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BODNER v. BANQUE PARIBAS

August 31, 2000

FERNANDE BODNER, ET AL., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
V.
BANQUE PARIBAS, ET AL., DEFENDANTS. ANNE MARIE BENISTI, ET AL., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS, V. BANQUE PARIBAS, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Johnson, District Judge.

    MEMORANDUM AND ORDER

Presently before the Court are defendants' motions to dismiss this action on various grounds including standing, international comity, Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, and other jurisdictional and substantive grounds. For the reasons stated below, defendants' motions to dismiss are denied in their entirety.

BACKGROUND

The Bodner*fn1 and Benisti plaintiffs bring this action for damages, an accounting, and to recover cash, records, art, jewelry, bank deposits, instruments, securities, other business, personal, and real property, and other assets allegedly wrongfully taken and withheld from them and their families (hereafter, the "looted assets") by persons or entities including Defendant Banks during the German occupation in France, and by the Vichy government. Plaintiffs seek recovery of the looted assets, full disclosure, accounting, disgorgement, restitution, compensatory, and punitive damages for the unlawful seizure and retention of the assets and the unjust enrichment of defendants over the past 50 years.

Before this Court are two related class actions, Bodner, et al. v. Banque Paribas, et al, No. 97 Civ. 7433, and Benisti, et al. v. Banque Paribas, et al., No. 98 Civ. 7851. The cases are substantially identical, except Bodner was filed on behalf of United States citizens and the Benisti plaintiffs are aliens who assert their claims under the Alien Tort Claims Act. Defendants' motions to dismiss apply to both cases and this Memorandum and Order shall resolve the pending issues in each case.

The Parties

The putative plaintiff class consists of all persons who themselves or whose family members were the Jewish victims and survivors of the Nazi Holocaust in France, their heirs and beneficiaries, and whose assets were deposited in or processed by or converted by one or more of Defendant banks during or after the Holocaust and not returned to the present date. Compl. at ¶ 76-77. The Bodner plaintiffs are United States citizens, while the Benisti plaintiffs are aliens who bring claims under the Alien Tort Claims Act.

Defendants are banking institutions operating in France during World War II, and their predecessors or successors. Named defendants are alleged to control the overwhelming majority of the banking market in France, and also do substantial business worldwide. Id. at ¶ 79. Plaintiffs contend defendants have substantial records and documents tracing the history, fate, and location of the looted assets. Id. at ¶ 79.

Underlying Facts

Plaintiffs claim defendants aided and abetted and conspired with the Vichy and Nazi regimes to plunder private property of plaintiffs, that defendant banks actively participated and profited from the plunder, and that these actions deprived plaintiffs of their means to finance their escape. Id. at ¶ 116.

The gravamen of plaintiffs' case is that defendants' looting of Jewish assets, the derivative facilitation of the murder of Jewish civilians as part of the Nazi regime's genocide program, and antisemitic discrimination by seizing Jews' property constituted complicity and conspiracy with the Nazi and Vichy regimes and aided and abetted the violations of international law during the war. Id. at ¶ 116. After the war, plaintiffs claim the defendants unjustly refused to return the looted assets, enriched themselves with the derivative profits, and concealed information, value, and derivative profits of the looted assets from the plaintiffs. Id. at ¶ 117.

According to plaintiffs, actions in furtherance of these goals included a French Banking Association Circular outlining the plan to seize plaintiffs' assets; blocking and confiscating plaintiffs' accounts and safety deposit boxes in advance of any official compulsion to do so; asking depositors to fill out detailed geneological questionnaires before allowing them, if non-Jewish, to withdraw or transfer funds; acting in concert with the Nazis and Vichy to profit from the expropriated assets; misrepresenting to plaintiffs and the general public their role during the Vichy government and their continued retention of assets; and failing to provide an accounting and restitution to plaintiffs. Id. at ¶ 118.

The Complaint

In the complaint, plaintiffs make several claims and seek to recover both monetary and declaratory relief. In Count One of the complaint, plaintiffs claim defendants' actions violated international laws including, but not limited to: the Nuremberg Charter Article 6(b), the Nuremberg Principles, the Hague Convention of 1907 Article 46, the Genocide Convention Article III(e), the United Nations Charter, and the Universal Declaration of Human Rights. Id. at ¶ 119.

In Count Two of the complaint, plaintiffs allege a violation of the Convention of Establishment, a 1959 treaty between the United States and France, which dictates the property of nationals of either contracting party could not be expropriated without a public purpose and just compensation. Id. at ¶ 123. Plaintiffs allege the treaty is applicable because the majority of the plaintiff class emigrated and became citizens of the United States after World War II. Id. at ¶ 123.

Count Three claims that defendants wrongfully assumed, retained, and exercised rights of ownership over the looted assets and that this constitutes conversion. Count Four alleges unjust enrichment in that defendants' refusal and failure to return the looted assets improperly deprived plaintiffs of their property and afforded defendants a substantial windfall from over fifty years of interest and investment returns. In Count Five, plaintiffs claim defendants had a special duty, in addition to their fiduciary responsibilities, to hold and maintain plaintiffs' assets with the utmost care for the account holders and their families and successors in interest. Defendants allegedly breached their fiduciary and special duties to plaintiffs by seizing the assets and by failing to conduct a full accounting after the war. Id. at ¶ 135.

The Matteoli Commission*fn2

The French government formed an independent commission comprised of historians, diplomats, lawyers, and magistrates to "study the conditions in which goods may have been illicitly acquired . . . and to publish proposals" regarding redress of Holocaust-era atrocities in France. Ptf.Mem. at 6 (quoting 1st Matteoli Comm'n Rep. at 4). The self-termed "study mission" submitted its first progress report submitted to the French Prime Minister on December 31, 1997. In that document, the Commission discussed its mandate, its inability to provide relief or redress to injured parties under its charter, and its largely information-gathering role. 1st Report at 3-4, 116. The second progress report was released in February of 1999. The Commission published its final report and an English summary on April 17, 2000. Since the completion of its final report, and having achieved its mandate, the Commission has been dissolved.

While defendants claim the work of the commissions will, in large part, obviate the issue of redress, plaintiffs question the degree to which the magnitude of restitution appropriate has been acknowledged. Specifically, there appears to be an unaccounted, missing five billion francs upon review and some numbers contained in the reports appear to raise questions. According to plaintiffs, the Commission estimates that the amount of assets blocked initially is more than three times the amount of assets distributed in restitution, which may account for the missing five billion francs.

Defendant banks are claiming full compliance and maximum cooperation with the efforts of the commission; defendants claim that full restitution will eventually be achieved for the plaintiff class through the efforts of this commission. However, the parties disagree about the role of the commission. Plaintiffs note the Commission was not designed nor intended to deal with individual claims, but to "treat general characteristics of spoilation and restitution . . . it is not compatible with responding to individual requests, not matter how legitimate the concerns which give rise to them." Ptf.Mem. at 6 (quoting 1st Matteoli Comm'n Rep. at 4). Defendants counter, claiming the Matteoli Commission is a part of a comprehensive endeavor on the part of the French government to flush out the scope of liability, provide a full accounting, and to make restitution.

The Saint Geours Supervisory Committee

The Drai Commission

The Matteoli Commission created a third commission charged with examining individual applications and working to compensate the victims of spoilation resulting from Holocaust-era anti-Semitic legislation. Final Report at 15. The Drai Commission was created as a reconciliation body to attempt to reach an agreement between the parties. Id. If settlement proved impracticable, the commission, established September 10, 1999 by prime ministerial decree, was to investigate, and make recommendations as to how to achieve individual restitution, likely through the framework of a government-sponsored institution. Id.

Defendants' Motions to Dismiss

In their motion, defendants claim: (1) plaintiffs lack standing to pursue these claims; (2) there is no federal question subject matter jurisdiction over either action, and that there is no diversity jurisdiction over the Bodner case; (3) the Court should defer to proceedings in France and decline jurisdiction under principles of international comity, the Act of State Doctrine, and the doctrine of forum non conveniens; (4) plaintiffs have failed to state a claim, under French or New York law, for the violation of any international law or breach of any treaty and their claims are time-barred; (5) plaintiffs have failed to join indispensable parties.

PROCEDURAL HISTORY

The Bodner case was commenced on December 17, 1997. Plaintiffs filed the first amended complaint on March 20, 1998. The Second Amended Complaint was filed in this case on March 1, 1999. The related action, Benisti, was filed on December 23, 1998. The parties filed this motion on November 1, 1999. This Court heard oral argument on the motion on March 15, 2000.

DISCUSSION

I. Standing

Defendants claim that plaintiffs lack standing to maintain this action because they have not pled sufficient facts to demonstrate the injuries alleged are "fairly traceable" to particular defendants' conduct and because plaintiffs' state claims regarding property interests of their deceased families. Plaintiffs dispute the merit of each of these grounds, claiming they have standing to sue each defendant, even those with whom they had no specific transactions, as the Second Amended Complaint alleges facts sufficient to show a conspiracy which included even the banks which did not have specific transactions with the plaintiffs. Plaintiffs also claim the named plaintiffs have standing to sue in their own capacities, for restitution of assets that have vested in them.

A. Causation

However, plaintiffs accurately state that they need not show more than general factual allegations laying out a good faith basis for how one or more of the defendants injured plaintiffs. Nor must each plaintiff allege facts against all defendants, nor each defendant's relationship with a plaintiff be explicitly identified. Under conspiracy law, where a plaintiff alleges injury as a result of a conspiracy where there were non-dealing actors, plaintiff has standing to sue the non-dealing partner-defendants. Brown v. Cameron-Brown Co., 652 F.2d 375, 378 (4th Cir. 1981). Presidential Life Ins. Co. v. Milken, 946 F. Supp. 267, 280 (S.D.N.Y. 1996). Defendants may be responsible for a co-conspirator's conduct in furtherance of the alleged conspiracy even if they have not dealt directly with plaintiffs. See Continental Cas. Co. v. Diversified Indus., 884 F. Supp. 937, 961 (E.D.Pa. 1995). The `silent partner' banks may be liable for their acts in furtherance of the conspiracy. Courts have found that plaintiffs have standing to sue in situations such as this. See e.g., In Re NASDAQ Market-Makers Antitrust Litigation, 169 F.R.D. 493, 508 (S.D.N.Y. 1996) (reasoning the injury to one plaintiff by a particular defendant as a result of the conspiracy confers standing to represent a class of plaintiffs injured by any of defendants' co-conspirators, even where only twenty-three of thirty-three defendants were alleged to have traded on behalf of plaintiffs); duPont Glore Forgan Inc. v. American Tel. & Tel., 69 F.R.D. 481, 486 (S.D.N.Y. 1975) (finding standing exists where plaintiffs dealt with only two of twenty-three defendant companies).

The Second Circuit has dismissed complaints which plead conspiracy in vague or conclusory terms and which do not allege specific instances of misconduct in furtherance of the conspiracy. See Ostrer v. Aronwald, 567 F.2d 551, 553 (2d Cir. 1977). Likewise, this Court has ruled that the presentation of conclusory statements regarding the existence of a conspiracy, without reference to specific facts which might support a conspiracy, do not adequately support a claim of conspiracy in the pleadings. Harrison v. New York City Dep't of Corrections, No. 96 Civ. 1465(SJ), 1997 WL 218211, at *2 (E.D.N.Y. Apr. 21, 1997). Plaintiffs in the instant case, however, have described in detail the conspiracy alleged to have existed during and after the Holocaust to deprive Jews of their assets, its continuation after the end of World War II, and the public laws and social structures enacted to enable the alleged conspiracy. The Second Amended Complaint alleges concerted action in violation of international law, including a tremendous conspiracy, wherein the entire power structure of the French banking ...


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