Wednesday, September 5, 2012

Judge Marra Dismisses Suit Over Holocaust Assets.



In a fascinating dispute over how Jewish property appropriated by the Nazis were administered after the war, Judge Marra has dismissed a suit brought by heirs of a Holocaust victim against an organization specifically established to recover lost Jewish assets.

Judge Marra first lays out the history of this little-known program:
After the conclusion of World War II, five American-based Jewish groups formed a committee to represent Jewish interests in reparations negotiations with the German government. Amended Complaint at ¶ 7. In 1946, the American military authority designated the Jewish Restitution Successor Organization (“JRSO”) as successor to heirless and unclaimed Jewish property. Amended Complaint at ¶ 9. In 1951, the Conference on Jewish Material Claims Against Germany, the Defendant in this case, supplanted the JRSO. In 1952, the Conference incorporated as a non-profit corporation in the State of New York. Amended Complaint at ¶ 11- 12. Also in 1952, the West German federal government admitted responsibility for Nazi crimes against the Jews and agreed to pay reparations to the Jewish people. Amended Complaint at ¶ 14.
Hey, better late than never!

And here's what the plaintiffs claim happened:
Bertha Bach owned a 771 square meter parcel of property in East Berlin. Amended Complaint at ¶¶ 44-45. In 1938, after being threatened by the German government, Bach sold the property to a German citizen. Amended Complaint at ¶ 46-47. On or about December 1992, The Conference filed a claim for the Bach property pursuant to its authority under the VermG.  Amended Complaint at ¶ 48. The Conference was ultimately granted the proceeds of the sale of the Bach property and designated a “legally entitled entity” to file for unclaimed Jewish property.  Amended Complaint at ¶ 50. The decision to grant The Conference the proceeds of the sale was appealed by private German sellers of the property, whose appeal was denied by an administrative court in Berlin on or about August 2004. Amended Complaint at ¶ 51. During or prior to the appeal, The Conference produced a birth certificate of Bertha Bach establishing that she was Jewish. Amended Complaint at ¶ 52.

Through their Amended Complaint, Plaintiffs allege that The Conference: (1) was unjustly enriched by receiving compensation from the German government for the Bach Property (Amended Complaint at ¶¶ 56-61); (2) breached a fiduciary duty owed to Plaintiffs “to protect their interest in the Bach Property and obtain any compensation on their behalf deriving from the Bach Property a result of the activities of the Nazi’s” (Amended Complaint at ¶¶ 62-66); and (3) violated a constructive trust which arose in favor of Plaintiffs (Amended Complaint at ¶¶ 67- 763). The Conference now seeks to dismiss the Amended Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(3), and 12(b)(6).
Unfortunately for plaintiffs, Judge Marra rules they have no standing:
The Court appreciates that Plaintiffs are not suing under the laws of Germany. Rather, they assert their claim arises out of Defendant’s Articles of Incorporation. However, the sovereign nation of Germany established a system for Jewish people aggrieved by the actions of the Nazi regime to be compensated for their loss of property. Defendant was granted rights under that system and successfully pursued the rights granted to it. Those facts do not impose a corresponding duty on Defendant to act for the benefit of Plaintiffs. Plaintiffs real complaint is with the system established by Germany, not with Defendant which merely acted in accordance with that system. Plaintiffs cannot use Defendant as a scapegoat for their dissatisfaction with the German compensation system. Plaintiffs have failed to set forth any authority that supports the proposition that a non-profit corporation granted rights under a compensation system established by a sovereign nation owes a duty to other potential beneficiaries of that system who failed to pursue their rights in a timely manner. The Court agrees with one New York state court that concluded that The Conference owes “no direct duty to any specific person which would provide standing to sue the organization.” Rottenberg v. Conference on Jewish Material Claims Against Germany, Inc., Index No. 110615/04 (N.Y. Sup. Ct. Feb. 16, 2005)).
Ok, I probably would have left the "scapegoat" part out, but a well-reasoned and interesting opinion.

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