives of the victims including the Conference on Jewish Material Claims, a non-governmental organization created to negotiate for and administer compensation for Nazi crimes to Jewish people around the world.”9 Id. The United States also confirms that, “throughout the negotiations, attorneys representing the victims vigorously represented not only the named plaintiffs, but also the interests of heirs and others who are similarly situated.” Id. ¶ 28; Statement of Interest of the United States of America, Whiteman v. Federal Republic 9 The Conference on Jewish Material Claims (“CJMC”) is an umbrella organization whose member organizations include the A merican Gathering/ Fede ration of Jewish H olocaust Survivors, the Ame rican Jewish Com mittee, the Am erican Jewish C ongress, B’nai B’rith International, the Centre of O rganizations of Holoca ust Survivors in Israel, and the W orld Jewish Congress. See Eizenstat Declaration, at 4 n.2. For more information about the CJMC, including its mission and a complete list of member organizations, see Claims Conference: The Conference on Jewish Material Claims A gainst Germ any, 2003 Annual Report with 2004 Highlights 1, 74 (2004), and the CJMC’s Website, http:/ /www .claim scon .org/ (last visite d July 21, 2005). 13 of Austria, No. 00-8006 (SWK), at 14 (S.D.N.Y. Oct. 12, 2001) (“United States Statement of Interest”). These negotiations came to fruition on January 17, 2001, when “the parties to the negotiations gathered in Washington to sign a Joint Statement concluding the negotiations, and expressing their support for the GSF as the exclusive remedy for all claims arising against Austria and/or Austrian companies arising out of or relating to the [Nazi] Era or World War II,” with certain exceptions not relevant here.10 Eizenstat Declaration ¶ 13. An agreement among the parties became effective on January 23, 2001, at the beginning of the administration of President George W. Bush, “when the United States and Austria exchanged diplomatic notes expressing Austria’s commitment that the operation of the GSF will be governed by principles the parties agreed upon during the negotiations, . . . and the United States’ commitment to take certain steps to assist Austria . . . in achieving ‘legal peace.’” United States Statement of Interest, at 6. The agreement embodied in this exchange of notes, Joint Statement and Exchange of Notes Between the United States and Austria Concerning the Establishment of the General Settlement Fund for Nazi-Era and World War II Claims, 40 I.L.M. 565 (Jan. 17, 2001) (“GSF Agreement”), is an executive agreement between the Governments of the United States and Austria, United States Statement of Interest, at 6 n.4. On June 6, 2001, the government of Austria adopted legislation creating the GSF. Id. at 6. On the same day, “the Austrian Federal Government provided the United States Government with a diplomatic note stipulating that Austria had fulfilled the obligations necessary to bring into force” the GSF agreement. Id. at 7. 10 Specifically, it was agreed that GS F not be the ex clusive remedy for claim s for in rem restitution of works of art an d claims covered by the R econciliation F und . See Eizenstat Declaration ¶ 10. It should be assumed throughout this op inion that these tw o categories of claim s are excluded from any general references to “all claims” aga inst Austria arising ou t of or relating to the N azi Era or W orld W ar II. 14 b. The GSF as a Remedy for Nazi-Era Property/“Aryanization” Claims Austria’s GSF legislation establishes an independent three-member Claims Committee to consider Nazi-era claims against Austria, with the United States and Austria each selecting one committee member, who would jointly appoint a chairperson. See United States Statement of Interest, at 8-9; see also GSF Agreement, Annex A ¶ 2.a, 40 I.L.M. at 571. The claims committee is required “to establish simplified procedures” and to use “relaxed standards of proof.” United States Statement of Interest, at 9; see also GSF Agreement, Annex A ¶ 2.c, 40 I.L.M. at 571. One half of GSF funds will be allocated through a “claims-based” process on a pro-rata basis, and the other half through an “equity-based” process on a per-household basis. Eizenstat Declaration ¶ 19; see also GSF Agreement, Annex A ¶ 2.f-h, 40 I.L.M. at 572-73. In addition, pursuant to the GSF Agreement, the government of Austria has “enacted legislation establishing, funding, and authorizing a three-member Arbitration Panel . . . to consider, on a case-by-case basis, the in rem return of publicly-owned property, including property formerly owned by Jewish communal organizations.” United States Statement of Interest, at 11; see also GSF Agreement, Annex A ¶ 3, 40 I.L.M. at 574-76. Austria also “amended certain pension and social benefit laws to assist victims of National Socialism.” United States Statement of Interest, at 12; see also GSF Agreement, Annex A ¶ 4, 40 I.L.M. at 576-77. In its Statement of Interest, the United States particularly underscores that “all victims with Nazi-era claims against Austria and/or Austrian companies . . . are eligible to submit claims to the GSF.” United States Statement of Interest, at 13 (emphasis in original). Upon considering the age of Holocaust survivors, the level of GSF funding, the allocation of GSF funds, and the GSF’s eligibility criteria, the United States represents to us that “the results of the negotiations as embodied in the GSF are fair under all the circumstances.” Id. at 20; see also id. at 20-22. Indeed, the position 15 of the United States is that the GSF Agreement “represent[s] a definitive statement of U.S. foreign policy that the GSF provides the best mechanism for resolving claims such as plaintiffs’, by assuring broad coverage of victims and broad participation by companies, which could not be possible through judicial proceedings, and providing as expeditious as possible a mechanism for making fair and speedy payments to now elderly victims.” United States Supplemental Letter, at 8 (citations and internal quotations marks omitted). c. United States Foreign Policy Interests in the GSF The United States further represents to us that it is in its “foreign policy interests . . . for the GSF to be the exclusive forum and remedy for the resolution of all claims against Austria . . . arising out of or relating to the National Socialist Era or World War II,” and that “the United States Government believes that all [such claims] should be pursued through the GSF instead of the courts.” United States Statement of Interest, at 15. According to the United States, its interests in the implementation of the GSF are five-fold. First, the United States invokes its “important policy objective . . . 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.” Id. “[T]he United States believes the best way to accomplish this goal is through negotiation and cooperation,” and it represents to us that the GSF “is an excellent example of how such cooperation can lead to a positive result.” Id. Therefore, it is the view of the United States that the GSF “will provide benefits to more victims, and will do so faster and with less uncertainty than would litigation.”11 Id. at 15-16. Indeed, “the United States hopes [that the GSF] 11 The United States Statement of Interest is echoed by amicus curiae American Council for Equal Compensation of Nazi V ictims From Austria (“AC OA ”), which describes itself as “the single organization representing H olocaust survivors from Austria in America,” and whose “sole mission” for the past thirty-nine years “has been to secure equal com pensation of all Nazi victims from Austria,” Br. of Amicus Curiae Am . Council for Equal Compe nsation of Nazi Victims from Austria at 4. The ACO A urges us to dismiss this action in order to secure to Holocaust victims the 16 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.” Id. at 17. Second, it is the position of the United States that the establishment of the GSF will strengthen the ties between the United States and . . . Austria. . . . Since 1945, the United States has sought to work with Austria to address the consequences of the Nazi era and World War II through political and governmental acts, beginning with the first compensation and restitution laws in post-war Austria that were passed during the Allied occupation. In recent years, AustrianAmerican cooperation on these and other issues has continued, and the joint effort to develop the Reconciliation Fund and the GSF has helped solidify the close relationship between the two countries. Id. (internal citations omitted). In this light, the United States has emphasized the role of Austria in “the prosperity of Europe”—particularly Austria’s efforts to “promot[e] democracy” and the “economic development of Central and Eastern Europe,” as well as its support for the “integration of the European Union.” Id. at 17-18. The United States has informed us that “continued cooperation with Austria”—which, it asserts, is being advanced by the GSF—“is important to helping achieve these United States interests.” Id. at 18. Third, the United States highlights that “the GSF 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.” Id. Fourth, the United States anticipates that the alternative to the GSF—“years of litigation whose outcome would be uncertain at best, and which would last beyond the expected life span of the large majority of survivors,” id.—“could lead to conflict among survivors’ organizations and among survivors and Austria and Austrian industry, conflicts into which the United States payments now available to them from the GSF as a result of the diplomatic negotiations undertaken on their behalf by the United States—payments that are being withheld pending the termination of this action. 17 Government would inevitably be drawn,” id. at 18-19. The Government further warns that such conflict would likely include “threats of political action, boycotts, and legal steps against corporations from Austria”—events that would “set[ ] back Austrian-American economic cooperation.” Id. at 19. Finally, the United States informs us that the GSF is a fulfillment of a half-century effort to complete the task of bringing a measure of justice to victims of the Nazi era. It 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 European history and to seek to ensure that it never happens again. Id. (internal quotation marks omitted). Although the United States acknowledges that “no amount of money will ever be enough to make up for Nazi-era atrocities,” it underscores that the GSF would make substantial additional funds and other avenues of relief available. Id. at 19-20. Under the GSF Agreement, a “precondition to allowing the GSF to make payments to victims” is the “dismissal of all pending Nazi-era property/aryanization claims against Austria and/or Austrian companies (as well as any other claim covered by the GSF).” Id. at 19; see also GSF Agreement, Annex C, 40 I.L.M. at 579-80. The United States informs us that plaintiffs’ suit—this litigation—is the only pending claim standing in the way of the GSF’s implementation. See United States Supplemental Letter, at 6. Because the continued pendency of this lawsuit “impedes the success of [an] important foreign policy initiative, and threatens the foreign policy interests of the United States,” the Government urges us to dismiss it. Id.12 12 Our dissenting colleague suggests that we should remand once more “for a determination of whether circum stances perm it and w arrant discretion ary deference to the exe cutive foreign policy interests stated here.” D issent, at [42 n.28]. Qu ite apart fro m the consid erable risk that any furth er delay would imp ose u pon elde rly vic tims currently awaiting com pensation, the dissent’s recomm endation w ould, in effect, encourage a federal district court to second -guess the U nited States Governm ent’s foreign policy dete rmination that— for a host of reasons, see United States Statement of Interest, at 15-20, including, inter alia, the importance of preserving relations with allied nations—the United States 18