In my role in development at UC Hastings College of the Law, I come across many invitations for interesting talks given by faculty. One day, I received an email invitation to hear Professor Morris Ratner speak about how, starting in 1996, as a young lawyer, he prosecuted and settled lawsuits against European entities that yielded payments of more than $7.5 billion to victims of Nazi persecution. I hadn’t been aware that such historic litigation had been conducted by someone who sat a floor above me in our Tenderloin building. When I asked him for an interview, he agreed, saying the topic was “near and dear” to him.
Professor Ratner and his legal team sued Swiss, German, Austrian, and French corporations that profited from Nazi atrocities by retaining Holocaust victims’ dormant bank accounts, failing to pay on life insurance policies, and using slave labor.
We met in Professor Ratner’s office on the UC Hastings campus to talk about the litigation, particularly the suit against the Swiss banks, which settled in 2000 for $1.25 billion in the United States Federal Court for the Eastern District of New York. Distribution of that settlement fund, which included a claims program involving tens of thousands of dormant account claimants, just wound up in 2013.
While we spoke, I couldn’t help but think how the person sitting across from me has played an important role in realigning history. Restitution to the victims and their families could never reverse the tragedy of the Holocaust, but the amount of time and effort spent by Professor Ratner and his team in returning assets to their rightful owners is an incredible gesture of respect and honor to the victims and their families. It turns out he gained a lot from the experience as well.
The Rumpus: What exactly did you accuse the Swiss banks of doing, and how were you able to sue them in US courts?
Morris Ratner: The jurisdictional question was at the time answered by reference to the Alien Tort Claims Act, which is a statute that says that a foreign national can sue in a United States court for violations of the law of nations, including genocide.
We accused the banks of the aiding and abetting of genocide. They did not directly commit genocide, but they facilitated it by laundering Nazi gold stolen from European central banks in occupied countries, and from Jews and other victims of Nazi persecution. By trading Nazi gold for Swiss francs, the Swiss gave the Nazis access to capital to fund the war effort, which in turn extended the implementation of Hitler’s final solution by years.
The heart of the case was our accusation that the Swiss banks profited from Nazi atrocities by concealing and retaining dormant bank accounts opened by Holocaust victims. Before the Holocaust, the banks held themselves out as a safe harbor for the assets of Jews and other targets of Nazi persecution. During the Holocaust, the banks routinely and illegally transferred Jewish accounts to the Nazi regime. After the Holocaust—still holding hundreds of millions of dollars in accounts of victims who died during the Holocaust, the banks stonewalled accounting for or returning those funds for decades, all the while charging fees on and destroying records pertaining to those accounts. Those were our core accusations against the Swiss banks.
Rumpus: In your talk at UC Santa Cruz, you mentioned Manfred and Lina Froehlich, who had perished during the Holocaust, and how their son Hermann later contacted a Swiss bank inquiring about bank accounts his parents may have opened. The bank denied the existence of such accounts in writing, and Hermann didn’t pursue the matter further. It was the Froehlichs’s grandchildren who finally received financial restitution from the Swiss banks as a result of your litigation. Was this a common scenario?
Ratner: The Froehlich family’s experience was unfortunately not unique. The Swiss banks litigation court website contains information regarding the claims of thousands of persons who received payments under the settlement. Some of the claimants simply did not know until the settlement that the banks held dormant accounts of their relatives who had died in the Holocaust. But many other persons actively pursued these accounts and were stonewalled by the banks for decades.
I never actually talked to the Froehlich family. Everything I know about them is what has been posted on the court-appointed settlement claims administrator’s website, which lists the outcomes of each claim in alphabetical order.
Rumpus: Do you have a rough estimate of what percent of victim damages were recovered from the Swiss banks? Were all of the dormant accounts identified and returned?
Ratner: No. In the early phases of the litigation, an economic historian we hired as an expert estimated the value of victim assets using aggregate data such as the amount of Jewish wealth in Europe and the Swiss banks’ role in processing and laundering it for the Nazis. From that kind of data, we were able to say it was possible that the banks had misappropriated somewhere in the broad range of roughly one billion to tens of billions of dollars in Jewish assets.
Subsequently, through an independent audit of bank files that was wrapped into our settlement, we learned that the estimate of provable dormant accounts was somewhere between about $650 million and $1.3 billion. Our settlement was at the high end of that range, at $1.25 billion, but it covered more than just dormant accounts. About $800 million of the $1.25 billion settlement was allocated to pay bank account claims. The rest paid other categories of claims, including insurance, looted assets, and slave labor claims against Swiss entities.
The main problem of proof was the widespread destruction of records. We could have proved and paid much more had relevant records been preserved.
Rumpus: How did families prove they were relatives of the victims?
Ratner: The Claims Resolution Tribunal (“CRT”) had access to all sorts of data. For example, they had the names of persons who opened roughly 4 million bank accounts for which there was still some documentation. As to those accounts, they had at least a registration card that had the name of the account holder, and, in many cases, an address. So if twenty people named Froehlich applied for the same bank account, the CRT would ask: Who was your relative? What do you remember about that person? Where did that person reside? If sixteen of them said their relatives were in Austria, and the account holder was from a city in Germany, the CRT could say that’s probably not the right Froehlich. The claim forms elicited information that could be used to match whatever was in the possession of the CRT.
It was not an adversarial process. The CRT was appointed to help claimants figure things out. They wouldn’t just rely on what people were telling them. The claims administrators would get the information from the claimants and then do additional research in repositories on the claimant’s behalf. For example, in Austria after the Anschluss, the Nazis forced Austrian Jews to register their assets, so a lot of Jews submitted documentation identifying their assets. Some of them included bank account references that weren’t in the Swiss bank files, so the CRT could go match a claim against that evidence, too.
Rumpus: How did you feel that a Jewish lawyer from the Wilmer Cutler (now WilmerHale) law firm defended the Swiss banks?
Ratner: Several Jewish lawyers defended the banks. A number of law firms were approached by the Swiss banks to represent them. Not every law firm agreed to work on these cases.
Roger Witten was the lead lawyer for Wilmer. He’s a really good lawyer. Actually, when I taught a course on Holocaust litigation at Harvard Law School, he was one of my guest lecturers. I have a good working relationship with him. He’s an honorable person and I don’t judge him at all for the choice he and his firm made to offer representation to a defendant.
If I had been approached to work on the defense side, I don’t know what I would have done. When I was young and had just graduated from law school, I worked for a big defense firm in San Francisco. I defended corporations accused of gender discrimination and companies accused of causing environmental contamination. It didn’t feel good to me to do that. So I switched to the plaintiffs’ side early in my career. In general, it felt better. But all parties—even powerful corporate defendants—deserve access to justice, which includes competent counsel.
Rumpus: What was the Swiss government’s involvement, if at all, and were any formal apologies ever issued?
Ratner: That’s a great question. The Swiss government’s involvement was that the Swiss National Bank was a government bank. And it engaged in much of the same conduct as the private banks—probably to a greater extent. But foreign government entities can claim what is called “sovereign immunity,” which shields them from claims like this.
The Swiss government has apologized for various things that took place during WWII and created the Bergier commission of eminent historians to investigate and produce definitive reports regarding Swiss conduct during and after World War II. So not only has the Swiss government made certain kinds of apologies, but it has created an historical record so that the Swiss can no longer hide behind this idea that they were neutral and that they themselves were just trying to survive. They obviously did much more than that to their own advantage.
Rumpus: How did you calculate damage from slave labor or forced labor?
Ratner: In the US, if you experience pain in connection with some injury—say you get a medical device implanted and something goes wrong and the device causes you tremendous pain—you plead for personal injuries and what’s called “pain and suffering” or “emotional distress.” It’s the function of the jury to convert your testimony of what your pain and suffering felt like into a dollar figure.
Had we done that for the slave labor cases, those cases would have been worth literally trillions of dollars, as there were millions of surviving slave laborers (Jews who were forced to labor in “work-to-death” programs) and forced laborers (mostly non-Jewish Eastern Europeans who were not in work-to-death programs). It was not possible to settle the cases for trillions, or even for hundreds of billions, of dollars. But you can see why negotiations to resolve the suit were so difficult.
When we were negotiating with the Germans, the parties were very far apart. To break the logjam, President Bill Clinton wrote a letter in the middle of these negotiations saying he thought they should settle for around ten billion Deutschmarks (about $5 billion at the time). That figure—coming from the President of the United States at a delicate time in the negotiations—created a functional floor and ceiling. That became the inevitable settlement amount.
Rumpus: Were you upset by the number President Clinton suggested at the time?
Ratner: I’m very grateful to the Clinton administration. We were in the State Department in Washington D.C. on the day that George Bush’s administration was taking over from the Clinton administration, so Colin Powell was touring the State Department with his transition team on the day that we were wrapping up negotiations on the last of the Holocaust cases.
We were pulling all nighters working side-by-side with administration officials in order to finish these negotiations before the Clinton administration left, and the reason is, the Bush administration did not care about these cases and would not have put the kind of resources Clinton put into resolving them favorably. It was just a political reality. The Republicans didn’t like international human rights litigation against private corporations. It was considered anti-business.
So, yes, I was disappointed in the ten billion Deutschmarks number, but, on the other hand, but for the Clinton administration’s support, this could have all fallen apart.
Rumpus: So history lined up well.
Ratner: History lined up okay. It wasn’t perfect but history rarely is perfect.
Rumpus: In the first class action suit against the Swiss banks, there was an offer of $600 million on the table to settle the case. Your team turned the offer down. Wasn’t this a risky move? You could’ve gotten nothing.
Ratner: It’s hard to turn down $600 million. This might not have been a bad deal to resolve just the banking portion of the case, but the banks wanted a general release on everything. They wanted to give $600 million in exchange for a broad release of claims so that no one could ever sue any Swiss entity for World War II-era conduct again.
Because of the publicity surrounding these claims, we were in constant contact with Holocaust survivors around the world. We had a sophisticated, informed, and participatory group of well-organized class members, including community representatives who knew what they were talking about who were in regular contact with us. Many of those groups happened to be based in New York, so we were able to take the temperature of people who in the normal course of their working lives represented or spoke for many of the victims. They all lined up behind a much higher number. And they were telling us, “No, hold out.” So it was a lot easier to hold out.
Rumpus: You were 29 years old, just five years out of law school, when your law partners assigned you to the Swiss Bank case. Did you appreciate the weight of what was being placed on you?
Ratner: It’s hard to go back in time, but I can probably safely say that I did not fully appreciate the magnitude of what we were doing in the very early days of the Holocaust-era cases. I don’t think I really appreciated it until I started seeing the level of media attention the litigation was generating, and until the Swiss litigation expanded into literally dozens of worldwide class actions against a range of European companies. When the matter first crossed my desk, it was just one interesting and challenging case. I didn’t know that it would become this dramatic, historic piece of litigation that would ultimately affect so many people. I couldn’t have foreseen on Day 1 that the Swiss banks litigation would become a tidal wave of Holocaust-era litigation.
Rumpus: When I asked for the interview, you agreed, saying this topic is “near and dear” to you. Did you lose relatives in the Holocaust?
Ratner: I’m a Jew. And I’m gay. If I had been living in Germany in 1939, I would probably have been put into a concentration camp and killed. So this litigation was personal.
Most of my family is from Russia, Poland and Belarus, and fled to the United States before WWI partly in response to anti-Semitism in Europe but also because there were opportunities in the US—economic opportunities—that didn’t exist in Europe at the time.
So I didn’t have a familial connection to the Holocaust, but I suspect that most Jews view it, as I do, as a central feature of our history and identity, just like people in the US who lived through 9/11 can be defined by that event as Americans even if we didn’t know anybody who died in the World Trade Center.
Rumpus: How do you think your life has changed after having worked on these cases?
Ratner: The litigation changed my life in a number of ways. It gave me an opportunity to work on a once-in-a-generation piece of litigation. It gave me experiences and education in law practice at a particular geo-political level that most lawyers don’t encounter in their professional lives. My career path would have mostly involved domestic cases involving relatively traditional disputes, but for my work on the Holocaust cases.
It would never have occurred to me before I had the opportunity to work on the Nazi-era cases to file claims on behalf of comfort women who had been forced into sex slavery in WWII. I wouldn’t have seen the possibilities, but, after the Swiss case, I saw the possibilities, and I pursued other categories of large-scale litigation, including other human rights cases, on behalf of worldwide groups. I had learned to think big.
At the same time, the litigation humbled me. No matter how hard I worked on behalf of my clients, I could never truly make them whole. The best my colleagues and I could do for them was to provide an imperfect, incomplete and long-delayed justice. Litigation is a powerful tool for social justice, but it has its limits.
And as a professor, my experiences prosecuting Holocaust-era litigation prompt me to teach my students in a different way. To me, the subjects I teach—including civil procedure and legal ethics—seem profoundly important in a way I might not have appreciated as fully if all I had ever done were insurance fraud cases. As a result, I feel emotionally connected to the practice of law, and I try to carry that emotional connection into the classroom.
Rumpus: That’s a great gift.
Ratner: It is a gift.
Photographs by Christopher Dydyk.