IN THE UNITED STATES DISTRICT COURT FOR THE ......2010/08/13 · Péter Nagy Telephone: 312.251-4600 André H. Friedman Facsimile: 312.251-4610 NAGY & TRÓCSÁNYI, LLP 620 Eighth

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION ─────────────────────────────┐ HOLOCAUST VICTIMS OF BANK THEFT, Civil Case No. 10-1884 Plaintiffs,

v. MAGYAR NEMZETI BANK, ERSTE GROUP BANK, MKB BAYERISCHE LANDESBANK, Magistrate Judge Ashman OTP BANK and CREDIT ANSTALT BANK, Defendants. ─────────────────────────────┘

DEFENDANT OTP BANK’S MOTION TO DISMISS

For the reasons more fully set forth in the Memorandum of Law in Support of Defendant

OTP Bank’s Motion to Dismiss, OTP Bank, by and through counsel,

1. Hereby moves the Court to dismiss the Plaintiffs’ Complaint on the following grounds:

a. lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1); b. lack of personal jurisdiction over OTP Bank pursuant to Fed. R. Civ. P.

12(b)(2); c. assuming arguendo that subject-matter and personal jurisdiction exist, the

Plaintiffs’ claims are barred by the applicable executive agreement and treaty; d. assuming arguendo that subject-matter and personal jurisdiction exist and that

the claims are otherwise not settled, the case presents a political question which renders Plaintiffs’ claims nonjusticiable; and

e. assuming arguendo that subject-matter and personal jurisdiction exist and that

the claims are otherwise not settled and/or nonjusticiable, failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6).

2. In support of its Motion, OTP Bank submits the following materials, each of which

are filed herewith:

Honorable Samuel Der-Yeghiayan

Case 1:10-cv-01884 Document 35 Filed 08/02/10 Page 1 of 2

–2–

a. The Declaration of Zoltán Dencs, executed on August 2, 2010;

b. the Declaration of Ildikó Varga, executed on July 30, 2010; and c. the Compendium of Other Materials Filed in Support of OTP Bank’s Motion

to Dismiss.

WHEREFORE, OTP Bank respectfully requests that the case against it be dismissed, and

that the Court grant it such other or further relief as may be appropriate in the circumstances.

Dated: August 2, 2010 Respectfully submitted, OTP BANK By: /s/ Gregory L. Stelzer One of Its Attorneys

James R. Figliulo Gregory L. Stelzer FIGLIULO & SILVERMAN, P.C. Of Counsel: 10 South La Salle Street, Suite 3600 Chicago, Illinois 60603 Péter Nagy Telephone: 312.251-4600 André H. Friedman Facsimile: 312.251-4610 NAGY & TRÓCSÁNYI, LLP 620 Eighth Avenue Thomas G. Corcoran, Jr., pro hac vice New York, N.Y. 10018-1405 Laina Catherine Wilk Lopez, pro hac vice Telephone: 212.247-6014 BERLINER, CORCORAN & ROWE, LLP Facsimile: 212.398-6645 1101 Seventeenth Street N.W., Suite 1100 Washington, D.C. 20036 Telephone: 202.293-5555 Facsimile: 202.293-9035 Attorneys for Defendant OTP Bank


IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!" HOLOCAUST VICTIMS OF BANK THEFT, Civil Case No. 10-1884 Plaintiffs,

v. MAGYAR NEMZETI BANK, ERSTE GROUP BANK, MKB BAYERISCHE LANDESBANK, Magistrate Judge Ashman OTP BANK and CREDIT ANSTALT BANK, Defendants. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!#

MOTION FOR ENLARGEMENT OF PAGE LIMIT

Defendant OTP Bank, by and through its undersigned counsel, hereby moves, pursuant to

Local Rule 7.1 of this Court, for an enlargement of the default 15-page limit that would other-

wise govern the memorandum of law in support of OTP Bank’s Motion to Dismiss, filed today.

In support of this Motion, OTP Bank states as follows:

1. Plaintiffs filed their Complaint on March 25, 2010. Defendant OTP Bank, through

its undersigned counsel, first appeared in this action on July 13, 2010.

2. Today, OTP Bank filed a motion to dismiss the Complaint.

3. Pursuant to a standing order of this Court: “Any motion to extend the 15-page

limit shall contain specific reasons for requesting such an exception.” Defendant OTP Bank’s

reasons for requesting an exception are as follows:

a. By this lawsuit, Plaintiffs (both U.S. and alien) seek to represent a putative

class of at least 600,000 persons, including “all members of Greater Hungarian Jewry

whose assets were taken by the defendant banks during or immediately following or in

connection with the Hungarian Holocaust of March-October 1944.” (Compl. ¶¶60(a),



–2–

63).

b. Plaintiffs allege three Counts: (I) Participation in Genocide by Looting;

(II) Aiding and Abetting Genocide by Looting; and (III) Unjust Enrichment. (Id.

¶¶66-78).

c. Plaintiffs seek joint and several liability of all Defendant banks, in the

amount of 2 billion dollars, plus compound interest and punitive damages.

d. As is evident from the foregoing, this case is complex and large. It

involves claims purportedly based on the “laws of nations” for conduct that allegedly

took place approximately 65 years ago.

e. Defendant OTP Bank’s counsel, to properly address the several and

complex grounds warranting dismissal—including lack of subject-matter jurisdiction,

lack of personal jurisdiction, treaty preclusion, non-justiciability, and failure to state a

claim upon which relief may be granted—cannot reasonably do so consistent with the

high standards the Court is entitled to expect from the attorneys who appear before it,

within the default 15-page limit established by Local Rule 7.1.

4. Hereto annexed as an EXHIBIT is an unsigned copy of the oversized Memorandum

of Law in Support of OTP Bank’s Motion to Dismiss that OTP Bank’s counsel proposes to file on

its behalf. OTP Bank’s proposed memorandum is 47 pages, exclusive of its cover page, table of

contents, and table of authorities. The brief otherwise complies with Local Rule 5.2(c).

WHEREFORE, Defendant OTP Bank respectfully requests that the Court grant this

Motion, and enter an order permitting the filing of an executed copy of the Memorandum of Law

in Support of OTP Bank’s Motion to Dismiss, not to exceed 47 pages in length, in substantially

identical form to the EXHIBIT annexed to this Motion, and for such further or alternative relief as


–3–

may be appropriate under the circumstances.

Dated: August 2, 2010 Respectfully submitted, OTP BANK

By: /s/ Gregory L. Stelzer One of Its Attorneys

James R. Figliulo Gregory L. Stelzer FIGLIULO & SILVERMAN, P.C. Of Counsel: 10 South La Salle Street, Suite 3600 Chicago, Illinois 60603 Péter Nagy Telephone: 312.251-4600 André H. Friedman Facsimile: 312.251-4610 NAGY & TRÓCSÁNYI, LLP 620 Eighth Avenue Thomas G. Corcoran, Jr., pro hac vice New York, N.Y. 10018-1405 Laina Catherine Wilk Lopez, pro hac vice

Telephone: 212.247-6014 BERLINER, CORCORAN & ROWE, LLP Facsimile: 212.398-6645 1101 Seventeenth Street N.W., Suite 1100 Washington, D.C. 20036 Telephone: 202.293-5555 Facsimile: 202.293-9035 Attorneys for Defendant OTP Bank


IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!" HOLOCAUST VICTIMS OF BANK THEFT, Civil Case No. 10-1884 Plaintiffs,

v. MAGYAR NEMZETI BANK, ERSTE GROUP BANK, MKB BAYERISCHE LANDESBANK, Magistrate Judge Ashman OTP BANK and CREDIT ANSTALT BANK, Defendants. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!#

MEMORANDUM OF LAW IN SUPPORT

OF OTP BANK’S MOTION TO DISMISS

James R. Figliulo Gregory L. Stelzer FIGLIULO & SILVERMAN, P.C. Of Counsel: 10 South La Salle Street, Suite 3600 Chicago, Illinois 60603 Péter Nagy Telephone: 312.251-4600 André H. Friedman Facsimile: 312.251-4610 NAGY & TRÓCSÁNYI, LLP 620 Eighth Avenue Thomas G. Corcoran, Jr., pro hac vice New York, N.Y. 10018-1405 Laina Catherine Wilk Lopez, pro hac vice

Telephone: 212.247-6014 BERLINER, CORCORAN & ROWE, LLP Facsimile: 212.398-6645 1101 Seventeenth Street N.W., Suite 1100 Washington, D.C. 20036 Telephone: 202.293-5555 Facsimile: 202.293-9035 Attorneys for Defendant OTP Bank


E X

HIB

IT

Case 1:10-cv-01884 Document 41-1 Filed 08/02/10 Page 1 of 58

–i–

T A B L E O F C O N T E N T S

TABLE OF AUTHORITIES..........................................................................................................iii

INTRODUCTION...........................................................................................................................1

ARGUMENT……………………………………………………………………………………...2

I. THE COURT LACKS §1331 SUBJECT-MATTER JURISDICTION OVER ANY PLAINTIFFS’ CLAIMS................................................................................2

A. This Court Lacks §1331 Jurisdiction Over Plaintiffs’ Treaty Claims….................3

B. This Court Lacks §1331 Jurisdiction Over Plaintiffs’ Customary International Law Claims.........................................................................................6

II. THE COURT LACKS ATS SUBJECT-MATTER JURISDICTION OVER THE ALIEN PLAINTIFFS’ CLAIMS....................................................................7

A. “Participation in Genocide by Looting” (Count I)................................................10

B. “Aiding and Abetting Genocide by Looting” (Count II).......................................13

C. “Unjust Enrichment” (Count III)...........................................................................20

III. THE CASE AGAINST OTP BANK MUST BE DISMISSED FOR LACK OF PERSONAL JURISDICTION.........................................................................23

A. No Personal Jurisdiction Due to Lack of Illinois Contacts....................................24

B. No Personal Jurisdiction Due to Lack of Sufficient U.S. Contacts.......................24

1. No Personal Jurisdiction in Any State Court of General Jurisdiction.................................................................................................25

a. Correspondent Bank Account........................................................25

b. Agent for Service of Process..........................................................27

2. Exercising Jurisdiction is Inconsistent with the U.S. Constitution............28

IV. THE CLAIMS OF ALL PLAINTIFFS ARE PRECLUDED BY EXECUTIVE AGREEMENT AND TREATY.................................................................30


–ii–

A. The U.S. Plaintiffs’ Claims Are Precluded by the 1973 Claims Settlement Agreement...............................................................................30

B. The Claims of All Plaintiffs Are In Violation of And Precluded by the Paris Peace Treaty......................................................................33

V. ASSUMING ARGUENDO THAT THE PLAINTIFFS’ CLAIMS HAVE NOT BEEN SETTLED, THE CASE SHOULD BE DISMISSED AS PRESENTING A POLITICAL QUESTION..............................................................34

VI THE CLAIMS AGAINST OTP BANK MUST BE DISMISSED PURSUANT TO ASHCROFT v. IQBAL FOR FAILURE TO STATE A CLAIM.............................................................................................................39

A. Successor Liability................................................................................................40

B. Capacity to Sue......................................................................................................44

C. Failure to Plead Injury...........................................................................................45

CONCLUSION..............................................................................................................................47


–iii–

T A B L E O F A U T H O R I T I E S

Federal Cases

Abagninin v. AMVAC Chem. Corp., 545 F.3d 733 (9th Cir. 2008)…………………….…6, 12, 13

Abdullahi v. Pfizer, Inc., 562 F.3d 163 (2d Cir. 2009), cert. denied, 78 U.S.L.W. (No. 09-34) (U.S. June 29, 2010)..................................................10

Abecassis v. Wyatt, 2010 U.S. Dist. LEXIS 32731 (S.D. Tex. Mar. 31, 2010).............................18

Abiodun v. Martin Oil Serv., 475 F.2d 142 (7th Cir. 1973)…...........................................20, 21, 22

Alperin v. Vatican Bank, 410 F.3d 532 (9th Cir. 2005).................................................................38

American Ins. Ass’n v. Garamendi, 539 U.S. 396 (2003).......................................................30, 37

Arndt v. UBS AG, 342 F. Supp. 2d 132 (E.D.N.Y. 2004)..............................................................22

Asahi Metal Indus. Co. v. Superior Ct., 480 U.S. 102 (1987).......................................................23

Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009)………………………………………………...…passim

Association Benefit Servs., Inc. v. Caremark RX, Inc., 493 F.3d 841 (7th Cir. 2007)………...…23

Atlee v. Laird, 347 F. Supp. 689 (E.D. Pa. 1972)..........................................................................36

Baker v. Carr, 369 U.S. 186 (1962).........................................................................................34, 36

Beanal v. Freeport-McMoran, Inc. 197 F.3d 161 (5th Cir. 1999).................................................21

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)..........................................................................39

Board of Educ. of Peoria v. Ill. State Bd. Of Educ., 810 F.2d 707 (7th Cir. 1987).......................44

Boim v. Quranic Literacy Inst., 291 F.3d 1000 (7th Cir. 2002)…….................................15, 16, 17

Brooks v. Ross, 578 F.3d 574 (7th Cir. 2009)................................................................................39

Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).................................................................24

Burger-Fisher v. Degussa AG, 65 F. Supp. 2d 248 (D.N.J. 1999)....................................35, 36, 37

Cabello v. Fernandez-Larios, 402 F.3d 1148 (11th Cir. 2005)...............................................14, 15

Carmichael v. United Techs. Corp., 835 F.2d 109 (5th Cir. 1988)………...................................15


–iv–

Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994)……….…………………………….…………………..………15, 16, 17

Central States, S.E. & S.W. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934 (7th Cir. 2000).............................................................................29

Cisneros v. Aragon, 485 F.3d 1226 (10th Cir. 2007)....................................................................16

Cohen v. Hartman, 634 F.2d 318 (5th Cir. Unit B 1981)........................................................21, 22

Daventree, Ltd. v. Republic of Azer., 349 F. Supp. 2d 736 (S.D.N.Y. 2004)................................26

Doe I v. Qi, 349 F. Supp. 2d 1258 (N.D. Cal. 2004)……………………………..…………...…12

Doe v. GTE Corp., 347 F.3d 655 (7th Cir. 2003)..........................................................................17

Dreyfus v. Von Finck, 534 F.2d 24 (2d Cir. 1976)…………………………………..……………4

EEOC v. G-K-G Inc., 39 F.3d 740 (7th Cir. 1994)........................................................................42

Enahoro v. Abubakar, 408 F.3d 877 (7th Cir. 2005)…………………………………...………....8

Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir. 1980)…………………………………...….…8, 20

Fishel v. BASF Group, 1998 U.S. Dist. LEXIS 21230 (S.D. Iowa Mar. 11, 1998)…...…….…4, 7

Flores v. S. Peru Copper Corp., 343 F.3d 140 (2d Cir. 2003)..........................................5, 6, 8, 22

Frolova v. Union of Soviet Socialist Republics, 761 F.2d 370 (7th Cir. 1985)……………...……3

Frumkin v. J.A. Jones, Inc., 129 F. Supp. 2d 370 (D.N.J. 2001)...................................................38

Goldstar (Pan.) S.A. v. United States, 967 F.2d 965 (4th Cir. 1992)……………………………..4

Gray v. Cardoza, 2006 U.S. Dist. LEXIS 43710 (E.D. Cal. June 27, 2006)…………………..…5

Guaylupo-Moya v. Gonzales, 423 F.3d 121 (2d Cir. 2005)………………………………….……5

Haemoscope Corp. v. Pentapharm AG, 2002 U.S. Dist. LEXIS 23387 (N.D. Ill. Dec. 6, 2002)............................................................................................................30

Hamid v. Pricewaterhouse, 51 F.3d 1411 (9th Cir. 1995).......................................................21, 22

Handel v. Artukovic, 601 F. Supp. 1421 (C.D. Cal. 1985)………………………………………..4

Hanninen v. Fedoravitch, 583 F. Supp. 2d 322 (D. Conn. 2008)..................................................28


–v–

Haver v. Yaker, 76 U.S. 32 (1869)………………………………………………………………...6

Heinrich ex rel. Heinrich v. Sweet, 49 F. Supp. 2d 27 (D. Mass. 1999)……………………......5, 7

Hereros ex rel. Rirnako v. Deutsche Afrika-Linien Gmblt & Co.,232 Fed. Appx. 90 (3d Cir. Apr. 10, 2007)………………………………………………..9, 36

Hilao v. Estate of Marcos, 103 F.3d 767 (9th Cir. 1996)..............................................................15

Huynh Thi Anh v. Levi, 586 F.2d 625 (6th Cir. 1978)…….………………………………………4

Igartua de la Rosa v. United States, 32 F.3d 8 (1st Cir. 1994)…………………………………....5

IIT v. Vencap, Ltd., 519 F.2d 1001 (2d Cir. 1975).............................................................20, 21, 22

In re Agent Orange Prod. Liab. Litig., 373 F. Supp. 2d 7 (E.D.N.Y. 2005),aff’d 517 F.3d 104 (2d Cir. 2008), cert. denied, 129 S. Ct. 1524 (2009)..........................…..12

In re Austrian and German Bank Holocaust Litig., 80 F. Supp. 2d 164 (S.D.N.Y. 2000)............38

In re Iraq and Afg. Detainees Litig., 49 F. Supp. 2d 85 (D.D.C. 2007)……………………..........4

In re World War II Era Japanese Forced Labor Litig., 114 F. Supp. 2d 939 (N.D. Cal. 2000).........................................................................30, 32, 34

In re World War II Era Japanese Forced Labor Litig., 164 F. Supp. 2d 1153 (N.D. Cal. 2001).............................................................................32, 34

In re Xe Serv. Alien Tort Litig., 665 F. Supp. 2d 569 (E.D.Va. 2009)…………………………….7

International Hous., Ltd. v. Rafidain Bank Iraq, 712 F. Supp. 1112 (S.D.N.Y. 1989),rev’d on other grounds, 893 F.2d 9 (2d Cir. 1989)..................................................................26

ISI Int’l, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548 (7th Cir. 2001)................................25

Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424 (D.N.J. 1999)……………………………….…4

Janmark, Inc. v. Reidy & Dreamkeeper, Inc., 132 F.3d 1200 (7th Cir. 1997)..............................24

Jogi v. Voges, 480 F.3d 822 (7th Cir. 2007)………………………………………………………5

Kadic v. Karadzic, 70 F.3d 232 (2d Cir. 1995)…………………………………………………..10

Khulumani v. Barclay Nat’l Bank, Ltd., 504 F.3d 254 (2d Cir. 2007).....................................14, 15

Kyler v. Montezuma Cty., 2000 U.S. App. LEXIS 1145 (10th Cir. Jan. 28, 2000)….........………5


–vi–

Leema Enter., Inc. v. Willi, 575 F. Supp. 1533 (S.D.N.Y. 1983)..................................................26

Licci v. Am. Express Bank, Ltd., 2010 U.S. Dist. LEXIS 32873(S.D.N.Y. Mar. 31, 2010)........................................................................................................26

Liu Bo Shan v. China Constr. Bank Corp., 2010 U.S. Dist. LEXIS 63938(S.D.N.Y. June 28, 2010).........................................................................................................19

McKesson v. Islamic Republic of Iran, 539 F.3d 485 (D.C. Cir. 2008)……………………...…3, 4

Medellin v. Texas, 552 U.S. 491 (2008)………………………………………………………..…4

National Sun Indus., Inc. v. Dakahlia Comm. Bank,1997 U.S. App. LEXIS 9662 (2d Cir. May 2, 1997)...............................................................29

Ntsebeza v. Daimler AG, 617 F. Supp. 2d 228 (S.D.N.Y. 2009)...................................................19

Presbyterian Church of Sudan v. Talisman Energy, Inc., 582 F.3d 244 (2d Cir. 2009), petition for cert. filed, 78 U.S.L.W. 3643 (U.S. Apr. 15, 2010).................14, 17, 18, 19

Princz v. Fed’l Republic of Germany, 26 F.3d 1166 (D.C. Cir. 1994)……………………..…4, 36

Rosario Veiga v. World Meteorological Org., 2010 U.S. App. LEXIS 4440 (2d Cir. Mar. 3, 2010)………………………………………………..……………………..…5

Rozenkier v. A.G. Schering, 196 Fed. Appx. 93 (3d Cir. Aug 2, 2006)........................................38

Sampson v Fed’l Republic of Germany, 250 F.3d 1145 (7th Cir. 2001).......................................36

Sarei v. Rio Tinto, PLC, 550 F.3d 822 (9th Cir. 2008)..................................................................16

Semi Conductor Materials, Inc. v. Citibank Int’l PLC, 969 F. Supp. 243 (S.D.N.Y. 1997).........26

Serra v. Lappin, 600 F.3d 1191 (9th Cir. 2010)……………………………………………..…4, 7

Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252 (11th Cir. 2009)………………………….8, 19, 21

Sompo Japan Ins., Inc. v. Nippon Cargo Airlines Co. 552 F.3d 776 (7th Cir. 2008)…………..…6

Sosa v. Alvarez-Machain, 542 U.S. 692 (2004)………………………………………..……passim

Swanigan v. Argent Mortgage Co., 2010 U.S. Dist. LEXIS 71083 (N.D. Ill. July 14, 2010)...........................................................................................................39

Tamam v. Fransabank SAL, 677 F. Supp. 2d 720 (S.D.N.Y. 2010)........................................26, 30

Tamari v. Basche & Co., 730 F.2d 1103 (7th Cir. 1984)...............................................................21


–vii–

Taveras v. Taveraz, 477 F.3d 767 (6th Cir. 2007).........................................................................17

Tel-Oren v. Libyan Arab Republic, 726 F.2d 774 (D.C. Cir. 1984)……………………………3, 4

Tobar v. United States, 2008 U.S. Dist. LEXIS 72622 (S.D. Cal. Sept. 19, 2008)…………….....5

Ungaro-Benages v. Dresdner Bank AG, 2003 U.S. Dist. LEXIS 27693 (S.D. Fla. Feb. 14, 2003)....................................................................................................44, 45

United States v. Belmont, 301 U.S. 324 (1937).............................................................................30

United States v. Smith, 18 U.S. 153 (1820)……………………………………...…8, 9, 10, 11, 22

United States v. Swiss Am. Bank, Ltd., 191 F.3d 30 (1st Cir. 1999)..............................................25

United States v. Swiss Am. Bank, Ltd., 274 F.3d 610 (1st Cir. 2001)............................................29

Vietnam Ass’n for Victims of Agent Orange v. Dow Chem. Co., 517 F.3d 104 (2d Cir. 2008) cert. denied, 129 S. Ct. 1524 (2009)…..........................……..6, 9

Ware v. Hylton, 3 U.S. 199 (1796)................................................................................................34

World Wide Minerals, Ltd. v. Republic of Kaz., 296 F.3d 1154 (D.C. Cir. 2002).........................33

Xuncax v. Gramajo, 886 F. Supp. 162 (D. Mass. 1995)…………………………………………..7

Statutes

18 U.S.C. §1091………………………………………………………….……………5, 11, 12, 13

18 U.S.C. §1092…………………………...………………………………………………………5

18 U.S.C. §2333.......................................................................................................................15, 16

18 U.S.C. §2511.............................................................................................................................17

18 U.S.C. §2520.............................................................................................................................17

28 U.S.C. §1331…………………………………………………………………………...2, 3, 6, 7

28 U.S.C. §1350………………………….……………………………………………….…passim

31 U.S.C. §5318.......................................................................................................................27, 28

735 ILCS 5/2-209..........................................................................................................................24


–viii–

N.Y. Bus. Corp. Law §1304……..................................................................................................28

N.Y. C.P.L.R. §301..................................................................................................................25, 26

N.Y. C.P.L.R. §302..................................................................................................................25, 26

Session Laws

Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA Patriot Act”), Pub. L. No. 107-56, 115 Stat. 272 (2001).....................25, 27, 28, 29, 30

Rules and Regulations

31 C.F.R. §103.........................................................................................................................27, 28

31 C.F.R. App. A to Subpt. I of Pt. 103.........................................................................................27

Fed R. Civ. P. 4........................................................................................................................24, 25

Fed. R. Civ. P. 8.............................................................................................................................39

Treaties

Agreement Between the Government of the United States of America and the Government of the Hungarian People’s Republic Regarding the Settlement of Claims, 24 U.S.T. 522, TIAS 7569 (1973)............................................31, 32

Convention (IV) Relative to the Protection of Civilian Persons in Time of War, 75 U.N.T.S. 287 (1956)…….………………………………3, 4, 5, 6

Convention (IV) Respecting the Laws and Customs of War on Land, 36 Stat. 2277 (1907)…………………………………………………………3, 4

Convention on the Prevention and Punishment of the Crime of Genocide, 78 U.N.T.S. 277 (1948)…………………………..………...3, 5, 6, 10

International Covenant on Civil and Political Rights, 993 U.N.T.S. 171 (1976)…………3, 4, 5, 6

Paris Peace Treaty (Feb. 10, 1947)....................................................................................33, 34, 38

Other Authorities

13D Wright & Miller, Federal Practice and Procedure §3563 (3d ed. 2008)................................3


–ix–

CIA World Factbook: Hungary.......................................................................................................1

Curtis A. Bradley, Jack L. Goldsmith, & David H. Moore, Sosa, Customary Inter-

national Law, and the Continuing Relevance of Erie 120 Harv. L. Rev. 869 (2007)………...7

David Marcus, Famine Crimes in International Law, 97 A.J.I.L. 245 (2003)…………………..12

Foreign Claims Settlement Commission, Annual Report 2009.....................................................32

Gabor Kadar & Zoltan Vagi, Self Financing Genocide, pp. 282-350 (Central European Univ. Press, English Ed., 2004)...........................................................35

Hungarians’ Holocaust Suit Settled for $25.5 Million, Wash. Post, Sept. 27, 2005, at A03........35

Michael D. Ramsey, International Law Limits on Investor Liability

in Human Rights Litigation, 50 Harv. Int’l L.J. 271 (2009)…………………………………14

Miklos Molnár, A Concise History of Hungary, pp. 288-337 (Cambridge Univ. Press, 2001)................................................................................................35

Raphael Lemkin, Axis Rule in Occupied Europe(Carnegie Endowment for International Peace, 1944)…….………………………................10

Restatement (Third) of the Foreign Relations Law of the United States §111 (1987)……………5

Statute of the International Court of Justice..................................................................................22

The Holocaust Encyclopedia, U.S. Holocaust Memorial Museum, Genocide Timeline (2010)…………………………………………………………………...10

United Nations Treaty Collection, Convention on the Prevention and Punishment of the Crime of Genocide, Parties to Convention................................................11

Wolfgang Schomburg & Ines Peterson, Genuine Consent to Sexual

Violence Under International Criminal Law, 101 A.J.I.L. 121 (2007)……………………...12

Hungarian Laws

Act 1997 X.....................................................................................................................................34

Government Decree 200/1945 ME................................................................................................43

Government Decree 1600/1944 ME..............................................................................................43



–x–



Government Resolution 1035/1997 Korm.....................................................................................34

Government Resolution 1091/2007 Korm.....................................................................................34

Government Resolution 2098/1994...............................................................................................34


–1–

INTRODUCTION

OTP Bank Nyrt (“OTP Bank”) denies liability on the merits. It was established on

November 11, 1991. OTP Bank’s legal predecessor, Országos Takarékpénztár N.V., was

established with no legal predecessor on March 1, 1949. The conduct alleged herein took place

in 1944. For this reason and more, Plaintiffs will not be able to prove that OTP Bank committed

any of the acts alleged in their Complaint. Those issues are not, however, the subject of this

brief. OTP Bank here moves for dismissal based on numerous threshold matters that precede

adjudication of these facts.

Plaintiffs sue on behalf of a putative class of “at least 600,000 persons” and “includ[ing]

all members of Greater Hungarian Jewry whose assets were taken by the defendant banks during

or immediately following or in connection with the Hungarian Holocaust of March-October

1944.” (Compl. ¶¶60(a), 63). They allege three Counts: (I) Participation in Genocide by Looting;

(II) Aiding and Abetting Genocide by Looting; and (III) Unjust Enrichment. (Id. ¶¶66-78). The

Defendants are Magyar Nemzeti Bank (the national bank of Hungary) and four private banks,

including OTP Bank. (Id. ¶¶56-57). Plaintiffs ask that the Defendants be held jointly and

severally liable, that compensation for the alleged theft be awarded in the amount of

“$2,000,000,000 plus interest compounded annually since 1944,” and that punitive damages be

awarded. (Id. p. 33). Two billion dollars compounded annually at 5.14 percent 1 interest from

1944 to 2010 (66 years) is, according to our calculation, about $54.7 billion – almost 30 percent

of Hungary’s 2009 gross domestic product of $184.9 billion. (See Compendium of Other

Materials, Att. 1, CIA Factbook).

1 Assuming this case were even appropriate for a discretionary award of compound pre-judgment

interest, we use a 5.14 percent interest rate as a rough calculation of the weekly average of one-year constant-maturity Treasury yields from 1962-2010, the years for which data is readily available.<http://www.federalreserve.gov/releases/h15/data/Weekly_Friday_/H15_TCMNOM_Y1.txt>


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Plaintiffs are grouped into two categories, U.S. Plaintiffs, (Compl. ¶¶30-39), and alien

Plaintiffs (id. ¶¶40-54). Both categories allege that the Court has subject-matter jurisdiction over

their claims pursuant to 28 U.S.C. §1331, because they “involve treaties to which the United

States is party, international law, and federal questions generally.” (Id. ¶23). The alien Plaintiffs

also allege jurisdiction pursuant to the Alien Tort Statute (“ATS”), 28 U.S.C. §1350. (Id. ¶24).

We proceed as follows. First, we argue that this Court lacks subject-matter jurisdiction

pursuant to §1331. Second, we argue that the Court lacks subject-matter jurisdiction pursuant to

the ATS. Third, we argue that the Court lacks personal jurisdiction because OTP Bank has no

contacts with Illinois and almost none with the United States.

Fourth, assuming jurisdiction, we argue that Plaintiffs’ claims have been settled by an

executive agreement and treaty between the United States and Hungary. Fifth, we argue,

assuming jurisdiction and that the claims have not been settled, that the case should be dismissed

as presenting a political question which renders the claims non-justiciable. Claims arising out of

the Hungarian Holocaust were addressed after World War II by several treaties and international

agreements, and claims of this magnitude are not appropriate for resolution by a U.S. court.

Finally, we argue, assuming jurisdiction, non-settlement, and justiciability, that the

Complaint fails to state a plausible claim for relief as required by Ashcroft v. Iqbal, 129 S. Ct.

1937 (2009).2

ARGUMENT

I. The Court Lacks §1331 Subject-Matter Jurisdiction Over Any of Plaintiffs’ Claims

Title 28 U.S.C. §1331 provides in full as follows: “The district courts shall have original

2There are numerous other grounds for dismissing the Complaint, which need not be addressed at

the pleading stage, including: (1) statute of limitations, (2) laches, (3) forum non conveniens, (4) act of state, (5) comity, (6) failure to join indispensable parties, (7) the class proposed does not meet the require-ments for class certification, (8) standing, and (9) lack of corporate liability under international law.


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jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United

States.” We first address all Plaintiffs’ allegations that the following treaties provide the Court

with subject-matter jurisdiction over their claims: (1) the Convention on the Prevention and

Punishment of the Crime of Genocide (“Genocide Convention”), 78 U.N.T.S. 277 (1948); (2) the

Convention (IV) Respecting the Laws and Customs of War on Land (1907) (“Customs of War

Convention”), 36 Stat. 2277; (3) the International Covenant on Civil and Political Rights

(“ICCPR”) (1976), 993 U.N.T.S. 171; and (4) the Convention (IV) Relative to the Protection of

Civilian Persons in Time of War (1956) (“Civilian Persons Convention”), 75 U.N.T.S. 287.

(Compl. ¶23). Second, we address whether this Court has §1331 jurisdiction over Plaintiffs’

alleged customary international law claims. (Id.).

A. This Court Lacks §1331 Jurisdiction Over Plaintiffs’ Treaty Claims

District courts have jurisdiction over any civil action based on a claim or right arising

under a U.S. treaty. See 13D Wright & Miller, Federal Practice & Procedure §3563 at 237 (3d

ed. 2008). However, as the Seventh Circuit wrote in Frolova v. Union of Soviet Socialist

Republics, 761 F.2d 370 (7th Cir. 1985), “[t]reaties made by the United States are the law of the

land, U.S. Const. VI, but if not implemented by appropriate legislation they do not provide the

basis for a private lawsuit unless they are intended to be self-executing.” Id. at 373 (citing inter

alia with approval Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 798 (D.C. Cir. 1984) (Bork,

J. concurring)). Even where a treaty is self-executing, §1331 jurisdiction will not lie unless the

treaty also creates a private right of action. See McKesson v. Islamic Republic of Iran, 539 F.3d

485, 488-89 (D.C. Cir. 2008) (finding Iran-U.S. Treaty of Amity to be self-executing, but noting

that that “does not end our search for a treaty-based cause of action, because whether a treaty is

self-executing is a question distinct from whether the treaty creates private rights or remedies.”)


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(internal citations and quotations omitted). Treaties are not presumed to create privately

enforceable rights. See Medellin v. Texas, 552 U.S. 491, 506 n.3 (2008) (“the background

presumption is that international agreements, even those directly benefitting private persons,

generally do not create private rights or provide for a private cause of action in domestic

courts.”) (internal citations and quotations omitted); McKesson, 539 F.3d at 489; Goldstar (Pan.)

S.A. v. United States, 967 F.2d 965, 968 (4th Cir. 1992).

Here, none of the treaties on which Plaintiffs rely are self-executing or provide private

rights of action. First, as to the Customs of War Convention, “[t]he cases are unanimous” in

holding that it is not self-executing and does not provide a private right of action. See Princz v.

Fed’l Republic of Germany, 26 F.3d 1166, 1175 (D.C. Cir. 1994); Goldstar (Pan.) S.A., 967 F.2d

at 968; Tel-Oren, 726 F.2d at 809-810 (Bork, J. concurring); Dreyfus v. Von Finck, 534 F.2d 24,

30 (2d Cir. 1976); Fishel v. BASF Group, 1998 U.S. Dist. LEXIS 21230, at *23 (S.D. Iowa Mar.

11, 1998) (unpublished); Handel v. Artukovic, 601 F. Supp. 1421, 1424-26 (C.D. Cal. 1985).

Courts also unanimously have held that the Civilian Persons Convention is neither self-

executing nor does it provide a private right of action. See Tel-Oren, 726 F.2d at 809-810 (Bork,

J., concurring); Huynh Thi Anh v. Levi, 586 F.2d 625, 629 (6th Cir. 1978); In re Iraq & Afg.

Detainees Litig., 479 F. Supp. 2d 85, 115-117 (D.D.C. 2007); Iwanowa v. Ford Motor Co., 67 F.

Supp. 2d 424, 439 n.16 (D.N.J. 1999).

As for the ICCPR, courts universally have held that it is not self-executing and does not

provide a private right of action because the United States specifically so stated in its

reservations to ratification. See Sosa v. Alvarez-Machain, 542 U.S. 692, 735 (2004) (“the United

States ratified the [ICCPR] on the express understanding that it was not self-executing and so did

not itself create obligations enforceable in the federal courts.”); Serra v. Lappin, 600 F.3d 1191,


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1196-97 (9th Cir. 2010); Rosario Veiga v. World Meteorological Org., 2010 U.S. App. LEXIS

4440, at *4 (2d Cir. Mar. 3, 2010) (unpublished); Guaylupo-Moya v. Gonzales, 423 F.3d 121,

137 (2d Cir. 2005); Flores v. S. Peru Copper Corp., 343 F.3d 140, 164 n.35 (2d Cir. 2003);

Kyler v. Montezuma Cty., 2000 U.S. App. LEXIS 1145, at *4 (10th Cir. Jan. 28, 2000)

(unpublished decision); Igartua De La Rosa v. United States, 32 F.3d 8, 10 n.1 (1st Cir. 1994)

(per curiam); Heinrich ex rel. Heinrich v. Sweet, 49 F. Supp. 2d 27, 43 (D. Mass. 1999); Tobar v.

United States, 2008 U.S. Dist. LEXIS 72622, at *22-23 (S.D. Cal. Sept. 19, 2008) (unpublished).

The Genocide Convention also is not self-executing and does not provide for a private

right of action. The Genocide Convention is not self-executing because, at the time it was

ratified, Congress enacted implementing legislation. See 18 U.S.C. §1091, Genocide Convention

Implementation Act of 1987 (the Proxmire Act). A treaty which requires implementing

legislation is the opposite of self-executing. See Jogi v. Voges, 480 F.3d 822, 830 (7th Cir. 2007)

(citing Restatement (Third) of the Foreign Relations Law of the United States (“Restatement”)

§111(4) (1987)). Further, the Convention does not provide a private right of action because 18

U.S.C. §1092 expressly states that the implementing legislation shall not “be construed as

creating any substantive or procedural right enforceable by law by any party in any proceeding.”

See also Sosa, 542 U.S. at 748 (Scalia, J. concurring) (“[w]e know” the Genocide Convention

does not provide a private right of action because “Congress inscribed [that determination] into

the Genocide Convention Implementation Act of 1987[.]”) (emphasis in original); Gray v.

Cardoza, 2006 U.S. Dist. 43710, at *14-15 (E.D. Cal. June 27, 2006) (unpublished) (ordering

pro se litigant not to include a genocide claim in amended complaint because, based on §1092,

no private cause of action is provided, and citing cases).

The Genocide Convention, ICCPR, and Civilian Persons Convention cannot form the


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basis for a claim for another reason – the United States had not ratified any of those treaties at

the time of the alleged events in 1944. See Sompo Japan Ins., Inc. v. Nippon Cargo Airlines Co.,

522 F.3d 776, 781 (7th Cir. 2008) (finding that, because “the incident giving rise to [plaintiff’s]

claim took place on December 28, 2000,. . .several years before the Montreal Convention

became effective in the United States,” the defendant’s liability was not governed by the

Montreal Convention); Abagninin v. AMVAC Chem. Corp., 545 F.3d 733, 738 (9th Cir. 2008)

(“A treaty not ratified by the United States at the time of the alleged events cannot form a basis

for [a claim]”); Vietnam Ass’n for Victims of Agent Orange v. Dow Chem. Co., 517 F.3d 104,

118 (2d Cir. 2008) (rejecting reliance on treaty because the United States did not ratify it until

after the torts alleged), cert. denied, 129 S. Ct. 1524 (2009). See also Haver v. Yaker, 76 U.S. 32,

35 (1869) (United States is bound by a treaty only after “the Senate, in whom rests the authority

to ratify it, . . .agree[s] to it”); accord Flores, 343 F.3d at 162. The United States did not ratify

the Genocide Convention until 1988, the ICCPR until 1992, and the Civilian Persons Convention

until 1955, and hence was not bound by any of them at the time of the alleged events.

B. This Court Lacks §1331 Jurisdiction Over Plaintiffs’ Customary

International Law Claims

Both categories of Plaintiffs also claim that §1331 jurisdiction exists because they assert

violations of “international law, and federal questions generally.” (Compl. ¶23). Customary

international law (“CIL”) does not, however, provide a private right of action under federal law

absent congressional authority.

In Sosa, the Supreme Court held that the ATS, discussed below with regard to the alien

Plaintiffs’ claims, provides such congressional authority to hear a narrow set of violations of the

laws of nations in U.S. courts. 542 U.S. at 714. By contrast, §1331 does not so provide. As the

Supreme Court said, “[the ATS] was enacted on the congressional understanding that courts


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would exercise jurisdiction by entertaining some common law claims derived from the law of

nations; and we know of no reason to think that federal-question jurisdiction was extended

subject to any comparable congressional assumption.”3 Id. at 731 n.19. For this reason, courts

have consistently rejected arguments that jurisdiction under §1331 exists for CIL claims.

In Serra, for example, the Ninth Circuit expressly rejected the plaintiffs’ argument that

§1331 jurisdiction existed over a CIL claim, holding that CIL “is not a source of judicially

enforceable private rights in the absence of a statute conferring jurisdiction over such claims.”

600 F.3d at 1197. “If any plaintiff could bring any claim alleging a violation of the law of nations

under federal-question jurisdiction, there would be no need for statutes such as the ATS[.]” Id. at

n.7 (citing Sosa, 542 U.S. at 731 n.19). See also In re Xe Serv. Alien Tort Litig., 665 F. Supp. 2d

569, 578 n.7 (E.D. Va. 2009) (“no court has held that claims alleging violations of the law of

nations are cognizable under other grants of subject matter jurisdiction in the absence of ATS

jurisdiction.”); Heinrich, 49 F. Supp. 2d at 42; Fishel, 1998 U.S. Dist. LEXIS 21230, at *24;

Xuncax v. Gramajo, 886 F. Supp. 162, 193-194 (D. Mass. 1995) (declining to rule “definitively”

but finding more persuasive the weight of authority that §1331 jurisdiction does not encompass

“federal-common-law-cum international-law” claims).

Because there is no jurisdiction pursuant to §1331 – the only jurisdictional basis alleged

by the U.S. Plaintiffs – all of the U.S. Plaintiffs’ claims must be dismissed. Further, the alien

Plaintiffs’ claims allegedly arising under §1331 must be dismissed.

We now turn to the alien Plaintiffs’ other alleged jurisdictional ground – the ATS.

II. The Court Lacks ATS Subject-Matter Jurisdiction Over the Alien Plaintiffs’ Claims

The alien Plaintiffs allege that this Court has jurisdiction over their claims pursuant to the

3See generally Curtis A. Bradley, Jack L. Goldsmith, & David H. Moore, Sosa, Customary

International Law, and the Continuing Relevance of Erie, 120 Harv. L. Rev. 869, 911-14 (2007).


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ATS, which reads in its entirety: “The district courts shall have original jurisdiction of any civil

action by an alien for a tort only, committed in violation of the law of nations or a treaty of the

United States.” 28 U.S.C. §1350. Federal jurisdiction exists under the ATS when (a) an alien (b)

sues for a tort (c) committed in violation of a U.S. treaty or the “law of nations.” Sinaltrainal v.

Coca-Cola Co., 578 F.3d 1252, 1261 (11th Cir. 2009); Flores, 343 F.3d at 148. Here, the alien

Plaintiffs allege that OTP Bank committed torts “in violation of the law of nations.” (Compl.

¶24). As to ATS jurisdiction then, the threshold question is whether the torts alleged violate the

law of nations. See Sinaltrainal, 578 F.3d at 1263 n.11; Enahoro v. Abubakar, 408 F.3d 877, 885

(7th Cir. 2005); Filartiga v. Pena-Irala, 630 F.2d 876, 880 (2d Cir. 1980).

In Sosa, the Supreme Court held that the “ATS was meant to underwrite litigation” of

only “a narrow set of common law actions derived from the law of nations.” 542 U.S. at 721; see

also id. at 729. Any claim based on a violation of the law of nations must “rest on a norm of

international character accepted by the civilized world and defined with a specificity comparable

to the features of the 18th-century paradigms” of piracy, infringement on the rights of

ambassadors, and violation of safe conducts. Id. at 725; see also Enahoro, 408 F.3d at 884

(quoting Sosa). That is, “federal courts should not recognize private claims under federal

common law for violations of any international law norm with less definite content and

acceptance among civilized nations than the historical paradigms familiar when §1350 was

enacted.” Sosa, 542 U.S. at 732.

For the level of specificity and acceptance required, Sosa, id. refers to United States v.

Smith, 18 U.S. 153, 163-180 (1820). In Smith, the Supreme Court assessed whether piracy had

been “defined by the law of nations with reasonable certainty,” id. at 160, concluding as follows:

What the law of nations on this subject is, may be ascertained by consulting the works of jurists, writing professedly on public law; or by the general usage and practice of nations;


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or by judicial decisions recognising and enforcing that law. There is scarcely a writer onthe law of nations, who does not allude to piracy as a crime of a settled and determinate nature; . . .all writers concur, in holding, that robbery, or forcible depredations upon the sea, animo furandi, is piracy. The same doctrine is held by all the great writers on maritime law, in terms that admit of no reasonable doubt. The common law, too, recognises and punishes piracy as an offence, not against its own municipal code, but as an offence against the law of nations, (which is part of the common law,) as an offence against the universal law of society, a pirate being deemed an enemy of the human race. . .So that, whether we advert to writers on the common law, or the maritime law, or the law of nations, we shall find that they universally treat of piracy as an offence against the law of nations, and that its true definition by that law is robbery upon the sea. And the

general practice of all nations in punishing all persons, whether natives or foreigners,

who have committed this offence against any persons whatsoever, with whom they are in

amity, is a conclusive proof that the offence is supposed to depend, not upon the

particular provisions of any municipal code, but upon the law of nations, both for its definition and punishment. We have, therefore, no hesitation in declaring, that piracy, by the law of nations, is robbery upon the sea. . . .

Id. at 160-62 (emphasis added). In long footnote 8 of its decision, the Smith Court traced with

“minute accuracy” the respected authorities and “citations. . .believed to be sufficient” to “show

that piracy is defined by the law of nations.” Id. at 163 n.8.

Based on Sosa and Smith, then, there must be “scarcely a writer” who fails to allude to

the acts alleged as crimes of a settled and determinate nature, and it must be the “general practice

of all nations” to punish same. As we show just below, the alien Plaintiffs cannot show that, as

of 1944, “scarcely a writer” failed to allude to any of the three torts alleged herein as crimes of a

settled and determinate nature and that it was “the general practice of all nations” to punish them.

See Vietnam Ass’n for Victims of Agent Orange, 517 F.3d at 123 (holding that, because plaintiffs

failed to ground “their claims arising under international law in a norm that was universally

accepted at the time of the events giving rise to the injuries alleged, the courts are without

jurisdiction under the ATS to consider them.”) (emphasis added); Hereros ex rel. Rirnako v.

Deutsche Afrika-Linien Gmblt & Co., 232 Fed. Appx. 90, 95 (3d Cir. Apr. 10, 2007)

(unpublished) (“to determine whether. . .conduct violated a specific, universal and obligatory

norm of international law, that conduct. . .must be made in view of the norm of international


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conduct at the time.”).

A. “Participation in Genocide by Looting” (Count I)

In Count I, Plaintiffs allege a cause of action for “participation in genocide by looting.”

(Compl. p. 26). An initial question, therefore, is whether genocide in and of itself was a norm in

1944 that would have passed Sosa muster. If genocide itself was not a Sosa norm in 1944, a

fortiori “participation in genocide” by any means could not have been a Sosa norm in 1944.

Genocide only became a violation of the law of nations as defined by Smith and Sosa

well after, and in reaction to World War II. See Kadic v. Karadzic, 70 F.3d 232, 241 (2d Cir.

1995) (“In the aftermath of the atrocities committed during the Second World War, the

condemnation of genocide as contrary to international law quickly achieved broad acceptance by

the community of nations.”) (emphasis added). Specifically, the term “genocide” was not even

coined until 1944, by a man named Raphael Lemkin, who first used the word in the book Axis

Rule in Occupied Europe.4 On November 20, 1945, the International Military Tribunal in

Nuremberg began its trials of 22 Nazi German leaders on charges of crimes against peace, war

crimes, crimes against humanity and conspiracy.5 The Nuremberg tribunal was revolutionary. It

marked the first time in history that an international tribunal served as a post-war mechanism for

bringing national leaders to justice.

In 1947-48, Lemkin was among those who brought “genocide” to the attention of the

United Nations. In 1948, the United Nations enacted the Genocide Convention, and at that time,

approximately 20 nations signed. The Convention entered into force on January 12, 1951. The

4The history in this section is taken from the Holocaust Encyclopedia, U.S. Holocaust Memorial

Museum, Genocide Timeline (last updated 2010). (See Compendium of Other Materials, Att. 2). This Encyclopedia has been cited by other courts as authoritative. See, e.g., Abdullahi v. Pfizer, Inc., 562 F.3d 163, 177-78 (2d Cir. 2009), cert. denied, 78 U.S.L.W. (No. 09-34) (U.S. June 29, 2010).

5The word “genocide” was included in the indictment, but as a descriptive, not legal, term.


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United States did not ratify it until 1988.6 As of 2010, the Convention has 141 nations as parties.

(See Compendium of Other Materials, Att. 3).

As is evident from this history, the required Sosa consensus had not been reached

regarding the crime of genocide in 1944. As of 1944, only one writer (Lemkin) was alluding to

it. This hardly meets the “scarcely a writer” standard of Sosa. Further, although the Convention

was ratified by approximately 20 nations in 1948, more than 100 others did not see fit to ratify it

until later. The United States did not, for example, ratify it until 1988. It was therefore far from

the “general practice of all nations” to punish the crime in 1944 as is required by Smith and Sosa.

Because the norm against genocide had not achieved a Sosa-acceptable consensus as of 1944, it

may not serve as the basis for any of the ATS claims in this case.

Further, even though genocide may now be a Sosa-acceptable norm, “looting” is not

universally recognized as a component of it. The United States has defined “genocide” in 18

U.S.C. §1091(a) as follows:

Whoever. . .with the specific intent to destroy, in whole or in substantial part, a national, ethnic, racial, or religious group as such–

(1) kills members of that group; (2) causes serious bodily injury to members of that group; (3) causes the permanent impairment of the mental faculties of members of the group

through drugs, torture, or similar techniques; (4) subjects the group to conditions of life that are intended to cause the physical

destruction of the group in whole or in part; (5) imposes measures intended to prevent births within the group; or (6) transfers by force children of the group to another group. . . .

Plaintiffs essentially concede that §1091(a)(1), (2), (3), (5), and (6) do not apply because they

allege that the only “pertinent part” of the definition is §1091(a)(4). (Compl. ¶67). The question,

6 Notably, the first conviction for genocide in an international tribunal did not come until

September 2, 1998, when the International Criminal Tribunal for Rwanda (“ICTR”) found Jean-Paul Akayesu guilty of genocide and crimes against humanity for acts he engaged in and oversaw as mayor of a Rwandan town.


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then, is whether it is universally agreed, in a manner that passes Sosa muster, that looting

“subjects [a] group to conditions of life that are intended to cause the physical destruction of the

group in whole or in part[.]” §1091(a)(4).

We submit that it does not. We have found no authority for the proposition that looting is

among the universally agreed “conditions of life” that are intended to “cause” “physical

destruction.” Cf. Wolfgang Schomburg & Ines Peterson, Genuine Consent to Sexual Violence

under International Criminal Law, 101 A.J.I.L. 121, 129 (2007) (arguing that sexual violence

constitutes genocidal condition of life); David Marcus, Famine Crimes in International Law, 97

A.J.I.L. 245, 263 (2003) (noting that intentional use of starvation constitutes genocidal condition

of life by ICTR).

Further, even assuming looting may be a genocidal act, Plaintiffs have failed to plead a

required element of genocide – specific intent. See 18 U.S.C. §1091(a) (defining genocide as

requiring “specific intent”). That is, because Plaintiffs are alleging “participation in genocide,”

they must allege that OTP Bank specifically intended the physical destruction of Jews. See

Abagninin, 545 F.3d at 739-40 (holding that the plaintiff pled only “knowledge of a

consequence” and conclusory allegations and hence failed to state a claim); In re Agent Orange

Prod. Liab. Litig., 373 F. Supp. 2d 7, 115 (E.D.N.Y. 2005), aff’d 517 F.3d 104 (2d Cir. 2008),

cert. denied, 129 S. Ct. 1524 (2009) (holding that “[t]he use of herbicides in Vietnam did not

constitute genocide. . . particularly with the United States’ understanding regarding specific

intent. The United States did not use herbicides in Vietnam with the specific intent to destroy any

group. Nor were those herbicides designed to harm individuals or to starve a whole population

into submission or death. The herbicides were primarily applied to plants in order to protect

troops against ambush, not to destroy a people.”); Doe I v. Qi, 349 F. Supp. 2d 1258, 1308 n.35


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(N.D. Cal. 2004) (collecting cases holding that genocide is a specific-intent crime).

Here, as in Abagninin, Plaintiffs plead at most that OTP Bank had knowledge of a

consequence, not specific intent. Paragraph 68 vaguely alleges that “Defendant banks in 1944

engaged in a conspiracy to complete the genocide the Nazis had begun by looting. . . thus

ensuring the physical destruction of Jewish communities. . .by making it impossible for survivors

and heirs of the Holocaust ever to return to their homes and businesses in Greater Hungary.” No

fact is alleged here (and, as OTP Bank was not established until 1949, there cannot be) – nor

anywhere else in the Complaint – that even remotely suggests that OTP Bank specifically

intended to physically destroy the Jews. There is only a conclusory allegation of engaging in a

“conspiracy to deprive Jewish customers of their financial assets and to withhold information

regarding these assets from descendants of customers.” (Id. ¶20). Under Iqbal, discussed infra,

conclusory allegations need not be credited, and in any event, a conspiracy to deprive Jews of

their assets does not a “physical destruction” make. 18 U.S.C. §1091(a)(4).

For all these reasons, Count I must be dismissed for lack of subject-matter jurisdiction.

B. “Aiding and Abetting Genocide By Looting” (Count II)

We note again that, if, as discussed just above, genocide had not achieved a Sosa-style

consensus in 1944, it cannot serve as the basis for an “aiding and abetting” cause of action as

alleged in Count II. Assuming there was a Sosa genocide norm in 1944, the question as to Count

II is whether, as Sosa noted, “international law extends the scope of liability for a violation of a

given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation

or individual.” 542 U.S. at 733 n.20.

We submit that aiding and abetting liability was not recognized as a CIL norm in 1944.

At Nuremberg, it was unclear whether aiding and abetting liability existed under international


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criminal law, to say nothing of civil law. There were only a very few prosecutions for aiding and

abetting at Nuremberg, and those convictions may actually have rested on some other theory. See

Michael D. Ramsey, International Law Limits on Investor Liability in Human Rights Litigation,

50 Harv. Int’l L.J. 271, 307 (2009) (citing and quoting “leading” international criminal law

treatise by Professor Antonio Cassese for proposition that, at Nuremberg trials, “aiding and

abetting was not clearly defined as distinct from that of ‘participation in a common purpose’”

and noting that “Cassese seems to acknowledge that the Nazi-era cases themselves fall short of

providing clear guidance on the question of indirect liability.”) (internal quotations omitted). It

certainly was not the general practice of all nations to punish aiders and abettors in 1944 and thus

aiding and abetting would not have passed the muster of Sosa at that time.

If aiding and abetting ever was firmly established in a manner that passes Sosa muster,

such establishment did not occur until the 1990s, based on holdings by the International Criminal

Tribunal for the former Yugoslavia (“ICTY”) and ICTR. Indeed, to the extent certain courts have

held that the law of nations provides for aiding and abetting liability, those courts have either

relied on these ICTY and ICTR cases, see Presbyterian Church of Sudan v. Talisman Energy,

Inc., 582 F.3d 244, 259 (2d Cir. 2009), petition for cert. filed, 78 U.S.L.W. 3643 (U.S. Apr. 15,

2010); Khulumani v. Barclay Nat’l Bank, Ltd., 504 F.3d 254, 282 (2d Cir. 2007) (per curiam)

(Katzmann, J., concurring), or failed to support their holding, see Cabello v. Fernandez-Larios,

402 F.3d 1148, 1158-60 (11th Cir. 2005).

Neither Presbyterian Church nor Cabello addressed international law in 1944, for neither

had cause to do so. In Presbyterian Church, 582 F.3d at 258,7 the Second Circuit adopted Judge

Katzmann’s analysis of the law of nations in the Khulumani case, which addressed torts

7Presbyterian Church addressed human rights abuses allegedly committed by the Government of

the Sudan in the 1990s.


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allegedly committed in the 1980s apartheid-era in South Africa. Judge Katzmann did not focus

on pre-1944 law, but on post-World War II law, in particular the ICTY and ICTR statutes and

rulings from the 1990s. See Khulumani, 504 F.3d at 270-77 (Katzmann, J., concurring). And, in

Cabello, 402 F.3d 1148, the court addressed a 1973 execution in Chile, but did not discuss the

law of nations at any time, let alone in 1944.8 For these reasons, there is no aiding and abetting

liability norm under Sosa at the time of the alleged events.

Even if aiding and abetting liability were recognized under international law, it should

not be recognized as a cause of action under the ATS. In Central Bank of Denver, N.A. v. First

Interstate Bank of Denver, N.A., 511 U.S. 164 (1994), the Supreme Court sharply cautioned

against recognizing aiding and abetting liability where a statute fails to provide for it expressly.

Id. at 174, 177-78. In its one-sentence text, the ATS fails to so provide.

Although the Seventh Circuit has not yet ruled on aiding and abetting liability under the

ATS, it has recognized the Central Bank rule in other contexts. In Boim v. Quranic Literacy

Institute, 291 F.3d 1000 (7th Cir. 2002), for example, the Seventh Circuit held that, based on the

structure of 18 U.S.C. §2333 – which provides an express cause of action against terrorists –

aiders and abettors could be held liable. The court rejected the defendant’s argument that Central

Bank required a ruling that §2333 did not permit aiding and abetting liability, but distinguished

Central Bank on several grounds: (1) unlike the securities statute which provided only an implied

cause of action, §2333 provided an express cause of action; (2) Congress expressed an intent for

8In Cabello, the Eleventh Circuit analyzed only the legislative history of the TVPA – not the ATS

– and cited to other court decisions which supposedly had found in favor of aiding and abetting liability under the ATS. 402 F.3d at 1157-58. We say “supposedly” because neither of the relied-upon decisions actually so found. In Hilao v. Estate of Marcos, 103 F.3d 767, 776-77 (9th Cir. 1996), the court addressed command responsibility, and in Carmichael v. United Technologies Corp., 835 F.2d 109, 113-14 (5th Cir. 1988), the court assumed without deciding that the ATS provides jurisdiction over those who aid and abet.


–16–

§2333 to import general tort law principles, which include aiding and abetting liability; (3)

Congress expressed an intent for §2333’s civil liability to extend as far as criminal liability,

which extends to aiders and abettors; (4) failing to extend §2333 liability to aiders and abettors is

“contrary to Congress’ stated purpose of cutting off the flow of money to terrorists at every point

along the chain of causation.” Boim, 291 F.3d at 1019.

None of the distinguishing factors found in Boim are present here, hence the Central

Bank rule should control. First, the Supreme Court has held that the ATS provides no cause of

action, let alone an implied one. Sosa, 542 U.S. at 714. Second, the Supreme Court has held that

Congress expressed an intent in the ATS to import international tort law, id. at 733 n.20, not U.S.

concepts of tort, and, as discussed supra, there is no evidence that, in 1944, CIL included aiding

and abetting liability. Third, there is no evidence that Congress intended the ATS – which uses

the word “tort” not “crime – to be co-extensive with criminal liability, even if there may be some

overlap. See, e.g., id. at 721; Sarei v. Rio Tinto, PLC, 550 F.3d 822, 831 (9th Cir. 2008);

Cisneros v. Aragon, 485 F.3d 1226, 1230 (10th Cir. 2007). And, finally, fourth, failing to extend

the ATS to aiders and abettors is not contrary to any “stated purpose” of Congress, for there were

no statements to that effect when the ATS was passed. See Sosa, 542 U.S. at 712 (quoting Judge

Friendly: “This old but little used section is a kind of legal Lohengrin. . .no one seems to know

whence it came.”); see also id. at 718-19 (noting lack of legislative history of ATS).

There are also policy reasons against finding aiding and abetting liability under the ATS.

See Sosa, 542 U.S. 727 (“the possible collateral consequences of making international rules

privately actionable argue for judicial caution.”). To our knowledge, no other nation recognizes

this sort of civil liability for international wrongs in national courts. Thus, such claims intrude

upon foreign relations by creating friction with foreign nations, particularly where (as here) the


–17–

claims are made against non-U.S. entities for alleged wrongs occurring outside the United States

by plaintiffs who are not U.S. citizens. Further, such liability may open the floodgates to such

litigation in the United States. Indeed, compared to the 200 years since the enactment of the ATS

when the ATS was little used, the 1990s and 2000s has witnessed a rash of ATS litigation. See

id. at 732-33 (“the determination [of] whether a norm is sufficiently definite to support a cause of

action should (and, indeed, inevitably must) involve an element of judgment about the practical

consequences of making that cause available to litigants in the federal courts.”); Taveras v.

Taveraz, 477 F.3d 767, 782 (6th Cir. 2007) (refusing to allow ATS “cause of action over parental

child abduction where a parent immigrates with her children to the United States” based on

“fear” that such a decision would “open the floodgates to a mass of custody-related disputes by

aliens”).

We note that the Seventh Circuit later relied on Central Bank to distinguish Boim,

explaining: “[n]ormally federal courts refrain from creating secondary liability that is not

specified by statute.” Doe v. GTE Corp., 347 F.3d 655, 658-59 (7th Cir. 2003) (holding that,

because “nothing in the statute condemns assistants,” web hosts could not be held liable for

aiding and abetting violations of 18 U.S.C. §§2511 and 2520 for intercepting and disclosing oral

communications).

Further, even assuming this Court were to find that aiding and abetting liability existed in

a Sosa-acceptable form in 1944, the alien Plaintiffs have not pled any allegations to meet the

high standard for aiding and abetting liability. In Presbyterian Church, the Second Circuit held:

applying international law, we hold that the mens rea standard for aiding and abetting liability in ATS actions is purpose rather than knowledge alone. Even if there is a sufficient international consensus for imposing liability on individuals who purposefully

aid and abet a violation of international law,. . .no such consensus exists for imposing liability on individuals who knowingly (but not purposefully) aid and abet a violation of international law.


–18–

582 F.3d at 259 (emphasis in original, internal citations omitted). That is, the aider and abettor

must share the purpose of the primary wrongdoer, which in this case would be the Nazis.

Plaintiffs in this case plead no allegations of purposeful intent by OTP Bank. At most,

plaintiffs vaguely and conclusorily allege that “the banks”:

(a) acted in “collaboration” with Hungary “in the implementation of the decrees of April 1944 by serving as intermediaries between the Jews and the Hungarian regime” by “follow[ing] the instructions of the Hungarian government decrees,” (Compl. ¶13);

(b) “engaged in a nation-wide conspiracy to deprive Jewish customers of their financial assets,” (Id. ¶20); (see also id. ¶68);

(c) “serv[ed] as the economic arm of the Hungarian Holocaust” by aiding and abetting in “the identification, designation, and expropriation of Jewish bank accounts, stocks, properties mortgaged to said banks, contents of vaults, jewelry, works of art, gold, stock certificates and bonds.” (Id. ¶57); and

(d) refused to return the looted assets and lied to plaintiffs as to the whereabouts of said assets in order to profit from same. (Id. ¶69).

None of these allegations provide any factual content which would support a finding of

purposeful intent to aid and abet genocide.9 There is no allegation that OTP Bank “was a partisan

in regional, religious, or ethnic hostilities” or that OTP Bank “acted with the purpose to assist”

genocide. Presbyterian Church, 582 F.3d at 263; see also Abecassis v. Wyatt, 2010 U.S. Dist.

LEXIS 32731, at *77-93 (S.D. Tex. Mar. 31, 2010) (unpublished) (applying Iqbal, Sosa, and

Presbyterian Church and finding that plaintiffs failed to state a claim for a violation of the law of

nations due to the failure to plead purposeful intent). There is also no allegation that would tend

to show that, even if partisan, OTP Bank in any way purposefully intended acts to aid in

committing genocide at a time when the bank was not even in existence.

9Paragraph 64(d), which conclusorily states that one of the “questions of law and fact common to

the class” is whether “Defendant banks or their predecessors willfully seized and converted to their own use the plaintiffs’ assets,” does not state allegations of fact as to OTP Bank but rather pleads only questions allegedly common to the class.


–19–

Plaintiffs also do not plead – as is required – that OTP Bank provided “practical

assistance to the principal which has a substantial effect on the perpetration of the crime.”

Presbyterian Church, 582 F.3d at 259. See also Ntsebeza v. Daimler AG, 617 F. Supp. 2d 228,

257 (S.D.N.Y. 2009) (same). As discussed supra, Plaintiffs allege (conclusorily) that (the then-

non-existent) OTP Bank looted assets, but do not allege any factual content detailing how the

looting of assets practically assisted the Nazis in their efforts to physically destroy the Jews.

Even if looting were “practical assistance” in genocide, Plaintiffs fail to allege any factual

content to explain how such looting had a “substantial effect” on the Nazis’ perpetration of the

crime. “[P]articipation in a crime is substantial if ‘the criminal act most probably would not have

occurred in the same way had not someone acted in the role that the accused in fact assumed.’”

Liu Bo Shan v. China Constr. Bank Corp., 2010 U.S. Dist. LEXIS 63938, at *21 (S.D.N.Y. June

28, 2010) (unpublished) (plaintiff’s aiding and abetting claim failed because no allegation of

practical assistance with substantial effect). Nothing in Plaintiffs’ allegations even remotely

suggests that the Nazis’ genocidal acts would not have occurred in the same way had OTP Bank

not allegedly looted assets.

To the extent the Complaint alleges even a general (as opposed to specific) intent (which

it does not), conclusory allegations are not assumed to be true, even at the motion to dismiss

stage. Iqbal, 129 S. Ct. at 1951 (discussed infra). Thus, the conclusory allegations discussed

supra as well as the conclusory allegation that “all the banks in Hungary in 1944. . .were

conclusively presumed by the law of Hungary to know and be able to distinguish Jewish rights in

property from those of non-Jewish citizens” (Compl. ¶14) need not be credited. In any event, this

allegation at best states a claim for knowledge, not purposeful intent, and hence is insufficient.

See Sinaltrainal, 578 F.3d at 1268 (refusing to infer truth of conclusory allegations and holding


–20–

that plaintiffs failed to plead facts which would state a plausible claim).

C. “Unjust Enrichment” (Count III)

The Seventh Circuit and at least three other Circuits have held that commercial torts such

as unjust enrichment (Count III) are not considered CIL violations. One of the first such cases is

Abiodun v. Martin Oil Service, 475 F. 2d 142 (7th Cir. 1973). There, the Seventh Circuit

considered whether plaintiffs could sue Martin Oil under the ATS for allegedly committing fraud

by promising plaintiffs they would be trained in the United States as oil executives instead of as

service station operators. The court held that fraud and deceit did not amount to violations of the

“law of nations” because they did not violate “those standards, rules or customs (a) affecting the

relationship between states or between an individual and a foreign state, and (b) used by those

states for their common good and/or in dealings inter se.” Id. at 145 (citations omitted). As

explained in Filartiga, later cited with approval in Sosa, 542 U.S. at 73, “[i]t is only where the

nations of the world have demonstrated that the wrong is of mutual, and not merely several,

concern, by means of express international accords, that a wrong generally recognized becomes

an international law violation within the meaning of the statute.” 630 F.2d at 888. Because fraud

and deceit were only the several (not mutual) concern of nations, they did not rise to the level of

violations of the law of nations.

Two years after Abiodun, in IIT v. Vencap, Ltd., 519 F.2d 1001 (2d Cir. 1975), the

Second Circuit adopted the same definition of the law of nations in rejecting claims of fraud,

conversion, and corporate waste as violations of the law of nations. There, Judge Friendly held

that, although “every civilized nation doubtless has [some form of the Eighth Commandment

“Thou shalt not steal”]. . . as a part of its legal system,” stealing is not a wrong of mutual, as

opposed to several, concern of nations. Id. at 1015. See also Filartiga, 630 F.2d at 888 (citing IIT


–21–

with approval); Tamari v. Bache & Co., 730 F.2d 1103, 1104 n.1 (7th Cir. 1984) (citing IIT with

approval and noting that the ATS “has been narrowly construed and would not supply a basis for

federal jurisdiction over the common law [fraud] claim.”).

Cohen v. Hartman, 634 F.2d 318 (5th Cir. Unit B 1981) (per curiam) also held that a

complaint alleging tortious conversion “is in no way based on a violation of the ‘law of

nations.’” Id. at 319. That court noted that, “while every nation may have laws penalizing the

tortious conversion of the property of another person, the rule against such conduct is no part of

the ‘law of nations’ and a cause of action based on violation of the rule does not satisfy the

jurisdictional requirements of 28 U.S.C.A. §1350.” Id. at 320. See also Sinaltrainal, 578 F.3d at

1261 (adopting Cohen standard in post-Sosa case and holding that “[o]ffenses against the law of

nations principally involved the rights or interests of whole states or nations, and did not

necessarily involve the private interests of individuals seeking relief in court.”); Beanal v.

Freeport-McMoran, Inc., 197 F.3d 161, 166-67 (5th Cir. 1999) (holding that environmental

abuses were not of mutual concern of nations and hence did not rise to the level of violations

against the law of nations).

And, in Hamid v. Pricewaterhouse, 51 F.3d 1411 (9th Cir. 1995), the Ninth Circuit

followed IIT and held that allegations of fraud, breach of fiduciary duty, misappropriation of

funds, looting of a bank by insiders, and misrepresentations about the bank’s financial condition,

were not violations of customary international law, but “garden variety violations of statutes,

banking regulations, and common law.” Id. at 1418. Because the plaintiffs’ claims did not

amount to violations of the laws of nations, they could not be considered for purposes of ATS

jurisdiction. Id.

All four of these decisions – Abiodun, IIT, Cohen, and Hamid – preceded Sosa. If these


–22–

courts did not find that such torts rose to the level of the law of nations before Sosa, they surely

would find those same torts did not rise to that level after Sosa. Sosa raised, not lowered, the bar

for what is required to find a norm in violation of the law of nations. Norms now must comport

with the standard set out in Smith, 18 U.S. at 163-180, which, as we have stated, requires

“scarcely a writer” to disagree with it and a “general practice of all nations” to punish it.

In Arndt v. UBS AG, 342 F. Supp. 2d 132 (E.D.N.Y. 2004), issued shortly after Sosa, the

district court continued to rely upon Abiodun and IIT for the notion that “garden variety

commercial claims, including fraud, unjust enrichment, conversion and misrepresentation” id. at

139 (emphasis added), do not rise to the level of violations of the law of nations. In that case –

which bears striking similarities to this one – plaintiffs sued UBS for an accounting, imposition

of a constructive trust, fraud, misrepresentation, spoliation of evidence, and unjust enrichment

alleging that UBS, as successor-in-interest to I.G. Farben, “a German company which profited

during the Nazi regime, failed to turn over assets which rightfully belong to Holocaust victims.”

Id. at 134. The court concluded, id. at 141:

The claims asserted . . .– including fraud, conversion and misrepresentation – may be legal theories that can be advanced in many if not all States, but these are not “wrongs” expressed by mutual concern and reflected in “international accords.” Flores, 343 F.3d at 155-56 (citing IIT). Because of this essential pleading deficiency, Plaintiffs do not state a claim for relief under the [ATS] within the subject matter jurisdiction of this Court.

Given the binding precedent of Abiodun as well as the persuasive authorities of IIT,

Cohen, Hamid, and Arndt, this Court should find that unjust enrichment (Count III) fails to rise

to the level of a Sosa violation of the law of nations,10 and accordingly must be dismissed for

lack of subject-matter jurisdiction.

10Article 38 of the Statute of the International Court of Justice, cited by the Plaintiffs (Compl.

¶75), is not to the contrary. It says nothing about unjust enrichment. (See Compendium of Other Materials Att. 4).


–23–

In any event, Plaintiffs’ unjust enrichment allegations are conclusory and need not be

accepted as true under Iqbal. Plaintiffs have pled no factual content that Plaintiffs deposited

anything of value with OTP Bank or a predecessor, that OTP Bank retained it by refusing

Plaintiffs’ demands for its return, or that OTP Bank benefitted from assets that rightfully belong

to Plaintiffs. Cf. Association Benefit Servs., Inc. v. Caremark RX, Inc., 493 F.3d 841, 855 (7th

Cir. 2007) (elements of unjust enrichment under Illinois law: (a) defendant unjustly retained a

benefit to plaintiff’s detriment and (b) the retention of that benefit violates fundamental

principles of justice, equity, and good conscience). They have alleged only conclusorily that

“Jews” – though not specifically these Plaintiffs – were “ordered to take their personal property

and valuables” to the nearest bank (Compl. ¶21) – though not specifically to any predecessor of

OTP Bank or OTP Bank itself, and that “Defendants have been unjustly enriched to the

detriment of the plaintiffs as a result of their wrongful confiscation of plaintiffs’ bank accounts,

titles to real estate, mortgage and land contract equity, and contents of safe deposit boxes.”

(Compl. ¶76). These allegations do not show the plausibility of misconduct by OTP Bank.

For all these reasons, Plaintiffs’ unjust enrichment claim (Count III) must be dismissed.

III. The Case Against OTP Bank Must Be Dismissed For Lack of Personal Jurisdiction

The Supreme Court has cautioned that “[g]reat care and reserve should be exercised

when extending our notions of personal jurisdiction into the international field.” Asahi Metal

Indus. Co. v. Superior Ct., 480 U.S. 102, 115 (1987) (internal citations and quotations omitted).

This Court, too, should exercise great care and reserve in determining whether OTP Bank, a

foreign bank with no contacts with the United States (save one, described below), is subject to

the personal jurisdiction of this Court. As we show just below, OTP Bank is not subject to

personal jurisdiction in any court in the United States.


–24–

A. No Personal Jurisdiction Due to Lack of Illinois Contacts

In a federal question case, where no federal statute authorizes nationwide service of

process, this Court has personal jurisdiction to the extent permitted by the law of the state in

which it sits. See Janmark, Inc. v. Reidy & Dreamkeeper, Inc., 132 F.3d 1200, 1201 (7th Cir.

1997). Illinois law allows personal jurisdiction over a defendant to the same extent permitted by

the U.S. Constitution. See 735 ILCS 5/2-209(c). Plaintiffs must therefore at least show that OTP

Bank has “purposefully established ‘minimum contacts’ in [Illinois]” such that it is “not

unreasonable to require [the bank] to submit to the burdens of litigation in [Illinois].” Burger

King Corp. v. Rudzewicz, 471 U.S. 462, 474-76 (1985).

The Complaint identifies no contacts between OTP Bank (a non-resident) and Illinois,

and there are none. (See Declaration of Zoltán Dencs, OTP Bank Motion to Dismiss, Exhibit 1

(“Dencs Decl.”) ¶19). With OTP Bank lacking any contacts with Illinois, the State’s long-arm

statute 735 ILCS 5/2-209(a) is unavailable as a basis for personal jurisdiction.

B. No Personal Jurisdiction Due to Lack of Sufficient U.S. Contacts

Plaintiffs may argue that personal jurisdiction exists over OTP Bank pursuant to Fed. R.

Civ. P. 4(k)(2), which provides in full as follows: “For a claim that arises under federal law,

serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant

if: (A) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and

(B) exercising jurisdiction is consistent with the United States Constitution and laws.” As we

show just below, although Plaintiffs purport to allege claims arising solely under federal law and

OTP Bank is not subject to jurisdiction in any state court of general jurisdiction, Plaintiffs cannot

rely on this rule because exercising personal jurisdiction over OTP Bank is inconsistent with the

U.S. Constitution. Fed. R. Civ. P. 4(k)(2)(B).


–25–

Rule 4(k)(2) was enacted to address instances where a defendant has “ample contacts

with the nation as a whole, but whose contacts are so scattered among states that none of them

would have jurisdiction.” ISI Int’l, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548, 551 (7th

Cir. 2001). Plaintiffs bear the burden of establishing the prerequisites for Rule 4(k)(2) national-

contacts service. See United States v. Swiss Am. Bank, Ltd., 191 F.3d 30, 38-42 (1st Cir. 1999)

(discussing allocation of burden of proof in context of predecessor version of Rule 4(k)(2)).

1. No Personal Jurisdiction in Any State Court of General Jurisdiction

OTP Bank does not have “ample contacts” with the United States as a whole. Its only

contacts with the United States are (a) correspondent bank accounts with the Bank of New York

Mellon, Deutsche Bank Trust Company of the Americas, JPMorgan Chase Bank, N.A., Bank of

America N.A. (N.Y. Branch), and Standard Chartered Bank (N.Y. Branch), all of which are in

New York, and which were established solely to facilitate international banking transactions,

(Dencs Decl. ¶14); and (b) an agent for service of process in New York to comply with the USA

Patriot Act11 (Dencs Decl. ¶21).12 As shown just below, these contacts are insufficient to subject

OTP Bank to personal jurisdiction in New York or in any other jurisdiction within the United

States.

a. Correspondent Bank Account

Merely maintaining a correspondent bank account with a financial institution in New

York is not, by itself, sufficient to subject a foreign defendant to personal jurisdiction under the

“doing business” or “transacting business” prongs of New York’s long-arm statute. N.Y. CPLR

11Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and

Obstruct Terrorism Act of 2001 (“USA Patriot Act”), Pub. L. No. 107-56, 115 Stat. 272 (2001).

12OTP Bank has no office, branch, affiliate, subsidiary, address, personnel, or phone number in the United States. (See Dencs Decl. ¶¶ 8-13).


–26–

§§301, 302(a)(1). See Licci v. Am. Express Bank Ltd., 2010 U.S. Dist. LEXIS 32873, at *11-12

(S.D.N.Y. Mar. 31, 2010) (unpublished); Semi Conductor Materials, Inc. v. Citibank Int’l PLC,

969 F. Supp. 243, 246 (S.D.N.Y. 1997) (“Courts have repeatedly found that a correspondent

bank relationship between a foreign bank and a New York financial institution does not provide

sufficient grounds to exercise personal jurisdiction over a foreign bank.”) (collecting cases). “To

be sufficient to confer jurisdiction, the use of the correspondent banking relationship. . .must

constitute the ‘very root’ of the claims against the foreign bank.” Licci, 2010 U.S. Dist. LEXIS

32873, at *13 (citations omitted).

Here, the correspondent banking relationship is not even mentioned in the Complaint, so

it certainly does not constitute the “very root” of the claims alleged. In fact, OTP Bank’s

correspondent bank accounts are not used for any purpose even remotely related to the conduct

alleged. As OTP Bank’s only U.S. contact, these accounts cannot provide a basis for personal

jurisdiction. See Tamam v. Fransabank SAL, 677 F. Supp. 2d 720, 727 (S.D.N.Y. 2010) (“courts

in this district have routinely held that merely maintaining a New York correspondent bank

account is insufficient to subject a foreign bank to personal jurisdiction”); Daventree Ltd. v.

Republic of Azer., 349 F. Supp. 2d 736, 762 (S.D.N.Y. 2004) (Swiss bank’s New York

correspondent account through which racketeering monies were transferred held insufficient for

personal jurisdiction under N.Y. CPLR §302(a)(1) on RICO and ATS claims); International

Hous. Ltd. v. Rafidain Bank Iraq, 712 F. Supp. 1112, 1118-19 (S.D.N.Y. 1989), rev’d on other

grounds, 893 F.2d 8 (2d Cir. 1989) (“Courts have generally held correspondent bank accounts

alone to be insufficient to confer personal jurisdiction over a defendant.”); Leema Enter., Inc. v.

Willi, 575 F. Supp. 1533, 1537 (S.D.N.Y. 1983) (“mere maintenance of correspondent bank

accounts to facilitate international financial transactions or money transfers . . . is not enough to


–27–

confer this court with personal jurisdiction over the defendant, especially [where] . . . the

accounts are unrelated to the fraud alleged.”).

b. Agent for Service of Process

OTP Bank has named an agent for service of process in New York pursuant to the USA

Patriot Act, as described below. The naming of this agent for service of process also is not

sufficient to confer personal jurisdiction over OTP Bank in New York.

To prevent money laundering, the USA Patriot Act authorizes the Secretary of the

Treasury or the Attorney General to issue a summons or subpoena “to any foreign bank that

maintains a correspondent account in the United States . . ..” 31 U.S.C. §5318(k)(3)(A)(i). The

summons or subpoena may be served on a foreign bank in the United States “if the foreign bank

has a representative in the United States . . ..” §5318(k)(3)(A)(ii). OTP Bank’s correspondent

banks must “maintain records in the United States identifying . . . the name and address of a

person who resides in the United States and is authorized to accept service of legal process for

records regarding the correspondent account.” §5318(k)(3)(B)(i). Under related Treasury

Department regulations, a foreign bank’s correspondent bank is required to maintain records

identifying “the name and street address of a person who resides in the United States and is

authorized, and has agreed to be an agent to accept service of legal process for records regarding

each such account.” 31 C.F.R. §103.177(a)(2). The correspondent bank is deemed to be in

compliance with this requirement if, at least once every three years, it obtains a certification from

the foreign bank in the form prescribed in the relevant regulations. Id. §103.177(b) & Appx. A to

Subpt. I of Pt. 103.

In compliance with these laws and regulations, OTP Bank has named an agent in New

York with authority only “to accept service of legal process for records regarding each such


–28–

account.” Id. §103.177(a)(2). (See Dencs Decl. ¶20-21). OTP Bank also has given the required

certification described in §103.177(b) to its correspondent banks. The certification names CT

Corporation in New York City as OTP Bank’s agent “authorized to accept service of legal

process on behalf of [OTP Bank] from the Secretary of the Treasury o[r] the Attorney General of

the United States pursuant to Section 5318(k) of title 31, United States Code.” Id.

The USA Patriot Act and the related Treasury Department regulations make it clear that

the requirement of naming an agent for service of process is strictly to permit the Secretary of the

Treasury and the Attorney General to obtain anti-money laundering disclosures from foreign

banks and nothing more. This interpretation is bolstered by the absence of a private right of

action under the USA Patriot Act. See, e.g., Hanninen v. Fedoravitch, 583 F. Supp. 2d 322, 326-

27 (D. Conn. 2008). That is, if private plaintiffs have no right of action under the USA Patriot

Act, then the statute’s requirement cannot reasonably be interpreted as conferring personal

jurisdiction over foreign banks in non-USA Patriot Act litigation.

For all these reasons, OTP Bank’s compliance with the USA Patriot Act by naming an

agent for service of process cannot serve as a basis for personal jurisdiction over OTP Bank in

New York.13

2. Exercising Jurisdiction is Inconsistent with the U.S. Constitution

In addition, subjecting OTP Bank to personal jurisdiction in a U.S. court does not

comport with the U.S. Constitution. The question in a personal jurisdiction constitutional

13The compliance-based reason for naming an agent to receive process served by federal

authorities under the USA Patriot Act is distinguishable from the jurisdiction-conferring effect of registering with the N.Y. Department of State to conduct business there. The latter requires either designating the Secretary of State as an agent for service of process or naming a registered agent. See

N.Y. Bus. Corp. Law §1304 (2010). OTP Bank has not registered with the N.Y. Secretary of State under §1304 to conduct business in New York, (Dencs Decl. ¶15), and has not named a registered agent for that purpose (id. at ¶¶20-21).


–29–

analysis is whether the defendant’s conduct and connection with the forum are such that it should

reasonably anticipate being haled into court there. See Central States, S.E. & S.W. Areas Pension

Fund v. Reimer Express World Corp., 230 F.3d 934, 942-43 (7th Cir. 2000). “To establish such a

reasonable anticipation the defendant must have purposefully availed itself of the privilege of

conducting activities in the forum, invoking the benefits and protections of its laws.” Id. at 943.

“Once minimum contacts have been shown to exist, a court must examine other factors, such as

the forum’s interest in adjudicating the dispute and the burden on the defendant, to determine

whether the exercise of personal jurisdiction satisfies traditional notions of fair play and

substantial justice.” Id.

Here, OTP Bank has no reason to anticipate that it might be haled into a U.S. court. It has

not “purposefully availed” itself of the privilege of conducting activities here, nor has it invoked

the benefits and protections of U.S. laws. OTP Bank does not conduct business in New York or

elsewhere in the United States, through its New York correspondent bank account or otherwise.

See United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 619-621 (1st Cir. 2001) (no general

jurisdiction over foreign bank, even with correspondent bank account in the United States);

National Sun Indus. Inc. v. Dakahlia Comm. Bank, 1997 U.S. App. LEXIS 9662, at *3 (2d Cir.

May 2, 1997) (unpublished) (“The maintenance of an active correspondent bank account in New

York does not, without more, demonstrate a foreign corporation’s ‘presence’ in New York.”).

Further, USA Patriot Act certifications (including the designation of an agent for service

of process) are insufficient evidence of “availment.” As one court said:

If these PATRIOT Act certifications were sufficient minimum contacts to satisfy due process, every foreign bank that opens a correspondent account in the United States would be subject to jurisdiction. Clearly, that is not the case. Moreover, the fact that these PATRIOT Act certifications require foreign banks to designate a proxy to accept service of process by the U.S. government does not indicate that Defendants should reasonably foresee being haled into a U.S. court, especially not


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by Israeli citizens injured by Lebanese terrorists in Israel. . . . As the correspondent accounts are the sum total of Defendants’ alleged contacts with the United States, Plaintiffs have not established minimum contacts with the United States to make the exercise of specific jurisdiction constitutionally permissible.

Tamam, 677 F. Supp. 2d at 732 (citation omitted).

Assuming arguendo that the correspondent bank account and designation of a USA

Patriot Act agent could somehow subject OTP Bank to jurisdiction in New York, Plaintiffs still

cannot benefit from Rule 4(k)(2) because OTP Bank would then be subject to jurisdiction in

New York. Rule 4(k)(2)(A) requires that the defendant not be subject to jurisdiction in any state

court of general jurisdiction. See Haemoscope Corp. v. Pentapharm AG, 2002 U.S. Dist. LEXIS

23387, at *29 (N.D. Ill. Dec. 6, 2002) (unpublished) (holding that, if single contact were

sufficient to satisfy the minimum contacts requirement, then defendant would be subject to

personal jurisdiction in Massachusetts, and Rule 4(k)(2) would not help the plaintiff; and, if the

single contact did not satisfy the minimum contacts requirement, then it would violate the Fifth

Amendment to subject defendant to personal jurisdiction).

For all these reasons, the Complaint must be dismissed against OTP Bank for lack of

personal jurisdiction.

IV. The Claims of All Plaintiffs Are Precluded by Executive Agreement and Treaty

A. The U.S. Plaintiffs’ Claims Are Precluded by the 1973 Claims Settlement

Agreement

It is well-established that the President has the power to conclusively settle by executive

agreement the claims of its citizens against foreign states and the nationals of foreign states. See

American Ins. Ass’n v. Garamendi, 539 U.S. 396, 415 (2003); United States v. Belmont, 301 U.S.

324, 330-331 (1937); In re World War II Era Japanese Forced Labor Litig., 114 F. Supp. 2d

939, 948 (N.D. Cal. 2000).

Article 1(1) of the Agreement between the Government of the United States of America


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and the Government of the Hungarian People’s Republic Regarding the Settlement of Claims, 24

U.S.T. 522, TIAS 7569, which entered into force on March 6, 1973 (“1973 Claims Settlement

Agreement”), states that Hungary agrees to pay to the United States a lump sum of $18,900,000

“in full and final settlement and in discharge of all claims of the Government and nationals of the

United States against the Government and nationals of the Hungarian People’s Republic which

are described in this Agreement.” Article 2 provides in relevant part that the

claims which are referred to in Article 1 and which are being settled and discharged by this Agreement are claims of nationals ... of the United States for (1) property, rights and interests affected by Hungarian measures of nationalization, compulsory liquidation, expropriation, or other taking on or before the date of this Agreement. . .

Article 3(1) of the Agreement defines “nationals of the United States” to mean “a natural

person who is a citizen of the United States, or who owes permanent allegiance to the United

States.” The term “national of the Hungarian People’s Republic” is defined to include “a juridical

person incorporated or constituted under Hungarian law.” Art. 3(2). OTP Bank is a juridical

person incorporated and constituted under Hungarian law, (Dencs Decl. ¶6), and hence is

covered by this Agreement. Given that the Agreement covers the claims of all “nationals of the

United States,” persons alleged to be U.S. nationals with claims against OTP Bank (see Compl.,

¶¶36-37) are covered by the Agreement.

Pursuant to Article 6(1) of the Agreement, full payment of the $18.9 million “shall

discharge the Government of the Hungarian People’s Republic and Hungarian nationals from

their obligations to the Government of the United States and its nationals in respect of all claims

referred to in Article 2 of this Agreement. Upon their discharge, the Government of the United

States will consider as finally settled all claims for which compensation is provided under Article

1, whether or not they have been brought to the attention of the Government of the Hungarian

People’s Republic.”


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The Foreign Claims Settlement Commission (“FCSC”) is an independent agency within

the U.S. Department of Justice and handles claims of U.S. nationals against foreign governments,

including the claims of U.S. nationals pursuant to the 1973 Claims Settlement Agreement via the

Hungarian Claims Fund. According to the FCSC’s Annual Report of 2009 (Compendium of

Other Materials, Att. 5, at 26), Hungary paid the lump sum of $18.9 million in full as of June 9,

1980. Hungary therefore has satisfied the requirements of the Agreement, and as such, fully

discharged its duties under same. Pursuant to that Agreement, the FCSC accepted 365 claims,

and rejected 1,159 claims. (See id. at 47). This Hungarian Claims Program was completed on

May 16, 1977. If distribution has not been made to the U.S. Plaintiffs herein, it is the

responsibility of the United States, not of OTP Bank. Article 5 of the Settlement Agreement

expressly states: “The distribution of the lump sum referred to in paragraph (1) of Article 1 of

this Agreement falls within the exclusive competence of the Government of the United States in

accordance with its legislation[.]”

Notably, other courts have found the ATS claims of World War II era victims to be

precluded by treaty. See, e.g., In re World War II Era Japanese Forced Labor Litig., 114 F.

Supp. 2d at 942, 945 (dismissing ATS claims of plaintiffs who were U.S. or Allied soldiers

because 1951 Treaty of Peace with Japan – which provided for waiver of “all” reparations and

“other claims” of the “nationals” of Allied powers “arising out of any actions taken by Japan and

its nationals during the course of the prosecution of the war” – constituted a waiver of such

claims); see also In re World War II Era Japanese Forced Labor Litig., 164 F. Supp. 2d 1153,

1156-57 (N.D. Cal. 2001) (same; Filipino plaintiffs’ ATS claims barred by Peace Treaty). We

urge this Court to find the same here.


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B. The Claims of All Plaintiffs Are In Violation of And Precluded by the Paris

Peace Treaty

Article 27 of the Paris Peace Treaty of February 10, 1947 (“Peace Treaty”)14 provides:

1. Hungary undertakes that in all cases where the property, legal rights or interests in Hungary of persons under Hungarian jurisdiction have, since 1 September 1939, been the subject of measures of sequestration, confiscation or control on account of the racial origin or religion of such persons, the said property, legal rights and interests shall be restored together with their accessories or, if restoration is impossible, that fair compensation shall be made therefor.

2. All property, rights and interests in Hungary of persons, organizations or communities which, individually or as members of groups, were the object of racial, religious or other Fascist measures of persecution, and remaining heirless or unclaimed for six months after

the coming into force of the present Treaty, shall be transferred by the Hungarian

Government to organizations in Hungary representative of such persons, organizations or communities. The property transferred shall be used by such organizations for purposes of relief and rehabilitation of surviving members of such groups, organizations and communities in Hungary. Such transfer shall be effected within twelve months from the coming into force of the Treaty, and shall include property, rights and interests required to be restored under paragraph 1 of this Article. (emphasis added).

All Plaintiffs’ claims are in violation of and barred by Article 27.2. The Plaintiffs’ assets

in this case are, apparently, “unclaimed for six months after the coming into force of the present

Treaty” as defined by the Treaty Article 27.2. Should the Plaintiffs now wish to “claim” them,

the proper forum is not a U.S. court but the special fund established by Hungary to handle such

matters, the Magyarországi Zsidó Örökség Közalapítvány or Jewish Heritage of Hungary Public

Endowment. <www.mazsok.hu.> To end-run this procedure by adjudicating Plaintiffs’ claims in

this Court would violate the Treaty and would implicate the act of state doctrine by questioning

acts of the Hungarian Government. See World Wide Minerals, Ltd. v. Republic of Kaz., 296 F.3d

1154, 1164 (D.C. Cir. 2002) (“The act of state doctrine precludes the courts of this country from

inquiring into http://www.mazsok.hu, the validity of the public acts a recognized foreign

14This Treaty, effective as of September 15, 1947, is between by the Western Allies (including

the United States), the Soviet Union, and Hungary.


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sovereign power committed within its own territory.”) (internal citations and quotations omitted).

Further, granting the relief sought may result in double recovery for Plaintiffs, if they made or

shall make a claim before the fund.15 For these reasons, the relief Plaintiffs seek violates the

Treaty and is barred by it. See Ware v. Hylton, 3 U.S. 199, 230 (1796) (1783 Treaty of Peace

between Great Britain and United States extinguished property claims); In re World War II Era

Japanese Forced Labor Litig., 114 F. Supp. 2d at 942, 945 (WWII Peace Treaty extinguishes

claims); In re World War II Era Japanese Forced Labor Litig., 164 F. Supp. 2d at 1156-57

(same).

V. Assuming Arguendo that the Plaintiffs’ Claims Have Not Been Settled, the Case

Should Be Dismissed as Presenting a Political Question

In Baker v. Carr, 369 U.S. 186 (1962), the Supreme Court created a six-pronged test for

determining whether a case involves a political question:

Prominent on the surface of any case held to involve a political question is [1] found a textually demonstrable constitutional commitment of the issue to a coordinate political department; or [2] a lack of judicially discoverable and manageable standards for resolving it; or [3] the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or [4] the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or [5] an unusual need for unquestioning adherence to a political decision already made; or [6] the potentiality of embarrassment from multifarious pronouncements by various departments on one question.

Id. at 217 (numbers added). If any one of these factors is “inextricable” from the case, the court

should dismiss the case as nonjusticiable because it involves a political question. Id.

Some historical background is in order. Beginning in 1944, Hungary suffered a series of

15The Hungarian Government implemented Article 27 of the Peace Treaty via several resolutions

(see Government Resolution 1091/2007 Korm) including Government Resolution 2098/1994, Act 1997:X, and Government Resolution 1035/1997 Korm. See Declaration of Idilkó Varga, Ex. F, G, H, I. (“Varga Decl.”), attached to OTP Bank’s Motion to Dismiss as Exhibit 2. The Magyarországi Zsidó Örökség Közalapítvány fund has received approximately HUF 8 billion (~US $50 million) to date and has distributed such funds to Jewish victims and victims’ organization as set forth on the fund’s Web site, www.mazsok.hu.


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calamities. It was occupied by Nazi Germany in March 1944, just before the commencement of

the misconduct alleged in the Complaint. It was then bombarded by the Allies, and by 1945 was

occupied by the Soviet Union. Hungary was under Soviet domination until 1989. See Miklos

Molnar, A Concise History of Hungary, pp. 288-337 (Cambridge Univ. Press, 2001)

(Compendium of Other Materials, Att. 6). See also Burger-Fisher v. Degussa AG, 65 F. Supp. 2d

248, 264-65 (D.N.J. 1999) (describing conditions in post-WW II Europe).

Turning to the Plaintiffs’ assets at issue in this case, in 1945-1946, Hungary experienced

probably the worst inflation historically recorded. The old unit of exchange, the pengo, the unit

of exchange in which the bank accounts belonging to Hungarians Jews was recorded, was

replaced in 1946 by the forint at a rate of 400,000 quadrillion to one. See Molnar, supra, at 300;

Government Decree 8640/1946, Government Decree 9000/1946 ME, (Varga Decl. Ex. D, E).

This change affected all Hungarians equally and, needless to say, rendered all of Plaintiffs’ bank

accounts in pengos worthless.

As to the Plaintiffs’ tangible assets, to keep them away from the advancing Soviets,

according to one history of the Hungarian Holocaust, most of them were loaded on the “Gold

Train” and moved west where they were captured by the advancing Americans. Most of the

assets were then mishandled in one way or another by the U.S. authorities and not returned to

Hungary. See Gabor Kadar & Zoltan Vagi, Self-Financing Genocide, pp. 282-350 (Central

European Univ. Press, English ed. 2004) (Compendium of Other Materials, Att. 7). According to

the Washington Post, the United States recently settled a case, Rosner v. United States, Case

#1:01-cv-01859- PAS (S.D. Fla.), brought against it by victims of the Hungarian Holocaust

arising out of the theft from the Gold Train for $25,500,000. See Hungarians’ Holocaust Suit

Settled for $25.5 Million, Wash. Post, Sept. 27, 2005, at A03 (Compendium of Other Materials,


–36–

Att. 8).

In these circumstances, the third Baker factor is “inextricable” from the case, that is, it is

impossible for a U.S. court 66 years after the fact to decide, given all the competing demands on

Hungary’s budget, what is “fair” compensation under the historical circumstances. The instant

case involves an alleged 600,000 plaintiffs and a request for compensatory damages that is equal

to 30 percent of the current GDP of Hungary (before punitive damages are even assessed). As

the court wrote in Degussa: “Major policy determinations are implicated in the determination of

the size and in the allocation of reparations. They are not the subject of judicial discretion.” Id. at

284. See also Hereros, 232 Fed. Appx. at 96 (citing and quoting Baker, and holding that there are

“no ‘judicially discoverable or manageable standards’ for adjudicating a case involving the

claims of some 125,000 putative plaintiffs for damage inflicted decades ago, by a government no

longer in existence.”).

The second Baker factor, “a lack of judicially discoverable and manageable standards”

for resolving the case is also “inextricable.” A U.S. court has no standard to determine what the

current Hungarian Government should, as a political matter, use to determine what “fair”

compensation is under all of these circumstances. And, as to those who are the more plausible

takers of the money – namely Germany, the Soviet Union, and the United States – they cannot be

joined to this lawsuit because they are immune. See generally Sampson v. Fed’l Republic of

Germany, 250 F.3d 1145 (7th Cir. 2001); Princz, 26 F.3d 1166. In addition, most, if not all, of

the relevant documents will be in Hungarian. Most, if not all, of the witnesses are probably dead.

The applicable law, that is Plaintiffs’ proposed Sosa norms, are vague and ill-established, as

discussed supra. See Atlee v. Laird, 347 F. Supp. 689, 702 (E.D. Pa. 1972) (three-judge panel)

(noting difficulty in managing a “foreign policy case” with the “very real possibility that the


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parties might not assemble all the data, in which case any attempt by the court to justify a

decision on the merits of an issue having so profound an effect on the nation would be both

difficult and unwise”).

The four factors we have not addressed, factors 1, 4, 5, and 6, are “inextricable” even if,

contrary to what we argue above, the applicable agreements do not settle these claims. All of

these factors involve the primacy of the Executive Branch in the field of foreign relations. There

is no doubt that the U.S. President has the lead role in this country’s foreign policy, with the

exception that the Senate must approve treaties. See Garamendi, 539 U.S. at 414 (noting that the

“historical gloss on the ‘executive Power’ vested in Article II of the Constitution has recognized

the President’s ‘vast share of responsibility for the conduct of our foreign relations[]’” and noting

express authority for Congress “to regulate public and private dealings with other nations in war

and foreign commerce”). And there is no doubt that the Hungarian Government has the power to

conduct its own foreign policy and settle the claims of its own citizens and their heirs. There is

probably no issue in human history that has been the subject of as many international agreements

as reparation claims arising out of World War II. See Degussa, 65 F. Supp. 2d at 265-269

(describing post World War II reparations agreements).

As the Supreme Court wrote in Garamendi, the “consistent Presidential foreign policy

[with regard to World War II] has been to encourage European governments and companies to

volunteer settlement funds in preference to litigation or coercive sanctions.” 539 U.S. at 421. As

the Court wrote in Degussa, “the questions whether the reparation agreements made adequate

provision for the victims of Nazi oppression and whether Germany has adequately implemented

the reparation agreements are political questions which a court must decline to determine.” 65 F.

Supp. 2d at 282.


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Finally we note that, under Article 40 of the Paris Peace Treaty, questions of its

interpretation and execution are expressly referred to “direct diplomatic negotiations,” and that

failing, to “the Three Heads of Mission acting under Article 39,”and that failing (aside from

mutual agreement of the parties), to “a Commission composed of one representative of each

party and a third member selected by mutual agreement of the two parties from nationals of a

third country.” Listed among these is not resolution by a U.S. court. It is irrelevant whether this

Court believes the Hungarian treaties or compensation are adequate; the question is whether their

adequacy can be adjudicated by this Court. As the Third Circuit has said, “the adjudication of

Nazi-era claims by United States federal courts would express a lack of respect for the Executive

Branch because of the Executive Branch’s longstanding foreign policy interest that issues

relating to World War II and Nazi-era claims be resolved through intergovernmental

negotiation.” Rozenkier v. A.G. Schering, 196 Fed. Appx. 93, 98 (3d Cir. Aug. 2, 2006)

(unpublished); see also Frumkin v. J.A. Jones, Inc., 129 F. Supp. 2d 370, 383 (D.N.J. 2001)

(dismissing Holocaust era claims on political question and international comity grounds).16

16

Alperin v. Vatican Bank, 410 F.3d 532, 549-50 (9th Cir. 2005), is not to the contrary. In Alperin, the Ninth Circuit held that the political question doctrine did not bar the court from adjudicating the plaintiffs’ Property claims, though it did bar adjudication of their War Objectives’ claims. In the Property claims, plaintiffs sought liability for conversion, unjust enrichment, restitution, and an accounting. Id. at 543. The court concluded that the Property claims were not barred as political questions in large part because no treaties on the subject had been negotiated with the Vatican; only with Italy. Id. at549-50. Here, by contrast, there are treaties directly with Hungary which address property claims both by and against Hungarian nationals. In the War Objectives claims, on the other hand, the Alperin plaintiffsalleged that the Vatican Bank “participated in. . .genocide” and “actively assisted the war objectives of the Ustasha Regime.” Id. at 543, 559. This is what Plaintiffs in this case have alleged against OTP Bank – participation in and aiding and abetting genocide. The claims against OTP Bank in this case, then, aremore closely aligned with the Alperin plaintiffs’ War Objectives claims, which were found to be nonjusticable. As the Ninth Circuit concluded:

We do not wish to imply in the slightest that these claims do not represent gravely serious harms for which the Holocaust Survivors deserve relief. The difficulty is that relief lies elsewhere. As the court observed in In re Austrian and German Bank Holocaust Litigation, “Those persecuted by the Nazis were the victims of unspeakable acts of inhumanity. At the same time, however, it must be understood that the law is a tool of limited capacity. Not every wrong, even the worst, is cognizable as a legal claim.” 80 F. Supp. 2d at 177. In this case, the Holocaust Survivors must


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VI. The Claims Against OTP Bank Must Be Dismissed Pursuant to Ashcroft v. Iqbal for

Failure to State a Claim

Last year, the Supreme Court, in Iqbal, reinterpreted Federal Rule of Civil Procedure

8(a)(2), which requires that a complaint “must contain. . .a short and plain statement of the claim

showing that the pleader is entitled to relief[.]” Iqbal tightened the standard for a well-pled

complaint in two ways.

First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.

Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. . . .Determining whether a complaint states a plausible claim for relief will. . .be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. . . .But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged – but it has not “show[n]” – “that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2).

129 S. Ct. at 1949-50 (internal citations omitted). See generally Bell Atl. Corp. v. Twombly, 550

U.S. 544 (2007). More generally, the Court held,

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” . . .A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. . . .The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’”

129 S. Ct. at 1949 (citations omitted). See also Brooks v. Ross, 578 F.3d 574, 580-81 (7th Cir.

2009); Swanigan v. Argent Mortgage Co., 2010 U.S. Dist. LEXIS 71083, at *2-3 (N.D. Ill. July

14, 2010) (Der-Yeghiayan, J.) (unpublished). In this case, none of Plaintiffs’ allegations against

look to the political branches for resolution of the War Objectives Claims which, at base, are political questions.

Id. at 562.


–40–

OTP Bank meet these standards. We addressed supra why Plaintiffs’ claims for participation in

genocide, aiding and abetting genocide, and unjust enrichment fail to meet the Iqbal standard.

We now turn to successor liability, capacity to sue, and injury.

A. Successor Liability

The Complaint in paragraph 27 concedes that OTP Bank was not in existence in 1944 but

alleges it is a “successor” to banks then in existence that participated in genocide by looting the

Hungarian Jews. Under Iqbal, an allegation that OTP Bank is a “successor” without more is a

legal conclusion that need not be accepted by the Court.

The Plaintiffs plead no facts as to what obligations OTP Bank has succeeded. In

paragraphs 36, 37, 43, 45, 48, and 53, numerous banks are named and alleged to be “now

known” as OTP Bank. “Now known” is a vague and conclusory description which need not be

credited. Cf. Iqbal, 129 S. Ct. at 1951 (allegations that “petitioners ‘knew of, condoned, and

willfully and maliciously agreed to subject [him]’ to harsh conditions of confinement ‘as a matter

of policy, solely on account of [his] religion, race, and/or national origin and for no legitimate

penological interest.’. . . [and that] Ashcroft was the ‘principal architect’ of this invidious policy,

. . .and that Mueller was ‘instrumental’ in adopting and executing it” were “bare assertions”

which amounted “to nothing more than a ‘formulaic recitation of the elements’” of the claim and

as such were not entitled to be assumed true) (internal citations omitted). These paragraphs plead

no facts alleging successorship, and do not – as is required by Iqbal – give the court “factual

content” that allows it “to draw the reasonable inference” that OTP Bank “is liable for the

misconduct alleged.”

Further, in paragraphs 19-22, there are numerous allegations against the “defendant

banks” and “bank officials” but no further illumination as to why OTP is among the offending


–41–

banks. There is no plausible allegation that OTP Bank itself has done anything. Paragraph 57

alleges that “all the named defendants or their predecessors were doing business in Hungary in

1944.” “Their predecessors” provides no factual content; only a legal conclusion. Further,

Paragraph 64, reciting questions of law and fact common to the class, makes allegations against

defendant banks and “their predecessors” but provides no factual allegation showing that any of

the banks in existence in 1944 were “predecessors” of OTP Bank or, with respect to more recent

events, that OTP Bank itself has done anything. Paragraph 69 again refers to “defendant banks

and their sucessors” but provides no facts showing that OTP Bank is a successor.

Paragraph 17 is also vague. It alleges that, from “1945-1989, a communist government

took control” of Hungary and nationalized “the banks . . . .For many banks, however, it was

business as usual; the only difference was who owned the shares. Many smaller banks were

gradually merged into large banks. In 1989, the government unexpectedly re-privatized the

banks.” This paragraph does not provide any factual allegation that the Communist regime took

over OTP Bank, or that, following any Communist ownership, business at OTP Bank in

particular continued “as usual” – whatever that means. There is also no fact allegation that, in

1989, the government re-privatized OTP Bank, and if it did, how that affected OTP Bank’s

liabilities.

Paragraph 18 alleges that “expropriation of private property without paying fair

compensation by governments is itself a violation of international law and cannot affect the

status of the Jewish assets in question. The law is clear that the private property of the Jews of

Greater Hungary continues to belong to them no matter how many hands it has passed through.”

This paragraph is entirely conclusory and sets forth no factual content to explain why OTP Bank

is responsible for what happened under 44 years of Communist rule.


–42–

Plaintiffs claim that the “policy” of the “present-day banks” regarding “inter-bank

transfers and assignments, mergers, consolidations, acquisitions, changes and modifications of

ownership, and other complex financial arrangements” has not been transparent. (Compl. ¶71).

That “the banks” have allegedly been non-transparent does not, however, excuse Plaintiffs from

providing any factual content as to a plausible theory for successor liability.

Paragraph 14 undermines any claim that OTP Bank is liable. There, Plaintiffs allege that

“[u]nder a new Hungarian law [in 1944], a special account was created in the

Postatakarekpentzar of the defendant Magyar Nemzeti Bank in order to centralize and coordinate

the funds from all the frozen and spoliated accounts.” It is not plausible that, on the one hand

OTP held Jewish assets and has, up until the present, refused to turn them over, but on the other

hand was forced, via the “Hungarian law” in the 1940s to turn over all Jewish assets to the

centralized account in the Magyar Nemzeti Bank. Plaintiffs provide no factual content for why,

given the “Hungarian law” referred in paragraph 14, OTP Bank would continue to hold spoliated

Jewish assets.

The Complaint also fails to put OTP Bank on notice of any legal theory upon which it has

successorship liability. Under U.S. federal law, where corporation A (purchaser) purchases all

the stock of corporation B (seller), it may succeed to the liabilities of corporation B, but where

corporation A simply purchases “assets,” corporation A “generally does not acquire the seller’s

liabilities, even if all the assets are transferred by the sale so that in effect the entire business has

been sold, and the purchaser intends to continue it as a going concern.” EEOC v. G-K-G Inc., 39

F.3d 740, 747 (7th Cir. 1994). There is no allegation that OTP Bank purchased all of the shares

of any predecessor banks, or that, if it did, it succeeded to any of the predecessor bank’s

liabilities which might be at issue here. Hungarian law may or may not be the same. Regardless,


–43–

Plaintiffs do not allege even conclusorily on what legal theory OTP Bank has successor liability.

Plaintiffs’ claims are also implausible for historical reasons. When examining whether a

complaint meets the Iqbal standard, the Court should take into account the surrounding history.

In Iqbal, the Court wrote, discussing the September 11 attacks:

It should come as no surprise that a legitimate policy directing law enforcement to arrest and detain individuals because of their suspected link to the attacks would produce a disparate, incidental impact on Arab Muslims, even though the purpose of the policy was to target neither Arabs nor Muslims. On the facts respondent alleges the arrests Mueller oversaw were likely lawful and justified by his nondiscriminatory intent to detain aliens who were illegally present in the United States and who had potential connections to those who committed terrorist acts. As between that “obvious alternative explanation” for the arrests. . . and the purposeful, invidious discrimination respondent asks us to infer, discrimination is not a plausible conclusion.

129 S. Ct. at 1951-52 (internal citations omitted).

We have set out most of the relevant history just above. One additional historical

circumstance is relevant here. As suggested in paragraph 14 of the Complaint, the accounts

belonging to Hungarian Jews were ordered, in 1944, to be transferred to the Treasury which held

an account at the Hungarian national bank, Magyar Nemzeti Bank. Pursuant to this decree, banks

had to physically hand over any tangible assets to the government appointed entities and transfer

the money balances in any account to the Hungarian treasury. (See Government Decree

3840/1944 ME, nationalizing bank accounts, Varga Decl. Ex. B).17 Given the historical

background, there are “obvious alternative explanations” for the missing assets. The Germans

stole them, and/or the Hungarian Treasury stole them, and/or the Hungarian National Bank stole

them, and/or the Soviets stole them, and/or the money assets were rendered worthless by 400,000

quadrillion percent inflation, and/or, as to the tangible assets, the Americans stole them. That

17This law was later revoked by Government Decree 200/1945 ME. (Varga Decl, Ex. C). See also

Government Decree 1600/1944 (Varga Decl. Ex. A), which also was later revoked.


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OTP Bank stole them is not a “plausible conclusion” from the Plaintiffs’ allegations.

B. Capacity to Sue

Paragraphs 36, 37, 40, 43, 45, 48, and 53 mention OTP Bank by name. Plaintiffs fail to

plead that they have the capacity to sue OTP Bank for the misconduct alleged. Capacity to sue is

a party’s personal right to come into court. See Board of Educ. of Peoria v. Ill. State Bd. of

Educ., 810 F.2d 707, 709-710 (7th Cir. 1987). Plaintiffs’ claims in the above-mentioned

paragraphs are derivative, meaning that capacity to sue is derived from and hence dependent on

their status as heirs of various persons. Ungaro-Benages v. Dresdner Bank AG, 2003 U.S. Dist.

LEXIS 27693, at *53-54 (S.D. Fla. Feb. 14, 2003) (unpublished).

First, the Plaintiffs in paragraphs 36,18 37, 43,19 45, 48, and 5320 fail to allege that the

persons on whose behalf they are suing are in fact deceased. Second, the Plaintiffs in paragraphs

36 and 37 fail to allege that they are heirs to the assets at issue. And, in paragraph 43, Mr. Erem

alleges (conclusorily) that he is heir to his father’s assets but not that he is heir to the assets of his

paternal or maternal grandparents.

Third, those Plaintiffs who do allege that they are “heirs” have done so insufficiently. It is

insufficient, for example, to plead in conclusory fashion with no factual detail that a plaintiff is

“heir” to a particular relative as in paragraphs 40, 43, 4521, 48, and 53. It is also insufficient as in

18Also, Mr. Gergely-Jungreisz’s claim (Compl. ¶36) should be dismissed because it is moot. Mr.

Gergely-Jungreisz is alleged to be deceased, and there is no allegation that any heir or personal representative of his estate is or will be substituted for him.

19In paragraph 43, Plaintiff Erem alleges that his “entire family” was killed. He does not allege whether the particular persons to whom he claims he is heir are dead.

20In paragraph 53, Plaintiff Somogyi alleges that his father is dead, but does not allege that his “maternal grandparents” to whom he claims to be heir, are dead.

21Ms. Gertler’s claims for “her father’s loss of employment and attendant rights” (Compl. ¶45) are also dismissable as conclusory and for lack of capacity to sue.


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paragraphs 37, 40, 43, 48, and 53, to plead in conclusory fashion with no factual detail that a

plaintiff is “heir” to business assets. Ungaro-Benages provides a helpful comparison. In that

case, a plaintiff bringing an ATS claim alleged that she was “the heir, through her grandmother

and her mother, to a portion of the estate of Benno Orenstein.” Id. at *53. The court held that her

claims should be dismissed for failure to plead capacity to sue because she failed to allege that

the claims “devolved to her through any judicial process by operation of law or that she has been

appointed as a personal representative of any of the interested estates.” Id. at *53-54 (construing

Florida law). So here. The Plaintiffs in the cited paragraphs fail to allege that the claims at issue

devolved to them through any judicial process by operation of law or that they have been

appointed personal representative of any interested estate.

C. Failure to Plead Injury

Plaintiffs with allegations specific to OTP Bank (paragraphs 36, 37, 40, 43, 45, 48, and

53) fail to plead any factual content that they have suffered injury traceable to OTP Bank’s

conduct.22 We use paragraph 37 as a representative example. There, Leslie (Laszlo) Keller

alleges in full as follows:

Plaintiff Leslie (Laszlo) Keller was born in Szekesfehervar, Hungary, in August 1921, and is a resident of Delray Beach, Florida. His father, Ferenc Keller and mother, Olga Deutsch, had a large wholesale grocery import business named “Deutsch es Keller” and a coffee business named “Victoria Café.” His parents were deported to Auschwitz in 1944 and did not return. The businesses had their accounts in a savings bank in Szekesfehervar, now known as OTP. The plaintiff has never been compensated for these accounts.

Mr. Keller fails to allege – even assuming he is heir to the contents of his parents’ business

accounts, which he does not allege (as discussed supra) – that OTP Bank succeeded to this

liability of “the savings bank in Szekesfehervar” (discussed supra) or that he ever asked OTP

Bank or “the savings bank in Szekesfehervar” for the assets, or that OTP Bank or Szekesfehervar

22Without injury in fact fairly traceable to OTP Bank, Plaintiffs may lack jurisdictional standing.


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ever refused to turn over the assets upon his asking. He has pled at most a vague conclusory

allegation of injury.

The same is true in the other paragraphs which specifically mention OTP Bank, namely

36, 40, 43, 45, 48, and 53. All of the Plaintiffs in these paragraphs fail to allege that any of the

Plaintiffs ever asked OTP Bank or its alleged predecessors for the assets, or that OTP Bank or

any predecessor ever refused to turn over the assets upon their asking. There are no facts alleging

any injury that is causally connected to OTP Bank.

The only paragraphs that even remotely allege that a plaintiff asked for and was denied return of

the assets are paragraphs 9 and 43 (Gabriel Erem). Paragraph 9 alleges that “survivors” and

“heirs” went to “banks” to retrieve assets and that “bank employees said they had no information

as to what happened to the contents of the boxes.” Failing to provide any factual content

regarding which survivors and heirs, which banks, which assets, and which bank employees said

what and when fails to state a plausible claim upon which relief can be granted. And, in

paragraph 43, Mr. Erem alleges that his “efforts to obtain reimbursement from those two banks

have been unavailing.” This allegation also fails to provide any factual content. First, he alleges

failed efforts to obtain reimbursement from “those two banks” but mentions four banks – “the

Diener Bank, which became Erste Group Bank, and by the Kisvardai Takarekpenztar Bank, now

known as OTP.” (Compl. ¶43). Second, the paragraph fails to describe the “efforts” at obtaining

reimbursement, such as dates on which Mr. Erem asked, who he asked, what the result was, etc.

For all the foregoing reasons, Plaintiffs’ claims fail to meet the Iqbal standard.

* * *


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CONCLUSION

For the foregoing reasons, the case as to OTP Bank should be dismissed circumstances.

Dated: August 2, 2010 Respectfully submitted, OTP BANK

By: One of Its Attorneys

James R. Figliulo Gregory L. Stelzer FIGLIULO & SILVERMAN, P.C. Of Counsel: 10 South La Salle Street, Suite 3600 Chicago, Illinois 60603 Péter Nagy Telephone: 312.251-4600 André H. Friedman Facsimile: 312.251-4610 NAGY & TRÓCSÁNYI, LLP620 Eighth Avenue Thomas G. Corcoran, Jr., pro hac vice

New York, N.Y. 10018-1405 Laina Catherine Wilk Lopez, pro hac vice

Telephone: 212.247-6014 BERLINER, CORCORAN & ROWE, LLPFacsimile: 212.398-6645 1101 Seventeenth Street N.W., Suite 1100 Washington, D.C. 20036 Telephone: 202.293-5555 Facsimile: 202.293-9035

Attorneys for Defendant OTP Bank


Documents

IN THE UNITED STATES DISTRICT COURT FOR THE ......2010/08/13 · Péter Nagy Telephone: 312.251-4600 André H. Friedman Facsimile: 312.251-4610 NAGY & TRÓCSÁNYI, LLP 620 Eighth