Opinion ID: 2772783
Heading Depth: 3
Heading Rank: 2

Heading: Potential Procedural Difficulties

Text: Plaintiffs suggest that several procedural obstacles might still deny them access to the remedies defendants identified. In the related context of forum non conveniens, the Supreme Court has made clear that an “unfavorable change in law may be given substantial weight” only when “the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all.” See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 (1981). “[T]he relief need not be as comprehensive or as favorable as a plaintiff might obtain in an American court.” Chang v. Baxter Healthcare Corp., 599 F.3d 728, 736 (7th Cir. 2010). None of the asserted procedural obstacles deny relief to the extent that plaintiffs can claim that Hungary provides no remedy at all. 22 Nos. 13-3073 & 14-1319 First, plaintiffs argue that the lack of a class action device in Hungary ensures that these claims will never be brought. But the absence of a class action device does not mean as a matter of law that a nation’s courts fail to offer effective remedies. See Aguinda v. Texaco, Inc., 303 F.3d 470, 478 (2d Cir. 2002) (finding adequate a forum that lacked a class action device but allowed unlimited joinder of parties with similar claims arising out of the same facts); In re Union Carbide Corp. Gas Plant Disaster at Bhopal, India, 809 F.2d 195, 199, 202 (2d Cir. 1987) (finding adequate a forum that allowed representative suits in place of class actions). Until recently, rules allowing for group litigation were rare outside of the United States. Deborah R. Hensler, The Future of Mass Litigation: Global Class Actions and Third-Party Litigation Funding, 79 Geo. Wash. L. Rev. 306, 306 (2011). Even though many nations have joined the United States in adopting group litigation procedural devices, American-style class actions remain uncommon. Id. at 307–08. A nation need not allow the relatively uncommon American-style class action to be considered an adequate forum. See Aguinda, 303 F.3d at 478; see also Howe v. Goldcorp Investments, Ltd., 946 F.2d 944, 952 (1st Cir. 1991) (Breyer, C.J.). While Hungary does not have an identical class action device, it permits plaintiffs to use a joinder-like mechanism to enforce jointly claims arising out of the same legal relationship or where the claims are based on similar legal and factual grounds. AA172 (national railway identifying in its submission on remedies a joinder mechanism), citing section 51 of Act III of 1952 on the Civil Procedure Code. While the lack of an identical class action device may well impose additional burdens on plaintiffs, the equivalent mechanism in Hungary does not appear to be so burdensome as to deprive Nos. 13-3073 & 14-1319 23 plaintiffs of an effective remedy. See Aguinda, 303 F.3d at 478 (“While the need for thousands of individual plaintiffs to authorize the action in their names is more burdensome than having them represented by a representative in a class action, it is not so burdensome as to deprive the plaintiffs of an effective alternative forum.”). Second, to the extent that plaintiffs worry that their claims may be time-barred, Hungary appears to have formally extended the statute of limitations for Holocaustrelated claims. See AA1177 (national bank explaining in its submission on remedies that Hungary had formally extended “the statute of limitations regarding Holocaust-era claims”), citing Decree No. 11 of 1960, art. 85(3); Abelesz, 692 F.3d at 682 n.11 (“Plaintiffs have advised [the Court] that Hungary has amended its constitution to declare that there are no statutes of limitations on crimes visited upon the Hungarian people during World War II.”). Moreover, counsel for the national defendants told us at oral argument that if plaintiffs bring these claims in Hungary, the national defendants would not assert any statute of limitations defenses. The parties have not presented nor could we find any reason to think that Hungarian courts would not enforce such a waiver. With this waiver, we need not consider the effect such defenses might have on the adequacy of Hungarian remedies. Cf. Chang, 599 F.3d at 736 (noting that an alternative forum might be inadequate if the plaintiff’s suit would be time-barred unless defendant agrees to waive the statute of limitations and the waiver would be enforced in the alternative forum). Finally, plaintiffs argue that changes in the Hungarian constitution might subject them to a risk of prosecution if 24 Nos. 13-3073 & 14-1319 they brought these Holocaust-era claims in Hungary. On the record before us, this fear of prosecution is too speculative to show that the Hungarian courts could not hear these claims fairly. Hungarian courts have ruled that good-faith arguments put forward during civil litigation cannot be used as a basis for civil and criminal defamation charges. See AA 497– 516 (collecting translations of case law explaining when litigants might be liable for statements made during litigation). The cases provided by the litigants indicate that liability might attach for statements made during litigation only if they are unreasonably offensive or false. 3. Structural Issues Concerning Hungarian Courts Plaintiffs also raise structural issues on the adequacy of Hungarian courts. They argue that even if remedies might be available to them in theory, limits on judicial independence would prevent those remedies from being effective. See generally Sarei v. Rio Tinto, PLC, 550 F.3d 822, 832 (9th Cir. 2008) (en banc) (explaining that a “remedy must be available, effective, and not futile” and that “a court must look at the circumstances surrounding the access to a remedy” to measure effectiveness). For example, in Flomo v. Firestone Natural Rubber Co., 643 F.3d 1013, 1025 (7th Cir. 2011), we said it would “border on the ridiculous” to require litigants “to file suit in a court in Nazi Germany complaining about genocide” before being allowed to bring suit in the United States. But we also made clear that as a “matter of international comity” we might also “give the courts of the nation in which the violation had occurred a chance to remedy it, provided that the nation seemed willing and able to do that.” Id. The courts of Nazi Germany—or those of the regime in Hungary at that time—would have been unable to handle genocide claims Nos. 13-3073 & 14-1319 25 fairly. But we should not presume that the modern regimes replacing them many decades later are unwilling or unable to remedy the wrongs asserted by plaintiffs, absent specific evidence to that effect. Accordingly, plaintiffs offer two theories why Hungary is not willing and able to provide otherwise available remedies. First, they argue that the Hungarian government—and in particular, the judicial system—has been restructured so that claims like these would not receive a fair hearing in Hungary. Second, they contend that rising anti-Semitic attitudes in Hungary suggest that they would not receive a fair and impartial hearing and that their safety would be jeopardized if they sued there. In the years leading up to 2012, all parties agree, plaintiffs could have trusted Hungary to handle these claims fairly. Plaintiffs’ own expert witness on Hungarian law agreed with the defendants’ expert that prior to 2012, “Hungary [was] a well-established European state, with a well functioning legal system that operates under established and cognizable rules of law.” AA 219–20 (plaintiffs’ expert agreeing with this characterization before questioning whether the situation had changed and whether that system would allow for effective remedies for Holocaust victims), quoting Declaration of Dr. Sonnevend. In the 2012 appeals, the record supported our conclusion that Hungary had “a functional and independent judiciary” with an “apparent ability to provide an adequate remedy to plaintiffs.” Abelesz, 692 F.3d at 683. While we were sympathetic to plaintiffs’ concerns about anti-Semitism, there was not sufficient evidence to conclude that “Hungarian courts would be so obviously 26 Nos. 13-3073 & 14-1319 incapable of providing a fair and impartial hearing” that United States courts should step in. Id. at 684. For this reason, plaintiffs focus on how the situation has changed since 2012. Plaintiffs first point to new language in the 2011 New Constitution’s preamble as evidence that Hungary implicitly disavows responsibility for the Holocaust. The preamble dates Hungary’s “restoration of our country’s self-determination, lost on the nineteenth day of March 1944, from the second day of May 1990.” That date is considered “the beginning of [Hungary’s] new democracy and constitutional order.” AA 767 (translation of New Constitution, Apr. 25, 2011). Though this was brought to our attention during the prior appeal, plaintiffs present additional opinion evidence that this provision should be read as the Hungarian government’s denial of responsibility for the Hungarian Holocaust. At the same time, others have read the provision as serving different ends, including a desire to emphasize the nation’s constitutional heritage. See, e.g., AA 467–68 (European Centre for Law and Justice Memorandum on the Hungarian New Constitution). Either way, absent a clear interpretation of that provision, the language of the preamble falls well short of the firm denial required by the Restatement to excuse the need for exhaustion. § 713 cmt. f (excusing domestic exhaustion for expropriation claim when the “state firmly denies responsibility”). Plaintiffs also stress that a combination of laws passed by the government and the Fourth Amendment to the New Constitution enabled the Hungarian government to undermine the judiciary’s independence. The government lowered the retirement age for judges from 70 to 62, added six judges to the Constitutional Court, created a National Judicial OfNos. 13-3073 & 14-1319 27 fice with power to control dockets, and eliminated the precedential value of twenty years of Constitutional Court decisions. In response, defendants explain that the most controversial measures are either not to be worried about or no longer in place. The later Fifth Amendment eliminated the National Judicial Office’s power to assign cases. AA 1431, 1438 (declaration of defendants’ expert). The European Court of Justice rejected the proposed change in retirement age, and the government allowed any forcibly retired judges to return to their jobs. AA1437–38. Finally, defendants clarify that the provision rendering prior decisions of the Constitutional Court no longer binding was not meant to undermine the legal effects of those decisions. Rather, defendants argue that it was designed to clarify that, going forward, the Constitutional Court should endeavor to interpret the new Constitution. AA 1430. Though one might worry that the speed with which change has been made to the judiciary signifies a lack of respect for the rule of law, we are also encouraged by the Hungarian government’s willingness to revisit these provisions. By doing so, the government has responded to international criticisms and shown some effort to respect international norms and values, including an independent judiciary. Again, we believe we understand plaintiffs’ concerns, but we believe they are too speculative to override the norm of requiring exhaustion of domestic remedies before resorting to foreign courts. In addition to these concerns about the independence of the Hungarian courts, plaintiffs argue that growing antiSemitic attitudes coupled with attempts to minimize Hunga28 Nos. 13-3073 & 14-1319 ry’s role in the Holocaust make Hungary unable or unwilling to hear Holocaust-era claims. They also argue that their safety could be jeopardized if they visited Hungary to testify in court. More specifically, plaintiffs point to troubling evidence that anti-Semitism is on the rise in Hungary and that Hungary may be among the worst in Europe today on that score. AA 240 (declaration of Dr. Halmai pointing to survey evidence), citing Anti-Defamation League, Attitudes Toward Jews in Ten European Countries, March 2012. The plaintiffs’ expert expressed concern that some factions would take political advantage of these sentiments and push the governing party to do the same. AA 237–39 (declaration of Dr. Halmai), citing The Trajectory of Democracy—Why Hungary Matters: Hearing Before the Commission on Security & Cooperation in Europe (2013) (written and oral statements of Paul A. Shapiro, Director, Center for Advanced Holocaust Studies). Along these lines, plaintiffs highlight testimony explaining that the Hungarian government has attempted to minimize Hungary’s role in the Holocaust and to rehabilitate the reputations of historical and cultural figures known to have been antiSemitic or perpetrators of the Holocaust. Id. These events have led some Hungarian Jews to question whether there might now be good reason to leave Hungary. AA 1213–15 (Lisa Abend, Ancient Fear Rises Anew, Time Magazine, Apr. 1, 2013). At the same time, plaintiffs’ own expert testified clearly that the “current governing parties in Hungary are certainly not anti-Semitic.” AA 222 (Dr. Halmai declaration). The Prime Minister of Hungary has expressed a zero-tolerance policy with respect to anti-Semitism. AA 327–28 (Prime MinNos. 13-3073 & 14-1319 29 ister: Anti-Semitism is Unacceptable and Intolerable, Prime Minister’s Office—News (May 6, 2013)); AA 330–31 (Speech by Prime Minister Viktor Orbán at the 14th Plenary Assembly of the World Jewish Congress, Prime Minister’s Office—Speeches (May 6, 2013)). Unlike the United States, Hungary has made public denial of the Holocaust a criminal offense. AA 492 (translation of section 269/C of Act IV of 1978 on the Criminal Code). And while there are some political groups who do not adhere to that positive vision of how Jews should be treated, the same might be said of other countries throughout Europe and the world. As plaintiffs acknowledge, antiSemitism unfortunately has been on the rise throughout Europe and is also present in the United States. But absent governmental policies or other evidence that such discrimination is barring access to or punishing resort to domestic remedies, United States courts should not take the step of hearing these claims without first giving the Hungarian courts a chance to rule on them. To hold otherwise would imply that United States courts should presume that the courts of other nations cannot fairly hear claims brought by historically persecuted groups. Altogether, the evidence in the record supports understandable concerns about whether plaintiffs can receive a fair hearing in Hungary. But those concerns remain too speculative to justify taking this case from Hungarian courts. One could easily imagine that Thurgood Marshall and the NAACP Legal Defense and Educational Fund had similar concerns about many United States courts’ ability to hear claims by African Americans in 1950 and later. Yet our courts by and large rose to the challenge in the following decades. 30 Nos. 13-3073 & 14-1319 We are not persuaded that “Hungarian courts would be so obviously incapable of providing a fair and impartial hearing” that United States courts should intervene. Abelesz, 692 F.3d at 684; cf. Stroitelstvo Bulgaria Ltd. v. BulgarianAmerican Enterprise Fund, 589 F.3d 417, 421 (7th Cir. 2009) (finding anecdotal complaints insufficient to allow a federal court to declare a foreign legal system inadequate). The record identifies developments that signal that the Hungarian government or people might do troubling things if confronted with these claims. As far as we can tell from the record here, though, plaintiffs have not offered examples where other people have attempted to bring Holocaust claims only to have the Hungarian courts close their doors to them or otherwise treat them unfairly. For this reason, we agree with the district court that plaintiffs “offer mere speculation and unsupported fears that they may not be treated fairly in the Hungarian court system.” Fischer, 2013 WL 4525408, at . In fact, other evidence in the record indicates that plaintiffs’ fears are unlikely to be realized if they file suit in Hungary. The Hungarian government and courts appear to have ably handled discussion of the Holocaust as well as Holocaust-era litigation. Defendants have cited cases where Holocaust victims sued in Hungary for the return of works of art and antique furniture taken during the Holocaust. AA 290– 92 (return of stolen artwork); AA 337–38 (return of paintings). In these cases, plaintiffs successfully sued instrumentalities of the government and won return of their property. More recently, the Hungarian government itself has established a program to return artwork that the state owns but may have obtained through unclear circumstances or wrongdoing. AA 342–43 (new office designed to review goods entrusted to the state). On top of these examples, deNos. 13-3073 & 14-1319 31 fendants show that the Hungarian government recently complied with a request by an attorney in the United States to depose a Hungarian war criminal. See Charles S. Fax, “A Tale of Discovery under the Hague Convention,” American Bar Association: Litigation News, Fall 2013. While these examples do not guarantee, of course, that plaintiffs’ claims will be treated fairly, they tend to indicate that such claims can be heard fairly. In sum, the district court did not err in finding that plaintiffs had not presented a legally compelling reason for their failure to exhaust remedies in Hungary. We emphasize, however, that the district court’s dismissal of claims against the national railway and bank was properly without prejudice. If plaintiffs attempt to bring suit in Hungary and are blocked arbitrarily or unreasonably, United States courts could once again be open to these claims against the national railway and bank.