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Vatican Bank: Dismiss Holocaust Survivors' Reparations Suit

The Vatican Bank says a California federal court must dismiss an action by Holocaust survivors who claim the bank converted their assets after World War II in cooperation with a fascist regime.

The bank and the Franciscan Religious Order are asking Judge Maxine M. Chesney dismiss a fourth amended class-action complaint filed by 29 plaintiffs.

The bank says the action must be dismissed on the grounds of sovereign immunity, while the religious order contends the plaintiffs do not have standing to sue.

The Holocaust survivors allege the defendants profited from the genocidal acts carried out by the World War II-era Croatian Ustasha regime. The Ustasha were installed by the Nazis during the war and began a persecution campaign targeting certain ethnic and religious groups such as Serbs, Jews and Roma.

In addition to operating concentration camps where hundreds of thousands died, the regime confiscated victims' assets and placed them in the Ustasha treasury.

The plaintiffs allege that profits from looted assets and slave labor passed through the Vatican Bank. The Order of Friars was named as a defendant for allegedly aiding former Ustasha leaders after the war.

The survivors claim the defendants knowingly concealed, laundered, converted and profited from the assets looted by the Ustasha and by doing so prevented the rightful owners and their beneficiaries from obtaining the property.

The suit, filed Feb. 14 in the U.S. District Court for the Northern District of California, raises causes of action for conversion, unjust enrichment and restitution and seeks an accounting of the plaintiffs' property and the profits allegedly derived.

In response the defendants assert the suit must be dismissed because subject matter jurisdiction is lacking.

They say the Foreign Sovereign Immunities Act bars the plaintiffs' claims because the Vatican Bank is an instrumentality of a foreign sovereign.

In support of its dismissal motion the bank provided a declaration by an expert as to its legal status as an instrumentality of the Vatican.

The Franciscan Religious Order contends the Holocaust survivor plaintiffs do not have standing because they cannot show personal and individualized harm that is traceable to the order's alleged conduct and that is likely to be redressed by a favorable ruling.

The order explains that several plaintiffs have not alleged a loss of property and are instead advancing claims for a relative's loss. Other survivors have not alleged any property loss at all.

Although five plaintiffs allege a personal loss of their property, they have not linked these losses to actions by the defendant order, the motion says.

In defense of their suit the plaintiffs argue that the Vatican Bank has not met its burden of proving that it is an agency or instrumentality of a foreign sovereign.

The bank's expert declaration is insufficient to show immunity, they say.

The survivors further argue that even if the Vatican Bank is a sovereign instrumentality, immunity does not apply because the bank engages in commercial activity in the United States.

The plaintiffs also say they have alleged an injury sufficient to confer standing. They call the religious order's arguments to the contrary "a fanciful misinterpretation of the facts."

The defendants, in their recent reply briefs, reiterate their arguments and add that the Vatican Bank only has to make a prima facie showing of sovereign status. The bank does not have to prove its sovereignty by a preponderance of the evidence and therefore the declaration is sufficient, they say.

The Franciscan Religious Order also contends that the plaintiffs have not cited any authority that would provide them with standing based on injuries suffered by their family members.

The allegations fail and the action must be dismissed, the defendants say.