NYU Law Professor Burt Neuborne Gets His Due -- New York Magazine

Getting His Due

The division of the looted-assets money upset Rechter and the leaders of other grassroots American survivor groups. They saw it as an injustice that so much aid would go to the former Soviet Union, at the expense of poor survivors in the U.S. The case was supposed to be about restitution, compensating victims, but this outcome seemed more like charity. And so they broke from Neuborne, and their lawyer, Samuel J. Dubbin, filed an appeal on behalf of American Holocaust survivors, holding up the $100 million in aid. Months passed without a resolution, frustrating Neuborne and the judge. Korman called for a meeting in his chambers in Brooklyn. Dubbin flew in from Florida; Neuborne trekked in from Manhattan. “The judge took out a yellowed copy of the Times and showed me a story about how hard life is in Russia,” Dubbin says. “I told Korman about the needs in Miami.”

What happened next is bitterly disputed. Dubbin says that the judge admitted he did not realize that the needs of some survivors in America were so great and that Neuborne offered a quid pro quo: He’d help them if Dubbin would just drop the appeal. Neuborne recalls the meeting differently: “The judge told Dubbin, ‘Why are you doing this? Your appeal is worthless’ … I said to Dubbin, ‘I don’t want to embarrass you. Isn’t there some way you can save face?’ ”

Indeed there was: “I have a great deal of sympathy with the argument that the needs of poor survivors in the United States should be carefully considered,” Neuborne wrote in an open letter to Dubbin’s clients. The first $100 million would be disbursed under the 75-21-4 formula, but he held out the possibility that future looted-assets money from the main $1.25 billion pile would be diverted to impoverished Holocaust victims in Miami and elsewhere in the States. “I will support thoughtful plans designed to assure that the needs of the American survivor community are addressed … with due regard for the fact that they have not received significant distributions up to this point.” Satisfied, the American survivors abandoned their appeal. Later Korman thanked them in a conference call. “You are performing a mitzvah, and I will not forget it.”

Yet subsequent distributions of $60 million and $45 million to the looted-assets class proceeded under the same formula: 75 percent to the former Soviet Union, 4 percent to the U.S. Feeling double-crossed, the American survivors filed a new appeal. And Neuborne, to their astonishment, opposed them. “It was a betrayal,” says Dubbin. “Instead of backing us, backing the plaintiffs, he backs the judge.”

Neuborne says Dubbin is trying to turn a face-saving gesture—the letter—into a promise. “We sat in that room, the judge and I, and we told Dubbin, ‘This is not binding … You understand that, don’t you?’ ” he says. Neuborne says the survivors misunderstand his role and that Dubbin misrepresents it. “I have tried to explain to them: ‘Look, of course I am going to represent you. But my representation is to make sure your views are heard by the special master and the judge. Once that happens, they will make a decision. And my job is to enforce that.’ ”

Neuborne, in his role as lead settlement attorney, inevitably became more CEO than crusader. The job had him develop a mechanism to file claims and explain it at survivor gatherings from Italy to California. There were negotiations in Switzerland for bank records and decisions on how to invest the money. Neuborne lobbied Congress, winning a tax exemption that saved tens of millions of dollars. Korman even asked Neuborne to review the bills of other lawyers seeking fees. “It was his work on every vacation, every trip. We go to Europe and he is faxing papers from the hotel in Paris,” his wife, Helen, says. “Nobody expected it to happen this way. It just happened.”

Last December, a week before Christmas, Neuborne sent Korman a letter. Nearly seven years had passed since he’d become lead settlement counsel. Neuborne had successfully defended every legal challenge to the settlement, including those filed by Dubbin on behalf of the American survivors. Hundreds of millions of dollars still had not been distributed, but systems to file, review, and pay claims for plundered bank deposits were in place. Neuborne thought it was time to get paid. In his letter, Neuborne reminded the judge that he had waived fees in the first phase of the case. He added, “Once it became clear that service as Lead Settlement Counsel would entail an enormous commitment of time and intellectual energy, you suggested, and I agreed, that hourly … compensation should be paid.” Neuborne declared that he had worked 8,178 hours since 1999, at $700 an hour. After applying a 25 percent discount, he staked out his bottom line: $4,088,500.