207 F.Supp.2d 16 (E.D.N.Y. 2002), 99 Civ. 3487, Garb v. Republic of Poland

Docket Nº:99 Civ. 3487(ERK).
Citation:207 F.Supp.2d 16
Party Name:Theo GARB, et al., Plaintiffs, v. REPUBLIC OF POLAND and Ministry of Treasury of Poland (Ministertwo Skarbu Panstwa), Defendants.
Case Date:June 24, 2002
Court:United States District Courts, 2nd Circuit, Eastern District of New York
 
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207 F.Supp.2d 16 (E.D.N.Y. 2002)

Theo GARB, et al., Plaintiffs,

v.

REPUBLIC OF POLAND and Ministry of Treasury of Poland (Ministertwo Skarbu Panstwa), Defendants.

No. 99 Civ. 3487(ERK).

United States District Court, E.D. New York.

June 24, 2002

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Joseph P. Garland, Law Office of Joseph P. Garland, New York, NY; Stephen A. Whinston, Berger & Montague, P.C., Philadelphia, PA (Edward W. Millstein, Michael C. Dell'Angelo, Berger & Montague, P.C., Philadelphia, PA; Mel Urbach, Law Offices of Mel Urbach, Jersey City, NJ; Edward E. Klein, Jay Solomon, Solomon Jaskiel, Klein & Solomon, LLP, New York, NY; Marvin A. Miller, Miller Faucher & Cafferty LLP, Chicago, IL; J. Dennis Faucher, Miller Faucher & Cafferty, LLP, Philadelphia, PA; J. Daniel Azulay, Azulay & Azulay, P.C., Chicago, IL; Kenneth F. McCallion, Rajan Sharma, Goodkind Labaton Rudoff & Sucharow, New York, NY; Kenneth A. Elan, Law Office of Kenneth A. Elan, New York, NY, on the brief), for Plaintiffs.

Owen C. Pell (Karen M. Asner, Alycia Regan-Benenati, on the brief) White & Case LLP, New York, NY, for Defendants.

MEMORANDUM & ORDER

KORMAN, Chief Judge.

The complaint in this case arises out of the near total annihilation of the Jews of Poland by the Nazis during World War II and the subsequent horrendous treatment of the small number who survived. Prior to the War, Poland had the largest Jewish population in all of Europe--more than three million Jews. The overwhelming majority of these Jews died during the War or were murdered by the Nazis and their Polish collaborators. A small number of Polish Jews fled to Palestine. The majority of those who were fortunate to escape the horrors of the Holocaust moved eastward and sought refuge in the Soviet Union. After the War, on July 6, 1945, the Soviet Union and Poland entered into a repatriation agreement whereby 230,000 of these Polish Jews returned to Poland.

Many of the surviving Jews were in "horrible condition[;] ... they [were] exhausted, starved and half-naked, or in rags ... [and] sick." (Stein Aff. ¶ 9.) They arrived to find Poland "in a state of chaos and ruin." (Id. ¶ 5.) Much of their "property had been adversely possessed for as long as five years by the time of liberation and repatriation." (Pls.' Mem. at 5.) Tensions over that property sparked a renewal of violence against the Jews. During the

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first two years after the war, more than 1,000 Jews were murdered. (Stein Aff. ¶ 10.)

Post-War violence against the Jews culminated in a riot which occurred on July 4, 1946 in Kielce, Poland. (Am.Compl.¶ 93.) A local boy's accusation of kidnaping by a mentally disabled Jew ignited simmering tensions between Jewish and non-Jewish residents of the town. (Stein Aff. ¶ ¶ 15-16.) A crowd gathered around a building that housed nearly 200 Jews. According to plaintiffs' affidavit, Polish army officers disarmed the Jewish residents of the building and forced them into the hands of the mob, whereupon 41 Jews were killed. (Id. ¶ 17.) Some historians believe that the riot was planned and implemented by Polish security officials and communist party higher-ups. (Id. ¶ ¶ 22-34.) Although nine individuals alleged to have participated in the Kielce riot were tried and executed, the army officers and security officials allegedly responsible for the riot were arrested, but never tried. (Id. ¶ ¶ 20, 22.)

Violence against Jews did not end after Kielce. Thirty-three other Jews were murdered that month. (Am.Compl.¶ 93.) Jewish property was looted. (Id.) The result of this post-war violence was that the vast majority of the few remaining Jews in Poland chose to emigrate by 1946, leaving behind their property and possessions. (Id. ¶ 95.) Anti-Semitic violence continued in Poland even after this mass immediate post-war emigration. In 1956, there were more than 40 incidents where Jews were beaten or abused. (Stein Aff. ¶ 39.) Plaintiffs allege that the local authorities did not react appropriately to these incidents and cite statements concerning the anti-Semitism of Communist party officials. (Id.) Plaintiffs also allege that in 1967 some 9,000 Jews were purged from the Communist party, the Foreign Ministry, the armed forces and the defense establishment in response to concerns over the development of a "Fifth Column" anti-Communist movement. (Id. ¶ 47; Am. Compl. ¶ 96.)

It is undisputed that, after the post-Kielce emigration, Poland nationalized land in 1946-47. Defendants maintain, however, that these nationalization laws affected all Poles and did not target or discriminate against Polish Jews specifically. (Defs.' Reply Mem. at 2; see Korzycka-Iwanow Aff. ¶ ¶ 9-10 (outlining six nationalization statutes enacted by the then-governing communist regime as a "means of production and central planning and management of the national economy")). According to defendants, laws were enacted relating to the following categories of property: (1) "deserted properties;" (2) "post-German" properties; and (3) "abandoned properties." (Korzycka-Iwanow Aff. ¶ ¶ 4-5.) The laws provided that "deserted property"--real property that was confiscated by the Nazis or that was the subject of forced sales--was to be returned to its owners, or their legal successors, if a claim application was received by December 31, 1948. (Id. ¶ 5.) Conversely, property characterized as "abandoned"--once belonging to the Third Reich or German citizens--became the property of the Treasury. (Id.) Plaintiffs allege that the true owners of much of this "abandoned property" were Jews and that this category was established to legitimize the taking of that property by defendants. (Am.Compl.¶ 102.)

On July 16, 1960, an Agreement was signed by Poland whereby it agreed to pay $40 million over a period of twenty years in full settlement of claims by United States nationals arising from the nationalization of property, the appropriation or loss of the use of property by the Polish government, and debts owed by nationalized enterprises or upon property which

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has been nationalized. See generally Agreement with the Government of the Polish People's Republic Regarding the Claims of Nationals of the United States, July 16, 1960, 11 U.S.T. & O.I.A., T.I.A.S. No. 4545 (1960) ("1960 Treaty"). Claims for war damage and property taken by governments other than Poland were not covered under the agreement. (Id.) The Agreement was also restricted to persons who were United States citizens on the date the property was taken by the Polish government. (Id.)

Plaintiffs allege that officials of the Polish army and security services incited, participated in, and purposely failed to prevent the Kielce riot and the subsequent anti-Jewish violence--actions "motivated not simply by abstract anti-Semitism, but by a specific desire to prevent Polish Jews from reclaiming their property" after World War II. (Pls.' Mem. at 7.) Plaintiffs also cite a book alleging that the American government had some "official and semi-official indications provided by the Warsaw government that it is encouraging the migration of the Jews of [a major] part of its Jewish population." (Stein Aff.¶ 12, citing George Lenczowski, The Middle East in World Affairs 330 (1980)). According to plaintiffs, "[a]t all times relevant to the events described herein, ministers, officers, and directors of Poland and [the Ministry of the Treasury] knew, or were in the possession of such information that they should have known, that they were part of an unlawful scheme that (i) resulted in depriving the Jewish Holocaust victims and their heirs of their Properties, and (ii) provided Poland and [the Ministry] with enormous profits from the use and enjoyment of such Properties." (Am.Compl.¶ 108.)

Plaintiffs and class members are "Jewish persons and entities (and their heirs and successors) who owned real property and improvements thereon in Poland during the period September 1, 1939 to May 30, 1945." (Am.Compl.¶ ¶ 2, 68.) Plaintiffs allege five claims. First, plaintiffs contend that defendants violated customary international law by creating, participating in, and/or failing to prevent the permanent dispossession of Polish Jews' property in the aftermath of the Holocaust and that defendants then profited commercially from their management of the properties. (Am.Compl.¶ ¶ 111-15.) Second, plaintiffs also accuse defendants of wrongfully converting plaintiffs' and other class members' properties for their own use and benefit. (Am.Compl.¶ ¶ 116-18.) Third, plaintiffs seek an order declaring defendants to be constructive trustees of the property seized and requiring them to turn over the income and profits of that property to plaintiffs and other class members. (Id. ¶ ¶ 119-21.) Fourth, plaintiffs demand an accounting of the amount and disposition of the property seized and of the profits derived therefrom. (Id. ¶ ¶ 122-24.) Fifth, the sub-class of plaintiffs whose property is currently held by a defendant, or any other Polish governmental body, seeks restitution. (Id. ¶ ¶ 125-28.)

DISCUSSION

A. Introduction

The Republic of Poland and its Ministry of the Treasury move pursuant to Federal Rule of Civil Procedure 12(b) to dismiss this action on the ground, inter alia, of lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1330, 1602-1611 (2001), which "provides the sole basis for obtaining jurisdiction over a foreign state in federal court." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 439, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989). The Act is composed of both jurisdictional provisions, 28 U.S.C. § 1330,

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and immunity provisions, 28 U.S.C. §§ 1602-1611. Section 1330(a) grants the district courts "original jurisdiction without regard to amount in controversy of any nonjury civil action...

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