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ALPERIN v. VATICAN BANK

United States District Court, Northern District of California


May 29, 2003

EMIL ALPERIN, ET AL., PLAINTIFFS,
v.
VATICAN BANK, ET AL., DEFENDANTS.

The opinion of the court was delivered by: Maxine M. Chesney, United States District Judge

ORDER DENYING MOTION FOR JUDGMENT BY DEFAULT; DISMISSING ACTION
Before the Court is plaintiffs' motion, filed April 10, 2001, for judgment by default on plaintiffs' Third Amended Complaint ("TAC") against defendant Croation Liberation Movement (Hrvatski Oslobodilacki Pokret) ("HOP") pursuant to Federal Rule of Civil Procedure 55(b)(22).

BACKGROUND

By order dated January 3, 2003, the Court dismissed, under the political question doctrine, the action against defendants Order of Friars Minor (OFM") and Instituto per le Opere di Religione ("IOR"). By separate order filed concurrently therewith, the Court provided plaintiffs the opportunity to demonstrate that the political question doctrine was not equally applicable to plaintiffs' claims against HOP and further to demonstrate that the Court has personal jurisdiction over HOP. On January 31, 2003, plaintiffs filed a memorandum addressing both issues and, on February 3, 2003, filed a supplemental memorandum further addressing the issue of personal jurisdiction.

DISCUSSION

A. Political Question Doctrine

As discussed in the Court's order of January 3, 2003, by which the Court granted the motions to dismiss filed by defendants OFM and IOR, "[t]he political question doctrine holds that a federal court having jurisdiction over a dispute should decline to adjudicate it on the ground that the case raises questions which should be addressed by the political branches of government:" See Iwanowa v. Ford Motor Co., 67 F. Supp.2d 424, 483-84 (N.J. 1999). As further discussed in that order, the Supreme Court has identified the features that characterize a case raising a nonjusticiable political question:

1] A textually demonstrable constitutional commitment of the issue to a coordinate political department; [2] or a lack of judicially discoverable and manageable standards for resolving it; [3] or the impossibility of deciding without an initial policy determination of a kind clearly for non-judicial discretion; [4] or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; [5] or an unusual need for unquestioning adherence to a political decision already made; [6] or the potentiality of embarrassment from multifarious pronouncements by various departments on one question.
Baker, 369 U.S. at 217. If any one of these factors is "inextricable from the case," the court should dismiss the case as nonjusticiable on the ground that it involves a political question. See Baker, 369 U.S. at 217.

For the reasons expressed in its January 3, 2003 Order Granting Defendants' Motions to Dismiss, which order the Court incorporates in full by reference herein, the issues raised by the claims against HOP are equally nonjusticiable under the political question doctrine.

1. Commitment of the Issue to a Coordinate Political Department
Plaintiffs argue that in the absence of defendants OFM and IOR, the case no longer "fit[s] neatly into the category of Holocaust restitution as pursued by the Executive branch to date." (See Plaintiffs' Memorandum of Law Distinguishing HOP on Political Question Issue ("Pls.' Mem.") at 2:11-12.)

To the extent plaintiffs' argument is based on their contention the case against HOP is distinguishable from that against OFM and IOR because the Ustasha persecuted Christian Serbs, (see id. at 2:10, 15-17), plaintiffs' argument lacks merit. The events underlying plaintiffs' claims against OFM and IOR are the same events underlying plaintiffs' claims against HOP.*fn1

To the extent plaintiffs contend the case against HOP is distinguishable on the ground that HOP is neither a "governmental entity nor connected with any government," (see id. at 3:3.), plaintiffs' argument likewise fails. Governmental status has not been deemed a prerequisite for application of the political question doctrine. See, e.g., Iwanowa v. Ford Motor Company, 67 F. Supp.2d 424, 485-86 (N.J. 1999) (holding class action against German automobile manufacturer and its American parent nonjusticiable under political question doctrine where plaintiffs sought compensation and damages for forced labor in manufacturer's factory during World War II); Burger-Fischer v. Degussa AG, 65 F. Supp.2d 258, 282, 284-85 (N.J. 1999) (holding class action against German corporations nonjusticiable under political question doctrine where plaintiffs alleged defendants participated in Nazi regime's looting of gold and personal property and in using and profiting from forced labor). Citing Kadic v. Karadzic, 70 F.3d 232 (2d Cir. 1995), plaintiff argues that HOP is "better equated with other Balkan legal personalities which have been successfully sued in Federal Court for human rights violations." (See Pls.' Mem. at 4:6-8.) Kadic, however, did not involve claims arising from World War II, but rather from the recent Bosnian civil war. See Kadic, 70 F.3d at 236-37.

In any event, even if plaintiffs were successful in distinguishing their claims against HOP on such grounds, such distinction ultimately is unavailing as the Court lacks judicially discoverable and manageable standards for resolving the issues against HOP.

2. Lack of Judicially Discoverable and Manageable Standards for Resolving the Issues
At the outset, it should be noted that, for purposes of determining the question of discoverable and manageable standards, the fact HOP has not responded to the TAC does not itself serve to distinguish plaintiffs claims against HOP from those against OFM and IOR. Although a defendant, by reason of its failure to respond to a complaint, is deemed to have admitted the well-pleaded factual allegations contained therein, "necessary facts not contained in the pleadings and claims which are legally insufficient are not established by default." See Cripps v. Life Insurance Co. of No. America, 980 F.2d 1261, 1267 (9th Cir. 1992).

Here, although the TAC consists of 29 pages, few references are made therein to HOP. Rather, the TAC describes in detail the atrocities committed by the Ustasha and other Nazi sympathizers. Neither the Ustasha nor the Independent State of Croatia, on whose behalf the Ustasha acted, is named as a defendant, nor are any of the leaders of the Ustasha, who, as alleged in the TAC, include" [Ante] Pavelic, (President of Puppet Croatia), [Andrija] Artukovic (Ustasha Minister of Justice), [Dinko] Sakic (Jasenovac Concentration Camp Commander) and [Stjepan] Hefer (Ustasha Minister of Agriculture)." (See TAC ¶ 39.)*fn2

HOP, a movement alleged to have been founded by Pavelic in Argentina in 1956, more than ten years after the last of the events giving rise to plaintiffs' claims, (see TAC ¶¶ 39, 43, 47), is not alleged to have committed the war crimes at issue, and plaintiffs' conclusory description of HOP as the "successor organization to the Ustasha government," (see TAC ¶ 39), is insufficient to equate HOP with the Ustasha for purposes of liability. What remains are plaintiffs' allegations that "[a]s late as January 1952 the CIA reported 5 million Swiss francs consisting of Ustasha loot transferred from Switzerland to Pavelic in Argentina," (see TAC ¶¶ 40, 57), and that HOP "had access to looted funds." (See TAC ¶ 39). There is no allegation that HOP received the 5 million francs. Indeed, according to plaintiffs, HOP was not founded until 1956, four years after the transfer was reported.*fn3 Rather, plaintiffs make the general allegation that "[a]ll Defendants . . . improperly retained and concealed illicit profits and withheld them from their rightful owners." (See TAC ¶ 5.)

Under such circumstances, even assuming plaintiffs have pleaded sufficient facts as to HOP to support a finding of liability, plaintiffs' damages claim against HOP implicates the same barriers to identifying and dividing that portion of the Ustasha Treasury transferred to the defendant as the Court has previously discussed with respect to plaintiffs' claims against OFM and IOR. (See Order Granting Defendants' Motions to Dismiss at 13-14.) Plaintiffs arguments to the contrary are unavailing.

At the outset, plaintiffs seek to distinguish their claims against HOP from those against OFM and IOR on the ground that a "specific res" exists. (See Pls. Mem. at 5:9-11.) For the reasons expressed in the Court's Order Granting Defendants' Motions to Dismiss, plaintiffs' argument is unpersuasive.

Next, to the extent plaintiffs' assertion that HOP is "better equated with other Balkan legal personalities which have been successfully sued," (see id. at 4:6-8), is also intended to support plaintiffs' position on the issue of judicially discoverable and manageable standards, plaintiffs' argument likewise fails. First, any reliance on Kadic v. Karadzic, 70 F.3d 232, is, again, misplaced. Unlike the instant action, the events in Kadic, as noted above, were alleged to have occurred in recent years, see Kadic, 70 F.3d at 236-37, and the sole defendant was alleged to have personally ordered the commission of the atrocities giving rise to the complaint. See id. at 242. Similarly, Tachiona v. Mugabe, 216 F. Supp.2d 259 (S.D.N.Y. 2002), on which plaintiffs also rely, is distinguishable. In Tachiona, the defendants were the ruling party of Zimbabwe and three of its officers, who were alleged to have committed atrocities during a recent and very limited period of time, specifically, the four months preceding Zimbabwe's June 2000 elections. See Tachiona v. Mugabe, 169 Supp.2d 259, 264, 266 (S.D.N.Y. 2001).

Neither Kadic nor Tachiona involved barriers to judicial resolution even approaching the magnitude of those presented by the instant action against HOP. Indeed, in finding the claims alleged in Kadic justiciable, the Court of Appeals cited to its decision in Klinghoffer v. S.N.C. Achille Lauro, 937 F.2d 44, (2d Cir. 1991), an action the Klinghoffer court had described as "an ordinary tort suit."*fn4 See Kadic, 70 F.3d at 249; Klinghoffer, 937 F.2d at 49.*fn5

Here, by contrast, plaintiffs have not brought "an ordinary tort suit." Rather, plaintiffs case against HOP presents the same intractable problems with respect to discovery, proof and apportionment of loss recognized in other cases involving the atrocities committed during World War II, see, e.g., Kelberine v. Societe Internationale, et. al., 363 F.2d 989, 995 (D.C. Cir. 1965); Iowana v. Ford Motor Co., 67 F. Supp.2d 424, 489 (N.J. 1999); Burger-Fisher v. Degussa AG, 65 F. Supp.2d 248, 284 (N.J. 1999), and discussed in detail in the Court's order granting the motion to dismiss filed by defendants OFM and IOR.

Consequently, for the reasons set forth above and in the Court's order of January 3, 2003, in which the Court granted the motions to dismiss filed by OFM and IOR, the Court finds that plaintiffs claims against HOP present political questions that are not justiciable.

B. Personal Jurisdiction

"When entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties." Tuli v. Republic of Iraq, 172 F.3d 707, 712 (9th Cir. 1999). Because a default judgment that later can be successfully attacked is void, "a court should determine whether it has the power, i.e., the jurisdiction, to enter the judgment in the first place." See id.

Here, as noted, the Court, by order filed January 3, 2003, afforded plaintiffs the opportunity to demonstrate that the Court has personal jurisdiction over HOP, and plaintiffs have addressed the issue of personal jurisdiction in both their initial and supplemental responses thereto. Plaintiffs, however, have failed to plead or otherwise show that HOP is subject to this Court's jurisdiction.

"A court may exercise either general or specific jurisdiction over a nonresident defendant." Sher v. Johnson, 911 F.2d 1357, 1360 (9th Cir. 1990). General jurisdiction is applicable where the defendant engages in "substantial" or "continuous and systematic" activities in the forum, irrespective of whether the cause of action is related or unrelated to those activities. See id. Specific jurisdiction requires that the defendant have "sufficient contacts" with the forum in relation to the cause of action. See id. In particular, (1) the defendant must "purposefully avail[] himself or herself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of the forum's laws;" (2) "the claim must arise out of or result from the defendant's forum-related activities"; and (3) "exercise of jurisdiction must be reasonable." See id. With respect to both types of jurisdiction, an evaluation of the sufficiency of the defendant's contacts necessarily includes a determination of the time at which such contacts occurred. Compare Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 569-70 (2d Cir. 1996), cert. denied, 519 U.S. 1006 (1996) ("In general jurisdiction cases, district courts should examine a defendant's contacts with the forum state over a period that is reasonable under the circumstances — up to and including the date the suit was filed — to assess whether they satisfy the `continuous and systematic' standard."), with Farmers Ins. Exch. v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 913 (9th Cir. 1990) (holding, where specific jurisdiction is at issue, the only relevant contacts are those "occurring prior to the event causing the litigation").

Here, whether personal jurisdiction is assessed as of the time of the events giving rise to plaintiffs' claims or the time of the filing of the complaint, plaintiffs have failed to make the requisite showing. First, given the nature and timing of the events underlying plaintiffs' claims, plaintiffs have made no effort to establish specific jurisdiction; instead, plaintiffs confine their allegations in the TAC, as well as their arguments and supporting evidence, to the question of general jurisdiction. Second, plaintiffs have failed to make an adequate showing as to general jurisdiction.

In response to the Court's January 3, 2003 Order Re: Plaintiffs' Motion for Judgment by Default, plaintiffs, citing the TAC, state they have alleged that HOP has members in the United States and is doing business in California. (See Pls.' Mem. at 6:19-21.) The Court has not located those allegations in the TAC. Rather, plaintiffs allege that "HOP has been active" in the United States, (see TAC ¶ 39), at best a conclusory and ambiguous statement both as to the time and nature of HOP's activities. Further, when given a opportunity to elaborate, plaintiffs' submitted an exhibit stating that HOP was founded in Buenos Aires, Argentina in 1956 and that in 1991, the organization "in its entirety" was moved to Croatia. (See Pls.' Mem. Ex. 2 (Ruchala Dec.), third unnumbered attachment ("The History and Program of Croatian Liberation Movement").)*fn6 By way of additional explication, plaintiffs submit a document, which, according to plaintiffs, "lists Dr. Anton Bonifacic of Chicago, Illinois as a past President of HOP." (See Pls.' Mem. at 6: 21-22.) That document, however, makes no reference to Dr. Bonifacic's residence and, in any event, states that his presidency lasted from October 1975 through July 1981. (See id. Ex. 2, third unnumbered attachment.) Plaintiffs also submit a document authored by the United States Secret Service, which document, according to plaintiffs, is evidence "that HOP was active in the past in the United States." (See Pls.' Supp. Mem. at 2:4-5.) This document, however, sheds little, if any, light on HOP's current activities. Indeed, under the subheading "Membership," it states: "Membership and Area of Operation Membership (sic) — Unknown." (See id. Ex 5.)

Under the circumstances, plaintiffs have failed to show that at any relevant time period, HOP had sufficient contacts with the United States for purposes of establishing personal jurisdiction.

CONCLUSION

For the reasons stated, the Court finds plaintiffs' claims against HOP present political questions that are not justiciable and that the Court lacks personal jurisdiction with respect to plaintiffs' claims against HOP.

Accordingly, plaintiffs' Motion for Judgment by Default is hereby DENIED and the complaint against HOP is hereby DISMISSED.

The Clerk shall close the file.

IT IS SO ORDERED.


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