In Re: Austrian And German Holocaust Litigation
Burt Neuborne, New York, New York, (Melvyn I. Weiss, Deborah M. Sturman, Milberg Weiss Bershad Hynes & Lerach, New York, New York, Elizabeth J. Cabraser, Morris A. Ratner, Caryn Becker, Lieff, Cabraser, Heimann & Bernstein, New York, New York, Michael D. Hausfeld, Cohen, Milstein, Hausfeld & Toll, Washington, D.C., Joseph D. Ament, Michael B. Hyman, Much Shelist Freed Denenberg Ament & Rubenstein, Chicago, Illinois, Irwin Levin, Richard Shevitz, Cohen & Malad, Indianapolis, Indiana, Barry A. Fisher, Fleishman, Fisher & Moest, Los Angeles, California, on the brief), for Petitioners Duveen, Lowenberg, Lee, Milrod, Frenkel, Friedlander-Stuart, Kaufman, Buchwalter, Simon-Hamburger, Elkan, Neuberger, Schwarz, Gutman, and Bishop.
Robert A. Swift, Philadelphia, Pennsylvania (Kohn Swift & Graf, Philadelphia, Pennsylvania, Larry Kill, Linda Gerstel, Anderson Kill & Olick, New York, New York, Edward D. Fagan, Livingston, New Jersey, William Marks, The Marks Law Firm, Bernardsville, New Jersey, Carey R. D‘Avino, New York, New York, Michael Witti, Witti, Neumann & Partners, Munchen, Germany, on the brief), for Petitioners Watman, Abraham, Schonberger, Schlinger, Schwarz.
Stephen A. Whinston, Philadelphia, Pennsylvania (Edward W. Millstein, Berger & Montague, Philadelphia, Pennsylvania, Richard Appleby, New York, New York, Mel Urbach, Jersey City, New Jersey, J. Dennis Faucher, Miller Faucher Cafferty & Wexler, Philadelphia, Pennsylvania, on the brief), for Petitioners Kahn, Deutsch, Schaffer, and World Council Of Orthodox Jewish Communities, Inc.
Jeffrey Barist, New York, New York (On the brief: William R. Spiegelberger, Aline Matta, Milbank, Tweed, Hadley & McCloy, New York, New York, for Petitioner Deutsche Bank Ag; Philip Allen Lacovara, Thomas M. Mueller, Andrew H. Schapiro, Michael O. Ware, Mayer, Brown & Platt, New York, New York, for Petitioner Bayerische Hypo-und Vereinsbank Ag; Kenneth A. Caruso, Robert Y. Lewis, John A. Zaloom, Shaw Pittman, New York, New York, for Petitioner Dresdner Bank Ag; Roger M. Witten, John A. Trenor, Wilmer, Cutler & Pickering, Washington, D.C., for Petitioner Commerzbank Ag; Alan Kanzer, Alston & Bird, New York, New York, for Petitioner E.ON Ag).
David Boies, Armonk, New York (Ann M. Galvani, Carl J. Nichols, Boies, Schiller & Flexner, Armonk, New York, on the brief), for Respondent.
Lawrence Byrne, New York, New York (Lance Croffoot-Suede, Sharon M. Sash, Squadron, Ellenoff, Plesent & Sheinfeld, New York, New York), for Unnamed Plaintiff Putative Class Members Gutman et al. in Support of Respondent.
Douglas Hallward-driemeier, Attorney, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C. (Stuart E. Schiffer, Acting Assistant Attorney General, Mark B. Stern, Attorney, Appellate Staff, Civil Division, United States Department of Justice, David J. Anderson, David O. Buchholz, Attorneys, Federal Programs Branch, Washington, D.C., on the brief), for Amicus Curiae United States in support of Petitioners.
Schlam, Stone & Dolan, New York, New York (Richard H. Dolan, Bennette D. Kramer, of counsel), filed a brief for Amicus Curiae Individual Claims Committee for the Austrian Bank Holocaust Litigation Settlement in Support of Respondent.
Stroock & Stroock & Lavan, New York, New York (Charles G. Moerdler, Curtis C. Mechling, James A. Shifren, David A. Javdan, Joseph E. Strauss, of counsel), filed a brief for Amici Curiae Bank Austria AG and Creditanstalt Ag.
Before Oakes, Kearse, and Cabranes, Circuit Judges.
Per Curiam
The present litigation is a consolidation of putative, uncertified, class actions brought in 1998 and 1999 by Holocaust victims or their heirs asserting slave labor and property loss claims against certain German and Austrian banks. The claims against the Austrian banks were settled pursuant to a March 1999 agreement, which the district court approved in January 2000, see In re Austrian and German Holocaust Litigation, 80 F.Supp.2d 164, 180 (S.D.N.Y. 2000), aff‘d sub nom. D‘Amato v. Deutsche Bank, 236 F.3d 78, 87 (2d Cir. 2001). In October and November 2000, following the July 2000 signing of the Compact and the creation of the Foundation, all but one of the named plaintiffs moved in the district court for an order pursuant to
The district court, in an order dated March 7, 2001, initially denied the motion, citing three reasons. First, the Foundation had not been fully funded. Second, the absent members of the putative class, in any future effort to pursue their claims, would be faced with a Statement of Interest from the United States urging dismissal. Third, a subclass of plaintiffs comprising absent putative class members who had sued Austrian banks and settled their claims in part by receiving an assignment of those banks’ claims against German banks for misappropriation of Austrian bank assets during World War II (the “Assigned Claims“), was not to receive distributions from the Foundation on account of the Assigned Claims. In an order dated March 20, 2001, the court denied reconsideration. The court noted that although its first concern had, by then, been alleviated by completion of the Foundation‘s funding, the court remained concerned by the prejudice it envisioned with respect to the holders of the Assigned Claims. Accordingly, despite the motions for voluntary dismissal with prejudice to the moving plaintiffs and without prejudice to any absent putative class members, and without objection by the defendants, the district court refused to dismiss the moving plaintiffs’ claims.
The present mandamus petitions were filed by, respectively, plaintiffs Duveen, et al., Watman, et al., and Kahn, et al. (collectively “plaintiffs-petitioners“), and defendants Deutsche Bank AG, et al. (“German Bank petitioners“), seeking an order of this Court requiring the district court to grant forthwith the plaintiffs’ motions for voluntary dismissal. By order dated April 3, 2001, this Court invited the district court to respond, and it has done so through counsel, contending principally that mandamus relief is inappropriate both procedurally because of the availability of other routes to appellate review, and substantively because the court had an obligation to make a searching inquiry into the proposed dismissal and that inquiry led it to conclude that the dismissal would prejudice the absent putative subclass members holding the Assigned Claims. On April 27, we scheduled oral argument on the petitions for May 15.
have committed to urge the Foundation to adopt eligibility criteria for payment of Austrian Assigned Claims from the German Foundation property fund....
. . . .
10. The Central and Eastern European Board Members will urge that eligible holders of the Assigned Claims be allowed to present claims for property to the German Foundation Property Claims Panel on the same terms and conditions as any other claimant. They will urge, further, that the fact that holders of the Assigned Claims have already received partial payment for such claims under the Austrian bank settlement will not preclude them from seeking additional payments from the German Foundation‘s Property Claims Panel.
. . . .
12. The same coalition of Central and Eastern European Foundation representatives plays a similar role with respect to the Austrian Foundation, and will urge the adoption of claims criteria which similarly recognize the validity of the Assigned Claims.
. . . .
18. Plaintiffs’ counsel and their clients are making these commitments under the assumption that an order by this District Court granting the prior-filed motions for voluntary dismissal will remove all material conditions for the Bundestag to make a finding of final legal peace so that the German Foundation monies can be authorized to be paid by the close of the present session of the Bundestag.
19. Given the foregoing, plaintiffs now urge the Court to grant the prior-filed motion for voluntary dismissal, but only pursuant to
Fed. R. Civ. P. 60(b) . If the assumptions on which this motion is made prove to be untrue, plaintiffs will file motions to vacate the orders granting motions for voluntary dismissal. . . .
(Declaration of Michael D. Hausfeld dated May 9, 2001 (“Hausfeld Declaration” or “Declaration“), ¶¶ 8, 10, 12, 18-19 (emphases added).) The district court held a hearing on the reconsideration motion on May 10. At the hearing, Hausfeld reiterated the representations made in his Declaration. Other attorneys for plaintiffs-petitioners, however, pointed out that the Central and Eastern European representatives discussed by Hausfeld held only five seats on a 27-person German board. Burt Neuborne, an attorney for the Duveen plaintiffs who is also the Foundation board member designated by the United States to represent Holocaust victims, stated that the Board would give a proposal by the Central and Eastern European representatives serious, unbiased, and intense attention; but he stated that he could not predict what the result of that consideration would be. Stephen Whinston, an attorney for the Kahn plaintiffs, emphasized that any distribution by the Foundation to holders of the Assigned Claims on account of those claims would violate existing German law and thus could not be realized without new German legislation. He argued that it would be inappropriate to permit a Rule 60(b) challenge to a judgment of dismissal if the Foundation refuses to allocate money to the Assigned Claims in compliance with existing German law. Jeffrey Barist, speaking for the German Banks, added that, despite the hopes discussed by Hausfeld, the parties had no control over the timing of action to be taken by the German legislature:
[T]here is an assumption in Mr. Hausfeld‘s papers... that the Bundestag will declare legal peace by the close of its present term, which I understand to be June. As your Honor knows, before funds can flow from the foundation to the victims, the German Bundestag must find it to be adequate legal peace. Clearly, it is not for us to direct the parliament of a friendly foreign sovereign state as to its acts and, clearly, there can be no representation made by mere counsel as to what the parliament of Germany is going to do.
I should note for the record, however,... it is my understanding that Chancellor Schroeder and the German parliament have made it clear that dismissal of the case as presently before your Honor, which could include the cases in the consolidated complaint as to which voluntary dismissal has been sought, is regarded as a necessary condition to legal peace.
(Hearing Transcript, May 10, 2000 (“Tr.“), at 19-20.)
After hearing all the arguments, the district court stated as follows:
I have carefully considered this application, all of the supporting documentation, and I paid close attention to today‘s presentations, and I am going to rule from the bench. I find that the recent commitments and adjustments to the Compact as set forth today adequately remove the prejudice to the members of the Austrian Bank Settlement Class. Accordingly, I hereby grant the motion to dismiss the consolidated complaint subject to Federal Rule of Civil Procedure 60(b).
Now, I will issue a more detailed order and I am keeping in mind a number of the things said here at this hearing and will attempt to address them in the order.
(Tr. 22.) On May 11, 2001, the court issued its written order (“May 11 Order” or “Order“). The Order stated, in pertinent part, that
[p]laintiffs’ dismissal of their claims with prejudice is based on their understanding that:... (b) the Court‘s Order granting plaintiffs’ motions for voluntary dismissal of the Consolidated Complaint will remove all material obstacles preventing the German Bundestag from making a finding of final “legal peace” so that the German Foundation monies can be authorized to be paid to claimants by the close of the present session of the Bundestag. . . .
7. In renewing their motion to voluntarily dismiss the Consolidated Complaint, plaintiffs rely on the assumptions as set forth above, in the Hausfeld Declaration, and at the Hearing. If any of the assumptions on which this renewed motion is made are not realized or prove to be untrue, plaintiffs have represented that they will file motions, pursuant to
Federal Rule of Civil Procedure 60(b) , to vacate the orders granting motions for voluntary dismissal, in this case and in related actions involving slave labor and insurance claims. Plaintiffs may also move, pursuant toFederal Rule of Civil Procedure 60(b) , to vacate this Order in the event the eligibility criteria of the German Foundation and/or Austrian Foundation are not revised as contemplated in the Hausfeld Declaration.
Id. page 6, ¶ 7. The Order stated that “[a]ll claims against all German defendants in the above-captioned actions are dismissed with prejudice as to all plaintiffs who have previously moved to voluntarily dismiss the Consolidated Complaint....” Id. pages 6-7, ¶ A. The court stated that it would entertain a motion to transfer to another venue the claim of the one plaintiff who had not sought a voluntary dismissal; the Clerk of the Court was directed to enter a final judgment immediately with respect to the dismissed claims.
Despite the May 11 Order‘s dismissal of all claims asserted by plaintiffs-petitioners, all petitioners contend that their mandamus petitions are not moot, arguing principally that paragraphs 4(b) and 7 of the May 11 Order exceed the authority of the district court. They contend that the court should be directed, at the least, to excise those paragraphs from the Order. Whether by mandamus or by treatment of the mandamus petitions as appeals from the May 11 Order, we agree.
A writ of mandamus is available “only to confine an inferior court to a lawful exercise of its prescribed authority, or to compel it to exercise its authority when it is its duty to do so.” Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 18 (1983); see also In re IBM, 687 F.2d 591, 603 (2d Cir. 1982) (granting mandamus where district court had failed for nearly three months to rule on a stipulated motion for dismissal, the legal issues were “clear-cut,” and several concerns “emphasize[d] the importance of a prompt disposition of th[e] matter and of the litigation“). Further, mandamus is an extraordinary remedy, and the writ normally is not to be granted if the relief sought could be obtained by means of a direct appeal. See, e.g., Helstoski v. Meanor, 442 U.S. 500, 505-08 (1979); Kerr v. United States District Court, 426 U.S. 394, 403 (1976). An order that is beyond the scope of the district court‘s authority is of course normally remediable through a direct appeal.
As a procedural matter, the district court‘s May 11 Order appears to be a final order from which an appeal could be taken; and arguably the issuance of that order makes consideration of the petition for mandamus inappropriate. In an ordinary case, if a party sought mandamus to compel the district court to approve an unopposed attempt at voluntary dismissal of the action and the court, prior to argument on the mandamus petition, entered a final judgment dismissing the action, we would likely dismiss the petition as moot, either because all of the relief sought had been granted or because any perceived error in the dismissal could be challenged by an appeal from the judgment. See, e.g., National Equipment Rental LTD v. Mercury Typesetting Co., 323 F.2d 784, 786 (2d Cir. 1963); see generally Bridge C.A.T. Scan Associates v. Technicare Corp., 710 F.2d 940, 944 (2d Cir. 1983) (court normally does not treat premature appeals as requests for mandamus). We will, however, depart from our normal practice where there is a strong public interest in expeditiously deciding the issues presented and a direct appeal would occasion inappropriate delay, see, e.g., In re Federal Communications Commission, 217 F.3d 125, 133-34 (2d Cir.), cert. denied, __ U.S.___, 121 S. Ct. 606 (2000), or there has already been undue delay, see, e.g., Corcoran v. Ardra Insurance Co., 842 F.2d 31, 35 (2d Cir. 1988) (treating improvidently filed appeal as a petition for mandamus). These criteria for either mandamus or treatment of the petitions as appeals are plainly met here.
Under Article III of the Constitution of the United States, the province of the Judicial Branch of the federal government is the adjudication of the rights of the parties to cases or controversies under the applicable laws. The conduct of foreign relations is committed largely to the Executive Branch, with power in the Legislative Branch to, inter alia, ratify treaties with foreign sovereigns. The doctrine of separation of powers prohibits the federal courts from excursions into areas committed to the Executive Branch or the Legislative Branch. Given that separation of powers, “the political-question doctrine restrains courts from reviewing an exercise of foreign policy judgment by the coordinate political branch to which authority to make that judgment has been ‘constitutional[ly] commit[ted].‘” Goldwater v. Carter, 444 U.S. 996, 1006-07 (1979) (Brennan, J., dissenting (quoting Baker v. Carr, 369 U.S. 186, 217 (1962))). It is thus beyond the authority of the courts to interfere with the Executive Branch‘s foreign policy judgments. See, e.g., First National City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 766 (1972) (“‘The conduct of the foreign relations of our government is committed by the Constitution to the executive and legislative--‘the political‘--departments of the Government, and the propriety of what may be done in the exercise of this political power is not subject to judicial inquiry or decision.‘” (quoting Oetjen v. Central Leather Co., 246 U.S. 297, 302 (1918))).
In light of these constraints, we have considerable difficulty with the two portions of the May 11 Order that are challenged by petitioners, to wit, part (b) of paragraph 4, and all of paragraph 7. As quoted above, paragraph 4(b) expresses an understanding that the Order “will remove all material obstacles preventing the German Bundestag from making a finding of final ‘legal peace’ so that the German Foundation monies can be authorized to be paid to claimants by the close of the present session of the Bundestag.” Order page 4, ¶ 4(b). Paragraph 4(b) seemingly requires the German legislature to make a finding of legal peace and to do so before its summer recess. It would be beyond the authority of the court so to trammel on the prerogatives of a legislature in the United States. Much less does the court have the power to require such actions of the legislature of a foreign sovereign.
Most importantly, the last sentence of paragraph 7 states that plaintiffs may make a
It is of course true under our federal jurisprudence that any final judgment may be the subject of a motion to vacate pursuant to
The petitions for a writ of mandamus with respect to the motions for dismissal are granted. The district court is instructed to enter forthwith an amended judgment that (1) omits part (b) of paragraph 4 of the May 11 Order (and re-letters the succeeding parts of that paragraph as necessary), and (2) omits the paragraph 7 of that Order.
We note that certain petitioners have also asked that the matter be remanded to a different judge. Only a ministerial act is required for the amendment of the judgment on remand, and we decline to remand to a different judge. We also note that certain petitioners filed, in addition to their mandamus petitions, notices of appeal from the district court‘s March orders denying dismissal (Nos. 01-7289 and 01- 7321). In light of the district court‘s May 11 Order and this Court‘s issuance of mandamus, we regard those appeals as moot, and they are dismissed.
The mandate shall issue forthwith.