April 21, 2005

Ninth Circuit Allows Class Action Against Vatican Bank to Proceed

The Ninth Circuit Court of Appeals ruled that to recover financial gains made from puppet governments established by the Nazis in Croatia during the Second World War. Ukrainian, Russian and Belarusian Holocaust victims sued, among other parties, the Vatican Bank in 1999 for profiting “from the genocidal acts of the Croatian Ustasha political regime” which was installed by the Nazis. The Ustasha government ran death camps where as many as 700,000 people were murdered. After the regime fell after the Nazis’ defeat, its leaders fled to Italy and some of its assets went into Vatican control, according to a US State Department report. A lower court had dismissed the case, saying it was not justiciable under the political question doctrine requiring courts to stay out of cases normally handled by the executive and legislative branches. The Ninth Circuit partially disagreed with the lower court’s ruling, saying in that “no ongoing government negotiations, agreements or settlements are on the horizon. The outside chance that the executive branch will issue a statement in the future that has the ‘potentiality of embarrassment’ when viewed against our decision today does not justify foreclosing the Holocaust survivors’ claims.”