Judge Sets First Trial of Holocaust Claims Against Insurance Firms
In a landmark step in Holocaust reparations litigation, a Los Angeles Superior Court judge Friday scheduled the first trial in the United States or Europe in the rapidly proliferating cases charging that Holocaust survivors are entitled to compensation from insurance companies and banks, and firms that allegedly used them as slave laborers.
Over the objections of insurance company attorneys, Judge Florence-Marie Cooper set Feb. 9, 2000, for the trial of Adolf Stern vs. Assicurazioni Generali.
Stern, 82, and six other family members, some of whom live in Los Angeles, are seeking $135 million, most of it in punitive damages. Their lawsuit contends that Generali, a large Italian-based insurer, has acted in bad faith in failing to honor claims that family members lodged several times since the end of World War II on a policy purchased in 1929 by family patriarch Moshe “Mor” Stern. He was a leading wine producer in Czechoslovakia who was killed in the gas chamber at Auschwitz, along with his wife and three of their seven children. Adolf Stern, who lives in Florida, is a surviving son of Mor Stern.
“This is a real benchmark day for Holocaust survivors” because it means some of them may get a trial within their lifetimes, said Claremont attorney William M. Shernoff, who represents the Stern family and the plaintiffs in three other cases against Generali, whose holdings include the largest insurance company in Israel.
“Ironically, today marks the 55th anniversary of the Stern family deportation to Auschwitz,” said Shernoff’s co-counsel, Lisa Stern of Los Angeles, a relative of the family that brought the case.
Although there is Holocaust-related litigation filed in several U.S. cities and in Europe, including massive class action cases against Generali and a dozen other insurers in New York and Newark, N.J., there has been no ruling that any of those cases can go forward.
The insurers contend that the time has long passed for any such cases to be heard and that if they were heard, it ought to be in the European country where the policy was purchased.
Thus far, Generali has not succeeded with that argument in the Stern case.
In January, Cooper ruled that California courts have jurisdiction under the Holocaust Victims Insurance Act, which was passed last year, to consider cases of this type. Introduced by Assemblyman Wally Knox (D-Los Angeles), the measure passed the state Legislature without dissent and was signed into law by then-Gov. Pete Wilson. The law extends until 2010 the statute of limitations for filing Holocaust-era insurance lawsuits.
A state appeals court upheld Cooper’s ruling and Generali has asked the California Supreme Court to review the case. The state’s highest court has until June 15 to decide whether it will hear the matter.
On Friday, Cooper also rejected Generali’s contention that she had no jurisdiction to hear the three other Holocaust-related cases filed against the company here. “Although some factual distinctions exist between and among Stern” and the plaintiffs in those cases, “they are not legally significant,” the judge concluded.
Cooper stressed that in the new law the Legislature declared that California had an “overwhelming public policy interest” in affording California residents an opportunity to have these cases tried in the state. “To compel California residents to attempt to litigate these cases” in Europe, as Generali urged, “would utterly defeat that public policy interest,” Cooper said. She noted that there is no assurance that the cases could proceed abroad because of statutes of limitations.
Alex Friedman, 79, a Hollywood resident born in Hungary who is the plaintiff in one of the other cases, said afterward that he was very happy about the judge’s ruling. Friedman said he survived life in a concentration camp but his parents and his two sisters were murdered at Auschwitz.
During the hearing, Cooper also directed Generali, defended by Skadden, Arps, Slate, Meagher & Flom, one of the nation’s largest law firms, to file a legal answer to the Stern lawsuit within 30 days. Defense lawyer Peter Simshauer objected, maintaining that Generali has not submitted itself to the jurisdiction of the court and thus far has only made appearances to contest jurisdiction.
Cooper briskly informed the attorney that she was putting an end to the “fiction” that Generali had not made what is known as a general appearance in the case.
In March, Cooper sanctioned Generali $14,126 for making statements that were “at least disingenuous and clearly designed to mislead the court on the critical issue of whether” the company had had substantial contacts with the state and earlier subjected itself to the jurisdiction of California courts. At the time, Cooper noted that Generali had filed at least two dozen lawsuits in the state and had been named as a defendant in 80 and had not contested jurisdiction. According to state officials, Generali handles about $22 million in premiums annually in California.
Simshauer said that Generali--along with four other large European-based insurers--is participating in an international commission seeking to forge a global settlement of the Holocaust claims controversy. He also told the judge that the company has approached California Insurance Commissioner Chuck Quackenbush, who has been an advocate for Holocaust survivors, about settling the case.
Earlier in the Stern case, Adolf Stern said in pretrial testimony that he first tried to collect on his father’s policy in Prague in 1946, after he was liberated from Buchenwald. Stern said he was told that Generali could not process an insurance claim without a death certificate from the Third Reich.
