By Haggai Carmon

On January 4, 2009, the 9th Circuit Court of Appeals in San Francisco dismissed a class-action suit brought by Holocaust survivors against the Vatican Bank, ruling that the Bank is protected under the U.S. Foreign Sovereign Immunities Act and that the U.S. court system does not have jurisdiction in this case.

The suit was originally filed in 1999 by Holocaust survivors from Croatia, the Ukraine and Yugoslavia, most of whom now live in the United States. It alleges that the Vatican Bank accepted and laundered assets stolen by the Nazis from thousands of Jews, Serbs and Gypsies oppressed and killed when the Nazi-supported Ustasha government ran Croatia.

In suing, the survivors sought an accounting and recovery of the Ustasha Treasury, part of which was transferred to the Vatican after WWII. The plaintiffs were hopeful, given that in 1998, Swiss banks accused of questionable money management on behalf of the Nazi regime agreed to pay about $1.25 billion to Holocaust victims and their families.

In Alperin et al  v. Vatican Bank, Plaintiff Attorney Jonathan Levy argued that the Vatican Bank has engaged in commercial activities in the U.S., which is one of the exemptions to the Foreign Sovereign Immunities Act. The Court, however, ruled that the defendant’s commercial activities in the U.S. were simply “too tangentially related to [the plaintiffs’] legal claims to be considered the basis for the suit.”

Although Levy does not plan to appeal the decision, he did voice his disappointment that “the court found that dealing in gold teeth from concentration camps was not a commercial act.”