U.S. Appeals Court Reinstates Vatican Holocaust Suit

Mon Apr 18, 2005 07:46 PM ET

By Barbara Grady

SAN FRANCISCO (Reuters) - A federal appeals court on Monday reinstated a lawsuit brought by Holocaust survivors who sued the Vatican Bank on charges it laundered assets stolen from victims of Croatia's pro-Nazi World War II regime.

The U.S. 9th Circuit Court of Appeals decision reversed a lower court ruling that had dismissed the case on grounds that foreign policy rather than lawsuits should address such historical claims.

The three-judge panel ruled some of the plaintiffs' key claims -- such as ones relating to lost and looted property -- did not fall under the political question doctrine and said even the U.S. Supreme Court has left open the door to lawsuits that touch upon foreign diplomacy.

"We conclude that some of the claims are barred by the political question doctrine and some of the claims are justifiable," the court wrote. "Although the parties have multiple procedural and substantive challenges to overcome down the road, they are entitled to their day -- or years -- in court on the justifiable claims."

The elderly Holocaust survivors originally filed the lawsuit in U.S. federal court in San Francisco in 1999 against the Vatican Bank and the Franciscan Order.

The class action lawsuit accused the Vatican Bank of receiving hundreds of millions of dollars of gold and other assets looted from victims of Croatia's brutal Ustasha regime from 1941-1945. As many as 700,000 people, most of them Serbs, were killed at death camps run by the Nazi-allied government.

The plaintiffs also alleged the illicit funds may have been funneled to groups working to smuggle Nazis out of Europe after the war, including Adolf Eichmann.

The lawsuit, which the lower court dismissed in 2003, did not seek any specific monetary amount but instead asked for, at least initially, a review of how much money was involved.

The Vatican Bank, which has denied the allegations, had argued foreign policy, not lawsuits, should address such historical claims. The bank's lawyer could not immediately be reached for comment.

The U.S. appeals court, however, did uphold the lower court's dismissal of some of the plaintiffs' allegations such as charges the Vatican Bank assisted the Nazi-allied Ustasha political movement, saying the issue was outside judicial jurisdiction.

But a lawyer representing the original 24 plaintiffs -- many of whom live in San Francisco -- expressed hope the case would move forward quickly as some of the survivors have been waiting more than 50 years for restitution.

"We're very pleased, very happy to have this case resurrected," said Kathryn Lee Boyd, who is a professor at Pepperdine University Law School. "We were successful on many of the claims -- the property claims were the meat of the case."