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. Neubrones 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. Neubornes 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