Bodner v. Banque Paribas

• Decision Date: 31 August 2000
• Docket Number: No. 98 CV 7851(SJ).,No. 97 CV 7433(SJ).,97 CV 7433(SJ).,98 CV 7851(SJ).
• Citation: 114 F.Supp.2d 117
• Parties: 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.
• Court: U.S. District Court — Eastern District of New York

114 F.Supp.2d 117

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.

No. 97 CV 7433(SJ).

No. 98 CV 7851(SJ).

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

August 31, 2000.

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Goodkind Labaton Rudoff & Sucharow LLP, New York City, by Kenneth F. McCallion, Thomas A. Dubbs, H. Rajan Sharma, Roy H. Carlin, PC, New York City, Harriet Tamen, New York City, Cohen Milstein Hausfield & Toll, PLLC, Washington, D.C., by Michael D. Hausfeld, Paul T. Gallagher, Lieff Cabraser Heimann & Bernstein, New York City, by Elizabeth Cabraser, Michael Ratner, Milberg Weiss Bershad Hynes & Lerach, LLP, New York City, by Melvyn Weiss, Joseph Opper, Milberg Weiss Bershad Hynes & Lerach, LLP, New York City, by Melvyn Weiss, Joseph Opper, Cohen & Malad, PC, Indianapolis, IN, by Irwin Lewin, Richard Shevitz, Law Offices of Curtis Trinko, LLP, New York City, Starr & Holman, LLP, New York City, by Thomas A. Holman, for plaintiffs.

Shearman & Sterling, New York City, by Frederick T. Davis, for defendants Banque Paribas, Credit Lyonnais, Societe Generale, Credit Agricole, Banque Indosuez a/k/a Credit Agricole Indosuez, Natexis f/k/a Banque Credit Francaise due Commerce Exterieur.

White & Case, LLP, New York City, by Owen C. Pell, for defendants Credit Commercial de France and Chase Manhattan Bank.

Cahill Gordon & Reindel, New York City, by Floyd Abrams, for Barclay's Bank and J.P. Morgan.

Chase Manhattan Legal Department, New York City, by Robert Stephenson, for defendant Chase Manhattan Bank.

MEMORANDUM AND ORDER

JOHNSON, District Judge.

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 Bodner¹ 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.

In Count Six, plaintiffs contend that Defendant banks were obligated to retain and hold accounts, assets, and property on their behalf in trust and with the highest degree of care. Id. at ¶ 138. From the moment the blocking laws became effective, plaintiffs claim the banks accepted a de facto legal role as trustees of the sequestered accounts and safe deposit assets. Id. at ¶ 139. Despite this, defendants failed to provide adequate information as to the status of plaintiffs' assets and property. Nor have they, according to plaintiffs, offered restitution or compensation for their retention of the assets or their non-disclosure of records pertaining to plaintiffs. Id. at ¶ 142. Plaintiffs claim Defendant banks failed to return blocked assets pursuant to 1944 laws requiring them to do so, and an accounting is necessary in order to best determine the rights of the plaintiffs. Since they never relinquished their interests to these accounts, plaintiffs allege they are entitled to demand a full accounting. Id. at ¶ 142.

The Matteoli Commission²

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...