Class Actions and Mass Tort
Litigation in a Global Context
Prof. Linda S. Mullenix
Restitutionary Class Actions
Restitutionary Class Actions
 Questions:
 What is a restitutionary class action?
 How do restitutionary class actions differ
from mass tort class actions or human
rights class actions?
 Do restitutionary class actions have some
different claim for resolution than mass
tort or human rights class actions? Why?
Restitutionary Class Actions
 Questions:
 Should judicial systems treat restitutionary
claims diffrently than human rights or mass tort
claims? Why, or why not?
 What are the practical problems of resolving
restitutionary claims?
 Are the Holocaust-era litigation successful
examples of resolution of restitutionary claims?
 Whic parts of the litigation were successful, and
which not?
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How does one measure the “success” of such
litigation?
Restitutionary Class Actions
Burt Neuborne, Preliminary Reflections on
Aspects of Holocaust Era Litigation in
American Courts, 80 Wash.U.L. Rev. 796
(2002)
In re Holocaust Victim Assets Litigation,
105 F. Supp.2d 139 (E.D.N.Y. 2000)(J.
Korman, approving settlement class)
Restitutionary Class Actions
 Questions:
 Holocaust litigation was pursued on many
different fronts, in many different cases:
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What were the different pieces of Holocaust-related
litigation?
Who pursued these cases?
Who were the parties?
What were the theories behind these separate
litigations?
What were the problems inherent in each
litigation?
Restitutionary Class Actions
 Questions:
 How did the judicial system handle these different
types of Holocaust litigation?
 Were these claims appropriately pursued in the
United States? Was this a form of settlement
blackmail on the various defendants?
 Should the bank asset claims have been severed
from the slave labor claims? From the denial-ofentry claims?
 Should these claims have been resolved through
diplomatic means only? What value was added by
judicial mediation?
Restitutionary Class Actions
 Questions:
 Prof. Neuborne was the lead settlement counsel in the
Holocaust bank asset claims litigation. Is his description or
perspective of these related cases biased in any way by his
role as the lead settlement attorney?
 What is Prof. Neubrone’s “three-legged stool” metaphor?
Does this provide a different prospective for resolving
group claims?
 What criticisms were raised against the class resolution of
the Holocuast claimaints? Which of these objections have
persuasive merit?
 Were the results beneficial to the class members? Are Prof.
Neuborne’s responses to criticisms of the class settlement
persuasive?
Restitutionary Class Actions
 Questions:
 Is the Holocaust litigation and its
resolution a model for the resolution of
group claims? In what way?
 Is the resolution of the Holocaust claims
suitable only for a narrow special group of
historical claims, or does this have wider
implications for other events?
Restitutionary Class Actions
Burt Neuborne, Preliminary Reflections on
Aspects of Holocaust Era Litigation in
American Courts, 80 Wash.U.L. Rev. 796
(2002)
Restitutionary Class Actions
Burt Neuborne, Preliminary Reflections on Aspects of
Holocaust Era Litigation in American Courts, 80 Wash.U.L.
Rev. 796 (2002)
 Provides excellent description factual background of series
of related Holocaust litigation
 Provides in-depth description of personal role as lead
settlement counsel in Holocaust bank assets litigation
 In-depth description of role of judiciary in resolving various
cases
 Provides insight into parallel diplomatic and governmental
roles on resolving Holocaust-era related claims
 Excellent footnoted source materials on entire case record
of Holocaust litigation, secondary source materials and
commentary
Restitutionary Class Actions
Burt Neuborne, Preliminary Reflections on
Aspects of Holocaust Era Litigation in
American Courts, 80 Wash.U.L. Rev. 796
(2002)
Three-legged stool metaphor:
1. Class action litigation
2. Diplomacy
3. Aroused public opinion: community
insistence on dealing with long-delayed
issues arising from the Holocaust
Restitutionary Class Actions
Burt Neuborne, Preliminary Reflections on Aspects
of Holocaust Era Litigation in American Courts,
80 Wash.U.L. Rev. 796 (2002)
Aspects of the Holocaust-era litigation:
1. Swiss Bank Litigation
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bank accounts
looted assets
slave labor
denial of entry/deportation
2. Austrian Bank Litigation
3. German Foundation (no litigation)
Restitutionary Class Actions
 Questions:
 How did the Swiss bank litigation come about?
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How was it insitituted?
What was the jurisdiction of the American court
to hear these claims?
What were the legal theories?
Who were the parties, the defendants, the
attorneys?
What role did the judge play in managing the
Swiss bank Holocaust claims? Is this a proper
role for a judge?
Restitutionary Class Actions
 Swiss Bank Litigation in U.S.A. -- Chronology:
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1996: Plaintiffs file overlapping U.S. class actions
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Defendants: several Swiss banks sued; multiple actions
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Earlier efforts to use courts to seek relief for Holocaust
victims rejected by U.S. courts (see fn. 23); no court ruled
on merits of claims
Banking claims based on alienage jurisdiction
International law claims based on Alien Tort Claims Act
(see fn. 29 discussion of jurisdictional bases)
Allegations (two sources):
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Banking claims: funds deposited in Swiss banks before
Holocaust not returned to lawful owners
Violations of customary international law: knowing
participation in financing slave labor camps, knowing
fencing of property (“looting assets”)
Restitutionary Class Actions
 Swiss Bank Litigation in U.S.A. --Chronology:
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1997: federal judge Korman sets up committee structure
to advance class litigation
April 1997: Defendants file motions to dismiss
June-July 1997: Plaintiffs respond
August 1997: oral arguments
August 1997-July 1998: judge declines to rule,
settlement pressure on parties, Justice Dept. Eizenstadt
conducts settlement negotiations, settlement offer at
$600 million
July 1998: Judge Korman reconvenes settlement
neogotiations
August 1998: $1.25 billion settlement in principle agreed
(see fn. 33 description of negotiation breakthrough)
Restitutionary Class Actions
 Swiss Bank Litigation in U.S.A.:
Restitutionary Class Actions
 Questions:
 How successful was the Swiss bank class
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litigation in resolving the claims of the various
class members?
How successful were the other diplomatic and
extra-judicial efforts to resolve Holocausrt era
claims?
What is an appropriate measure of success?
What does “justice” mean or require for the class
claimants in these cases?
Prof. Neuborne clearly believes these litigation
efforts were a success. Do you agree?
Restitutionary Class Actions
 Results: Distribution of Funds to Class Members
(from Swiss Bank litigation and German
Foundation):
 Slave laborer class (entitlements):
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1,000,000 claimants still living
Total combined payment: $8,950 (two sources)
Swiss bank allocation $200m-300m payments to
laborers
 surviving claimant $1,450
German Foundation: DM 8.1 billion (approx. $4
billion US):
 Surviving clamants $7,500
Restitutionary Class Actions
 Results: Distribution of Funds to Class
Members (from Swiss Bank litigation and
German Foundation):
 Actual disbursements (slave laborers):
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115,000 surviving Jewish laborers
identified and paid claims
750,000 surviving non-Jewish laborers
identified; $2.5 billion transferred to
organizations of Hocoaust victims for
transfer to forced labor victims
Restitutionary Class Actions
 Results: Distribution of Funds to Class Members (from
Swiss Bank litigation and German Foundation):
 Owners of bank accounts (allocations):
 Swiss bank settlement: $800 million allocated for return
of deposits
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German Foundation: $500 million available for
unreturned German and Austrian bank accounts
Austrian settlement fund:
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As of 2002: $50 million distributed
1,000 claimants; approximately $5,000 each paid claim
46,000 accounts identified with links to Holocaust
victims, 12,000 computer matches
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400 claims validated
First 400 awards averaging $100,000
Restitutionary Class Actions
 Results: Distribution of Funds to Class
Members (from Swiss Bank litigation and
German Foundation):
 Bank accounts (problems with claims
settling):
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Massive destruction of relevant records
Badly damaged records
Claims process time consuming; validation
process cumbersome
Restitutionary Class Actions
 Results: Distribution of Funds to Class Members (from Swiss
Bank litigation and German Foundation):
 Refugee class (persons denied entry, expelled, etc.):
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$2,500 payments authorized
As of 2002, 550 refugee claims validated and paid
 “Looted Assets” class:
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Defined as member of one of five groups victims/targets of Nazi
prosecution
Property knowlingly “fenced” through Swiss bank
Special Master determined impossible to administer class on
individual basis (linkage problems)
Court directed “cy pres” administration of funds, on behalf of
poorest Holocaust victims throughout the world
$145 million of looted class assets dircted to agencies serving
poorest Holocaust survivors throughout world
Ten year plan to assure continuing support
Restitutionary Class Actions
 Other settlement aspects –German
Foundation “Future Fund”
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Initial funding DM 700m ($350 million)
To support toleration efforts in Europe
Funds support worthy projects linked to
values of toleration; remembrance of
Holocaust
$2.85 billion distributed to Holocaust
victims