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Southern District of New York Chief Judge Michael B. Mukasey on Wednesday retained jurisdiction over 12 class actions seeking recovery on insurance policies issued to Holocaust victims, refusing to defer to a compensation system set up in 1998 by the government of Israel and major European insurance companies. The two remaining European insurance companies in the case, Assicurazioni Generali and the Zurich Life Insurance Co., had urged Mukasey to defer to the decision-making process of the International Commission on Holocaust Era Insurance Claims. The commission was established by a consortium of six major European insurance companies in 1998, including the two defendants before Mukasey in the case, In Re: Assicurazioni Generali S.p.A.Holocaust Insurance Litigation, MDL 1374. The plaintiffs are seeking to recover on insurance policies, most of them for life insurance, which were either expropriated or otherwise not honored during World War II. The two defendants — Generali, an Italian company, and Zurich, a Swiss company — are the remaining defendants. All German insurance companies have been dismissed because they were covered by a 1998 agreement pledging $5.5 billion to end all Holocaust litigation against German entities. Other defendants had previously been dismissed from the case because they had insufficient contact with the United States. The Holocaust-era insurance claims commission initially received $90 million in funding from the six companies in the founding consortium, and in 2000, Generali provided an additional $100 million. In addition to the government of Israel, several non-governmental Jewish organizations and the insurance regulators of several states subscribed to the compensation program. The commission is chaired by former U.S. Secretary of State Lawrence Eagleburger. Judge Mukasey rejected the two defendants’ claim of forum non conveniens, finding that the claims commission is not an adequate forum because “it is in a sense the company store.” To support that finding, Mukasey quoted from a letter written in 2001 by Eagleburger, in which he complained that the founding companies were withholding $60 million of the $90 million initially pledged as “a ‘form of punishment’ for some decisions I have made with which the companies disagree.” COMMISSION CRITICIZED In addition, Judge Mukasey noted that a number of public officials and reports have criticized the commission for “excessive administrative expenses and failure to make sufficient progress in resolving Holocaust insurance claims.” He pointed out that according to the plaintiffs, the commission has made offers of payment on only 797 claims out of a total of more than 77,000 filed. He further noted that claimants had accepted only 273 of the 797 offers. The two insurers also argued for dismissal under the doctrine of forum non conveniens, or inconvenient forum, saying that Mukasey should defer to the courts of the seven European countries in which they had sold policies prior to the Nazi campaign of extermination. But weighing the potential inconvenience to the two sides in litigating far from home, Mukasey found that the balance of hardships tipped decidedly in the plaintiffs’ favor. The plaintiffs have made a “strong showing,” Mukasey wrote, that if they were forced to file their claims in seven European countries, their costs would be driven up and “their ability to press their claims” would be “seriously endanger[ed].” That is especially the case, he noted, because the European countries do not recognize class actions as a method of conducting lawsuits. Another factor in retaining jurisdiction, Judge Mukasey wrote, stems from New York’s strong policy interest in having Holocaust-era insurance claims litigated there. New York’s Holocaust Victims Insurance Act of 1998 “explicitly states,” he noted, that “no action concerning Holocaust-era insurance claims arising between 1929 and 1945 shall be dismissed from the New York State courts on the ground of forum non conveniens (under N.Y.C.P.L.R. � 327).” The public policy expressed in the New York statute was also an important factor in the judge’s determination that choice of forum clauses in the original policies designating European courts should not be enforced. ‘IMPOSSIBLE TO CONCLUDE’ The judge said that given the multiple changes in government of many of the nations designated in the policies written 70 years ago, it is “impossible to conclude” that enforcement of the contractual choice “would accurately reflect the expectation of the parties.” The firms representing the plaintiffs were Kohn, Swift & Graft; Fagan & Associates; Anderson Kill & Olick; Heller Ehrman White & McAuliffe; Lieff, Cabraser, Heimann & Bernstein; Milberg Weiss Bershad Hynes & Lerach; Shernoff Bidart & Darras; Law Office of Lisa Stern; Whyte Hirschboeck Dudek; Klein & Solomon; Law Offices of Mel Urbach; and Dubbin & Kravetz. Defendant Assicurazioni Generali was represented by Salans and the Law Offices of M. Scott Vayer. Holland & Knight represented Zurich Life Insurance Co.

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