Court Opinion

ID: 3033265
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:49:14.667076+00
Date Added: 2024-06-11T11:40:46.883241
License: Public Domain

Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

12-10-2008

Gross v. German Foundation
Precedential or Non-Precedential: Precedential

Docket No. 07-3726

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2008

Recommended Citation
"Gross v. German Foundation" (2008). 2008 Decisions. Paper 16.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/16

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2008 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
                                        PRECEDENTIAL

        UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT
                  ____________

                 Nos. 07-3726 & 07-3727
                      ____________

                       ELLY GROSS;
        ROMAN NEUBERGER; JOHN BRAND,
 in their individual capacities as third-party beneficiaries
   of the agreements leading to the establishment of the
German Foundation “Remembrance, Responsibility and the
   Future”, as representatives of all German Foundation
          beneficiaries; SYLVIA GREENBAUM,

                  Appellants in 07-3726
                             v.

     THE GERMAN FOUNDATION INDUSTRIAL
  INITIATIVE, and its constituent managing companies;
   ALLIANZ AG; BASF AG; BAYER AG; BMW AG;
  COMMERZBANK AG; DAIMLERCHRYSLER AG;
DEUTSCHE BANK AG; DEGUSSA-HUELLS AG; DEUTZ
   AG; DRESDNER BANK AG; FRIEDR KRUPP AG
 HOESCH KRUPP; HOECHST AG; RAG AG; ROBERT
      BOSCH GMBH, SIEMENS AG; VEBA AG;
VOLKSWAGEN AG, sued individually; and as members of
       the German Foundation Industrial Initiative
                  ______________

                             1
      BARBARA SCHWARTZ LEE; BERNARD LEE,

                   Appellants in 07-3727
                            v.

      DEUTSCHE BANK, AG; DRESDNER BANK, AG

                        __________

        On Appeal from the United States District Court
                 for the District of New Jersey
       (Civ. Action Nos. 02-cv-02936 and 03-cv-03181)
      District Judge: Honorable Dickinson R. Debevoise
                         ____________

                  Argued October 29, 2008

Before: McKEE, NYGAARD, and MICHEL,* Circuit Judges.

             (Opinion Filed: December 10, 2008)

             BURT NEUBORNE, ESQUIRE (ARGUED)
             New York University Law School
             40 Washington Square South
             New York, New York 10012

  *
    The Honorable Paul R. Michel, Chief Judge of the United
States Court of Appeals for the Federal Circuit, sitting by
designation.

                             2
AGNIESZKA M. FRYSZMAN, ESQUIRE
(ARGUED)
MICHAEL D. HAUSFELD, ESQUIRE
KATHLEEN M. KONOPKA, ESQUIRE
HILARY K. RATWAY, ESQUIRE
Cohen, Milstein, Hausfeld & Toll P.L.L.C.
1100 New York Avenue, N.W., West Tower,
Suite 500
Washington, D.C. 20005

LISA J. RODRIGUEZ, ESQUIRE
Trujillo Rodriguez & Richards, LLC
3 Kings Highway West
Haddonfield, New Jersey 08033

ALLYN Z. LITE, ESQUIRE
Lite, Depalma, Greenberg & Rivas
Two Gateway Center, 12th Floor
Newark, New Jersey 07102
       Attorneys for Appellants, Elly Gross,
       Barbara Schwartz Lee, and Bernard Lee

JEFFREY BARIST, ESQUIRE (ARGUED)
SANDER BAK, ESQUIRE
FELIX WEINACHT, ESQUIRE
Milbank, Tweed, Hadley & McCloy
One Chase Mahattan Plaza
New York, New York 10005
      Attorney for Appellees,
      Deutsche Bank and Dresdner Bank

               3
ROGER M. WITTEN, ESQUIRE (ARGUED)
LOUIS R. COHEN, ESQUIRE
JOHN A. TRENOR, ESQUIRE
MATTHEW E. DRAPER, ESQUIRE
Wilmer Cutler Pickering Hale and Dorr LLP
399 Park Avenue
New York, New York 10022
      Attorney for Appellees, Allianz AG,
      Bayer AG,Commerzbank AG, Degussa-
      Huells AG, Deutz AG, and RAG AG

KONRAD L. CAILTEUX, ESQUIRE
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
       Attorney for Appellee, BMW AG

BUD G. HOLMAN, ESQUIRE
PAUL DOYLE, ESQUIRE
Kelley, Drye & Warren
101 Park Avenue, 29th Floor
New York, New York 10178
       Attorney for Appellee, DaimlerChrysler
       AG

JOHN J. GIBBONS, ESQUIRE
TERRY MYERS, ESQUIRE
THOMAS R. VALEN, ESQUIRE
Gibbons P.C.
One Gateway Center

               4
Newark, New Jersey 07102
     Attorneys for Appellee, ThyssenKrupp
     AG

BRANT W. BISHOP, ESQUIRE
ORESTE P. MCCLUNG, ESQUIRE
Kirkland & Ellis LLP
655 15th Street, N.W.
Washington, D.C. 20005
      Attorney for Appellee, Siemens AG

THOMAS M. MUELLER, ESQUIRE
MARK D. MCPHERSON, ESQUIRE
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, New York 10104-0050
      Attorney for Appellee, BASF AG

NEIL MCDONELL, ESQUIRE
BRIAN E. MCGUNIGLE, ESQUIRE
DEIRDRE SHERIDAN, ESQUIRE
Dorsey & Whitney LLP
250 Park Avenue
New York, New York 10177
      Attorney for Appellee, Robert Bosch
GmbH

DANIEL V. GSOVSKI, ESQUIRE
IAN CERESNEY, ESQUIRE
Herzfeld & Rubin P.C.
40 Wall Street

               5
              New York, New York 10005
                   Attorney for Appellee, Volkswagen AG

                        ____________

                 OPINION OF THE COURT
                      ____________

MICHEL, Chief Circuit Judge.

       At issue in this World War II reparations case is whether

the Joint Statement of the Berlin Accords constitutes a privately

enforceable contract between some of the participants to the

Joint Statement. Appellants contend that the defendant German

companies owe “interest” on their payments to a reparations

fund created by the Berlin Accords. In a prior appeal to our

court, we held that the claim presented a justiciable issue not

foreclosed by the political question doctrine. Having again

considered the allegations of the complaints, we hold that the

disputed interest provision of the Joint Statement does not

                               6
constitute or confer a privately enforceable cause of action on

the Appellants, who assert standing as third-party beneficiaries.

In so holding, we note the thoroughness of the district court’s

analysis and reasoning.       Because we agree with Judge

Debevoise’s rationale, we adopt it as ours, with some minor

points as described herein.

                        I. Background

       Because the history and facts of this case are set forth in

ample detail in our previous opinion, Gross v. German

Foundation Industrial Initiative, 456 F.3d 363 (3d Cir. 2006)

(“Gross II”), and the two district court opinions, Gross v.

German Foundation Industrial Initiative, 499 F. Supp. 2d 606

(D.N.J. 2007) (“Gross III”), and In re Nazi Era Cases Against

German Defendants Litigation, 320 F. Supp. 2d 235 (D.N.J.

                                7
2004) (“Gross I”), we do not repeat them here.1 Rather, we

briefly summarize the history and facts, insofar as they aid the

present discussion.

       The claims here involve reparations for Nazi-era slave

labor, forced labor, appropriation of personal property, and

dishonored insurance policies. As early as 1998, the United

States and German governments, aware of the significance of

the claims and the seriousness of the risk posed to the German

economy, encouraged negotiations between the plaintiffs and

the defendant German corporations. The negotiations involved

senior diplomatic executives from both the U.S. and German

governments, specifically and respectively former Deputy

   1
   Several other cases have also detailed the history of the
Berlin Accords and the reparation claims at issue here. See
generally Am. Ins. Ass’n v. Garamendi, 539 U.S. 396 (2003);
Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424 (D.N.J.
1999); Burger-Fischer v. Degussa AG, 65 F. Supp. 2d 248
(D.N.J. 1999).

                               8
Secretary of the Treasury Stuart Eizenstat and Count Otto

Lambsdorff, chief negotiator for former German Chancellor

Gerhard Schroeder. Several German companies came together

as the German Foundation Industrial Initiative (“the Initiative”),

which acted as the negotiating arm of the German industry.

Representing the claimants were plaintiffs’ attorneys who had

filed the U.S. civil actions.

       After many months of intense negotiations and

significant lucubration, on July 17, 2000, a diplomatic

agreement, commonly referred to as the Berlin Accords or the

Berlin Agreements, was reached as a means of resolving these

long-standing claims.      Under the agreement, the German

Foundation “Remembrance, Responsibility and the Future”

(“the Foundation”) was established as the intended, exclusive

forum for receiving, processing, and paying reparation claims at

issue here. Germany and the German companies each agreed to

                                9
contribute DM 5 billion to fund the Foundation. The plaintiffs’

lawyers agreed to dismiss with prejudice the numerous pending

litigations, so that the victims would receive payment through

the Foundation rather than civil actions and that the German

companies would achieve “all-embracing and enduring legal

peace.”

       The Berlin Accords consist of (1) the Joint Statement, (2)

the Executive Agreement between the United States and

Germany, and (3) the Foundation            Law.      The   Joint

Statement—formally titled “The Joint Statement on occasion of

the final plenary meeting concluding international talks on the

preparation of the Foundation ‘Remembrance, Responsibility

and the Future’”—sets forth a goal of the Foundation, which is

to “provide dignified payments to hundreds of thousands of

survivors and to others who suffered from wrongs during the

National Socialist era and World War II.” Joint Statement,

                              10
pmbl. ¶ 12.      The Joint Statement commits the German

government and German industry to provide DM 10 billion in

capitalization. As structured, the Initiative would collect DM 5

billion from individual German companies and then transfer the

money to the Foundation. Particularly significant for this case,

the last sentence of Paragraph 4(d) of the Joint Statement states:

       German company funds will continue to be
       collected on a schedule and in a manner that will
       ensure that the interest earned thereon before and
       after their delivery to the Foundation will reach at
       least 100 million DM.

       The second document, the Executive Agreement, outlines

the U.S. and German governments’ commitments to the

Foundation and obligates the United States Executive, in all

cases for which it is notified of a claim against a German

company arising out of the WWII era, to file a statement of its

                               11
foreign policy interests with the court in which the claim is

pending, stating that United States’ foreign policy interests favor

resolution through the Foundation. The third document, the

Foundation Law, is codified under German law and establishes

the Foundation as the legal entity for processing claims and

distributing the DM 10 billion fund.

       On May 30, 2001, the German legislature declared “legal

peace,” triggering the obligations of the German government

and the German companies to each pay DM 5 billion to the

Foundation. The German government made timely payment, but

the Initiative did not complete payment until December 2001, at

which point it had transferred DM 5.1 billion, which included

DM 100 million as the “interest” designated in Paragraph 4(d)

of the Joint Statement.

       Due to the delay in the Initiative’s payment and the

differing assertions of what the “interest” provision mandated,

                                12
several claimants filed suit, attempting to enforce the “interest”

provision of the Joint Statement. In June 2002, Elly Gross and

others filed their complaint as third-party beneficiaries seeking

recovery for breach of contract against the Initiative and against

its founding companies.       They alleged that the German

corporations owed interest in excess of the DM 100 million

already paid, based on the Initiative’s financial obligation from

and after July 17, 2000, the date the Joint Statement was signed.

In July 2003, Bernard and Barbara Schwartz Lee brought a

similar breach of contract action against Deutsch Bank AG and

Dresdner Bank AG. They allege that the two banks agreed to

pay interest earned on their payment from December 14, 1999.

       These complaints were assigned to Judge Bassler. The

Initiative and the defendant corporations moved to dismiss the

complaints pursuant to Federal Rule of Civil Procedure 12(b)(6)

                               13
and argued, in the alternative, that the claims were

nonjusticiable. In a single opinion, the district court held that

the claims were not justiciable. Gross I, 320 F. Supp. 2d at 254.

On appeal, we reversed, holding that, while the claims

implicated foreign policy issues within the realm of the

Executive Branch, the case was nevertheless justiciable.

Gross II, 456 F.3d at 377–91. We also noted that “[a] court

would face at least two questions on the merits of this dispute:

(1) is the Joint Statement, or part of the Joint Statement,

enforceable as a private contract, and (2) if so, what ‘interest’

obligation, if any, did the parties intend for the German

Foundation Industrial Initiative?” Id. at 387.

       On remand, the cases were reassigned to Judge

Debevoise. Among other motions, defendants in the Gross case

moved to dismiss under Rule 12(b)(6) on the basis that the

claims were not privately enforceable.       Defendants in the

                               14
Schwartz Lee case moved to dismiss on the basis of a lack an

enforceable December 1999 contract. In a single opinion, Judge

Debevoise dismissed both complaints, holding that the Joint

Statement is not a contract but a political document and thus

does not confer a private cause of action on the plaintiffs. Gross

III, 499 F. Supp. at 610. Plaintiffs in both cases timely appealed

on September 11, 2007.

          II. Standard of Review and Jurisdiction

       The district court had diversity jurisdiction under 28

U.S.C. § 1332(a)(2).2 We have jurisdiction under 28 U.S.C. §

1291. We review de novo the district court’s dismissal of the

action under Federal Rule of Civil Procedure 12(b)(6). Phillips

   2
    Gross Appellants also contend that the district court had
federal question jurisdiction under 28 U.S.C. § 1331, but they
have not briefed the issue. Judge Bassler, held that the court
had diversity jurisdiction only, see Gross I, 320 F. Supp. at
238–39, and we need not address the issue here.

                               15
v. County of Allegheny, 515 F.3d 224, 230 (3d Cir. 2008); see

also In re Paoli R.R. Yard PCB Litig., 221 F.3d 449, 461 (3d

Cir. 2000) (“De novo means [that] . . . the court’s inquiry is not

limited to or constricted by the . . . record, nor is any deference

due the . . . conclusion [under review].” (quotation omitted)). In

our plenary review, we apply the same legal standard of

determining whether a plaintiff has stated a valid claim, viz. “‘a

complaint with enough factual matter (taken as true) to suggest’

the required element.” Phillips, 515 F.3d at 234 (quoting Bell

Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007)). We must

accept the complaint’s allegations as true and draw all

reasonable inferences in favor of the non-movant. Worldcom,

Inc. v. Graphnet, Inc., 343 F.3d 651, 653 (3d Cir. 2003).

       Appellants ask us to determine whether the Joint

Statement confers a private cause of action for their breach of

contract claim. If it does, then Appellants’ complaints are “a

                                16
proper exercise of [their] ‘right . . . to seek judicial relief from

injuries caused by another’s violation of a legal requirement.’”

See McKesson Corp. v. Islamic Republic of Iran, 539 F.3d 485,

488 (D.C. Cir. 2008) (quoting Cannon v. Univ. of Chicago, 441

U.S. 677, 730 n.1 (1979) (Powell, J., dissenting)). We review

the interpretation of an international agreement de novo. United

States ex rel. Saroop v. Garcia, 109 F.3d 165, 167 (3d Cir.

1997); see also McKesson, 539 F.3d at 488; United States v. Al-

Hamdi, 356 F.3d 564, 569 (4th Cir. 2004) (“Interpretation of an

international treaty is an issue of law subject to de novo

review.”).

 III. Application of the Law of International Agreements

       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

                                17
the legal framework for examining the Joint Statement. Next,

applying those principles, we expand on some additional points

which warrant further discussion here.

                                  A.

       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. at 608. It was on that day that eight sovereign nations, a

                                  18
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

                               19
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

                               20
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.

                                B.

       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 (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 (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

                                21
construction adopted by the parties.’” (quoting Choctaw Nation

of Indians v. United States, 318 U.S. 423, 431–32 (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 exhibits 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 (1850); see also El Al Israel

Airlines, Ltd. v. Tseng, 525 U.S. 155, 167 (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 (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 (1963)).          In line with this

precedent, and regardless of whether we apply any presumption

                                22
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

                               23
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

                                24
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

                              25
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 (1983) (characterizing “shall,” “will,” and “must” as

“language of an unmistakably mandatory character”)—the

                               26
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

   3
     We note in passing that Schwartz Lee does not see any
distinction between “shall” and “will” and considers both to
be mandatory. Schwartz Lee Appeal Br. 34 (“The words
‘shall’ and ‘will’ indicate the binding nature of the
agreement.”).

                               27
(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

                              28
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 Schroder

during the negotiations in December 1999). Had the German

companies opted to not complete their payments to the Initiative,

                               29
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

                               30
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.

                                C.

       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

                                31
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

                                32
just as applicable here in analyzing whether the historical

context surrounding the Joint Statement evinces an intent to

confer privately enforceable rights.

                              33
                                D.

       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 Medellín v. Texas, 128 S. Ct. 1346 (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,

Medellín 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.

                                34
2006) (citing Trans World Airlines, Inc. v. Franklin Mint Corp.,

466 U.S. 243, 252 (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, Medellín’s self-execution

discussion does not complete the picture.

       As we see it, Medellín 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

                               35
agreements, even those directly benefitting 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 benefitting 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 Transp. Co. v. United States, 663 F.2d 1081,

                               36
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.

                               37
                               E.

       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

                               38
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

                                 39
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 (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

(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 (“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.

                                40
         IV. Application to Schwartz Lee Plaintiffs

       The Schwartz Lee Appellants dispute the propriety of

applying the judgment to dismiss the Gross complaint to the

Schwartz Lee complaint. They contend that the district court

could not dismiss their complaint because the defendant banks

in the Schwartz Lee case (i.e., Deutsche Bank AG and Dresdner

Bank AG) never moved to dismiss based on the lack of a private

cause of action. Rather, the Banks’ motion to dismiss asserted

that no enforceable contract existed between plaintiffs and

defendants.

       First, we note that the two Schwartz Lee plaintiffs are

members of the putative class in the Gross action. Barbara

Schwartz Lee and Bernard Lee both averred that they are

beneficiaries of the Foundation. Schwartz Lee Compl. 4-5. The

putative class in the Gross case comprises all beneficiaries of

the Foundation. Gross Compl. 3. Also, the two defendant banks

                              41
in Schwartz Lee are individually named as defendants in the

Gross case.

       Second, although docketed as separate cases, the two

have proceeded as if one. In Gross I, Judge Bassler issued a

single opinion that temporarily disposed of both actions. On

appeal in Gross II, we reviewed that dismissal as if the two

cases were a single action. Likewise, when remanded to the

district court, the litigants continued on a single course with but

minor differences in their “interest” calculations. Arguments for

the dispositive motions were heard during a single session

before Judge Debevoise on April 17, 2007.

       The situation before us does not raise fairness concerns

sought to be addressed by the doctrines of issue and claim

preclusion. See Nat’l R.R. Passenger Corp. v. Pa. Pub. Util.

Comm’n, 288 F.3d 519, 525 (3d Cir. 2002) (“Th[e] general rule

[of collateral estoppel] is subject to a number of equitable

                                42
exceptions designed to assure that the doctrine is applied in a

manner that will serve the twin goals of fairness and efficient

use of private and public litigation resources.”). Schwartz Lee’s

attorneys had notice that the Initiative moved to dismiss the

complaint as privately unenforceable. Furthermore, in a letter

to the district court dated November 22, 2006, counsel for

plaintiffs in both Gross and Schwartz Lee presented arguments

countering the Initiative’s position that the Joint Statement was

not privately enforceable. Counsel presented their arguments on

the letterhead of Lite DePalma Greenberg & Rivas, LLC, local

counsel for both sets of plaintiffs. The letter was signed by 1)

Burt Neuborn, counsel for Gross plaintiffs; 2) Michael Hausfeld

and Agnieszka Fryszman, counsel for Schwartz Lee plaintiffs;

and 3) Allyn Z. Lite, “Plaintiffs’ Liaison Counsel.” The letter

set forth a cogent summary of the plaintiffs’ position without

distinguishing between the two cases. From the district court’s

                               43
perspective, plaintiffs in both cases were aware of and addressed

a common basis for dismissal.

       Moreover, Schwartz Lee has not presented any argument

or position overlooked by the district court. Thus, even if we

were to vacate the district court’s dismissal of the Schwartz Lee

complaint, the only logical outcome after remanding would be

dismissal. Accordingly, we find no error in the district court’s

dismissal of Schwartz Lee’s complaint.

                               44
                       V. Conclusion

      For the foregoing reasons, we affirm the district court’s

dismissal of the complaints.

                               45