Bill Signed Bolstering Holocaust-Era Claims

In a move that will put further pressure on a group of German and American corporations to settle claims that they exploited slave labor during World War II, Gov. Gray Davis on Wednesday signed into law a bill that strengthens the hand of Holocaust survivors filing such cases in California.

The measure, authored by state Sen. Tom Hayden (D-Los Angeles), formally gives California courts jurisdiction to hear World War II-era slave labor cases and extends the statute of limitations for filing such suits until Dec. 31, 2010.

The signing came on the eve of the next round of negotiations at the State Department in Washington seeking to resolve slave labor claims.

More than a dozen German firms, including DaimlerChrysler, Deutsche Bank and Volkswagen, with the assistance of the German government, have been trying to reach a bilateral agreement with the U.S. government that could provide compensation for up to 2 million surviving slave laborers.

In June, the companies announced that they had formed a foundation to deal with the thorny issue, but said that funds would only be made available if they receive long-term protection from lawsuits related to Nazi government actions. Moreover, the companies have said they want an agreement between governments rather than a court settlement, which would have to be reviewed for fairness by a judge.

The plan, which reportedly could provide up to $1.7 billion, has been denounced as inadequate by Jewish organizations such as the World Jewish Congress, as well as by attorneys who have filed class-action suits against the German companies in San Francisco and in federal court in New Jersey.

Ford and General Motors, which had subsidiary operations in Germany, also have been sued for using slave labor during the war. The two firms are not part of the German foundation plan.

The companies facing suits contend that U.S. courts have no jurisdiction to hear these cases, and even if they did, the statute of limitations has expired. Judges in New Jersey and San Francisco are reviewing company motions to dismiss the cases on those grounds.

The law’s enactment “will help right a historic wrong which occurred over 50 years ago during World War II when men, women and children were forced into slave labor,” Davis said Wednesday.

Hayden said: “It sends a very powerful message from California to the U.S. government and the German government, who are in the midst of rather closed negotiations about a settlement.

“If the international negotiators want to avoid very expensive litigation by survivors as well as very bad public relations for companies like Volkswagen and Ford, they ought to settle,” Hayden added. “Otherwise, this law allows us to go ahead and take them to court.”

The law permits plaintiffs to seek compensation and damages for the work they performed. Compensation is defined as the present value of wages and benefits that individuals should have been paid and damages for injuries sustained in connection with the labor performed. “Present value” is to be calculated on the market value of the services at the time they were performed, compounded annually to the date of full payment without diminution for wartime or postwar currency devaluation.

New York attorney Melvyn I. Weiss, one of the lead lawyers for the Holocaust survivors, said Wednesday that his firm will file new suits in California because of the passage of the statute, which his firm helped draft.

“The new law makes it easier for us” to pursue the subsidiaries and successor firms of companies that used slave labor, Weiss said.

Weiss and Michael Hausfeld, his Washington, D.C., co-counsel on the Holocaust cases, both said they were disappointed at a lack of progress in resolving the slave labor issue. The Washington negotiating session scheduled today will be held under the auspices of Stuart Eizenstat, deputy secretary of the Treasury, who is the Clinton administration’s point man on Holocaust reparations issues.

Weiss and Hausfeld said they were disturbed that the German companies have announced that they would not discuss anything at the meeting besides how they would be protected from further legal claims if they pay money to Nazi victims.

The German companies have said they hope to reach an agreement by Sept. 1, the 60th anniversary of the start of World War II.

Both Weiss and Hausfeld said that far too many issues remain unresolved--including the amount of a settlement fund--for that to be a realistic date.

An attorney representing the German firms in the talks declined to return a call seeking comment. A State Department source said that Eizenstat hoped to make further progress Wednesday, but acknowledged that the matter was complicated and much remained to be done.