Federal Republic of Germany v. Philipp, 592 U.S. ___ (2021)
German Jewish art dealers owned a collection of medieval relics. Their heirs allege that the Nazi government unlawfully coerced the consortium into selling the collection to Prussia for a third of its value. The relics are currently maintained by an instrumentality of the Federal Republic of Germany and displayed at a Berlin museum. After unsuccessfully seeking compensation in Germany, the heirs brought claims in the U.S. Germany argued that the claims did not fall under an exception to the Foreign Sovereign Immunities Act for “property taken in violation of international law,” 28 U.S.C. 1605(a)(3) because a sovereign’s taking of its own nationals’ property is not unlawful under the international law of expropriation. The heirs countered that the purchase was an act of genocide, a violation of international human rights law. The D. C. Circuit affirmed the denial of a motion to dismiss.
The Supreme Court vacated. Under the expropriation exception, a foreign sovereign’s taking of its own nationals’ property remains a domestic affair. Historically, a sovereign’s taking of a foreign national’s property implicated international law because it constituted an injury to the state of the alien’s nationality. A domestic taking did not interfere with relations among states. The FSIA’s expropriation exception emphasizes property and property-related rights, while human rights violations are not mentioned. Germany’s interpretation of the exception is more consistent with the FSIA’s goal of codifying the restrictive theory of sovereign immunity, under which immunity extends to a sovereign’s public, but not private, acts. Other FSIA exceptions confirm Germany’s position; those exceptions would be of little consequence if human rights abuses could be packaged as violations of property rights and brought within the expropriation exception.
An exception to the Foreign Sovereign Immunities Act for “property taken in violation of international law,” does not permit a suit in the U.S. against the German government by heirs of German Jewish art dealers who lost valuable collections to the Nazi government.
SUPREME COURT OF THE UNITED STATES
Syllabus
FEDERAL REPUBLIC OF GERMANY et al. v. PHILIPP et al.
certiorari to the united states court of appeals for the district of columbia circuit
No. 19–351. Argued December 7, 2020—Decided February 3, 2021
Respondents are the heirs of German Jewish art dealers who formed a consortium during the waning years of the Weimar Republic to purchase a collection of medieval relics known as the Welfenschatz. The heirs allege that when the Nazi government rose to power, it unlawfully coerced the consortium into selling the collection to Prussia for a third of its value. The relics are currently maintained by the Stiftung Preussischer Kulturbesitz (SPK), an instrumentality of the Federal Republic of Germany, and displayed at a Berlin museum. After unsuccessfully seeking compensation in Germany, the heirs brought several common law property claims in United States District Court against Germany and SPK (collectively Germany). Germany moved to dismiss, arguing that it was immune from suit under the Foreign Sovereign Immunities Act. As relevant, Germany asserted that the heirs’ claims did not fall within the FSIA’s exception to sovereign immunity for “property taken in violation of international law,” 28 U. S. C. §1605(a)(3), because a sovereign’s taking of its own nationals’ property is not unlawful under the international law of expropriation. The heirs countered that the exception did apply because Germany’s purchase of the Welfenschatz was an act of genocide, and the relics were therefore taken in violation of international human rights law. The District Court denied Germany’s motion to dismiss, and the D. C. Circuit affirmed.
Held: The phrase “rights in property taken in violation of international law,” as used in the FSIA’s expropriation exception, refers to violations of the international law of expropriation and thereby incorporates the domestic takings rule. Pp. 4–16.
(a) The heirs contend that their claims fall within the FSIA’s exception for cases involving “property taken in violation of international law,” §1605(a)(3)—a provision known as the expropriation exception—because the forced sale of the Welfenschatz constituted an act of genocide, and genocide is a violation of international human rights law. Germany argues that the relevant international law is not the law of genocide but the international law of expropriation, under which a foreign sovereign’s taking of its own nationals’ property remains a domestic affair. Pp. 4–13.
(1) The “domestic takings rule” invoked by Germany derives from the premise that international law customarily concerns relations among states, not between states and individuals. Historically, a sovereign’s taking of a foreign national’s property implicated international law because it constituted an injury to the state of the alien’s nationality. A domestic taking, by contrast, did not interfere with relations among states. This domestic takings rule endured even as a growing body of human rights law made states’ treatment of individual human beings a matter of international concern. And those who criticized the treatment of property rights under international law did so on the ground that all sovereign takings, not just domestic takings, were outside the scope of that law. This dispute over the existence of international law constraints on sovereign takings eventually reached the Court in Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 436. Hesitant to delve into this controversy, the Court instead invoked the act of state doctrine. In response, Congress passed the Second Hickenlooper Amendment to the Foreign Assistance Act of 1964, which prohibits United States courts from applying the act of state doctrine where a “right[ ] to property is asserted” based upon a “taking . . . by an act of that state in violation of . . . international law.” 22 U. S. C. §2370(e)(2). Courts and commentators understood the Amendment to permit adjudication of claims Sabbatino had avoided deciding, i.e., claims against other countries for expropriation of American-owned property. But nothing in the Amendment purported to alter any rule of international law, including the domestic takings rule. Congress used nearly identical language when it crafted the FSIA’s expropriation exception twelve years later. Based on this historical and legal background, courts reached a “consensus” that the expropriation exception’s “reference to ‘violation of international law’ does not cover expropriations of property belonging to a country’s own nationals.” Republic of Austria v. Altmann, 541 U.S. 677, 713 (Breyer, J., concurring). Pp. 5–8.
(2) The heirs concede that the international law of expropriation retained the domestic takings rule at the time of the FSIA’s enactment, but they read “rights in property taken in violation of international law” to incorporate any international norm, including international human rights law, rather than merely the international law of expropriation. The text of the FSIA’s expropriation exception, however, supports Germany’s reading. The exception places repeated emphasis on property and property-related rights, while injuries and acts associated with violations of human rights law, such as genocide, are notably lacking—a remarkable omission if the provision was intended to provide relief for atrocities such as the Holocaust. A statutory phrase concerning property rights most sensibly references the international law governing property rights, rather than the law of genocide. The heirs’ position would arguably force courts themselves to violate international law not only by ignoring the domestic takings rule, but also by derogating international law’s preservation of sovereign immunity for violations of human rights law. Germany’s interpretation of the exception is also more consistent with the FSIA’s express goal of codifying the restrictive theory of sovereign immunity, 28 U. S. C. §1602, under which immunity extends to a sovereign’s public, but not private, acts. It would destroy the Act’s distinction between private and public acts were the Court to subject all manner of sovereign public acts to judicial scrutiny under the FSIA by transforming the expropriation exception into an all-purpose jurisdictional hook for adjudicating human rights violations. Pp. 8–12.
(3) Other FSIA provisions confirm Germany’s position. The heirs’ approach would circumvent the reticulated boundaries Congress placed in the FSIA with regard to bringing claims asserting human rights violations. One FSIA exception, for example, provides jurisdiction over claims “in which money damages are sought against a foreign state for personal injury or death, or damage to or loss of property,” but only where the relevant conduct “occurr[ed] in the United States.” §1605(a)(5). And the FSIA’s terrorism exception eliminates sovereign immunity for state sponsors of terrorism, but only for certain human rights claims, brought by certain victims, against certain defendants. §§1605A(a),(h). Such restrictions would be of little consequence if human rights abuses could be packaged as violations of property rights and thereby brought within the expropriation exception. Pp. 12–13.
(b) The heirs’ counterarguments cannot overcome the text, context, and history of the expropriation exception. They claim that the 2016 Foreign Cultural Exchange Jurisdictional Immunity Clarification Act—which amends the FSIA to explain that participation in specified “art exhibition activities” does not qualify as “commercial activity” under the expropriation exception, §1605(h)—demonstrates that Congress anticipated that Nazi-era claims could be adjudicated under the exception. Congress’s effort to preserve sovereign immunity in a narrow, particularized context, however, does not support the broad elimination of sovereign immunity across all areas of law. Other statutes aimed at promoting restitution to Holocaust victims, on which the heirs rely, generally encourage redressing those injuries outside of public court systems and do not speak to sovereign immunity. See, e.g., Holocaust Expropriated Art Recovery Act of 2016, 130Stat. 1524. Pp. 14–15.
(c) This Court does not address Germany’s argument that the District Court was obligated to abstain from deciding the case on international comity grounds or the heirs’ alternative argument that the sale of the Welfenschatz is not subject to the domestic takings rule because the consortium members were not German nationals at the time of the transaction. Pp. 15–16.
894 F. 3d. 406, vacated and remanded.
Roberts, C. J., delivered the opinion for a unanimous Court.
JUDGMENT ISSUED. |
Judgment VACATED and case REMANDED. Roberts, C. J., delivered the opinion for a unanimous Court. |
Argued. For petitioners: Jonathan M. Freiman, New Haven, Conn.; and Edwin S. Kneedler, Deputy Solicitor General, Department of Justice, Washington, D. C. (for United States, as amicus curiae.) For respondents: Nicholas M. O'Donnell, Boston, Mass. |
Reply of petitioners Federal Republic of Germany, et al. filed. (Distributed) |
Motion of the Acting Solicitor General for leave to participate in oral argument as amicus curiae and for divided argument GRANTED. |
Brief amici curiae of The World Jewish Congress, Commission for Art Recovery, and Ambassador Ronald S. Lauder filed (also in 18-1447). VIDED. (Distributed) |
Brief amici curiae of Professor William S. Dodge and Professor Maggie Gardner filed (also in 18-1447). VIDED. (Distributed) |
Brief amici curiae of Members of the United States House of Representatives filed (also in 18-1447). VIDED. (Distributed) |
Motion of the Acting Solicitor General for leave to participate in oral argument as amicus curiae and for divided argument filed. |
Brief amici curiae of American Association of Jewish Lawyers and Jurists and other advocates for Holocaust restitution filed. (Distributed) |
Proposal of amici curiae the World Jewish Congress, Commission for Art Recovery, and Ambassador Ronald S. Lauder to lodge materials under Rule 32.3 filed. |
Brief amicus curiae of Peter Toren filed. (Distributed) |
Brief amici curiae of Holocaust Survivors Foundation, USA, Inc., et al. (also in 19-351) filed. VIDED. (Distributed) |
Brief amici curiae of The 1939 Society, et al. filed (also in 18-1447) filed. VIDED. (Distributed) |
Brief amicus curiae of The Holocaust Art Restitution Project, Inc. filed. (Distributed) |
CIRCULATED |
Brief amici curiae of Florida Holocaust Museum, et al. filed. (Distributed) |
Brief of respondents Alan Philipp, et al. filed. (Distributed) |
Proposal of Respondents to lodge materials under Rule 32.3 filed. |
Brief amici curiae of National Jewish Commission on Law and Public Affairs (COLPA), et al. filed. |
Record received from the U.S.C.A. D.C. Circuit is electronic and located on PACER. |
Record requested from the U.S.C.A. District of Columbia Circuit. |
SET FOR ARGUMENT on Monday, December 7, 2020. |
Brief amici curiae of Professors Samuel Estreicher and Thomas H. Lee in support of neither party filed (also in 18-1447). VIDED. |
Brief amicus curiae of United States filed. |
Brief amicus curiae of Societe Nationale SNCF SA in support of neither party filed (also in 18-1447). VIDED |
Brief amici curiae of Holocaust and Nuremberg Historians in support of neither part filed. |
Brief amici curiae of Davis R. Robinson, et al. in support of neither party filed. |
Brief amici curiae of Foreign International Law Scholars and Jurists filed. |
Brief of petitioners Federal Republic of Germany, et al. filed. |
Joint appendix filed. (Statement of costs filed) |
Proposal of petitioners to lodge materials under Rule 32.3 filed. |
Blanket Consent filed by Petitioner, Federal Republic of Germany, et al. |
Blanket Consent filed by Respondent, Alan Philipp, et al. |
Motion to extend the time to file the briefs on the merits granted. The time to file the joint appendix and petitioners' brief on the merits is extended to and including September 4, 2020. The time to file respondents' brief on the merits is extended to and including October 22, 2020. |
Motion for an extension of time to file the briefs on the merits filed. |
Petition GRANTED. |
DISTRIBUTED for Conference of 7/1/2020. |
DISTRIBUTED for Conference of 6/25/2020. |
Supplemental brief of respondents Alan Philipp, et al. filed. VIDED. (Distributed) |
Brief amicus curiae of United States filed. VIDED. |
The Solicitor General is invited to file a brief in this case expressing the views of the United States. |
DISTRIBUTED for Conference of 1/17/2020. |
Reply of petitioners Federal Republic of Germany, et al. filed. (Distributed) |
Brief of respondents Alan Philipp, et al. in opposition filed. |
Petition for a writ of certiorari filed. (Response due October 18, 2019) |
Application (19A118) denied by The Chief Justice. The application is denied without prejudice to petitioners filing a new application after seeking relief in the district court. |
Application (19A118) for a stay pending the filing and disposition of a petition for a writ of certiorari, submitted to The Chief Justice. |