Class Actions and Mass Tort Litigation in a Global Context Prof. Linda S. Mullenix

1. Class Actions and Mass Tort Litigation in a Global ContextProf. Linda S. Mullenix Restitutionary Class Actions

2. 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?

3. 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? • How does one measure the “success” of such litigation?

4. 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)

5. Restitutionary Class Actions • Questions: • Holocaust litigation was pursued on many different fronts, in many different cases: • 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?

6. 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-of-entry claims? • Should these claims have been resolved through diplomatic means only? What value was added by judicial mediation?

7. 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?

8. 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?

9. Restitutionary Class Actions Burt Neuborne, Preliminary Reflections on Aspects of Holocaust Era Litigation in American Courts, 80 Wash.U.L. Rev. 796 (2002)

10. 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

11. 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

12. 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 ● bank accounts ● looted assets ● slave labor ● denial of entry/deportation 2. Austrian Bank Litigation 3. German Foundation (no litigation)

13. Restitutionary Class Actions • Questions: • How did the Swiss bank litigation come about? 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?

14. Restitutionary Class Actions • Swiss Bank Litigation in U.S.A. -- Chronology: • 1996: Plaintiffs file overlapping U.S. class actions • 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 • Defendants: several Swiss banks sued; multiple actions • 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): • 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”)

15. Restitutionary Class Actions • Swiss Bank Litigation in U.S.A. --Chronology: • 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)

16. Restitutionary Class Actions • Swiss Bank Litigation in U.S.A.:

17. Restitutionary Class Actions • Questions: • How successful was the Swiss bank class 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?

18. Restitutionary Class Actions • Results: Distribution of Funds to Class Members (from Swiss Bank litigation and German Foundation): • Slave laborer class (entitlements): • 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

19. Restitutionary Class Actions • Results: Distribution of Funds to Class Members (from Swiss Bank litigation and German Foundation): • Actual disbursements (slave laborers): • 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

20. 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 • As of 2002: $50 million distributed • German Foundation: $500 million available for unreturned German and Austrian bank accounts • Austrian settlement fund: • 1,000 claimants; approximately $5,000 each paid claim • 46,000 accounts identified with links to Holocaust victims, 12,000 computer matches • 400 claims validated • First 400 awards averaging $100,000

21. Restitutionary Class Actions • Results: Distribution of Funds to Class Members (from Swiss Bank litigation and German Foundation): • Bank accounts (problems with claims settling): • Massive destruction of relevant records • Badly damaged records • Claims process time consuming; validation process cumbersome

22. Restitutionary Class Actions • Results: Distribution of Funds to Class Members (from Swiss Bank litigation and German Foundation): • Refugee class (persons denied entry, expelled, etc.): • $2,500 payments authorized • As of 2002, 550 refugee claims validated and paid • “Looted Assets” class: • 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

23. Restitutionary Class Actions • Other settlement aspects –German Foundation “Future Fund” • 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