Supreme Court Will Review Question of Sovereign Immunity for Taking of Assets in Holocaust

The U.S. Supreme Court yesterday granted review in Republic of Hungary v. Simon, (Docket No. 23-867, certiorari granted 6/24/2024) (Order List), a long-running case in which Holocaust survivors have sued to recover the value of property which Hungary expropriated from them during the Holocaust. At issue is whether the expropriation exception to sovereign immunity under the Foreign Sovereign Immunities Act applies so that the suit can be pursued in American courts. Here the seized assets were liquidated, and the proceeds were placed in the Hungarian treasury.  Under the FSIA, those proceeds must have been used in a commercial activity in the United States in order for U.S. courts to have jurisdiction. At issue in the appeal are questions of who must show that commercial nexus.  The D.C. Circuit below in its 2023 decision (full text) which is on appeal began its opinion as follows:

In 1944, as World War II neared its end, the Hungarian government implemented an accelerated campaign to exterminate its remaining Jewish population. Within a matter of months, the government systematically executed over half a million Jews—roughly two-thirds of the Jewish population in Hungary at the war's outset. This state-perpetrated genocidal campaign ranks among the greatest crimes in human history.

The questions raised by these appeals bear on whether survivors of the Hungarian Holocaust may hale the Hungarian government and its instrumentalities into United States courts to answer for a subset of the wrongs they committed—namely, their confiscation of property from victims of the Holocaust.

The SCOTUSblog case page has links to all the pleadings in the case.

FSIA Precludes Suit Against Hungary for Property Confiscated from Its Jewish Population In Holocaust

In Simon v. Republic of Hungary, (DC Cir., Aug. 8, 2023), in a case on remand from the Supreme Court, the Court of Appeals for the D.C. Circuit held that under the Foreign Sovereign Immunities Act, the government of Hungary may not be sued in United States Courts for taking of property from its own nationals. The court said in part:

In 1944, as World War II neared its end, the Hungarian government implemented an accelerated campaign to exterminate its remaining Jewish population. Within a matter of months, the government systematically executed over half a million Jews—roughly two-thirds of the Jewish population in Hungary at the war’s outset. This state-perpetrated genocidal campaign ranks among the greatest crimes in human history.

The questions raised by these appeals bear on whether survivors of the Hungarian Holocaust may hale the Hungarian government and its instrumentalities into United States courts to answer for a subset of the wrongs they committed—namely, their confiscation of property from victims of the Holocaust. The plaintiffs invoke the Foreign Sovereign Immunities Act’s expropriation exception as a means to pierce the Hungarian state’s sovereign immunity and assert jurisdiction in federal district court. Defendants object that the exception is inapplicable....

Cognizant of the Supreme Court’s recent holding that “a country’s alleged taking of property from its own nationals” generally falls outside the scope of the Foreign Sovereign Immunities Act’s expropriation exception ..., the plaintiffs in these suits assert they were not Hungarian nationals at the time of the takings at issue. They instead claim that they were either stateless or Czechoslovakian nationals. The district court dismissed the claims of the plaintiffs asserting statelessness but concluded that most of the plaintiffs asserting Czechoslovakian nationality could proceed. 

We largely affirm. Like the district court, we conclude that the plaintiffs claiming statelessness ... have not made out a recognized claim within a Foreign Sovereign Immunities Act exception....

We likewise affirm the district court’s denial of the defendants’ motions to dismiss the claims of some of the plaintiffs asserting Czechoslovakian nationality, with a few exceptions....

Judge Randolph dissented as to the plaintiffs claiming Czechoslovakian nationality.

 

Abuse Victim's Claim Against The Vatican Dismissed Under FSIA

In Robles v. Holy See (State of Vatican City), (SD NY, Dec. 20, 2021), a New York federal district court dismissed a suit against the Vatican by plaintiff who was sexually abused by Catholic priest Barry Bossa from 1981 to 1986. Plaintiff claimed that the Vatican's policies contributed to the abuse, and asserted negligence and vicarious liability claims against the Vatican. The court held that under the Foreign Sovereign Immunities Act, it lacks jurisdiction over the Holy See on the claims as plead, saying in part:

At least at this stage ... the exception to the FSIA for tort liability based on the actions of an employee provides jurisdiction for claims of negligence, negligent training, supervision, and retention, and international law claims against the Holy See....

The Holy See’s alleged conduct, such as promulgating policies and supervising its employees and officials, occurred in large part at the Vatican.... As a result, the Holy See is immune from Plaintiff’s claims arising from the Holy See’s conduct that occurred outside the United States....

The Tortious Act Exception also excludes “any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused.” 28 U.S.C. § 1605(a)(5)(A). It is at this last step of the analysis that the last of Plaintiff’s remaining claims against the Holy See — negligence, negligent training, supervision, and retention, and violations of customary international law, all pursuant to respondeat superior based on the alleged actions of its putative employees— fail....

Case-law is clear that decisions related to employment and supervision are exactly the kind of policy judgments that the discretionary exclusion was designed to shield.....

Plaintiff’s broader negligence claim against the Holy See pursuant to respondeat superior, including his failure-to-warn and failure-to-report allegations ... is dismissed without prejudice, because, although perhaps a steep uphill climb, Plaintiff could conceivably allege facts in an amended complaint demonstrating lack of discretion as to these actions....

Supreme Court: FSIA Shields Germany From Suit Over Nazi Takings of German-Jewish Property

Yesterday in Federal Republic of Germany v. Philipp, (Sup. Ct., Feb. 3, 2021), the U.S Supreme Court held that the Foreign Sovereign Immunities Act (FSIA) precludes plaintiffs from filing suit in U.S. courts to recover for Jewish property taken by the Nazi government from German nationals.  Plaintiffs sued over the Nazi government's coercing a consortium of German Jewish art dealers to sell an art collection to Prussia at a one-third of its value. The FSIA provides that foreign countries, with certain exceptions, are immune from suit in U.S. courts.  Plaintiffs contended that the exception for cases  "in which rights in property taken in violation of international law are in issue" should apply because the coerced sale of their property was an act of genocide.

 A unanimous Supreme Court rejected plaintiffs' argument on two grounds. First it held that the exception for property taken in violation of international law does not include expropriation of property from a country's own nationals. Second it held that the exception for property taken in violation of international law does not apply to property taken in violation of international human rights law, saying in part: 

We need not decide whether the sale of the consortium’s property was an act of genocide, because the expropriation exception is best read as referencing the international law of expropriation rather than of human rights. We do not look to the law of genocide to determine if we have jurisdiction over the heirs’ common law property claims. We look to the law of property.

The Court yesterday also remanded Republic of Hungary v. Simon, (Sup. Ct., Feb. 3, 2021), for further consideration in light of tis decision in Germany v. Philipp. That case is a class action claim for property taken by the Hungarian government from Hungarian Jews during the Holocaust.

SCOTUSblog discusses the decisions.

Supreme Court Hears Arguments On Suits Over Nazi Confiscation of Jewish-Owned Property

The U.S. Supreme Court today heard oral arguments in two cases involving suits to recover the value of Jewish-owned property confiscated by governments in Hungary and Germany during World War II. In Republic of Hungary v. Simon (links to transcript and audio of full oral arguments), the Court was asked to decide on whether principles of international comity could be invoked by the district court to abstain from deciding the case under the Foreign Sovereign Immunities Act. The case was brought by surviving Hungarian nationals seeking to recover on behalf of a worldwide class the value of property taken from them during the Holocaust.

In an amicus brief, the United States government argued:

The United States has a paramount interest in ensuring that its foreign partners establish appropriate domestic redress and compensation mechanisms for Holocaust victims, and therefore seeks to prevent litigation in U.S. courts that could undermine that objective.

SCOTUSblog case page has links to all the filing in the case. 

In Federal Republic of Germany v. Philipp (links to transcript and audio of full oral arguments), the Court, in addition to the comity question, is asked to decide whether the expropriation exception to sovereign immunity in the Foreign Sovereign Immunities Act covers the taking of property in the Holocaust in violation of human rights provisions of international law. The suit seeks recovery for the forced sale at a fraction of its actual value of a collection of medieval reliquary art that had been purchased in 1929 by a consortium of Jewish art dealers in Germany.

SCOTUSblog case page has links to all the filing in the case.

AP reports on the arguments in both cases.

Chabad Moves One Step Closer To Recovering Sanctions Against Russia In Attempt To Repatriate Library

Agudas Chasidei Chabad of the United States v. Russian Federation, (D DC, Nov. 6, 2020), is the latest decision in a long-running attempt by Agudas Chasidei Chabad to recover from the Russian government two expropriated collections of valuable Jewish religious books and manuscripts. In 2013, the D.C. federal district court held the Russian government and three of its agencies in civil contempt, and imposed sanctions of $50,000 per day, for not complying with a 2010 default judgement ordering it to return the materials. (See prior posting). Plaintiffs attempted to find Russian assets to satisfy the sanctions by issuing subpoenas to Tenam, an indirectly wholly-owned subsidiary of Russia's nuclear agency.  Tenam challenged the subpoenas by challenging the underlying judgment against Russia. The district court held that Tenam lacks standing to challenge that judgment, and Tenam appealed. Now Tenam seeks a stay of discovery pending that appeal. In this latest 54-page decision, the federal district court denies that stay. VINnews reports on the decision. [Thanks to Steven H. Sholk for the lead.]

Israeli Rabbinical Judges Immune In State Court At Suggestion of State Department

In Ben-Hiam v. Edri, (NJ App., Feb. 5, 2018), a New Jersey appellate court held that a State Department "suggestion of immunity" in a suit against foreign officials is binding on New Jersey courts when the State Department has found that the foreign officials were acting within the scope of their authority for a foreign sovereign.  At issue is a suit brought in New Jersey against six Israeli rabbinical judges and an official of the Rabbinical Religious Courts Administration of Israel.  The suit grew out of a divorce and child custody dispute filed in Israeli courts by a couple who lived in New Jersey, but were Israeli citizens who were married in Israel and had traveled to Israel when the divorce action was filed.  While the Israeli litigation was pending, the husband (plaintiff in this case) returned to the United States.  Competing custody rulings for the couple's daughter were issued in the U.S. and Israel. The Israeli rabbinical court awarded custody of the daughter to the mother, but was unable to grant a divorce because the husband refused to grant the wife a get (Jewish divorce document).

What happened next is explained by the New Jersey court:

Israeli law gives rabbinical courts the authority to issue certain sanctions to pressure a nonconsenting spouse to give consent to a get. Accordingly, to compel plaintiff to consent to the get, the rabbinical court issued a series of escalating sanctions against plaintiff. Ultimately, the rabbinical court issued an order finding that under Jewish law, plaintiff's refusal was criminal and that Jewish persons must avoid dealing with plaintiff. That rabbinical court order was sent to plaintiff's rabbi in New Jersey, and was published on several websites.

In April 2015, plaintiff filed a civil complaint ... in New Jersey. Specifically, plaintiff contended that defendants aided and abetted in the kidnapping of his daughter, defamed him, and intentionally inflicted emotional distress on him.

D.C. Circuit Revives Holocaust Survivors' Expropriation Claims Against Hungary

In Simon v. Republic of Hungary, (DC Cir., Jan. 29, 2015), the C.C. Circuit Court of Appeals allowed 14 Holocaust survivors to move ahead with claims against Hungary and the Hungarian state-owned railroad for property taken by the Nazis during World War II. The court summarized its decision as follows:

The wartime wrongs inflicted upon Hungarian Jews by the Hungarian government are unspeakable and undeniable. The issue raised by this appeal is whether those wrongs are actionable in United States courts.... The district court dismissed the suit, holding that the Foreign Sovereign Immunities Act’s treaty exception grants the Hungarian defendants immunity. The court concluded that the 1947 Peace Treaty between the Allied Powers and Hungary set forth an exclusive mechanism for Hungarian Holocaust victims to obtain recovery....

We hold that the peace treaty poses no bar to the plaintiffs’ lawsuit. While the treaty secures an obligation by Hungary to provide compensation for property interests confiscated from Hungarian Jews during the War, that obligation is not exclusive of other, extra-treaty means of recovery.... As a result, the FSIA’s treaty exception does not preclude this action.

Plaintiffs, however, still must overcome the FSIA’s default grant of immunity to foreign sovereigns. We hold that the FSIA’s expropriation exception affords plaintiffs a pathway to pursue certain of their claims: those involving the taking of the plaintiffs’ property in the commission of genocide against Hungarian Jews.... We further hold that the plaintiffs’ claims do not constitute nonjusticiable political questions.... We leave for the district court to consider on remand whether, as a matter of international comity, the plaintiffs must first exhaust available remedies in Hungary before proceeding with their claims in United States courts.

Law.com reports on the decision.

DC Court of Appeals Grants Default Judgment Against North Korea In Torture Death of Christian Missionary

In Kim v. Democratic People's Republic of Korea, (DC Cir., Dec. 23, 2014), the Court of Appeals for the D.C. Circuit awarded a default judgment against North Korea to the family of Reverend Dong Shik Kim who allegedly was abducted from China by North Korean agents, taken to a North Korean labor colony, tortured and then killed. Kim, a Christian missionary, was allegedly targeted for providing humanitarian aid to North Korean defectors and refugees who fled to China seeking asylum, and for his proselytizing defectors.  According to a 2008 Washington Post article:

Kim, whose wife and two children are U.S. citizens, had raised the ire of the North Korean government by helping its citizens flee the repressive regime and by attempting to convert North Korean athletes who attended the 1996 Olympic Games in Atlanta.

The suit against North Korea was based on the "terrorism exception" to the Foreign Sovereign Immunities Act, allowing suits based on allegations of torture. The appeals court found that plaintiffs had produced sufficiently satisfactory evidence of torture to satisfy the requirements for entering a default judgment. The court concluded:

If the DPRK is unhappy with that outcome and has evidence that it has not tortured and killed Reverend Kim, it, like any defendant in default, may ask the district court to vacate that judgment under Federal Rule of Civil Procedure 60(b).

McClatchy News reports on the decision.