Top Lawyer on Holocaust Restitution Cases Taking Flak Over Fee Request

By Nathaniel Popper

Published January 13, 2006, issue of January 13, 2006.
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The most respected legal strategist in the Swiss bank dispute has come under attack from other lawyers after requesting more than $4 million in fees — a sum that would make him the highest paid attorney to work on the case.

The lawyer making the request, New York University law professor Burt Neuborne, gained respect and prominence for refusing to take any fees for his work in achieving the $1.25 billion settlement in 1998 with the Swiss banks accused of withholding Holocaust-era deposits. More than a dozen lawyers litigated the case, several of whom told the Forward that they assumed Neuborne had continued to work pro bono.

Neuborne’s application for fees, filed December 19, is for work he has done since 1999 in administering the settlement fund as lead settlement counsel. He was appointed to the position by the federal judge in the case, Edward Korman.

In the fee application submitted to Korman, Neuborne requested $4.1 million for 8,178 hours of work since 1999. Together, the other lawyers who worked on the case were awarded $5.3 million.

Lawyers seeking fees in Holocaust restitution and reparation cases have faced constant opposition because of the widespread belief that any money recovered should go to Holocaust survivors. Any request from Neuborne was certain to draw scrutiny because he has been held up as the exemplar of a public-minded pro bono attorney. In fact, Korman asked him to help decide on fees for the other lawyers, and Neuborne’s current request faces opposition from those who expressed unhappiness with Neuborne’s earlier recommendations.

Philadelphia attorney Robert Swift, who was on the executive committee of attorneys in the case along with Neuborne, filed a legal document December 29, asking the judge to refuse Neuborne’s request. “Prof. Neuborne neither informed me that he intended to seek a fee during the administration of the settlement nor sought to engage the legal skills of me or most other settlement class counsel who were acting pro bono,” Swift wrote.

Swift was not paid for work he did since the settlement, but he did receive $1.2 million in fees for his work in achieving the agreement. He had requested greater compensation, which was rejected on Neuborne’s recommendation.

In contrast to Swift, a number of other lawyers involved in the case, including those who worked pro bono, supported Neuborne’s request and praised his efforts since the settlement.

“The only person who could seriously challenge this either hasn’t been paying attention or has a bone to pick,” said Morris Ratner, a lawyer from the original case, whose law firm donated his fees to Columbia University’s law school. “Burt single-handedly implemented a billion-dollar settlement. What he is seeking in fees is totally modest.”

Michael Bazyler, a legal historian who has written about the restitution movement, said that the work Neuborne has done since the settlement was more arduous than the work required to reach the settlement in the first place.

“The heavy-duty work has come during the distribution of the funds,” Bazyler said. “If anybody deserves fees in the Swiss case, it’s Burt Neuborne.”

The $1.25 billion won from the Swiss banks is still being distributed — Neuborne estimated that about $800 million already has been disbursed. The biggest continuing dispute is how to spend any unclaimed money. Korman, the judge, has decided to distribute most of the remaining funds to needy survivors in the former Soviet Union rather than to survivors in America. Neuborne has drawn the ire of some American survivor organizations for supporting Korman’s decision. These groups also expressed unhappiness when hearing of Neuborne’s fee request.

“He was yelling all the time that he was working pro bono,” said Leo Rechter, the president of the National Association of Jewish Holocaust Survivors. “If it was up to us, we would have said that we didn’t want his services.”

While Neuborne received nothing for his work in achieving the Swiss settlement, he was awarded $4.4 million for his work in a separate case against German industries, which was settled in 1999. At the time, he said he was only accepting the money because it didn’t come out of the survivors’ pot. Neuborne’s new fees would come from funds for survivors. Neuborne said this fee was fundamentally different from the one for the German case because it was for administering funds rather than for representing the survivors in court.

“There’s a big difference between defending the victims’ rights and performing a service for them once you get the money,” Neuborne told the Forward. “It’s like running an enormous business that is under legal attack all the time.”

In his petition, Neuborne said he represented the settlement fund in 29 legal matters and increased the value of the fund by at least $35 million. Among Neuborne’s actions, he successfully lobbied to make any payouts to American survivors tax-free. He also successfully argued that the Swiss banks should pay millions of dollars in interest on the money held since the agreement.

In opposing Neuborne, Swift pointed out that on at least three days Neuborne billed for more than 24 hours. Neuborne said that happened because he billed any hours to the day in which he started projects, and he frequently worked through the night.

Even among attorneys who praised Neuborne’s work, a few said they had not realized that Neuborne would receive compensation as lead settlement counsel.

“My assumption was that he was continuing to work pro bono,” said Martin Mendelsohn, a Washington lawyer who worked on the case.

Neuborne said that when the judge initially asked him to be lead settlement counsel, he had declined the job and accepted only after the judge said he would be compensated. Korman told the Forward that he could not comment on a pending case but said he would hold a hearing on the matter.

The hearing could create a difficult situation for Korman because he will have to preside over a matter in which he is personally involved. Neuborne said that he has lunch with Korman every month to discuss progress on the case and that the two have worked closely, in the face of strenuous opposition, to administer the fund.

“I’ve never worked harder. I’ve never been more successful. I’ve never been prouder of my legal work,” Neuborne said.

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