June 21, 2011
New momentum for bill to allow lawsuits against Holocaust-era insurance companies
It’s becoming a D.C. perennial: Every two years, a new Congress is ushered in and lawmakers from Florida herald a bill that once and for all will bring insurance companies to account for swindling Holocaust survivors.
And every two years, congressional staffers and Jewish community professionals who negotiate Holocaust restitution say the bill’s chances of passage are nil.
But this year, proponents of the bill say, the stars are aligned differently: A passionate congressional advocate is now in a position of considerable power. And for the first time, the bill has bipartisan Senate backing.
“The survivors are determined to speak for themselves,” said Sam Dubbin, the lawyer who for years has shepherded versions of the bill into Congress only to see them disappear into a twilight zone of parliamentary procedure. “They have an irrefutable legal and moral claim to have their rights restored.”
At issue is whether Holocaust survivors and their families should be allowed to sue European insurance companies for failing to pay on the policies of Jewish policy-holders killed at the hands of the Nazis. Except in extraordinary cases, such as lawsuits against state sponsors of terrorism, Americans cannot use U.S. courts to sue foreign entities.
In the late 1990s, Jewish groups including the Claims Conference reached settlements with European insurance companies that resulted in some $306 million being disbursed for survivors and survivor institutions through the International Commission on Holocaust Era Insurance Claims, known by the acronym ICHEIC (pronounced EYE-check). These groups, including the Anti-Defamation League, the American Jewish Committee, B’nai B’rith International, the World Jewish Congress and the World Jewish Restitution Organization see protecting the insurance companies from individual lawsuits as key to the strategy of getting European nations and institutions to agree to negotiated restitution settlements that result in money for needy survivors.
But Dubbin and some survivor groups, like the National Association of Jewish Child Holocaust Survivors, say the ICHEIC agreements never legally precluded individual lawsuits, and that legislation allowing such lawsuits against the insurance companies would correct a historic injustice. They say the ICHEIC process, which officially ended in 2007, was irredeemably weighted toward the insurers.
Opponents say that if Congress passed a bill that would allow individual U.S. lawsuits against the insurance companies, it would upend the executive branch’s exclusive control over foreign policy. Essentially, they say, it’s a jurisdiction issue.
“It would be a cruel and unrealistic increase in expectations to have people go to court to try to sue companies against whom they would have great difficulty getting jurisdiction,” said Stuart Eizenstat, the Clinton administration’s special representative for Holocaust issues at the time the ICHEIC settlements were being negotiated. Today, Eizenstat is a top negotiator for the Claims Conference.
The battle between the two sides abounds with allegations of bad faith and greed, and even the threat of elderly survivors picketing a fundraiser for a politician once seen as sympathetic to their cause.
The new bill, sponsored by Rep. Ileana Ros-Lehtinen (R-Fla.) and Rep. Ted Deutch (D-Fla.) in the U.S. House of Representatives and Sens. Bill Nelson (D-Fla.) and Marco Rubio (R-Fla.) in the U.S. Senate, would allow courts to proceed over executive branch objections in litigating claims aimed at insurers. Ros-Lehtinen, who has championed similar bills for years, is now able as chairwoman of the House Foreign Affairs Committee to expedite the bill.
Leo Rechter, president of the National Association of Jewish Holocaust Survivors, a group that is associated with Dubbin, told JTA that he wants courts to compel insurers to produce documentation that litigants believe to be secreted away.
“Survivors were children during the Holocaust years, and we do not have information” about parents’ claims, he said.
Advocates of the legislation say billions are potentially at stake. Some survivors say ICHEIC denied claims even when they had evidence.
“Even though I have papers showing this policy existed, the ICHEIC commission allowed Generali to deny my claim without giving any proof,” Suzanne Marshak wrote to JTA, referring to a policy she says her uncle had with the Italian insurer.
Eizenstat says ICHEIC’s standards were “relaxed,” in that applicants were not required to provide legal standards of proof that they were beneficiaries.
The latest dustup between the two sides followed a June 1 story in The New York Times that alluded to allegations by Dubbin, who is based in Florida, that Jewish groups backing the ICHEIC process have profited from opposing the legislation.
The Jewish groups fired back with a June 13 letter to Nelson and Ros-Lehtinen outlining their arguments against the bill: It would raise unrealistic expectations among survivors; reopen a negotiating process that a number of Western European nations had presumed was closed and “call into question the U.S. ability to abide by its commitments.” Such uncertainties, they said, would inhibit Eastern European nations now negotiating to settle Holocaust-era claims.
Roman Kent, a survivor and treasurer of the Claims Conference, says the legislation gets in the way of helping needy survivors now, noting Germany’s recent commitment to increase its funding of home care for elderly survivors to $180 million in 2012. This year, the figure is $156 million.
“Litigation is costly and prolonged, and there are negotiations going on that will actually produce benefits for survivors now,” he said.
On June 17, the Holocaust Survivors Foundation, which supports the legislation, said in response that separate negotiations should not impinge on the right of individuals to litigate claims and that Western European nations are unlikely to renege on separate agreements.
The largest and more established survivors group, the American Gathering of Jewish Holocaust Survivors, also has weighed in supporting the bill, with a caveat: Cap lawyers’ fees. Max Liebmann, the group’s senior vice president, said an overriding consideration was a recent spate of scandals that exposed lawyers ostensibly representing survivors as making unseemly profits.
“Dubbin is trying to cut in on this and make money,” he said.
Dubbin’s clients vouch for his integrity.
“He helps us with everything for so many years, not just insurance, with getting information, with filling out papers, and he never got paid,” said David Mermelstein. “If I go to court and win, shouldn’t he get paid?”