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SAMPSON v. FEDERAL REPUBLIC OF GERMANY

September 10, 1997

JACOB SAMPSON, Plaintiff,
v.
FEDERAL REPUBLIC OF GERMANY and THE CONFERENCE ON JEWISH MATERIAL CLAIMS AGAINST GERMANY, INC., Defendants.



The opinion of the court was delivered by: WILLIAMS

 Pro se Plaintiff Jacob Sampson seeks a declaratory judgment that a question of actual controversy exists between him and Defendants Federal Republic of Germany and The Conference on Jewish Material Claims Against Germany, Inc. Both defendants have moved the court to dismiss the amended complaint under Rule 12(b) of the Federal Rules of Civil Procedure or, in the alternative, for summary judgment under Rule 56 of the Federal Rules of Civil Procedure. *fn1" The court abhors the inhuman treatment that the Nazi regime perpetrated on Mr. Sampson. Furthermore, the court accepts that Sampson has not been fairly compensated for his suffering. However, for the reasons set forth below, the court grants defendants' motions to dismiss both Plaintiff Sampson's original complaint and amended complaint.

 Background

 The court, in its discretion, treats both defendants' motions as motions to dismiss. In ruling on these motions to dismiss, the court "accept[s] as true the factual allegations of the complaint." Lashbrook v. Oerkfitz, 65 F.3d 1339, 1343 (7th Cir. 1995) (citation omitted). Therefore, the following facts are taken from plaintiff's amended complaint, unless stated otherwise.

 Jacob Sampson ("Sampson") is a Holocaust survivor. (Am. Compl. P I.) From 1939 to 1945, he was imprisoned, first in the Ghetto Lodz, Poland, and later in the Auschwitz concentration camp. (Id. P III.) The Gestapo killed sixty members of his family at Auschwitz. (Id.) Today, Sampson is a citizen of the United States and a resident of Chicago. (Id. P I.)

 The Conference on Jewish Material Claims Against Germany, Inc. (the "Claims Conference") is an international coalition of twenty-three Jewish nonprofit organizations. (Conf. Mem. Supp. Mot. to Dismiss at 3.) It is incorporated in the state of New York. (Mem. Supp. Am. Compl. at 4.) For over forty years, the Claims Conference has had ongoing discussions with the Federal Republic of Germany ("Germany") to secure restitution for Jewish survivors of the Nazi regime. (Conf. Mem. Supp. Mot. to Dismiss at 3.)

 In 1952, representatives of the Claims Conference and Germany agreed on Protocols Nos. 1 and 2. (Id.) Protocol No. 1 called for Germany to "redress . . . National-Socialist [Nazi] wrongs" and to "take as soon as possible all steps within [its] constitutional competence to ensure the carrying out of the [agreed upon] programme (sic)." (Id. Ex. 4.) Germany complied with this Protocol by enacting the German Federal Indemnification Law which made payments to Holocaust victims. (Id. at 3.) The Claims Conference did not administer any of this fund. (Id.)

 Realizing that identifying and locating all possible Holocaust survivors would be impossible, Germany agreed in Protocol No. 2 to pay Israel DM 450 million for the benefit of the Claims Conference. (Id. at 3-4; Ex. 6.) The Claims Conference used this money for "the relief, rehabilitation and resettlement of Jewish victims of National-Socialist persecution [who did not live in Israel], according to the urgency of their needs." (Id. Ex. 6, Art. 2.) *fn2" Protocol No. 2 expressly provides that disputes will be handled by an Arbitral Commission established between Israel and Germany. (Id. Ex. 6, Art. 4; see also, Ex. 7, Arts. 14-15.)

 Because some Holocaust victims never received any compensation, in 1980 the Claims Conference and Germany established the "Hardship Fund" to give a one-time payment to Holocaust survivors who had not received any prior compensation. (Id. at 4.) While the Claims Conference does administer the Hardship Fund, "its only role is to determine whether claimants [meet] the express requirements set forth in the German Guidelines. [It] is not, and never has been, permitted to differentiate between qualified applicants in the amount of the payment . . . ." (Id. at 5.) The Hardship Fund expressly prohibits a "right of action to receive compensation." (Id. Ex. 8, § 3.)

 Finally, in 1990, Germany and the Claims Conference established the "Article 2 Fund" to provide compensation to Nazi victims who had received minimal or no compensation. (Id. at 5.) The Article 2 Fund provides a one-time payment of DM 5000 and monthly payments of DM 500. (Id.) The Claims Conference administers the payments from the Article 2 Fund, but it does not have any discretion to deviate from Germany's guidelines. (Id. at 5-6.) Furthermore, the Article 2 Fund states that "there is no legal claim to the payments provided according to this agreement." (Id. Ex. 9, Part IV, P 2.)

 Sampson filed a claim with Germany in 1948 and another claim in 1981 with the Hardship Fund. (Compl. P IX.) He never received any reply to these requests. (Id.) However, his application for payments under the Article 2 Fund was approved in February 1996. (Id. Attach.) He received a one-time payment of DM 5000 and monthly payments of DM 500 retroactive to August 1995. (Id. ; Conf. Mem. Supp. Mot. to Dismiss at 6.)

 In September 1996, Sampson filed this claim seeking a declaratory judgment that he is entitled to state a claim against both defendants in the amount of $ 10 million plus costs. (Compl. PP II-III.) He claims that both defendants, separately and jointly, conspired to deprive him of his civil rights when they refused to fairly compensate him for his imprisonment by Nazi Germany. (Id. PP III-VI.) Furthermore, he claims that "defendants recognized but consistently failed to live up to their promises of full compensation." (Pl.'s Resp. to Mot. Dismiss Am. Compl. at 3.) After leave was given, Sampson filed an amended complaint in May 1997. *fn3" His amended complaint includes charges that (1) defendants embezzled funds that should go to Holocaust survivors, (2) they breached a covenant with him, and (3) they discriminated against him. (Am. Compl. PP III-V, IX.)

 Analysis

 Both defendants move the court to dismiss plaintiff's amended complaint under Rule 12(b) of the Federal Rules of Civil Procedure. A motion to dismiss tests the sufficiency of the complaint, not the merits of the suit. Demitropoulos v. Bank One Milwaukee, N.A., 915 F. Supp. 1399, 1406 (N.D. Ill. 1996) (citing Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990)). Therefore, the court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in favor of the plaintiff. Zinermon v. Burch, 494 U.S. 113, 118, 108 L. Ed. 2d 100, 110 S. Ct. 975 (1990); Colfax Corp. v. Illinois State Toll Highway Auth., 79 F.3d 631, 632 (7th Cir. 1996) (citations omitted). The court will dismiss a claim only if "it appears beyond doubt that [the plaintiff] can prove no set of facts in support of his claim which would entitle him to relief." Colfax, 79 F.3d at 632 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)).

 Jacob Sampson brings his claims as a pro se plaintiff. *fn4" "Allegations of the pro se complaint [are held] to less stringent standards than formal pleadings drafted by lawyers." Haines v. Kerner, 404 U.S. 519, 520, 30 L. Ed. 2d 652, 92 S. Ct. 594 (1972) (per curiam). Accordingly, "pro se complaints are to be liberally construed." Wilson v. Civil Town of Clayton, Ind., 839 F.2d 375, 378 (7th Cir. 1988); see also Hamlin v. Vaudenberg, 95 F.3d 580, 583 (7th Cir. 1996).

 Sampson claims that he has not been fairly compensated for Nazi Germany incarcerating him in a concentration camp from 1939 to 1945. (Am. Compl. PP IV-VI.) Furthermore, he claims that defendants diverted funds to "Gestapo murderers" that should have gone to him and other Holocaust survivors. (Id. P V.)

 Germany moves to dismiss Sampson's complaint (1) for lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act, (2) in the alternative, for failure to state a claim upon which relief can be granted under the act of state doctrine, and (3) in the alternative, for failure to state a claim upon which relief can be granted under the statute of limitations.

 The Claims Conference moves to dismiss Sampson's complaint for failure to state a claim upon which relief can be granted on the alternative grounds (1) that Sampson has no standing and therefore no claim, (2) that the act of state doctrine bars his suit, and (3) that the statute of limitations bars his claim.

 The court will separately discuss Germany's sovereign immunity defense and Sampson's standing to sue the Claims Conference. The court will then discuss the act of state doctrine and the statute of limitations as they apply to both defendants. Finally, the court will discuss Sampson's other allegations against both defendants.

 I. FOREIGN SOVEREIGN IMMUNITIES ACT

 Under the United States Constitution, the sole power to establish the inferior federal courts vests with the United States Congress. U.S. Const. art. III, § 1. Congress also determines and limits the subject matter jurisdiction of the lower federal courts. Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 433, 102 L. Ed. 2d 818, 109 S. Ct. 683 (1989) (citations omitted). Therefore, this court may not hear cases against a foreign sovereign unless Congress grants it the power to do so.

 Before 1952, unless the State Department requested otherwise, foreign governments had absolute immunity from being called into United States courts. Id. at 434 n.1 (citation omitted); see also Princz v. Federal Republic of Germany, 307 U.S. App. D.C. 102, 26 F.3d 1166, 1169 (D.C. Cir. 1994), cert. denied, 513 U.S. 1121, 130 L. Ed. 2d 803, 115 S. Ct. 923 (1995); Carl Marks & Co. v. Union of Soviet Socialist Republics, 665 F. Supp. 323, 338 (S.D. N.Y. 1987), cert. denied, 487 U.S. 1219, 101 L. Ed. 2d 909, 108 S. Ct. 2874 (1988). In 1952, the State Department suggested that plaintiffs could sue foreign sovereigns in United States courts for their commercial but not for their governmental acts. Amerada, 488 U.S. at 434 n.1; Princz, 26 F.3d at 1169.

 In 1976, Congress enacted the Foreign Sovereign Immunities Act ("FSIA") which codified this distinction between commercial and governmental acts. The FSIA added a chapter to the United States Code entitled "Jurisdictional Immunities of Foreign States." 28 U.S.C. §§ 1602-1611 (1994). *fn5" Section 1604 gives foreign countries immunity "from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter." The FSIA also gives the federal district courts sole jurisdiction over controversies against foreign sovereigns. § 1330(a). *fn6" "Sections 1604 and 1330(a) work in tandem: § 1604 bars federal and state courts from exercising jurisdiction when a foreign state is entitled to immunity, and § 1330(a) confers jurisdiction on district courts to hear suits brought by United States citizens . . . when a foreign state is not entitled to immunity." Amerada, 488 U.S. at 434. Furthermore, the United States Supreme Court held in Amerada "that the FSIA provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country." 488 U.S. at 443 (emphasis added); see also Saudi Arabia v. Nelson, 507 U.S. 349, 355, 123 L. Ed. 2d 47, 113 S. Ct. 1471 (1993); Wolf v. Federal Republic of Germany, 95 F.3d 536, 540-41 (7th Cir. 1996), cert. denied, 137 L. Ed. 2d 313, 117 S. Ct. 1112 (1997). Consequently, the court must apply the FSIA in every situation involving a foreign sovereign defendant to determine if the court has subject matter jurisdiction to hear the case. Amerada, 488 U.S. at 434 (citation omitted).

 Although Congress enacted the FSIA in 1976, courts apply its provisions retroactively to 1952 because it codified provisions that were in effect then. Carl Marks, 665 F. Supp. at 339. Consequently, foreign sovereigns after 1952 could reasonably expect to be called into United States courts for claims that resulted from their commercial activity. Id.; see also Princz, 26 F.3d at 1170; Djordjevich v. Bundesminister Der Finanzen, 827 F. Supp. 814, 816-17 (D.D.C. 1993), aff'd, 310 U.S. App. D.C. 142, 44 F.3d 1031 (D.C. Cir. 1994).


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