Jonathan Bilyk Jan. 27, 2015, 11:29am

While acknowledging the difficulties descendants of those who died in the Holocaust might experience in asking their ancestral homeland to redress the myriad wrongs visited upon its Jewish population, a federal appeals court late last week ruled that Hungary, at least for now, is where those Holocaust survivors should press their claims against the central European nation’s central bank and national railroad for the roles they played.

In its Jan. 23 opinion, the Seventh Circuit Court of Appeals in Chicago upheld the dismissal of complaints brought on behalf of Hungarian victims of the Holocaust and their heirs against the Hungarian national railway and bank, as well as several private banks.

The judges noted they shared a “worry” that recent developments in Hungary’s government and judiciary could signify “a lack of respect for the rule of law" and expressed concern over the apparent resurgence of anti-Semitism in Hungary in recent years.

But they said the country --which has enjoyed a democratic government since 1990 after enduring a regime allied with Nazi Germany during World War II and then four decades under a Communist regime installed by the Soviet Union-- still stands as a better legal starting point for the litigation.

“Absent governmental policies or other evidence that such discrimination is barring access to or punishing resort to domestic remedies, United States courts should not take the step of hearing these claims without first giving the Hungarian courts a chance to rule on them,” the panel held. “To hold otherwise would imply that United States courts should presume that the courts of other nations cannot fairly hear claims brought by historically persecuted groups.”

Judge David F. Hamilton wrote the panel's more than 40-page opinion, in which Judges Michael S. Kanne and John Daniel Tinder concurred.

The case dates back to 2010, when a group of lawyers, including Northwestern University law professor Anthony D’Amato, filed suit in federal court in Chicago on behalf of Paul Chaim Shlomo Fischer and a class of other Holocaust survivors and heirs of victims.

The suit accused the Hungarian institutions of aiding and abetting genocide and the theft of property belonging to the victims of that genocide, which included the widespread illegal seizure and transfer of wealth from Holocaust victims to the perpetrators and their associates in numerous nations.

The victims seek more than $75 billion in damages from the banks and $1.25 billion from the railway.

Although federal judges have held that U.S. law does not preclude litigation over alleged violations of international law, in which a country illegally takes the property of citizens of another country, as occurred during the Holocaust, they have also consistently said that those bringing such actions must first demonstrate all legal options to redress the wrongs have either been exhausted in the foreign country in question, or that pending redress actions in those home countries are demonstrably farcical.

That precedent prompted the federal judge in this case to dismiss the suits against the Hungarian institutions, with the understanding the case could be refiled in the U.S. once actions in Hungary had been concluded.

The plaintiffs, however, appealed that decision, arguing that Hungary’s judicial structure does not offer adequate legal forums in which to try the case, while recent developments in the country might make it difficult for the plaintiffs to receive “fair and impartial” treatment in that country’s courts.

In response and intending to serve as proof to the opposite, the banks and railway pointed to Hungarian laws, which legally penalize denial of the Holocaust, offer some compensation to survivors and their families and place no time limits on actions brought Holocaust victims or their heirs.

In the recent Seventh Circuit opinion, the judges said they agreed with the lower court that the case should proceed first in Hungary and then in the U.S.

“Altogether, the evidence in the record supports understandable concerns about whether plaintiffs can receive a fair hearing in Hungary. But those concerns remain too speculative to justify taking this case from Hungarian courts,” Hamilton wrote for the panel.

“One could easily imagine that Thurgood Marshall and the NAACP Legal Defense and Educational Fund had similar concerns about many United States courts’ ability to hear claims by African Americans in 1950 and later. Yet our courts by and large rose to the challenge in the following decades.”

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