Could this train make it through: the law and strategy of the Gold Train case.

Author:Tiefer, Charles

    In 1944-45, the Nazis seized personal belongings of the Hungarian Jewish population and dispatched some of the most valuable of them on a train. The United States Army took control of this "Gold Train" and gave reassurances that it would keep the valuables safe. However, the items were plundered by individual soldiers, including officers, and diverted to various uses. After decades of dormancy, a Presidential Commission exposed the facts, but the government still did not right the wrong--until there was litigation.

    The "Gold Train" case (Rosner v. United States (1)) represents a measure of justice for the victimized community of Hungarian Jewish Holocaust survivors. This case is one of the most successful human rights class actions ever brought against the United States. It teaches important lessons regarding future human rights cases, especially those against the United States. These lessons concern both the legal doctrines in such cases and strategic questions about how to mobilize the public's sympathy for human rights victims injured by the United States abroad.

    Survivors and descendants of Hungarian Jews brought this class action against the United States to seek restitution because their valuables were seized by the Nazis in 1945 and subsequently loaded on a train which came into United States Army control. The valuables were disposed of by grants to international organizations, sale, waste, and looting, rather than being returned to the owners. Strategically, Hungarian Jewry, as Holocaust-era victims, had the sympathy of American Jewry, a group whose voice would help bring about a just settlement. (2) The Rosner settlement obliged the United States to devote $25 million to the needs of this class of Holocaust victims. (3)

    There is much more to the Gold Train case than meets the eye, and the litigation took many unanticipated turns over five years of preparation, research, litigation, negotiation, and settlement. Doctrinally and strategically the route to obtaining justice was anything but simple. The underlying events occurred in far flung locales--Hungary, Austria, France, London, New York, Budapest, Israel, and Washington, DC, among others--over 55 years before the case was brought. Both factual (4) and legal questions posed major challenges. (5)

    There was never a guarantee of success; far from it. Few cases of this magnitude succeed against the United States. (6) The Department of Justice has a responsibility to protect the assets of the United States government against all defensible claims, no matter how compelling the facts. (7) The United States litigates vigorously, possessing unique defenses (from sovereign immunity to the political question doctrine), substantial litigation budgets, and top-flight legal talent with deep wells of institutional knowledge. And, of course, the case existed against the backdrop of the heroic role that the United States Army played in liberating Europe in World War II. (8) It is difficult to imagine a more worthy opponent than the United States.

    As to doctrine, the defendant, the United States government, could cite precedent with appellate support in defending against a class of individuals who were neither citizens nor resident aliens, who were arguably without connections to the United States in 1945, and who were asserting claims from actions of the United States Army overseas in the immediate aftermath of war. (9) The defendant did succeed in having the constitutional claim dismissed. (10) Additionally, the Department of Justice employed its potent jurisdictional defense based on sovereign immunity (11) expecting either to knock off the case in district court or to kill it on interlocutory appeal. (12)

    In 2001, Hungarian Jews began the Rosner class action in federal court in Miami, Florida. In 2002, the court made the key decision in the case. It allowed some of the plaintiffs' non-constitutional claims to stand, and allowed discovery as to these, while dismissing plaintiffs' constitutional claim. After the court ordered mediation, the court-appointed mediator, Fred Fielding, was able to bring the Justice Department to settle, including a settlement fund of $22 million for Hungarian Jewry. (13)

    To sketch briefly this Article's parts, Part I discusses in more detail the facts and the procedural history of the case. In June 1998, Congress created the Presidential Advisory Commission on Holocaust Assets in the United States. In October 1999, the Commission's staff issued a "Progress Report on: The Mystery of the Hungarian 'Gold Train," (14) which, in effect, blew the whistle on the Gold Train episode. (15)

    To summarize, as a part of the Holocaust personally managed by Adolph Eichmann, the Nazis deported hundreds of thousands of Hungarian Jews to death camps, looted the wealth of the Hungarian Jewish community, and sent quantities of valuable personal property and ceremonial objects on a train to Germany. The Army intercepted the train when hostilities ceased. Much of the wealth was looted, some disappeared, and some was used to reimburse those who paid for general relief for World War II's displaced persons. (16)

    Plaintiffs filed Rosner as a class action for Jews deprived of their property. The case came to a decisive legal battle concerning the Justice Department's motion to dismiss, producing a key judicial opinion in 2002 from the United States District Court for the Southern District of Florida. The district court dismissed some claims, notably the constitutional takings claim, but it sustained other claims and rejected the Justice Department's motion for reconsideration. (17) Crucially, the decision not to dismiss was an interlocutory judgment, not a final one. As an interlocutory judgment, it was not appealable. The case would stay in the district court rather than being taken away to appellate courts that might be unfavorable venues. (18) A period of discovery of facts pertaining to jurisdiction preceded major settlement efforts by the plaintiffs. In the end, the plaintiffs achieved a settlement favorable to the Hungarian Jewish community.

    Notwithstanding the plaintiffs' strong claim of wrongful injury, doctrinally, the Gold Train case faced powerful legal obstacles discussed in Part II. The Justice Department of the early 2000s espoused a comprehensive conceptual analysis, particularly as to the constitutional argument about a Fifth Amendment "taking."

    The DOJ's constitutional argument against a takings claim could be labeled the "concentric circles of remoteness." (19) It opposed finding constitutional rights for extraterritorial aliens and ideally limited rights to either citizens abroad or aliens in the country. (20)

    This issue had significance for the development of human rights law during the 2000s when there was intense legal interest in whether the Constitution applied extraterritorially or gave protections to aliens. (21) Within that debate, the Gold Train plaintiffs did have responses to the Justice Department's "concentric circles of remoteness" defense. For example, many valuable objects on the Gold Train would rightfully belong to individuals who were, currently, United States citizens or residents who had immigrated or who had inherited from 1945 victims. Yet, the district court dismissed the constitutional takings claim. Though an obstacle to future types of cases that might depend upon a broadly inclusive theory of constitutional taking, it fortunately was not a fatal blow to the Gold Train case. (22)

    Plaintiffs' key response put forth other legal claims that did not run head-on into the "concentric circles of remoteness." Instead, it mobilized other factual aspects of the Gold Train matter in order to pierce the Army's shield of sovereign immunity. One aspect was the claim formulated as a violation of the Administrative Procedures Act which waives sovereign immunity. (23) The other was the implied-in-fact contract of bailment claim, the relevant version of the contract exception to sovereign immunity. (24)

    Part III examines the legal strategy. Had the plaintiffs done nothing more than present legal arguments, the case would have squandered pressure on the defendant to settle, because of delay and loss of public interest. The Administration had powerful reasons to stand behind the Justice Department's position. Even without appeals, the case lasted for years, in contrast to other Holocaust-victim cases which tended to settle at an early stage. As noted by Morris A. Ratner, who participated in a number of Nazi-era class cases or group settlements, the other "Nazi-era cases settled at a relatively early stage of litigation." For example, "[t]he Swiss banks litigation ... settl[ed] after briefing and argument but before any ruling on motions to dismiss the pleadings." (25)

    Specifically, the Department of Justice's tough stance in the case was predicated on its serious responsibility to protect the United States Treasury (26) and the government's desire not to face liability for its actions in national security affairs. (27) Plaintiffs made several strategic moves in this case, including successfully researching the case despite the challenges posed by the twin problems of the destruction of documentation together with the scattering of the Jewish Community caused by the combination of the Holocaust and the passage of decades. In other strategic moves, plaintiffs chose to file the case in Miami, and also made it difficult for the Justice Department to stall the case in appellate proceedings for threshold issues, rather than merits. The case's scheduling created opportunities (28) for a media (29) and settlement strategy. (30)

    Finally, Part IV discusses the implications for future human rights cases, particularly those against the United States. Other human rights victims suing the United States may not have the extraordinarily high level of public sympathy compared to Holocaust-era victims. On the other hand, they...

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