Suing for reparations

Holocaust: The success of lawsuits against Swiss banks has given new impetus to war-crimes class action suits. Two of them threaten Deutsche Bank's purchase of Bankers Trust Corp.

January 17, 1999|By Sean Somerville | Sean Somerville,SUN STAFF

Three days after it was announced in November, the $10 billion merger between Bankers Trust Corp. and Deutsche Bank AG faced an unusual threat.

It came not from antitrust authorities, not from plummetting stocks and not from disagreements over future control.

The potential obstacle to the merger of Deutsche Bank and the parent of Baltimore's BT Alex. Brown arose from events more than 54 years ago in Nazi Germany.

Holocaust survivors asked U.S. regulators to delay approving the merger until Deutsche Bank settled claims that it looted assets and profited from slave labor during World War II.

"Deutsche Bank cannot be permitted to obtain the benefits and protections of doing business in the United States without a full accounting and disgorgements of these assets," lawyers for survivors said.

The claims, in two suits against Deutsche Bank filed in U.S. District Court in New York, are part of a spate of lawsuits aimed at those suspected of committing decades-old wrongs.

The most publicized claims are related to the Holocaust. Survivors have won $1.25 billion from Swiss banks to settle wartime claims. Germany's leading industrial giants, including Volkswagen, Siemens, Daimler-Benz and BMW, face claims connected to wartime slave labor.

U.S. companies are not exempt from war-crimes suits. Chase Manhattan Bank and J. P. Morgan & Co. were named last month as defendants in a lawsuit claiming that their branch banks in Paris joined with the Nazis to steal millions of dollars in Jewish assets. Ford Motor Co. faces a suit in New Jersey federal court over a German subsidiary's use of forced labor.

Elsewhere, Asian-American groups are looking for potential plaintiffs among survivors of the Japanese army's 1937 massacre of civilians in Nanking, China. They hope to bring class action lawsuits in the United States against the Japanese government and Japanese companies.

Asian "comfort women" who were forced to work as sexual slaves to Japanese soldiers in World War II have sued the Tokyo government in Japanese courts.

It's impossible to say for sure whether litigation over historical grievances has increased, because no one tracks such suits. Japanese-Americans who were interned in the United States in World War II and many American Indian tribes have used the courts to press their grievances.

Historians and lawyers offer a variety of reasons for war-crimes class action lawsuits -- ranging from the idealistic (based on the United Nations' postwar universal code of human rights) to the cynical (lawyers getting big bucks from old wrongs). Also contributing to the apparent legal trend are previously untapped historical records.

The impact of such claims can be serious and far-reaching. Companies not only pay millions, but face business losses by being associated with history's most horrific episodes.

Encouraged by the success against the Swiss banks, lawyers could well burrow into other pockets of history, even those that predate the Holocaust. "There are a lot of interesting questions," said Charles Gustafson, a law professor at Georgetown University. "If you can sue for slave labor in [Nazi] Germany why not sue for slave labor in the U.S. 150 years ago?"

Michael Hausfeld, a Washington attorney at Cohen, Milstein, Hausfeld & Toll, who sued the Swiss banks and Deutsche Bank, views the suits as finishing the work of the Nuremberg war crimes trials of prominent Nazis.

"There are whole groups of individuals who were not prosecuted at Nuremberg and clearly entities -- corporations for the most part -- that had a close collaboration with the objectives of the Nazi regime which were never brought to any form of justice," he said.

Others see less lofty motives. "This is being done for money," said Lawrence Schonbrun of Berkeley, Calif., a lawyer and a prominent critic of class action suits. "I believe lawyers -- these people who turned O. J. Simpson into Martin Luther King and the LAPD into Nazis -- are not the kinds of people who should be making historical judgments."

In the lawsuit filed by Hausfeld against Deutsche Bank, the bank is accused of profiting from a "genocidal system of slave labor inflicted by the Nazi regime," obtaining, concealing and profiting from assets seized by Nazis; and otherwise helping the "Nazi regime prepare for its illegal war of aggression."

One plaintiff is Martin Lowenberg, a Michigan resident born in Germany in 1928, who went with his father to deposit valuables at the Deutsche Bank branch in Fulda, Germany, after Jewish families there were instructed to prepare for relocation. Lowenberg's family never recovered the items, which included gold watches, earrings, rings, necklaces, crystal and silver.

"Systematic plundering was an integral part of genocide," said Hausfeld, whose father lost 68 of 70 relatives in Poland during the war, including an uncle for whom he is named. "What's sad here or tragic is the fact that many people who were exterminated essentially paid for their own extermination."

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