D'Amato, et al. v. Deutsche Bank
| Decision Date | 01 August 1999 |
| Docket Number | Docket No. 00-7130 |
| Citation | 236 F.3d 78 |
| Parties | (2nd Cir. 2001) ALFONSE M. D'AMATO, Special Master, HAROLD WATMAN, on behalf of himself and all other persons similarly situated; RUTH ABRAHAM, on behalf of herself and all other persons similarly situated; MICHAL SCHONBERGER, on behalf of himself and all other persons similarly situated; Plaintiffs-Appellees, GERALD HAAS; CHARLOTTE HASS SCHUELLER; GABRIELE HAMMERSTEIN; HELEN NIGHTENGALE; ALICE NIGHTENGALE LUHAN; SIMON BRONNER, Consolidated Plaintiffs-Appellees, v. DEUTSCHE BANK; DRESDNER BANK; GERMAN BANKING INSTITUTIONS #1 - 100, Defendants. RUDOLFINE SCHLINGER; ERNESTINE SCHWARZ WASYL, Plaintiffs-Appellees, v. CREDITANSTALT AG; BANK AUSTRIA AG, Defendants-Appellees, PETER GEORGI, Movant-Appellant |
| Court | U.S. Court of Appeals — Second Circuit |
Appeal from the judgment of the United States District Court for the Southern District of New York (Shirley W. Kram, Judge) entered January 12, 2000, certifying the plaintiff class for settlement purposes and approving as fair the settlement agreement between Plaintiffs and Defendants, and denying Peter Georgi's motion to intervene.
AFFIRMED.
[Copyrighted Material Omitted]
Peter Georgi, pro se, Woodland Hills, California.
Robert Swift, Kohn, Swift & Graf, P.C., Philadelphia, Pennsylvania (Dennis F. Sheils, Neil L. Glazer, Kohn, Swift & Graf, P.C., Philadelphia, Pennsylvania, on the brief; Lawrence Kill, Anderson, Kill & Olick, P.C., New York, New York, on the brief; Edward D. Fagan, Fagan & D'Avino, LLP, Livingston, New Jersey, on the brief), for Plaintiffs-Appellees.
Charles G. Moerdler, Stroock, Stroock & Lavan LLP, New York, New York (Curtis C. Mechling, James A. Shifran, David A. Javdan, Emily Culpepper, Stroock, Stroock & Lavan LLP, New York, New York, of counsel), for Defendants-Appellees.
Before: LEVAL and PARKER, Circuit Judges.*
Peter Georgi, pro se, appeals from the judgment of the United States District Court for the Southern District of New York (Shirley W. Kram, Judge) entered January 12, 2000, denying his motion to intervene and approving the settlement in this consolidated class action. Plaintiffs, who are members of groups persecuted by the Nazi regime during World War II, seek redress for various torts and international law violations committed against them by, among other defendants, Bank Austria AG and Creditanstalt AG, (collectively "the Austrian Banks").1 After reaching a settlement agreement, Plaintiffs and Defendants sought both certification of the plaintiff class for settlement purposes and approval of the settlement. Appellant Georgi, a purported member of the class, moved to intervene and to add the Republic of Austria and Brown Brothers Harriman (a private bank) as defendants. Georgi objected to the adequacy of the settlement, claiming that it is insufficient to cover even his claim against the Austrian Banks. He also claimed that the existing parties were providing inadequate representation.
For reasons set forth below, we affirm the District Court's order that Georgi's motion to intervene be denied as untimely. Further, we affirm the District Court's approval of the settlement.
In 1938, German troops invaded Austria and annexed it into the German Reich in what is now known as the Anschluss. Subsequent to this annexation, the Nazi regime took control over major Austrian financial institutions, including Creditanstalt and Landerbank (which was later merged into Bank Austria). During the period from 1938 to 1945, these banks participated in a process called "Aryanization" whereby the Nazi regime seized assets and properties belonging to Jewish residents.
B. The Instant Action
Beginning in mid-1998, several individual and class actions were filed against the Austrian Banks, as well as Deutsche Bank, Dresdner Bank, Commerzbank and Hypo Bank (collectively, "the German Banks") in both the Southern and Eastern Districts of New York, alleging that the banks had committed various torts and violations of international law in cooperation with the Nazi Regime. After transfer of the Eastern District actions to the Southern District of New York, these actions were consolidated for all purposes pursuant to a February 19, 1999 order. On March 17, 1999, plaintiffs filed a consolidated class action complaint against the Austrian and German Banks. The consolidated complaint alleged that defendant banks cooperated and conspired with the Nazi Regime to convert plaintiffs' assets on deposit with defendant banks and to exploit and profit from slave and forced labor.
In December 1998, the District Court appointed Alfonse D'Amato as Special Master to supervise and facilitate settlement negotiations between the parties. Formal discovery was not done, but, over several months, the Austrian Banks produced many documents and provided extensive access to their records. In March 1999, after several meetings and telephone conversations, the Austrian Banks and the plaintiff class reached a settlement agreement in the amount of $40 million.
On June 24, 1999, the District Court granted preliminary certification of the class for settlement purposes and granted preliminary approval of the settlement. At the same time, it scheduled a hearing for November 1, 1999 to determine whether the settlement was fair, reasonable and adequate (the "Fairness Hearing").
In July 1999, the District Court approved the plaintiffs' proposed form of notice and the notice campaign. The approved form of notice included a description of the essential settlement terms, an explanation of the claims procedure and mechanism for receiving claim forms, as well as a cautionary statement that those class members who chose not to opt out would be bound by the terms of the settlement. Additionally, the notice alerted class members to their right to opt out and/or to present written objections to the settlement by an October 18, 1999 deadline.
Between August 13, 1999 and September 18, 1999, notice was mailed to 27,883 Austrian Holocaust survivors. To further achieve the 'best notice practicable,' the notice campaign also utilized newspaper advertisements, direct mailings to organizations throughout the world, and a world wide web home page.
Three days prior to the Fairness Hearing, on October 29, 1999, appellant Georgi filed his motion to intervene. He sought to add as defendants Brown Brothers Harriman (a private bank) and the Republic of Austria. Additionally, in his motion to intervene, he objected to the settlement terms and alleged he was being inadequately represented by the existing parties.
On November 1, 1999, the District Court conducted the Fairness Hearing. Plaintiffs and Defendants presented evidence regarding the fairness of the settlement, including testimony by John Rees regarding the role of the Austrian Banks in the Aryanization efforts and by Alphonse D'Amato regarding the negotiation process. Georgi and five other objectors to the settlement appeared at the Fairness Hearing and were given an opportunity to present their objections.
C. The Settlement's Terms
The key terms of the settlement are summarized below.
The Austrian Banks shall fund a "Humanitarian Fund" in the sum of $30 million to be disbursed in installments, with $15 million to be disbursed within 20 days of the settlement's effective date2 and the remaining $15 million within one year after the prior payment. The Humanitarian Fund shall be used to pay Allowed Claims.3 By a July 28, 1999 order, Judge Kram appointed the following three members to the Humanitarian Fund committee to administer the fund: (1) Simon Wiesenthal; (2)Miriam M. Robinson, Esq.; and (3) Rabbi Gilbert S. Rosenthal.
The Austrian Banks shall also pay $10 million as an "Administrative and Interim Allowed Claim Fund" payable within twenty days after the execution of the agreement. This fund will be used to pay administrative costs, to pay Interim Allowed Claims, and to fund a Historical Commission.
The Interim Allowed Claims settlement process will be used to expedite the review and award of allowable claims by the Honorable Theodore R. Kupferman. Any awards made pursuant to this process shall be deemed final, and are deducted from the sum due by the Austrian Banks for funding the Administrative and Interim Allowed Claims Fund. Any challenge to the reasonableness of the awards granted shall be made to the Court.
The Historical Commission will be created to ensure the preservation of documentation and information relating to the acts alleged in the Complaint, and to maintain a public archive of these materials, and to identify Class members. The Commission shall have access to the Austrian Banks' records and shall investigate and publish a report regarding the activities of the Austrian Banks during the Nazi era.
By a July 28, 1999 order, Judge Kram appointed the members of the Historical Commission: (1) Dr. Heinricht Senfft; (2) Professor Oliver Rathkolb; and (3) Dr. Theodore Venus.
Claims will be processed and valued by an Individual Claims Officer, subject to review on appeal by the Individual Claims Committee. The Committee shall consist of three members, the majority of which shall be, if possible, Holocaust survivors. This committee will establish standards to determine which claims shall be allowed and the amount of these claims. The Committee shall also have discretion to pay all or a portion of any claim on an expedited basis, subject to Court approval. Any disputes shall be resolved by the Court.
By a July 28, 1999 order, Judge Kram appointed the following members of the Claims Committee: (1) Paul D. Wachter, Esq.; (2) Hon. Theodore R. Kupferman; and (3) Guy Velella, Esq.
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