Welcome

Nazi-Era Claims From Holocaust Heirs Rebuffed at Supreme Court (1)

Feb. 3, 2021, 3:23 PM; Updated: Feb. 3, 2021, 5:33 PM

Heirs of Holocaust victims stripped of their property during World War II can’t press their claims in U.S. courts—at least not yet.

The Supreme Court Feb. 3 sided with Hungary and Germany in a pair of cases, saying foreign courts should resolve disputes between those countries and their citizens—not the U.S.

During oral arguments Dec. 7, several of the justices were concerned that allowing these suits to continue here could open the U.S. to suits in other countries.

“Look what you’re opening up,” Justice Stephen Breyer said during arguments, noting that the list of things the U.S. could be hauled into foreign courts for “goes on and on.”

Both cases sought compensation for property taken from Jewish citizens by the Nazis.

In one, heirs of Jewish art dealers sued to recover a collection of medieval relics known as the Guelph Treasure, which they say was forcefully sold in the 1930s for 35% of its value.

In the other, families of Hungarian Holocaust victims sued the country for seizing property from Jewish citizens before sending them to death camps.

The court, however, sent the cases back to the lower courts to consider whether other arguments could support hearing the cases in the U.S.

Domestic Issue

Foreign countries are generally immune from being dragged into U.S. courts.

The Foreign Sovereign Immunities Act, though, provides some narrow exceptions.

At issue here is the act’s expropriation exception, which allows plaintiffs to sue foreign nations in federal courts for “rights in property taken in violation of international law.”

The cases present similar issues, so the court addressed the scope of the FSIA in the German case, summarily sending the Hungarian one back to the lower court.

Pointing to the “domestic takings rule,” Germany argued that the taking of property from its own citizens isn’t a violation of international law—only the taking of property from foreign nationals.

The Supreme Court agreed, saying there’s unanimous international support that domestic takings should be dealt with domestically, not in foreign courts.

“United States law governs domestically but does not rule the world,” Chief Justice John Roberts wrote for a unanimous court.

Jurisdictional Hook

In doing so the court rejected the plaintiffs’ argument that “violation of international law” went beyond property rights to include human rights abuses.

The property was taken from them to further the Nazi’s genocide of the Jewish population, the plaintiffs said.

The court refused to read the exception broadly as “an all-purpose jurisdictional hook for adjudicating human rights violations.”

Doing so could subject the U.S. itself to human rights suits, the justices said.

“As a Nation, we would be surprised—and might even initiate reciprocal action—if a court in Germany adjudicated claims by Americans that they were entitled to hundreds of millions of dollars because of human rights violations committed by the United States Government years ago,” Roberts wrote.

Guelph Treasure

This isn’t the end of the road for the plaintiffs, however.

The court sent the cases back to consider whether other arguments permit suit in the U.S.

In particular, the plaintiffs in the German case say they weren’t German citizens at the time the property was taken, so they don’t fall within the domestic takings rule.

Those plaintiffs include American citizens who claim Nazi leader Hermann Goering “employed a combination of political persecution and physical threats to coerce the consortium into selling the remaining pieces to Prussia in 1935 for approximately one-third of their value,” according to the court.

It noted the importance of the collection in German heritage, dating back to the Holy Roman Empire.

The Baltimore Sun reported in 1935 that part of it was gifted to Adolf Hitler, but the Prussian Cultural Heritage Foundation (SPK)—which currently houses the treasure—denies that ever happened.

The plaintiffs already attempted to get relief in Germany, but were rebuffed. That prompted them to sue in the U.S. for $250 million in compensation.

The cases are Federal Republic of German v. Philipp, U.S., No. 18-1447 and Republic of Hungary v. Simon, U.S., No. 19-351.

(Updates with quotes and reasoning from the opinion.)

To contact the reporter on this story: Kimberly Strawbridge Robinson in Washington at krobinson@bloomberglaw.com

To contact the editors responsible for this story: Seth Stern at sstern@bloomberglaw.com; John Crawley at jcrawley@bloomberglaw.com

To read more articles log in. To learn more about a subscription click here.