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SOCIETE INTERNATIONALE v. KENNEDY

June 30, 1964

SOCIETE INTERNATIONALE, etc., Plaintiff,
v.
Robert F. KENNEDY et al., Defendants



The opinion of the court was delivered by: PINE

From time to time over the past sixteen years this action has occupied the attention of this Court and its Special Master, the United States Court of Appeals for the District of Columbia Circuit, and the Supreme Court of the United States. In April of this year it was finally brought to a close. This was accomplished by the entry into a Stipulation of Settlement between plaintiff and defendants, consented to by all the intervenors except a minuscule number, whose rights have been adequately safeguarded, and the filing of praecipes of dismissal with prejudice by the consenting intervenors. The records of this Court have been filled with many volumes of pleadings, thousands of pages of transcript, countless briefs and numerous opinions of the Courts involved. The history of this case gives color to the utterance of a cynical wag that the legal complexities increase in proportion to the amount of money involved; and here the money involved amounts to many millions of dollars.

However, for the purpose of the motions now before me, the issues can be stated in a few sentences, as follows:

 The Alien Property Custodian, acting under the Trading With The Enemy Act, *fn1" vested in himself the American assets of a Swiss corporation known as Societe Internationale Pour Participations Industrielles et Commerciales, S.A., et al. Throughout the litigation this corporation has been frequently referred to as Interhandel, and is referred to as Interhandel herein. These assets consisted of more than 90% Of the capital stock of General Aniline and Film Corporation of Delaware and certain bank accounts. Interhandel brought action in this Court to recover these assets claiming they were illegally seized, and the Attorney General, succeeding to the powers of the Alien Property Custodian, answered claiming that Interhandel was controlled by officers and stockholders who were engaged in a conspiracy with the German Government and German nationals to conduct the business of General Aniline and Film Corporation in their interest during the war with Germany, and that, therefore, the vesting was authorized by law.

 The basic issue raised by the petition for intervention was what part of the assets of a corporation organized under the laws of a neutral country may the custodian retain where part of the corporate stock is owned by enemies, part by American citizens, and part by non-enemy aliens. The Supreme Court held that when the Government seizes assets of a corporation organized under the laws of a neutral country, the rights of innocent stockholders to an interest in the assets proportionate to their stockholdings must be fully protected. *fn2"

 The foregoing is only a brief statement of the issues involved in this litigation, but is sufficient for consideration of the motions now before me, which I shall take up separately, as follows:

 The first is a motion by Eric G. Kaufman. He has consented to the stipulation above referred to, and has filed a praecipe of dismissal with prejudice. He has never appeared as counsel in this case, but as an intervenor only.

 In his present motion filed after the dismissal with prejudice of his original petition to intervene, as above stated, he moves 'for leave to intervene as counsel pro hac vice for Kaufman intervenors in order to assert the circumstances under which Irving Moskowitz, Esq., was retained as counsel to represent Kaufman intervenors.' To his present motion he attaches a 'motion for interlocutory relief' in which he states that he was one of the original intervenors in this action, and prior to his intervention had performed extensive and exhaustive research as to the manner in which the rights of non-enemy stockholders might be protected; that following this research he entered into a contract with Irving Moskowitz, Esq., by the terms of which Mr. Moskowitz agreed that he should receive '25% Of our total gross fees;' that he understands that the amount agreed upon between Interhandel and counsel for the Kaufman group (including Mr. Moskowitz) is '$ 800,000 for fees alone;' and that although he has a 25% Interest in the fees agreed upon between Mr. Moskowitz and his associates 'as counsel for the Kaufman group' he has not been able to persuade Mr. Moskowitz to abide by the terms of his agreement. He prays that the Court require the distribution of fees 'allotted for counsel for Kaufman intervenors' in accordance with the agreement referred to, and that it issue a rule directing Mr. Moskowitz and his associate counsel to show cause why the agreement should not be honored and enforced. In an affidavit attached to his moving papers he states he is admitted to practice as an attorney in the courts of New York State and is a member of the Bar of the Supreme Court of the United States; that he is the owner of 6 shares of Interhandel and the members of his immediate family own 80 shares in addition thereto; that he commenced extensive legal research with a view toward protecting the stock owned by him, his family, and those similarly situated, namely non-enemy shareholders, and that in 1950 he retained the firm of Graubard and Moskowitz to represent his family and him insofar as their shares are concerned, as well as those similarly situated. With his moving papers he attaches copies of correspondence between Graubard and Moskowitz and himself supporting his claim to receive 25% Of the total gross fees. He also attaches copies of correspondence between Graubard and Moskowitz and Robert Sher and Isadore Alk. The latter two were retained as Washington counsel by the former, who were not members of the bar of the District of Columbia. Messrs. Sher and Alk succeeded Messrs. Kominers and Fisher, who had previously been retained by Graubard and Moskowitz as Washington counsel.

 The question is whether he may now intervene in this action to assert his claim to 25% Of the fee agreed to be paid to his own counsel under a private out-of-court agreement between Interhandel and his counsel, or whether he should be remitted to a separate action against his counsel to enforce his contractual claim.

 In the first place, there is no proceeding pending in this Court in which he may intervene, since the petition for intervention to which he was a party has, as above stated, been dismissed with prejudice. Therefore, Barnes v. Alexander, 232 U.S. 117, 34 S. Ct. 276, 58 L. Ed. 530 and the other cases cited by petitioner are not apposite. In those cases there were proceedings pending in court. He disavows any claim against Interhandel (T. pp. 82, 84).

 In the second place, any moneys to be paid in the future to Mr. Moskowitz and his associates by Interhandel are not a fund before the Court. By his own statement they constitute moneys that will be paid by Interhandel as a result of a private agreement reached between Interhandel and Mr. Moskowitz and his associates.

 As stated by the Special Master in this case, in an opinion confirmed by this Court on July 23, 1952, it cannot 'be said that in any real sense property in the possession of the Alien Property Custodian (as here) is 'in the custody or subject to the control or disposition of the Court."

 In its Memorandum Opinion of October 17, 1963, this was made clear by this Court when it stated that the responsibility for an amicable settlement of the case, if that was desired by the parties, resides in the parties themselves and their counsel who are all sui juris, and who possess an intimate familiarity with the issues of law and fact involved in the litigation growing out of their years of association with its details and ramifications. Such a settlement necessarily would include a settlement of counsel fees.

 In the third place, Kaufman cannot intervene of right under Rule 24(a), Fed.R.Civ.P., because he does not come within any of the categories giving such right, and cannot intervene under Rule 24(b), Fed.R.Civ.P., ...


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