Circuit OKs Suit Against Vatican Over Holocaust
The Recorder
04-19-2005
Just in time for the picking of a new pope, the Ninth Circuit
U.S. Court of Appeals decided Monday that Holocaust survivors can pursue the
Vatican Bank for profiting from a Nazi puppet regime.
The decision in Alperin v. Vatican Bank, 05 C.D.O.S.
3216, revives a class action that had been dismissed by San Francisco U.S.
District Judge Maxine Chesney.
Groups of Ukrainian, Russian and Belarusian Holocaust victims
-- potentially hundreds of thousands, according to plaintiff attorneys -- had
sued the Vatican Bank, the Franciscan Order, the Croatian Liberation Movement
and various banks in 1999. Plaintiffs allege the defendants "profited from
the genocidal acts of the Croatian Ustasha political regime," which was
installed by the Nazis during World War II, according to the opinion.
The Ustasha regime operated death camps where as many as
700,000 Serbs died. After the Croatian government collapsed at the end of the
war, its leaders fled to Italy and some assets went into Vatican control,
according to a State Department report. Plaintiffs allege that the Vatican
Bank, an arm of the sovereign Vatican government, essentially laundered the
money, said plaintiff lawyer Thomas Easton of Eugene, Ore.
Easton said he believed it was "just a coincidence"
that the decision came on the first day cardinals deliberated who will be the
next pope.
However, Easton hopes the Catholic church takes advantage of
the timing and agrees to settle the case.
"I would think a new pope might want to clean the decks
of this kind of stuff," Easton said. "I'm thinking we have a good
chance to settle now."
The claims could exceed $100 million, according to a press
release put out by Easton's partner in the case, Jonathan Levy of Ohio.
Pepperdine University School of Law Professor Kathryn Lee Boyd argued the
plaintiffs case at the Ninth Circuit.
Chesney had granted a motion to dismiss because she believed
the case wasn't justiciable under the political question doctrine. That legal
test requires courts to stay out of business normally conducted by the
executive and legislative branches.
Monday's divided Ninth Circuit panel said Chesney was right,
but only regarding the so-called "war objective" claims. Two of the
three panel judges -- Ninth Circuit Judge M. Margaret McKeown and Senior
Illinois District Judge Milton Shadur, sitting by designation -- said they would
allow the more "garden variety" tort of conversion claims.
"In the landscape before us, this lawsuit is the only
game in town with respect to claimed looting and profiteering by the Vatican
Bank," McKeown wrote for the majority. "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."
But the third panelist, Ninth Circuit Judge Stephen Trott,
said that's not good enough.
"With all respect to my valued colleagues, I see it as a
mistake to measure this issue of justifiability by a 'this lawsuit is the only
game in town' standard," Trott write in dissent. "This is not
our 'game,' period, and we do not become vested with jurisdiction by default of
the other branches."
The defendants have not yet decided whether to appeal, said
Paul Vallone of San Francisco's Hinshaw & Culbertson, who represents the
Franciscan Order.
Although Monday's decision was a setback for his client,
Vallone pointed to sections of the opinion that tell the plaintiffs they are by
no means home free.
"There are several other obstacles that plaintiffs need
to get through," Vallone said.
Indeed, several times the judges noted the complexity and
difficulty of the massive case, calling it a "behemoth" and comparing
the district court's work on it to Sisyphus, the mythological figure who rolled
a boulder up a hill only to have it roll back down for eternity.
Easton, on the other hand, found those comments encouraging.
"Those are signals to both sides to settle the case," he said.
The lawyer for the Vatican Bank, Jeffrey Lena of Berkeley,
could not be reached for comment.