Amicus Curiae Brief — Alan Philipp, et al., Petitioners v. Federal Republic of Germany, et al.

Nos. 19-351 and 19-520

In the Supreme Court of the United States

FEDERAL REPUBLIC OF GERMANY, ET AL., PETITIONERS

v.

ALAN PHILIPP, ET AL.

ALAN PHILIPP, ET AL., PETITIONERS

v.

FEDERAL REPUBLIC OF GERMANY, ET AL.

ON PETITION AND CONDITIONAL CROSS-PETITION

FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

MARIK A. STRING

Acting Legal Adviser

Department of State

Washington, D.C. 20520

NOEL J. FRANCISCO

Solicitor General

Counsel of Record

JOSEPH H. HUNT

Assistant Attorney

General

EDWIN S. KNEEDLER

Deputy Solicitor General

COLLEEN E. ROH SINZDAK

Assistant to the Solicitor

General

SHARON SWINGLE

CASEN B. ROSS

JOSHUA K. HANDELL

Attorneys

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

QUESTIONS PRESENTED

The Foreign Sovereign Immunities Act of 1976

(FSIA), 28 U.S.C. 1330, 1441(d), 1602 et seq., provides

that a foreign state and its agencies and instrumentalities are immune from the jurisdiction of federal and

state courts in civil actions, subject to limited exceptions. The “expropriation exception” applies in any case

“in which rights in property taken in violation of international law are in issue” and there is a specified commercial nexus to the United States.

28 U.S.C.

1605(a)(3).

1. The questions presented in the petition for a writ

of certiorari are:

(a) Whether the expropriation exception applies

to claims related to a foreign state’s violations of international human rights law in connection with the

taking of the property of its own nationals.

(b) Whether a court may invoke the doctrine of

international comity to abstain from exercising jurisdiction under the FSIA.

2. The question presented in the conditional crosspetition is whether a foreign state is subject to jurisdiction under the expropriation exception based not on any

connection between the expropriated property and the

foreign state’s own commercial activities in the United

States, but instead on a connection to the U.S. commercial activities of an agency or instrumentality of the foreign state.

(I)

TABLE OF CONTENTS

Page

Interest of the United States....................................................... 1

Statement ...................................................................................... 1

Discussion ...................................................................................... 6

I. The first question regarding the expropriation

exception warrants this Court’s review......................... 7

A. The court of appeals’ decision is wrong .................. 7

B. The scope of the expropriation exception

warrants the Court’s review .................................. 12

II. The comity question warrants this Court’s review .... 15

A. The court of appeals’ decision is wrong ................ 15

B. Whether international comity is an available

defense under the FSIA warrants this Court’s

review ....................................................................... 19

III. This Court should decline to review the question

presented in the conditional cross-petition ................. 22

Conclusion ................................................................................... 24

TABLE OF AUTHORITIES

Cases:

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

(7th Cir. 2012) ................................................................ 13, 20

Altmann v. Republic of Austria, 317 F.3d 954

(9th Cir. 2002), aff ’d on other grounds, 541 U.S.

677 (2004) ......................................................................... 7, 13

Argentine Republic v. Amerada Hess Shipping

Corp., 488 U.S. 428 (1989) .................................................... 2

Bolivarian Republic of Venezuela v. Helmerich

& Payne Int’l Drilling Co., 137 S. Ct. 1312 (2017) .......... 10

de Csepel v. Republic of Hungary:

859 F.3d 1094 (D.C. Cir. 2017), cert. denied,

139 S. Ct. 784 (2019) .................................................... 4

139 S. Ct. 784 (2019) .................................................... 6, 22

(III)

IV

Cases—Continued:

Page

de Sanchez v. Banco Cent. de Nicaragua, 770 F.2d

1385 (5th Cir. 1985) ......................................................... 7, 13

FOGADE v. ENB Revocable Trust, 263 F.3d 1274

(11th Cir. 2001) .................................................................... 12

Fischer v. Magyar Államvasutak Zrt.

777 F.3d 847 (7th Cir.), cert. denied,

135 S. Ct. 2817 (2015) ................................................... 19, 20

GDG Acquisitions, LLC v. Government of Belize

749 F.3d 1024 (11th Cir. 2014) ........................................... 15

Garb v. Republic of Poland, 440 F.3d 579

(2d Cir. 2006) ....................................................................... 23

Hernandez v. Mesa, 140 S. Ct. 735 (2020) .......................... 12

Hilton v. Guyot, 159 U.S. 113 (1895) ................................... 15

Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (2018) ............. 12

Mezerhane v. República Bolivariana de Venezuela,

785 F.3d 545 (11th Cir. 2015),

cert. denied, 136 S. Ct. 800 (2016) ................................. 7, 13

Mujica v. AirScan Inc., 771 F.3d 580

(9th Cir. 2014), cert. denied, 136 S. Ct. 690

(2015) ........................................................................ 15, 16, 19

Oetjen v. Central Leather Co., 246 U.S. 297 (1918) ............ 15

Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (1996) ...... 16

Republic of Argentina v. NML Capital, Ltd.

573 U.S. 134 (2014).................................................... 4, 17, 18

Republic of Austria v. Altmann, 541 U.S. 677

(2004) .................................................................... 7, 12, 16, 21

Republic of Philippines v. Pimentel, 553 U.S. 851

(2008) .................................................................................... 16

Royal & Sun Alliance Ins. Co. v. Century Int'l

Arms, Inc., 466 F.3d 88 (2d Cir. 2006) .............................. 15

Simon v. Republic of Hungary:

812 F.3d 127 (D.C. Cir. 2016) ................................. 4, 8, 13

V

Cases—Continued:

Page

911 F.3d 1172 (D.C. Cir. 2018) ......................................... 5

Société Nationale Industrielle Aérospatiale v.

United States District Court, 482 U.S. 522 (1987) .......... 16

Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) ............. 12, 17

Ungaro-Benages v. Dresdner Bank AG

379 F.3d 1227 (11th Cir. 2004) ........................................... 16

Verlinden B. V. v. Central Bank of Nigeria,

461 U.S. 480 (1983).......................................................... 9, 17

Victory Transp. Inc. v. Comisaria Gen. de

Abastecimientos y Transportes, 336 F.2d 354

(2d Cir. 1964), cert. denied, 381 U.S. 934 (1965) ................ 9

Statutes:

Antiterrorism and Effective Death Penalty Act of

1996, Pub. L. No. 104-132, Tit. II, Subtit. B,

§ 221(a), 110 Stat. 1241-1242 .............................................. 18

Foreign Sovereign Immunities Act of 1976,

28 U.S.C. 1330, 1441(d), 1602 et seq. ................................... 1

28 U.S.C. 1391(f )(4) ................................................... 13, 20

28 U.S.C. 1603(a) ............................................................... 2

28 U.S.C. 1604 .................................................................... 2

28 U.S.C. 1605-1607........................................................... 2

28 U.S.C. 1605(a)(1)-(6) ................................................... 10

28 U.S.C. 1605(a)(3) ................................................. 2, 7, 23

28 U.S.C. 1605(h)(2)(A) ................................................... 11

28 U.S.C. 1605A ............................................................... 18

28 U.S.C. 1605A(a)(2)(A)(iii)........................................... 18

28 U.S.C. 1606 .............................................................. 2, 17

Holocaust Expropriated Art Recovery Act of 2016,

Pub. L. No. 114-308, § 2, 130 Stat. 1524 ........................... 10

§ 2(8), 130 Stat. 1525 ....................................................... 10

VI

Statute—Continued:

Page

Holocaust Victims Redress Act, Pub. L. No.

105-158, Tit. II, § 201, 112 Stat. 17 .................................... 11

Miscellaneous:

Bureau of European and Eurasian Affairs, U.S.

Dep’t of State, Prague Holocaust Era Assets

Conference: Terezin Declaration (June 30, 2009),

https://2009-2017.state.gov/p/eur/rls/or/126162.htm ....... 21

H.R. Rep. No. 1487, 94th Cong., 2d Sess. (1976) .............. 8, 9

Restatement (Second) of Foreign Relations Law of

the United States (1965) ...................................................... 7

Restatement (Third) of Foreign Relations Law of the

United States (1987) ............................................................. 7

Alice Ruzza, Expropriation and Nationalization,

reprinted in Oxford Public International Law

(updated July 2017), https://opil.ouplaw.com/

view/10.1093/law:epil/9780199231690/law9780199231690-e1541 ............................................................ 8

In the Supreme Court of the United States

No. 19-351

FEDERAL REPUBLIC OF GERMANY, ET AL.,

PETITIONERS

v.

ALAN PHILIPP, ET AL.

No. 19-520

ALAN PHILIPP, ET AL., PETITIONERS

v.

FEDERAL REPUBLIC OF GERMANY, ET AL.

ON PETITION AND CONDITIONAL CROSS-PETITION

FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

INTEREST OF THE UNITED STATES

This brief is submitted in response to the Court’s order inviting the Solicitor General to express the views

of the United States. In the view of the United States,

the petition for a writ of certiorari should be granted,

and the conditional cross-petition should be denied.

STATEMENT

1. The Foreign Sovereign Immunities Act of 1976

(FSIA), 28 U.S.C. 1330, 1441(d), 1602 et seq., provides

(1)

2

the sole basis for jurisdiction in a civil suit in United

States courts against a “ ‘foreign state,’ ” which the Act

defines to include “an agency or instrumentality of a

foreign state.” 28 U.S.C. 1603(a); see Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434435 & n.3 (1989). The FSIA provides that “a foreign

state shall be immune” from the jurisdiction of U.S.

courts, 28 U.S.C. 1604, unless it falls within one of the

limited exceptions described in 28 U.S.C. 1605-1607. If

one of those exceptions applies, “the foreign state shall

be liable in the same manner and to the same extent as

a private individual under like circumstances.” 28 U.S.C.

1606.

This case involves the FSIA’s expropriation exception to immunity from suit. That exception provides

that a “foreign state shall not be immune from the jurisdiction of ” U.S. courts in any case “in which rights in

property taken in violation of international law are in

issue” and there is a specified commercial nexus to the

United States. 28 U.S.C. 1605(a)(3).

2. a. Respondents, who also are conditional crosspetitioners, are the heirs of several Jewish art dealers

who owned firms in Frankfurt, Germany in the 1930s.

19-351 Pet. App. (Pet. App.) 2. In 1929, the firms

formed a consortium and purchased a valuable collection of medieval relics known as the “Welfenschatz.” Id.

at 2-3. In 1935, the consortium sold a portion of the collection to the Nazi-controlled state of Prussia. Id. at 3,

40. After World War II, that portion was seized by U.S.

troops and ultimately turned over to the Stiftung

Preussischer Kulturbesizt (SPK), an instrumentality of

Germany that was created after World War II to pre-

3

serve Prussia’s cultural artifacts. Id. at 4. The collection is currently on display in an SPK-administered museum in Berlin. Ibid.

In 2014, respondents sought to recover the Welfenschatz, alleging that the consortium was forced to sell

the collection to the Nazis at a greatly reduced value as

part of the Nazi campaign to deprive Jews of valuable

art and destroy Jewish livelihoods. Pet. App. 3-4, 39-41.

Respondents first submitted their claim to an Advisory

Commission established by Germany pursuant to an international declaration encouraging the development of

alternative dispute resolution mechanisms for Nazi-era

art claims. Id. at 4. After hearing testimony from five

experts, the Commission issued a non-binding recommendation that “the sale of the Welfenschatz was not a

compulsory sale due to persecution,” so it did “not recommend the return of the Welfenschatz.” Id. at 4-5, 4445 (citation omitted).

b. Respondents then filed suit against petitioners

Germany and the SPK in the District Court for the District of Columbia, asserting several common-law causes

of action, including replevin, conversion, unjust enrichment, and bailment. Pet. App. 5. Petitioners moved to

dismiss, arguing—among other things—that jurisdiction was improper and that international comity required the court to abstain. Ibid. The court denied the

motion. Ibid.

3. The court of appeals affirmed in part and reversed in part. Pet. App. 24. It first determined that

respondents had alleged that their property was “taken

in violation of international law” under the FSIA’s expropriation exception because respondents asserted

that the forced sale of the Welfenschatz was part of the

Nazi genocide. Id. at 6-15. The court explained that, in

4

Simon v. Republic of Hungary, 812 F.3d 127, 142-143

(D.C. Cir. 2016) (Simon I), it had held that the expropriation exception could apply to a claim that a sovereign had taken the property of its own nationals if the

taking “amounted to the commission of genocide.” Pet.

App. 7 (citation omitted). The court determined that respondents’ allegations were sufficient to establish that

the forced sale of the Welfenschatz amounted to genocide because respondents had alleged that “the Nazis

were motivated, at least in part, by a desire ‘to deprive

[German] Jews of the resources needed to survive as a

people.” Id. at 14 (quoting Simon I, 812 F.3d at 143).

The court of appeals next held that the district court

lacked jurisdiction over Germany because the expropriation exception’s “commercial nexus” requirement is

satisfied with respect to a foreign state itself only when

the expropriated property or property exchanged for

such property is present in the United States. Pet. App.

15 (quoting de Csepel v. Republic of Hungary, 859 F.3d

1094, 1101 (D.C. Cir. 2017), cert. denied, 139 S. Ct. 784

(2019)). “[B]ecause the Welfenschatz is in Berlin” the

court determined that Germany must be dismissed

from the suit. Id. at 15-16. The court, however, concluded that the suit could continue against SPK, which

satisfied the commercial-nexus requirement for agencies or instrumentalities of a foreign state. Id. at 16.

The court of appeals then rejected petitioners’ contention that the district court should have abstained

from exercising jurisdiction because principles of international comity suggest that respondents must first exhaust their claims in the German courts. Pet. App. 1621. Invoking Republic of Argentina v. NML Capital,

Ltd., 573 U.S. 134 (2014), the court held that “ ‘any sort

of immunity defense” “must stand on the Act’s

5

text,’ ” and “nothing in the text of the FSIA’s expropriation exception requires exhaustion.” Pet. App. 17 (citation omitted). The court rejected petitioners’ assertion that they were not invoking comity to establish immunity, but rather to support the application of “a non

jurisdictional common-law doctrine” favoring “exhaustion.” Id. at 18 (citation omitted). The court recognized,

however, that its position was contrary to that of the

Seventh Circuit and the United States, which had recently explained its view that the FSIA “does not foreclose dismissal on international comity grounds.” Id. at

20 (quoting U.S. C.A. Amicus Br. at 14-15, Simon v.

Republic of Hungary, 911 F.3d 1172 (D.C. Cir. 2018)

(No. 17-7146)).

After rejecting petitioners’ other arguments, Pet.

App. 21-24, the court of appeals remanded to the district

court to permit the suit to proceed against the SPK, id.

at 24.

4. The court of appeals denied rehearing en banc.

Pet. App. 96-97, 119-136.

Judge Katsas would have granted rehearing. In his

view, the expropriation exception applies only where a

foreign state appropriates property in violation of the

international law of takings, which does not apply to a

state’s taking of the property of its own nationals. Pet.

App. 101-110. Judge Katsas also would have concluded

that exhaustion and abstention are permissible “nonjurisdictional” defenses that may be invoked in FSIA

cases. Id. at 113. Judge Katsas observed that the

panel’s decision created a “circuit split on a sensitive

foreign-policy question” regarding comity-based abstention; that there was a danger that similar suits

6

would proliferate in the D.C. Circuit; and that the decision would force courts to inquire into foreign policy issues unsuitable for the Judicial Branch. Ibid.

DISCUSSION

The United States deplores the atrocities committed

against victims of the Nazi regime, and supports efforts

to provide them with remedies for the wrongs they suffered. Since the end of World War II, the United States

has worked in numerous ways to achieve some measure

of justice, and with the United States’ encouragement

and facilitation, the German government has provided

significant relief to compensate Holocaust survivors

and other victims of the Nazi regime. Nevertheless, in

permitting respondents to proceed with their suit

against the SPK, the court of appeals reached two erroneous conclusions regarding the application of the

FSIA. Those erroneous holdings warrant this Court’s

review of the two questions presented in the petition for

certiorari.

Respondents’ conditional cross-petition does not,

however, present a question warranting certiorari. Respondents challenge the court of appeals’ holding that a

court may not exercise jurisdiction over a foreign state

under the expropriation exception where neither the

property at issue, nor property exchanged for that

property, is in the United States. The court’s decision

is correct; this Court denied certiorari review on the

same issue last Term, de Csepel v. Republic of Hungary,

139 S. Ct. 784 (2019); and the conditional cross-petition

should be similarly denied.

7

I. THE

FIRST

QUESTION

REGARDING

EXPROPRIATION EXCEPTION WARRANTS

COURT’S REVIEW

THE

THIS

A. The Court Of Appeals’ Decision Is Wrong

The FSIA’s expropriation exception provides jurisdiction over claims “in which rights in property taken

in violation of international law are in issue.” 28 U.S.C.

1605(a)(3). To adhere to that text, a court may only exercise jurisdiction under the expropriation exception

when it is satisfied that a claim involves an alleged “violation” of the principles of “international law” governing when “property” is unlawfully “taken.” Ibid. As the

“consensus view” has long recognized, a plaintiff cannot

establish such a “ ‘violation of international law’ ” when

the property in question “belong[s] to a country’s own

nationals.” Republic of Austria v. Altmann, 541 U.S.

677, 713 (2004) (Breyer, J., concurring); see also, e.g.,

Mezerhane v. República Bolivariana de Venezuela,

785 F.3d 545, 549 (11th Cir. 2015), cert. denied,

136 S. Ct. 800 (2016); Altmann v. Republic of Austria,

317 F.3d 954, 968 (9th Cir. 2002), aff ’ d on other grounds,

541 U.S. 677 (2004); de Sanchez v. Banco Cent. de Nicaragua, 770 F.2d 1385, 1395-1398 (5th Cir. 1985).

1. The principles of the international law of expropriation are well-established. A state may not engage

in the discriminatory expropriation of the property of

aliens, and it may not expropriate foreign nationals’

property without the payment of adequate compensation. See Restatement (Second) of Foreign Relations

Law of the United States §§ 165-166, 185-187 (1965); see

also Restatement (Third) of Foreign Relations Law of

the United States § 712(1) (1987) (explaining that it is

unlawful for a state to engage in a “taking” “of the

property of a national of another state”) (emphasis

8

added); see also Alice Ruzza, Expropriation and Nationalization, reprinted in Oxford Public International Law

¶ 2 (updated July 2017). As even the court of appeals

below acknowledged, “an ‘intrastate taking’—a foreign

sovereign’s taking of its own citizens’ property—does

not violate the international law of takings.” Pet. App.

7 (citation omitted). A plaintiff therefore cannot establish that her property was “taken in violation of international law” as required by the expropriation exception if she asserts that her property was taken by her

own government.

That understanding is reinforced by the House Report accompanying the FSIA, which explains that the

expropriation exception was intended to govern “[e]xpropriation claims,” involving “the nationalization or

expropriation of property without payment” of the

“compensation required by international law,” as well

as “takings which are arbitrary or discriminatory in nature,” as when a state targets the property of foreign

nationals while leaving the property of its own citizens

undisturbed. H.R. Rep. No. 1487, 94th Cong., 2d Sess.

19-20 (1976) (House Report). In other words, the takings exception—like the international law of takings it

references—is concerned with a state’s treatment of the

property of foreign nationals, and not with the treatment of the property of its own citizens.

2. The court of appeals, however, held that respondents could pursue their claims of an intrastate taking

under the expropriation exception because they alleged

that the forced sale of the Welfenschatz “amounted to

the commission of genocide,” which is itself a violation

of international law. Pet. App. 7 (quoting Simon v. Republic of Hungary, 812 F.3d 127, 142 (D.C. Cir. 2016)).

That conclusion is flawed for several reasons.

9

First, as Judge Katsas emphasized in his dissent

from the denial of rehearing en banc, genocide is about

the intentional “extermination of a national, ethnic, racial, or religious group.” Pet. App. 102. Yet it is undisputed that the FSIA provides no jurisdiction over

claims involving mass murder and the infliction of physical suffering. It would be odd for the FSIA to provide

jurisdiction over claims of genocide only when, and to

the extent, property is taken in relation to genocide,

while extending no jurisdiction to other acts, including

killing members of a group or otherwise inflicting conditions of life calculated to bring about a group’s destruction. It is unlikely that Congress would have “address[ed] genocide as exclusively a property offense,”

ibid., particularly because Congress has never enacted

a cause of action for the sort of property-based genocide

claims at issue in this case. Instead, plaintiffs assert

claims such as common law conversion and unjust enrichment. See, e.g., id. at 5 (enumerating respondents’

common law claims).

Second, the court of appeals’ broad reading of the expropriation exception ignores statutory history and

context, which demonstrate that the FSIA was primarily intended to codify the “restrictive theory” of foreign

sovereign immunity that the Executive Branch had

adopted and applied for decades before the FSIA’s enactment. Verlinden B. V. v. Central Bank of Nigeria,

461 U.S. 480, 487 (1983). Under the restrictive theory,

a foreign state is immune for its “public acts,” ibid., but

not for those that are private or commercial. House Report 14; see also Victory Transp. Inc. v. Comisaria Gen.

de Abastecimientos y Transportes, 336 F.2d 354, 360

(2d Cir. 1964), cert. denied, 381 U.S. 934 (1965). The

bulk of the FSIA’s immunity exceptions are therefore

10

“narrow ones[,] covering waiver, commercial activity in

the United States,” “torts causing injury in the United

States, and arbitration.” Pet. App. 104 (Katsas, J., dissenting from the denial of rehearing en banc) (citing 28

U.S.C. 1605(a)(1)-(6)).

The expropriation exception is one of the few deviations from the rule because it allows courts to exercise

jurisdiction over sovereigns for “public acts” that constitute violations of the international law of expropriation, but that deviation was not intended to be a “radical

departure.” See Bolivarian Republic of Venezuela v.

Helmerich & Payne Int’l Drilling Co., 137 S. Ct. 1312,

1320 (2017) (citation and emphasis added). The exception therefore should not be understood to cover the

claims in this case because, as Helmerich observed, “[a]

sovereign’s taking or regulating of its own nationals’

property within its own territory is often just the kind

of foreign sovereign’s public act (a ‘jure imperii’) that

the restrictive theory of sovereign immunity ordinarily

leaves immune from suit.” Id. at 1321 (emphasis omitted). The Helmerich Court did say that “there are fair

arguments to be made that a sovereign’s taking of its

own nationals’ property sometimes amounts to an expropriation that violates international law, and the expropriation exception provides that the general principles of immunity for these otherwise public acts should

give way.” Ibid. But the Court did not resolve the issue

or address the circumstance in which such a proposition

might apply.

Third, the court of appeals determined that the expropriation exception applies in this case in part based

on inferences drawn from two post-FSIA statutes. Pet.

App. 9-10, 13-14 (citing the Holocaust Expropriated Art

Recovery Act of 2016 (HEAR Act), Pub. L. No. 114-308,

11

§ 2, 130 Stat. 1524, and the Holocaust Victims Redress

Act, Pub. L. No. 105-158, Tit. II § 201, 112 Stat. 17). But

while those statutes demonstrate Congress’s concern

with art seizures that occurred as part of the Holocaust,

they do not expand the expropriation exception or create a cause of action in U.S. courts for respondents’

claims. To the contrary, the HEAR Act expresses the

“sense of Congress” that “the use of alternative dispute

resolution” mechanisms “established for this purpose”

is likely to “yield just and fair resolutions in a more efficient and predictable manner” than litigation. § 2(8),

130 Stat. 1525. Further, while a 2016 amendment to the

FSIA exempts “Nazi-era claims” from a general grant

of immunity for “certain art exhibition activities” in the

United States, the exemption does not purport to

broaden the existing statutory basis for jurisdiction

over Nazi-era claims. 28 U.S.C. 1605(h)(2)(A). Instead,

it states that the new grant of immunity will not apply

to cases in which a plaintiff asserts jurisdiction under

the expropriation exception and “rights in property

taken in violation of international law are in issue within

the meaning” of that exception. Ibid. In other words,

the exception merely protects jurisdiction over Naziera claims to the extent they were already covered by

the expropriation exception. As explained in this brief,

the expropriation exception did not already cover claims

such as those at issue here, although it would cover a

claim based on a violation of the international law of takings by a person who was a national of a country other

than the one that took her property.

Fourth, to the extent there is ambiguity in the expropriation exception, it should be resolved against jurisdiction. This Court has recognized the serious “risks of

adverse foreign policy consequences” when U.S. courts

12

attempt to set “limit[s] on the power of foreign governments over their own citizens,” Sosa v. AlvarezMachain, 542 U.S. 692, 727-728 (2004), and it has instructed that “[w]hen foreign relations are implicated,

it ‘is even more important . . . “to look for legislative

guidance before exercising innovative authority over

substantive law.” ’ ” Hernandez v. Mesa, 140 S. Ct. 735,

747 (2020) (quoting Jesner v. Arab Bank, PLC, 138

S. Ct. 1386, 1403 (2018) (opinion of Kennedy, J.)). Those

risks are implicated where, as here, Germany, with support from the United States, has provided alternative

mechanisms for resolving claims like those at issue

here. The expropriation exception cannot be said to

provide a “clear mandate” for courts to exercise jurisdiction over such domestic takings claims. Sosa, 542

U.S. at 728.

B. The Scope Of The Expropriation Exception Warrants

The Court’s Review

Both parties acknowledge (19-351 Pet. (Pet.) 23-24;

19-351 Resp. Br. in Opp. (Br. in Opp.) 23 n.10) that the

courts of appeals have adopted varying approaches to

the application of the expropriation exception. That uncertainty regarding the scope of the exception warrants

this Court’s intervention. And the issue is important

because of the foreign policy implications of the reading

of the expropriation exception adopted below.

For decades after the enactment of the FSIA, there

was a general “consensus” that the expropriation exception does not cover domestic takings. Altmann, 541

U.S. at 713 (Breyer, J., concurring). Multiple circuits

endorsed that understanding. See FOGADE v. ENB

Revocable Trust, 263 F.3d 1274, 1294 (11th Cir. 2001)

(“[a]s a rule, when a foreign nation confiscates the property of its own nationals, it does not implicate principles

13

of international law”); Altmann, 317 F.3d at 968 (9th

Cir.); de Sanchez, 770 F.2d at 1395-1398 (5th Cir.).

Then, in 2012, the Seventh Circuit permitted plaintiffs to bring domestic takings claims against an instrumentality of the Hungarian government in connection

with the Holocaust. Abelesz v. Magyar Nemzeti Bank,

692 F.3d 661, 675 (7th Cir. 2012). The Seventh Circuit

explained that jurisdiction was permissible because

plaintiffs alleged that the takings “effectuated genocide” by providing “fund[ing]” and “impoverish[ing]

those who survived.” Ibid. As the case below reflects,

the D.C. Circuit has also recently permitted genociderelated takings claims to proceed, although its reasoning diverges from that of the Seventh Circuit because it

holds that jurisdiction is appropriate only where the

takings themselves “amounted to the commission of

genocide.” Simon I, 812 F.3d at 142; see also Pet. App.

7.

No other circuit has adopted the reasoning of either

the Seventh or the D.C. Circuit, 1 and it is unlikely that

other courts of appeals will have many opportunities to

do so in the future. Because the D.C. Circuit has both

held that it is permissible to exercise jurisdiction over

some domestic takings claims and prohibited courts

from abstaining under the doctrine of international

comity, see Part II, infra, plaintiffs may prefer to bring

their suits in the District of Columbia going forward.

The FSIA’s venue provision, 28 U.S.C. 1391(f )(4), which

provides that a civil action may always be brought “in

Indeed, the Eleventh Circuit recently rejected an argument that

because “alleged confiscations violated treaty-based ‘human rights

law,’ ” they also “violated international law,” although it observed

that genocide cases are “distinguishable.” Mezerhane, 785 F.3d at

548, 551.

1

14

the United States District Court for the District of Columbia if the action is brought against a foreign state or

political subdivision thereof,” facilitates that preference. See Pet. 14. The question is therefore ripe for

this court’s review.

The question’s resolution also has important consequences. As Judge Katsas observed, the D.C. Circuit’s

understanding of the expropriation exception seems to

require federal courts more generally to determine the

existence and scope of alleged genocides, embroiling

courts in sensitive foreign policy issues that are better

left for the political branches. Pet. App. 105 (Katsas, J.,

dissenting from the denial of rehearing en banc). Moreover, because the D.C. Circuit’s interpretation allows

courts to consider allegations against a sovereign

brought by its own citizens, it may have significant foreign policy implications. See pp. 20-21, infra.

Respondents contend (Br. in Opp. 22-24) that this

case is not an appropriate vehicle because even if the

expropriation exception is interpreted to be consistent

with the international law governing takings, jurisdiction would still lie because, at the time of the alleged

expropriation, the members of the consortium that sold

the Welfenschatz were not recognized as German citizens. But respondents have not previously disputed

that the facts alleged would constitute a domestic taking, see, e.g., 19-351 Pet. Reply Br. 8, and in any event,

the alleged taking occurred before the members of the

consortium would have been deprived of their citizenship. See 19-520 Pet. Supp. App. 59-60.

15

II. THE COMITY QUESTION WARRANTS THIS COURT’S

REVIEW

A. The Court Of Appeals’ Decision Is Wrong

1. a. This Court has long recognized the doctrine of

international comity, which permits U.S. courts to take

account of the “legislative, executive or judicial acts of

another nation,” giving “due regard both to international duty and convenience, and to the rights of its own

citizens or of other persons who are under the protection of its laws.” Hilton v. Guyot, 159 U.S. 113, 164

(1895). International comity discourages a U.S. court

from “reexamin[ing]” the “validity of the acts of [a foreign] sovereign State” in a way that could “ ‘imperil the

amicable relations between governments.’ ” Oetjen v.

Central Leather Co., 246 U.S. 297, 304 (1918).

One strand of comity is “adjudicatory comity,” under

which a U.S. court may abstain from exercising jurisdiction in deference to adjudication in a foreign forum.

See Mujica v. AirScan Inc., 771 F.3d 580, 599 (9th Cir.

2014), cert. denied, 136 S. Ct. 690 (2015); see also, e.g.,

GDG Acquisitions, LLC v. Government of Belize,

749 F.3d 1024, 1030-1032 (11th Cir. 2014); Royal & Sun

Alliance Ins. Co. v. Century Int'l Arms, Inc., 466 F.3d

88, 92–94 (2d Cir. 2006). Adjudicatory comity is typically invoked “when a sovereign which has a legitimate

claim to jurisdiction concludes that a second sovereign

also has a legitimate claim to jurisdiction under principles of international law.” Mujica, 771 F.3d at 598 (citation omitted).

b. Like sovereign immunity, the doctrine of international comity helps to ensure that United States courts

afford proper respect to foreign sovereigns and their interests. But unlike sovereign immunity, which is afforded in accordance with the statutory mandates set

16

out in the FSIA, international comity is a doctrine of

“prudential abstention,” rooted in the “common law,”

Mujica, 771 F.3d at 597-598. Courts therefore have discretion to abstain based on the weighing of interests at

stake in a particular case. See, e.g., Republic of Philippines v. Pimentel, 553 U.S. 851, 866 (2008). Sometimes

the Executive Branch may assist the courts by providing its view that abstention is appropriate in a particular case. See Altmann, 541 U.S. at 701-702 (recognizing

that, when the FSIA does not confer immunity, the

State Department’s view that exercising jurisdiction

would be harmful to foreign policy “might well be entitled to deference”). At other times, a court may itself

determine whether international comity favors abstention by examining the factors that are typically relevant

in a comity analysis: “the particular facts, sovereign interests, and likelihood that resort to [those] procedures

[of the foreign state] will prove effective.” Société Nationale Industrielle Aérospatial v. United States District Court, 482 U.S. 522, 544 (1987).

Adjudicatory comity also differs from sovereign immunity in that the doctrine may be applied even when

the sovereign is not itself a party to the litigation. International comity concerns may arise in any “case[]

touching the laws and interests of other sovereign

states,” Société Nationale, 482 U.S. at 543 n.27. Accordingly, courts may abstain in favor of a foreign forum even when the litigation is between private parties.

E.g., Ungaro-Benages v. Dresdner Bank AG, 379 F.3d

1227, 1237-1238 (11th Cir. 2004); Mujica, 771 F.3d at

614-615. Comity abstention is thus akin to other

common-law abstention principles applied by federal

courts, such as forum non conveniens, and federalismbased abstention. See Quackenbush v. Allstate Ins. Co.,

17

517 U.S. 706, 716, 723 (1996) (recognizing that a federal

court may decline to exercise jurisdiction in deference

to state interests).

c. The FSIA contemplates that these non-immunity

defenses will remain available to foreign states even

when a U.S. court has jurisdiction because an exception

to sovereign immunity applies. Under 28 U.S.C. 1606, a

foreign state “shall be liable in the same manner and to

the same extent as a private individual under like circumstances” for any claim for which a foreign state is not immune from suit. Because “private individual[s]” may invoke common law non-immunity doctrines, foreign states

must be allowed to invoke them as well. Cf. Verlinden,

461 U.S. at 490 n.15 (the FSIA “does not appear to affect

the traditional doctrine of forum non conveniens”).

2. The court of appeals therefore erred in concluding that the FSIA “leaves no room” for courts to abstain

under the doctrine of international comity. Pet. App.

20. Petitioners should be permitted to invoke that doctrine in support of their assertion that the district court

should decline to exercise jurisdiction over respondents’

claims until they have been exhausted in the German

courts. There are several flaws in the court of appeals’

reasoning that led it to conclude otherwise.

a. To begin, the court of appeals was mistaken in its

assertion that Republic of Argentina v. NML Capital,

Ltd., 573 U.S. 134 (2014), precludes the assertion of

comity defenses in cases governed by the FSIA. Pet.

App. 17-18. In NML Capital, the Court addressed

“[t]he single, narrow question” of “whether the [FSIA]

specifies a different rule [for post-judgment execution

discovery] when the judgment debtor is a foreign state.”

573 U.S. at 140. The Court held that “any sort

of immunity defense made by a foreign sovereign

18

in an American court must stand on the Act’s text,” and

that the FSIA does not “forbid[] or limit[] discovery in

aid of execution of a foreign-sovereign judgment

debtor’s assets.” Id. at 141-142. But the Court also expressly recognized that, even where there is jurisdiction

under the FSIA, a court “may appropriately consider

comity interests” relevant to other non-immunity determinations in the litigation. Id. at 146 n.6 (making that

point regarding the scope of discovery). Thus, contrary

to the court of appeals’ understanding, NML leaves ample “room” for “common-law” doctrines based on “considerations of comity.” Pet. App. 20.

b. The court of appeals also erred in suggesting that

Congress was unlikely to have intended for courts to

rely on comity principles to require exhaustion because

the FSIA terrorism exception sets out specific circumstances in which a plaintiff must “afford[] [a] foreign

state a reasonable opportunity to arbitrate” before

bringing suit. 28 U.S.C. 1605A(a)(2)(A)(iii). The court

reasoned that, by requiring exhaustion in certain circumstances, Congress meant to foreclose it in all others.

Pet. App. 18-19. But Congress added the terrorism exception to the FSIA some 20 years after the statute’s

initial enactment. See Antiterrorism and Effective

Death Penalty Act of 1996, Pub. L. No. 104-132,

§ 221(a), 110 Stat. 1241. There is no reason to think that

it enacted a limited pre-litigation arbitration requirement for terrorism cases as an indirect mechanism to

foreclose the availability of comity-based exhaustion defenses more generally. Rather, Section 1605A’s narrow

arbitration requirement comfortably coexists with the

principle that courts have discretion to abstain when

comity favors exhaustion in a foreign forum.

19

c. The court of appeals’ decision also appears to

have been influenced by a broader misunderstanding of

the nature of comity abstention. The court rejected the

proposition that comity-based abstention draws support from “ the well-established rule that exhaustion of

domestic remedies is preferred in international law as a

matter of comity.’ ” Pet. App. 19 (quoting Fischer v.

Magyar Államvasutak Zrt., 777 F.3d 847, 859 (7th Cir.),

cert. denied, 135 S. Ct. 2817 (2015)). In the D.C. Circuit’s view, that “well-established rule” has no application in a case involving private plaintiffs because—

under international law—the rule only applies in “nation vs. nation litigation.” Ibid. (citations omitted). But

comity abstention is a doctrine of domestic U.S. “common law” that is not limited to the precise application of

international-law exhaustion principles. Mujica, 771

F.3d at 597. To be sure, the common-law doctrine is informed by principles of international law favoring a litigant’s exhaustion of “remedies available in the domestic legal system.” Sosa, 542 U.S. at 733 n.21. But courts

are free to apply comity-based abstention in contexts

beyond those contemplated under international law.

See Pet. App. 111 (Katsas, J., dissenting from the denial

of rehearing en banc) (explaining how exhaustion has

been invoked in ATS cases).

B. Whether International Comity Is An Available Defense

Under The FSIA Warrants This Court’s Review

1. Review is necessary to resolve the “split [of authority] on [this] sensitive foreign-policy question.”

Pet. App. 115 (Katsas, J., dissenting from the denial of

rehearing en banc). As the D.C. Circuit explicitly

acknowledged, its rejection of the viability of comitybased abstention in FSIA cases conflicts with the posi-

20

tion of the Seventh Circuit, which has repeatedly invoked “principles of international comity” in requiring

plaintiffs to “exhaust” their “domestic remedies” against

foreign sovereigns before pressing their claims in U.S.

courts. Fischer, 777 F.3d at 852; see Abelesz, 692 F.3d

at 678-685. Contrary to the decision below, the Seventh

Circuit has emphasized that abstaining to allow plaintiffs to take advantage of a foreign forum is not a form

of sovereign immunity: “If plaintiffs attempt to bring

suit in [a foreign forum] and are blocked arbitrarily or

unreasonably, United States courts could once again be

open to these claims.” Fischer, 777 F.3d at 865-866. 2

Moreover, the conflict is ripe for this Court’s review

because—as is true with respect to the first question

presented, see p. 13, supra—the FSIA’s venue provision, 28 U.S.C. 1391(f)(4), reduces the prospect of substantial further percolation in the courts of appeals.

2. Review is also warranted because the United

States has important foreign-policy interests in ensuring that federal courts have the ability to abstain under

the doctrine of international comity. Litigation against

foreign sovereigns frequently raises foreign-policy concerns, and U.S. interests may be particularly sensitive

where the claims allege serious human rights abuses on

the part of a foreign state. Moreover, as relevant here,

The Seventh Circuit, however, mistakenly described its application of comity principles as “impos[ing] an exhaustion requirement

that limits where plaintiffs may assert their international law

claims.” Fischer, 777 F.3d at 857 (emphasis added). As noted, p. 19,

supra, international-comity-based abstention is better characterized as a prudential doctrine recognizing that, in a particular case, a

foreign sovereign may have a greater interest in resolving the dispute than the United States, and that U.S. interests may be better

served by deferring to that foreign sovereign’s interests.

2

21

the United States has urged foreign partners to establish appropriate redress and compensation mechanisms

for Holocaust victims. See, e.g., Bureau of European

and Eurasian Affairs, U.S. Dep’t of State, Prague Holocaust Era Assets Conference: Terezin Declaration

(June 30, 2009), https://2009-2017.state.gov/p/eur/rls/

or/126162.htm (emphasizing importance of property

restitution and compensation, and supporting national

programs to address Nazi-era property confiscations).

The exercise of jurisdiction by U.S. courts in some such

cases may undermine the ability of the United States to

advance its foreign-policy objectives.

Indeed, the United States itself sometimes makes a

submission to a court to express its view that comity

counsels abstention in a particular case, and this Court

has suggested that those views “might well be entitled

to deference.” Altmann, 541 U.S. at 701-702. And, while

respondents contend (Br. in Opp. 35-39) that this case

is not a suitable vehicle because a court would not abstain here, that assertion is premature. No court has

yet had an opportunity to consider whether comity

counsels in favor of applying a prudential exhaustion requirement in this case, because the lower courts erroneously held that comity abstention was categorically

unavailable. Pet. App. 20, 83.

3. The question presented in this case is also raised

by petitioners in Republic of Hungary v. Simon, No.

18-1447 (filed May 16, 2019). The United States recommends that the Court grant the petition for a writ of

certiorari in this case and hold the petition in Simon because this case is the better vehicle for this Court’s review. See U.S. Amicus Br. at 12-13, Simon, supra (No.

18-1447). Petitioners in Simon did not raise the juris-

22

dictional question of whether a state’s taking of property from its own nationals satisfies the requirements

of the FSIA’s expropriation exception. To ensure that

both issues are before the Court, the United States recommends granting review in this case. If, however, the

Court decides to instead grant review in Simon, the

United States recommends holding the petition in this

case pending Simon’s disposition.

III. THIS COURT SHOULD DECLINE TO REVIEW THE

QUESTION PRESENTED IN THE CONDITIONAL

CROSS-PETITION

The conditional cross-petition presents the question

whether a foreign state is subject to suit under the

FSIA’s expropriation exception if neither the expropriated property, nor any property exchanged for such

property, is present in the United States. This Court

declined to grant certiorari on the same question just

last term in de Csepel, supra, and there have been no

meaningful developments in the interim. Accordingly,

this Court’s review is not warranted.

1. The FSIA’s expropriation exception offers two

distinct tests to determine whether there is an adequate

nexus between the defendant and the United States.

The first nexus test requires that the property at issue,

or property exchanged for the property at issue, be present in the United States in connection with commercial

activities “carried on in the United States by the foreign

state” itself. 28 U.S.C. 1605(a)(3). The second nexus

test is less demanding and requires that a foreign

state’s agency or instrumentality be “engaged in a commercial activity in the United States,” but does not require that the property at issue be in the U.S. or be used

in the agency or instrumentality’s U.S. commercial activities. Ibid.

23

As the court of appeals correctly recognized, Pet.

App. 15-16, and as the United States explained in its invitation brief in de Csepel, U.S. Amicus Br. at 8-18, Section 1605(a)(3)’s text and structure are most naturally

read to establish two distinct tracks for obtaining jurisdiction, depending on the entity whose immunity is at

stake. If that entity is the foreign state itself, then the

stricter “foreign state” nexus must be satisfied; if that

entity is an agency or instrumentality, then the looser

“agency or instrumentality” nexus must be satisfied.

2. As the United States also explained in its brief in

de Csepel, U.S. Amicus Br. at 18-19, the D.C. Circuit’s

position on this question does not warrant review because it is consistent with the only other court of appeals decision to discuss the question, albeit in dicta.

Garb v. Republic of Poland, 440 F.3d 579, 589 (2d Cir.

2006). No other court of appeals has issued an opinion

on the question in the interim. Rather, in asserting that

review is proper (19-520 Pet. 16-17), respondents cite

inapposite cases that were decided before this Court denied review in de Csepel. See U.S. Amicus Br. at 18-19.

24

CONCLUSION

The petition for a writ of certiorari should be granted

and the conditional cross-petition for a writ of certiorari

should be denied.

Respectfully submitted.

MARIK A. STRING

Acting Legal Adviser

Department of State

MAY 2020

NOEL J. FRANCISCO

Solicitor General

JOSEPH H. HUNT

Assistant Attorney

General

EDWIN S. KNEEDLER

Deputy Solicitor General

COLLEEN E. ROH SINZDAK

Assistant to the Solicitor

General

SHARON SWINGLE

CASEN B. ROSS

JOSHUA K. HANDELL

Attorneys