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Manfred Gerstenfeld on Holocaust Justice: The Battle for Restitution in America’s Courts

Filed under: International Law, World Jewry
Publication: Jewish Political Studies Review

Jewish Political Studies Review

Jewish Political Studies Review 17:3-4 (Fall 2005)

Michael Bazyler notes that according to historians, the Germans stole assets valued at $230-$320 million in today’s monies from the Jews in Europe. The renewed Holocaust restitution process since the end of the twentieth century has drawn major political and media interest in many countries. It has led to substantial payments to both Jews and non-Jews. Only part of these involve stolen assets and, despite their size, represent only small percentages of the overall amount plundered or even of what had already been paid out since the war. The process has also stimulated official research about Holocaust and post-Holocaust attitudes toward the Jews in more than twenty-five countries. In the context of post-Holocaust studies, restitution issues are a major subject. This field of research also deals with other important topics related to the aftermath of the Shoah, such as the reception that surviving Jews received in European societies to which they returned, the judicial process concerning the war crimes committed against the Jews, the theme of war memory versus history, as well as Holocaust education.

A few books have contributed substantially to the understanding of the latest restitution process. The one reviewed here enriches this short list. Among the more valuable publications is Stuart Eizenstat’s Imperfect Justice,1 which gives the inside views of a major actor in the process. Another is Avi Beker’s The Plunder of Jewish Property during the Holocaust, which covers a great variety of subjects.2 Many of these, however, were still unfolding when the book was published. Michael Bazyler is a professor of law at Whittier Law School, California. He specializes in Holocaust law, a rare discipline. In this book he covers a major topic: how the American legal system dealt with restitution issues. The author refers to the Holocaust restitution “movement” rather than “process,” in view of its wide scope both geographically and temporally.


The First Class Action

Lawyer Edward Fagan was the first to file a class-action lawsuit in an American court on Holocaust restitution in October 1996. It claimed $20 billion from the Swiss banks. This and other suits were settled out of court in August 1998, with the approval of Edward Korman, the judge presiding over the case.

The result was that the Swiss banks made payments in installments of $1.25 billion. The agreement named five categories of eligible claimants, which were given the status of “Victims or Targets of Nazi Persecution.” These included Jews, homosexuals, physically or mentally disabled and handicapped persons, the Romani (Gypsy) people, as well as a Christian group.

Bazyler also devotes detailed attention to how the sum was distributed. Korman, in appointing a “special master” to propose an allocation plan, chose Judah Gribetz, a well-known Jewish attorney from New York.

Bazyler’s book deals with other important restitution topics. These include the major issue of German slaves and forced laborers. The difference in definition between these two terms was initially made by the plaintiffs’ lawyers. The first were camp prisoners, mainly Jews, who were intended to be worked to death. The second were meant to survive but were also unpaid. More than twenty thousand German companies used this type of labor. The first slave-labor action in the United States was filed in March 1998 against the Ford Motor Company concerning its German subsidiary.

At the end of 1999, an overall settlement with Germany was reached valued at $5.2 billion. Here as well, large parts of the amounts distributed were directed to non-Jews.

Another major issue of litigation concerned the reclaiming of prewar insurance policies. Bazyler concludes that rather little has been achieved on this matter. In a later publication, Sidney Zabludoff concurs: “The International Commission of Holocaust Era Insurance Claims (ICHEIC) failed to meet its promises to Holocaust victims and their heirs to compensate in speedy fashion policies that remained unpaid for some sixty years.” Zabludoff adds that the insurance companies, members of ICHEIC, did not honor their initial pledges and also the U.S. legal decisions were unfavorable to the claimants.3

Two other major matters addressed by Bazyler are the litigations against French banks and those concerning art looted during the Holocaust. The latter subject is still very much in development and proceeds on a case-by-case basis. It is likely to continue for many more years.

The Holocaust litigations in the United States also led to important legal developments. They were accompanied by substantial disagreements, mainly in the Jewish community and also outside it.

Bazyler considers various “gray areas” in his book, and addresses them in more detail in a later article.4 These include: the question of whether the demand for financial restitution demeans the memory of the Holocaust, how to assure fair distribution of the funds collected, and whether part of the restitution funds should be allocated to Holocaust education and remembrance or belong solely to survivors. Other such issues include the high legal fees and the controversy over whether Jewish lawyers should have taken on the defense of European companies sued on behalf of Holocaust survivors.


A Spearhead for Non-Jewish Claimants

As aforementioned, while the Jews were the spearhead of the Holocaust litigations in the United States, large parts of the funds obtained will go to non-Jewish claimants. The widespread criticism of the proceedings was, however, entirely directed against the Jews and the Jewish organizations. This discrepancy has received little media attention. It was the Jews who also created the infrastructure for many other claims. This subject has also been addressed by Eizenstat. Bazyler, however, discusses this in more detail in the final chapter of his book. The use of the Holocaust restitution process as a precedent for claims by other victims is still in early gestation. Among the disparate array of claims are those concerning slave labor in Japanese companies, insurance claims from the Armenian genocide, and African American claims for slave labor. Others include claims of apartheid victims in South Africa, Sudeten Germans expelled from Czechoslovakia after World War II, and of the Nepal Gurkhas for discrimination in benefits during their military service in the British army. Bazyler also briefly considers the significance of the restitution issue for a possible future settlement involving Palestinian refugees and Jews forced to flee Arab countries.

The Holocaust restitution issue is momentous, and scholars are likely to study it for decades to come. By dealing with a large variety of subjects, Bazyler has laid the basis for many future detailed investigations in various areas.

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1. Stuart Eizenstat, Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II (New York: Public Affairs, 2003).

2. Avi Beker, ed., The Plunder of Jewish Property during the Holocaust: Confronting European History (London: Palgrave, 2001).

3. Sidney Zabludo., “The International Commission of Holocaust-Era Insurance Claims: Excellent Concept but Inept Implementation,” Jewish Political Studies Review, Vol. 17, Nos. 1 & 2, Spring 2005, pp. 81-82.

4. Michael Bazyler, “Suing Hitler’s Willing Business Partners: American Justice and Holocaust Morality,” Jewish Political Studies Review, Vol. 16, Nos. 3 & 4, Fall 2004.