‘Last Chance’ Appeal

In what they acknowledge is their "last chance" to benefit from the $1.25 billion Swiss bank settlement with Holocaust survivors, groups of American survivors asked the U.S. Supreme Court Monday to consider hearing their appeal of the way in which a Brooklyn federal judge has ordered the money allocated.

In particular, the American survivors objected to the decision of Judge Edward Korman to distribute to social service agencies in the former Soviet Union 75 percent of the $100 million he set aside for those whose assets were looted by the Nazis. The American survivors contend that 30 percent of all survivors live in the U.S. but that only 4 percent of the $100 million was set aside for American social service agencies that care for them.

In announcing this allocation system, Korman explained that survivors in the former Soviet Union are the "neediest" survivors, that they have received less compensation over the years than survivors in the U.S. and that American survivors have the benefit of more family and community support networks than do those in the former Soviet Union.

But in their papers, filed by Samuel Dubbin of Miami, the survivors pointed out that "it is bedrock class-action law … that class members with the same claims and legal injuries must be treated the same, and there can be no discrimination among class members unrelated to differences in their claims or injuries themselves."

Korman has 30 days to reply to Dubbin’s petition.

The Swiss banks entered into this settlement in response to claims that after the war they hoarded the deposits of Jewish Nazi victims. Dubbin pointed out in his court papers that "this case is not about solving" the needs of survivors in the former Soviet Union or "comprehensively balancing the scales regarding the colossal and varied wrongs of the Holocaust and its aftermath.

"The supervision of a large class settlement simply does not empower a court to freelance on broad issues of social justice, relative need, or the historic burdens of having been on the wrong side of the Iron Curtain after World War II," Dubbin wrote. "In class actions, that requires treating equally class members with equal legal claims and injuries, regardless of unrelated differences or circumstances or need."

"For most U.S. members of the looted asset class, their rights against the Swiss banks will have been compromised for no consideration whatsoever," he said, adding that because of the relatively small amount of money being distributed here "most of the poorest U.S. class members will have no realistic opportunity to receive benefits…"

Dubbin argued that the only way to satisfy the purpose of the litigation is to require that the money be divided in such a way that there is an "equal opportunity to share in the settlement proceeds."

He cited statistics that found most survivors in the U.S. are between the ages of 75 and 85 and that they are dying at a rate of 5 to 10 percent each year. It is said that between 30,000 and 45,000 of these survivors live at or below the poverty line and that about 20,000 are unable to provide for such basic needs as food, medicine, home care and other vital services because they do not receive adequate support from social safety nets. It is estimated that a minimum of $30 million would be needed each year to care for these needy survivors; the judge allocated $750,000 to the U.S. each year.

The court papers contend also that Burt Neuborne, who was selected by Korman to be the lead counsel for the survivors, "failed to advocate" for them to correct the disparities in the distribution. As a result, the survivors claim that they were "denied adequate representation."

Dubbin pointed out in the court filing that Neuborne’s role in the case was somewhat cloudy. At one point, he said, Korman told an appeals court that Neuborne "does not represent any party" but rather was defending the judge’s decision "for the benefit" of the court. Neuborne wrote in response that he was, in fact, still representing the survivors. Dubbin argued also that Neuborne had promised to fight for a change in the distribution formula in subsequent allocations to the survivors, but that he failed to keep that commitment. And he said that Neuborne left the impression that he was working without a fee: until late last year when he asked for $4.1 million for work he had performed after the August 1998 settlement.

In a separate action, Dubbin objected to Neuborne’s fee, and Neuborne asked Korman to hold a hearing to permit him to justify his request. But on April 4, Korman recused himself, saying the pending fee application had "adversely impacted my ability to work with him." He then assigned the matter to another judge.