UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 01-1859-CIV-SEITZ/BANDSTRA
Plaintiffs,
v.
UNITED STATES OF AMERICA,
Defendant.
|
|
||||||||||||||||||||||||||||||||||||
PLAINTIFFS’ OPPOSITION TO GOVERNMENT’S MOTION TO DISMISS UNDER RULES
12(b)(1) AND 12(b)(6)
I. INTRODUCTION
After three years of litigation, the Defendant again moves to dismiss this
lawsuit brought by Hungarian Holocaust survivors and their heirs. This motion
should be denied, and the Plaintiffs should be allowed to proceed, for the
simple reason that the facts and law plainly compel it.
Notwithstanding the Government’s legal machinations, on key factual questions
little is in dispute. The Government, through its experts and pleadings, now
agrees that the Gold Train contained stolen Jewish property,[1] that it was
handed over to the U.S. with explicit assurance the property would be returned
to Hungary or its rightful owners,[2] that looting and misappropriation
occurred,[3] and that it decided to keep the stolen Jewish property to
alleviate the burdens of the U.S. Treasury.[4] The Government has not
challenged the testimony of Plaintiffs who show their property was on the
train,[5] or the conclusions of Plaintiffs’ expert as to which Jewish
communities in Hungary had their property on the train,[6] or Plaintiffs’
experts who have shown that it was U.S. law and policy to restitute the
property to the country of origin, regardless of later border shifts, and that
Government did so many times.[7] Indeed, before another court, the Government
has made a judicial admission that it was the policy of the United States to
return all property seized in Austria to the country from which it was
taken.[8] The factual differences that do exist (such as the amount of looting
that occurred, the precise dollar value of the property on the train) are
irrelevant at this stage of the proceedings.
The Government’s motion to dismiss is a recitation of irrelevant facts
combined with a series of technical and meritless legal arguments. Indeed,
some of them (e.g., the treaty and other 12(b)(6) defenses) are barred in a
second pre-answer motion under Rule 12(g).
The Plaintiffs’ standing to bring this case is clear. They have suffered an
injury in fact, traceable to the Government’s conduct, and have shown
conclusively that they and other Hungarian Jews had property on the Gold Train
that the United States had in its hands and refused to return. (See infra at §
IV.) The Court already has ruled against the Government twice on the statute
of limitations defense; and Plaintiffs have presented unrefuted evidence that
they did not know about the Gold Train until 1999, or later. (See infra at §
VI.) As for the Government’s rather incredible contention that the survivors
“should have known” the story of the Gold Train, suffice it to say that the
Government’s own expert admits he had never heard of it until the 1980s, and
that years of work in archives were required to learn what happened. (Id.)
The Plaintiffs’ claims for non-monetary relief should proceed. The “military
authority exception” to the APA’s waiver of sovereign immunity does not apply
because the actions complained of are decidedly non-military as alleged
throughout the First Amended Complaint and confirmed through discovery. (See
infra at § VII.) The Government’s 12(b)(6) motion claiming that two
international agreements bar the plaintiffs’ claims (the 1946 Treaty of Peace,
and a 1973 Executive Agreement) are untimely because the Government already
has made a 12(b)(6) motion, and cannot make a second one pre-answer. Even
still, the Government’s argument is specious; neither pact was ever intended
to address victims’ claims. (See infra at §VIII.C.)
Finally, the U.S. Supreme Court’s recent landmark ruling in Rasul v. Bush, 124
S. Ct. 2686 (2004), significantly widens the Court’s authority to hear this
case brought by Hungarian survivors who were friendly aliens during World War
II for alleged violations of the Constitution and international law.[9]
In the end, although the Court may resolve factual disputes when deciding a
Rule 12(b)(1) motion that attacks the facts (as the Government’s motion does),
the law does not permit the court to resolve every fact. Instead, the Eleventh
Circuit requires a court to deal with only the bare minimum, until the court
is satisfied it is competent to exercise its jurisdiction.[10] All facts that
touch on or overlap with the merits must be construed in Plaintiffs’ favor –
to be resolved not merely on cross motion documents, but in a trial.
Since August 2002, when this Court last ruled on the Government’s prior Motion
to Dismiss, the plaintiffs have had the opportunity to conduct limited
discovery. Newly produced documents,[11] combined with court rulings and
admissions by the government,[12] have significantly strengthened the legal
basis for this case. In all, Plaintiffs have more than met the necessary
showing to survive this Motion to Dismiss. They should be permitted to proceed
to trial to test the merits of their case.
II. FACTS
The central fact is this: nearly six decades after the events described, the
defendant through its retained expert, Ronald Zweig, has suddenly admitted
many – in fact, most – of the key factual allegations supporting Plaintiffs’
complaint. The Government’s submission is largely a frontal admission that the
allegations of the First Amended Complaint (“FAC”) are accurate. The
Government has produced few, if any, contemporaneous documents to refute
Plaintiffs’ allegations.
Plaintiffs’ FAC contains the factual allegations that support this case, which
are incorporated herein. In addition, Plaintiffs have submitted expert reports
from Gábor Kádár, Francis A. Gabor, and Jonathan Petropoulos as Exhibits 1, 2,
3, 4, and 5, attached to the Declaration of R. Brent Walton (“Walton Decl.”).
Plaintiffs explicitly rely on and incorporate their statements. It is not
necessary to rely on the Plaintiffs’ experts alone. The Government has
submitted two declarations by Ronald Zweig; the second of which incorporates,
for the first time, his 312-page book, The Gold Train, including its
references (hereinafter “GT”). While Zweig puts a different gloss on the facts
and seeks to justify the Government’s thefts and misappropriations of
property, and its unilateral reinterpretation of the multilateral restitution
agreement, his research confirms Plaintiffs’ case on most major issues. In
addition, the Government put forward as the person most knowledgeable Clayton
Laurie, who gave deposition testimony and [under seal]. While the Government’s
entire motion does not mention the testimony of its “most knowledgeable”
person, his testimony also confirms key aspects the Plaintiffs’ case.
A. The Confiscation of Jewish Property
Plaintiffs assert that a large volume of property stolen from Hungary’s Jews
was loaded onto the Gold Train for plunder. For years, the Government claimed
it did not know what was on the train, or that there was any proof that Jewish
property was on the train. See, e.g., Phillips Dep., 59:6-12, Ex. 14 Walton
Decl. Now, the Government admits the obvious. Zweig states that the Gold Train
“carried a large part of the transportable wealth of the Jews who had lived
within the enlarged borders of wartime Hungary. Gold, wedding rings, watches,
jewelry, silverware, cash, stamp collections, cameras, binoculars, even
Persian carpets and expensive furniture – enough to fill a freight train of
almost fifty wagons.” (GT at 3.) Indeed, the subtitle of his book calls it
“The Second World War’s Most Terrible Robbery.”[13]
Though the parties disagree about the value of the property that was on the
Gold Train, there is no dispute that the Gold Train contained a sizeable
portion of the movable wealth of the Hungarian Jews. Furthermore, there is no
dispute that the cities and towns in Hungary from which the Jewish wealth was
taken and placed on the Gold Train are those specified in Gábor Kádár’s expert
report.[14] Consequently, there is no dispute that the Gold Train contained a
large part of the transportable wealth of the Jews who in 1944 resided in:
Barcs, Bátaszék, Békéscsaba, Beregszász, Beszterce, Budapest, Csíkszereda,
Csorna, Csurgó, Dabas, Debrecen, Dés, Devecser, Diosgyőr, Dombóvár, Eger,
Esztergom, Felsővisó, Gyöngyös, Győr, some places of Heves County, Kaposvár,
Kassa, Keszthely, Kolozsvár, Kunszentmiklós, Marcal, Miskolc, Mohács, Monor,
Mosonmagyaróvár, Munkács, Nagykanizsa, Nagylózs, Nagyvárad, Nyíregyháza,
Orosház, Ózd, Pápa, Pécs, Pécsi, Putnok, Sopron, Sopronkőhida, Sopronkövesd,
Szatmárnémeti, Szécsény, Szentgotthárd, Szigetvár, Szombathely, some places of
Southern Hungary, Tab, parts of the “Transdanubian” region, Tamási, Újpest,
Ungvár, parts of Vas County, Veszprém, Zalaegerszeg, Zalaszentgrót, Zilah, and
Zirc.[15]
B. The Handover of the Train and the Promises Made
The Plaintiffs contend that the train was handed over to the Americans for
safekeeping, at which time a promise was made that the train and its contents
would be returned. Zweig argues that the U.S. promised to return the train;
the Hungarian guards later fretted that while they had indeed received a
promise, it had not been put in writing. (GT at 124; Zweig Dep., 96:20-22.)
The Government admits this fact. (Def. Br. at 9.)
C. Relevant U.S. Rules, Regulations and Policy
The Plaintiffs contend that the policies and laws of the United States
required the Government to restitute the property to Hungary or to Plaintiffs,
the real owners. In its Motion to Dismiss, the Government insists otherwise.
However, in the evidence it has presented, the Government confirms that Decree
No. 3,[16] Provisional Handbook, and the Army Field Manual, are directly
applicable to and governed the Army’s conduct in occupied Austria. First,
Laurie testified at his deposition that the Army is subject to laws and
regulations including the Articles of War, the requirements set forth in the
Army Field Manual, which likewise impose duties and affirmative obligations
upon the Army in occupied Austria. (Laurie Dep., 113:1-5.)[17]
Second, [UNDER SEAL]
Laurie also explained that [UNDER SEAL] Lastly, the Government has also
confirmed and echoed Plaintiffs’ position in statements and arguments it made
to one federal court. Thus, the Government admits that Decree No. 3 governed
the conduct of the occupation forces in Austria, and noted that “[u]nder the
military decrees and policies in effect in post-war Austria, property seized
by the United States Forces in Austria was sorted and turned over to the
country from which the object had been taken.”[18] This Decree required that
all property – “whether stolen, aryanized, or legitimately acquired” – had to
be returned to the country of origin. Id.; see also In re Portrait of Wally,
2002 U.S. Dist. Lexis 6445, *47 (S.D.N.Y. April 12, 2002) (same).
D. Identifiability
Plaintiffs contend that despite classifying the Gold Train as enemy property,
the United States knew from the outset the Gold Train property was “persecutee
property,” that originated from Hungary; and that some considerable number of
individual items were personally identifiable. (See, e.g., FAC at ¶¶ 12, 13,
23, 25, 196, et seq.) The Government cannot prove otherwise.
According to Zweig, the United States knew from the beginning that the Gold
Train contained “persecutee property,” (GT at 124), and confirmed this fact no
later than July 10, 1945, when American Intelligence officials interrogated
the Hungarian soldiers who accompanied the Gold Train. (GT at 123.)[19] Thus,
the Army established that the Gold Train contained looted assets taken from
the Jews of Hungary. Zweig also confirms that the United States never compiled
an inventory (GT at 194; Zweig 1st Rep., at 32); the Government denied
Hungarian requests to create an inventory (GT at 144-145); and refused
requests to inspect the contents from both the Jewish community and the
Hungarian Government (GT at 144, 153.)[20] Moreover, Zweig admits that the
Executive Branch wanted to turn over identifiable items to their proper owners
(GT at 154) and that “items of jewelry” were identifiable. Zweig further
agrees that other items on the train included stamp collections and Judaica, (GT
at 96), both distinctive and thus identifiable.[21] Moreover, the Parke-Bernet
Galleries catalogs of items that the United States caused to be auctioned show
many distinct items, many of which were identifiable.
E. Failure to Safeguard the Property
Zweig confirms that the Government failed to compile a detailed inventory of
the contents on the Gold Train. (GT at 194; Zweig 1st Rep. at 32.) He also
confirms that the United States refused requests from members of the Jewish
community in Hungary and the Hungarian Government to inspect the contents of
the train and assist in inventorying the looted property. (GT at 144-145,
153.) According to one of the documents relied on by the Government and Zweig,
and produced to Plaintiffs, one reason no inventory had been completed was
that the creation of the inventory itself would deprive high ranking members
of the armed forces an opportunity to plunder:
The local American Military Authorities are doing everything to obstruct that
work [inventorying the Gold Train], especially in view of the fact that with
the beginning of this work they have lost a source for easily acquiring
riches. It is known that top-ranking officers of the American Army have
pocketed very valuable items.[22]
F. Hungarian Jews Seek their Property and Are Rebuffed
Zweig confirms that representatives of the Hungarian Jewish community met with
and corresponded with Arthur Schoenfeld, who headed the diplomatic mission to
Hungary, from December 1945 through March of 1946. During that time, they
explained the history of the train and despoliation of the Jews, asked the
Government to inventory the train, asked for the return of the Gold Train, and
offered to help return the property to its owner, and when impossible, the
items would be used for Jewish welfare, and that Hungary had created the
legislative apparatus to accomplish such a purpose. Schoenfeld told them that
they could not make a claim, they needed to speak to the Hungarian Government
about this as the matter was one between the Governments, and that Hungarian
Government was negotiating with the U.S. (GT at 144-145, 153, 158-159; Zweig
Dep., 105-106, 109:26-28, 110:7-14.) Schoenfeld also told them that the Gold
Train was a matter for inter-Allied determination. (Zweig Dep., 110:15-21.)
After being told this, and following Schoenfeld’s instruction, the
representatives approached the Hungarian Government and the Hungarian
Government began to negotiate the return of the Gold Train on behalf the
Jewish community. (Id. 116:5-11.)[23] The Hungarian government even passed a
law that would funnel the looted property back to the original owners and
created a special Jewish committee to help in this process. (Id. 116:12-17; GT
158-159.)
G. Ownership
Zweig concedes that the property continued to belong to the Hungarian Jewish
owners (GT at 106) and that despite the magnitude of the Holocaust there were
approximately 140,000 surviving Jews in Hungary in 1946. (Id. at 140.) His
book weakly explains that the Government decision not to turn the train back
was made because “it was felt” (Id. at 163) that most of the owners had
“presumably” died in Auschwitz (Id.), despite the U.S. knowing about the
presence of a large and vibrant Jewish community in Budapest that repeatedly
sought the return of the items. (Id. at 139-140.)
H. United States’ Mishandling of the Property
Zweig also corroborates Plaintiffs’ allegations of looting and other
mishandling of the Gold Train property while it was in the Government’s
custody. (Zweig 1st Rep. at 32-33.) Although Zweig tries to minimize the
extent to which the Army mishandled the property, he admits that in March of
1946 the United States “formalized” into policy the existing practice of
“allowing officers to requisition materials” solely on memorandum receipt. He
further admits that these items were “rarely returned.” (GT at 155.) In fact,
“almost none” of the items requisitioned were ever returned to Property
Control. (Id. at 198.)
And, though Zweig also tries to minimize the value of the Gold Train and the
looting that occurred while in U.S. custody, he cites and otherwise relies
upon notes of a conversation between Gideon Rafael, envoy for the Jewish
Agency in Palestine, and Col. Arthur Marget, Chief U.S. Economic Officer in
Austria, who not only valued the property between $50 and $120 million in
1945, (Id. at 147),[24] but also informed Rafael – on at least two occasions –
that it was known to him that there was widespread looting.[25] Moreover, the
looting was not confined to senior officers. According to Zweig, “enterprising
young women” were seen wearing jewelry near the Salzburg warehouse. (Zweig 1st
Rep. at 32.)
I. United States’ Determination
Zweig corroborates Plaintiffs’ contention that the United States’ decision not
to return the Gold Train was based on its own budgetary concerns arising out
of its agreement to fund the resettlement of Europeans, including European
Jews. (Zweig 1st Rep. at 36-37; White Decl. at ¶ 22 n.2; FAC ¶¶ 16, 20, 261,
365-66; Plunder & Restitution, at 9, Ex. 16 Walton Decl.) According to Zweig,
the United States unilaterally redefined Article 8 of the Paris Agreement in
two significant ways. (GT at 163-164.) As ratified, Article 8 expressly
applied only to “non-monetary” gold, and then only to the sub-set of
non-monetary gold found in Germany.[26] However, in November of 1946, the
Executive Branch changed the existing and on-going application of Article 8
“so that the original allocation to the IGCR of ‘non-monetary gold found in
Germany’ would be extended to all victim assets (not only gold) found anywhere
in the European theatre, including Austria.” (GT at 163.) Furthermore, Zweig
confirms that the Government made this unilateral amendment to Article 8 of
the Paris Agreement to benefit itself by alleviating the burden on the
Treasury “in connection with the financing and resettlement problems” of
displaced persons (Id. at 167), which was “a problem that would not go away.”
(Id. at 163.)[27] Once these financial benefits to the United States’ fisc
were explained, whatever differences of opinion may have once existed were
gone, the Executive Branch altered Article 8 and “approval [to the decision
not to return the Gold Train property to Hungary] was quickly given.”[28] This
is admitted by the defendant. According to the final report of the
Presidential Advisory Commission on Holocaust Assets, the decision to auction
off the Jews’ property “had the effect of decreasing the financial burden on
the United States of supporting the refugees.” Plunder & Restitution at 9
(emphasis added).
J. Statute of Limitations
Zweig, a noted scholar in the Holocaust and restitution issues stated, that
until the 1980’s, he did not know about the Gold Train. His understanding of
the Gold Train story required research in 25 public and private collections
located in six different countries. Many of the documents are still classified
and some have only recently been released. (GT at x-xi; Zweig 2nd Rep. at 2,
Ex. 8 Walton Decl.)[29]
K. The Sum of the Government’s Admissions Confirms Each Element of Plaintiffs’
Claims
From these admitted facts, it is clear that the United States mishandled the
Gold Train property by: (a) failing to inventory it or maintain property
controls over the inventory; (b) failing to secure the property (which
includes allowing senior officers to “requisition” the property on memorandum
receipt); and (c) by failing to return the property to Hungary. The United
States Government well understood that: (i) the property on the train came
from the Jewish population of Hungary; (ii) numerous items were personally
identifiable[30] and that means existed through the Jewish community by which
even more materials were personally identifiable; (iii) the Government
disposed of the property for reasons that carried out an American budgetary
policy; (iv) and the Government violated its own international agreements and
directly benefited itself. The United States shrouded many of the facts
related to the Gold Train in secrecy for many years, hiding them from the
public view, protecting them by classifications.
These are the major allegations of the Plaintiffs’ complaint. Recognizing its
inability to refute the facts, the Government strains to construct a series of
evasive, legalistic defenses, including a sudden and late “discovery” that not
one, but two international agreements, it now tells the Court, preclude
Plaintiffs’ claims. For the reasons discussed below, all of the Government’s
arguments are incorrect and should be rejected.
legal argument
III. THE COURT MAY NOT DISMISS THE CASE UNDER 12(b)(1)
A. The Government’s Heavy Legal Burden
To obtain a dismissal pre-answer under Rule 12(b)(6)[31] or 12(b)(1), the
Government, being the moving party, bears a heavy burden as “it is a rare case
in which a motion on this ground should be granted.” St. Joseph’s Hosp., Inc.
v. Hospital Corp. of Am., 795 F.2d 948, 953 (11th Cir. 1986). “[A] complaint
should not be dismissed for failure to state a claim unless it appears beyond
a doubt that the plaintiff can prove no set of facts in support of his claim
which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45 (1957);
Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 682 (11th Cir. 2001)
(complaint may not be dismissed unless “it is clear that no relief could be
granted under any set of facts that could be proved consistent with the
allegations”). The Court “must accept the allegations set forth in the
complaint as true.” United States v. Pemco Aeroplex, Inc., 195 F.3d 1234, 1236
(11th Cir. 1999) (en banc).
B. Dismissal Under Rule 12(b)(1) Is Precluded Because Facts Are Intertwined
With The Merits
Though citing to the governing cases in a footnote, (Def. Br. at 16 n.9), the
Government fails to acknowledge that: “it is extremely difficult to dismiss a
claim for lack of subject matter jurisdiction.” Garcia v. Copenhaver, Bell &
Associates, 104 F.3d 1256, 1260 (11th Cir. 1997). [32] Here, the burden is
insurmountable since there are disputed issues of fact intertwined with the
merits; the case cannot be resolved in a motion brought under Rule 12(b)(1).
As the court held in Morrison v. Amway Corp., 323 F.3d 920, 929-30 (11th Cir.
2003), where the jurisdictional challenge requires decision of facts going to
the merits of the case, “the district court should . . . treat[ ] the motion
as a motion for summary judgment under Rule 56 and refrain[ ] from deciding
disputed factual issues”[33] More specifically, the court explained:
If a jurisdictional challenge does implicate the merits of the underlying
claim then ‘the proper course of action for the district court . . . is to
find that jurisdiction exists and deal with the objection as a direct attack
on the merits of the plaintiff’s case. . . . Judicial economy is best promoted
when the existence of a federal right is directly reached and, where no claim
is found to exist, the case is dismissed on the merits. . . . .’ Garcia, 104
F.3d at 1261, quoting Williamson v. Tucker, 645 F.2d 404, 415-16 (5th Cir.
1981). . . .
Id.; see also Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (same);
5A Wright & Miller, Federal Practice and Procedure § 1350, at 235 (2d ed.
1990).[34]
Thus, although jurisdiction is essential to the exercise of Article III
powers, and even though the Court can resolve certain factual disputes, in
Lawrence and Morrison, the Eleventh Circuit explained that courts should not
decide everything to do with jurisdiction, even in a 12(b)(1) factual attack,
the way the Government requests. Rather, the Eleventh Circuit, consistent with
the requirements of jurisdiction, requires a court to deal with only the bare
minimum, until the court is satisfied that it is competent to exercise its
authority. All findings beyond that are attacks on the merits, not to be
resolved merely on the cross-motion documents, but must await a full trial.
C. Article III Standing For One Party And One Claim Is Sufficient To Confer
Jurisdiction
Article III defines the limits of the “judicial power” – or subject matter
jurisdiction – of the federal courts. This includes the power to hear “all
Cases, in Law and Equity, arising under this Constitution, the Laws of the
United States, and Treaties made or which shall be made, under their
Authority.” Pursuant to this Constitutional authority, Congress has granted
the federal courts jurisdiction over “all civil actions arising under the
Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331.
Congress has also granted the federal courts jurisdiction over actionable
claims asserted by aliens for “violations of the law of nations or a treaty of
the United States.” 28 U.S.C. § 1350; Sosa v. Alvarez-Machain, infra.
Standing is another threshold issue that must be met before a court can
exercise its Article III powers. However, if “one plaintiff has standing to
bring all claims in an action, the court need not inquire into the standing of
others.” American Iron & Steel Inst. v. OSHA, 182 F.3d 1261, 1274 n.10 (11th
Cir. 1999) (citing Planned Parenthood of the Atlanta Area, Inc. v. Miller, 934
F.2d 1462, 1465 n. 2 (11th Cir.1991)); see also Prado-Steinman v. Bush, 221
F.3d 1266, 1280 (11th Cir. 2000) (one named plaintiff must have standing to
assert the same claims on behalf of other sub-class members).
Similarly, once the Court has jurisdiction over the parties, to obtain
jurisdiction over the case, all the Court needs is jurisdiction over a single
claim. For once the court has jurisdiction over any claim, under the
supplemental jurisdiction provisions of 28 U.S.C. § 1367 and principles
enunciated by the Supreme Court in Supreme Tribe of Ben-Hur v. Cauble, 255
U.S. 356 (1921), the Court may adjudicate the other claims presented, if they
“are so related to the claims in the action within such original jurisdiction
that they form part of the same case or controversy under Article III.” 28
U.S.C. § 1367(a).
D. The Tucker Act Waives Sovereign Immunity
The Government’s dismissal motion all but ignores the issue of sovereign
immunity. However, given a 12(b)(1) motion, Plaintiffs are compelled to
address the issue briefly, as jurisdiction is lacking unless a waiver of
sovereign immunity applies. The Little Tucker Act, 28 U.S.C. § 1346(a)(2),
supplies such waiver and grants the Federal District Court concurrent
jurisdiction with the Federal Court of Claims over “any claim against the
United States founded either upon the Constitution, or any Act of Congress or
any regulation of an executive department, or upon any express or implied
contract with the United States,” as long as the claim does not exceed
$10,000. This language provides a waiver of the Government’s sovereign
immunity, and does so for all claims based on any act of Congress, executive
regulations, implied contracts, and Constitutional claims that can “fairly be
interpreted as mandating compensation” for the damage sustained. United States
v. White Mountain Apache Tribe, 537 U.S. 465, 472 (2003).
This is a new standard, one more relaxed than before:[35]
This “fair interpretation” rule demands a showing demonstrably lower than the
standard for the initial waiver of sovereign immunity. “Because the Tucker Act
supplies a waiver of immunity for claims of this nature, the separate statutes
and regulations need not provide a second waiver of sovereign immunity, nor
need they be construed in the manner appropriate to waivers of sovereign
immunity.” Mitchell II, supra, at 218-219. It is enough, then, that a statute
creating a Tucker Act right be reasonably amenable to the reading that it
mandates a right of recovery in damages. While the premise to a Tucker Act
claim will not be “lightly inferred,” 463 U.S., at 218, a fair inference will
do.
Id. at 472-73. Thus, if a plaintiff relies on an act of Congress, regulation,
or constitutional provision that is “reasonably amenable” to a reading
requiring compensation, then the Tucker Act has waived sovereign immunity and
the suit may proceed. Id.
Furthermore, courts do not strictly construe statutes and substantive rights
against finding a particular right is reasonably amenable to providing
damages. To the contrary, the Supreme Court explained in Mitchell, “the
exemption of the sovereign from suit involves hardship enough where consent
has been withheld. We are not to add to its rigor by refinement of
construction where consent has been announced.” 463 U.S. at 219; see also
White Mountain, 537 U.S. at 477 (rejecting strict requirements in favor of
“the less demanding requirements of fair inference that the law was meant to
provide a damage remedy for breach of a duty”).
Money mandating rights include all statutes that require payment of damages
for violations, breaches of contracts,[36] and breaches of fiduciary duties.
Those rights to compensation can be found in the statute or regulations either
expressly or by implication. Eastport S.S. Corp. v. United States, 372 F.2d
1002, 1007 (Ct. Cl. 1967).
IV. PLAINTIFFS HAVE STANDING
The Government argues that Plaintiffs lack standing because they have suffered
no injury caused by or at least fairly traceable to the actions or omissions
of the defendant that will be redressed by a favorable ruling. (Def. Br. at 17
(citing Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)). This contention
is amply refuted by the allegations in the FAC, and affirmatively satisfied by
the evidence presented below.
A. Plaintiffs’ Injuries Caused By The Government Can Be Redressed By This
Court
In evaluating whether a party has satisfied Lujan, the Court must “accept as
true all material allegations of the complaint, and must construe the
complaint in favor of the complaining party.” Midrash Sephardi, Inc. v. Town
of Surfside, 366 F.3d 1214, 1223 (11th Cir. 2004) (citing Warth v. Seldin, 422
U.S. 490, 501 (1975)). Moreover, unlike other threshold issues, “a district
court cannot decide disputed factual questions or make findings of credibility
essential to the question of standing on the paper record alone but must hold
an evidentiary hearing,” Bischoff v. Osceola County, 222 F.3d 874, 878, 879
(11th Cir. 2000) (emphasis in original).
Applying these standards here, it is plain that, as alleged, Plaintiffs
suffered a clear and demonstrable injury at the hands of the Government. This
was implicit in the Court’s first ruling denying the Government’s motion to
dismiss. The Government took possession of Plaintiffs’ property and failed to
return it either to them or Hungary despite being required to do so under
implied-in-fact contract theory the Court upheld against the Government’s Rule
12(b)(6) challenge. If the Government had returned the property either to
Plaintiffs or Hungary, Plaintiffs (or Plaintiffs’ now deceased parents or
other loved ones) would have received their property back more than 55 years
ago and would not have had to rebuild their lives from scratch. In fact,
Hungary had enacted a law that required it to return the property to its
owners or pay compensation. (Kádár Dep., 253-254; 261:10-20.) Moreover, the
Government wrongfully retained the Jewish property knowing it was stolen
property to alleviate its own obligations. (Supra at § II.I.) These are
sufficient allegations to establish standing under any circumstance:
Plaintiffs allege an injury to themselves and have a viable claim that would
entitle them to relief by a favorable decision. The threshold issue of
standing is satisfied as a matter of law.
1. Plaintiffs have proved their property was in U.S. custody
The Government contends, without support, that no Plaintiff has demonstrated
his or her property ever came into U.S. possession. (Def. Br. at 18.) By doing
so, the Government ignores the unrefuted evidence offered by Plaintiffs who
have demonstrated that their property came into U.S. possession; some have
done so without the assistance of any expert testimony at all.
For example, Elizabeth Bleier testified that her family’s identifiable
possessions were auctioned off in New York in the late 1940s. She produced
Decree 1600 receipts listing specific property seized by the Hungarians in
April 1944 – property that she was able to identify as having been sold by
Parke-Bernet at auction in 1948,[37] including an elaborate and distinctive
silver bowl;[38] a distinctive piece of jewelry;[39] a handmade handbag;[40]
distinctive hand painted jewelry;[41] and several other specific family
heirlooms seized by the Hungarian Nazis, and auctioned by the Americans. Mrs.
Bleier also produced her own wedding photograph, in which her mother is
wearing a distinctive, handmade brooch that was auctioned off at Parke-Bernet
in 1948.[42] Mrs. Bleier also brought her Kiddush cup (the one depicted in the
FAC at ¶ 468) to the deposition and observed that since the cup had followed a
clear chain of custody—seized from her father, loaded on the Gold Train,
auctioned in New York—it stood to reason that other property seized from her
family at the same time had made the same journey.[43]
The Government does not dispute that property auctioned off at Parke-Bernet
was on the Gold Train, and Zweig confirms that it was. (GT at 206-07.)[44]
Moreover, he corroborates Plaintiffs’ evidence that most of the property sold
at Parke-Bernet auctions held over four years came from the Gold Train. (Id.)
Thus, any Plaintiff who can, as Mrs. Bleier has, identify property in the
auction catalogs as being his or hers has established that his or her property
came into the Government’s possession and was on the Gold Train.[45]
The Government also possesses an inventory of the some 1,200 pieces of art
that came into its possession that the U.S. documents explain were on the Gold
Train.[46] This inventory likewise provides proof that Plaintiffs’ property
was in the Government’s hands. For example, Plaintiff Erwin Deutsch testified
that he and his family were expelled from their apartment in Budapest, and
then stripped of their valuable property (Deutsch Dep., 16:2-5, Ex. 22 Walton
Decl.) He testified that, as documented by witnesses in a 1994 statement a
painting by a well-known Hungarian artist, Fulup Laszlo, was hanging on his
apartment wall. (Id. 21:22-25.) Mr. Deutsch testified that this same painting
was listed in the inventory identifying paintings in the possession of the
United States and stored at the Salzburg Warehouse. (Id. 25:17-21.) Similarly,
Plaintiff Zoltan Weiss identified several paintings from a receipt filled out
by his father, which he believed were likely to be the paintings listed on the
inventory that the Government has determined were on the Gold Train.[47]
2. Expert testimony proves that class members’ property was in U.S. custody.
The Government asserts it is impossible to determine with any degree of
likelihood whose property was on the train. (Def. Br. at 9.) Yet, even beyond
the above examples, any one of which is sufficient to establish standing, the
Government’s assertion is demonstrably wrong. Plaintiffs and their families
turned over identifiable property to the Hungarian fascists, and in turn, that
property was in fact loaded onto the train. (Kádár Aff. at ¶¶ 22-65, Ex. 1
Walton Decl.) If Plaintiffs show “a colorable interest in at least some of the
property,” they are “asserting their own right” and satisfy the standing
requirement. Rodriguez-Aguirre, 264 F.3d 1195, 1206 n.7 (10th Cir. 2001). As
the foregoing examples and the facts below demonstrate, Plaintiffs meet this
test.
Gábor Kádár, Plaintiffs’ expert and recognized worldwide as a leading
authority on the Hungarian Gold Train,[48] has opined after having taken into
consideration the looting that occurred in Hungary, the protocols of the
“processing,” and the separation of Toldy loot from the train, that “when the
United States accepted custody of the Gold Train cargo and acceded to Avar’s
request to safeguard that property until it could be returned to Hungary or
its true owners, the Gold Train contained the stolen Jewish property, from
Jews who resided in the named cities and/or regions identified in Paragraph 65
of Kádár’s Affidavit.[49] Before the Holocaust, the named Plaintiffs (or their
parents or relatives) resided in these places.
Additionally, the Government and Zweig overstate the impact that Toldy’s
separate loot and the alleged “disorganization, massive looting, and the
wartime chaos” had on the train’s cargo. (Def. Br. at 18.) All of these
potential confounding variables were considered carefully by Gábor Kádár in
his opinions. Indeed, both Gábor Kádár and Ronald Zweig have explained that
whatever “disorganization” existed in Hungary, the looting of the valuable
property—the property that was on the Gold Train—was a “carefully organized
plunder.” (GT at 3.)
Second, there is little if any evidence that the wartime chaos had any impact
on the size of the train’s cargo. Certainly, wartime chaos impacted which
Financial Directorates followed the Hungarian protocols and actually delivered
the Jewish property to Budapest or the sorting facilities at Óbánya or
Brennbergbánya. However, there is no evidence of “massive looting” of the
valuable Jewish property intended for the Gold Train. According to official
U.S. documents, there is only one instance where Avar and his men failed to
protect the cargo from looting and theft from the day it left Brennbergbánya
to the day the Army accepted custody over it, and even then only 500
inexpensive chrome-cased watches were lost from the voluminous cargo.[50]
Furthermore, there is little if any documentary evidence of looting in Hungary
either, not even in Zweig’s book—except of course the looting from Plaintiffs
and other Hungarian Jews, and then what Toldy took.[51] Zweig’s evidence of
looting that he describes in his reports are irrelevant to this case, as they
largely address poultry, agricultural products, horses, automobiles, cattle,
equipment, and other property that was never intended for the Gold Train. (Zweig
2nd Rep. at 10 (citing the looting of cattle, farm machinery, animals and
poultry);[52] Zweig Dep., 185-186.) This evidence is unavailing to the
Government’s position, as even Zweig admits its irrelevance to the case:
“[o]nly the most valuable property [looted from the Jews] was selected for
centralization and later transportation out of Hungary,” (Zweig 1st Rep. at 9)
(emphasis added), and the Government has yet to present documentary evidence
that these items were pilfered from the Hungarian authorities handling Jewish
assets once they were under the department’s control, and Kádár has explained
there was very little looting of the valuable movable property because that
property was “safeguarded.” (Kádár Dep., 38-39, Ex. 59 Walton Decl.)[53]
Additionally, the Government is incorrect that the loot taken by Toldy
prevents this case from satisfying Article III. (Def. Br. at 18-19.) It is
relatively easy to remove Toldy from the equation based on the kind of
property he took. For example, he did not take any of 18 cases of gold jewelry
with precious and semi-precious stones (“Ar. eksz”) (GT Inventories at
103-104; Kádár Aff. at ¶ 64, Ex. 1 Walton Decl.; Identification of 18 cases
marked “Eksz,” GT 12394, Ex. 48 Walton Decl.); nor did Toldy have Judaica, (Zweig
Dep., 78:18-22), silver, (Id. 79:6-10),[54] rugs or carpets, (Id. 80:1-4), or
china, (Id. 80:5-6), or other similar property. As Kádár explained in his
affidavit and deposition, Toldy absconded with the small, valuable pieces; he
did not take the silverware, the porcelain, rugs or other household items of
value. (Kádár Aff. ¶ 36; Kádár Dep., 248:5-19.) Toldy’s total take: 44 cases
of valuables identified by Kádár in his affidavit. (Zweig Dep., 77:22-24.)
Thus, for Plaintiffs who are claiming anything other than the kinds of
valuables that traveled in pine cases with the Toldy convoy, whatever
“valuables” Toldy absconded with are irrelevant to the claim.
Plaintiffs lived in the cities and towns[55] from which the loot was taken.
Furthermore, Plaintiffs all provided compelling and undisputed evidence that
the Hungarian Nazis had confiscated their property, some even showing the
Government the receipts given to their families by the Hungarian Nazis under
Decree 1600. These receipts itemize property that was taken, and placed on the
Gold Train.[56] Several Plaintiffs saw their family members take their
family’s property to the local bank as was required. For instance, Plaintiff
Veronika Baum, as a terrified young girl, saw German soldiers go from room to
room in her family’s home and business, inspecting property and taking notes.
(Baum Dep., 47:2-11, Ex. 24 Walton Decl.) Several Plaintiffs had jewelry,
wedding rings and other personal items wrested from them by gendarmes and
soldiers while their families were crowded into the ghetto.[57] The property
seized from these Plaintiffs from the towns identified by Gábor Kádár was
among the property on the Gold Train when the Government accepted custody of
the train.[58]
The Government’s argument, stripped to its essence, is that although the
Government did not own the property on the Gold Train, Plaintiffs have not
proved that they did, thus the property must have been owned by other
Hungarian Jews who lived in the cities and towns listed above but as yet are
unnamed parties to this case and Plaintiffs cannot represent them. The
argument is legally deficient. The Tenth Circuit in Rodriguez-Aguirre, 264
F.3d 1195 (10th Cir. 2001), responded to a similar argument made by the
government and held that the standing requirements were met by those who made
a colorable claim to some of the property. Here, Plaintiffs are asserting
their own rights to the property, they have established that some of their
property was (or at least probably was) on the Gold Train, and that they
certainly have a colorable right to items on the train. (See Zweig Dep.,
101:13-15 (Reasonable to assume that some of the survivors still in Hungary
had property on the Gold Train)). Moreover, under Rule 23, and with the
Court’s permission, Plaintiffs can and have sought to enforce the rights of
all owners of property on the Gold Train. If the class is certified, the Court
would thereby include all property owners that the Government admits exist
but, as yet, are allegedly absent from the case.
3. Plaintiffs’ harm is traceable to the Government’s conduct
Plaintiffs were directly harmed by the Government’s decision not to restitute
their property to Hungary, as U.S. laws and policies required. (Petropoulos
Supp. Aff. ¶¶ 44-50; see Portrait of Wally, at 161-62 (“the United States
Forces were required to transfer all seized property — whether stolen,
aryanized, or legitimately acquired — back to the designated agency of the
country from which the object had been taken”)). The Government contends that
plaintiffs cannot be certain they would have received property or
compensation, had restitution been duly made. (Def. Br. at 19-20.) This is not
a legal defense, but an excuse for misconduct – and a wholly hypothetical one
at that. It provides no basis for dismissal.
The available evidence indicates that the Jews of Hungary would have benefited
from timely restitution. When the United States promised to restitute the
property, Hungary was actively preparing to receive it and to return it to the
Jews. Indeed, in anticipation of the arrival of the Gold Train assets, the
Hungarian Government had formed a Jewish Rehabilitation Agency, in cooperation
with Jewish organizations, and expressly agreed to turn over those assets to
that agency. (See supra at § II.F.) Jewish leaders in Hungary personally
“offered to supervise the return of the items on the train to their individual
owners. Where this was not possible, the items would be used for general
Jewish welfare purposes in Hungary.” (GT at 144.) Weeks later, the Hungarian
Government convened a committee with leaders of the Jewish community to work
together to retrieve the train’s contents. (Id. at 145.) Indeed, Hungary was
willing to assign its claims (and perhaps did assign its claims) to the
Hungarian Jews in an effort to assist them reclaim their property.[59] Later,
when Hungary received its gold reserves, it made clear that it was not waiving
any Jewish claims. (Id. at 156.)
The record is clear: Pre-Communist Hungary, seeking to win favor with the
West, restituted to Jews. (Kádár Aff at ¶ 95, Ex. 1 Walton Decl.) Even the
U.S. knew this: Hungary had adopted several measures “to restore to the Jews
both the status and property of which they were deprived during Hungarian
fascist regimes. In some cases these measures have gone even further than
restoration to include some element of recompense. These measures are all in
conformity with the public statements of Hungarian leaders and the announced
principles of the Hungarian Republic.” (Id. at ¶ 90 (quoting U.S. memo)).
The Government also argues that it would be unfair to have restituted the
property to Hungary, since that nation’s borders had shifted after the war.
(Def. Br. at 20.) Hungary was not unique; the borders of dozens of European
nations changed as a result of World War II. The U.S. was required to
restitute property to the country of origin, without parsing border shifts.
Anything else would have meant either that no property could ever have been
restituted, or the U.S. would have faced an impossible administrative burden.
By April 1944, the U.S. had made clear its conviction that occupation
officials should bear only the initial responsibility for effecting
restitution for property looted from occupied countries, and that “The
question of restoration to individual owners is a matter for these [foreign]
Governments to handle in whatever way they see fit. The original owners may
have received part payment for property taken from them under duress and the
Governments in question may wish to make adjustments for this circumstance in
returning the property. In some cases it may be impossible to locate the
original owners or their heirs and the Governments involved will have to
decide what should be done with the property or proceeds therefrom” (Plunder
and Restitution, SR-140). Thus, once looted assets were returned to the
country of origin, no additional U.S. involvement was deemed necessary or
desirable.
(Petropoulos Supp. Aff. at ¶ 7, Ex. 4 Walton Decl.) (emphasis added); see also
id. at ¶ 63 (“[the United States] restitutes any property irrespective of
ownership [once the officials] are satisfied that removal was by general
direction of ex-enemy puppet government or without compensation, or even
removal by owner himself without compensation as in case of Hungarians”). So
consistent with restitution laws and policy, the United States restituted
property to the U.S.S.R., Poland, Czechoslovakia, Romania, and Hungary, and
others – all countries that saw their borders shift. (Id. at ¶ 5; Petropoulos
Dep., 88-90, Ex. 60 Walton Decl.) In fact, as early as 1945, the Government
began to return parts of the Gold Train — the railcars — to Hungary despite
that some cars bore markings of other countries. (Zweig Dep., 86:11-22.)[60]
The train and its contents came from Hungary. The law required their return to
Hungary. The United States immediately returned some railcars but kept the
contents.
Furthermore, the Government’s recent “unfairness” argument is not supported by
the facts. The wealth of the Hungarian Jews was focused in Hungary, as the
country is known today, and the core of wealth on the Gold Train came from
Budapest. (Kádár Dep., 29:16-17, Ex. 59 Walton Decl.; see also Zwieg Dep.,
49:5-17 (acknowledging wealth focused in Budapest and a few other major urban
areas, and Kruge in Greater Hungary)).
Lastly, to the extent that some Plaintiffs might not be able to prove
conclusively which items of their specific property were on the train, that
failure is itself ascribed to the Government’s unlawful acts. The passage of
decades has made it far more difficult for Plaintiffs – individually or as a
class – to identify specific personal property (though, of course, some are
able to, see supra). For example, the Government was required to inventory and
keep proper records of the property accepted into custody.[61] However, the
Government never did this with the Gold Train. Certain categories of items
were frequently marked with initials or engraved with family names.[62]
Numerous Plaintiffs testified that they would have been able to identify their
property had they been given access to it in a timely manner, viz., in the
years immediately after World War II.[63] Additionally, the Government had in
its possession numerous lists of property and property owners, as well as
sealed envelopes that, according to U.S. documents, bore the names of original
owners. (Kádár Aff. at ¶ 59; Petropoulos Supp. Aff. at ¶ 57.) Those lists,
once in the possession of the Government, now have disappeared and were not
used by the Government in making its decision, even though that was the reason
they were retained. (Kádár Aff. ¶ 59.) Furthermore, the Government on numerous
occasions rebuffed the efforts of representatives of the Hungarian Jewish
community and/or the Hungarian Government to inspect the property, help
inventory the property, or aid the Government in returning the property to its
rightful owners.[64] (See supra at § II.F.)
The doctrine of “spoliation” holds that when a party has within its possession
evidence that is damaged or eliminated, it is appropriate to presume the
evidence was contrary to the interest of the party. In this case, the
Government allowed property and lists of property to be lost, degraded,
destroyed or sold, at a time when it knew full well that claims were being
made by the Hungarian Jews. In 1945-47, representatives of the Hungarian
Jewish community, as well as directly pleading with United States authorities
for access to the property, were pursuing the only legal remedies that the
Government told them were available, namely working through the Government of
Hungary. The Government thus was on notice that claims were being made on the
property, and in fact, knew that after February 1946, the Hungarian Government
had waived its rights to the property in favor of the Jews and was now
asserting the claim for the property on behalf of Hungarian Jews. (See supra.)
The Government was aware that it might face liability for the property in a
court of law. As the transfer of the property to the International Refugee
Organization was being readied, the United States sought indemnification from
the American Jewish Joint Distribution Committee (“Joint”) for legal claims
expected to be brought by Hungarian Holocaust survivors. The Joint demurred,
as an internal memorandum concluded that such guarantees might get the group
in “legal hot water.” Joel Fischer, the general counsel to the Joint, wrote:
The U.S. Army is presumably turning over to the IRO all of the non-monetary
gold in Austria, (including the Hungarian Gold Train) which they have and
which has not been stolen by individuals. . . . For us to come forward and
give guarantees with respect to claims which might be lodged against these
assets would be ill advised. We will receive the proceeds from the sale of
these assets without any strings attached and why should we start attaching
strings for ourselves; from your letter I'm sure you'll agree.
Letter from Joel Fischer to Moses Leavitt, Aug. 2, 1947, Ex. 43 Walton Decl.;
see also Memo to Sec. of State from Paris, France sgd Caffery, 3 July 1946, GT
22808-22813 (noting Gen. Tate’s recommendation to set aside a reserve of 15%
to satisfy future claims), Ex. 41 Walton Decl.
The Government cannot shirk its obligations to restitute the stolen Jewish
property because of conjecture that Hungary might shirk its own laws and
treaty obligations. Whether Hungary would have broken its promise to the Jews
is unprovable speculation. That the United States broke its promise to the
Hungarian Jews is proven historical fact.
Plaintiffs meet the threshold requirements required by Article III.
B. This Case May Not Be Dismissed Under the Doctrine of Prudential Standing
1. Prudential standing principles are not jurisdictional
The Government next claims that Plaintiffs’ claims must be dismissed for lack
of subject matter jurisdiction under Rule 12(b)(1) because “prudential
principles” preclude standing. (Def. Br. at 21.) This argument is misplaced.
The “general prohibition on a litigant’s raising another person’s legal
rights” is a judicially self-imposed limit[].” Allen v. Wright, 468 U.S. 737,
751 (1984). As such, it is “flexible and not jurisdictional in nature.”
American Iron & Steel Institute v. Occupational Safety and Health
Administration, 182 F.3d 1261, 1274 (11th Cir. 1999) (emphasis added). As a
matter of law, the Government’s prudential standing argument provides no
grounds for dismissal for lack of subject matter jurisdiction.
2. Plaintiffs assert their own claims, not Hungary’s
The Government’s argument posits a moral inversion. The Government argues in
effect that Plaintiffs – the true owners of the Gold Train property, from whom
it was stolen by agents of the Hungarian Fascist Government – have no direct
interest in their own property, but have only an indirect interest derivative
of the direct interest of the successor Hungarian Government. Perhaps sensing
how outrageous its argument is, the Government disavows belief in its factual
basis, claiming only that it is based on “their [i.e., Plaintiffs’] theory.”
(Def. Br. at 21.)
Plaintiffs have never said that the Hungarian Government had a superior
interest to their property. This was stolen property. The Plaintiffs never
lost title to it, and neither the Hungarian Fascist Government nor the
successor Hungarian Government ever gained good title to the property. (FAC at
¶ 304.) And, neither did the Army.
Plaintiffs’ point is that the United States restituted looted property “to the
Governments of the rightful owners,” i.e., the country of origin. (Petropoulos
Supp. Aff. at ¶ 5.) This policy was followed not because the Governments of
the countries of origin had superior claims than the “rightful owners,” but
rather was based on administrative convenience. (Id. at ¶ 18.) Rather than
processing the claims of thousands of individuals, it was the policy of the
U.S. to, in effect, permit the countries of origin to act as the “agents” of
the rightful owners and deal only[65] with them. This administrative choice
does not confer a superior legal interest in the property.
3. Even if prudential standing principles apply, Plaintiffs satisfy the
requirements
While Plaintiffs deny that they are asserting Hungary’s rights, rather than
their own, it is nevertheless clear that, even if third-party prudential
standing analysis applies, Plaintiffs satisfy these requirements. The “general
prohibition against third-party standing” is intended to “ensure[] that the
courts hear only concrete disputes between interested litigants who will frame
the issues properly.” Harris v. Evans, 20 F.3d 1118, 1121 (11th Cir. 1994). In
contrast to the amorphous claims common in standing jurisprudence, Plaintiffs
present a concrete dispute: they seek compensation for personal property that
they allege was misappropriated by the Government. It is hard to imagine
litigants more interested than rightful property owners who, despite the
hardships they have endured, are vigorously pursuing their claims for
compensation in the twilight of their lives.
Plaintiffs in any event satisfy the three factors set forth in Powers v. Ohio,
499 U.S. 400 (1974), to allow third-party standing. The Government does not
even contest the first requirement, injury in fact. The second factor requires
a close relationship between the litigant and the third party; this test, too,
is met. As the Supreme Court has recognized, “the relationship between the
litigant and the third party may be such that the former is fully, or very
nearly, as effective a proponent of the right as the latter.” Singleton v.
Wulff, 428 U.S. 106, 115 (1976). Such is the case here. Many Plaintiffs are
citizens or former citizens of Hungary. It is Plaintiffs’ property that is at
issue, not Hungary’s; Plaintiffs are the real parties in interest. Hungary is
obligated by the 1947 Treaty of Peace to restore property seized from Jews or,
if restoration is impossible, to compensate them. (Article 27.) Thus,
Hungary’s only conceivable interest in the property is to ensure that its use
is to compensate the owners. Hungary’s interests are not only “properly
aligned” with the Plaintiffs’ (Harris, 20 F.3d at 1123), they are entirely
congruent. The Government relies on the spurious argument that the 1947 Treaty
of Peace and/or the 1973 Settlement Agreement set the Plaintiffs and Hungary
at odds. (Def. Br. at 23-24.) As we show below, neither of these documents
bars Plaintiffs’ right to recover. (See infra at § VIII.C.)
The third prudential standing factor is that there be “some hindrance” to the
third party’s asserting its own interest. Curiously, the Government says not a
word here about either the Treaty or the Settlement Agreement. Rather, it says
merely that Hungary is a “sovereign state” and there is “no reason that it
cannot protect any interest it thinks it may have regarding the Gold Train.”
(Def. Br. at 24.) The reason is obvious. The Government’s argument with
respect to the second factor demolishes its argument on the third factor.
Clearly, from the Government’s viewpoint, the Treaty and the Agreement are a
hindrance to Hungary bringing suit. Not a bar, but a hindrance. The Government
would clearly raise these issues if Hungary sued which would make the
litigation more protracted and uncertain. And, it must be recalled, the object
of such litigation would not be to compensate Hungary, but the rightful owners
of the property. Thus the cost-benefit calculus would present a “practical
barrier[]” to suit by Hungary sufficient to meet the hindrance factor. Cf.
Powers, 499 U.S. at 415 (small financial stake and burdens of litigation
present sufficient hindrance to support third party standing).
V. THE COURT HAS SUBJECT MATTER JURISDICTION OVER
PLAINTIFFS’ DAMAGE CLAIMS BECAUSE EACH
CLAIM IS MONEY MANDATING
As discussed above, the Court has subject matter jurisdiction over any claim
for damages founded upon the “Constitution, or any Act of Congress or any
regulation of an executive department, or upon any express or implied
contract” that is fairly interpreted as money mandating. Without question,
Plaintiffs’ claims are money mandating and founded upon these very sources.
A. Plaintiffs’ Contract, Takings, And Exaction Claims Are Money Mandating
Implied-in-fact contract claims are money mandating. Hatzlachh Supply Co. v.
United States, 444 U.S. 460, 466 (1980); Quality Tooling, Inc. v. United
States, 47 F.3d 1569, 1575 (Fed. Cir. 1995). The Tucker Act provides a waiver
of immunity for Plaintiffs’ contract claims to proceed, as the Court has
implicitly held. Rosner, 231 F. Supp. 2d at 1210 n.9.
Fifth Amendment Takings claims are money mandating.[66] Plaintiffs have
briefed this issue extensively already and hereby incorporate that briefing by
reference.[67] In short, the Just Compensation Clause of the Fifth Amendment
provides its own independent waiver of sovereign immunity and requires
compensation whenever property is taken for public use. Jacobs v. United
States, 290 U.S. 13, 16 (1933); Yearsley v. W. A. Ross Constr. Co., 309 U.S.
18, 22 (1940); Davis v. Passman, 442 U.S. 228, 242-43 n.20 (1979); First
English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304,
315 (1987); Alder v. United States, 785 F.2d 1004, 1009 (Fed. Cir. 1986); El-Shifa
Pharmaceutical Industries Co. v. United States, 55 Fed. Cl. 751 (2003)
(rejecting Ashkir, relied upon by the Court); Turney v. United States, 115 F.
Supp. 457 (Ct. Cl. 1953).
Illegal Exaction claims are money mandating. An illegal exaction claim is a
due process claim for money that has been improperly retained by the
Government (in violation of law). It is viable even where the money is not
paid directly to the Government. By definition, such a claim is money
mandating. Aerolineas Argentinas v. United States, 77 F.3d 1564, 1572-73 (Fed.
Cir. 1996) (en banc); Eastport S.S. Corp. v. United States, 178 Ct. Cl. 599,
605 (1967); Eversharp, Inc. v. United States, 125 F. Supp. 244, 247 (Ct. Cl.
1954); Pan Amer. World Airways Inc., v. United States, 122 F. Supp. 682,
683-84 (Ct. Cl. 1954); Bernaugh v. United States, 38 Fed. Cl. 538, 543 (1997),
aff’d, 168 F.3d 1319 (Fed. Cir. 1998) (taking of property); Bowman v. United
States, 35 Fed. Cl. 397, 401 (1996) (taking of property). The failure of a
plaintiff to establish that the exaction was contrary to law does not deprive
a court of jurisdiction, but is an adjudication on the merits. Aerolineas
Argentinas, 77 F.3d at 1574.
Plaintiffs’ illegal exaction claim is that the Government retained their
property in violation of the law based on the Constitution (due process and
takings), Decree No. 3, and other policies and laws in effect in occupied
Austria. As the Government explained in the Portrait of Wally case:
Under the military decrees and policies in effect in post-war Austria,
property, including artwork, seized by the United States Forces in Austria was
sorted and turned over to the country from which the object had been taken.
Portrait of Wally, at 109, Ex. 17 Walton Decl.; In re Portrait of Wally, at
*47 (all property taken under Decree No. 3 must be returned to country of
origin). Accordingly, because the Government violated the law and, in doing
so, received money in effect from the sale of Plaintiffs’ property to help pay
for programs that the Government was obliged to fund,[68] Plaintiffs state an
illegal exaction claim.
B. The Court Has Jurisdiction To Determine Which Of Plaintiffs’ International
Law Claims Are Money Mandating, And Adjudicate The Merits Of Those That
Are[69]
The Supreme Court has clarified that the Court has jurisdiction to decide the
merits of Plaintiffs’ so-called international law claims. Rasul v. Bush, 124
S. Ct. 2686, 2004 U.S. Lexis 4760 (2004). In Rasul, the Court of Appeals held
the federal courts “lack jurisdiction to consider challenges to the legality
of detention of foreign nationals captured abroad in connection with
hostilities and incarcerated at the Guantanamo Bay Naval Base, Cuba.” Id. at
2690. The Supreme Court reversed.
The Supreme Court’s most relevant discussion concerns the Al Odah detainees.
They alleged that the Government’s failure to inform them of the charges
against them, restrictions on the right to counsel, and their lack of access
to the courts violated the Constitution, international law, and treaties of
the United States. Id. at 2691. They asserted federal jurisdiction. Relying on
Johnson v. Eisentrager, 339 U.S. 763 (1950), the Court of Appeals had held,
among other things, that aliens outside the United States could not assert
these constitutional rights, and therefore dismissed the complaint for lack of
jurisdiction. Id. at 2691-92.
The Supreme Court explained that the decision in Eisentrager rested on “six
critical facts.” Id. at 2693. In Eisentrager, the individuals were (a) enemy
aliens; (b) who has been or resided in the United States; (c) and captured
outside the territory of the United States and held in military custody as a
prisoner of war; (d) where he or she was tried and convicted by a Military
Commission sitting outside the United States; (e) for offenses against laws of
war committed outside the United States; (f) and was at all times imprisoned
outside the United States. Id. Moreover, the Court emphasized that the
petitioners could assert all of their claims because the U.S. exercised
custody over them, even though that custody was outside the territorial
jurisdiction of the courts. Id. at 2695.
The Court distinguished at length the Guantanamo detainees from the Nazi war
criminals (known enemy aliens) at issue in Eisentrager, and in the end
concluded that nonresident aliens are entitled to the privilege of litigation
in federal courts.
The courts of the United States have traditionally been open to nonresident
aliens. Cf. Disconto Gesellschaft v. Umbreit, 208 U.S. 570, 578 (1908) (“Alien
citizens, by the policy and practice of the courts of this country, are
ordinarily permitted to resort to the courts for the redress or wrongs and the
protection of their rights”). And indeed, 28 U.S.C. §1350 explicitly confers
the privilege of suing for an actionable “tort . . . committed in violation of
the law of nations or a treaty of the United States” on aliens alone.
Id. at 2698-99. Rasul clearly holds that the Court has jurisdiction to decide
Plaintiffs’ claims.
Moreover, and perhaps more importantly, the Supreme Court recently confirmed
that Congress granted an implied private right of action to aliens when it
enacted 28 U.S.C. § 1350. Congress limited this cause of action to those
claims having definite content and an almost universal degree of international
acceptance among civilized nations. Sosa v. Alvarez-Machain, 124 S. Ct. 2739,
2004 U.S. Lexis 4763, at *71 (June 29, 2004).[70] The Court explained that
district courts can and should recognize these federal common law claims and
enforce such norms, just as the courts have been doing since the nation’s
founding. Citing to the watershed rulings of the modern era, including
Filartiga v. Pena-Irala, 630 F.2d 876, 890 (2d Cir. 1980), Judge Edwards’
concurrence in Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 781 (D.C. Cir.
1984), and In re Estate of Marco Human Rights Litig., 25 F.3d 1467, 1475 (9th
Cir. 1994), the Court explained that these rulings are “generally consistent”
with the Court’s decision in Sosa. Sosa, at *71.[71]
The Constitutional authority that a federal court possesses to create or find
a cause of action is derived from the court’s “general jurisdiction to decide
all cases ‘arising under the Constitution, laws, or treaties of the United
States.’” Correctional Services Corp. v. Malesko, 534 U.S. 61, 66 (2001).
Therefore, although the nomenclature is to describe these claims as
international law claims, that description is incorrect. Of legal necessity,
the claims are ones that “arise under” federal law either through the
“Constitution, laws, or treaties of the United States.”
Expropriation of private property without any compensation has attained the
special status to become federal law and actionable under 28 U.S.C. § 1350.
Restatement (Third) of Foreign Relations Law § 712; Banco Nacional de Cuba v.
Chase Manhattan, 658 F.2d 875, 891 (2d Cir. 1981) (“the failure to pay any
compensation to the victim of an expropriation constitutes a violation of
international law”); West v. Multibanco Comermex, S.A., 807 F.2d 820, 831-32
(9th Cir. 1987) (same); Kalamazoo Spice Extraction Co. v. The Provisional
Military Gov’t of Ethiopia, 729 F.2d 422, 426 (6th Cir. 1984) (same); Shanghai
Power Co. v. United States, 4 Cl. Ct. 237, 240 (1983); 1 L. Oppenheim,
International Law, § 155, at 352 (8th ed. Lauterpacht 1955) (which also
reflects a correct statement of law from earlier editions); see also H.R. Rep.
No. 1487, 94th Cong., 2d Sess. 19-20, reprinted in 1976 U.S.C.C.A.N. 6604,
6618 (taking violates international law if it is done “without payment of the
prompt adequate and effective compensation required by international law” or
is “arbitrary or discriminatory in nature”).
The Government has resolutely adhered to this principle, until now. See
generally 8 M. Whiteman, Digest of International Law 1085-1136 (1967). This
view, consistently adhered to by the Government until now, is commonly
referred to as the Hull Doctrine because the most celebrated expression of
this opinion came from United States Secretary of State Cordell Hull to the
Government of Mexico in 1938 on the subject of Mexico’s agrarian takings. Hull
explained: “under every rule of law and equity, no Government is entitled to
expropriate private property, for whatever purpose, without provision for
prompt, adequate, and effective payment therefor.” Note of Secretary of State
Hull, Aug. 22, 1938, 19 Dept. of State Press Releases No. 465, Aug. 27, 1938,
at 140;[72] Shanghai Power, 4 Cl. Ct. at 240. Moreover, this fact, among
others, helped convince the court in Shanghai Power that it was obliged to
apply international law consistent with U.S. policy to the facts of the case.
There is no doubt that rights created by virtue of an expropriation are backed
by accepted principles of international law. Moreover, recognition of such
rights is not contrary to our public policy, but, indeed, is consistent with
the repeated expressions of our State. . . .
Our Government has, however, been among the strongest proponents of the view
that the right to full and fair compensation exists and must be respected by
other nations. It would be inappropriate for this court to adopt a contrary
position.
Shanghai Power, 4 Cl. Ct. at 241. This claim is money mandating.
Notably, the Government recently confirmed this view of the law in the most
emphatic of terms, stating to the court in the Portrait of Wally case:
The principles preventing seizure of property from private citizens during
wartime and governing restitution of such property, particularly after World
War II, have been unambiguously subscribed to by scores of nations, including
Austria and the United States. In the Hague Convention of 1907,[73] forty-one
nations, including Austria and the United States, agreed to the prohibition of
the seizure of property during wartime from private citizens. Hague Convention
of 1907, Article 56 (“All seizure of, destruction of, willful damage done to
institutions of this character, historic monuments, works of art and science,
is forbidden, and should be made subject to legal proceedings.”). During World
War II, these principles were reiterated by the Allies in the London
Declaration of 1943,[74] in which eighteen nations warned the Nazi regime that
all confiscations of property were subject to restitution. And Article 26 of
the Austrian State Treaty of 1955 confirmed the adoption of these principles
of restitution by Austria and the Allies.
Portrait of Wally, at 161-62, Ex. 17 Walton Decl.
Courts have recognized that disgorgement and/or restitution are proper forms
of civil relief for violations of international law, and that such claims are
privately actionable under 28 U.S.C. § 1350. Bolchos v. Darrel, 3 F.Cas. 810 (D.S.C.
1795); Respublica v. Delongchamps, 1 U.S. (1 Dall.) 111, 116 (Pa. Oyer &
Terminer 1784); see, e.g., The Venus, 12 U.S. (8 Cranch) 253, 297 (1814) (“The
law of nations is a law founded on the great and immutable principles of
equity and natural justice”).
Plaintiffs bring this claim against the United States under the waiver of
sovereign immunity provided in the Tucker Act. The claim is money mandating
and founded on an Act of Congress, specifically 28 U.S.C. § 1350. No
additional waiver is required.[75]
C. Provisional Handbook And The Army Field Manual Are Binding On The Conduct
Of The U.S. Army As Its Own Regulation And Create Substantive Rights That Are
Money Mandating
The Supreme Court has expressly held that military powers during war-related
foreign occupation are “regulated and limited . . . directly from the laws of
war . . . from the law of nations.” Dooley v. United States, 182 U.S. 222, 231
(1901); 11 Ops Att’y Gen. 297, 299-300 (1865) (laws of war and general laws of
nations “are of binding forced upon the departments and citizens of the
Government”). The codification of those laws is found in the Army Field Manual
27-10, The Rules of Land Warfare. See Morrison v. United States, 492 F.2d
1219, 1225 & n.8 (Ct. Cl. 1974) (explaining it a “compilation of legal
principles that relate to land warfare. It is based upon treaties ratified by
the United States, statutory law, and applicable custom,” and indicating
provisions tied to statutes and texts of treaties are binding law).
Certain statutes or regulations require compensation for violations, while
others are money mandating because they are “reasonably amenable” to an
interpretation, drawing all “fair inferences,” that violations demand
compensation. Fisher v. United States, 364 F.3d 1372, 1377 (Fed. Cir. 2004).
They include provisions of substantive law or regulations that Plaintiffs
allege the Government violated which require compensation when hostilities
cease and include, Decree No. 3 and Paragraphs 323, 326, 331, and 345 of the
Army Field Manual. Therefore, the Tucker Act provides a waiver of sovereign
immunity. Plaintiffs state a claim in which they are entitled to relief.
VI. THE GOVERNMENT FAILS TO ESTABLISH THAT PLAINTIFFS’ CLAIMS ARE TIME-BARRED
The Court has already rejected the Government’s argument on statute of
limitations on a motion to dismiss. The Government has provided no valid
reason for the Court to reconsider its decision. “Expiration of the statute of
limitations does not divest a district court of subject matter jurisdiction,
but rather constitutes an affirmative defense, which the defendant can waive.”
United States v. Najjar, 283 F.3d 1306, 1308-09 (11th Cir. 2002). The
Government contends otherwise, and argues that principles of equitable tolling
should not apply under the facts. (Def. Br. at 25.)
A. The Statute Of Limitations Is Not Jurisdictional
Despite the Court’s initial ruling in this case that statute of limitations
“must be strictly observed” as a “condition of Congress’s waiver of sovereign
immunity,” 231 F. Supp. 2d at 1206, recent Supreme Court authority clarifies
that this aspect of the Court’s ruling was erroneous. The generic statute of
limitations applicable to claims brought under the Tucker Act is not
jurisdictional. White Mountain, supra.
Under Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990), once
sovereign immunity is waived, limitations periods that run in favor of the
Government are not jurisdictional unless Congress explicitly so provides. When
Congress has waived the Government’s immunity, common law treatment and
exceptions to statute of limitations apply “in the same way” as they do in
“private suits.” Id. at 95. Thus, unless Congress indicates a contrary intent,
the “general rule” is that statutory time limits running in favor of the
Government are not “jurisdictional.” Id. at 95-96; see also Franconia
Associates v. United States, 536 U.S. 129, 145 (2002) (Tucker Act claim and
rejecting special accrual rule where Government is defendant noting
“limitations principles should generally apply to the Government ‘in the same
way’ that they apply to private parties”); Scarborough v. Pincipi, 124 S. Ct.
1856, 1869 (2004) (same, though not Tucker Act).
The Solicitor General agrees that the Supreme Court “has made clear that,
unless strict compliance with a filing deadline is a prerequisite to the
jurisdiction of the court, ‘statutory filing deadlines are generally subject
to the defenses of waiver, estoppel, and equitable tolling.’” Brief for the
U.S., Kontrick v. Ryan, No. 02-819, at 10 (July 17, 2003) (quoting United
States v. Locke, 471 U.S. 84, 94 n.10 (1985)). And, according to the
Government, a filing period cannot be “jurisdictional” if, by its terms, it
“does not limit jurisdiction to those cases in which there has been a timely
filing.” Id. at 13 (quoting Zipes, 455 U.S. at 393.)
In Kontrick, the Supreme Court concluded that Bankruptcy Rule 4004(a) was not
“jurisdictional” (i.e., not related to subject matter jurisdiction of federal
courts) because it did not serve to “delineate” a “class of cases” “within a
court’s adjudicatory authority.” 124 S. Ct. 906, 915 (2004); see also United
States v. Cotton, 535 U.S. 625, 630 (2000) (lamenting the Court’s sometimes
loose use of the term “jurisdictional” and making clear “what the term means
today, i.e., ‘the courts’ statutory or constitutional power to adjudicate the
case’”) (quoting Steel Co. v. Citizens for a Better Environment, 523 U.S. 83,
89 (1998)) (emphasis added). Furthermore, the Court provided valuable insight
into identifying “a rule governing subject-matter jurisdiction:” it is one
that “cannot be expanded to account for” the parties’ conduct. Id. at 916.
The Tucker Act’s waiver of sovereign immunity, which specifies certain kinds
of claims for which Congress has authorized and provided its consent to be
sued, does not condition the waiver of sovereign immunity upon a timely
filing. And, just as courts are powerless to find a waiver of sovereign
immunity when Congress has not provided one, courts are equally powerless
narrow the waiver Congress grants. Indeed, the Court in Irwin emphasized that
courts must “be careful not to assume the authority to narrow the waiver that
Congress intended, or construe the waiver unduly restrictively.” Irwin, 498
U.S. at 94. Thus, where a statute, such as the Tucker Act, waives sovereign
immunity for a class of claims without conditioning that waiver on a timely
filing, judicially implying such a requirement improperly narrows the waiver
Congress intended. Nothing in section 2401(a) makes any mention of
jurisdiction. And, in such a case, the Supreme Court explains that the statute
is only a procedural bar which permits recognition of traditional common law
doctrines such as equitable tolling, waiver, and estoppel does not broaden
Congress’ waiver but instead is “likely to be a realistic assessment of the
legislative intent as well as a practically useful principle of
interpretation.” Id. at 95; cf. United States v. Texas, 507 U.S. 529, 534
(1993) (courts presume “retention of long-established and familiar principles,
except when a statutory purpose to the contrary is evident”).
Moreover, the Supreme Court ruled in Franconia Associates that the statute of
limitations applicable here is not to be read restrictively. More
specifically, the Court held that language contained in section 2401(a),
through ruling on a Tucker Act section 2501 claim, should be applied in the
same way as it does to private parties, and that any other reading would be an
“unduly restrictive” reading of Congress’ intent in waiving sovereign immunity
for claims brought under the Tucker Act. 536 U.S. at 145. Thus, the statute of
limitations is an ordinary procedural rule and affirmative defense. See, e.g.,
Cedars-Sinai Medical Center v. Shalala, 125 F.3d 765, 770 (9th Cir. 1997)
(holding § 2401(a) is not jurisdictional); accord Washington v. Garrett, 10
F.3d 1421, 1437 (9th Cir. 1993); Hughes v. United States, 263 F.3d 272, 278
(3d Cir. 2001); Glarner v. United States, 30 F.3d 697, 701 (6th Cir. 1994);
Slaaten v. United States, 990 F.2d 1038, 1043 n.5 (8th Cir. 1993); Schmidt v.
United States, 933 F.2d 639, 640 (8th Cir. 1991); see also Sandvik v. United
States, 177 F.3d 1269, 1271 (11th Cir. 1999) (“garden-variety statute of
limitations” are “not a jurisdiction bar that would escape equitable
tolling”); Milam v. United States Postal Service, 674 F.2d 860, 862 (11th Cir.
1982) (construing Title VII with a similar statute of limitations, stating
“[t]imely filing is not a prerequisite to federal jurisdiction”).
B. Plaintiffs’ Claims Are Not Time-Barred As A Matter of Law
According to the Government, Plaintiffs’ claims are governed by the generic
catchall 6-year statute of limitations contained in 28 U.S.C. § 2401(a).
Edwards v. Shalala, 64 F.3d 601 (11th Cir. 1995); (Def. Br. at 25).
Although Plaintiffs bear the burden of proving subject matter jurisdiction,
the Government carries the laboring oar in establishing all affirmative
defenses, which include affirmatively proving that Plaintiffs failed to comply
with the limitations period. Fed. R. Civ. P. 8(c); Morton’s Market, 198 F.3d
at 832-33; Krueger v. Saiki, 19 F.3d 1285, 1286 (8th Cir. 1994). This means
that the Government, as the moving party, must affirmatively prove in the
record that “demonstrates conclusively” Plaintiffs (a) “had notice of their
claims,” and (b) “that, had they exercised reasonable diligence, they would
have discovered adequate grounds” to file this lawsuit during the limitations
period. Morton’s Market, 198 F.3d at 832-33. The Government fails if all it
can do is show that facts “might have caused a plaintiff to inquire” or “could
have led to evidence supporting his claim.” Id. The Government has failed to
carry that burden here. Its motion should be denied.
1. The Government cannot show the Plaintiffs were on notice in the 1940s
As the Government argues, accrual of a cause of action “occurs ‘when the
Plaintiff discovers, or by the exercise of due diligence would have
discovered, that he has been injured and who caused the injury.’” (Def. Br. at
28 (quoting United States v. Rodriquez-Aguirre, 264 F.3d 1195, 1212 (10th Cir.
2001), and citing Chappell v. Rush, 340 F.3d 1279, 1283 (11th Cir. 2003);
United States v. Duke, 223 F.3d 627, 630 (7th Cir. 2000)):
Plaintiffs were put on notice of the claims they bring in this action when
they discovered, or by exercising due diligence would have discovered, that,
(1) at the end of World War II, the United States took possession of a train
that had come from Hungary and was loaded, in part, with the personal property
of Jews, and (2) that the United States did not return the contents of the
train to the Hungarian Government, or to them. With that information, they
would have known that they had been injured, and by whom (e.g., that their
property had been taken from them, that the United States found property that
may have been theirs, and that it did not return the property to the Hungarian
Government, or to them).
(Def. Br. at 28-29.)
It is the Government’s burden to produce “undisputed” facts that “demonstrate
conclusively” the Plaintiffs could have and should have discovered the
Government’s involvement or the cause of action earlier. Morton’s Market,
supra; Richards v. Mileski, 662 F.2d 65, 71 (D.C. Cir. 1981); Smith v. Nixon,
606 F.2d 1183, 1191 (D.C. Cir. 1979).
After depositions of the Plaintiffs, the record is clear: before 1999, none of
the Plaintiffs had any knowledge that a trainload of Jewish property from
Hungary came into the possession of the United States, much less that the
Government had refused to return the property. In short, they did not know
“that they had been injured, [or] by whom”[76] until after the facts about the
Gold Train were first revealed by PCHA in 1999.
As the Court is aware, whether one could have, by the exercise of due
diligence, discovered that they had been injured and that the Government
caused their injury, is so fact intensive that it “is [not] even an
appropriate question for summary judgment.” Rosner, 231 F. Supp.2d at 1209
n.7; Rodriquez-Aguirre, 264 F.3d at 1211. Plaintiffs had no particular reason
to believe that the U.S. had received their property. It was just as likely
that their property had been destroyed in the maelstrom of war at the end of
World War II, or kept by the Hungarian Government or banks to whom it had been
surrendered, or looted by fleeing Nazis and fascists, or looted by invading
Soviet troops, or some combination of all the foregoing possibilities.
Plaintiffs never suspected that their property fell into the hands of the
United States, whose troops never even entered Hungary. At his deposition,
George Rasko explained a very common attitude of the Hungarian Jews toward the
United States after the war and liberation:
For us, United States – I mean, we had some personal experiences with the
Russians – I mean the Soviets, but for us the Americans were always the
liberators who actually didn’t do anything wrong, you know what I mean?
So we never thought in our wildest imagination that United States or people
who represented the United States – I don’t really say that the Government in
a sense, but the people who represented the United States would have taken
stuff which didn’t belong to them. That was kind of inconceivable. We kind of
expected that from the Russians, we seen the Germans firsthand, but United
States, kind of we never assumed anything like that. That was kind of
inconceivable to us.[77]
The logical place to have inquired would have been the banks, the Hungarian
Government or the Soviet occupation authorities; they, at least, were might
have been expected to know something about their property. Plaintiffs did make
such inquiries, but came up empty-handed.[78]
Considerations of the reasonableness of Plaintiffs’ actions cannot be
separated from the context in which they occurred. Having escaped death in the
Holocaust, some Plaintiffs were struggling to survive day to day in a
devastated post-war Hungary,[79] while others were languishing in DP
camps.[80] By 1949, and continuing for decades, many Plaintiffs then began
suffering under an oppressive Communist dictatorship where making waves was
dangerous.[81] And yet others were struggling to learn new languages and build
new lives in foreign lands. To suggest that it was incumbent on Plaintiffs
living under such circumstances to have made any inquiry—let alone sufficient
inquiry—that would have led them to discover their injuries and the
perpetrator flies in the face of reality.
a. Obscure articles in American newspapers do not give notice to Holocaust
survivors, many of whom were teenagers living in DP camps
The Government argues that these Holocaust survivors should have read about
the Gold Train in the newspapers. Then they would have discovered America’s
role in causing their injuries. (Def. Br. at 29.)
As an initial matter, the Government’s assertion is not borne out by
inspecting the articles cited. The Government encloses four documents that
purport to be articles from The New York Times.[82] Only two mention that the
property in question came from Jews (October 10, 1946 and December 30, 1948)
and one (November 9, 1946), clearly has nothing to do with the Gold Train at
all. In any event, it is extremely unlikely that an article buried in the
inside pages of a newspaper in New York was widely seen in Hungary or the DP
camps of Europe, let alone read by those who speak Magyar.
The Government also encloses two “unofficial” translations by the US Embassy
of articles purportedly appearing in Szabadsag in June 1948.[83] Neither
specifically identifies the property in question as Jewish. Moreover, the
newspaper is identified as the Communist daily, hardly trustworthy.[84] It is
impossible to infer from these that the news of the Gold Train was widely
broadcast in Hungary. In short, none of these articles establishes that
Plaintiffs should have learned of their injury from the press had they only
been diligent. The assertion that a few news stories is sufficient to impute
knowledge to the Plaintiffs is contrary to the law. Morton’s Market, 198 F.3d
at 832-33; O’Connor, 311 F.3d at 1152-53.
b. Government has failed to prove agency relationship to impute knowledge to
Plaintiffs and absent all class members
The Government also argues that Plaintiffs could and should have learned of
their injuries from “representatives of the surviving Hungarian Jewish
community, who themselves are members of the putative class.” (Def. Br. at
29.) Certain individuals in the Hungarian Jewish community were aware that the
Gold Train was in the Government’s possession. (Kádár Aff. at ¶¶ 74-76, Ex. 1
Walton Decl.) But inquiry notice by some class members can only be imputed to
other class members if there is an agency or other relationship among the
class members that would support such imputed knowledge. Briskin v. Ernst &
Ernst, 589 F.2d 1363, 1369 (9th Cir. 1978). In the absence of any proof as to
who these individuals were, how they acquired their information, which
organizations they represented, which Jews were included in their membership,
evidence on how monolithic the Jewish community in Hungary was, whether any
Plaintiffs knew any of them, and a host of other unanswered questions, one
cannot conclude that their knowledge should be imputed to Plaintiffs.
Indeed, the notion that knowledge about the Gold Train was widespread and
easily acquired with a modicum of diligence is belied by Zweig’s admitted
ignorance. He had never heard of the Gold Train until the 1980s, when he
“stumbled” across a mention of it in the British archives. (See supra at §
II.J.) And, he readily admits that understanding the Gold Train requires a
breadth of expertise and hard research. (Zweig Dep., 36:6-14.)
2. Assuming Plaintiffs’ claims accrued earlier, the doctrine of equitable
tolling applies and tolled claims until 1999
If Plaintiffs’ claims accrued before 1999, equitable tolling permits a court
to deem preserve the claim when “principles of equity would make the rigid
application of a limitation period unfair.” Miller v. New Jersey State Dept of
Corrections, 145 F.3d 616, 618 (3d Cir. 1998). The policy of repose reflected
in limitations period is outweighed by the “interests of justice [that]
require vindication of the plaintiff’s rights.” Burnett v. New York Central
R.R. Co., 380 U.S. 424, 428 (1965).
The Government recognizes that equitable tolling applies to suits against the
Government. Irwin, 498 U.S. 89 (1990). The Government, however, seeks to
impose a straightjacket on the doctrine, limiting it to the two situations
mentioned in Irwin, i.e., when the claimant filed a defective pleading during
the statutory period or when he was induced or tricked by his adversary’s
misconduct into allowing the filing deadline to pass. (Def. Br. at 26 n. 19.)
But as the Supreme Court and this Court have recognized, the Irwin list is not
exhaustive and tolling may apply in other situations. Young v. United States,
535 U.S. 43 (2002); Rosner, 231 F. Supp. 2d at 1208-1209. The Eleventh Circuit
has applied the doctrine to other situations. For example, in Ferreiro v.
United States, No. 96-4963 (11th Cir. Sept. 30, 1997)[85] the claimant missed
the deadline for filing a claim in admiralty because counsel for the Customs
Service mistakenly told him he must file his claim under the Federal Tort
Claims Act. Although the court assumed that the Government’s mistake was
inadvertent, it nevertheless found that equitable tolling applied, noting that
one should be able to put reasonable reliance on information and instructions
from a Government lawyer in a responsible position. Slip op. at 6-7. In
concluding, the court stated:
Irwin does not draw an unrealistic or unfair hard line which must be applied
to all equitable tolling cases. 498 U.S. 89, 95-96. The doctrine’s use is not
confined to fraudulent or intentionally harmful and misleading conduct. Its
application, though limited, is not totally inflexible. This approach may
cause the Government to be more responsible in its dealings with citizens and
to realize it cannot always shift the burden of its own unfortunate conduct to
an innocent party.
Id. at 9; see also, Furnes v. Reeves, 362 F.3d 702 (11th Cir. 2004) (equitable
tolling held to apply under International Child Abduction Remedies Act when
child is secreted); Sandvik v. United States, 177 F.3d 1269, 1272 (11th Cir.
1999) (equitable tolling may apply to prisoner petition untimely due to
extraordinary circumstances beyond petitioner’s control, unavoidable even with
diligence).
Federal courts have found equitable tolling in a number of circumstances. It
applies when the plaintiff knows that he has been injured but is unaware that
his injury is the result of misconduct. Cada v. Baxter Healthcare, 920 F.2d
446, 451 (7th Cir. 1990); Chung v. Department of Justice, 333 F.3d 273, 279
(D.C. Cir. 2003). It applies after the Government converts war surplus
property until Plaintiffs have evidence of Government’s dominion over the
property. Aleutco Corp. v. United States, 244 F.2d 674, 679-80 (3d Cir. 1957).
It applies when war gets in the way. Burnett, 380 U.S. at 429.
The evidence developed in this case demonstrates clearly that the conduct of
the Government was deceptive, and moreover, that the extraordinary
circumstances of the Holocaust warrant equitable tolling. The Government knew
from the beginning that the Gold Train property was loot stolen from Hungarian
Jews. (Supra; Zweig Dep., 94:9-19.) As early as December 20, 1945,
representatives of the surviving Jewish community were requesting return of
the Gold Train property from the U.S. Legation in Budapest.[86] They were
told, however, that they could not assert a claim; only the Hungarian
Government could assert a claim on their behalf. Furthermore, their requests
to inspect the property or help inventory the property or assist the
Government in finding individual owners were rebuffed. (Kádár Aff. at ¶¶
74-78; Supra, § II.F.)
Heeding Schoenfeld’s instruction and advice, the Jewish representatives
enlisted the Hungarian Government’s assistance to recover the Gold Train
property on behalf of the Jews.[87] (Supra.) After a few months of
negotiating, these efforts by Hungary eventually led to a promise by the
Secretary of State to the Hungarian Government that all identifiable looted
property would be returned to Hungary, its country of origin, and that Hungary
took this to be a promise to return the Gold Train as looted property. (Kádár
Aff. at ¶¶ 68-73, 79-91). The Government, however, reneged on that promise as
well and turned over most of what Gold Train property remained to the PCIRO. (Kádár
Aff. at ¶¶ 96-98). The ostensible reason and the one that was given was that
the property was “unidentifiable,”[88] but this was only after the Government
unilaterally redefined Article 8 to create a legal pretext to immunize itself
from takings and other claims over the Hungarian Jews’ property.
Under applicable restitution policy and laws, all that was required to be
known about property was its country of origin and that it had been forcibly
removed by the Nazis or a puppet Government.[89] Under Decree No. 3, not even
this knowledge was required; the Government just needed to know that it came
from Hungary. The Government had known since the beginning that the Gold Train
came from Hungary.
It was a pretext because the Government had other ulterior motives for wanting
to dispose of the Gold Train property through the PCIRO. Sale of the property
by the PCIRO (and other property like the Gold Train) would help relieve the
substantial drain imposed on the Treasury by its decision to support masses of
displaced persons.[90] (Supra, § II.I; Plunder and Restitution, at 9; FAC at
¶¶ 409-11.) Additionally, disposal of the property – without taking a proper
inventory – would conceal the substantial wastage to the property caused by
the depredatory conduct of high ranking officers and others. (FAC at ¶¶
258-279, 300-301.) And, the disposal of the property itself, together with all
the accompanying indicia of ownership, whether or not it rises to the level of
sanctionable spoliation, certainly made future claims by the rightful owners
more difficult, permitting the Government to argue, as it does here, that
Plaintiffs cannot prevail because they cannot prove that their property was on
the Gold Train.
In addition, the Government concealed from the public its conduct by
classifying documents as secret that might have revealed its role in causing
Plaintiffs’ injury. The Government had an affirmative duty not to “cause or
permit to be done any act of commission or omission which results in damage to
or concealment of any of the properties covered by” Decree No. 3. This is
sufficient to toll all limitations until the disabling secret classification
has been lifted, at the earliest. Zweig informs us that the declassification
began in 1998. (GT at x-xi.; see also Kádár Dep., 230:3-8; 243-244) (noting
that he was in the United States when documents relevant to the Gold Train
were declassified).
But for the Government’s possession of the property and its failure to follow
the governing restitution laws, the Hungarian Jews would have been able to
obtain their property and/or pursue other remedies adequately.[91] In this
situation, and even pre-Irwin, the Supreme Court held that the principles of
equitable tolling preserve the causes of action. Burnett, 320 U.S. at
360).[92] Plaintiffs’ claims should be tolled under the doctrine of equitable
tolling.
VII. PLAINTIFFS ASSERT VIABLE APA CLAIMS
Plaintiffs seek non-monetary relief under the APA including an accounting and
return of the property still in the Government’s possession as required under
Decree No. 3, WARX 99226,[93] and other applicable laws, and a declaration
that the Government’s failure to restitute the Gold Train property to Hungary
was arbitrary, capricious, an abuse of discretion, and not in accordance with
law. As the Court is aware, the APA provides a waiver of sovereign immunity
for such claims. Rosner, 231 F. Supp. 2d at 1211 (quoting 5 U.S.C. § 702).
The Government contends that the military authority exception insulates it
from these claims, or that the challenged actions are nonreviewable under
§701(a)(2) because they are committed to agency discretion. (Def. Br. at
33-43.) As explained below, the Government is mistaken.
A. Applicable Standards
Section 702 of the APA provides “[a] person suffering legal wrong because of
agency action, or adversely affected or aggrieved by agency action within the
meaning of the relevant statute, is entitled to judicial review thereof.” The
review perforce grants a right of equitable or declaratory relief for legal
challenges to federal agencies’ or officials’ action as contrary to law. Japan
Whaling Ass’n. v. American Cetacean Soc’y, 478 U.S. 221, 230-31 n.4 (1986).
This right also includes the right to challenge agency action that violates a
treaty. Indeed,
[v]ery rarely do statutes withhold judicial review. It has never been the
policy of Congress to prevent the administration of its own statutes from
being judicially confined to the scope of authority granted or to the
objectives specified. Its policy could not be otherwise, for in such a case
statutes would in effect be blank checks drawn to the credit of some
administrative officer or board.
Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 671 (1986); see
also Heckler v. Chaney, 470 U.S. 821 (1985) (the APA is applicable in
instances where statutes are “drawn so that a court would have [a] meaningful
standard against which to judge the agency’s exercise of discretion”).
The strong presumption in favor of judicial review is subject to few
exceptions, and those exceptions are narrowly construed. For example, the
exception to judicial review provided in subsection § 701(a)(2) applies only
in those rare instances where statutes and regulations are so broad that a
reviewing court cannot find law to apply. Thus, the exception is very narrow.
Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971).
Moreover, it has no application here, as there is ample law to apply, as
spelled out in the FAC, paragraphs 302-322.
B. The Court May Review Army Conduct To Ensure Compliance With The Law And Its
Regulations
The Government’s position is further undercut by the numerous cases in which
the courts of appeal have held review available where military officials have
violated their own regulations. See, e.g., Feliciano v. Laird, 426 F.2d 424
(2d Cir. 1970); Van Bourg v. Nitze, 388 F.2d 557 (D.C. Cir.1967); Bluth v.
Laird, 435 F.2d 1065 (4th Cir. 1970); Nixon v. Secretary of Navy, 422 F.2d 934
(2d Cir. 1970); Schatten v. United States, 419 F.2d 187 (6th Cir. 1969); Smith
v. Resor, 406 F.2d 141 (2d Cir. 1969).
Thus, the Court can review the requisitions that occurred for compliance with
the Constitution[94] and military regulations;[95] and other applicable
regulations set forth in the Army Field Manual,[96] and can decide questions
about whether property is war booty or captured enemy property.[97] In these
instances, the Courts are not second-guessing authorized decisions. Instead,
the court is determining whether the exercise of military authority was
authorized at all. And, deciding whether the exercise is with or without
authority is within the expertise of the Judiciary. See Service v. Dulles, 354
U.S. 363 (1957); Sampson v. Murray, 415 U.S. 61 (1974); Adkins v. United
States, 68 F.3d 1317, 1323 (Fed. Cir. 1995) (military regulations limit and
provide standards against which courts are equipped to judge military
conduct); Murphy v. United States, 993 F.2d 871, 873 (Fed. Cir. 1993)
(military is bound to follow its own regulations once promulgated); Harmon v.
Brucker, 355 U.S. 579 (1958) (federal courts may review internal military
affairs to determine if actions were outside the scope of powers); Mindes v.
Seaman, 453 F.2d 197 (5th Cir. 1971) (discussing and citing cases).
C. The Government Has Presented No Reason For This Court To Reverse Its
Previous Holding That The Actions Complained Of Were Not Military In Nature
In spite of the Court’s prior ruling that the actions for which Plaintiffs’
seek review under the APA were non military in nature, Rosner, 231 F.Supp.2d
at 1212, the Government again seeks to travel under the military authority
exception.
The Court’s reasoning in denying the government’s first motion to dismiss
based upon the APA’s military authority exception was sound: “the allegations
of the Complaint refer to events that occurred after World War II;” the
Court’s deference to the political branches with respect to military matters
“does not [and has never] extend[ed] to all actions which could arguably be
traced back to an exercise of military authority [citing Owens v. Brown, 455
F. Supp. 291, 300 (D.D.C. 1978)];” something more is required.[98] The
exception is limited to an authorized military official “exercising” his or
her discretionary authority on the field of battle, readying the troops for
war—including training—second guessing lawful orders, and other situations
anticipated by Doe v. Sullivan, 938 F.2d 1370 (D.C. Cir. 1991) (APA exception
limited to “military commands made in combat zones or in preparation for, or
in the aftermath of, battle,” . . . i.e. disputes over military strategy or
discipline, or between soldiers and their superiors). See also Reid v. Covert,
354 U.S. 1, 34 (1957) (“‘in the field’ means in the area of actual
fighting”).[99]
Further, as this Court previously held: “Plaintiffs’ Complaint makes specific
allegations regarding conduct that, although exercised by military personnel,
is decidedly non-military in nature.” Rosner, 231 F.Supp.2d at 1212. The
operative allegations of the FAC regarding the Government’s actions in
violation of law, and the discovery in this case, all confirm the non-military
nature of the conduct at issue. The Government seems to admit as much when it
characterizes its obligations with respect to the property in question as
administrative. (Def. Br. at 37.) Even as described by the Government, “the
Army’s storage and security of Gold Train property, the Army’s making
available for requisitioning property from the warehouse where Gold Train
property was stored, and the United States’ decision to turn over Gold Train
property to the IGCR” (Def. Br. at 34) are non-military in nature. Further, it
simply cannot be said that conduct that is illegal under the military’s own
rules and regulations involved the exercise of military authority in the
field.
The Government, in effect, renews its effort to obtain a reconsideration of
the Court’s prior rulings, rather than presenting any facts that would rebut
the non-military character of the conduct in question. It argues that the
technical state of war did not end until December 1951, but evades the fact
that hostilities ended much earlier, and, moreover, fails to address the
underlying and controlling reality that the conduct in question was not
military in nature, and was therefore outside of the exception. In essence,
the Government disregards the case law, including this Court’s ruling, that
the exception does not apply to conduct that is non-military in nature (even
when exercised by military personnel).
The Government also relies on a prior version of the APA which allegedly
excluded review of WWII military actions, arguing that its repeal precludes
the application of the current exclusion to the conduct at issue. “As
originally enacted, the APA contained an even more explicit exception covering
“functions which by law expire on the termination of present hostilities
[meaning WWII] . . . That exclusion was omitted through 1966 amendments to the
Act on the ground that those functions had been fully executed and the
exclusion had become superfluous. . . . The subsequent 1966 amendments should
not be applied retroactively to permit review of those acts now.” (Def. Br. at
36.)
The Government’s argument is wrong, factually, legally, and logically. To
begin with, it omitted language from the provision it cites. The previous
exclusion applied to “functions which by law expire on the termination of
present hostilities, within any fixed period thereafter, or before July 1,
1947.” 5 U.S.C.A. Section 701, Historical and Statutory Notes, page 389
(emphasis supplied). So, even if this prior incarnation of the APA supercedes
the current version, it would not help the Government. To the contrary, it
also reflects concern about functions related to the conduct of hostilities.
The end of the war was declared on May 8, 1945. The “termination of
hostilities” was proclaimed by the President as of December 31, 1946.[100]
Here, the Government’s obligations regarding the property did not terminate
with the hostilities and Plaintiffs allege that the Government’s final
decision not to return the Plaintiffs’ property to Hungary was made no earlier
than December 2, 1947, the date the United States informed Hungary that it
considered the matter “closed.” In short, the prior APA provision would not
have precluded APA review of the Plaintiffs’ claim.
D. The Government’s Construction Asks For A Blank Check On Military Action
Here, the Government contends that simply by virtue of the Gold Train being in
possession of an occupying power, review is precluded. No matter how military
an exercise may be, Congress did not intend the exception to swallow the rule
and the strong presumption that judicial review is generally available. Were
it otherwise, the military could engage in plunder or pillage without any
legal consequence.
Indeed, courts have their “time-honored and constitutionally mandated role of
reviewing and resolving claims.” One of these roles is to determine “the
allowable limits of military discretion, and whether or not they have been
overstepped in a particular case.” Sterling v. Constantin, 287 U.S. 378, 401
(1932). Congress has not exempted the Court from reviewing the Government’s
conduct here. Indeed, as the Court recently held, when civilians are involved
the military must “subject itself to the judicial process of having its
reasonableness determined and its conflicts with other interests reconciled.”
Hamdi v. Rumsfeld, 124 S. Ct. 2633, 2650 (2004).
Plaintiffs are requesting that the Court perform its established function of
reviewing and resolving claims that seek to hold the military to its own
standards, as well as the standards established by the Constitution, to have
the Government’s conduct declared in violation of Decree No. 3, the Fifth
Amendment, its treaty obligations, manuals and regulations.[101] Such an
exercise of judicial authority is not second-guessing military discretion or
the exercise of military authority in the field. It is fulfilling the promise
of the Constitution, and exercising judicial expertise where Congress has not
excluded it and individuals have sought it. APA review is permitted.
E. Plaintiffs’ Claim for Prospective Relief of an Accounting of Property In
U.S. Possession Is Valid
Finally, a significant part of the non-monetary relief sought here is an order
from the Court to compel the Government to search its Army Posts and
warehouses for property that was on the Gold Train and provide an accounting
of it. This requests mirrors what was ordered in Britain in 1999. (See
Petropoulos Dep., 179-180). The documentary evidence reveals that in 1956 the
Government had in its possession at a Quartermasters Depot in Virginia
property from the Gold Train.[102] The Government gave this property to
Austria, again in violation of Decree No. 3 and all of the other laws cited in
the complaint. Moreover, the Government did not even attempt to benefit Jews
anywhere in 1956 in its handling of this persecutee property nor did it comply
with its own (albeit unlawful) interpretation of Article 8.
The Plaintiffs’ APA claim clearly seeks relief based on the Government’s
failure to act since the war. Although the military authority exception might
preclude review of some Army actions that occurred “in time of war or in
occupied territory,” 5 U.S.C. § 701(b)(1)(G), it certainly does not apply to
claims that concern the Government’s failure to act in the years since. Jaffee
v. United States, 592 F.2d 712, 719-20 (3d Cir. 1979). Accordingly, the Court
has jurisdiction to determine the merits of Plaintiffs’ claim for an
accounting of Gold Train inventory still in the Government’s possession, as
well as to require the Government to return any property found. As the Supreme
Court has held, because “relief by injunction operates in futuro,” a case
seeking only prospective relief is governed by the law in effect at the time
of decision. Landgraf v. USI Film Products, 511 U.S. 244, 273-74 (1994)
(quotation omitted).
Plaintiffs’ prospective relief claim here in no way interferes with the
exercise of military personnel decisions, training or weaponry, nor does it
involve issues of expertise or judgment that require military decision making
or involve a policy choice that pertains to our national defense. What
Plaintiffs ask is no more than what the Government has asked of other nations,
and imposed on itself in the creation of the Holocaust Commission: openness
about the Government’s dealings concerning Holocaust Era Assets. As former
Secretary of State Madeline Albright stated during the Washington Conference
on Holocaust Era Assets:
Our imperative must be openness. Because the sands of time have obscured so
much, we must dig to find the truth. This means that researchers must have
access to old archives and by that I don’t mean partial, sporadic or eventual
access — I mean access in full, everywhere. . . . The obligation to seek the
truth and act on it is not the burden of some but of all. It is universal, . .
. every nation, every business, every organization . . . is obliged to do so.
In this arena, none of us are spectators, none are neutral; for better or
worse, we are all actors on history’s stage.
Proceedings of Washington Conference on Holocaust Era Assets, December 1,
1998. There is no reason that the Government should not also roll up its
sleeves and dig in its warehouses to find the truth.
The Government itself has represented to one federal court (and correctly so)
that it was required to return all property seized by U.S. Forces in Austria,
which includes property seized pursuant to Decree No. 3, to the “country from
which the object had been taken.” Moreover, “the United States Forces were
required to transfer all seized property—whether stolen, aryanized, or
legitimately acquired—back to the designated agency of the appropriate
national Government.”[103] The Government’s failure to abide by Decree No. 3
in 1948 aggrieved Plaintiffs, the very least the Government can be required to
do is search its facilities for whatever property might be left.
VIII. GOVERNMENT’S 12(B)(6) MOTION SHOULD BE DENIED AS A MATTER OF LAW;
PLAINTIFFS STATE CLAIMS UPON WHICH RELIEF MAY BE GRANTED
A. The Government’s Motion Violates Rule 12(g) And Is Contrary To Court
Rulings
The Government previously attempted to dismiss Plaintiffs’ claims. As a
consequence of the Government’s choice, it is now precluded from challenging
this action in a second motion to dismiss for failure to state a claim upon
which relief could be granted on the claims asserted in the original
complaint. Moreover, the Government is barred from asserting any defense in a
motion to dismiss that was available to it in the first motion but which it
neglected to raise. Rule 12(g); see Albany Ins. Co. v. Almacenadora Somex, 5
F.3d 907, 909 (5th Cir. 1993); 5A Wright & Miller, Federal Practice and
Procedure § 1388, at 736 (2d ed. 1990). The fact that Plaintiffs have filed an
amended complaint does not alter the impact of this rule; the Government is
expressly precluded from asserting such a defense in a second pre-answer
motion. Id. at §§ 1392 & 1388; Wafra Leasing Corp. v. Prime Capital Corp., 247
F. Supp.2d 987, 999 (N.D. Ill. 2002); United States Fidelity & Guaranty Co. v.
Jepsen, 1991 WL 249706 (N.D. Ill. Nov. 14, 1991).[104]
IX. GOVERNMENT’S 12(B)(6) MOTION SHOULD BE DENIED AS A
MATTER OF LAW; PLAINTIFFS STATE CLAIMS
UPON WHICH RELIEF MAY BE GRANTED
A. The Government’s Motion Violates Rule 12(g) And Is Contrary To Court
Rulings
The Government previously attempted to dismiss Plaintiffs’ claims. As a
consequence of the Government’s choice, it is now precluded from challenging
this action in a second motion to dismiss for failure to state a claim upon
which relief could be granted on the claims asserted in the original
complaint. Moreover, the Government is barred from asserting any defense in a
motion to dismiss that was available to it in the first motion but which it
neglected to raise. Rule 12(g); see Albany Ins. Co. v. Almacenadora Somex, 5
F.3d 907, 909 (5th Cir. 1993); 5A Wright & Miller, Federal Practice and
Procedure § 1388, at 736 (2d ed. 1990). The fact that Plaintiffs have filed an
amended complaint does not alter the impact of this rule; the Government is
expressly precluded from asserting such a defense in a second pre-answer
motion. Id. at §§ 1392 & 1388; Wafra Leasing Corp. v. Prime Capital Corp., 247
F. Supp.2d 987, 999 (N.D. Ill. 2002); United States Fidelity & Guaranty Co. v.
Jepsen, 1991 WL 249706 (N.D. Ill. Nov. 14, 1991).[105]
B. Plaintiffs Assert A Valid Contract Claim
The Court has upheld the bailment claim twice already. Nevertheless, the
Government contends for the third time that Plaintiffs fail to state this
claim. The first time the Court denied the Government’s motion the Court ruled
that plaintiffs had “alleged sufficient facts to survive a motion to dismiss.”
Rosner, 231 F. Supp.2d at 1215. The Court added, “given the fact intensive
nature of such a claim, such is more appropriately addressed on summary
judgment.” Id. (footnote omitted). The Court ruled the same way the second
time. Id. at 1217. The Court further held that discovery on contract formation
issues would follow the Court’s resolution of its subject matter jurisdiction.
Id. at 1218. There Government has not presented any reason to depart from the
Court’s prior rulings. Moreover, the Government is precluded from asserting
yet anot