Holocaust Stolen Goods Leave Justices Struggling Over US Role

The US Supreme Court once again struggled with the role that US courts should play in returning property stolen by foreign countries during World War II to its original owners.

In several cases brought by Holocaust survivors against foreign nations, the justices have wrestled with how to balance the international friction that can result from hauling sovereign nations into US courts and fulfilling Congress’s intent to allow suits in some cases.

That struggle is exemplified in the case heard by the justices on Tuesday, which was originally filed in 2010 and has already made its way up to the Supreme Court once before.

In it, Holocaust survivors and their families say Hungary and its national railroad stole property from Jews while transporting them to concentration camps. They stole the plaintiffs’ property “while forcing them onto cattle cars,” said their lawyer, Shay Dvoretzky.

But Justice Department lawyer Sopan Joshi said the question is not whether Hungary acted wrongly. Instead, it’s about whether the US is the proper place to resolve the dispute.

Seeking Balance

Joshi, who argued for the US government on Hungary’s side, said that the Foreign Sovereign Immunities Act generally says US courts aren’t the right place to resolve those disputes. And while it does allow for some exceptions, those are “a small departure from the restrictive theory of sovereign immunity.”

That includes when the foreign country or the stolen property has a sufficient commercial connection to the US.

The US Court of Appeals for the D.C. Circuit said that Hungary’s practice during the Holocaust was to liquidate the stolen property and add the proceeds to the general treasury. Because that general fund was later used to issue bonds in the US, that was enough to bring the case within the exception to immunity and allow suit in the US.

Hungary’s attorney Joshua Glasgow said that’s too expansive and threatens to open US courts up to almost any dispute. “Simply showing that funds entered into the general revenues of an entire nation that contained billions of dollars followed by untold numbers of transactions following that deposit simply isn’t consistent” with the FSIA, Glasgow said.

“You’re really just asking us to throw out the general rule that sovereigns can’t be sued for appropriations of this sort,” Chief Justice John Roberts told Dvoretzky. “I mean, once you say commingling counts, well, then everything’s pretty much fair game,” Roberts said.

Justice Brett Kavanaugh agreed, saying that the risk of international friction counseled for a narrower reading of the exception.

“It’s a big deal to hail a foreign country in a US court,” Kavanaugh said, noting that no other country has a law that allows that. Given the risk of reciprocal actions against the US, it would be “more prudent to choose the narrower interpretation,” Kavanaugh said.

At any given time, the US government faces thousands of lawsuits overseas, Joshi said. The risk of reciprocal actions by other countries could “multiply greatly the number of lawsuits that we would have to contend with,” he said.

Justice Samuel Alito pushed Joshi on whether that was true.

“I don’t understand your argument about retaliation,” Alito told Joshi. “Do you think that if lawsuits are brought in the United States based on the expropriation, let’s say, of the property of US nationals abroad, then foreign countries are going to entertain suits based on the expropriation in this country of the property of their nationals?”

“Is the United States going around expropriating the property foreign nationals?” he asked Joshi.

Moreover, Justice Elena Kagan wondered if a rule that was too narrow would provide a “road map to any country that wants to expropriate property.”

Presumably “Congress wouldn’t have wanted to write a provision that has no meaning,” Kagan told Glasgow. “And under your theory, I think that there would be precious little meaning to this, because it really just, you know, gives foreign countries an easy way to expropriate poverty and make sure there’s no accountability for that expropriation.”

The case is Republic of Hungary v. Simon, U.S., No. 23-867, argued 12/3/24.