‘‘[q]uestions of justi- ciability are distinct from questions of jurisdiction, and a court with jurisdic- tion over a claim should nonetheless decline to adjudicate it if it is not justiciable’’
How later courts described this case
- ‘‘[q]uestions of justi- ciability are distinct from questions of jurisdiction, and a court with jurisdic- tion over a claim should nonetheless decline to adjudicate it if it is not justiciable’’
Written by the judges who cited it.
The opinion
Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
8-3-2006
Gross v. German Foundation
Precedential or Non-Precedential: Precedential
Docket No. 04-2744
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 04-2744 & 04-2745
ELLY GROSS,
ROMAN NEUBERGER, JOHN BRAND,
in their individual capacities as third-party beneficiaries
of the agreements leading to the establishment of the
German Foundation “Remembrance, Responsibility,
and the Future,” as representatives of all
German Foundation beneficiaries
Elly Gross,
Appellant at No. 04-2744
v.
GERMAN FOUNDATION INDUSTRIAL INITIATIVE,
and its constituent managing companies;
ALLIANZ AG; BASF AG; BAYER AG; BMW AG;
COMMERZBANK AG; DAIMLERCHRYSLER AG;
DEUTSCHE BANK AG; DEGUSSA-HUELLS AG;
DEUTZ AG; DRESDNER BANK AG;
FRIEDR KRUPP AG HOESCH KRUPP;
HOECHST AG; RAG AG;
ROBERT BOSCH GMBH; SIEMENS AG;
VEBA AG; VOLKSWAGEN AG,
sued individually, and as members of the
German Foundation Industrial Initiative
BARBARA SCHWARTZ LEE;
BERNARD LEE,
Appellants at No. 04-2745
v.
DEUTSCHE BANK AG; DRESDNER BANK AG
On Appeal from the United States District Court
for the District of New Jersey
D.C. Civil Action Nos. 02-cv-2936 & 03-cv-3181
(Honorable William G. Bassler)
Argued April 26, 2006
2
Before: SCIRICA, Chief Judge,
SMITH and STAPLETON, Circuit Judges*
(Filed August 3, 2006)
BURT NEUBORNE, ESQUIRE (ARGUED)
New York University Law School
40 Washington Square South
New York, New York 10012
AGNIESZKA FRYSZMAN, ESQUIRE (ARGUED)
Cohen, Milstein, Hausfeld & Toll
1100 New York Avenue, N.W., West Tower, Suite 500
Washington, D.C. 20005
ALLYN Z. LITE, ESQUIRE
Lite, Depalma, Greenberg & Rivas
Two Gateway Center, 12th Floor
Newark, New Jersey 07102
Attorneys for Appellants, Elly Gross,
Barbara Schwartz Lee and Bernard Lee
*
This appeal was argued before the panel of Chief Judge
Scirica, Judge Alito and Judge Rosenn on July 19, 2005. The
quorum was reconstituted to include Judge Smith and Judge
Stapleton after the elevation of Judge Alito to the Supreme
Court and the death of Judge Rosenn. The case was reargued
before the reconstituted panel on April 26, 2006.
3
JEFFREY A. BARIST, ESQUIRE (ARGUED)
Milbank, Tweed, Hadley & McCloy
One Chase Mahattan Plaza
New York, New York 10005
Attorney for Appellees,
Deutsche Bank AG and Dresdner Bank AG
ROGER M. WITTEN, ESQUIRE
Wilmer Cutler Pickering Hale and Dorr
399 Park Avenue, 30th Floor
New York, New York 10022
Attorney for Appellees, Allianz AG, Bayer AG,
Commerzbank AG, Deutz AG, and RAG AG
THOMAS M. MUELLER, ESQUIRE
Mayer Brown Rowe & Maw
1675 Broadway
New York, New York 10019
Attorney for Appellee, BASF AG
KONRAD L. CAILTEUX, ESQUIRE
Weil, Gotshal & Manges
767 Fifth Avenue, 27th Floor
New York, New York 10153
Attorney for Appellee, BMW AG
4
BUD G. HOLMAN, ESQUIRE
Kelley, Drye & Warren
101 Park Avenue, 29th Floor
New York, New York 10178
Attorney for Appellee, DaimlerChrysler AG
KEVIN J. McKENNA, ESQUIRE
JOHN J. GIBBONS, ESQUIRE
Gibbons, Del Deo, Dolan, Griffinger & Vecchione
One Riverfront Plaza
Newark, New Jersey 07102-5497
Attorneys for Appellees, Degussa-Huells AG,
Friedr Krupp AG Hoesch Krupp, and
Robert Bosch GmbH of Stuttgart, Germany
BRANT W. BISHOP, ESQUIRE
Kirkland & Ellis
655 15th Street, N.W., Suite 1200
Washington, D.C. 20005
Attorney for Appellee, Siemens AG
DANIEL V. GSOVSKI, ESQUIRE
Herzfeld & Rubin
40 Wall Street
New York, New York 10005
Attorney for Appellee, Volkswagen AG
5
WALTER E. DIERCKS, ESQUIRE
Rubin, Winston, Diercks, Harris & Cooke
1155 Connecticut Avenue, N.W., Suite 600
Washington, D.C. 20036
Attorney for Amicus Curiae-Appellee,
Federal Republic of Germany
OPINION OF THE COURT
SCIRICA, Chief Judge.
At issue in this World War II reparations case is whether
a suit seeking additional funds for victims of Nazi-era wrongs is
justiciable. Claimants contend German companies owe
“interest” on their payments to a reparations fund created with
the substantial involvement of the United States and German
governments to benefit Nazi victims or their descendants. The
District Court held the claim presented a nonjusticiable political
question. We will reverse and remand.
I. Background
During the Nazi era, German companies employed slave
and forced labor, appropriated private property, and refused to
pay insurance policies. Legal redress was largely unavailable to
6
the victims of these crimes for nearly half a century1 because
their claims against the German government and German
companies were barred or deferred by various international
agreements and treaties, intended to facilitate the rebuilding of
the German economy.2
The situation began to change after the fall of the Berlin
Wall in November 1989, when the Federal Republic of
Germany, the German Democratic Republic, the United States,
Great Britain, France, and the former Soviet Union entered into
1
World War II-era victims did receive some compensation for
the harm they suffered. The German government paid tens of
billions of deutschmarks in compensation through domestic
legislation and agreements with nations and non-governmental
entities. See Am. Ins. Ass’n v. Garamendi, 539 U.S. 396,
404–05 (2003); Burger-Fischer v. Degussa AG, 65 F. Supp. 2d
248, 270 (D.N.J. 1999). But these measures excluded many
victims and certain types of claims. Garamendi, 539 U.S. at
404–06.
2
For a history of negotiations between the Allied
governments after Germany’s defeat, see generally Garamendi,
539 U.S. at 401–06; Iwanowa v. Ford Motor Co., 67 F. Supp. 2d
424, 447–55 (D.N.J. 1999); Burger-Fischer, 65 F. Supp. 2d at
265–72.
7
the Two-Plus-Four Treaty,3 ending the rights formerly held by
the Allies in Germany. The treaty was silent on the issue of
private individuals’ war-related claims against the German
government and German companies, but German courts
interpreted it to terminate the previous bar on such claims. E.g.,
Oberverwaltungsgericht [OVG] [Administrative Court of
Appeals, Muenster] NJW 1998, 2302, at 8–10, cited in Iwanowa
v. Ford Motor Co., 67 F. Supp. 2d 424, 455 (D.N.J. 1999);
Landgericht [LG] [District Court, Bremen] 1998, 1 O 2889/90,
at 13, cited in Iwanowa, 67 F. Supp. 2d at 455; see also Am. Ins.
Ass’n v. Garamendi, 539 U.S. 396, 404–05 (2003).4
In light of the German courts’ interpretation of the treaty,
many uncompensated victims brought claims against German
companies in United States courts. Victims and their heirs, both
individually and in class actions, sued banks, insurers, and
manufacturers that had used or profited from slave and forced
labor, or wrongfully appropriated assets during the National
Socialist era. In response to early cases and in preparation for
further litigation, seventeen major German corporations formed
an unincorporated association called the German Foundation
3
Treaty on the Final Settlement with Respect to Germany,
Sept. 12, 1990, S. Treaty Doc. No. 101-20, 1696 U.N.T.S. 1115,
29 I.L.M. 1186.
4
Some United States district courts disagreed, concluding the
treaty’s silence perpetuated the bar on reparations claims. See,
e.g., Burger-Fischer, 65 F. Supp. 2d at 272.
8
Industrial Initiative. The seventeen founding members were
Allianz AG, BASF AG, Bayer AG, BMW AG, Commerzbank
AG, DaimlerChrysler AG, Degussa Huls AG, Deutsche Bank,
Deutz AG, Dresdener AG, Hoechst AG, RAG AG, Robert
Bosch GmbH, Siemens AG, Veba AG, ThyssenKrupp AG, and
Volkswagen AG.
A. Negotiations for a Reparations Fund
The United States and German governments, aware of the
significance of the underlying claims and the seriousness of the
risk posed to the German economy, encouraged negotiations
between plaintiffs and defendant German corporations. In the
Fall of 1998, the German government asked Deputy Secretary
of the Treasury Stuart Eizenstat5 to facilitate a resolution of the
class action suits. Over the next year and a half, Deputy
Secretary Eizenstat chaired a series of meetings among lawyers
for the victims, lawyers for the German companies, and
representatives of the German government. Leading
negotiations on the German side were Chancellor Schroeder’s
Envoy and Chief German Negotiator, Count Otto Lambsdorff,
and his predecessor, Bodo Hombach.
5
Before moving to the Treasury in 1999, Stuart Eizenstat
served as the Secretary of State’s Special Envoy on Property
Restitution in Central and Eastern Europe (since 1995), as
Under Secretary of State for Economic Affairs, and, before that,
as Under Secretary of Commerce and United States Ambassador
to the European Union.
9
On February 16, 1999, German Chancellor Gerhardt
Schroeder, joined by the German companies that comprised the
German Foundation Industrial Initiative, announced plans for
formal negotiations to settle all pending litigation in United
States courts relating to German companies’ Nazi era conduct.
The United States State Department hosted the first plenary
session of formal negotiations on May 11 and 12, 1999. The
goal was to create a foundation (a reparations fund) to
compensate Nazi-era victims and to fund ongoing projects to
prevent religious and ethnic intolerance in Germany. In
exchange for funding the foundation, German companies would
receive “legal peace”—the termination and resolution of all suits
against them in United States courts on WWII-era claims and an
assurance of protection from future suits.
A total of 12 plenary sessions were held in Bonn and
Berlin, Germany, and in Washington, D.C. Lawyers in the
pending cases joined government representatives from the
United States, Germany, Israel, Belarus, the Czech Republic,
Poland, Russia, Ukraine, representatives from the Conference on
Jewish Material Claims Against Germany, and representatives
from the German Foundation Industrial Initiative.
Negotiations reached a breakthrough in December 1999.
Responding to an offer from the German companies to fund the
foundation with DM 8 billion, the plaintiffs’ lawyers, with the
support of Poland, the Czech Republic, the Republic of Belarus,
and the Ukraine, countered on December 13 with an offer for
DM 10 billion. President Bill Clinton wrote to Chancellor
10
Gerhard Schroeder that day, urging acceptance of the DM 10
billion “counteroffer,” which was “a firm commitment for
settlement of which we both could be proud.” See Garamendi,
539 U.S. at 405–06. The next day, Chancellor Schroeder
accepted the counteroffer, thanking President Clinton for his
“decisive impulses for a consensus which could be accepted by
all parties involved.” Also that day, Deputy Secretary Eizenstat
communicated to the victims’ attorneys the German Foundation
Industrial Initiative’s and German government’s acceptance of
this offer. President Clinton announced the agreement from the
Oval Office the following day, December 15. Two days later,
the parties made a formal public announcement in Bonn,
Germany.
Over the ensuing months, the parties negotiated
allocation details—how much money would go to each partner
organization and which types of victims were eligible—and
detailed procedures for the Foundation’s operation. On July 20,
2000, the foundation, called “Remembrance, Responsibility and
the Future,” was formally established.
B. The Berlin Accords
The documents establishing the Foundation, collectively
referred to as the Berlin Accords or the Berlin Agreements,
consist of the Joint Statement, the Executive Agreement
between the United States and Germany, and the Foundation
Law. The Joint Statement—formally titled “The Joint Statement
on occasion of the final plenary meeting concluding
international talks on the preparation of the Foundation
11
‘Remembrance, Responsibility and the Future’”—sets forth the
goal of the Foundation, which is to “provide dignified payments
to hundreds of thousands of survivors and to others who
suffered from wrongs during the National Socialist era and
World War II.” Preamble, para. 12. The Joint Statement
commits the German government and German industry to a DM
10 billion capitalization, and places responsibility for collecting
the German companies’ share on the German Foundation
Industrial Initiative. Particularly significant for this case,
Section 4(d) of the Joint Statement provides, in part:
German company funds will continue to be
collected on a schedule and in a manner that will
ensure that the interest earned thereon before and
after their delivery to the Foundation will reach at
least 100 million DM.
The second document of the Berlin Accords, the
Executive Agreement, outlines the United States and German
governments’ commitment to the Foundation. It obligates the
United States Executive, in all cases for which it is notified of
a claim against a German company arising out of the WWII era,
to file a statement of its foreign policy interests with the court in
which the claim is pending, stating that United States’ foreign
policy interests favor resolution through the Foundation.
Specifically, Article 2(1) of the Executive Agreement provides:
The United States shall, in all cases in which the
United States is notified that a claim described in
article 1(1) has been asserted in a court in the
12
United States, inform its courts through a
Statement of Interest, in accordance with Annex
B, and, consistent therewith, as it otherwise
considers appropriate, that it would be in the
foreign policy interests of the United States for
the Foundation to be the exclusive remedy and
forum for resolving such claims asserted against
German companies as defined in Annex C and
that dismissal of such cases would be in its
foreign policy interest.
See also Art. 3(4) (“The United States shall take appropriate
steps to oppose any challenge to the sovereign immunity of the
Federal Republic of Germany with respect to any claim that may
be asserted against the Federal Republic of Germany concerning
the consequences of the National Socialist era and World War
II.”). Article 1(1) describes the type of “claim” that triggers the
filling of a Statement of Interest:
The parties agree that the Foundation
“Remembrance, Responsibility and the Future”
covers, and that it would be in the their interests
for the Foundation to be the exclusive remedy and
forum for the resolution of, all claims that have
been or may be asserted against German
companies arising from the National Socialist era
and World War II.
The Executive Agreement also commits the German
government to oversight of the Foundation. See id., Art. 1(3)
13
(“The Federal Republic of Germany assures that the Foundation
will be subject to legal supervision by a German governmental
authority[.]”).
The final document of the Berlin Accords, the
Foundation Law, is codified under German law. The
Foundation Law went into effect on August 12, 2000,
establishing the Foundation as a legal entity and an
instrumentality of the German government, subject to initial
oversight by the Ministry of Finance. Foundation Law § 8(1).
It specifies that DM 5 billion of the Foundation’s funding would
be contributed by the German government, and the other DM 5
billion through the German Foundation Industrial Initiative. Id.
§3(3). It establishes a 27-member Board of Trustees and a
three-member Board of Directors. Id. §§ 5–6. The Board of
Trustees is to make decisions on “all fundamental matters”
relating to the Foundation, id. § 5(5), and to perform roughly the
same function a board of directors would perform in a United
States corporation. The United States is permitted to appoint
two members to the Board of Trustees: a representative of the
United States government and an attorney to represent the
interests of the victims. The Board of Directors is to represent
the Foundation in judicial and extrajudicial matters, manage the
day-to-day business of the Foundation, and implement the
decisions of the Board of Trustees, id. § 6(3), and in this way to
function like the officers of a United States corporation.
C. Obtaining Dismissals of Cases Pending
in United States Courts
14
The Berlin Accords conditioned contributions to the
Foundation on the dismissal of all pending and future WWII-era
claims against German companies in United States courts. Joint
Statement, Preamble, para. 13; id., § 4(b). Claimants contend at
the time the Joint Statement and Executive Agreement were
signed on July 17, 2000, the parties expected it would take about
six months to obtain dismissal of cases then pending in United
States courts. In August 2000, at the request of the parties, the
Judicial Panel on Multi-District Litigation consolidated fifty-
three cases involving slave and forced labor claims—most of
which were putative class actions—before Judge Bassler in the
United States District Court for New Jersey. MDL Transfer
Order, No. 1337 (August 4, 2000); see In re Nazi Era Cases
Against German Defs. Litig., 213 F. Supp. 2d 439, 442 (2002).
Suits involving unpaid insurance policies proceeded in the
Southern District of New York before Chief Judge Mukasey;
and suits against German banks involving unpaid insurance
policies proceeded in the Southern District of New York before
Judge Kram.
After consolidation of the slave and forced labor claims
but before class certification, the parties sought permission to
dismiss the suits with prejudice in light of the proposed
payments from the Foundation. Judge Bassler approved the
voluntary dismissals of 49 pending cases on December 5, 2000,
but sounded a cautionary note:
[O]f great concern to Plaintiffs in these actions is
the prospect that full funding of the Foundation
15
might never be achieved, and that as a result they
would have dismissed their claims with prejudice
for nothing. The Court shares this understandable
concern, and for this reason all of the Orders of
Dismissal (with the consent of the parties) were
made expressly subject to Federal Rule of Civil
Procedure 60(b). . . . Pursuant to Rule 60(b),
should the Foundation not achieve full funding,
Rule 60(b) would provide the Plaintiffs who have
dismissed with prejudice their complaints in
reliance on full funding with an avenue for relief.
In re Nazi Era Cases, 213 F. Supp. 2d at 445 (citing In re Nazi
Era Cases Against German Defs. Litig., 198 F.R.D. 429, 446–47
(D.N.J. 2000)). On December 14, 2000, Chief Judge Mukasey
similarly entered an order granting leave to dismiss the actions
against the German insurance companies.
Judge Kram refused to grant voluntary dismissal of the
plaintiffs’ claims against the German banks. On March 8, 2001,
she denied the voluntary motion to dismiss because it would
“subject all absent class members to the detrimental statement
of interest and the other terms of the Compact, even though the
absent class members’ only source of compensation for their
claims has yet to be fully funded.” See In re German and
Austrian Bank Litig., No. CIV 3938 SWK, 2001 WL 228107, at
*6 (S.D.N.Y. Mar. 8, 2001). At a May 10, 2001 rehearing,
Judge Kram granted the motion to dismiss, conditioning the
grant on certain changes to the Foundation’s allocation schedule.
16
See Duveen v. U.S. Dist. Court (In re Austrian & German
Holocaust Litig.), 250 F.3d 156, 160–62 (2d Cir. 2001).
Plaintiffs and defendants sought a writ of mandamus. On May
17, 2001, the Court of Appeals for the Second Circuit granted
the writ, compelling Judge Kram to grant leave to dismiss all
claims without conditions. Id. at 165. The judge granted the
dismissals on May 18 and 21, 2001. On May 30, the German
legislature declared “legal peace,” triggering the obligations of
the German government and the German companies’ to each
pay DM 5 billion to the Foundation. On October 19, 2000, the
United States and German governments exchanged diplomatic
notes stipulating, in accordance with Article 5 of the Executive
Agreement, that the Executive Agreement entered into force on
that same date.
With all cases pending in United States courts dismissed
and with the Executive Agreement in force, the German
government fulfilled its DM 5 billion commitment in two equal
payments on October 31, 2000, and December 31, 2000. The
German Foundation Industrial Initiative was not as prompt. The
parties dispute the timing and amounts of the German
Foundation Industrial Initiative’s payments toward its obligation
of DM 5 billion principal, plus DM 100 million “interest.” In
June 2001 it transferred the contributions it had collected to
date, which represented the bulk of its payments. It made
another contribution in October 2001. After a final payment in
December 2001, the German Foundation Industrial Initiative’s
contribution totaled DM 5.1 billion.
17
D. Dispute Over the “Interest” Obligation
The parties’ dispute in this case centers on the German
Foundation Industrial Initiative’s obligation to pay “interest” on
the German companies’ DM 5 billion contribution to the
Foundation. Section 4(d) of the Joint Statement provides:
Assuming the request for transfer referred to in
paragraph (e) is granted, the DM 5 billion
contribution of German companies shall be due
and payable to the Foundation and the payments
from the Foundation shall begin once all lawsuits
against German companies arising out of the
National Socialist era and World War II pending
in U.S. courts including those listed in Annex C
and D are finally dismissed with prejudice by the
courts. . . . German company funds will continue
to be collected on a schedule and in a manner that
will ensure that the interest earned thereon before
and after their delivery to the Foundation will
reach at least 100 million DM.
The Joint Statement uses the term “German companies,” defined
in Annex A, to describe the German corporations, and other
businesses, that would contribute DM 5 billion to the
Foundation in exchange for “legal peace.” The Joint Statement
provides that if the full contribution were not raised from the
German companies, the seventeen founding members of the
Initiative would make up the difference. In exchange, the
18
founding members had exclusive decision making authority for
the Initiative.
Claimants contend the German Foundation Industrial
Initiative owes “interest” in excess of the amount of DM 100
million set forth in Section 4(d) of the Joint Statement.
Interpreting “at least” as a floor and not a ceiling, they contend
“interest” is owed in the amount earned on third-party
contributions for the period those contributions were held by the
German Foundation Industrial Initiative prior to their transfer to
the Foundation. Claimants also contend “interest” is owed to
compensate the Foundation for the unexpected delay in the
German Foundation Industrial Initiative’s completion of its
contribution—for the time period between dismissal of the last
case and full payment of the obligation.
Claimants contend the parties intended “interest” would
be payable at four percent on all funds collected by the Initiative
from German businesses, and that this rate should be used to
calculate the additional “interest” due. Their theory is that the
“interest” amount of DM 100 million in the Joint Statement was
calculated using the July 2000 German statutory default interest
rate, which was four percent. Contending the parties expected
legal peace to be achieved within six months after the Joint
Statement’s signing, they note that applying a four percent rate
to DM 5 billion for six months amounts to DM 100 million. As
for when “interest” obligations commenced, claimants
alternatively contend additional “interest” payments were due
from the time of Judge Kram’s refusal to grant dismissal until
19
the day the German Foundation Industrial Initiative fully
contributed its principal obligation or from the day the
Bundestag declared legal peace until the day of final payment.6
The German Foundation Industrial Initiative contends
nothing is due beyond the DM 5.1 billion German companies
have paid. It contends the DM 100 million was an absolute
ceiling on “interest” payments, explaining this amount did not
represent actual interest earned on the DM 5 billion. Rather, it
was additional funding intended to break an impasse in the
allocation negotiations among the victims’ representatives. It
was labeled “interest” so as not to breach the DM 10 billion
cap—a breach that might have upset the fixed expectations of
the German companies and the German government on the
agreed-to DM 10 billion figure. The German Foundation
Industrial Initiative cites a letter from President Bill Clinton to
Chancellor Gerhard Schroeder, describing the DM 10 billion as
a “ceiling agreed [to] by all participants in this process.”
6
In addition to claiming “interest” owed during these delays,
claimants assert other dates from which to measure “interest”
owed: onward from December 14, 1999, when the parties orally
agreed on the Berlin Accords; onward from July 17, 2001, when
the parties signed the Joint Statement; onward from when the
German Foundation Industrial Initiative received funds from the
German businesses and other groups, on a rolling basis; and
onward from when founding members of the German
Foundation Industrial Initiative took a certain tax credit under
German law. (Appellees’ Br. 15–16.)
20
The German Foundation Industrial Initiative contends
that putting the merits of the “interest” dispute aside, this case
raises a nonjusticiable political question. It contends the Joint
Statement is a political and diplomatic statement rather than an
enforceable contract or settlement agreement and that United
States courts have no authority to “rewrite” the document to
include new obligations. The German Foundation Industrial
Initiative also contends the United States Executive has made
a decision, reflected in the Berlin Accords, to commit
supervision and administration of the Foundation to diplomacy
or to the German government. Moreover, if the United States
courts do not refrain from adjudicating the case because it
presents a nonjusticiable political question, the German
Foundation Industrial Initiative contends they should do so
under the act of state doctrine or under the doctrine of
international comity.
Claimants respond this case is justiciable as a basic
contract dispute. They contend the Joint Statement either
constitutes or includes a contract. They also contend contractual
obligations were created by the German Foundation Industrial
Initiative’s oral promises to pay DM 5 billion, beginning in mid-
December 1999, and by representations before United States
judges that if the judges dismissed the cases, the German
Foundation Industrial Initiative would fully fund the
Foundation.
The United States government addressed the “interest”
issue in two letters. The first, relied upon heavily by the
21
German Foundation Industrial Initiative in litigation, was
written by the Deputy Secretary of State Richard Armitage in
response to an April 18, 2002 letter from Dr. Otto Graf
Lambsdorff, the Vice Chairman of the Board of Trustees of the
Foundation, also the former German Federal Minister of Finance
and the German Federal Chancellor’s personal representative to
the Board of Trustees of the Foundation. Gross v. German
Found. Indus. Initiative (In re Nazi Era Cases Against German
Defs. Litig.), 320 F. Supp. 2d 235, 250 (D.N.J. 2004). The
undated letter makes two general points: first, the United States’
interests are better met through political rather than judicial
resolution of this dispute; second, the United States takes no
position on whether additional funds are due. The full text of
the letter reads:
Dear Otto:
I am writing in response to your letter of
April 18, to share with you U.S. views concerning
the obligations of German companies with regard
to interest payments.
President Bush reaffirmed the United
States’ support for the German Foundation,
“Remembrance, Responsibility and the Future,”
on the occasion of Chancellor Schroeder’s March
2001 visit to Washington. You can be assured
that the United States has never wavered from its
strong commitment, memorialized in the
Executive Agreement of July 17, 2000, to help
achieve all-embracing and enduring legal peace
22
for German companies operating in the United
States. We will continue to work closely with the
Federal Republic of Germany to ensure the
success of the Foundation. I also assure you that
the interest issue does not affect the U.S.
Government’s obligation to file statements of
interest in individual cases pursuant to the
Executive Agreement. We will continue to
satisfy that obligation.
We have made many attempts to resolve
this issue over the past several months together
with your government, the Foundation, and the
Foundation Initiative. Our goal has been to
ensure that all obligations are met in the course of
the Foundation’s implementation, while at the
same time bearing in mind our shared vision of
legal peace. The policy of the United States has
been that the proper venues for addressing issues
concerning the Foundation are in the Foundation
or through U.S.-German diplomacy. Therefore,
the U.S. Government believes that matters
concerning interest payments should be resolved
as a political matter in these domains, not by the
courts.
Neither the Joint Statement nor the
Executive Agreement conclusively provides for
the disposition of interest earned prior to the
transfer of the industry contribution to the
23
Foundation. At this time, there is no shared
understanding among the participants to the
Foundation negotiations as to their intent with
respect to the disposition of such interest. Nor
does the negotiating history provide a basis for
decisively resolving disagreements on the interest
issue. The Joint Statement states in paragraph
4(d) that “German company funds will continue
to be collected on a schedule and in a manner that
will ensure that the interest earned thereon before
and after their delivery to the Foundation will
reach at least 100 million DM.”
The German Finance Ministry and the
Foundation Board of Directors have provided
their view that the Foundation Initiative has met
its legal and financial obligations. The
Foundation Board of Directors’ letter of April 4
confirmed that the companies had paid DM 5
billion plus DM 100 million in interest to the
Foundation, and that the Foundation had earned
additional interest of DM 90 million on the
companies’ contribution after the transfer. The
Directors’s December 11, 2001, letter asserted
that the Foundation Initiative has met the financial
commitments it made in the Joint Statement. The
Finance Ministry, which is responsible under
German law for legal oversight of the Foundation,
also has stated that German industry has “fulfilled
24
its obligations vis-a-vis the [Foundation] to their
full extent.”
The U.S. Government has no independent
information that conclusively resolves
disagreements surrounding the interest issue. It is
not in a position to say that German industry has
a commitment to provide additional funds beyond
the DM 5.1 billion previously transferred to the
Foundation. With respect to any U.S. court cases
that may be brought against German entities on
the question of pre-transfer interest, the U.S.
Government will be guided by this view.
I am pleased to learn that the Foundation’s
tremendous progress continues, and that $1.3
billion in payments have been made to some
750,000 surviving forced and slave laborers.
German-American cooperation has made a
significant contribution to the reconciliation
between Germany and the victims of National
Socialism, especially those in Central and Eastern
Europe who were caught behind the Iron Curtain
without recognition of their suffering. Our
common effort demonstrates our shared
commitment to human dignity, especially as many
of these countries turn to our democracies to help
shape their future. German-American cooperation
in addressing the injustices of the past is but one
element of our joint effort to expand the
25
community of nations that cherish the values of
democracy, tolerance and economic freedom.
I look forward to the satisfactory resolution
of the insurance issues as well as future reports on
the Foundation’s achievements.
Sincerely,
Richard L. Armitage7
The second letter addressing the issue was written by William
R. Kirschner, a trial attorney for the United States Department
of Justice, Civil Division. Sent to Judge Bassler on July 22,
2002, in advance of oral argument on the claimants’ 60(b)
motion, discussed below, it was the only official correspondence
sent to a United States judge regarding the “interest” dispute.
Kirschner was silent on the United States’ position as to
justiciability and the proper forum in which to resolve the
dispute, but expressly disclaimed a position on the merits. The
letter reads:
Dear Judge Bassler:
It has come to our attention that there is a
proceeding currently before you in which one of
the issues is whether the German Foundation
7
See Letter from Deputy Secretary of State Richard Armitage
to Chancellor’s Representative Otto Graf Lambsdorff (undated)
[“the Armitage letter”], filed in In re Nazi Era Cases Against
German Defendants Litig., MDL No. 1337, Civ. No. 98-CV-
4104 (WGB) (D.N.J.).
26
“Remembrance, Responsibility, and the Future”
was fully funded with respect to the contributions
owed by German companies, and, in particular
whether the German companies paid sufficient
interest on their promised DM 5 billion
contribution.
The U.S. Government has no independent
information that conclusively resolves
disagreements surrounding the interest issue. It is
not in a position to say whether or not German
industry has a commitment to provide additional
funds beyond what has been transferred to the
Foundation.
Sincerely yours,
William R. Kirschner8
II. Procedural History
This is not the only litigation associated with the
“interest” dispute. Certain slave labor claimants brought a Fed.
R. Civ. P. 60(b) motion before Judge Bassler to enforce the
“settlement” and for declaratory relief. See In re Nazi Era
Cases, 213 F. Supp. 2d at 439. To avoid jeopardizing the entire
8
See Letter from William R. Kirschner, Trial Attorney, U.S.
Dept. of Justice, to Judge William G. Bassler (July 22, 2002)
[“the Kirschner letter”], filed in In re Nazi Era Cases Against
German Defendants Litig., MDL No. 1337, Civ. No. 98-CV-
4104 (WGB) (D.N.J.).
27
resolution and the payment of the DM 10 billion to the victims,
claimants declined to move to reopen under Rule 60(b). Instead,
they asked the court to define the defendants’ “interest”
obligation. On July 23, 2002, the District Court held it had not
retained jurisdiction to enforce the “settlement.” Id. at 450.
On October 18, 2001, attorney Michael Hausfeld sought
an order in the United States District Court for the Eastern
District of New York to prevent the United States from filing a
statement of interest urging dismissal of related cases. See
Ukrainian Nat’l Ass’n of Jewish Former Prisoners of
Concentration Camps & Ghettos v. United States, 178 F. Supp.
2d 312, 314 (E.D.N.Y. 2001). The court dismissed the case
without prejudice, holding it had no authority to prevent the
United States from filing a statement of interest in other
litigation. In November 2001, attorney Burt Neuborne sought
an order directing payment of all “interest” allegedly due from
the Foundation. See Neuborne v. German Found. Indus.
Initiative, No. CV-01-7701 (E.D.N.Y. filed Nov. 16, 2001). At
the request of a German negotiator, Neuborne withdrew the
lawsuit shortly thereafter, intending to pursue negotiations with
the German Foundation Industrial Initiative.
In May 2002, Hausfeld brought an action in California
state court on behalf of third-party beneficiaries of the
Foundation, suing under state law for unlawful, deceptive, and
unfair business practices stemming from the “interest” dispute.
See Widerynski v. Deutsche Bank AG, No. BC274449 (Cal.
Super. Ct. filed May 23, 2002). In January 2003, the court
28
dismissed the action for failure to state a claim under California
law and also by reason of international comity. The court
observed the case “is a classic paradigm for the application of
international comity . . . where, as here, a foreign country’s laws
and executive actions bar the suit, the foreign country has a
substantial interest in the matter, the country has provided an
appropriate method of resolving it, and there is no overriding
U.S. interest to the contrary.” Widerynski v. Deutsche Bank AG,
No. BC274449, op. at *6 (Cal. Super. Ct. Jan. 31, 2003).
This case was filed in June 2002, when Elly Gross,
Roman Neuberger, and others brought a claim as third-party
beneficiaries for breach of contract against the German
Foundation Industrial Initiative and against its founding
companies. In July 2003, Bernard and Barbara Schwartz Lee
brought a similar breach of contract action as third-party
beneficiaries against Deutsche Bank AG and Dresdner Bank
AG. Claimants in both cases were either named plaintiffs or
class members in the Nazi-era cases brought against German
corporate defendants consolidated before Judge Bassler.
Responding to a defense motion, the District Court dismissed
both cases as presenting nonjusticiable political questions on
June 8, 2004. Gross, 320 F. Supp. 2d at 252. Both cases were
consolidated for appeal.
III. Standard of Review and Jurisdiction
The District Court had diversity jurisdiction under 28
U.S.C. § 1332(a)(2). We have jurisdiction under 28 U.S.C. §
1291. We exercise plenary review because the actions were
29
dismissed under the political question doctrine. New Jersey v.
United States, 91 F.3d 463, 466 (3d Cir. 1996). Justiciability
under the political question doctrine is a matter of federal law.
See Banco National de Cuba v. Sabbatino, 376 U.S. 398, 425
(1964). Our review under the act of state doctrine and
international comity is plenary because the District Court did not
reach these issues. See Specter v. Garrett, 971 F.2d 936,
942–43, 955–56 (3d Cir. 1992), vacated on other grounds by
506 U.S. 969 (1992).
IV. Discussion
Questions of justiciability are distinct from questions of
jurisdiction, and a court with jurisdiction over a claim should
nonetheless decline to adjudicate it if it is not justiciable. Baker
v. Carr, 369 U.S. 186, 198 (1962). At issue here is whether the
“interest” dispute is justiciable.
The German Foundation Industrial Initiative contends we
should dismiss this case as a nonjusticiable political question
because: (1) the President of the United States made a decision,
reflected in the Berlin Accords, to relegate the supervision and
administration of the Foundation to German sovereignty or to
diplomacy, (2) the Joint Statement is a political and diplomatic
statement rather than an enforceable contract or settlement
agreement, and (3) the United States judiciary should refrain
from “rewriting” the Joint Statement to include obligations not
addressed in that political document. Alternatively, the German
Foundation Industrial Initiative contends we must decline to
30
adjudicate this case under either the act of state doctrine or the
doctrine of international comity.
Claimants respond this case is justiciable as a basic
contract dispute involving the interpretation of Section 4(d) of
the Joint Statement. They contend a contract was created by
reason of (1) the Joint Statement, either by itself or as a
memorialization of the December oral agreement, (2) oral
promises beginning in mid-December 1999 by the German
Foundation Industrial Initiative to pay DM 5 billion, and (3)
representations made by the German Foundation Industrial
Initiative’s lawyers before United States judges, constituting an
enforceable promise binding the German Foundation Industrial
Initiative.
As an initial matter, we decline to consider the oral
statements made in December 1999 and those made before
United States judges. As claimants define it, the dispute in this
case is over the meaning of the “interest” provision in the Joint
Statement. (Appellants’ Br. 18 (“The precise legal issue before
the Court is the construction of the term ‘at least’ as used in
Defendants’ promise . . . to pay interest on the deferred payment
of DM 5 billion.”).) But the oral communications in December
1999 occurred before the Joint Statement was adopted. As a
result, they do not bear on our analysis of whether a dispute
arising from the Joint Statement is justiciable. Nor do the
alleged promises made to United States judges. As claimants
concede, if the Berlin Accords do not require additional
“interest” payments, the promises in United States courts to
31
follow through on their terms cannot independently require
additional payments. If at all relevant, the promises made before
judges might provide evidence that the German Foundation
Industrial Initiative is bound to pay additional “interest” under
Section 4(d) of the Joint Statement. But this goes to the merits
of the “interest” dispute and not to the question of justiciability.
Accordingly, our analysis focuses on claimants’ contention that
the Joint Statement creates enforceable obligations and this case
is justiciable as a basic contract dispute.
A. The Political Question Doctrine
“The political question doctrine excludes from judicial
review those controversies which revolve around policy choices
and value determinations constitutionally committed for
resolution to the halls of Congress or the confines of the
Executive Branch.” Japan Whaling Ass’n v. Am. Cetacean
Soc’y, 478 U.S. 221, 230 (1986). As a general matter, the
conduct of foreign relations is constitutionally committed
primarily to the Executive Branch. Alfred Dunhill of London,
Inc. v. Republic of Cuba, 425 U.S. 682, 706 n.18 (1976); see
also Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 386
(2000) (“The ‘nuances’ of the ‘foreign policy of the United
States . . . are much more the province of the Executive Branch
and Congress than of this Court.’”) (quoting Container Corp. of
Am. v. Franchise Tax Bd., 463 U.S. 159, 196 (1983)); Haig v.
Agee, 453 U.S. 280, 292 (1981) (“Matters intimately related to
foreign policy and national security are rarely proper subjects
for judicial intervention.”).
32
But the Court has cautioned that not “every case or
controversy which touches foreign relations lies beyond judicial
cognizance,” Baker, 369 U.S. at 211. “[U]nder the Constitution,
one of the Judiciary’s characteristic roles is to interpret statutes[,
treaties, and executive agreements],” and “we cannot shirk this
responsibility merely because our decision may have significant
political overtones.” Japan Whaling, 478 U.S. at 230.
Accordingly, a predicted negative impact on foreign relations
does not, by itself, render a case nonjusticiable under the
political question doctrine.
In determining the presence or absence of a
nonjusticiable political question, whether or not foreign relations
are implicated, we consider six factors articulated by the Court
in Baker v. Carr:
Prominent on the surface of any case held to
involve a political question is found [1] a
textually demonstrable constitutional commitment
of the issue to a coordinate political department;
or [2] a lack of judicially discoverable and
manageable standards for resolving it; or [3] the
impossibility of deciding without an initial policy
determination of a kind clearly for nonjudicial
discretion; or [4] the impossibility of a court’s
undertaking independent resolution without
expressing lack of the respect due coordinate
branches of government; or [5] an unusual need
for unquestioning adherence to a political
33
decision already made; or [6] the potentiality of
embarrassment from multifarious pronouncements
by various departments on one question.
369 U.S. at 217. Each of these factors “has one or more
elements which identify it as essentially a function of the
separation of powers.” Id. A finding of any one of the six
factors indicates the presence of a political question. See INS v.
Chadha, 462 U.S. 919, 941 (1983). Should a factor be present,
a holding of nonjusticiability still depends on whether the factor
is “inextricable from the case at bar.” Baker, 369 U.S. at 217.
Aware that “the ‘political question’ label” can “obscure the need
for case by case inquiry,” id. at 210–11, we necessarily avoid
“resolution by any semantic cataloguing,” id. at 217. Instead,
we undertake a “discriminating inquiry into the precise facts and
posture of the particular case.” Id.
1. The District Court’s Analysis
Consistent with the approach of most courts in focusing
only on those Baker factors applicable in a given case, the
District Court analyzed this matter under the fourth
factor—expressing lack of respect for coordinate branches of
government—and the sixth factor—embarrassment arising from
multifarious pronouncements. Gross, 320 F. Supp. 2d at 254.
In concluding the case presented a political question under both
of these factors, the District Court focused on two issues: (1) the
relationship between the “interest” dispute and the history of the
underlying reparations claims, and (2) the letter from Deputy
Secretary of State Armitage expressing “U.S. views concerning
34
the obligations of German companies with regard to interest
payments.” Id. at 252–53. With respect to the first issue, the
District Court characterized the “interest” dispute as “the coda
in the long drama of disagreements concerning Holocaust-era
restitution.” Id. at 253. Recognizing that “matters of Holocaust-
era restitution are best resolved through dialogue, negotiation,
and cooperation as opposed to prolonged and uncertain
litigation,” id. at 252 (quoting Frumkin v. JA Jones, Inc. (In re
Nazi Era Cases Against German Defs. Litig.), 129 F. Supp. 2d
370, 380 (D.N.J. 2001)), the court explained that these
considerations are “no less evident . . . when the core issue is not
whether restitution is proper, but how much restitution, namely
in the form of interest, was agreed upon.” Id. With respect to
the second issue, the court characterized the Armitage letter as
an expression of the United States Executive’s position that the
United States judiciary was not the proper forum for this
dispute’s resolution. The court concluded the letter
demonstrated that the United States and Germany had
“committed the resolution of this issue to diplomacy over
litigation.” Id. at 253.
We agree with the District Court that these two
factors—(1) the relationship of the “interest” dispute with the
strong history of executive management of Nazi-era reparations
claims, and (2) the presence of an expression of interest from the
United States Executive—inform our analysis, and should be
addressed before we discuss each Baker factor. We believe the
parties’ characterizations of the Joint Statement should also be
discussed before reaching the Baker factors. For reasons that
35
follow, we reach a conclusion different from that of the District
Court. We conclude that adjudicating the “interest” dispute
would not present a nonjusticiable political question.
2. Reliance on History of Management
A strong history of the United States Executive’s
management of a dispute does not necessarily render a case
nonjusticiable, just as a weak history does not rule out questions
of justiciability. But a strong history of management is
potentially relevant to an analysis of some of the Baker factors.
For example, judicial intervention redirecting consistent
Executive decision making could constitute policy-making
under the third Baker factor. Judicial intervention where certain
executive pronouncements have historically controlled a dispute
could express a lack of respect for the Executive under the
fourth Baker factor. We note that while a strong history of
management is not one of the six factors, the Baker Court listed
it as a relevant inquiry, commonly employed by courts that had
found a political question in foreign-relations cases.9
9
In its analysis, the Baker Court examined prior foreign
policy cases that wrestled with nonjusticiability principles:
Our cases in this field seem invariably to show a
discriminating analysis of the particular question
posed, in terms [1] of the history of its
management by the political branches, [2] of its
susceptibility to judicial handling in the light of
its nature and posture in the specific case, and [3]
36
There is a long history of executive management of the
reparations claims underlying the “interest” dispute, with little
judicial intervention. For sixty years, it has been the consistent
policy of the United States to address compensation for Nazi-era
injuries through diplomacy and through German government
institutions, and not through litigation in United States courts.
See Garamendi, 539 U.S. at 420–21 (“The issue of restitution
for Nazi crimes has in fact been addressed in Executive Branch
diplomacy and formalized in treaties and executive agreements
over the last half century, and . . . securing private interests is an
express object of diplomacy today, just as it was addressed in
agreements soon after the Second World War.”). Many courts
have treated Holocaust reparations cases as nonjusticiable
disputes, even where private parties are bound up in the
litigation.10
of the possible consequences of judicial action.
Baker, 369 U.S. at 211.
10
Before the Foundation was created, two district courts
determined that the political question doctrine barred Nazi-era
claims from adjudication in American courts. See Burger-
Fischer v. Degussa AG, 65 F. Supp. 2d 248, 282 (D.N.J. 1999);
Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424, 489 (D.N.J.
1999); see also Kelberine v. Societe Internationale, 363 F.2d
989, 995 (D.C. Cir. 1966) (holding suit for Nazi-era property
damage was “not presently susceptible of judicial
implementation”).
37
After the Foundation was created, the Court of Appeals
for the Eleventh Circuit held that claims by an heir against two
German banks, for assets allegedly stolen during the Nazi
regime, were not political questions despite the Executive’s
filing of a Statement of Interest, but the court chose nonetheless
to abstain under the international comity doctrine. Ungaro-
Benanges v. Dresdner Bank AG, 379 F.3d 1227, 1235–37 (11th
Cir. 2004). The Court of Appeals for the Second Circuit found
a political question and dismissed Nazi-era property deprivation
claims against Austria and Austrian companies, citing the
Austrian version of the Berlin Accords’ Foundation and a
statement of interest filed by the United States government.
Whiteman v. Dorotheum GMBH, 431 F.3d 57, 58–60 (2d Cir.
2005).
The Court of Appeals for the Ninth Circuit recently held
that the political question doctrine did not bar Holocaust
survivors’ World War II-era claims against the Vatican Bank
regarding restitution of property. Alperin v. Vatican Bank, 410
F.3d 532, 538 (9th Cir. 2005). In Alperin, however, the Ninth
Circuit found that “the Executive has declined a long-standing
invitation to involve itself in the dispute,” id., which
distinguishes Alperin from this case, in which the Executive was
key to negotiating the Berlin Accords. Alperin also recognized
the abrogation of Kelberine in light of modern complex
litigation procedures. Id. at 554–55.
Other Holocaust-era claims have settled prior to
resolution of the political question issue. See In re Austrian &
38
Whether this strong history of executive management of
Holocaust reparations claims bears on our analysis under the
Baker factors depends on whether the “interest” dispute is a
final but inseparable part of the prior nonjusticiable claims or
whether it is something different. If, as the District Court
concluded, the “interest” dispute is the inseparable “coda” in the
sixty-year history of international diplomatic negotiations,
Gross, 320 F. Supp. 2d at 253, the strong history of executive
management would dominate our Baker analysis. But if the
“interest” issue presents a distinct dispute, our Baker analysis
will place less emphasis on the United States Executive’s past
actions and statements and on the judiciary’s past responses in
related cases.
We believe the present dispute raises issues that are
significantly different from those in cases that have been
dismissed from United States courts under the political question
doctrine. It is true that a judgment for the claimants would
require payment to the Foundation, translating to increased
payments to victims. But there is a difference between a suit for
reparations and a suit to enforce an alleged contract for
“interest.” As the District Court recognized, “the core issue is
German Bank Holocaust Litig., 80 F. Supp. 2d 164 (S.D.N.Y.
2000) (litigation against Austrian banks); In re Holocaust Victim
Assets Litig., 105 F. Supp. 2d 139 (E.D.N.Y. 2000) (litigation
against Swiss banks).
39
not whether restitution is proper, but how much restitution,
namely in the form of interest, was agreed upon.” Gross, 320 F.
Supp. 2d at 252. The District Court concluded nonetheless that
the “interest” dispute could not be separated from prior
nonjusticiable reparations claims. But the present dispute is not
over a reparations claim, but over a specific “interest” provision
in a recently negotiated document. This distinction removes the
dispute from the history of the underlying claims and
distinguishes it from other cases dismissed by United States
courts.
Were the “interest” dispute inextricable from the long
history of Executive management, we would expect some
communication from the United States Executive—direct
Executive intervention, a Statement of Interest under the
Executive Agreement, a statutory statement of interest under 28
U.S.C. § 517, a letter to the court, or any other way in which the
United States Executive can make its interests known to a court.
As we discuss, the United States Executive has declined to
express a position to the United States courts either on the merits
of the “interest” claim or on whether the matter should be
resolved in a diplomatic or judicial forum. The United States
Executive’s one communication expressing a position on
justiciability—the Armitage letter—was not directed to a United
States court.
Were the “interest” dispute inextricable from the history
of judicial noninvolvement in reparations cases, we would also
40
expect ongoing diplomacy to resolve the issue.11 See Alperin v.
Vatican Bank, 410 F.3d 532, 558 (9th Cir. 2005) (holding no
political question where “[i]n the landscape before us, this
lawsuit is the only game in town with respect to claimed looting
and profiteering by the Vatican Bank. No ongoing government
negotiations, agreements, or settlements are on the horizon.”).
There has been no representation that the United States
government is engaged in any form of diplomacy or negotiations
regarding the payment of additional “interest.”12
We do not think the Supreme Court’s opinion in
Garamendi informs our inquiry into whether the strong history
of executive management bears heavily on our justiciability
analysis. The German Foundation Industrial Initiative contends
Garamendi—which, in the context of a preemption analysis,
gave strong deference to Executive prerogative in foreign
11
The United States’ signing of the Berlin Accords did not
predetermine the proper forum by which parties would enforce
the “interest” provision of the Joint Statement. See Gross, 320
F. Supp. 2d at 248–49 (“Defendants’ interpretation that the Joint
Statement itself provides that the interest obligations are
properly decided by the Foundation appears incorrect.”).
12
In a July 11, 2005, letter to this Court, Neuborne reported
that the State Department informed him that no diplomatic
negotiations were underway with Germany on the “interest”
issue. Letter from Burt Neuborne to Marcia Waldron, Clerk,
United States Court of Appeals for the Third Circuit.
41
affairs—stands for the proposition that the United States
Executive has an “exclusive role in matters relating to the
Foundation and Nazi-era claims against German nationals.”
(Appellees’ Br. 27.) Garamendi addressed a California statute
requiring any insurer doing business in the state to disclose
certain information about Holocaust-era insurance policies that
had been in effect between 1920 and 1945, and that the insurer
or a related company had sold to persons in Europe. 539 U.S.
at 409–10. The Court noted, “[t]he issue of restitution for Nazi
crimes” falls within the Executive’s powers, and “has in fact
been addressed in Executive Branch diplomacy and formalized
in treaties and executive agreements over the last half century.”
Id. at 420–21. The point of the California statute in Garamendi
was to provide information about decades-old insurance
policies, so that their holders or descendants would be able to
sue on these policies. Besides its disclosure requirement, the
state statute amended California’s rules of civil procedure to
allow “state residents to sue in state court on insurance claims
based on acts perpetrated in the Holocaust.” Id. at 409. These
claims to enforce insurance policies were the claims the
Foundation was set up to exclusively resolve. Furthermore, the
Supreme Court did not venture outside the confines of its
preemption analysis to address questions of justiciability. To
the extent the issues of executive prerogative raised in
Garamendi apply, they are accounted for in our discussion of
the six Baker factors.
We believe the “interest” dispute is distinct from the
underlying reparations claims, which led to the creation of the
42
Foundation. Accordingly, we will place less emphasis on the
strong history of executive management of Nazi-era reparations
cases in our analysis under the Baker factors than did the
District Court.
3. United States’ Expressions of Its Interest
A second factor central to our analysis under the Baker
factors is the presence or absence of a formal expression to the
courts of the United States Executive’s interests in this dispute.
With respect to this issue, the District Court focused on the
Armitage letter, believing it to be an expression of the United
States Executive’s interest. As noted, the Armitage letter makes
two general points: the United States’ interests are better met
through political rather than judicial resolution of the “interest”
dispute, and the United States takes no position on whether
additional funds are due. The letter is silent on whether the
Berlin Accords support a private, contract-based right of action.
Certain questions frame our discussion of the Armitage
letter. First, was the United States obligated to file a Statement
of Interest, as described in Annex B to the Joint Statement?
Second, how does this impact what weight we should give the
Armitage letter as an expression of the United States
Executive’s interests? Our answer to the first question informs
our answer to the second. If a Statement of Interest were
required under the Executive Agreement, the United States
Executive’s decision not to file one would demonstrate that its
interests align with judicial adjudication of the merits. We
would then give little weight to the Armitage letter. If a
43
Statement of Interest were not required under the facts of this
dispute, we would attach greater weight to the Armitage letter
as the only expression we have of the Executive’s position. A
third question would then arise: does the Armitage letter
constitute a definite and authoritative expression of interest to
which we should defer, considering its content and the fact that
the United States Executive has declined to file a statutory
statement of interest or other communication with this Court?
a. The Failure of the United States Executive
to File a Statement of Interest
Under the facts of this dispute, we do not think the
United States was obligated by any provision of the Berlin
Accords to file the Statement of Interest as set forth in Annex B
of the Executive Agreement.13 In the Executive Agreement, the
13
We note that at the second oral argument, neither the
claimants nor the German Foundation Industrial Initiative
appeared to challenge this conclusion. Had we found a
Statement of Interest was indicated by the facts of this case, then
the United States might be in breach of the Executive
Agreement. See Ungaro-Benanges, 379 F.3d at 1236 (“The
United States is in full compliance with the Foundation
Agreement so long as it files a statement of interest to courts
urging respect for the Foundation as the exclusive forum to
resolve these claims.”). Our analysis acknowledges the
Executive’s compliance with the Executive Agreement.
44
United States promised it would file a Statement of Interest in
a certain set of cases:
The United States shall, in all cases in which the
United States is notified that a claim described in
article 1(1) has been asserted in a court in the
United States, inform its courts through a
Statement of Interest, in accordance with Annex
B, and consistent therewith, as it otherwise
considers appropriate, that it would be in the
foreign policy interests of the United States for
the Foundation to be the exclusive remedy and
forum for resolving such claims asserted against
German companies as defined in Annex C and
that dismissal of such cases would be in its
foreign policy interest.
Executive Agreement, Art. 2(a). Article 1(1), in turn, describes
the covered claims as “. . . all claims that have been or may be
asserted against German companies arising from the National
Socialist era and World War II.” This is the same standard by
which the United States and Germany would decide the class of
claims for which the Foundation would be the “exclusive
remedy and forum.” Art. 1(1); see also Joint Statement,
Preamble, para. 14 (“exclusive remedy and forum”).
The definition of claims that “arise from” WWII and the
National Socialist era—which would trigger the obligation to
file a Statement of Interest and make the Foundation the
exclusive remedy and forum for the claim—should include those
45
claims the Berlin Accords were organized to dismiss: slave
labor claims, claims regarding banks’ wrongful retention of
assets, insurance claims pending in United States courts, and
similar suits that would be filed in the future. In the context of
“exclusive remedy and forum,” the District Court recognized
that these restitution and reparations claims differed from the
present “interest” dispute. See Gross, 320 F. Supp. 2d at
248–49. The District Court discussed the “arising from”
definition at length, concluding the Foundation was not the
exclusive forum for the “interest” dispute. See id.
The United States’ commitment to file a Statement of
Interest and the exclusive jurisdiction of the Foundation turn on
the definition of the same phrase: “arising out of the National
Socialist era and World War II.” Interpreting this phrase
consistently in both instances, we conclude the claim for
additional “interest” does not trigger the United States’
obligation to file an Annex B Statement of Interest in certain
cases.14
14
Central to our conclusion that the Berlin Accords do not
require the United States Executive to file a Statement of
Interest in this case are the language and context of the text of
the Executive Agreement and Joint Statement. Several practical
reasons provide secondary support. For example, a case “arising
from” WWII has a variety of problems not shared by the present
“interest” dispute, including stale or missing evidence, deceased
or missing witnesses, and legal hurdles such as statutes of
limitation or treaties and German domestic law that might
46
When filed, the Statement of Interest outlined in the
Berlin Accords explains that because of foreign policy interests,
the United States Executive prefers dismissal and resolution
through the Foundation. Annex B to the Executive Agreement
further describes the types of cases for which the Foundation
shall be the exclusive forum:
[T]he President of the United States has
concluded that it would be in the foreign policy
interests of the United States for the Foundation
to be the exclusive forum and remedy for the
resolution of all asserted claims against German
companies arising from their involvement in the
National Socialist era and World War II,
including without limitation those relating to
slave and forced labor, aryanization, medical
experimentation, children’s homes/Kinderheim,
other cases of personal injury and damage to or
loss of property, including banking assets and
insurance policies.
The language supports the view that the claims for which the
Foundation is the exclusive forum and remedy, and for which
the United States is required file a Statement of Interest, are
reparations and restitution cases, and not the present “interest”
dispute.
supercede the claim.
47
The contrast is striking between the United States
Executive’s inaction on the “interest” claim in this case and its
intervention in other cases for direct restitution or reparations
where it filed a statement of interest. This contrast supports our
view that a Statement of Interest (Annex B) was not required
here. The United States filed a statement of interest—similar to
that outlined in Annex B—in a private suit for Nazi-era property
damage against the Austrian government and Austrian entities.
See Whiteman v. Dorotheum GMBH, 431 F.3d 57, 58–63 (2d
Cir. 2005) (describing the General Settlement Fund, an Austrian
reparations scheme modeled after that of the Berlin Accords).
In dismissing WWII-era property damage claims against Austria
and Austrian companies on political question grounds, id. at
72–73, the Court of Appeals for the Second Circuit relied on the
United States Executive’s statement of interest for several
points: the Fund encourages good relations with Austria, Eastern
Europe, and Israel; negotiation is a better means to claim
resolution than is litigation; the Fund represents the culmination
of sixty years of diplomacy; and the outcome of litigation on the
same claims is uncertain at best. Id. at 66–68. The Whiteman
court explained:
[W]e hold that deference to a statement of foreign
policy interests of the United States urging
dismissal of claims against a foreign sovereign is
appropriate where, as here, (1) the Executive
Branch has exercised its authority to enter into
executive agreements respecting the resolution of
those claims; (2) the United States Government
48
(a) has established through an executive
agreement an alternative international forum for
considering the claims in question, and (b) has
indicated that, as a matter of foreign policy, the
alternative forum is superior to litigation; and (3)
the United States foreign policy advanced by the
executive agreement is substantially undermined
by the continuing pendency of the claims.
Id. at 59–60.
Even the Armitage letter distinguishes the “interest”
dispute from one in which the Executive Agreement requires the
United States to file a Statement of Interest. It explains: “the
interest issue does not affect the U.S. Government’s obligation
to file statements of interest in individual cases pursuant to the
Executive Agreement.” With this, Deputy Secretary Armitage
acknowledged—and we agree—the United States Executive was
not required under the Executive Agreement to file a Statement
of Interest in this case.
b. Expression of the United States Executive’s Position
We look to other potential indications and expressions of
the United States Executive’s interest, the most obvious being
the Armitage letter. But for several reasons, we conclude the
Armitage letter does not constitute a policy determination by the
United States Executive, or an authoritative expression of
Executive interest, to which we should defer. The Armitage
letter is directed to Otto Lambsdorff, the Vice Chairman of the
49
Foundation’s Board of Trustees. It is not directed to the United
States court adjudicating the “interest” dispute, or to any court
for that matter. The letter states the proper forum for resolution
of the “interest” dispute is political and diplomatic, not legal.
But it explicitly leaves open the merits question, stating “[t]he
U.S. Government has no independent information that
conclusively resolves disagreements surrounding the interest
issue.” Furthermore, the letter fails to declare the United States
Executive will seek intervention or dismissal.
The Supreme Court instructs “‘case-specific deference’
to the expressed foreign policy interests of the United States.”
See Whiteman, 431 F.3d at 59 (quoting Sosa v. Alvarez-
Machain, 542 U.S. 692, 733 n.21 (2004)). We conclude the
Armitage letter, making no promises to seek dismissal or that
the United States Executive would intervene, does not require or
counsel our deference. Cf. Republic of Austria v. Altmann, 541
U.S. 677, 702 (2004) (finding courts might defer to “the
considered judgement of the Executive on a particular question
of foreign policy”).
The Kirschner letter, although directed to the court, does
not change our view. As noted, the Kirschner letter was written
to Judge Bassler in advance of oral argument on the 60(b)
motion. It is the only formal correspondence from the United
States Executive to a court on the “interest” dispute, albeit from
a Department of Justice trial attorney and not from a State
Department official. Kirschner was silent on the position of the
United States as to justiciability and the proper forum in which
50
to resolve the dispute, but explicitly disclaimed a position on the
merits, stating the United States Executive “is not in a position
to say whether or not German industry has a commitment to
provide additional funds.” Kirschner’s position is consistent
with the decision of the United States Executive not to file an
Annex B Statement of Interest and with the lack of ongoing
diplomacy on the “interest” issue.
The United States could have expressed an interest in this
case through other means. The United States Executive has the
statutory authority, in any case in which it is interested, to file a
statement of interest:
The Solicitor General, or any officer of the
Department of Justice, may be sent by the
Attorney General to any State or district in the
United States to attend to the interests of the
United States in a suit pending in a court of the
United States, or in a court of a State, or to attend
to any other interest of the United States.
28 U.S.C. § 517 (“Interests of United States in Pending Suit”).
This authority is wholly separate from the obligations of the
Joint Statement. Alternatively, the United States could have
intervened in the case or petitioned the court to participate as
amicus curiae. But the United States has declined to express to
the District Court or to this Court a position on the justiciability
or merits of the “interest” dispute, except its lack of a position.
It has also declined to inform the District Court or this Court of
its position on the proper forum for resolution or on whether we
51
should dismiss on political question grounds. Because the
United States Executive has declined to take a formal position
on the justiciability of this case or on the merits of the “interest”
claim, we conclude the United States Executive has not, through
an expression of its interest in the case, committed the “interest”
dispute to a political branch.
4. Joint Statement
The final issue we address before analyzing the “interest”
dispute under the Baker factors is the parties’ characterizations
of the Joint Statement—the document giving rise to the claim
that additional “interest” is due. Claimants ask us to view the
Joint Statement as a contractual settlement agreement. They
note the resulting arrangement bears the hallmarks of an
enforceable contract, with parties exchanging promises and
taking action to their detriment in reliance on those promises.
They contend plaintiffs in pending cases would never have
agreed to the dismissal of their cases with prejudice without a
contractual obligation on the part of the German government
and industry to fund the Foundation pursuant to the Joint
Statement. They contend the language of Section 4(d) reads like
a contract between private parties, even if other portions of the
document contain precatory and diplomatic language.
The German Foundation Industrial Initiative asks us to
read the Joint Statement like a political statement, containing
diplomatic commitments and memorializing negotiations among
sovereign states. The German Foundation Industrial Initiative
notes that the arrangement between the private litigants and the
52
German government and industry would never have been
possible without the high-level diplomatic efforts of the
governments of several nations.
We recognize there is much to support the view of the
German Foundation Industrial Initiative that the Joint Statement
is a political document. The German Foundation Industrial
Initiative cites Ronald J. Bettauer, Deputy Legal Adviser in the
United States State Department, who participated in the
negotiations between the United States and German
governments culminating in the Berlin Accords. He
characterized the Joint Statement as follows:
As the negotiations came to a conclusion, we
needed a document indicating what further steps
it was agreed each participant would take. It
would not have been appropriate to have an
international agreement between individual
lawyers, private companies, an NGO and
sovereign states. We therefore developed a
document that set forth political rather than legal
commitments—that is, undertakings that various
participants “will” take various steps, rather than
legal commitments that they “shall” do so. At this
phase, we were once again involved in a
negotiation with all the participants on the text of
what became the “joint statement.” This
document set forth the undertakings of each party
as to the steps it would take. This final aspect of
53
the arrangement was more akin to a resolution
that an international organization adopts. But this
was not a negotiation in an international
organization.
Ronald J. Bettauer, Keynote Address—The Role of the United
States Government in Recent Holocaust Claims Resolution, 20
Berkeley J. Int’l L. 1, 3 (2002).
Much of the text of the Joint Statement also supports the
German Foundation Industrial Initiative’s view. The document
describes diplomatic commitments between and among the
nation-signatories. E.g., § 4(b) (providing the United States and
Germany “will” sign an Executive Agreement); § 4(c) (stating
that the governments of Israel and certain European states “will
implement” measures to ensure legal peace). And much of the
text declares principles rather than binding agreements. Section
1 of the Joint Statement announces “all participants consider the
overall result and the distribution of the Foundation funds to be
fair to the victims and their heirs.” Section 2 states “the primary
humanitarian objective of the Foundation . . . is to show results
as soon as possible.” These broad principles arguably do not
appear to define or guarantee legal obligations among private
parties.
The German Foundation Industrial Initiative also points
to what it considers a specific directive that the Joint Statement
cannot serve as a basis for contractual claims against Germany
or German companies. Specifically, the Preamble “recogniz[es]
that the establishment of the Foundation does not create a basis
54
for claims against the Federal Republic of Germany or its
nationals . . . .’”15 Preamble, para. 15. Claimants respond the
purpose of this language is to clarify that payment to the
Foundation of the agreed sum did not constitute an admission of
liability—a standard settlement provision. “Claims” could also
be read to refer to Nazi-era reparations claims, not to claims for
additional “interest.”
We believe the parties’ characterizations of the Joint
Statement bear primarily on the merits of the “interest” dispute
and not the question of justiciability. We need not decide
whether the high-level diplomatic efforts of various
governments in negotiating the Joint Statement or the
document’s precatory and diplomatic language means Section
4(d) does not impose binding and enforceable obligations on the
parties. We need only determine whether it is possible and
appropriate for a United States court to address and answer these
questions. Accordingly, we will give little weight to the parties’
overall characterizations of the Joint Statement in our
justiciability analysis. But we will consider various aspects of
their arguments. For example, the key role in negotiations
played by high-level United States officials will inform our
analysis under the fourth and sixth factors—addressing whether
a court would contradict Executive pronouncements or
embarrass other branches of government in adjudicating the
15
The term “nationals” applies to German companies. See S.
Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Group,
Ltd., 181 F.3d 410, 417 (3d Cir. 1999).
55
case. And the text of the Joint Statement itself will inform our
analysis under the second and third factors—addressing whether
a court would have discoverable and manageable standards for
resolving the “interest” dispute and whether they could do so
without making inappropriate policy determinations.
5. The Baker v. Carr Factors
We now turn to an analysis of the “interest” dispute
under the six Baker factors. For reasons that follow, we do not
think this case presents a political question under any of the
Baker factors.
The first factor asks whether there is “a textually
demonstrable constitutional commitment of the issue to a
coordinate political department.” Baker, 369 U.S. at 217. The
German Foundation Industrial Initiative has identified no
specific constitutional text that commits the issues raised by this
case to the Executive. Instead, it argues that this case raises
questions that are within the constitutional province of the
Executive in foreign affairs as recognized by the Court in
Garamendi.
We recognize that, even though the Executive’s powers
in foreign affairs “do[] not enjoy any textual detail” within the
Constitution itself, “in foreign affairs the President has a degree
of independent authority to act.” Garamendi, 539 U.S. at 414.
Those powers include the power to resolve issues like the one
raised by the claimants and to settle the claims of its citizens
against foreign governments and corporations. Id. at 415–16.
56
But it is precisely the breadth of the Executive’s power in this
field that counsels against our finding that the political question
doctrine precludes our review. While the Executive could
constitutionally act to resolve the issue of whether “interest” is
owed on this “contract” or to settle this claim through
diplomacy, it has not done so. If we were to find that any claim
raising an issue that the Executive could potentially resolve
within its constitutional “independent authority to act” in foreign
affairs to be nonjusticiable, we would risk erroneously sweeping
“every case or controversy which touches foreign relations . . .
beyond judicial cognizance.” Baker, 369 U.S. at 211. The mere
existence of the Executive’s power to extinguish claims made to
the Judiciary for redress from foreign entities and to resolve
certain issues raised in those claims, without an exercise of that
power, does not render those claims nonjusticiable by virtue of
being committed to a co-equal branch.
The second Baker factor asks whether there is “a lack of
judicially discoverable and manageable standards for resolving”
the case. Id. at 217. We believe the legal and factual questions
presented by the “interest” dispute are of the type the judiciary
is constitutionally competent to resolve under the Constitution,
and equipped to resolve as a practical matter. In adjudicating
the case, a court would have to interpret the Berlin
Accords—specifically, Section 4(d) of the Joint Statement—to
determine whether there is a binding, contractual “interest”
obligation. A court would face at least two questions on the
merits of this dispute: (1) is the Joint Statement, or part of the
Joint Statement, enforceable as a private contract, and (2) if so,
57
what “interest” obligation, if any, did the parties intend for the
German Foundation Industrial Initiative?
Courts have standards by which to answer both questions.
Courts routinely determine if a written text is an enforceable
contract, relying on the text itself and on such parol evidence as
the law allows, and routinely address questions of agency, third-
party beneficiaries, and damages. The complexity of the
contract issue—overlapping as it does with the law of
international agreements—does not leave a court without
standards. See Alperin, 410 F.3d at 552–55 (finding no political
question on the second factor, in a WWII-era restitution case
against the Vatican Bank, in part because “courts have
repeatedly risen to the challenge of handling cases involving
international elements as well as massive, complex class
actions”). That this case might require the deposition of
government witnesses may complicate the court’s task, but it
does not make this claim resemble those in which the judiciary
lacks standards to render a decision.
We note that even where significant foreign policy
concerns are implicated, a case does not present a political
question under this factor so long as it involves “normal
principles of interpretation of the constitutional provisions at
issue,” Wang v. Masaitis, 416 F.3d 992, 996 (9th Cir. 2005)
(quoting Goldwater v. Carter, 444 U.S. 996, 999 (1979)
(Powell, J., concurring)), normal principles of statutory
construction, see Japan Whaling, 478 U.S. at 230, or normal
principles of treaty or executive agreement construction, see id.
58
In Japan Whaling, the Court found no political question in
deciding if an executive agreement with Japan regarding
commercial whaling conflicted with the Secretary of
Commerce’s obligations under a federal statute. Id. at 229–230,
240–41 (“As Baker plainly held . . . the courts have the authority
to construe treaties and executive agreements, and it goes
without saying that interpreting congressional legislation is a
recurring and accepted task for the federal courts.”).
Unlike other political question cases, this case does not
involve a political rather than legal standard. See New Jersey v.
United States, 91 F.3d 463, 469–70 (3d Cir. 1996) (holding
courts are without judicially manageable standards for resolving
issues about how best to enforce national immigration laws or
to allocate resources for same); Guerrero v. Clinton, 157 F.3d
1190, 1196 (9th Cir. 1998) (holding there was a lack of
“judicially manageable standards by which to gauge the fidelity”
of the Secretary of Commerce’s response to a congressional
reporting mandate, when reports triggered no legal
consequences (quoting Nat’l Res. Def. Council, Inc., v. Hodel,
865 F.2d 288, 319 (D.C. Cir. 1988))). Nor is there a proposed
standard under which the court lacks the criteria to adequately
assess the claims before it. See Vieth v. Jubelirer, 541 U.S. 267,
281, 284–90 (2004) (plurality) (comparing racial
gerrymandering of political districts to political gerrymandering
and finding judicially manageable standards for the former but
not for the latter); Atkepe v. United States, 105 F.3d 1400, 1404
(11th Cir. 1997) (“In order to determine whether the Navy
conducted the missile firing drill in a negligent manner, a court
59
would have to determine how a reasonable military force would
have conducted the drill.”), cited in Alperin, 410 F.3d at 555.
This court has standards by which to construe this alleged
contract, despite the issues’ complexity and despite the
involvement of foreign nations and the United States Executive
in negotiating the Berlin Accords. Accordingly, this case does
not present a political question under the second Baker factor.
The third Baker factor asks whether adjudicating the case
would require “an initial policy determination of a kind clearly
for nonjudicial discretion.” Baker, 369 U.S. at 217. Under this
factor, a political question is implicated if in deciding the case,
a court would have to make a policy determination of the kind
appropriately reserved for diplomatic—and thus
Executive—discretion. See e.g., Atkepe, 105 F.3d at 1404
(holding the case nonjusticiable, in part, because the policy
determination would be of a kind reserved for military
discretion). A political question under the third factor “exists
when, to resolve a dispute, the court must make a policy
judgment of a legislative nature, rather than resolving the
dispute through legal and factual analysis.” EEOC v. Peabody
W. Coal Co., 400 F.3d 774, 784 (9th Cir. 2005).
Resolution of the “interest” dispute would undoubtedly
impact foreign relations and foreign policy. Furthermore,
deciding the dispute whether additional “interest” is due might
require a court to determine what the political sovereigns
intended when they drafted the Joint Statement. As noted, the
record reveals high-level diplomatic involvement by the
60
governments of many nations in negotiating the Berlin Accords,
and the Joint Statement memorializes many aspects of these
diplomatic negotiations.
But the question under the third Baker factor is not
whether a court will impact foreign policy, but rather whether it
will impermissibly intrude on the Executive’s role in
formulating policy. From time to time, courts decide cases that
impact foreign policy. See, e.g., Japan Whaling, 478 U.S. at
230 (noting that although the “[j]udiciary is particularly ill
suited” to make decisions that “revolve around policy choices,”
it cannot avoid its responsibility to interpret statutes and treaties
“merely because our decision may have significant political
overtones”). The question is whether a court can decide the
“interest” dispute without displacing the Executive in its foreign
policy making role. We conclude that it can. In adjudicating
the case, a court would be interpreting an agreement already
created and signed by another branch of government to
determine whether it contains an enforceable obligation for
additional “interest.” Interpreting agreements and deciding the
nature and scope of the parties’ obligations based on text and
evidence are among the activities that courts often perform
without considering public policy—foreign or domestic. A
court need not make “an initial policy determination of a kind
clearly for nonjudicial discretion” before resolving the issues
presented in this case.
Our conclusion might be different if the current “interest”
dispute were truly the inseparable “coda” to sixty years of
61
judicial noninvolvement, in which any judicial intervention
related to WWII reparations would encroach on decisions
reserved for the discretion of the United States Executive. But
because we conclude the “interest” issue is distinct from the
underlying reparations claims, we believe courts are equipped
to determine, without making foreign policy, if the Joint
Statement contains a private enforceable agreement.
Accordingly, this case does not present a political question
under the third Baker factor.
Under the fourth Baker factor, we ask whether it would
be possible for a court to “undertak[e] independent resolution
without expressing lack of the respect due coordinate branches
of government.” Baker, 369 U.S. at 217. Had the United States
Executive filed a statutory statement of interest under 28 U.S.C.
§ 517, a Statement of Interest under Annex B of the Executive
Agreement, or any other document with this Court asserting its
interests in dismissal, we might conclude judicial intervention
would contradict and show a lack of respect for a statement or
pronouncement of the United States Executive. See, e.g., Joo
v. Japan, 413 F.3d 45, 48 (D.C. Cir. 2005) (“[W]e defer to the
judgment of the Executive Branch of the United States
Government, which represents, in a thorough and persuasive
Statement of Interest, that judicial intrusion into the relations
between Japan and other foreign governments would impinge
upon the ability of the President to conduct the foreign relations
62
of the United States.”).16 But the United States Executive has
taken no position on the merits of this dispute, and has not
promised dismissal or intervention. While the Armitage letter
states a preference for diplomacy, we have concluded it does not
constitute an Executive expression of interest to which we
should defer. Furthermore, there is no ongoing diplomacy to
resolve this matter. There is no possibility of expressing a lack
of respect due the Executive branch when the Executive has not
expressed its interest in the dispute. Accordingly, the fourth
Baker factor does not render this dispute nonjusticiable.
The fifth Baker factor asks whether there is “an unusual
need for unquestioning adherence to a political decision already
made.” Baker, 369 U.S. at 217. The Armitage letter might itself
be described as a “political decision” (that is, it is an expression
of the United States Executive’s decision that this case be dealt
through diplomatic, and not legal, channels). But even if we
accept this characterization of the Armitage letter, we do not
16
In Joo, the court dismissed on political question grounds a
suit by foreign-citizen plaintiffs against Japan alleging torture
related to the WWII era, and the United States intervened with
a statement of interest, to which the court deferred. 413 F.3d. at
48–53 (affirming dismissal). The Joo court quoted the statement
of interest, which argued “it manifestly was not the intent of the
President and Congress to preclude Americans from bringing
their war-related claims against Japan . . . while allowing federal
or state courts to serve as a venue for the litigation of similar
claims by non-U.S. nationals.” Id. at 50.
63
think this case presents an “unusual need for unquestioning
adherence” to that decision. As Baker makes clear, the fifth
factor contemplates cases of an “emergency[ ] nature” that
require “finality in the political determination,” such as the
cessation of armed conflict. Id. at 213–14. Determining the end
of hostilities between nations is markedly different from the
issue before us, which does not require the same kind of finality
and does not implicate the same kind of “emergency” issues that
define a war. Accordingly, the fifth Baker factor does not
render this case nonjusticiable.
The sixth and final Baker factor asks about the potential
of “embarrassment from multifarious pronouncements by
various departments on one question.” Id. at 217. This factor,
like the fourth and fifth, is “relevant only if judicial resolution
of a question would contradict prior decisions taken by a
political branch in those limited contexts where such
contradiction would seriously interfere with important
governmental interests.” Kadic v. Karadzic, 70 F.3d 232, 249
(2d Cir. 1995). Underlying this factor is the idea that a foreign
government should be able to trust that diplomatic
pronouncements from the United States Executive are
authoritative. But here, there was no pronouncement from the
United States Executive. Even if authoritative, the Armitage
letter made no representations that the United States would
intervene or seek dismissal. To the contrary, the letter strongly
implied that a Statement of Interest would not be filed in this
case: “I also assure you that the interest issue does not affect the
U.S. Government’s obligation to file statements of interest in
64
individual cases pursuant to the Executive Agreement.” The
one Executive letter addressed to a United States court—the
Kirschner letter—declined to mention a preference for a
diplomatic solution. Accordingly, finding this case justiciable
does not risk creating multifarious pronouncements.
Had the United States Executive desired, it could have
filed a statutory statement of interest under 28 U.S.C. § 517,
substantially similar to that in Annex B of the Executive
Agreement, urging dismissal.17 But the United States
government filed no document with a court pointing to its
interests or to any foreign-policy positions that would be
contradicted were we to hold this case justiciable. See Baker,
369 U.S. at 212 (“[I]f there has been no conclusive
‘governmental action’ [on whether a treaty was terminated] then
a court can construe a treaty and may find it provides the
17
On this point, even the Statement of Interest, from Annex
B of the Executive Agreement, fails to promise dismissal: “The
United States does not suggest that its policy interests
concerning the Foundation in themselves provide an
independent legal basis for dismissal, but will reinforce the point
that U.S. policy interest favor dismissal on any valid legal
ground.” Promising dismissal, then, would have gone further
than did the Executive Agreement to secure legal peace. But in
this case, it is likely the filing of a Statement of Interest (or
statutory statement of interest) would have resulted in dismissal,
on political question grounds or otherwise. See, e.g., Whiteman,
431 F.3d at 72–74.
65
answer.”). Nor have the German companies or the German
government directed us to any statements of the United States
government that a holding of justiciability might contradict, or
to the attendant risk of embarrassment for the United States
Executive. As a result, holding this case justiciable is “not
incompatible with any formal position thus far taken by the
political branches. By the same token, [our] decision does not
turn a blind eye to any position expressed by those responsible
for conducting the nation’s foreign relations.” Ungar v. PLO,
402 F.3d 274, 281 (1st Cir. 2005) (affirming denial of sovereign
immunity to the Palestinian Liberation Organization, in a tort
suit by estates of victims of terrorism, and finding no political
question). Finally, there is no ongoing diplomacy to restrain us
from asserting jurisdiction.
The German Foundation Industrial Initiative places great
weight on the portion of the Armitage letter which states “the
U.S. Government believes that matters concerning interest
payments should be resolved as a political matter in these
domains, not by the courts.” But the “multifarious
pronouncements” that give rise to a nonjusticiable political
question involve conflicting pronouncements regarding the
merits, not conflicting pronouncements about justiciability.
Even where the Executive has directly argued that a question is
nonjusticiable and threatens the separation of powers, the
Supreme Court has found the judiciary ultimately decides these
issues and has, at times, reached conclusions in conflict with the
Executive’s conclusions. See, e.g., Clinton v. Jones, 520 U.S.
681, 699–700 (1997); United States v. Nixon, 418 U.S. 683,
66
692–93 (1974). It is conflicting opinions by the Executive and
the Judiciary about whether “interest” is owed on this “contract”
that would give rise to a political question. As noted, there is no
such pronouncement by the Executive. Accordingly, we
conclude the sixth Baker factor, like the first five, does not
render this case nonjusticiable under the political question
doctrine.
B. The Act of State Doctrine
Having found the claimants’ actions constituted a
nonjusticiable political question, the District Court did not
decide whether it should refrain from adjudicating the claims
under the act of state or international comity doctrines. Gross,
320 F. Supp. 2d at 253 n.21.
Under the act of state doctrine, American courts are
precluded from “inquiring into the validity of the public acts a
recognized foreign sovereign power committed within its own
territory.” Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398,
401 (1964); see also Restatement (Third) of Foreign Relations
Law § 443(1) (1987) (explaining American courts should not
invalidate the “acts of a governmental character done by a
foreign state within its own territory and applicable there”).
Courts must dismiss under the act of state doctrine when
resolution of a suit would require the court to declare invalid and
ineffective as “a rule of decision for the courts of this country”
the official act of a foreign sovereign. W.S. Kirkpatrick & Co.,
Inc. v. Envtl. Tectonics Corp., 493 U.S. 400, 405 (1990) (citing
Ricaud v. Am. Metal Co., 246 U.S. 304, 310 (1918)).
67
The act of state doctrine “does not bestow a blank-check
immunity upon all conduct blessed with some imprimatur of a
foreign government.” Timberlane Lumber Co. v. Bank of Am.,
549 F.2d 597, 606 (9th Cir. 1976) (citing Continental Ore Co.
v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962)),
superceded by statute on other grounds, Pub. L. No. 97-290, 15
U.S.C. § 6a. That predicate sovereign act is always required for
successful invocation of the doctrine. “In every case in which
we have held the act of state doctrine applicable, the relief
sought or the defense interposed would have required a court in
the United States to declare invalid the official act of a foreign
sovereign performed within its own territory.” W.S. Kirkpatrick,
493 U.S. at 405.
A predicate sovereign act is not present in this case. The
German Foundation Industrial Initiative and the German
government as amicus curiae cite letters from the Ministry of
Finance and from the Foundation’s Board of Directors,
concluding that no further “interest” is due. See Letter of Hans
Eichel, German Minister of Fin., to Colin Powell, U.S. Sec’y of
State (July 24, 2002); Letter from Michael Jansen, Chairman of
the Board of Dirs., German Foundation Industrial Initiative, to
Dieter Kastrup, Chairman of the Foundation Bd. of Trustees
(July 2, 2002); Letter of Rainer M. Turmer, on behalf of the
German Ministry of Fin., to Dieter Kastrup (April 12, 2002).
These are not official acts of a foreign sovereign, nor is the
February 16, 2004, letter from German Ambassador Wolfgang
Ischinger to Judge Bassler, requesting dismissal. As the District
Court noted, the German officials’ statements “explicate
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Germany’s understanding of the interest issue,” but they are not
“definitive.” Gross, 320 F. Supp. 2d at 250.
Even were a sovereign act presented, we have not been
asked to declare an official act of a foreign sovereign “invalid.”
Rather, we have been asked to give decisive weight to the
determination of certain Foundation officers and the German
Minister of Finance that the German Foundation Industrial
Initiative fulfilled its obligations under the Joint Statement.
Ruling on the merits here would neither ignore nor invalidate
the official acts of the German government. Accordingly, the
act of state doctrine does not counsel dismissal.
C. The Doctrine of International Comity
International comity is “the recognition which one nation
allows within its territory to the legislative, executive or judicial
acts of another nation, having due regard both to international
duty and convenience, and to the rights of its own citizens or of
other persons who are under the protection of its laws.” Hilton
v. Guyot, 159 U.S. 113, 164 (1895); see Remington Rand v. Bus.
Sys. Inc., 830 F.2d 1260, 1266 (3d Cir. 1987). Generally,
United States courts will not review acts of foreign governments
and will defer to proceedings taking place in foreign countries,
allowing those acts and proceedings to have extraterritorial
effect in the United States. See, e.g., Somportex Ltd. v.
Philadelphia Chewing Gum Corp., 453 F.2d 435, 440–44 (3d
Cir. 1971); Pravin Banker Assocs. v. Banco Popular Del Peru,
109 F.3d 850, 854 (2d Cir. 1997). But a court may deny comity
to a foreign legislative, executive, or judicial act if it finds that
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the extension of comity “would be contrary or prejudicial to the
interest” of the United States. Somportex, 453 F.2d at 440.
The German Foundation Industrial Initiative has not
pointed to an ongoing or pending proceeding taking place in
Germany. It contends instead that “[m]aintenance of these
lawsuits would conflict with these German executive and
legislative actions,” embodied in the Berlin Accords, and that
Germany’s oversight of the Berlin Accords is “exclusive.”
(Appellees’ Br. 40.) The German Foundation Industrial
Initiative also argues that in view of the statements by the
Foundation’s Board of Directors and the German Finance
Ministry that no additional money is due, we should dismiss this
case out of respect for decisions made by the German Executive
under German law. Ruling on the claimants’ action, the German
Foundation Industrial Initiative contends, would require
reviewing these official acts and pronouncements of the German
government.
The Supreme Court has emphasized, if there is no foreign
judgment or ongoing proceeding in a foreign tribunal,
application of international comity principles requires the
presence of a “true conflict” between United States law and
foreign law. Hartford Fire Ins. Co. v. California, 509 U.S. 764,
798–99 (1993). Unless foreign law either requires a foreign
entity “to act in some fashion prohibited by the law of the
United States,” or makes “compliance with the laws of both
countries . . . impossible,” a court need not abstain based on
principles of international comity. See id.
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Absent true conflicts, a judgment from a foreign court, or
parallel proceedings in a foreign forum, rarely have United
States courts abstained from deciding the merits of a case on
international comity grounds. See, e.g., United States ex rel
Saroop v. Garcia, 109 F.3d 165, 170 (3d Cir. 1997) (holding the
recognition of a foreign judgment requires both reciprocity on
the part of the foreign sovereign and fulfillment of other specific
criteria to be recognized as a judgment); Philadelphia Gear
Corp. v. Philadelphia Gear de Mexico, S.A., 44 F.3d 187,
193–94 (3d. Cir. 1994) (applying comity in light of a parallel
proceeding in a Mexican court); Somportex, 453 F.2d 435, 444
(3d Cir. 1971) (applying principles of international comity in
respecting an adjudication by an English tribunal).
Even in the context of a foreign court’s judgment, we
condition application of international comity on reciprocity,
Saroop, 109 F.3d at 170, taking into account several criteria,
including the foreign court’s jurisdiction, the proceedings
involved, and indicia of due process, see id. (quoting Hilton, 159
U.S. at 202–03).
We are aware of one instance where comity principles
have been applied, despite the absence of a foreign judgment,
foreign proceeding, or a “true conflict” between United States
and foreign law. In Ungaro-Benages v. Dresdner Bank AG, the
Court of Appeals for the Eleventh Circuit drew a distinction
between traditional “retrospective” application of international
comity—which respects the judgment of a foreign court or
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defers to parallel foreign proceedings—and prospective
application. 379 F.3d 1227, 1237–39 (11th Cir. 2004).
In the context of a case involving Holocaust-era property
claims, the Eleventh Circuit appeared to expand a conflict
principle into a broader abstention doctrine, and delineated the
factors it would consider in a prospective application: the
interests of the United States government, those of the foreign
government, and those of the international community in
resolving the dispute in a foreign forum. Id. at 1238. We
remain skeptical of this broad application of the international
comity doctrine, noting our “virtually unflagging obligation” to
exercise the jurisdiction granted to us, Colorado River v. United
States, 424 U.S. 800, 817 (1976), which is not diminished
simply because foreign relations might be involved, cf. Baker,
369 U.S. at 211(“[I]t is error to suppose that every case or
controversy which touches foreign relations lies beyond judicial
cognizance.”).
Even under a prospective application of the comity
doctrine, we are skeptical that Germany’s interest in resolving
the dispute in Germany eclipses the interests of the United
States or its citizens in adjudicating the merits of the dispute in
a United States court. Nor do we have any assurance that
claimants would have a forum available to them in Germany.
Accordingly, we decline to abstain from adjudicating the
merits of this case under the international comity doctrine.
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V. Conclusion
We will reverse the judgment of the District Court, and
remand for proceedings consistent with this opinion.
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