DC court says Holocaust survivors can sue Hungary in the US for huge reparations
Potential multi-billion dollar suit dates back to 2010. Appeals court rules that in pursuit of justice, case can be tried in States. Lawyers say decision could go to Supreme Court
Yaakov Schwartz is The Times of Israel's deputy Jewish World editor
BUDAPEST — The second-highest court in the United States has reinstated a lawsuit brought by a group of Holocaust survivors and their families against the government of Hungary and its national railroad. The class action suit demands restitution for the role Hungary played in the murder of 500,000 Jews and the seizure of their property during World War II.
Setting the stage for what could be a landmark civil suit running into the tens of billions of dollars, Judge Patricia A. Millett wrote for the US Court of Appeals for the District of Columbia Circuit on December 28 that Hungary could not force the plaintiffs to have the case tried in a Hungarian court.
The decision overturned that of a federal judge who ruled that the 1947 Paris Peace Treaty between Hungary and the Allied powers granted Hungary immunity.
A 2016 decision from the Court of Appeals in the ongoing case similarly overruled an additional federal court decision, which also would have prevented the case from being brought in the US.
The Court of Appeals said that victims of the Holocaust can claim compensation in a US court for any Jewish property seized by Hungary from the moment the Jews were expelled from their homes, calling the theft “genocidal taking” in contravention of international law.
“This is probably the most important and the only litigation in which the Hungarian government and its national railroad will be held responsible for their role in the destruction of Hungarian Jewry between 1941 and 1945,” Marc Zell, the legal counsel for the plaintiffs, told The Times of Israel.
“Up until now, Hungary, which was a sovereign state during the time of WWII, has never been brought to justice for what it did, and attempted to exonerate itself from any liability in its peace treaty that it signed in 1947 with the Allied powers,” Zell said.
New York-based attorney Konrad L. Cailteux told The Times of Israel that the defense had no comment due to pending litigation. Likewise, repeated requests for comment from the Hungarian Ministry of Justice were not answered.
On Friday, the defense filed a petition to have the appeal retried by the entire 11-judge DC Circuit Court alongside another case being brought against Germany. That petition is still pending.
According to Zell, by filing the petition Hungary may be positioning itself for a Supreme Court appeal.
The Hungarian government has invoked the 1947 treaty to stall this case numerous times since it was first brought in 2010, and succeeded in using it to drop a similar simultaneous case that was brought in Chicago.
“The Federal Appellate court told them [in the Chicago case] they had to go to Hungary to try it there, and they did — and they ran into a stone wall. They just threw up their hands in futility,” said Zell.
Zell alleged that the Hungarian court used “all kinds of technical grounds — the very thing that we argued to the court in Washington why it wasn’t fair to force Holocaust survivors and their families to go back to the very place of the Holocaust, a country that still has difficulty even admitting that they have responsibility for it, and try their case in a Hungarian court.”
‘More harm than good’
Over the past 20 years, the Hungarian government has made a pretense of allowing Hungarian Holocaust victims to file claims for their losses, said Zell, but he called the payouts “tantamount to a joke.”
“For persons who were sent to Auschwitz or to Mauthausen and survived, for example, or for those who had family members perish in the camps, they would pay maybe a thousand dollars,” said Zell.
He also alleged that many of the victims were denied relief altogether. Hungarian nationals living in Israel who applied for compensation under their Hebrew names were turned down, he said, though the Jewish and Hungarian names on file represented the same people.
“They turned them down on technical grounds and bureaucratic procedures, just to avoid having to pay them the very little compensation that they were theoretically willing to pay. It’s been a travesty of justice,” said Zell.
The lead plaintiffs include American, Canadian, Australian, and Israeli citizens. Notably absent among the group of 14 – 12 of whom survived Auschwitz – are any residents of Hungary.
Zell said that while Hungary-based Holocaust survivors are included in the class action and would benefit from a favorable ruling, not a single person currently living in Hungary wanted to take a lead role in the US case, fearing retribution back home.
Rabbi Zoltan Radnoti, chairman of the rabbinical council of MAZSIHISZ, the Federation of Hungarian Jewish Communities, told The Times of Israel last week that he wasn’t surprised by Hungarian Jews’ reluctance to get involved in the massive civil suit.
“A lot of people are afraid to go up against the government. It’s an Eastern European mentality,” Radnoti said. “Maybe the government will put them on a list of people who were against it. It’s not good for them, for their families. They know that if they go up against the government in the US, the Hungarian government knows everything – it’s extremely powerful.”
Radnoti pointed to recent strikes and demonstrations against an increasingly government-controlled media and what has been dubbed the new “slave labor law,” saying that the protests were at most a few thousand strong. “Why would people go? It’s not good for them,” he said.
He also noted fears of an anti-Semitic backlash by the greater Hungarian public.
“The [largely secular] Hungarian Jewish people don’t want to be seen as ‘Jewish,’” Radnoti said. “And if the US court says that the Hungarian government has to pay billions of dollars to Jews in Hungary or anywhere else, the people will say, ‘The Jews are taking money from the hospitals, the Jews are taking money from the police.’ It will do more harm than good.”
Achieving justice is a US lawyer’s mentality, he said.
“The Hungarian people don’t think like that. This was 74 years ago. Who cares? If we’re proven right, then what? What does it accomplish?” asked Radnoti.
There still remain ongoing efforts to negotiate compensation from the Hungarian government, albeit farther from the limelight, according to the World Jewish Restitution Organization (WJRO). The local Jewish community is cooperating with those efforts, the WJRO said.
“WJRO, in coordination with the Hungarian Jewish community, is in discussions with the Hungarian government regarding outstanding restitution issues,” said WJRO chair of operations Gideon Taylor.
‘Tens of billions of dollars of compensation’
Zell said that the case against the Hungarian government and the national railway, Magyar Allamvasutak, could see a significant financial claim filed on behalf of Jewish Holocaust survivors.
“We didn’t put a number in this case, but if it goes forward we’ll be asking for tens of billions of dollars of compensation, which is the amount that would be owed based on the value of the property that was taken at the time of the deportations to the camps,” said Zell.
Zell claimed the community was “extremely affluent,” enumerating confiscated holdings such as businesses, valuable properties, and artwork. “In one of our cases the family had a whole collection of Dutch Masters in its possession that were taken by the Hungarian government,” he alleged.
“All the bank accounts, the insurance policies, huge sums of money and personal property that were worth at the time well over 1 or 2 billion dollars,” continued Zell. “But with the passage of 70 years, with interest and everything else, this number has exploded,” he said, stressing that the suit only included movable property and didn’t even address the real estate appropriated from the country’s Jews.
If the case makes it all the way to a final judgment, the plaintiffs would likely seek satisfaction from Hungarian assets in the US or elsewhere, said Zell. However, he said, no Holocaust civil litigation has ever gone all the way to trial; cases have all either been dismissed or settled. If the case does make it to trial, it would be a judicial first.
Zell said that even today the Hungarian government maintains meticulous records from the period of the Jewish expulsion and decimation, and that many survivors would be able to prove exactly what they lost in the way of property. He said they would be entitled to cash sums that reflect the value of what they lost, as would heirs of victims who are no longer alive.
The assets of many victims who can’t come forward because they are dead and have no family to claim on their behalf are also compensable, Zell said. Reparations for those assets could go into a general fund that would benefit existing Holocaust survivors living in poverty or financial hardship, of which there are many in Israel and around the world. Any leftover money could go to benefit Jewish communities and institutions in Hungary.
However, he said, it would ultimately be up to the court to decide how to disburse any funds collected from either a settlement or a judgment.
The lawsuit also demands the railway refund the transportation costs it charged to Jewish communities for transporting them to the death camps.
The Hungarian national railway collected the Jews from their homes, and oftentimes stored them in temporary ghettos and shelters before they were put on the trains themselves, said Zell. When they boarded the trains, railway workers confiscated many people’s personal belongings — in some cases worth a lot of money, such as cash and jewelry that were hidden on the deportees to Auschwitz and Mauthausen, he said.
What distinguishes this case from others before it, said Zell, was that the Hungarian government is also a defendant, and so the amount of damages potentially claimable in this case is many times greater than that what could be claimed against the railroad alone.
“Whatever we agree to has to be an amount that has an impact on the Hungarian government and people. It cannot be something only symbolic,” said Zell. “We’re not looking to bankrupt them or the railroad. But we are looking to make the Hungarian government and people conscious in a material way, and that way justice will be served.”
