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By Louis M. Solomon
Victims of Bank Theft v. Magyar Nemzeti Bank, et al., No. 10 C 1884 (N.D.
Ill. May 2011), [enhanced version available to lexis.com subscribers] addresses motions to dismiss filed by international banking
institutions that allegedly "played a role in a wealth expropriation scheme
involving the theft and withholding of assets and funds from Hungarian Jews who
were victims of the Holocaust and their next of kin". The case is,
by our reckoning as well as the Court's, one of first or close-to-first
impression; the causes of action arise from a link that is trying to be drawn
is between banking institutions and direct or complicit involvement in the
The District Court observed that the
plaintiffs based their claims on alleged violation of the "historical norms
established by the treaties, customary international law, and the limited area
of law governing areas such as genocide". The Court did not see such
claims foreclosed by Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law] . That the claims were novel did not doom them, said
the Court, and "[g]enocide by looting and aiding and abetting genocide by
looting falls within the limited scope of jurisdiction recognized in Sosa".
Next, the District Court discussed
the issue whether the Alien Tort Statute (ATS) can or cannot subject
a corporation to liability. The District Court acknowledged that the
Second Circuit in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d
Cir. 2010) [enhanced version / unenhanced version ] (discussed
denial of rehearing here), held that a corporation could not be held liable
under international law. However, the Court found Kiobel "non-controlling",
instead relying on "persuasive precedent indicating that corporations can be
held liable under the ATS". Citing Romero v. Drummond Co., 552
F.3d 1303 (11th Cir. 2008) [enhanced version / unenhanced version ] (we discuss this 2011 decision in that case here).
The District Court then rejected the
balance of the defendants' grounds for dismissal, including not merely defenses
based on personal jurisdiction but forum non conveniens, statute of
limitations, political question, immunity under the FSIA, and the act of state
doctrine. The Court denied the motions to dismiss in their entirety.
The District Court did not address
the issue of what showing is needed before international norms could be
considered violated, here by financial institutions allegedly aiding and
abetting by looting. See our discussion (here)
where the Court (here the dissent in a decision by the First
Circuit) limits the types of cases where universal condemnation and hence
universal jurisdiction is available. Also, for a different analysis
and result with respect to both Sosa and Kiobel, see Boimah
Flomo v. Firestone Natural Rubber Co., 744 F. Supp. 2d 810 (S.D. Ind. 2010)
[enhanced version ] .
International Practice Law Blog for more analysis of international
and foreign law issues.
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