On Executive Statements of Interest

by Roger Alford

The Third Circuit earlier this month rendered one of the more interesting decisions I’ve seen on the subject of Executive Statements of Interest. In Gross v. German Foundation Industrial Initiative, available here, the Court was faced with a claim that interest in excess of DM 100 million was due on the DM 5 billion German slave labor settlement fund. As part of the bilateral settlement to secure “legal peace” for Germany, the United States agreed to file Statements of Interest to facilitate the dismissal of all outstanding litigation against Germany and German corporations.

The problem in this case was that there was no formal Statement of Interest filed by the United States. Instead there were a couple of letters that were alleged to be Statements of Interest. The first letter was by Richard Armitage and was sent to the top German negotiator, Otto Graf Lambsdorff, during settlement negotiations. That letter references the United States’ position that U.S. interests are better met through political rather than judicial resolution of this dispute. The second was a letter sent to the district court below by one William Kirschner, a trial attorney for the Department of Justice. It stated that the United States government “is not in a position to say whether or not German industry has a commitment to provide additional funds beyond what has been transferred to the Foundation.”

The Third Circuit addressed, among other things, (1) whether the United States was obligated to file a Statement of Interest in this case under the German Foundation settlement agreement; and (2) whether the Armitage letter constitutes an expression of United States interest. As to the first question, the Court concluded that the settlement agreement required the filing of a Statement of Interest in reparation and restitution cases, not the present case concerning interest on the settlement amount. As to the second question, the Court concluded that the Armitage letter did not constitute a policy determination by the Executive Branch or an authoritative expression of Executive interest to which the Court should defer.

The Court further found that the Kirschner letter offered little additional expressions of executive interest because it was silent on the U.S. position as to the justiciability of the dispute and expressly disclaimed a position on the merits. The Court concluded that “[b]ecause the United States Executive has declined to take a formal position on the justiciability of this case or on the merits of the ‘interest’ claim, we conclude the United States Executive has not, through an expression of its interest in the case, committed the ‘interest’ dispute to a political branch.”

Although I quibble with some of the wording in Gross, overall the result makes sense to me. The purpose of United States’ commitment to file Statements of Interest was to facilitate the dismissal of all pending and future slave labor reparation claims against German corporations. As Otto Graf Lambsdorff put in a chapter in my recent Holocaust Restitution book, the purpose of the Statements of Interest were to secure an “all-embracing and enduring legal peace for German industries against claims arising from the Nazi era and World World II…. We were convinced that this precedent would serve as an effective deterrent to any future lawyer who considers basing another individual or collective suit on facts already covered by the Foundation.” (pp. 176-77). In Gross, by contrast, the claim essentially involves an interpretive dispute about the settlement agreement and the claimants’ entitlement to interest thereon. The case does not threaten Germany’s desire for legal peace.

The Court also appears to be correct that a letter sent by a senior executive official to a German counterpart in the midst of treaty negotiations should not constititue a formal executive Statement of Interest as that term is traditionally understood. It might be useful for the merits of the dispute as part of treaty interpretation, but not for purposes of discerning whether the government had issued a formal Statement of Interest.

As for the Kirschner letter, one wonders what the Justice Department is doing filing letters to the court about the U.S. position on the German Foundation. That would seem to be the domain of the State Department to decide whether to file such a statement.

What is also interesting about Gross is how frequently courts appear willing to find the absence of a Statement of Interest as an indicator of justiciability under the political question doctrine. Alperin, Rio Tinto, and now Gross (not to mention Sosa) are all important recent decisions on the importance of Executive Statements of Interest. They suggest that the State Department must carefully consider its decision not to file a Statement of Interest (or in the case of Rio Tinto, the decision to file a Statement of Interest that is not unequivocally in opposition) and seriously risk a finding that the case is justiciable.


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