A federal appeals court has ruled that foreign companies sued in Holocaust-related lawsuits must answer questions about their ties to businesses in California, a decision that could enhance efforts by Holocaust victims to recover damages.
The 3-0 decision by the U.S. 9th Circuit Court of Appeals in San Francisco reinstated a suit that had been dismissed by a Los Angeles federal trial judge in October, 1998.
The May 18 ruling, made public Tuesday, may have ramifications affecting a number of other suits claiming that European insurers have acted in bad faith in failing to honor claims on policies issued between 1929 and 1945.
The court ruling came in a case against Ergo Versicherungsgruppe AG, the successor company to Victoria Insurance of Berlin.
Gabriele and Werner Stahl, the elderly grandchildren of Heinrich Stahl, contend that first Victoria and later Ergo failed to honor policies and stock options possessed by their grandfather, a prominent member of the Berlin Jewish community who was himself a Victoria executive. He was seized and taken to a concentration camp, where he died of pneumonia just a few months later in 1942.
The 9th Circuit did not render a definitive ruling about the Stahls' right to pursue their case. However, the appellate judges directed federal District Judge William D. Keller in Los Angeles to permit the plaintiffs to gather and present evidence on the extent of Ergo's ties in California. The appellate panel also advised Keller to take account of changes made to California law in 1999 that make it easier for plaintiffs to pursue Holocaust suits.
Presented by Assemblyman Wally Knox (D-Los Angeles), the law extends until 2010 the deadline for filing claims on insurance policies purchased in Europe between 1929 and 1945 from an insurer, or a "related company," now doing business in California. In addition, the statute broadly defines a "related company" to make it easier for a California court to assert jurisdiction over a foreign insurer.
"This decision will help establish that courts in California have jurisdiction over European companies that have been trying to hide from justice and hopefully will make them face up to their responsibilities," said Claremont attorney William Shernoff, who represents the Stahls.
Los Angeles attorney Joseph K. Hegedus, who represents the insurance company, made no comments on the merits of the decision. In a brief he submitted earlier, Hegedus wrote that the company does no business in California and that no court here should be able to assert jurisdiction over the firm. "The evidence irrefutably establishes Victoria has no presence whatsoever in California," the brief states.
District Court Judge Keller had agreed with that argument and said that the plaintiffs were not entitled to conduct any discovery about the extent of any contacts Victoria/Ergo has with the state of California.
The plaintiffs contend, however, that Victoria/Ergo has substantial ties with the state through its ownership of a company, Millennium Partners, which in turn owns property in Santa Ana and Fullerton.
Ergo's majority owner, Munich Reinsurance Co., also owns another insurance firm--American Reinsurance Co.--that is doing battle with California on Holocaust legal matters.
American has sued the California Department of Insurance, alleging that the department has no right to compel it to provide information to the state about policies it wrote between 1929 and 1945.
The Stahls assert that "on multiple occasions after the war" they and their father, Bruno, requested that Victoria "pay benefits under the huge stock options, life insurance and annuity policies that the family owned." But for decades, the suit says, Victoria has refused to honor its insurance obligations to the family.
The Stahls' case is unique among the Holocaust cases in that it is the only lawsuit in which the heirs of a former insurance executive are suing the company for whom their relative worked. According to the suit, Heinrich Stahl was the co-founder of Victoria Insurance and his late son Bruno was the company's representative in Brussels from 1931 to 1941.
Heinrich Stahl owned a large, lavishly furnished home as well as what was reputed to be the largest stamp collection in Germany. Stahl was also very active in Jewish affairs, serving as president of the Jewish community in Berlin during the 1930s.
Just before he was taken to the concentration camp at Theresienstadt on June 4, 1942, Heinrich Stahl sent a letter to his children and grandchildren saying he and his wife "had to renounce all our possessions and transfer our money to the Reich, and leave like beggars into an unknown future. . . . I am writing this letter to you on the eve of our execution, in order that you and others will know one day why your father and grandfather had to suffer such agonies and were driven to their deaths."
In a related development Tuesday, the Los Angeles-based Simon Wiesenthal Center and a Houston company that investigates insurance claims announced that they had gained access to German archives that could permit Holocaust survivors and heirs of people who perished in the Holocaust to locate assets looted by the Nazis.
At a New York press conference, Terrell E. Hunt, president of Risk International, said his firm had secured access to about 100,000 files containing documentation of assets stolen by the Nazis in Berlin, Frankfurt and Hamburg.
Rabbi Abraham Cooper, associate dean of the Wiesenthal Center, said Germany and Italy should open all files that would help locate the financial records of Holocaust victims.
"From our point of view, there cannot be any closure on this issue until such time as we get the relevant data into the hands of the people who count the most, meaning the people who actually were victimized during the Holocaust," Cooper said.