April 19, 2005

9th Circuit allows partial suit against Vatican Bank

Claire Cooper Bee Legal Affairs Writer

SAN FRANCISCO

A federal appeals court Monday restored part of a suit that was filed against the Vatican Bank by individuals and groups claiming to be victims of Croatia's World War II Nazi puppet regime.

In reversing a lower court's dismissal, the 9th U.S. Circuit Court of Appeals said purported victims of the Ustasha, as the regime was known, could press claims against the bank for allegedly enriching itself through the receipt of property looted from Jews, Serbs and Gypsies.

Also named as a defendant was the Order of Friars Minor, a Franciscan brotherhood that allegedly included high officials of the Ustasha.

The 9th Circuit declined to reinstate related human-rights claims against the bank or the religious order over alleged involvement with the Ustasha's campaign of enslavement, torture and execution. Such foreign-affairs questions are outside the courts' jurisdiction, the judges said.

A lawyer representing the plaintiffs said he hoped the defendants would move to settle the case to avoid negative publicity.

"I'm optimistic the new pope may decide this is time for a public apology for what happened in World War II and perhaps a small monetary settlement," said Oregon lawyer Thomas Easton.

He said his clients were less interested in money than in having history acknowledge what was done to them.

Defense attorney Paul Vallone of San Francisco said no decision had been made about what to do next, but he called the likelihood of settlement talks "probably slim." He said several other procedural issues remained to be decided and could "knock out the case" at the pretrial stage.

The 9th Circuit made the same point, noting that the plaintiffs may still face an uphill battle.

The ruling merely said property questions were legitimate ones for the judiciary.

"The property claims ultimately boil down to whether the Vatican Bank is wrongfully holding assets," wrote Judge Margaret McKeown of San Diego. "Deciding this sort of controversy is exactly what courts do."

The plaintiffs so far are two dozen individuals and four organizations listing diverse looted assets such as gold, silver and "50 advanced industrial Singer sewing machines." Lawyers said they'll seek certification of a much larger class that could extend beyond the borders of the former Yugoslavia and into Russia, Belarus and Ukraine.

The Bee's Claire Cooper can be reached at (415) 551-7701 or ccooper@sacbee.com.