Amicus Curiae Brief — Republicof Austria v. Altmann

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NOV 13 2°93

O

No. 03-13 aan

IN THE

Supreme Court of the United States

THE REPUBLIC OF AUSTRIA, a foreign state,

and the AUSTRIAN GALLERY,

Petitioners,

Vv.

MARIA V. ALTMANN,

Respondent.

On Writ oF CERTIORARI TO THE

UNiTED StaTEs Court OF APPEALS FOR THE NINTH CIRCUIT

BRIEF FOR AMICUS CURIAE, SOCIETE NATIONALE

DES CHEMINS DE FER FRANCAIS

IN SUPPORT OF NEITHER PARTY

ANDREAS F. LOWENFELD*

LinpDA J. SILBERMAN

40 Washington Square South

New York, NY 10012

(212) 998-6208

* Counsel of Record Attorneys for Amicus Curiae

- -

184164 g

COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

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TABLE OF CONTENTS

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I.

The Instant Case Presents Different

Considerations From The Case Brought

Against The Amicus Curiae, And In

Interpreting The Foreign Sovereign

Immunities Act The Court Should Be Careful

To Preserve These Critical Distinctions.

Se ee Cees ee ee eee eet eee es eee eee ee ee ee ee

A. Any Ruling on_ Impermissible

Retroactivity in This Case Should be

Limited to Application of Provisions

Conferring Jurisdiction Where No

Jurisdiction Existed Before. .........

B. The Presumption Against Retroactive

Application Does Not Apply to

Legislation that Forecloses Jurisdiction

Over Particular Claims. .............

il

Contents

II. Speculation About How The State

Department Would Have Or Might Have

Responded To A Request For Sovereign

Immunity Sixty Years Ago Is Inevitably

Unreliable. Inquiry Into Hypothetical

Decisions That Might Have Been Made

Long Ago Should Not Form The Basis Of A

Judicial Determination Of Jurisdiction In

Presently Pending Actions. ...........---

Teen TT ee cde eeRenerees

Page

11

ill

TABLE OF CITED AUTHORITIES

Cases: Page

Abrams et al v. SNCF, 175 F. Supp. 2d 423 (E.D.N.Y.

2001), vacated and remanded, 332 F.3d 173

CBB Cie. BEB) nc ccccccccccccccccccccccees passim

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

(9th Cir. 2002), amended, 327 F.3d 1246 (2003)

Bernstein v. N.V. Nederlandsche-Amerikaansche

Stoomvaart-Maatschappij, 210 F.2d 375 (2d Cir.

DEED 0660nbsbocbdeucedbecrectcasececceete s

Bernstein v. Van Heyghen Fréres, 163 F.2d 246

(2d Cir. 1947), cert. denied, 332 U.S. 772 (1947)

TTT TTTTITT TILT TT TTT TTT ETT TTT eT TT ee 8

Carl Marks & Co., Inc. v. Union of Soviet Socialist

Republics, 841 F.2d 26 (2d Cir. 1988) ......... 4

Garb v. Republic of Poland, 2003 WL21890843

(2d Cir. Aug. 6, 2003) ..........0..000000055. 9-10

Jackson v. People’s Republic of China, 794 F.2d 1490

(11th Cir. 1986), cert. denied, 480 U.S. 917 (1987)

eure Tere TTT TT TTPTTETTT TTT TT Ter errre Tree 4

iv

Cited Authorities

Lindh v. Murphy, 521 U.S. 320 (1997) .......--.

Société Nationale des Chemins de Fer Frangais v.

Abrams et al, No. 03-284, filed August 22, 2003

Whiteman v. Republic of Austria, WL 31868236

(2d Cir. Aug. 6, 2003) .......-.cceceececeees

Other Authorities:

Jurisdiction of United States Courts in Suits Against

Foreign States, Report of the House Comm. on

the Judiciary, H.R. Rep. No. 94-1487, p. 7 (1976)

1,5

10

l

THE INTEREST OF THE AMICUS CURIAE '

The Amicus Curiae, like the petitioner in the instant case,

is a foreign sovereign as defined in the Foreign Sovereign

Immunities Act of 1976, and is a defendant in a suit brought

in respect of acts alleged to have taken place during or shortly

after World War II. Both the instant case and the case to

which the Amicus is a party raise the issue of applicability

of the FSIA to events prior to its passage, though in

different postures. The Amicus Curiae has filed a petition

for certiorari to the Court of Appeals for the Second Circuit

upon which this Court has not yet acted, Société Nationale

des Chemins de Fer Francais v. Abrams et al, No. 03-284,

filed August 22, 2003.’ Since the decision in the instant case

may well have an impact on the outcome of the suit against

the Amicus, either in this Court (if review is eventually

granted) or (if review is denied) in further proceedings in

the lower courts, prudence dictates that the position of the

Amicus be presented to the Court at this time. As explained

hereafter, the position of the Amicus is not identical to the

position of either party in the instant case, and this brief is

not submitted in support of either party.

1. The parties have consented to the filing of this brief.

Their letters of consent have been lodged with the Clerk of the Court.

This brief has been authored in its entirety by undersigned counsel

for the amicus curiae. No person or entity, other than the named

amicus and its counsel, has made any monetary contribution to the

preparation and submission of this brief.

2. The case was conferenced on November 7, 2003, but no

action was taken.

2

SUMMARY OF ARGUMENT

1. For purposes of determining whether a jurisdictional

statute applies to actions brought after passage of the statute

based on events prior to passage, a distinction must be drawn

between jurisdiction-conferring and jurisdiction-ousting

provisions. Different provisions of the Foreign Sovereign

Immunities Act have different effects — some conferring and

some denying jurisdiction. Section 1605(a)(3) of the FSIA,

the provision at issue in the instant case, for the first time

bestows jurisdiction on U.S. courts to hear initial claims

against a sovereign arising from an alleged expropriation.

Other provisions of the Act operate to preclude jurisdiction

against a foreign sovereign or sovereign instrumentality.

In particular, § 1603(b) provides that state instrumentalities

as defined are entitled to the same immunities as the

sovereign, i.e., that there is no jurisdiction unless one of the

exceptions to immunity is applicable. As World War II claims

against foreign sovereigns and their instrumentalities

continue to proliferate, the Court should be careful to focus

on the several provisions of the FSIA involved in such cases,

and to keep the relevant distinctions in mind.

2. The unprecedented search conducted by the Court of

Appeals in the instant case in order to deduce how the State

Department would have responded to a request for immunity

six decades ago is too speculative to support a determination

with respect to jurisdiction and immunity. The Second Circuit

has built on the approach of the Ninth Circuit in the A/tmann

case before the court on this petition to launch deeper and

even more speculative inquiries that impair the separation

of powers and contradict the express intent of the Congress

to remove the State Department from case-by-case

participation in litigation against foreign sovereigns.

3

ARGUMENT

I. The Instant Case Presents Different Considerations

From The Case Brought Against The Amicus Curiae,

And In Interpreting The Foreign Sovereign

Immunities Act The Court Should Be Careful To

Preserve These Critical Distinctions.

A. Any Ruling on Impermissible Retroactivity in

This Case Should be Limited to Application of

Provisions Conferring Jurisdiction Where No

Jurisdiction Existed Before.

This case, like the action brought against the Amicus

Curiae, raises the question of application of the Foreign

Sovereign Immunities Act of 1976 to claims based on events

during or shortly after World War II. However, in the instant

case, plaintiff relies on the FSIA to confer jurisdiction over

a claim that almost certainly could not have been brought in

a U.S. court prior to adoption of the Act,’ and sovereign

defendants contend that applying the provision to them would

be “impermissibly retroactive.” In contrast, in the action

brought against the Amicus Curiae, Abrams et al v. SNCF,

175 F. Supp. 2d 423 (E.D.N.Y. 2001), vacated and remanded,

332 F.3d 173 (2d Cir. 2003), the FSIA bars plaintiffs’ claim

and it is the sovereign defendant who relies on the Act while

plaintiffs urge that applying the Act would be “impermissibly

retroactive.” In Abrams, plaintiffs argue that they could have

brought their action prior to adoption of the Act since,

3. We say “almost” certainly because the claim arose in the age

of absolute immunity, when suits could not be brought against foreign

sovereigns in the United States. However, plaintiffs in A/tmann

contended, and the Ninth Circuit agreed, that Austria could not

reasonably have expected the State Department to grant it immunity.

4

as they contend, a claim of sovereign immunity would not

have been allowed. Defendant, Amicus Curiae herein,

disputes that contention, and the Court of Appeals did not

accept it, but remanded the case to the District Court for

further inquiry with respect to the pre-1952 U.S. law and

practice. The Amicus Curiae submits that conferral of

jurisdiction by statute, as asserted by plaintiff in the instant

case, is fundamentally different for purposes of retroactivity

analysis from limiting the jurisdiction of courts by statute,

as was Clarified by passage of the FSIA with respect to claims

over state instrumentalities such as Amicus SNCF.

It is the submission of Amicus Curiae, supported as

hereinafter set out briefly and set out in greater detail in its

petition for certiorari in Case 03-284, that a statutory

limitation of jurisdiction always operates prospectively and

is therefore not caught in the dilemma of “impermissible

retroactivity.” Conferral of jurisdiction on a court, on the

other hand, such as inclusion for the first time of claims

against a foreign state based on expropriation, FSIA

§ 1605(a)(3), has been subject to a retroactivity analysis, to

determine: (a) whether Congress intended the new cause of

action to be available in respect to events prior to the

enactment; and (b) in the absence of clear intent, whether

applying the statute to pre-enactment conduct would bg

impermissibly retroactive in that it would frustrate the

legitimate expectations and justified reliance of the sovereign

defendants. See, e.g., Jackson v. People's Republic of China,

794 F.2d 1490 (11th Cir. 1986), cert. denied, 480 U.S. 917

(1987); Carl Marks & Co., Inc. v. Union of Soviet Socialist

Republics, 841 F.2d 26 (2d Cir. 1988) (both concluding that

claims by holders of imperial bonds issued seven decades

earlier could not be brought under the FSIA.)

ee

5

The instant case does not raise the issue of the effect of

a jurisdiction-ousting statute directly, since the question

presented addresses only the conferral, and not the exclusion

of jurisdiction by the FSIA. Thus the Court may well wish to

defer thé issue of the effect of a statutory bar to jurisdiction

to consideration of Abrams or some later case. If this is the

direction in which the Court wishes to proceed, Amicus urges

that the Court do so explicitly, lest too general a statement

about retroactivity in its judgment in this case blur the

distinction here emphasized. Of course, if the Court were to

grant review in No. 03-284, SNCF v. Abrams, the distinction

between conferral and ouster of jurisdiction for purpose of

retroactivity analysis could be clearly spelled out by the Court

in that case.

B. The Presumption Against Retroactive Application

Does Not Apply to Legislation that Forecloses

Jurisdiction Over Particular Claims.

In the leading decision on retroactive application of

statutes, Landgraf v. USI Film Products, 511 U.S. 244 (1994),

this Court set forth a general presumption against

retroactivity:

{E]lementary considerations of fairness dictate

that individuals should have an opportunity to

know what the law is and to conform their conduct

accordingly; settled expectations should not be

lightly disrupted.

511 U.S. at 265. The majority opinion in Landgraf went

on to distinguish statutes “conferring or ousting jurisdiction

6

whether or not jurisdiction lay when the suit was filed.”

The Court, per Justice Stevens, wrote:

Application of a new jurisdictional rule

usually “takes away no substantive right but

simply changes the tribunal that is to hear the

case.” [citation omitted]. Present law normally

governs in such situations because jurisdictional

statutes “speak to the power of the court rather

than to the rights or obligations of the parties”.

Id. at 274.

In his concurrence in Landgraf, Justice Scalia, joined

by Justices Kennedy and Thomas, further clarified the

relationship between jurisdiction and retroactivity, and

pointed out the distinction between jurisdiction-conferring

and jurisdiction-eliminating effects:

... the purpose of provisions conferring or

eliminating jurisdiction is to permit or forbid the

exercise of judicial power — so that the relevant

event for retroactivity purposes is the moment at

which that power is sought to be exercised. Thus,

applying a jurisdiction-eliminating statute to undo

past judicial action would be applying it

retroactively; but applying it to prevent any

judicial action after the statute takes effect is

applying it prospectively.

Id. at 293.

-—-—

>

In Lindh v. Murphy, 521 U.S. 320 (1997), Chief Justice

Rehnquist, joined by Justices Scalia, Kennedy and Thomas,

reiterated the need to distinguish between jurisdiction-

conferring and jurisdiction-ousting legislation:

Although in Hughes Aircraft Co. v. United

States ex rel. Schumer, we recently rejected a

presumption favoring retroactivity for jurisdiction-

creating statutes, . . . nothing in Hughes disparaged

our longstanding practice of applying jurisdiction-

ousting statutes to pending cases.

Id. at 342 n.3 (emphases in original).

The suit brought against Amicus in the Abrams case was

not, of course, in any sense a pending case when the FSIA

was adopted. But if a door-closing provision can apply even

to an action that had already been filed when the statute was

passed, it must surely be applicable to a claim based on events

more than three decades before passage of the Act and filed

nearly a quarter century after passage of the Act.

8

II. Speculation About How The State Department Would

Have Or Might Have Responded To A Request For

Sovereign Immunity Sixty Years Ago Is Inevitably

Unreliable. Inquiry Into Hypothetical Decisions

That Might Have Been Made Long Ago Should Not

Form The Basis Of A Judicial Determination Of

Jurisdiction In Presently Pending Actions.

The Court of Appeals in the instant case based its

determination concerning the application of the jurisdiction-

conferring aspect of the Foreign Sovereign Immunities

Act to pre-enactment events on its finding as to how the

Department of State would have responded to a request for

sovereign immunity by Austria. Focusing its inquiry in large

part on a document issued by the State Department in quite

different circumstances,’ the Court of Appeals concluded that

the Department would not have “recognized and allowed”

a request for immunity on behalf of the Republic of Austria

at the time of the events giving rise to the claim. Therefore,

the Court held, the Republic could not have reasonably

4. In relying in substantial part on the so-called “Bernstein

Letter”, the Ninth Circuit failed to distinguish between the Act of

State doctrine raised as a defense by a private litigant in the Bernstein

cases, and the issue of sovereign immunity raised by the sovereign

in Altmann. No government was involved in the Bernstein litigation,

and no plea of sovereign immunity was raised in those cases.

See Bernstein v. Van Heyghen Fréres, 163 F.2d 246 (2d Cir. 1947),

cert. denied, 332 U.S. 772 (1947), (act of state doctrine applied to

foreclose a private suit by a former owner of ships seized by the

former German government); Bernstein v. N.V. Nederlandsche-

Amerikaansche Stoomvaart-Maatschappij, 210 F.2d 375 (2d Cir.

1954), (act of state doctrine not applied following State Department’s

letter urging that the doctrine not be applied to foreclose acts of the

now defunct government of Nazi Germany).

ee

=. ETRE

9

expected a request for immunity to be granted, and hence

applying the 1976 Act to the events of the 1940s would not

be “impermissibly retroactive.” This is the first instance since

the passage of the Foreign Sovereign Immunities Act where

a U.S. court has based its decision on its speculation as to

how the Department of State would have responded to a

request for immunity on behalf of a sovereign, and the

conclusion is inherently unpersuasive.

The Court of Appeals in Abrams took its cue from

Altmann, but carried the process a significant step further.

The court remanded the Abrams case to the District Court

with instructions to “develop a record” as to how the State

Department would have responded to a request for immunity

on behalf of a French state instrumentality, Amicus herein.

In carrying out this direction, the District Court has

addressed a letter to the Legal Adviser of the State Department

stating:

I would appreciate, if you think it appropriate,

your considered view whether the State Department

would have recognized a sovereign immunity claim

if this case had been brought in the immediate

post-war period.

Letter from District Judge David G. Trager, August 28, 2003.

In two cases heard after Abrams, a different panel of the

Second Circuit followed the lead of the panel in Abrams,

remanding claims brought against Poland and Austria to the

respective district courts with directions to “invite the

participation of the Department of State in developing a

record to support their determinations.” Garb v. Republic of

10

Poland, 2003 WL21890843 (2d Cir. Aug. 6, 2003), (certiorari

applied for); Whiteman v. Republic of Austria, WL 31868236

(2d Cir. Aug. 6, 2003), (certiorari applied for). The Court of

Appeals in the latter cases cautioned the District Courts that

the necessary factual inquiry should be conducted “with

appropriate attention to separation-of-powers concerns”,

but otherwise gave no guidance.

As of this writing, the State Department has not

responded to the letter from the District Judge. It is evident,

however, that the precedent set in the instant case by the Ninth

Circuit has already led to roving inquiries about how the

Executive Branch would have acted two generations ago in

four cases brought against three sovereign states, with still

other cases not far behind. Unless this precedent is checked,

it seems inevitable that the State Department will be dragged

into case-by-case participation in litigation against foreign

sovereigns, contrary to the express desire of the Congress in

adopting the FSIA.° In the process, the orderly construction

of an important statute, based on the text and the intention

of the Congress, is bound to suffer.

5. See Jurisdiction of United States Courts in Suits Against

Foreign States, Report of the House Comm. on the Judiciary,

H.R. Rep. No. 94-1487, p. 7 (1976):

A principal purpose of this bill is to transfer the

determination of sovereign immunity from the executive

branch to the judicial branch, thereby reducing the

foreign policy implications of immunity determinations

and assuring litigants that these often crucial decisions

are made on purely legal grounds and under procedures

that insure due process.

11

CONCLUSION

| In deciding the issue of retroactivity presented by the

instant case, the Court should keep in mind the distinction

between jurisdiction-conferring and jurisdiction-foreclosing

effects of the FSIA, and should be careful not to preempt the

contention of SNCF in the Abrams case that applying the

FSIA to bar suit against it would have no impermissibly

retroactive effect. Further, the Court should reject all attempts

to run the tape of history backwards, by speculating, or asking

the State Department to speculate, how it would have

responded to a request for immunity six decades ago.

Respectfully submitted,

ANDREAS F, LOWENFELD*

Linpa J. SILBERMAN

40 Washington Square South

New York, NY 10012

(212) 998-6208

Attorneys for Amicus Curiae

* Counsel of Record