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In re Cases

July 5, 2006

IN RE: NAZI ERA CASES AGAINST GERMAN DEFENDANTS LITIGATION
THIS MATTER RELATES TO: RONALD MANDOWSKY ET AL., PLAINTIFFS,
v.
DRESDNER BANK AG, DEFENDANT.



The opinion of the court was delivered by: Bassler, Senior District Judge

FOR PUBLICATION

MDL No. 1337

OPINION

Plaintiffs Ronald Mandowsky and Seth Feldman (collectively as "Plaintiffs") move to set aside their December 19, 2000 Stipulation of Dismissal with Prejudice. Plaintiffs brought this action for compensation for property allegedly confiscated by defendant Dresdner Bank Aktiengesellschaft ("Dresdner Bank") as an agent of Nazi Germany. The property was located in what was formerly East Germany.

I. BACKGROUND

A. The Nacher Family Claims

Plaintiffs are the grandnephews and great-grandnephews of Ferdinand Nacher and Ignatz Nacher, respectively. Plaintiffs, as the heirs of Ferdinand and Ignatz, purport to be the rightful owners of property stolen by Dresdner Bank from their great-uncle Ignatz and now demand restitution. In 1934, Dresdner Bank, as affiliated with Nazi Germany, allegedly seized at gunpoint the majority stock certificates in Engelhardt Breweries from Ignatz Nacher, President of Engelhardt. (See Kerson Affidavit Ex. I, Original Complaint at ¶ 6; Ferdinand Nacher Affidavit (attached to Plaintiffs' Reply Memorandum) at ¶ 1.) Ignatz developed Engelhardt from its humble beginnings into a major brewery. (See William Barron Declaration, Ex. 3, Translation of the January 8, 1993 Berlin Court Decision at 3.)*fn1 After stealing his stock holdings, the Nazis deported Ignatz to Switzerland where he died in 1939. (Ferdinand Nacher Affidavit at ¶ 2; Kerson Affidavit Ex. A, May 25, 2004 International Organization for Migration Decision ("IOM Decision") at ¶ 3.) Soon thereafter, Ferdinand Nacher, Ignatz's nephew and vice-president of Englehardt, fled to Belgium. (Id. at ¶ 5.) Ferdinand made his way to the United States, served in the Army from 1943-1945 and became a citizen. (Id.) In 1956, Ferdinand was appointed Executor of Ignatz Nacher's estate. (Kerson Affidavit Ex. I, Original Complaint at ¶ 4.) From that date, Ferdinand pursued claims to Ignatz's stolen property in the courts of Germany and the United States. (Id.)

Ferdinand, represented by counsel at the time, settled a portion of the claims to the Nacher family property with Dresdner Bank in a West Berlin Court in 1956. (Plaintiffs' Reply Br. at 3; William Barron Declaration, Ex. 5, Translation of the December 18, 1956 Settlement Agreement at 21.) The 1956 settlement agreement provided that "all claims of . . . the Ignatz Nacher estate, on the one hand, and the Dresdner Bank . . ., on the other hand, are settled. Thus, not only are the principal claims settled, but also any entitlements to compensation and subsidiary claims that might somehow arise." (William Barron Declaration, Ex. 5, Translation of the December 18, 1956 Settlement Agreement at 5.)

Notwithstanding the 1956 settlement agreement, in 1990 Ferdinand Nacher filed a petition for restitution against Dresdner Bank in the Berlin District Court. The Berlin Court declared that the 1956 settlement "materialized effectively," and contrary to Ferdinand Nacher's allegations of deceit, the hearing "was not infringed upon." (William Barron Declaration, Ex. 3, Translation of the January 8, 1993 Berlin Court Decision at 19, 21.) The Court observed:

Insofar as [Ferdinand Nacher as the third party petitioner] lays claims to the purchase prices for the interests transferred, as well as the company properties transferred and the vehicle fleet . . ., it should be noted that his right as executor goes no further than that of the decedent [Ignatz Nacher]. [Ignatz Nacher] was owner of neither the Engelhardt-Brauerei AG nor the Groterjahn-Brauerei AG and the land and fleets belonging thereto, nor the other breweries set forth in the demand . . . . As a major stockholder of a corporation and as its chairman of the supervisory board he could steer the purchase and sale of breweries and real estate. But the profits from the sales didn't accrue to him, but rather the company represented by him. The profits came to him only through dividends. It operates the same for [Ferdinand Nacher as the third party petitioner] and the heirs represented by him with respect to the Engelhardt-Brauerei shares reimbursed to them in the settlement. He/they are not entitled to claims against the company for reasons of business politics.

A cancellation of the basis of a transaction, which could have the consequence that the settlement would have to adapt to the new conditions, did not take place. The possessions of the Engelhardt-Brauerei did not abruptly increase through the reunification of Germany. The third party petitioner himself doesn't state that parcels of land of the Engelhardt-Brauerei AG were dispossessed in East Berlin. (Id. at 25.)

On January 8, 1993, the Court denied Ferdinand Nacher's claims for restitution "insofar as they overstep[ped] the settlements arrived at on December 18, 1954." (Id. at 2.)

On April 13, 1994, Ferdinand filed a complaint against Dresdner Bank, as a foreign bank authorized to do business in New York, in the Supreme Court of New York demanding damages of $25 billion ($25,000,000,000.00). (Kerson Affidavit Ex. I, Original Complaint at ¶¶ 2, 4.) Ferdinand Nacher died in November 1996, naming his grandnephews, Plaintiffs, to continue in his place as co-executors of his estate. (Kerson Affidavit Ex. G, Last Will and Testament of Ferdinand Nacher at ¶¶ 3, 6.)

On August 15, 2000, Dresdner Bank removed the lawsuit to the United States District Court for the Eastern District of New York pursuant to 28 U.S.C. §§ 1331 and 1441. Dresdner Bank argued that the case became removable when the Governments of the United States and the Federal Republic of Germany entered into an Executive Agreement on July 17, 2000, pursuant to which Germany and German Industry created a Foundation, discussed infra, entitled "Remembrance, Responsibility and the Future" (the "Foundation"). (See Reply Declaration of William Barron, Ex. A, Dresdner Bank's Notice of Removal at ¶¶ 6, 7.)*fn2 Specifically, Dresdner Bank averred that the Executive Agreement enmeshed the Plaintiffs' claims with a substantial question of federal law. (Id. at ¶¶ 8-10.) The suit was then transferred here by order of the Multidistrict Litigation Panel and consolidated amongst approximately fifty similar cases "so that the Court could consider the impact of the German Foundation 'Remembrance Responsibility and the Future'" on the many civil suits being pursued in U.S. courts by Holocaust victims. In re Nazi Era Cases Against German Defendants Litigation, 213 F. Supp. 2d 439, 442 (D.N.J. 2002); see Multidistrict Litigation Panel Transfer Order, Docket No. 1337, 2000 U.S. Dist. LEXIS 11650 (August 4, 2000).

B. The Creation of the Foundation

The Foundation, examined at length in In re Nazi Era Cases Against German Defendants Litigation, was the result of an international effort led by Germany, the United States, and Israel to efficiently resolve the highly sensitive and numerous "claims for restitution and compensation arising out of the Holocaust." See 198 F.R.D. at 431-35 (internal citations omitted). As part of the extensive and historic negotiations that took place, it was agreed that in exchange for the creation of a 10 billion Deutsche Mark fund supporting the Foundation by the German Government and German industries, id. at 432-33, plaintiffs with pending lawsuits in the United States "promised dismissal with prejudice of all Holocaust-related litigation against German defendants pending in American courts (referred to as 'legal peace' by the parties). . . ." 213 F. Supp. 2d at 443; see also 198 F.R.D. at 430. The Foundation promised to provide Holocaust-era victims, or their heirs, with a "non-bureaucratic [and] non-adversarial" alternative means for recovery. 198 F.R.D. at 433.

On August 12, 2000, Germany promulgated the law creating the Foundation as a legal entity with the purpose of "respond[ing] to the moral responsibility of German business arising from the use of forced laborers and from damage to property caused by persecution, and from all other wrongs suffered during the National Socialist era and World War II." (Kerson Affidavit, Exhibit E, Executive Agreement between the Government of the Federal Republic of Germany and the Government of the United States of America concerning the Foundation, "Remembrance, Responsibility and the Future" at 2); id. at 432. The newly formed Foundation law provided that "[e]ligible claimants [would be] either those who personally were victims, or the heirs of victims who died after February 16, 1999." Id. at 433 (citing Gesetz Zur Errichtung Einer Stiftung "Erinnerung; Verantwortung und Zukunft" Translated as "Law of the Creation of a Foundation 'Remembrance, Responsibility and Future'" at § 13). Those eligible would be entitled to different amounts of recovery depending on the harm they or their family members endured. Id.

Overwhelmingly, the plaintiffs in U.S. courts sought voluntary dismissal with prejudice, examined in the Court's December 5, 2000 opinion, to ...


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