Rosalie Simon v. Republic of Hungary

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 10, 2015 Decided January 29, 2016

No. 14-7082

ROSALIE SIMON, ET AL.,

APPELLANTS

v.

REPUBLIC OF HUNGARY, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:10-cv-01770)

Paul G. Gaston argued the cause for appellants. With

him on the briefs were Charles S. Fax, Liesel Schopler, L.

Marc Zell, and David H. Weinstein.

Konrad L. Cailteux argued the cause for appellees. With

him on the briefs was Gregory Silbert.

Before: HENDERSON, SRINIVASAN and WILKINS, Circuit

Judges.

Opinion for the Court filed by Circuit Judge SRINIVASAN.

Concurring opinion filed by Circuit Judge HENDERSON.

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SRINIVASAN, Circuit Judge: This case arises out of one

of humanity’s darkest hours. In the summer of 1944, upon

the arrival of German troops in Nazi-allied Hungary, the

Hungarian government implemented an accelerated campaign

to deport Hungarian Jews to Nazi death camps for

extermination before the War’s end. At the outset of the War,

the Jewish population in Hungary numbered more than

800,000. By the end of the War, more than two-thirds of that

population had been murdered, with the lion’s share of

victims killed at Auschwitz in a mere three-month period in

1944. Winston Churchill described the brutal, mass

deportation of Hungarian Jews for extermination at Nazi

death camps as “probably the greatest and most horrible crime

ever committed in the history of the world.”

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. Plaintiffs, fourteen Jewish

survivors of the Hungarian Holocaust, bring various causes of

action against the Republic of Hungary and the Hungarian

state-owned railway arising from the defendants’ participation

in—and perpetration of—the Holocaust. 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 for their property losses, and that

permitting the plaintiffs’ lawsuit to proceed under the FSIA

would conflict with the peace treaty’s terms.

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

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confiscated from Hungarian Jews during the War, that

obligation is not exclusive of other, extra-treaty means of

recovery like the causes of action asserted in this case. 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. Because those

expropriations themselves amount to genocide, they qualify as

takings of property “in violation of international law” within

the meaning of the FSIA’s expropriation exception. We

further hold that the plaintiffs’ claims do not constitute non-

justiciable political questions falling outside of the Judiciary’s

cognizance. 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.

I.

A.

The Hungarian government, a wartime ally of Nazi

Germany, began a systematic campaign of discrimination

against Hungarian Jews as early as 1941. Hungary stripped

some Hungarian Jews of their Hungarian citizenship, forced

others into internment camps or slave labor battalions,

expelled others from public or professional employment, and

pressed still others into exile. But as of 1944—“on the very

eve of triumph over the barbarism which their persecution

symbolize[d]”—Hungarian Jews, “while living under

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persecution[,] ha[d] at least found a haven” from widespread

extermination in the Holocaust. Franklin D. Roosevelt,

Statement on Opening Frontiers to War Victims and Justice

for War Crimes, The American Presidency Project (Mar. 24,

1944). That reprieve from the Holocaust’s very worst horrors

would not persist.

In 1943, the Soviet Red Army dealt the Nazi Wehrmacht

and its allies a decisive blow at the battle of Stalingrad (now

Volgograd). The complete destruction of the German Sixth

Army turned the tide of war on the Eastern Front. And on the

Western Front, less than twenty-six months later—after the

Normandy landing and ensuing battles—American and Soviet

forces would meet at the Elbe River, in Torgau, Germany.

Within three days of that meeting, Adolf Hitler would be dead

by his own hand.

The Hungarian government sensed the sea change

attending the crushing defeat of the Nazis at Stalingrad.

Fearing the imminent Soviet advance, Hungary sought to

negotiate a separate peace with the United States, Great

Britain, and the other Western Allies. But Germany,

desperate to stave off Hungarian capitulation, rushed Nazi

troops into Hungary in March 1944. The Hungarian

parliament then ousted the existing government and installed

the fanatically anti-Semitic Döme Sztójay as Prime Minister.

The new Sztójay government, in collaboration with

German Nazis, embarked on a policy of total destruction of

Hungary’s Jewish population. “Nowhere was the Holocaust

executed with such speed and ferocity as it was in Hungary.”

Compl. ¶ 1. Within a period of three months in 1944, nearly

half a million Hungarian Jews were murdered.

5

First came persecution. Building on previous efforts to

marginalize Jews in society, the new Hungarian government

forbade Jews from traveling, wearing military or school

uniforms, eating in public restaurants, or using public pools.

Hungary banned books by Jewish authors from schools and

libraries. As of April 5, 1944, all Jews had to wear the

identifying yellow star.

Next came property confiscation and ghettoization.

Pursuant to government decrees, Hungary forced all Jews into

ghettos, where they were “stripped of protective clothing,

exposed to the elements, [and] deprived of sanitary facilities.”

Id. ¶ 101. Hungarian officials went home to home,

inventorying and confiscating Jewish property.

Finally came extermination in the death camps. With the

Hungarian government rapidly implementing Hitler’s Final

Solution, incarceration in the ghettos lasted but a few weeks.

Hungarian authorities marched Jews from the ghettos to

railroad stations, where they were divested of what little

property—typically suitcases, clothes, and hidden valuables—

they had managed to retain to that point. Within a mere three

months, the majority of Hungarian Jews had been transported

via railroad from the ghettos to Auschwitz and other death

camps. Ninety percent of those sent to Auschwitz and the

other camps were murdered upon arrival.

By January 17, 1945, Soviet troops had arrived in

Budapest. But by then, over 560,000 Hungarian Jews—out of

a pre-War population of nearly 825,000—had perished. The

overwhelming majority of those deaths came from the

roughly 430,000 Hungarian Jews deported to Auschwitz and

other camps during those three months in 1944.

6

B.

Because this case comes to us on a grant of dismissal in

favor of the defendants on grounds of sovereign immunity, we

assume the factual allegations in the complaint to be true. See

Price v. Socialist People’s Libyan Arab Jamahiriya, 294 F.3d

82, 93 (D.C. Cir. 2002). The named plaintiffs in this case are

fourteen Jewish survivors of the Hungarian Holocaust. All

fourteen were Hungarian nationals during World War II, but

have since adopted other nationalities. Twelve of the

plaintiffs were among the hundreds of thousands transported

to Auschwitz, but they beat the overwhelming odds and

survived.

The plaintiffs filed suit in the United States District Court

for the District of Columbia against the Republic of Hungary

(Hungary), the state-owned Hungarian railway, Magyar

Allamvastuak Zrt. (MÁV, and, with Hungary, referred to as

the Hungarian defendants), and Rail Cargo Hungaria Zrt.

(RCH), an Austrian freight-rail company that is the successor-

in-interest to MÁV’s World War II-era freight division. The

plaintiffs allege that the Republic of Hungary collaborated

with the Nazis to exterminate Hungarian Jews and to

expropriate their property. The defendant railways, the

plaintiffs contend, voluntarily played an integral role in that

effort—specifically by transporting Hungarian Jews to death

camps, and, at the point of embarkation, confiscating the

property of those about to be deported. The complaint asserts

causes of action ranging from the common law torts of

conversion and unjust enrichment for the plaintiffs’ property

loss, to false imprisonment, torture, and assault for their

personal injuries, to international law violations. The

complaint seeks certification of a class of plaintiffs and, as

relief, seeks compensatory damages, punitive damages, and

various forms of equitable relief.

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The defendants moved for dismissal of the claims. The

Hungarian defendants argued as alternate grounds for

dismissal: that they were immune from suit under the Foreign

Sovereign Immunities Act (FSIA), 28 U.S.C. §§ 1603 et seq.;

that the case presented a non-justiciable political question;

and that the case should be dismissed under the doctrine of

forum non conveniens. The district court concluded that the

FSIA granted the Hungarian defendants immunity from suit.

See Simon v. Republic of Hungary, 37 F. Supp. 3d 381, 408-

24 (D.D.C. 2014). Accordingly, the court dismissed the

claims against the Hungarian defendants for lack of subject-

matter jurisdiction. Fed. R. Civ. P. 12(b)(1). (The court also

dismissed the claims against RCH based on the lack of

personal jurisdiction over the company, 37 F. Supp. 3d at

425-44; see Fed. R. Civ. P. 12(b)(2), but the plaintiffs raise no

challenge to the dismissal of RCH in this appeal.)

II.

The plaintiffs appeal the dismissal of their claims against

the Hungarian defendants—the Republic of Hungary and

MÁV. We review de novo the district court’s dismissal of the

claims for lack of subject-matter jurisdiction. El Paso Nat.

Gas Co. v. United States, 750 F.3d 863, 874 (D.C. Cir. 2014).

“When reviewing a plaintiff’s unchallenged factual

allegations to determine whether they are sufficient to deprive

a . . . defendant of sovereign immunity, we assume those

allegations to be true.” Price, 294 F.3d at 93.

The parties agree that, for purposes of qualifying for

sovereign immunity under the FSIA, the Republic of Hungary

is a “foreign state,” and MÁV, a corporation wholly-owned

by the Republic of Hungary, is an “agency or instrumentality”

of the Hungarian state. 28 U.S.C. § 1603(a)-(b). In the

United States, the sole avenue for a court to obtain

8

jurisdiction over claims against a foreign state or its agencies

and instrumentalities is through the FSIA, 28 U.S.C. §§ 1603

et seq. See Peterson v. Royal Kingdom of Saudi Arabia, 416

F.3d 83, 86 (D.C. Cir. 2005).

The FSIA establishes a default rule granting foreign

sovereigns immunity from the jurisdiction of United States

courts. See 28 U.S.C. § 1604; Mohammadi v. Islamic

Republic of Iran, 782 F.3d 9, 13 (D.C. Cir. 2015). That

baseline grant of immunity, however, is subject to a number

of exceptions. See 28 U.S.C. §§ 1605-07; see also id. § 1604.

The plaintiffs argue that their claims fit within the FSIA’s

“expropriation exception,” which provides jurisdiction over

certain claims involving “rights in property taken in violation

of international law.” Id. § 1605(a)(3). The Hungarian

defendants contend that the expropriation exception is

inapplicable here. They further argue that the FSIA’s “treaty

exception,” see id. § 1604, in any event divests the district

court of any jurisdiction it might otherwise have under the

expropriation exception.

We first address the treaty exception, the ground upon

which the district court rested its decision to dismiss the

plaintiffs’ claims. Finding the treaty exception inapplicable,

we next examine whether the plaintiffs’ claims implicate the

FSIA’s expropriation exception, which, as noted, creates an

exception to foreign sovereign immunity for claims involving

property “taken in violation of international law.” Id. §

1605(a)(3). We hold that in the particular circumstances of

this case—involving confiscations of property that themselves

constitute the commission of genocide—certain of plaintiffs’

claims against the Hungarian defendants may proceed under

the FSIA’s expropriation exception.

9

A.

The FSIA’s baseline grant of immunity to foreign

sovereigns is “[s]ubject to existing international agreements to

which the United States [was] a party at the time of enactment

of th[e] Act.” 28 U.S.C. § 1604. That proviso is known as

the FSIA’s treaty exception. Under the treaty exception, “if

there is a conflict between the FSIA and such an agreement

regarding the availability of a judicial remedy against a

contracting state, the agreement prevails.” de Csepel v.

Republic of Hungary, 714 F.3d 591, 601 (D.C. Cir. 2013)

(quoting Moore v. United Kingdom, 384 F.3d 1079, 1085 (9th

Cir. 2004) (punctuation omitted)). “Any conflict between a

[pre-existing] treaty and the FSIA immunity provisions,

whether toward more or less immunity, is within the treaty

exception.” Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661,

669 (7th Cir. 2012); accord Moore, 384 F.3d at 1084-85. As

a result, in a case like this one, in which a pre-existing treaty

is said to confer more immunity than would the FSIA, the

treaty exception would override any of the FSIA’s exceptions

to immunity under which the claims otherwise could go

forward.

1.

In this case, the Hungarian defendants’ claim of

immunity under the treaty exception rests on the 1947 Peace

Treaty between Hungary and the Allied Powers (including the

United States). Treaty of Peace with Hungary (1947 Treaty),

Feb. 10, 1947, 61 Stat. 2065, 41 U.N.T.S. 135. The 1947

Treaty is an “international agreement[] to which the United

States [was] a party at the time of the enactment of” the FSIA

(in 1976). 28 U.S.C. § 1604. The treaty settled myriad issues

arising out of wartime hostilities, covering topics as varied as

the location of Hungary’s post-war frontiers and the

10

regulation of Hungarian railway rates. See 1947 Treaty arts.

1, 34.

The 1947 Treaty also contained provisions addressing the

payment of compensation for (or the restoration of) property

rights and interests seized by the Hungarian government

during the war. Article 26 pertained to property rights and

interests formerly held by non-Hungarian nationals. Article

27 addressed “persons under Hungarian jurisdiction”—

Hungarian nationals. Id. art. 27(1).

Article 27 is of particular salience here. In that article,

Hungary agreed:

[T]hat in all cases where the property, legal

rights or interests in Hungary of persons under

Hungarian jurisdiction have, since September

1, 1939, been the subject

of . . . confiscation . . . on account of the racial

origin or religion of such persons, the said

property, legal rights and interests shall be

restored . . . or, if restoration is impossible, that

fair compensation shall be made therefor.

Id. If any such property held by the Hungarian government

remained unclaimed six months after the treaty’s effective

date, Article 27 further provided that the property would be

transferred to relief organizations representing Holocaust

victims. Id. art. 27(2). The transferred property was then to

“be used by such organisations for purposes of relief and

rehabilitation of surviving” victims. Id.

Article 40 of the treaty specified a three-tiered process for

resolving “any dispute concerning the interpretation or

execution of the Treaty.” Id. art. 40(1). At the first stage, the

11

treaty signatories engaged in the dispute—e.g., the United

States and Hungary—would seek resolution through “direct

diplomatic negotiations.” Id. If negotiations failed, the

second stage would refer the dispute to the chief diplomats of

the United States, Soviet Union, and United Kingdom, who

were assigned to represent the Allied Powers “in dealing with

the Hungarian Government in all matters concerning the

execution and interpretation of” the treaty. Id. arts. 39, 40(1).

Should those “Heads of Mission” fail to reach a resolution

within two months, the dispute would move to the third stage,

in which a three-member commission—one representative

from each aggrieved party plus an independent third party—

would render a final resolution. Id. art. 40(1).

2.

The Hungarian defendants argue that the 1947 Treaty

precludes jurisdiction over the plaintiffs’ claims via the

FSIA’s treaty exception. Article 27, the defendants observe,

expressly obligates Hungary to provide compensation or

restitution for property rights and interests taken from

Hungarian Holocaust victims. See id. art. 27(1)-(2).

Consequently, the defendants’ argument goes, the plaintiffs’

actions seeking recovery for Hungary’s taking of their

property necessarily amount to a challenge to the adequacy of

Hungary’s efforts to comply with its treaty obligations under

Article 27. Any challenge to the adequacy of Hungary’s

measures under Article 27, the defendants contend, must be

pursued through Article 40, which provides for an exclusive,

non-judicial dispute resolution process for “any dispute

concerning the interpretation or execution of the Treaty.” Id.

art. 40(1). Because the plaintiffs seek relief outside of Article

40’s dispute resolution framework, the defendants conclude,

the plaintiffs’ claims conflict with the 1947 Treaty and are

foreclosed by the FSIA’s treaty exception.

12

Addressing essentially the same argument (on the same

facts), the Seventh Circuit, in a brief analysis, rejected the

defendants’ argument that the 1947 Treaty overrides any

otherwise available bases for jurisdiction under the FSIA.

Abelesz, 692 F.3d at 695-96. The district court here, in a

comprehensive and thoughtful decision, reached the opposite

conclusion, accepting the Hungarian defendants’ argument

that Articles 27 and 40 of the 1947 Treaty, via the FSIA’s

treaty exception, bar the plaintiffs’ action. We ultimately

agree with the Seventh Circuit and hold that the 1947 Treaty

does not preclude the plaintiffs’ suit.

For the Hungarian defendants to prevail in their argument

under the FSIA’s treaty exception, they would need to show

that Article 27 of the 1947 Treaty establishes the exclusive

means by which Hungarian Holocaust victims can seek

compensation for (or restoration of) property taken from them

during the War. If Article 27 establishes an exclusive means

of recovery, a Hungarian Holocaust victim could seek relief

only through that mechanism. If she believes that the relief

available through Article 27 is deficient in some manner, her

concerns could be aired only through Article 40’s state-to-

state, dispute resolution process—the exclusive means of

resolving any dispute about Hungary’s implementation of the

treaty. See 1947 Treaty, art. 40(1). But if Article 27’s

establishment of an obligation by Hungary to provide

compensation for expropriated property is not exclusive of

other means of recovery that may exist, see id. art. 27(1),

Article 40 then would not foreclose the plaintiffs’ suit: while

Article 40 sets out the sole means of resolving disputes

concerning implementation of the 1947 Treaty, it has no

bearing on any claims arising outside the treaty’s auspices.

We adopt that latter understanding of Article 27. In

particular, we understand Article 27 to establish a minimum

13

obligation by Hungary to provide restoration or compensation

to Hungarian Holocaust victims for their property losses. But

while Article 27 secures one mechanism by which Hungarian

victims may seek recovery, it does not establish the exclusive

means of doing so.

“The interpretation of a treaty . . . begins with its text.”

Medellin v. Texas, 552 U.S. 491, 506 (2008). The terms of

Article 27 do not speak in the language of exclusivity.

Although Article 27 provides certain rights to the Hungarian

victims of the Holocaust pertaining to their property losses, it

says nothing about whether those rights are exclusive of other

claims Hungarian Holocaust victims might bring, such as the

causes of action asserted by the plaintiffs here.

Other treaties concluding World War II hostilities, by

contrast, contain language expressly establishing a final and

exclusive resolution of war-related claims. The treaty ending

the War in the Pacific “recognized that Japan should pay

reparations to the Allied Powers for the damage and suffering

caused by it during the war.” Treaty of Peace with Japan art.

14(a), Sept. 8, 1951, 3 U.S.T. 3169. After elaborating on the

contours of that obligation—including the entitlement of the

Allied Powers to seize and retain certain property rights and

interests of Japan and Japanese nationals—the treaty

explicitly foreclosed extra-treaty claims against Japan:

“Except as otherwise provided in the present Treaty, the

Allied Powers waive all reparations claims of the Allied

Powers [and] other claims of the Allied Powers and their

nationals arising out of any actions taken by Japan and its

nationals in the course of the prosecution of the war.” Id. art.

14(b); see Joo v. Japan, 413 F.3d 45, 49-50 (D.C. Cir. 2005).

Article 27 of the 1947 Treaty contains no comparable

waiver of extra-treaty claims against Hungary. The absence

14

of any such waiver language in Article 27 is all the more

notable given that the 1947 Treaty itself contains an express

waiver of certain other claims (albeit claims by Hungary

rather than claims against it): “Hungary waives all claims of

any description against the Allied and Associated Powers on

behalf of the Hungarian Government or Hungarian nationals

arising directly out of the war.” 1947 Treaty art. 32(1); see id.

art. 30(4).

The context of Article 27 further weighs against

construing it to foreclose extra-treaty claims by Hungarian

Holocaust victims. A sovereign generally has the authority to

espouse and “settle the claims of its nationals against foreign

countries.” Dames & Moore v. Regan, 453 U.S. 654, 679

(1981). That authority may be exercised in the terms of a

peace treaty. As the treaty with Japan illustrates, a signatory

may resolve the claims of its nationals against its wartime

enemy in a peace treaty, including by waiving any alternate,

extra-treaty means of relief. In fact, the Supreme Court long

ago suggested that a treaty of peace, by its very nature, may

be seen to have the effect of finally settling the wartime

claims of one signatory nation (and its nationals) against the

other party. See Ware v. Hylton, 3 U.S. 199, 230 (1796)

(Chase, J.). If so, any treaty provisions addressing such

claims necessarily would be exclusive of extra-treaty relief.

Article 27 of the 1947 Treaty involves a fundamentally

different situation, however. Article 27 does not address the

claims of one signatory nation (and its nationals) against the

other side to the agreement. Rather, Article 27 secures a

means by which one signatory’s nationals (Hungarian

Holocaust victims) can obtain relief against their own

government. We have been made aware of no precedent for

understanding such a provision to preclude extra-treaty

claims. After all, while a sovereign can espouse and

15

extinguish the claims of its own nationals, it has no authority

to espouse and extinguish the claims of another state’s

nationals.

As a result, the United States and the other Allied Powers

who executed the 1947 Treaty with Hungary lacked the power

to eliminate (or waive) the claims of another state’s—i.e.,

Hungary’s—nationals in the treaty’s terms. They could, and

did, impose an obligation on Hungary to provide a minimum

means of recovery to Hungarian victims for Hungary’s

wartime wrongs, which is our understanding of Article 27.

But they could not render that means of recovery an exclusive

one because they had no power to settle or waive the extra-

treaty claims of another country’s (Hungary’s) nationals. And

while the Allied powers did possess the narrower power to

control the use of their own courts as forums for the

presentation of such claims, we do not read Article 27 to

speak to the use of an Allied nation’s courts for extra-treaty

wartime claims by Hungarian victims: Article 27 contains no

language addressing where any extra-treaty claims by

Hungarian victims may be brought, or specifying whether

Allied nations’ courts may be used as forums for such claims.

The Hungarian defendants point to the settlement of

certain wartime, property-related claims in various countries’

bilateral agreements with Hungary, including a 1973

Executive Agreement between the United States and Hungary

that addressed the property claims of United States nationals

against Hungary. See Agreement Between the Government of

the United States of America and the Government of the

Hungarian People’s Republic Regarding the Settlement of

Claims, Mar. 6, 1973, 24 U.S.T. 522. Those

intergovernmental accords, the defendants contend, show that

the only way of resolving claims outside of an Article 27

mechanism is through Article 40’s process of direct state-to-

16

state negotiations, not through extra-treaty, judicial causes of

action brought by individuals.

Again, however, those bilateral agreements involved one

nation’s espousal and settlement of its own nationals’ claims

against another nation (Hungary). There is little reason to

suppose that the parties to the 1947 Treaty would have

similarly relied on the Article 40 process of state-to-state

negotiations as the exclusive means of resolving claims

encompassed by Article 27—i.e., claims by Hungarian

nationals against Hungary itself. Because those claims lay

against their own government, Hungarian victims in 1947

would have had no obvious nation to speak and negotiate on

their behalf against Hungary in any Article 40, state-to-state

process. We thus conclude that the Allied Powers envisioned

Article 27 as securing at least one means by which Hungarian

victims could seek recovery against Hungary, but not to the

exclusion of any alternate, extra-treaty actions that might be

available to them.

The Hungarian defendants also emphasize Article 27(2)’s

requirement that “[a]ll property . . . remaining heirless or

unclaimed for six months after the coming into force of the

present Treaty, shall be transferred by the Hungarian

Government to organisations in Hungary representative of

such persons, organisations or communities,” for further

distribution to Holocaust victims. 1947 Treaty art. 27(2).

Because that provision calls for the distribution of “[a]ll”

property confiscated from Hungarian Holocaust victims and

retained by the Hungarian government, the defendants argue,

Article 27 must provide the exclusive source of relief for

those victims. Otherwise, the defendants contend, Hungary

might face a double-penalty: once when it distributed

property to relief organizations under Article 27, and a second

time when a plaintiff seeks compensation for the same

17

property in an extra-treaty action even though Hungary no

longer possesses it. We are unpersuaded by the defendants’

argument.

Much of the property confiscated by Hungary from its

nationals during the War was lost or destroyed in the

conflict—indeed, the defendants themselves argue as much.

See Appellees’ Br. 38. Hungary therefore would have had

nothing to transfer to relief organizations under Article 27(2)

with regard to many of the potential claims by Holocaust

victims. Article 27(2)’s requirement that Hungary transfer

confiscated property to relief organizations thus was not

intended to foreclose extra-treaty means of recovery. It

instead apparently was aimed to assure that the Hungarian

government would devote any remaining property to relief

efforts for Hungarian victims rather than retain the property

for a different use. In fact, even if Article 27 were construed

to establish an exclusive mechanism for recovery, Hungary

would still confront the possibility of the same sort of double-

penalty: Article 27(1) requires Hungary to provide

compensation to victims whose property cannot be restored,

see 1947 Treaty art. 27(1), as would be the case when a

claimant seeks recovery pursuant to Article 27(1) for property

already transferred to a relief organization.

For those reasons, we hold that Article 27 secures one

means by which Hungarian victims can seek recovery against

Hungary for their wartime property losses, but not to the

exclusion of other available remedies. Because the plaintiffs

in this case have brought causes of action arising outside of

the 1947 Treaty, their action creates no express conflict

between an “existing international agreement[]” and the

FSIA’s other immunity exceptions for purposes of the FSIA’s

treaty exception. 28 U.S.C. § 1604.

18

B.

Although the FSIA’s treaty exception does not foreclose

jurisdiction over the plaintiffs’ claims, the plaintiffs still must

overcome the FSIA’s default rule granting immunity to the

Hungarian defendants. The plaintiffs argue that the FSIA’s

expropriation exception, see 28 U.S.C. § 1605(a)(3), allows

for jurisdiction over their claims. We agree that jurisdiction

exists as to those of the plaintiffs’ claims that directly

implicate rights in property.

The FSIA’s expropriation exception strips a foreign

sovereign’s immunity against claims:

[I]n which rights in property taken in violation

of international law are in issue and that

property or any property exchanged for such

property is present in the United States in

connection with a commercial activity carried

on in the United States by the foreign state; or

that property or any property exchanged for

such property is owned or operated by an

agency or instrumentality of the foreign state

and that agency or instrumentality is engaged

in a commercial activity in the United States.

Id. A claim thus must meet three requirements to fit within

the FSIA’s expropriation exception: (i) the claim must be one

in which “rights in property” are “in issue”; (ii) the property

in question must have been “taken in violation of international

law”; and (iii) one of two commercial-activity nexuses with

the United States must be satisfied. See Peterson, 416 F.3d at

86; see also Abelesz, 692 F.3d at 671.

19

Because the district court concluded that the FSIA’s

treaty exception bars jurisdiction over the plaintiffs’ action,

the court did not reach any holding on the FSIA’s

expropriation exception. See Simon, 37 F. Supp. 3d at 407

n.21. While we ordinarily do not decide an issue unaddressed

by the district court, the parties have thoroughly briefed and

presented the applicability of the expropriation exception and

asked us to decide it. We think it appropriate in the

circumstances to take up the parties’ invitation and resolve

that issue in the first instance.

At the outset, we address the standards by which to assess

whether the plaintiffs’ claims fall within the terms of

§1605(a)(3). In prior FSIA cases involving the expropriation

exception, this court has held that, in assessing whether

“rights in property taken in violation of international law are

in issue,” the plaintiff need only make a “non-frivolous”

showing at the jurisdictional stage. See Helmerich & Payne

Int’l Drilling Co. v. Bolivarian Republic of Venezuela, 784

F.3d 804, 811-12 (D.C. Cir. 2015); Agudas Chasidei Chabad

of U.S. v. Russian Fed’n, 528 F.3d 934, 940-41 (D.C. Cir.

2008). That is because, in those cases, the plaintiff’s claim on

the merits directly mirrored the jurisdictional standard. The

plaintiff brought a basic expropriation claim asserting that its

property had been taken without just compensation in

violation of international law. See Helmerich, 784 F.3d at

810; Chabad, 528 F.3d at 938, 941; see also Restatement

(Third) of the Foreign Relations Law of the United States §

712(1) (Am. Law Inst. 1987). The same showing must be

made to establish jurisdiction under the FSIA’s expropriation

exception, which likewise calls for assessing whether the

property was “taken in violation of international law.” 28

U.S.C. § 1605(a)(3). When the jurisdictional and merits

inquiries fully overlap in that fashion, a plaintiff need not

prove a winning claim on the merits merely to establish

20

jurisdiction. Rather, the plaintiff need only show that its

claim is “non-frivolous” at the jurisdictional stage, and then

must definitively prove its claim in order to prevail at the

merits stage. See Bell v. Hood, 327 U.S. 678, 682 (1946);

Helmerich, 784 F.3d at 811-12; Chabad, 528 F.3d at 940-42.

This case differs from those prior cases involving the

FSIA’s expropriation exception. Here, the plaintiffs’ claim on

the merits is not an expropriation claim asserting a taking

without just compensation in violation of international law.

The plaintiffs instead seek recovery based on garden-variety

common-law causes of action such as conversion, unjust

enrichment, and restitution. The plaintiffs plead a “violation

of international laws” only to “give rise to jurisdiction” under

the FSIA’s expropriation exception, Compl. ¶ 207, not to

establish liability on the merits. Unlike in our prior cases,

consequently, the international-law violation at issue here—

genocide—bears solely on jurisdiction under § 1605(a)(3).

When, as here, the jurisdictional and merits inquiries do

not overlap, there is no occasion to apply the “exceptionally

low bar” of non-frivolousness at the jurisdictional stage.

Helmerich, 784 F.3d at 812. To establish jurisdiction in such

a situation, we therefore ask for more than merely a non-

frivolous argument. Instead, we assess whether the plaintiffs’

allegations satisfy the jurisdictional standard. See Chabad,

528 F.3d at 940. We now examine whether that showing has

been made under the FSIA’s expropriation exception.

1.

Our analysis begins with the expropriation exception’s

first requirement: that the claims are ones in which “rights in

property” are “in issue.” 28 U.S.C. § 1605(a)(3). The

plaintiffs have alleged numerous causes of action, ranging

21

from conversion of their property, to torture, to wrongful

death. The FSIA’s expropriation exception is not so broad as

to cover all of the plaintiffs’ claims.

We make FSIA immunity determinations on a claim-by-

claim basis, see Abelesz, 692 F.3d at 697; Fagot Rodriguez v.

Republic of Costa Rica, 297 F.3d 1, 13 (1st Cir. 2002);

Siderman de Blake v. Republic of Argentina, 965 F.2d 699,

706 (9th Cir. 1992), and “[c]laims against foreign sovereigns

that do not fall within the ambit of an FSIA exception are

barred.” Abelesz, 692 F.3d at 697. Section 1605(a)(3) applies

only to claims implicating “rights in property.” The

exception therefore affords no avenue by which to “bring

claims for personal injury or death”—or any other non-

property-based claims. Abelesz, 692 F.3d at 697; see id. at

677. Because the plaintiffs offer no alternate jurisdictional

basis for their non-property-based causes of action, we affirm

the district court’s determination that it lacked jurisdiction

over those claims.

Certain of the plaintiffs’ claims, however, place “rights in

property . . . in issue” within the meaning of the expropriation

exception. 28 U.S.C. § 1605(a)(3). Their conversion claim,

for instance, asserts that they “had the right to possess

personal property that was taken from them by the

defendants.” Compl. ¶ 165 (Count I). Their unjust

enrichment claim likewise contends that they “were deprived

of their personal property by the defendants” and that “[i]t

would be inequitable and unconscionable for the defendants

to continue to enjoy the benefits of possession and use of the

plaintiffs’ personal property.” Id. ¶¶ 170, 172 (Count II). In

the same vein, their restitution claim alleges that their

“personal property was taken . . . , denying them the use and

enjoyment thereof,” and that the “defendants have wrongfully

used and profited from that property.” Id. ¶ 203 (Count XV).

22

Those sorts of claims place “rights in property . . . in issue”

within the meaning of the FSIA’s expropriation exception.

Decisions applying another FSIA exception—the

immovable-property exception, 28 U.S.C. § 1605(a)(4)—are

instructive. That exception similarly turns on whether “rights

in property” are “in issue,” allowing for jurisdiction when

“rights in immovable property situated in the United States

are in issue.” Id. In Permanent Mission of India v. City of

New York, the Supreme Court held that an action seeking to

establish the validity of a tax lien imposed on real property

falls within the immovable-property exception. 551 U.S. 193

(2007). A tax lien on property qualifies as a property interest,

the Court explained, and “a suit to establish the validity of a

lien” thus “implicates rights in . . . property.” Id. at 199. Our

court has similarly concluded that “disputes directly

implicating property interests or rights to possession” are ones

in which “rights in . . . property” are “in issue” for purposes of

the immovable-property exception. Asociacion de

Reclamantes v. United Mexican States, 735 F.2d 1517, 1520-

22 (D.C. Cir. 1984) (Scalia, J.).

Here, a number of the plaintiffs’ claims seek recovery

arising from the Hungarian defendants’ confiscation of the

plaintiffs’ property. We leave it to the district court on

remand to determine precisely which of the plaintiffs’ claims

“directly implicat[e] property interests or rights to

possession,” id., thus satisfying the “rights in property . . . in

issue” requirement of § 1605(a)(3).

2.

The next question is whether the plaintiffs’ claims

involve property “taken in violation of international law.” 28

U.S.C. § 1605(a)(3). We conclude that the answer is yes.

23

The alleged takings of property in this case amounted to the

commission of genocide, and genocide violates international

law. The plaintiffs’ property therefore was “taken in violation

of international law.” Id.

a.

It is undisputed that genocide itself is a violation of

international law. See, e.g., Tel-Oren v. Libyan Arab

Republic, 726 F.2d 774, 791 n.20 (D.C. Cir. 1984) (Edwards,

J., concurring); accord Abelesz, 692 F.3d at 675-76

(collecting authority). The question then becomes whether

the takings of property described in the complaint bear a

sufficient connection to genocide that they amount to takings

“in violation of international law.” 28 U.S.C. § 1605(a)(3).

We hold that they do. In our view, the alleged takings did

more than effectuate genocide or serve as a means of carrying

out genocide. See Abelesz, 692 F.3d at 675-76. Rather, we

see the expropriations as themselves genocide. It follows

necessarily that the takings were “in violation of international

law.” 28 U.S.C. § 1605(a)(3).

The legal definition of genocide encompasses the

expropriations alleged in this case. The Convention on the

Prevention of the Crime of Genocide, adopted by the United

Nations in the immediate aftermath of World War II and

ratified or acceded to by nearly 150 nations (including the

United States), defines genocide as follows:

[A]ny of the following acts committed with

intent to destroy, in whole or in part, a

national, ethnical, racial or religious group, as

such:

(a) Killing members of the group;

24

(b) Causing serious bodily or mental harm to

members of the group; [or]

(c) Deliberately inflicting on the group

conditions of life calculated to bring about its

physical destruction in whole or in part . . .

Convention on the Prevention and Punishment of the Crime

of Genocide (Genocide Convention), art. 2, Dec. 9, 1948, 78

U.N.T.S. 277 (emphasis added). That definition is “generally

accepted for purposes of customary [international] law.”

Restatement (Third) of the Foreign Relations Law of the

United States § 702 cmt. d. It appears not only in the

Genocide Convention itself, but also in numerous other

international treaties. See, e.g., Rome Statute of the

International Criminal Court art. 6, July 17, 1998, 2187

U.N.T.S. 90; Statute of the International Tribunal for Rwanda

art. 2 (1994); Statute of the International Criminal Tribunal

for the Former Yugoslavia art. 4 (1993). The offense of

genocide under our domestic law uses the same definition.

See 18 U.S.C. § 1091(a).

For our purposes, the pivotal acts constituting genocide

are those set out in subsection (c) of the definition. The

complaint describes takings of property intended to

“[d]eliberately inflict[] on the group conditions of life

calculated to bring about its physical destruction in whole or

in part.” Genocide Convention art. 2(c). Indeed, the

Genocide Convention’s history indicates that paragraph (c)

aimed precisely to capture the practice of expropriation and

ghettoization in the Holocaust. A delegate to the drafting

committee specifically “referred to the destructive living

conditions in the Jewish Ghettos within German[-]occupied

territory during the Second World War as an example of the

sort of conditions falling within the purview of (a draft

version) of paragraph (c).” Christian J. Tams, Lars Berster &

25

Bjorn Schiffbauer, Convention on the Prevention of

Genocide: A Commentary 122 (2014) (citing [U.N. Doc.

E/AC 25/SR 414]); see also Int’l Criminal Court, Elements of

Crimes, art. 6(c) n.4 (2011) (stating that genocide under

paragraph (c) “may include, but is not necessarily restricted

to . . . systematic expulsion from homes”).

The Holocaust’s pattern of expropriation and

ghettoization entailed more than just moving Hungarian Jews

to inferior, concentrated living quarters, or seizing their

property to finance Hungary’s war effort. Those sorts of

actions would not alone amount to genocide because of the

absence of an intent to destroy a people. The systematic,

“wholesale plunder of Jewish property” at issue here,

however, aimed to deprive Hungarian Jews of the resources

needed to survive as a people. de Csepel, 714 F.3d at 594.

Expropriations undertaken for the purpose of bringing about a

protected group’s physical destruction qualify as genocide.

The complaint describes the plaintiffs’ experiences in just

those terms. As the complaint sets out, the Hungarian

Holocaust proceeded in a series of steps and included the

taking of property and ghettoization at various points in that

process: “The Nazis . . . achieved [the Final Solution] by first

isolating [Jews], then expropriating the Jews’ property, then

ghettoizing them, then deporting them to the camps, and

finally, murdering the Jews and in many instances cremating

their bodies.” Compl. ¶ 91. The ghettoization effort

included, as an integral component, the confiscation of the

Jews’ personal property. Id. ¶ 3. “Hungarian officials

stripped Jews . . . of their valuable possessions when they

were transferred into the Jewish [ghettos],” id. ¶ 82, and, once

in the ghettos, Jews were “stripped of protective clothing,

exposed to the elements, [and] deprived of sanitary facilities,”

id. ¶ 101. The plaintiffs’ individual experiences with

26

ghettoization exemplified that pattern. See id. ¶¶ 23, 29, 31,

42, 66, 73, 80. And the defendants confiscated any personal

property remaining in the victims’ possession before

transferring them via railroad to the Nazi death camps. See

id. ¶¶ 12, 16, 19, 32, 39, 43, 54, 68, 74, 80.

Because the plaintiffs thereby allege the requisite

genocidal acts and intent, their jurisdictional allegations

suffice as a legal matter to bring their property-based claims

within the FSIA’s expropriation exception. See Phoenix

Consulting Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C.

Cir. 2000). If the defendants were to challenge the factual

basis of those allegations on remand, the district court would

need to go beyond the pleadings and resolve the factual

dispute. See id. For present purposes, it is enough to note

that the complaint describes takings of property that are

themselves genocide within the legal definition of the term.

Such expropriations constitute “tak[ings] in violation of

international law.” 28 U.S.C. § 1605(a)(3).

b.

The defendants nonetheless contend that the

expropriations of property set out in the complaint were not

“in violation of international law.” The defendants rely on the

so-called “domestic takings rule,” under which, “generally, a

foreign sovereign’s expropriation of its own national’s

property does not violate international law.” Helmerich, 784

F.3d at 812; see United States v. Belmont, 301 U.S. 324, 332

(1937). Because the plaintiffs were Hungarian nationals at

the time of Hungary’s alleged expropriations, the defendants

argue, the domestic takings rule renders those takings non-

actionable under international law. We disagree. The

domestic takings rule has no application in the unique

circumstances of this case, in which, unlike in most cases

27

involving expropriations in violation of international law,

genocide constitutes the pertinent international-law violation.

International law has long prohibited a sovereign from

expropriating the property of another state’s nationals without

payment of just compensation. See, e.g., Restatement (Third)

of the Foreign Relations Law of the United States § 712(1);

Restatement (Second) of the Foreign Relations Law of the

United States §§ 185, 186 (Am. Law Inst. 1965). That basic

international-law prohibition against uncompensated

expropriations, however, has always generally exempted

intrastate takings. A sovereign’s expropriation of its own

national’s property might violate the state’s own domestic

laws, but it is ordinarily not a concern of international law.

See Belmont, 301 U.S. at 332; Helmerich, 784 F.3d at 812.

That understanding, captured by the domestic takings rule,

manifests the broader reluctance of nations to involve

themselves in the domestic politics of other sovereigns. See

Abelesz, 692 F.3d at 674-75. The domestic takings rule

means that, as a general matter, a plaintiff bringing an

expropriation claim involving an intrastate taking cannot

establish jurisdiction under the FSIA’s expropriation

exception because the taking does not violate international

law. See Republic of Austria v. Altmann, 541 U.S. 677, 712

(2004) (Breyer, J., concurring); Siderman, 965 F.2d at 711.

In this case, however, the plaintiffs do not bring a basic

international-law expropriation claim. Accordingly, the

international-law violation on which the plaintiffs premise

their argument for jurisdiction under § 1605(a)(3) is not the

traditional prohibition against uncompensated takings.

Rather, the relevant international-law violation for

jurisdictional purposes is genocide. See Compl. ¶ 207.

Genocide perpetrated by a state against its own nationals of

course is a violation of international law. See generally

28

Genocide Convention art. 2; see, e.g., Kadic v. Karadzic, 70

F.3d 232, 241-42 (2d Cir. 1995). The international-law

prohibition against genocide in fact was a direct reaction to

the actions of sovereigns against their own citizens. The

Hungarian Holocaust is a paradigmatic example. Genocidal

expropriations of the property of a sovereign’s own nationals

thus are “tak[ings] in violation of international law” for

purposes of the FSIA’s expropriation exception. 28 U.S.C. §

1605(a)(3). In short, the domestic takings rule has no

applicability in the discrete circumstances of this case.

The text of § 1605(a)(3), as we have explained, applies

foursquare to genocidal takings committed by a state against

its nationals. And nothing in the provision’s history or

context compels us to read the statute in a manner at odds

with its plain terms. To be sure, international law

traditionally did not regulate conduct between a sovereign and

its subjects. See 1 Oppenheim’s Int’l Law 849. But World

War II marked a change in that landscape, leading to

recognition of certain international-law norms that “protect

individuals from inhuman treatment by states, even if the

[offending] state is that state whose nationality the individual

has.” Id. at 851. In particular, “the condemnation of

genocide as contrary to international law quickly achieved

broad acceptance by the community of nations” in the

aftermath of the War and the Nuremberg Trials. Kadic, 70

F.3d at 241; see Princz v. Federal Republic of Germany, 26

F.3d 1166, 1173-74 (D.C. Cir. 1994). By the time of the

expropriation exception’s enactment in 1976 as part of the

FSIA, genocide had long been identified as an international-

law crime—as evidenced by the Genocide Convention, article

2, adopted in 1948.

Section 1605(a)(3)’s reference to “violation[s] of

international law” therefore includes genocide

29

notwithstanding that a sovereign’s actions against its own

citizens traditionally fell outside the purview of international

law. Judicial interpretation of the Alien Tort Statute, 28

U.S.C. § 1350, confirms that understanding. Even though

international human rights law did not even exist when the

First Congress enacted the Alien Tort Statute in 1789, the

statute’s reference to “law of nations” encompasses conduct

universally accepted as violating international law today, see

Sosa v. Alvarez-Machain, 542 U.S. 692, 732-33 (2004),

including genocide and certain other offenses committed by a

sovereign against its own subjects, e.g., Kadic, 70 F.3d at 242

(genocide); Abebe-Jira v. Negewo, 72 F.3d 844, 845-46 (11th

Cir. 1996) (torture); Tel-Oren, 726 F.2d at 791 n.20 (Edwards,

J., concurring) (genocide, torture, summary execution,

slavery). It follows a fortiori that the term “international law”

in the FSIA’s expropriation exception—enacted by the 94th

Congress well after the development of international human

rights law—likewise encompasses genocide. As with the

Alien Tort Statute, there are sound reasons for caution before

concluding that a state’s actions against its own nationals

infringe a prohibition of sufficiently universal acceptance to

amount to a “violation of international law” within the

meaning of § 1605(a)(3). See Sosa, 542 U.S. at 727-28. We

hold here only that genocide is such a crime.

Unsurprisingly, there is no indication in the legislative

history that Congress affirmatively considered § 1605(a)(3)’s

applicability in the distinctive context of genocidal takings.

Rather, the general international-law prohibition against

expropriations without just compensation would have been

foremost in Congress’s mind. See H.R. Rep. No. 94-1487, at

19-20 (1976). But in the absence of any indication that

Congress would have desired to exclude genocidal takings

from the statute’s scope, and in light of the established status

of genocide as an international-law crime by the time of the

30

FSIA’s enactment, we adhere to the expropriation exception’s

plain terms in holding that genocidal expropriations constitute

“tak[ings] in violation of international law.” 28 U.S.C. §

1605(a)(3).

We recognize one seeming anomaly, also noted by the

Seventh Circuit in addressing parallel claims arising from the

Hungarian Holocaust: that the FSIA scheme, as we construe

it, enables the plaintiffs to “seek compensation for taken

property but not for taken lives.” Abelesz, 692 F.3d at 677.

But that is a byproduct of the particular way in which

Congress fashioned each of the various FSIA exceptions.

See id. Those exceptions were designed to deal generally

with the full range of cases that might arise under them.

There is no reason to assume that, in every discrete context in

which those exceptions might be applied (such as claims

arising from genocide), there would be perfect coherence in

outcome across all of the exceptions. Congress determined as

a general rule that, for non-commercial torts, jurisdiction

would exist against foreign sovereigns only for “personal

injury or death . . . occurring in the United States.” 28 U.S.C.

§ 1605(a)(5). Congress established no such limitation for

claims involving “property taken in violation of international

law.” Id. § 1605(a)(3). The unavailability of jurisdiction for

personal-injury claims under a different, independent

exception affords no reason to deny jurisdiction for property-

related claims fitting squarely within the terms of the

expropriation exception.

3.

We turn finally to § 1605(a)(3)’s commercial-activity

nexus requirements. The nexus requirement differs somewhat

for claims against the foreign state itself (e.g., Hungary) as

compared with claims against an agency or instrumentality of

31

the foreign state (e.g., MÁV). See Chabad, 528 F.3d at 947.

As to the claims against Hungary, the question is whether the

“property [in issue] or any property exchanged for such

property is present in the United States in connection with a

commercial activity carried on in the United States by the

foreign state.” 28 U.S.C. § 1605(a)(3). As to the claims

against MÁV, the question is whether the “property [in issue]

or any property exchanged for such property is owned or

operated by an agency or instrumentality of the foreign state

and that agency or instrumentality is engaged in a commercial

activity in the United States.” Id. Considered at a more

general level, both kinds of claims require: (i) that the

defendants possess the expropriated property or proceeds

thereof; and (ii) that the defendants participate in some kind

of commercial activity in the United States.

The Hungarian defendants argue that the plaintiffs’

factual allegations fail to satisfy § 1605(a)(3)’s nexus

requirements. When a “defendant challenges . . . the legal

sufficiency of the plaintiff’s jurisdictional allegations,” we

must “take the plaintiff’s factual allegations as true and

determine whether they bring the case within . . . the [FSIA]

exception[] to immunity invoked by the plaintiff.” Phoenix

Consulting Inc., 216 F.3d at 40. Here, the Hungarian

defendants would be entitled to a dismissal for failure to

establish jurisdiction only if “no plausible inferences can be

drawn from the facts alleged that, if proven,” would satisfy

the expropriation exception’s nexus requirements. Price, 294

F.3d at 93. Applying that standard, we find that the plaintiffs’

allegations suffice to withstand dismissal as to the claims

against MÁV but not as to the claims against Hungary.

With respect to the requirement that defendants possess

the expropriated property or proceeds thereof, the complaint

alleges that the Hungarian defendants liquidated the stolen

32

property, mixed the resulting funds with their general

revenues, and devoted the proceeds to funding various

governmental and commercial operations. Those allegations

suffice to raise a “plausible inference[]” that the defendants

retain the property or proceeds thereof, absent a sufficiently

convincing indication to the contrary. Id. The defendants

suggest that the United States might have confiscated the

expropriated property from Hungary; that Hungary might

have turned over all of the confiscated property to a relief

organization in compliance with its obligations under the

1947 Treaty; or that Hungary might have liquidated all of the

proceeds on other government operations. That speculation

fails to demonstrate the implausibility of the plaintiffs’

claims.

The Seventh Circuit rejected similar arguments made by

Hungarian defendants facing claims brought by Hungarian

Holocaust victims under the expropriation exception.

Abelesz, 692 F.3d at 688. There, as here, the defendants

“offered no case or fact that demonstrates conclusively that

the value of the expropriated property is not traceable to their

present day cash and other holdings”; they thus failed to

defeat the plausibility of the plaintiffs’ claims. Id. at 689.

Although “[i]t is certainly possible that the value of plaintiffs’

expropriated property was lost during one or more of these

[intervening events],” it “is also plausible that defendants

retain the value of plaintiffs’ expropriated property.” Id.

Of course, the plaintiffs ultimately “may or may not be

able to prove the point.” Id. at 688. Upon any factual

challenge by the Hungarian defendants—e.g., concerning

whether the defendants in fact still possess the property or

proceeds thereof—the plaintiffs will bear the burden of

production, and the defendants will bear the burden of

persuasion to “establish the absence of the factual basis by a

33

preponderance of the evidence.” Chabad, 528 F.3d at 940.

We conclude only that the “[p]laintiffs’ claims that [the]

defendants currently own or operate their expropriated

property (or property exchanged for such property) are not so

implausible as to permit resolution on the pleadings alone.”

Abelesz, 692 F.3d at 689.

With respect to the requirement that the defendants be

engaged in commercial activity in the United States, the

plaintiffs allege that MÁV maintains “an agency for selling

tickets, booking reservations, and conducting similar business

in the United States.” Compl. ¶ 85. Because defendants make

no attempt to argue that the rail company fails to “engage[] in

a commercial activity in the United States,” the nexus

requirement is satisfied as to MÁV. 28 U.S.C. § 1605(a)(3).

But as to Hungary, by contrast, the plaintiffs put forward

only the bare, conclusory assertion that “property is present in

the United States in connection with commercial activity

carried on by Hungary within the United States.” Compl. ¶

83. There is nothing more. Although the plaintiffs “need not

set out all of the precise facts on which the[ir] claim[s] [are]

based in order to survive a motion to dismiss,” Price, 294

F.3d at 93, here, they allege precisely zero facts concerning

what commercial activity, if any, Hungary carries on in the

United States. Our inquiry is “similar to that of Rule

12(b)(6),” id., under which “[t]hreadbare recitals of the

elements of a cause of action, supported by mere conclusory

statements, do not suffice,” Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009). That is all the plaintiffs have advanced here. We

express no view on whether they can (or should be allowed

to) amend the complaint in this regard on remand. But as it

stands, the complaint’s allegations about Hungary’s

commercial activity fail to demonstrate satisfaction of

§1605(a)(3)’s nexus requirement.

34

4.

As a final argument against the applicability of the

FSIA’s expropriation exception, the Hungarian defendants

argue that there can be no jurisdiction under § 1605(a)(3)

unless the plaintiffs first demonstrate that they have exhausted

available domestic remedies in Hungary. It is important to

place that exhaustion argument in proper perspective. The

defendants could in theory assert (at least) three forms of an

exhaustion argument in this case. Only one of those

arguments is before us, and we reject it.

First, the defendants might contend that the FSIA itself

obligates a plaintiff to exhaust domestic remedies before

attempting to bring suit against a foreign sovereign in United

States courts. This court, however, has held that the FSIA

itself imposes no exhaustion requirement. See Chabad, 528

F.3d at 948-49; accord Abelesz, 692 F.3d at 678. The

Hungarian defendants thus understandably make no such

argument before us.

Second, the defendants could argue that, with regard to

the FSIA’s expropriation exception in particular, a plaintiff

cannot show a “violation of international law” as required by

§ 1605(a)(3) without exhausting domestic remedies in the

defendant state (or showing the absence of any need to do so).

That is the argument presented by the Hungarian defendants

here, and we find it unpersuasive in the circumstances.

In certain situations, exhaustion may be required before

an expropriation gives rise to a violation of international law.

When a case involves a basic international-law expropriation

claim asserting a taking of a foreign national’s property

without payment of just compensation, there may be no

violation until the plaintiff seeks (and is denied) compensation

35

through the sovereign defendant’s domestic laws. See

Altmann, 541 U.S. at 714 (Breyer, J., concurring); Fischer v.

Magyar Allamvasutak Zrt., 777 F.3d 847, 857 (7th Cir. 2015);

Restatement (Third) of the Foreign Relations Law of the

United States § 712. That would parallel the rule applicable

to domestic claims asserting a taking of property without just

compensation under the Fifth Amendment, as to which there

is no constitutional violation until the plaintiff unsuccessfully

attempts to obtain compensation through local remedies. See

Williamson Cty. Reg’l Planning Comm’n v. Hamilton Bank of

Johnson City, 473 U.S. 172, 194-95 (1985).

Any comparable rule under international law would have

no application here, however. As we have explained, the

relevant international-law violation in this case for purposes

of § 1605(a)(3) is not the basic prohibition against an

uncompensated expropriation of a foreign national’s property.

Rather, the takings of property in this case violate

international law because they constitute genocide. In the

context of a genocidal taking, unlike a standard expropriation

claim, the international-law violation does not derive from

any failure to provide just compensation. The violation is the

genocide itself, which occurs at the moment of the taking,

whether or not a victim subsequently attempts to obtain relief

through the violating sovereign’s domestic laws. See Fischer,

777 F.3d at 852, 857. In this case, the challenged takings

therefore “violat[e] [] international law” within the meaning

of § 1605(a)(3) regardless of whether the plaintiffs exhausted

Hungarian remedies.

This brings us to the third type of exhaustion argument

that the Hungarian defendants could assert in this case. The

defendants could contend that, even if the claims at issue fit

within § 1605(a)(3) so as to enable the exercise of

jurisdiction, the court nonetheless should decline to exercise

36

jurisdiction as a matter of international comity unless the

plaintiffs first exhaust domestic remedies (or demonstrate that

they need not do so). See id. at 858; Restatement (Third) of

the Foreign Relations Law of the United States § 713 cmt. f.

The Seventh Circuit found that prudential argument to be

persuasive in closely similar circumstances, see Fischer, 777

F.3d at 859-66, but the argument is not before us in this

appeal. The plaintiffs briefly contend in their reply brief that

no exhaustion requirement should apply here because of the

inadequacy of available Hungarian remedies, but the

defendants have not argued (and have had no occasion to

argue) the point in this court. Instead, the sole contention

before us is that the plaintiffs cannot show a “violation of

international law” under § 1605(a)(3) without exhausting

Hungarian remedies, an argument we have rejected. We

leave it to the district court to consider on remand, should the

defendants assert it, the third form of exhaustion argument:

whether, as a matter of international comity, the court should

decline to exercise jurisdiction unless and until the plaintiffs

exhaust available Hungarian remedies.

III.

To this point, we have concluded that the FSIA’s treaty

exception does not preclude consideration of the plaintiffs’

claims, and that jurisdiction over their property-based claims

exists under the FSIA’s expropriation exception. The

Hungarian defendants, however, also urge us to dismiss the

case for reasons apart from foreign sovereign immunity.

They contend that the case presents a non-justiciable political

question. Although the district court did not reach that issue,

both sides ask us to address it and present arguments in their

briefing. We conclude that, at least on the record before us at

this time, the case does not present a non-justiciable political

question.

37

“In general, the Judiciary has a responsibility to decide

cases properly before it, even those it ‘would gladly avoid.’”

Zivotofsky ex rel. Zivotofsky v. Clinton, 132 S. Ct. 1421, 1427

(2012) (quoting Cohens v. Virginia, 19 U.S. 264, 404 (1821)).

The political question doctrine constitutes a narrow exception

to that rule, and, when properly invoked, deprives a court of

authority to decide the issues before it. Id. A controversy

“involves a political question . . . where there is a textually

demonstrable constitutional commitment of the issue to a

coordinate political department; or a lack of judicially

discoverable and manageable standards for resolving it.” Id.

(quoting Nixon v. United States, 506 U.S. 224, 228 (1993))

(internal quotation marks omitted) (ellipsis in original). A

political question may also arise where there is “the

impossibility of a court’s undertaking independent resolution

without expressing lack of the respect due coordinate

branches of government; or an unusual need for

unquestioning adherence to a political decision already made;

or the potentiality of embarrassment from multifarious

pronouncements by various departments on one question.”

Baker v. Carr, 369 U.S. 186, 217 (1962). None of those

considerations leads us to conclude that this case presents a

non-justiciable political question.

The Hungarian defendants point to the 1947 Peace Treaty

and also the aforementioned 1973 Executive Agreement

between the United States and Hungary. Those agreements,

in the defendants’ view, demonstrate that the issue of

compensation for Hungary’s wartime actions has been

textually committed to the political branches and that judicial

consideration of the issue could undermine the Executive

Branch’s resolution. We disagree.

With regard to the question of textual commitment to the

political branches, “it is error to suppose that every case or

38

controversy which touches foreign relations lies beyond

judicial cognizance.” Id. at 211. There is no across-the-board

constitutional bar preventing the Judiciary’s consideration of

actions arising out of the wartime conduct of a foreign

sovereign. See, e.g., Altmann, 541 U.S. at 701-02; Alperin v.

Vatican Bank, 410 F.3d 532, 546-58 (9th Cir. 2005). The

plaintiffs’ property-based claims in this case generally “seek

restitution for looted assets,” and “[r]eparation for stealing,

even during wartime, is not a claim that finds textual

commitment in the Constitution.” Alperin, 410 F.3d at 551;

id. at 551-52.

Nor do the 1947 Peace Treaty or the 1973 Executive

Agreement raise any significant risk that judicial

consideration of this case could undermine Executive Branch

actions. As we have explained in rejecting the Hungarian

defendants’ arguments under the FSIA’s treaty exception, the

1947 Peace Treaty does not serve as the exclusive mechanism

by which former Hungarian nationals can seek compensation

for the wartime expropriation of their property. Because the

plaintiffs’ claims arise outside the 1947 Treaty, judicial

consideration of the claims does not undermine the

Executive’s negotiated resolution in that instrument. The

1973 Executive Agreement, meanwhile, is a bilateral accord

between the United States and Hungary. It addresses, at most,

the claims of current United States nationals. See de Csepel,

714 F.3d at 602-03. The agreement did not—and could not—

effect any Executive Branch resolution of the claims of non-

United States nationals, who make up the majority of the

plaintiffs in this case. As a result, regardless of the possible

implications of the agreement for the ultimate merits of the

claims asserted by United States nationals, it affords no basis

for declaring the entire case a non-justiciable political

question.

39

The Executive Branch, moreover, has given no indication

that adjudication of the plaintiffs’ lawsuit would encroach on

those agreements or raise any broader foreign relations

concerns. The Executive often files a statement in court if it

believes that judicial consideration of a case would interfere

with the operation of the United States’s treaties and

agreements or would otherwise impinge on the conduct of

foreign relations. See Alperin, 410 F.3d at 556-57. Notably,

the United States filed a statement of interest in this case, but

not with respect to the plaintiffs’ claims against the Hungarian

defendants.

In the district court, the government submitted a

statement pursuant to 28 U.S.C. § 517 in which it urged

dismissal of the suit against Austrian defendant RCH “on any

valid legal ground.” Statement of Interest of the United States

of America at 16 (July 15, 2011). The United States’s foreign

policy interests, the government averred, would be best served

by continuing its “long-standing, and ongoing, pursuit of

cooperative compensation arrangements with Austria and

other governments.” Id. at 15. The district court granted

dismissal of the claims against RCH on grounds of personal

jurisdiction, and the plaintiffs did not appeal that dismissal.

The government’s statement of interest conspicuously made

no argument—and raised no concerns—about the claims

against the Hungarian defendants, the subject of this appeal.

That silence by the government, when it otherwise made

known its concerns about this case, fortifies our conclusion

that the claims against the Hungarian defendants do not

present a non-justiciable political question.

* * * * *

For the foregoing reasons, we affirm in part and reverse

in part the district court’s decision. While we find that the

40

FSIA’s treaty exception does not preclude the plaintiffs’

claims, we affirm the district court’s dismissal of the

plaintiffs’ non-property claims because they do not come

within the FSIA’s expropriation exception. We reverse the

dismissal of the property-based claims, however, for which

jurisdiction exists under that exception. We leave it to the

district court to consider on remand whether, as a matter of

international comity, it should refrain from exercising

jurisdiction over those claims until the plaintiffs exhaust

domestic remedies in Hungary. The district court may also

elect to consider any other arguments that it has yet to reach

and that are unaddressed in our opinion today, such as the

defendants’ forum non conveniens arguments.

So ordered.

KAREN LECRAFT HENDERSON, Circuit Judge, concurring:

While I join the Court’s opinion in full, I write separately to

emphasize the baselessness of Hungary’s invocation of the

Treaty Exception to the Foreign Sovereign Immunities Act

(FSIA). 1 Implicit in Hungary’s argument is the premise that

it made a good-faith promise to return (within six months’

time), or to provide compensation for, the unlawfully

expropriated property belonging to the survivors of Hungary’s

attempted extermination of over one-half million Jewish

nationals in the last months of World War II. The signatories

to the 1947 Peace Treaty further agreed that any property that

remained unclaimed after six months would be given to

Holocaust relief organizations. According to Hungary, as a

result of those provisions, the 1947 Peace Treaty insulates

Hungary from the jurisdictional reach of the FSIA.

There is no suggestion that Hungary made any timely

attempt to satisfy its obligations under the 1947 Peace Treaty.

Indeed, the Hungarian Constitutional Court recognized that

even in 1993 Article 27’s requirements remained unfulfilled.

And given the unprecedented chaos of post–World War II

Europe, the commitment that property seized—and often

liquidated—by the Nazis could be located and returned in six-

months’ time, or that fair compensation for the seized

property could be paid within any reasonable time, was

illusory. Although looking back seventy years may make it

easy to assume that recovery from continent-wide, almost

decade-long devastation progressed smoothly, nothing could

be more inaccurate:

Imagine a world without institutions. It is a

world where borders between countries seem

to have dissolved, leaving a single, endless

landscape over which people travel in search

1

Specifically, I agree with the Court’s treatment of, and

conclusions regarding, Articles 27 and 40 of the 1947 Peace Treaty.

2

of communities that no longer exist. There are

no governments any more, on either a national

scale or even a local one. . . . No one has seen

a newspaper for weeks. There are no railways

or motor vehicles, no telephones or telegrams,

no post office, no communication at all except

what is passed through word of mouth. . . .

Law and order are virtually non-existent,

because there is no police force and no

judiciary. In some areas there no longer seems

to be any clear sense of what is right and what

is wrong. People help themselves to whatever

they want without regard to ownership—

indeed, the sense of ownership itself has

largely disappeared. Goods belong only to

those who are strong enough to hold on to

them, and those who are willing to guard them

with their lives. Men with weapons roam the

streets, taking what they want and threatening

anyone who gets in their way. . . . For modern

generations it is difficult to picture such a

world . . . . However, there are still hundreds

of thousands of people alive today who

experienced exactly these conditions—not in

far-flung corners of the globe, but at the heart

of what has for decades been considered one of

the most stable and developed regions on earth.

In 1944 and 1945 large parts of Europe were

left in chaos for months at a time. The Second

World War—easily the most destructive war in

history—had devastated not only the physical

infrastructure, but also the institutions that held

countries together. The political system had

broken down to such a degree that American

observers were warning of the possibility of

3

Europe-wide civil war. The deliberate

fragmentation of communities had sown an

irreversible mistrust between neighbours; and

universal famine had made personal morality

an irrelevance. “Europe”, claimed the New

York Times in March 1945, “is in a condition

which no American can hope to understand.”

It was “The New Dark Continent”.

KEITH LOWE, SAVAGE CONTINENT: EUROPE IN THE

AFTERMATH OF WORLD WAR II xiii–xiv (St. Martin’s Press

2012). Well into the 1950s, Europe remained “economically,

politically and morally unstable.” Id. at 69. Even the Allied

nations—the only group “universally recognized as untainted

by association with the Nazis”—were “completely unprepared

to deal with the complicated and widespread challenges that

faced them in the immediate aftermath of the war.” Id. at 69–

70.

Hungary was no exception. First occupied by Germany

in 1944 and then “liberated” by Stalin’s troops as the war

drew to a close, Hungary’s “[e]stablished state institutions

collapsed as their officials fled in the face of the Red Army’s

advance, forcing the country’s new occupiers to construct a

new state almost from scratch.” Mark Pittaway, The Politics

of Legitimacy and Hungary’s Postwar Transition, in

CONTEMPORARY EUROPEAN HISTORY 453, 455 (Cambridge

University Press 2004). Indeed, “[t]he last six months of the

war left Hungary devastated,” resulting in the destruction of

“40 percent of Hungary’s national wealth,” damage to 90 per

cent of Hungary’s industrial plants and loss of 40 per cent of

Hungary’s rail network and 70 per cent of Hungary’s railway

vehicles. LÁSZLÓ BORHI, HUNGARY IN THE COLD WAR, 1945–

1956: BETWEEN THE UNITED STATES AND THE SOVIET UNION

53–54 (Central European University Press 2004). The task of

4

rebuilding Hungarian society fell to the Soviet Union, which,

as the district court noted, had little interest in complying with

the terms of a treaty that did not further the interest of the

communist state. See Simon v. Republic of Hung., 37

F. Supp. 3d 381, 391 (D.D.C. 2014).

No group felt the effects of this upheaval more than the

Jewish survivors of Hitler’s death camps, the majority of

whom “believed it their duty to return to their countries of

origin and try to rebuild their communities the best they

could.” LOWE, supra at 191. Given the rampant anti-

Semitism that plagued the former Nazi-occupied areas, “[t]he

historiography of this period in Europe is littered with stories

of Jews trying, and failing, to get back what was rightfully

theirs.” Id. at 198. “[T]he property of Jews was dispersed”

far and wide “through a combination of confiscation, plunder,

theft and resale.” Id. Indeed, “[i]n larger cities like

Budapest,” this state of affairs “often rendered it impossible

for returning Jews to trace their property.” Id. at 198–99.

And even in smaller, rural towns where property could be

traced, the Hungarian courts often “ruled that horses and other

livestock plundered from Jewish farms should remain with

those who had ‘saved’ them.” Id. at 200.

Much ink has been spilled on the general upheaval in

post-World War II Europe 2 and the chaos that befell the

Soviet-occupied nations in particular. 3 Against this backdrop,

Hungary asks this Court to trust that it in fact intended to

restore expropriated property to its rightful owners within six

months, or to pay them fair compensation, in “all cases.”

Treaty of Peace, U.S.-Hung., art. 27, Feb. 10, 1947, T.I.A.S.

2

See, e.g., LOWE, supra.

3

See, e.g., Pittaway, supra; BORHI, supra.

5

No. 1651 (emphasis added). In Hungary’s view, the 1947

Peace Treaty represents the exclusive means by which

Hungarian Jewish victims of the Holocaust could obtain

recovery for property seized from them. It revises history—

and defies reality—to claim that Hungary had any intent or

ability to effectuate Article 27 of the 1947 Peace Treaty.

Accordingly, it would be unthinkable to conclude that the

1947 Peace Treaty fits within the FSIA’s Treaty Exception.