When Is a “Joint Statement” a Treaty?

The Third Circuit recently had to determine whether a “joint statement” between Germany and the United States regarding Holocaust settlement created a private right of action for alleged violations of Germany to pay interest on the $10 billion DM settlement fund. It presents an interesting question of whether the document should be interpreted to create a private right of action based on federal common law or “international agreement law.” The Third Circuit in Gross v. German Foundation Industrial Initiative concluded that the Joint Statement was a treaty, not a contract.

At issue in this World War II reparations case is whether the Joint Statement of the Berlin Accords constitutes a privately enforceable contract between some of the participants to the Joint Statement. Appellants contend that the defendant German companies owe “interest” on their payments to a reparations fund created by the Berlin Accords…. [W]e hold that the disputed interest provision of the Joint Statement does not constitute or confer a privately enforceable cause of action on the Appellants, who assert standing as third-party beneficiaries….

After many months of intense negotiations and significant lucubration, on July 17, 2000, a diplomatic agreement, commonly referred to as the Berlin Accords or the Berlin Agreements, was reached as a means of resolving these long-standing claims. Under the agreement, the German Foundation “Remembrance, Responsibility and the Future” (“the Foundation”) was established as the intended, exclusive forum for receiving, processing, and paying reparation claims at issue here…. The Berlin Accords consist of (1) the Joint Statement, (2) the Executive Agreement between the United States and Germany, and (3) the Foundation Law. The Joint Statement-formally titled “The Joint Statement on occasion of the final plenary meeting concluding international talks on the preparation of the Foundation ‘Remembrance, Responsibility and the Future’ ”-sets forth a goal of the Foundation, which is to “provide dignified payments to hundreds of thousands of survivors and to others who suffered from wrongs during the National Socialist era and World War II.” Joint Statement, pmbl. ¶ 12. The Joint Statement commits the German government and German industry to provide DM 10 billion in capitalization. As structured, the Initiative would collect DM 5 billion from individual German companies and then transfer the money to the Foundation. Particularly significant for this case, the last sentence of Paragraph 4(d) of the Joint Statement states: German company funds will continue to be collected on a schedule and in a manner that will ensure that the interest earned thereon before and after their delivery to the Foundation will reach at least 100 million DM….

We recognize that the Joint Statement is not a formal treaty; nevertheless, it constitutes part of the understanding reached among sovereign nations and private parties. Negotiations occurred during plenary sessions comprising high-level executives of foreign nations. The signatories of the Joint Statement itself includes the representatives of eight different nations. Further, the Joint Statement has meaning only in the context of the entire Berlin Accords. Indeed, the Joint Statement by itself is incomplete, as it talks of the Foundation, but understanding what the Foundation is requires resort to the Foundation Law. In sum, the Joint Statement appears to be a unique document, the objectives of which are to memorialize the efforts of the diplomatic talks resolving both political and legal issues. Thus, for at least these reasons, we agree with the district court that the law of international agreements provides the appropriate jurisprudential guidance in the analysis of whether the Joint Statement creates a private cause of action.

It makes perfect sense to me to describe the Joint Statement as a treaty, although I regret that the court failed to look to international law to determine the question. Had they done so it would have been an easier question. Article 2 of the Vienna Convention on the Law of Treaties provides “a ‘treaty’ means an international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation.” I would think that applying that test, one could conclude that the Berlin Accord is a treaty, with the Joint Statement as part of that treaty. The Third Circuit seemed to believe that it had to find the Joint Statement, standing alone, was a treaty rather than multiple instruments together constituting the treaty.