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Deferring to US foreign policy interests, a federal appeals court has tossed out a class-action lawsuit by Austrian Jewish victims of the Nazi regime in a ruling that may clear the way for payouts from a 2001 settlement fund.
In a 2-to-1 ruling Tuesday, the 2nd US Circuit Court of Appeals said it was "particularly mindful" of the federal government's statement that dismissing the case would advance its relations with Austria, Israel and Western, Central and Eastern European nations.
The lawsuit was the final case holding up implementation of an agreement with Austria that established a fund to compensate Austrian Jews whose property was confiscated during the Nazi era and World War II, the appeals court said.
Distributions from the Austrian compensation fund, which included $150 million to cover certain property claims, were contingent on dismissal of the case.
The US government had engaged in international negotiations for more than 50 years to settle Nazi-era claims but intensified efforts in 2000, resulting in a 2001 agreement with Austria to establish the fund, the court noted.
The US government noted in court papers that the compensation fund was the best alternative to "years of litigation whose outcome would be uncertain at best, and which would last beyond the expected life span of the large majority of survivors," the appeals court said.
The plaintiffs in the case were present and former nationals of Austria and their heirs and successors who suffered from Nazi persecution between 1938 and 1945.
They brought a lawsuit in October 2000 against the Republic of Austria and an organization through which Austria owns, operates and controls commercial enterprises. Austria had asked for dismissal of the lawsuit on the grounds of sovereign immunity.
Stanley M. Chesley, a Cincinnati lawyer who represents the World Jewish Restitution Organization and the Jewish Claims Conference, called the ruling "a clear green light to go forward."
Chesley said it was unclear when payments could begin to victims who submit claims.
Other lawyers in the case did not immediately return telephone messages for comment.
"We have to analyze it," Erika Jakubovits, an official with Vienna's Jewish Community, said about the decision. "I don't think we can say today that there is legal closure."
In his dissent, Circuit Judge Chester J. Straub called the ruling "unwarranted and troubling" and said it effectively allows the US executive branch to decide "on an ad hoc basis, when cases can and cannot be brought against a foreign sovereign."
He said the ruling might have the effect of "a strikingly broad doctrine mandating dismissal" whenever the executive branch decides that an issue presented to the court intrudes on foreign policy interests.