Political Question Doctrine

Author:International Law Group, PLLC

In dispute over interest on World War II reparations from Germany, Third Circuit finds that Joint Statement and 2000 Berlin Accords that provide for reparations fund are international political documents not enforceable contracts and do not confer private rights of action upon beneficiaries.


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The Berlin Accords came into being in July 2000 after intense negotiations to resolve long-pending claims over Nazi-era slave labor, forced labor, appropriations of personal property, and dishonored insurance policies. Germany and a consortium of German companies each agreed to contribute 5 billion German Marks to the Reparations Fund created by the Berlin Accords. The parties' Joint Statement envisioned a collection schedule that would generate at least 100 million German Marks in interest. The parties, however, failed to transfer the funds as quickly as expected.

Several claimants, as third-party beneficiaries, filed suit in New Jersey federal court to enforce the "interest" provision of the Joint Statement. Here, the Claimants argue that the defendant German companies "owe" interest on their payments to the reparations fund. The district court found the claims non-justiciable and dismissed them.

On the first appeal, the Third Circuit reversed even though the claims did implicate foreign policy issues. On remand, the district court found that the Joint Statement is not a contract but a political document and thus does not confer a private right of action on the Claimants. The Claimants again appealed. The Third Circuit affirms, largely agreeing with the district court; it holds that the disputed interest provision in the Joint Statement did not create or confer a privately enforceable cause of action.

The appellate Court first recognizes the unique importance of the Berlin Accords. "'July 17, 2000, was the occasion of one of the most remarkable diplomatic achievements since the end of World War II.' ... It was on that day that eight sovereign nations, a consortium representing numerous German companies, an international organization devoted to Nazi-era claims, and U.S. Plaintiff s' attorneys together signed the Joint Statement of the Berlin Accords.

Appellants cannot reasonably dispute the significant political nature of the talks leading to the Accords. Granted, one objective was to settle then-pending U.S. litigation between the Plaintiff s and the Defendant German companies, but we [must] weigh that private aspect of the resolution against the Berlin Accords' political, diplomatic, and historical significance." "The creation of the Berlin Accords was more than a mere settlement; it was a profound expiation by the Federal Republic of Germany and the German companies. Indeed, from the start of the negotiations, Deputy...

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