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Holocaust survivors are expanding the scope of their demands for wartime reparations by charging in two lawsuits that at least a dozen German or Austrian manufacturers profited through the use of slave labor.
Both suits seek compensatory and punitive damages on behalf of thousands of Nazi victims who, the suits allege, were subjected to inhumane treatment while forced to work without compensation during World War II.
The lawsuits follow the recent $1.25 billion settlement of Swiss bank claims and a $100 million settlement of insurance claims with Assicurazioni Generali S.p.A. of Italy (BI, Aug. 31). While many Holocaust victims' insurance claims still are being litigated, progress also is being made in establishing an international commission to resolve them.
The suits seeking compensation for slave labor stem from European court action. According to court papers, plaintiffs' legal right to seek compensation for slave labor was deferred by the London Debt Agreement of 1953 until German courts essentially lifted the moratorium in November 1997.
One slave-labor lawsuit was filed by 16 Holocaust survivors late last month in the U.S. District Court for the Eastern District of New York. The suit names at least 10 companies with recognizable product names, including BMW, Daimler-Benz, Audi, Volkswagen and Krupp.
The other suit, filed by two Holocaust survivors late last month in U.S. District Court in New Jersey, names only Volkswagen A.G. and Volkswagen of America Inc., the automaker's U.S. subsidiary in Auburn Hills, Mich.
While plaintiffs contend that some manufacturers' actions were voluntary, spokesmen for BMW, Mercedes-Benz and Volkswagen say the Nazis required most Germany companies to use forced labor during the war.
While manufacturers regret the inhumanity of that era, they have funded research, programs and humanitarian relief efforts to cope with it, spokesmen say. For example, Volkswagen recently announced it will be the first German company to establish a private fund to benefit people forced to work at the factory during 1944 and 1945.
A spokesman for BMW of North America adds, "We have always maintained that the German government should take responsibility for this." The German government has paid out about $56 billion in war-related compensation thus far, he added. If the government refuses to address this issue, then German industry should establish a centralized fund to compensate forced workers, he said.
In related action, four concentration camp survivors late last month filed suit in U.S. District Court in Newark, N.J., charging that Degussa A.G. of Frankfurt, Germany, and Degussa Corp., its Ridgefield, N.J., subsidiary, should be held accountable for their wartime activities. The lawsuit alleges that the company smelted looted gold -- including dental fillings -- manufactured gas used in gas chambers, supplied bomb technology and bought Jewish-owned businesses forced on the market at artificially low prices, according to the suit.
A Degussa representative said it is awaiting a copy of the complaint but otherwise declined comment.
Should the manufacturers be found liable for using slave labor, it is unlikely any defendant would have insurance for such action.
"I can't imagine that there would be insurance coverage for this," said Allyn Z. Lite, a plaintiff's attorney in the New Jersey slave-labor case. Insurance policies are not written to protect companies against an intentional tort, such as slavery, which is formally condemned by several international groups, including the United Nations.
However, discovery has not yet been conducted to determine whether insurance exists, said Mr. Lite, an attorney at Goldstein Lite & DePalma in Newark, N.J.
However, another observer is less certain about the coverage issue. "The situation is unprecedented, and the availability of coverage is unknown," said Arthur Flitner, assistant vp and senior director of curriculum for the American Institute for CPCU and the Insurance Institute of America in Malvern, Pa. "There are no easy answers to this.'