# Amicus Curiae Brief — Republicof Austria v. Altmann

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0692%3A11

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2004
- **Citation:** 541 U.S. 677

## Text

No. 03-13

In the Supreme Court of the United States

REPUBLIC OF AUSTRIA, ET AL., PETITIONERS

MARIA V. ALTMANN

ON WRIT OF CERTIORARI!
TOTHE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONERS

THEODORE B. OLSON
Nolicitor er rhe ra!
( ‘Ow? sel of Re cord
PETER D. KEISLER
Assistant Attorne y
(x rlé ral
EDWIN S. KNEEDLER
Th puty Solicitor (x rie ral

JEFREY P. MINEAR

WILLIAM H. TAFT. IV Assistant to the Solicitor
Legal Adviser General
JONATHAN B. SCHWARTZ MARK B. STERN
Deputy Legal Adviser DOUGLAS HALLWARD-DRIEMEIER
ELIZABETH M. TEE Attorneys
Attorney-Advise r 5. partie nt of Justice
Depart nt of Nrate Wasi ington . 7 C 20530-0001

—

Wash „gen. D.C. 20520 (202) 515-221;

QUESTION PRESENTED

Whether the Foreign Sovereign Immunities Act of 1976
(FSIA), 28 U.S.C. 1602 et se., authorizes United States
courts to exercise jurisdiction over a claim, arising before
the FSIA’s enactment, that a foreign state expropriated
property in violation of international law.

— —

TABLE OF CONTENTS

A. Foreign sovereign immunity
B. The factual allegations in this case

2 ——
Argument:
The FSIA does not authorize United States courts
to exercise jurisdiction over an expropriation claim
against a foreign state based on conduct that occurred
before enactment of the FSIA . . .
A. This Court’s retroactivity decisions preclude
application of the FSIA’s expropriation excep-
tion to claims that arose before enactment
——————
1. The FSIA is subject to established retro-
activity principles ....... 2
2. The application of those retroactivity princi-
ples depends on the particular FSIA provision
at issue
3. The FSIA’s expropriation exception created
a new substantive liability that is subject
to the presumption of non-retroactive
application
4. There is no basis for overcoming the pre-
sumption that the FSIA’s expropriation
exception is non-retroactive —
5. Retroactive application of the FSIA’s expro-
priation exception would be inconsistent
with international norms

(III)

I 2 WS to

11

12

14

17

IV

Table of Contents—Continued:

B. The court of appeals erred by relying on
unfounded speculation that, before enactment
of the FSIA, the Executive Branch would
have abridged a foreign state’s sovereign
immunity in the instance of Holocaust claims
1. The court of appeals erred in attempting
to surmise whether the Executive Branch
would have recognized a special exception
for Holocaust claims before enactment of
the FSIA .....
2. The United States did not condition a
foreign state’s right to absolute immunity
on whether the state was an “unfriendly”
nation
3. The United States did not depart from the
governing principles of sovereign immunity
in the case of Holocaust-related claims ...............
4. Austria did not lose its right to absolute
sovereign immunity in United States
courts by adopting the restrictive theory
of foreign sovereign immunity

TABLE OF AUTHORITIES
Cases:
Abrams v. Societe Nationale des Chemins de Fer
Francais, 332 F.3d 173 (2d Cir. 2003), petition for
cert. pending, No. 03-284 (filed Aug. 19, 2008) .................
Alfred Dunhill of London, Inc. v. Cuba, 425 U.S.
682 (1976)

Ambatielos Case (Greece v. United Kingdom), 1952
I CJ. 28

21

» 8

3, 13

Cases—Continued: Page

American Hawaiian Ventures, Inc. v. M.V_J.

Latuharhary, 257 F. Supp. 622 (D.N.J. 1966) 27
American Ins. Ass 'n v. Garamendi, 123 S. Ct. 2374

(2003) 18, 22
Argentine Republic v. Amerada Hess Shipping

Corp., 488 U.S. 428 (1989) 1, 19, 25
Banco Nacional de Cuba v. Sabbatino, 376 U.S.

398 (1964) 26, 27
Bernstein v. N. V. Nederlandsche-Amerikaansche:

173 F.2d 71 (2d Cir. 1949) 26

210 F. 2d 375 (2d Cir. 1954) 26, 27
California v. Deep Sea Research, Inc., 523 U.S. 491

(1998) 16
Carl Marks & Co. v. Union of Soviet Socialist,

Republics, 841 F.2d 26 (2d Cir.), cert. denied,

487 U.S. 1219 (1988) 10, 12
Carrato v. United States, [1982] 40 O.R. (2d) 459

(H.C.), judgment endorsed and appeal dismissed,

File No. 22/83 (Ont. Ct. App. Oct. 17, 1983) 19
Chemical Natural Res., Inc. v. Republic of

Venezuela, 215 A.2d 864 (Pa. 1966) 13
Dames & Moore v. Regan, 453 U.S. 654 (1981) 14, 22
Deutsch v. Turner Corp, 324 F.3d 692 (9th Cir.),

cert. denied, 124 S. Ct. 105 (2003) 28
Fujitsu Ltd. v. Federal Experss Corp, 247 F.3d 423

(2d Cir.), cert. denied, 534 U.S. 891 (2001) 17
Garb v. Republic of Poland, 72 Fed. Appx. 850

(2d Cir. 2003), petitions for cert. pending, Nos. 03-500

& 03-517 20
Guaranty Trust Co. v. United States, 304 U.S. 126

(1938) 3,11
Hughes Aircraft Co. v. United States ex rel.

Schumer, 520 U.S. 939 (1997) 7, 9, 10, 28
INS v. St. Cyr, 533 U.S. 289 (2001) 11, 15, 16

VI

Cases—Continued: Page

Jackson v. People’s Republic of China, 794 F.2d
1490 (11th Cir. 1986), cert. denied, 480 U.S. 917

(1987) 10, 12, 15
Johnson v. Eisentrager, 339 U.S. 763 (1950) 22
Joo v. Japan, 332 F.3d 679 (D.C. Cir. 2003) 10, 11, 12,

15, 18, 19, 22
Landgraf v. USI Film Prod., 511 U.S. 244

... —h— ͤͤ—— 9
Lindh v. Murphy, 521 U.S. 320 (1997 15
Mexico v. Hoffman, 324 U.S. 30 (1945) 3, 21, 24
Minnesota v. United States, 305 U.S. 382 (1939) ............. 29

Princz v. Federal Republic of Germany, 26 F.3d
1166 (D.C. Cir. 1994), cert. denied, 513 U.S. 1121

—...—.——— _ 25
Republic of Argentina v. Weltover, Inc., 504 U.S.

607 (1992) 13
Republic of Peru, Ex parte, 318 U.S. 578 (1948) .......... 3, 10,

11, 21, 23

Ricaud v. Amerian Metal Co., 246 U.S. 304

(1918) 22
Rich v. Naviera Vacuba, S. A, 197 F. Supp. 710

(E. D. Va.), aff d 295 F.2d 24 (4th Cir. 1961) 13
Sampson v. Federal Republic of Germany, 250 F.3d

1145 (7th Cir. 2001) 25, 26
Saudi Arabia v. Nelson, 507 U.S. 349 (1993) 1,13

19, 24, 25

Smith v. Socialist People’s Libyan Arab

Jamahiriya, 101 F.3d 229 (2d Cir. 1996) 26
Stephen v. Zivnostenska Banka, 15 A.D.2d 111

(N.Y. App. Div. 1961), aff d, 186 N.E.2d 676 (1962) 13-14
The Santissima Trinidad, 20 U.S. (7 Wheat.) 283

(1822) 16
The Schooner Exchange v. M Fadden, 11 US.

(7 Cranch) 116 (1812) 2,21

Tritt v. United States, [1989] Ont. Sup. C. J. Lexis
455 19

VII

Cases—Continued:
Underhill v. Hernandez, 168 U.S. 250 (1897)
Verlinden B. V v. Central Bank of Nigeria, 461 US.

480 (1983) 2, 4, 10, 12, 20, 21

Victory Transport, Inc. v. Comisaria General de
Abastecimientos y Tranportes, 336 F.2d 354 (2d Cir.

1964), cert. denied, 381 U.S. 934 (1965) 12-13, 24, 28

W.S. Kirkpatrick & Co. v. Environmental Tectonics
Corp., Int'l, 493 U.S. 400 (1990)
Ware v. Hylton, 3 U.S. (3 Dall.) 198 (1796)
Weltover, Inc. v. Republic of Argentina, 941 F. 2d
145 (2d Cir. 1991), aff d, 504 U.S. 607 (1992)
Wulfsohn v. Russian Socialist Federated Soviet
Republic, 138 N. E. 24 (N.Y. 1923)
Zwack v. Kraus Bros. & Co., 237 F.2d 255 (2d Cir.
1956)

Treaties, statutes and rules:

Agreement Relating to the Agreement of Oct. 24, 2000,
Concerning the Austrian Fund “Reconciliation, Peace,
and Cooperation”, Jan. 23, 2001, U.S.-Aus., 2001 WL
935261, Annex A

Austria: Settlement of Certain Claims Under Article
26 of the Austrian State Treaty, May 22, 1959, U.S.
Aus., 10 U.S.T. 1158

Bulgaria: Claims, Jul. 2, 1963, U.S.-Bulg., 14 U.S. T.
969

Convention on the Settlement of Matters Arising out
of the War and the Occupation, as amended, Oct. 23,
1954, 6 U.S.T. 4411

Council of Europe: European Convention on State
Immunity and Additional Protocol, art. 35(3), 11 I.L.M.
470, 482 (1972)

Declaration on Austria at Moscow, S. Exec. Rep. No. 8,
84th Cong., Ist Sess. (1955)

18

19

VIII

Treaties and statutes—Continued: Page

Poland: Settlement of Claims of United States
Nationals, Jul. 16, 1960, U.S.-Pol., 11 U.S.T.

Romania: Settlement of Claims of United States
Nationals and Other Financial Matters, Mar. 30,
I 14
State Treaty for the Re- establishment of an Indepen-
dent and Democratic Austria, May 15, 1955, art. 26,

1 ⁰ͤ—¶T1—— 18
Treaty of Peace with Japan, Sept. 8, 1951, 3 U.S. T

—. . ?]ñ 18
Vienna Convention on the Law of Treaties, S. Exec.

Doc. L, 92d Cong., Ist Sess. (1971) 1 17
Yugoslavia: Claims of United States Nationals

Nov. 5, 1964, U.S.-Yugo., 16 U.S. T. 1 14
Antiterrorism and Effective Death Penalty Act of

1996, Pub. L. No. 104-132, f 221(c), 110 Stat. 1248 ........... 16

Foreign Sovereign Immunities Act of 1976,
Pub. L. No. 94-583, 90 Stat. 2891 (28 U.S.C. 1330, 1602

et seg.) — 1, 3-4
28 U.S.C. 1602 . _ 15, 20
28 U.S.C. 16030b) * * 6
29 ..——.——— 4. 11, 19
28 U.S.C. 16050) (1) 7 12, 25
Oe 7 12
28 U.S.C. 16050) (3) a . 5, la
28 U.S.C. 1605-1607 4
International Claims Settlement Act Amendments
of 1955, ch. 645. 69 Stat. 562 (22 U.S.C. 1641 et seg.) 22

International Claims Settlement Act Amendments of
1958, Pub. L. No. 85-604, 72 Stat. 527 (22 U.S.C.

1642 et seq.) 14
International Emergency Economic Powers Act,
99. ' 22

Trading with the Enemy Act, ch. 106, 40 Stat. 411
(50 U.S.C. App. 1 et seq.) 22

IX

Statutes—Continued: Page
War Claims Act of 1948, ch. 826, 62 Stat. 1240 (50 U.S.C.

App. 2001 et seq.) — — — — 18, 22
112.1 2 —— 27
Foreign States Immunities Act, 1985, § 7 (Austl.)

(reprinted in 25 J. L. M. 715 (1986)) .. ... 19
State Immunity Act, 1978, § 23 (Eng.) (reprinted in

Wee. ——— 19
State Immunity Act, 1979, § 1 (Sing) (available at

) ..... 19
State Immunity Act, 1982 (Can.) (reprinted in

IX 4. ⁵ͤꝗV—᷑ 19

Miscellaneous:
Comment, American Oil Investors’ Access to Domes-

tic Courts in Foreign Nationalization Disputes,

123 U. Pa. L. Rev. 610 Gan. 1975) . . . . 13, 27
Note, Avoiding Expropriation Loss, 79 Harv. L. Rev.

rr. ²̃%⁰ä—ç2 13, 14
Note, The Castro Government in American Courts:

Sovereign Immunity and the Act of State Doc-

trine, 75 Harv. L. Rev. 1666 (June 1962) . . 13
Dep’t of St. Bull., July 9, 1956... ..... 18
H.R. Rep. No. 1487, 94th Cong., 2d Sess. (1976) 15, 20, 29
1 Robert Jennings & Arthur Watts, Oppenheim’s

International Law (9th ed. 1992) . . . .... 17
Letter from Legal Adviser Monroe Leigh to the

Solicitor General (Nov. 26, 1975) (reprinted in

425 U.S. 706 (1976)) 27
Letter from Acting Legal Adviser Jack B. Tate to

Acting Attorney General Phillip B. Perlman

(May 19, 1962) (reprinted in 425 U.S. 711 (1976) 3
Andreas F. Lowenfeld, The Sabbatino Amendment

International Law Meets Civil Procedure, 59 Am.

4. Tent’ Le. GBD (IGG) cccccccscscscccssececesesesoscssesssonsssssssssosvsssoscsosoese 13, 27

Miscellaneous—Continued: Page

Gerald Fitzmaurice, The Law and Procedure of the
International Court of Justice, 1951-54: General Prin-
ciples and Sources of Law, XXX British Year Book
of International Law 5 (198809L———2ͤ—————— 17

In the Supreme Court of the United States

No. 03-13
REPUBLIC OF AUSTRIA, ET AL., PETITIONERS
D.

MARIA V. ALTMANN

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONERS

INTEREST OF THE UNITED STATES

The United States has a substantial interest in the proper
construction of the Foreign Sovereign Immunities Act of
1976 (FSIA), 28 U.S.C. 1602 et seg., which presents the sole
basis for civil litigants to obtain jurisdiction over a foreign
state in United States courts. See Saudi Arabia v. Nelson,
507 U.S. 349, 355 (1993); Argentine Republic v. Amerada
Hess Shipping Corp., 488 U.S. 428 (1989). The United States
has a particularly strong interest in questions respecting the
FSIA’s retroactive application, which carry the potential
for serious adverse effects on our Nation’s foreign relations.
The United States also has a unique perspective on the
government’s sovereign immunity practice before enactment
of the FSIA, when the Executive Branch bore primary re-
sponsibility for making immunity determinations.

(1)

STATEMENT

Petitioners Republic of Austria and the Austrian Gallery
(collectively, Austria) challenge a court of appeals’ decision
arising from respondent’s suit to recover artwork that was,
respondent alleges, unlawfully confiscated from her uncle
during the Holocaust. The court of appeals affirmed the
determination of the United States District Court for the
Central District of California, on Austria’s motion to dismiss,
that the FSIA confers jurisdiction over the suit and that
respondent satisfied other procedural preconditions for
bringing that action.

A. Foreign Sovereign Immunity

The United States’ approach to the question of foreign
sovereign immunity can be separated into three distinct
periods of the Nation’s history. From the Nation’s founding
until 1952, the United States adhered to the “absolute”
theory of foreign sovereign immunity. See Verlinden B.V. v.
Central Bank of Nigeria, 461 U.S. 480, 486 (1983). The
Court endorsed that principle in The Schooner Exchange v.
M’Fadden, 11 U.S. (7 Cranch) 116 (1812), reasoning that, as a
necessary consequence of the dignity to be accorded foreign
sovereigns and the need for the courts to avoid upsetting
international relations, “the person of the sovereign [is
immune] from arrest or detention within a foreign territory”
if he enters “with the knowledge and license of its sover-
eign.” Id. at 137. Under the “absolute theory of sovereign
immunity,” as understood and applied by the Executive
Branch, “foreign sovereigns and their public property are
* * * not * * * amenable to suit in our courts without

Because this case is before the Court on the court of appeals’ affir-
mance of the district court’s denial of Austria’s motion to dismiss, the
allegations of the complaint are accepted as true for purposes of resolving
petitioners’ jurisdictional objections. See Pet. App. 9a.

their consent.” Guaranty Trust Co. v. United States, 304
U.S. 126, 134 (1938).”

In 1952, the United States’ practice was altered when, in
the “Tate Letter,” the Executive announced its adoption of
the “restrictive” theory of foreign sovereign immunity. See
Letter from Acting Legal Adviser Jack B. Tate to Acting
Attorney General Philip B. Perlman (May 19, 1962)
(reprinted in Alfred Dunhill of London, Inc. v. Cuba, 425
U.S. 682, 711-715 (1976)). The Tate Letter stated that
thenceforth the Department of State would recommend to
United States courts, as a matter of policy, that foreign
states be granted immunity only for their sovereign or public
acts Cure imperii), and not for their commercial acts Cure
gestionis). Ibid. See Verlinden, 461 U.S. at 486-487. The
United States adopted the restrictive theory in light of the
growing acceptance of that theory among foreign nations
and the need for a judicial forum to resolve disputes stem-
ming from the “widespread and increasing practice on the
part of governments oi engaging in commercial activities.”
Alfred Dunhill, 425 U.S. at 714 (Tate Letter).

In 1976, Congress enacted the FSIA, which reflects the
United States’ current approach to foreign sovereign
immunity. See Pub. L. No. 94-583, 90 Stat. 2891 (28 U.S.C.

2 Although, under the traditional approach, foreign sovereigns were
absolutely immune from suit in United States courts, the question occa-
sionally arose whether a particular res should be entitled to the sover-
eign’s immunity. See, e. g., Mexico v. Hoffman, 324 U.S. 30, 37 (1945). In
recognition of the potential for international conflict inherent in such
determinations, the courts developed the practice of deferring to the
Executive Branch’s judgment in such matters. See, e. g., Ex parte
Republic of Peru, 318 U.S. 578, 588-589 (1943). The courts determined
whether the particular property at issue was entitled to the benefit of the
foreign sovereign’s immunity “in conformity to the principles aseegcved by
the department of the government charged with the conduct of our foreign
relations.” Hoffman, 324 U.S. at 34-35.

1330, 1° 02, et seg.). The FSIA “contains a comprehensive set
of legal standards governing claims of immunity in every
civil action against a foreign state or its political sub-
divisions, agencies, or instrumentalities.” Verlinden, 461
U.S. at 488. “For the most part, the Act codifies, as a matter
of federal law, the restrictive theory of sovereign immunity.”
Ibid. The FSIA sets forth a general rule that foreign states
are immune from suit in United States courts, 28 U.S.C.
1604, and that courts may exercise jurisdiction over foreign
states only if the suit comes within one of the specific excep-
tions to that rule established by Congress, see 28 U.S.C.
1605-1607. Thus, if the suit does not come within one of the
exceptions, the fundamental rule of Section 1604 retains the
foreign sovereign’s immunity. Congress specifically in-
tended to relieve the State Department of the diplomatic
pressures associated with case-by-case suggestions of im-
munity and to establish iegal principles to guide the courts.
See Verlinden, 461 U.S. at 488.

B. The Factual Allegations In This Case

Respondent was a Jewish citizen of Austria who fled Nazi
persecution and came to the United States, where she be-
came an American citizen. She brought this action to re-
cover six paintings by the famous Austrian artist Gustav
Klimt that the Republic of Austria currently possesses and
houses within the Austrian Gallery. The paintings at issue
include the now-famous Klimt portraits of respondent’s aunt,
Adele Bloch-Bauer. Respondent alleges that, during the
Holocaust, Nazi officials confiscated the paintings from her
uncle, Ferdinand Bloch-Bauer, in violation of international
law. Pet. App. 38a-41a.

According to respondent’s complaint, Ferdinand Bloch-
Bauer’s heirs attempted to recover the expropriated prop-
erty under post-war restitution laws, but Austria maintained
that Adele Bloch-Bauer, who had died in 1925, had be-

— oo — *

queathed the Klimt paintings to Austria. Pet. App. 4Ia-42a
Respondent recounts that, in the immediate post-war period,
Austrian Gallery officials insisted that Ferdinand’s heirs re-
linquish their claims to those Klimt paintings in exchange for
the right to export other recovered property. Id. at 41a-44a.
Respondent further asserts that, in 1998, she obtained docu-
ments from the Austrian Gallery’s archives revealing that,
even in 1948, the Gallery had known that Adele’s testa-
mentary wish that the paintings be donated to the Gallery
was not legally binding. Id. at 42a-43a & n.8, 45a n.11.

Respondent and her fellow heirs filed an administrative
claim in Austria, seeking return of the Klimt paintings. Pet.
App. 46a-47a. The administrative committee returned a
number of Klimt drawings and a portion of Ferdinand’s
valuable porcelain collection to Ferdinand’s heirs. But tne
committee voted, allegedly under politica! pressure, to deny
the claims as to the Klimt paintings. Id. at 47a. Although
respondent could have sought review of the administrative
decision through the Austrian courts upon paying a filing
fee, id. at 8a, she instead filed this suit in federal district
court, ibid. a

Respondent claims that Austria expropriated the Klimt
paintings in violation of international law and that the dis-
trict court has jurisdiction pursuant to the FSIA’s expro-
priation exception, 28 U.S.C. 1605(a)(3) (reproduced in
Appendix, infra, la). Austria moved to dismiss, arguing,
inter alia, that the FSIA could not be applied retroactively
to conduct that occurred in the 1930s and 1940s. The district
court denied the motion, holding that the FSIA
expropriation exception confers jurisdiction over disputes
arising from events predating its enactment. Pet. App. 59a.

8 Throughout the litigation, the parties have accepted that the
Republic of Austria is a foreign state, that the Austrian Gallery is an
“agency or instrumentality” of that foreign state, and that the Gallery is

Austria appealed pursuant to the collateral order doctrine.
See Weltover, Inc. v. Republic of Argentina, 941 F.2d 145,
147 (2d Cir. 1991), aff’d, 504 U.S. 607 (1992). The court of
appeals affirmed, ruling that “the exercise of jurisdiction in
this case does not work an impermissible retroactive appli-
cation of the FSIA.” Pet. App. 2a. That court did “not reach
the broad conclusion of the district court that the FSIA may
be generally applied to events predating the 1952 Tate
Letter.” Id. at lla. It acknowledged rulings of other courts
“not to apply the FSIA to events predating its enactment,”
id. at 13a-14a, and it assumed, “without deciding,” that those
cases were correct, id. at 14a. The court nevertheless con-
cluded that application of the FSIA’s expropriation excep-
tion would not be impermissibly retroactive because, in the
court’s estimation, the Executive Branch would not have
recognized Austria’s claim of immunity from respondent’s
World-War-II-era claim. Id. at 14a-2la. The court cited con-
temporaneous State Department pronouncements that the
Allies reserved the right to declare forced property trans-
fers in Axis territories invalid and that the courts should not
refrain from passing on the validity of acts of Nazi officials.
See id. at 17a-18a. The court reasoned, from those state-
ments, that the Executive Branch would have allowed
American courts to exercise personal jurisdiction over these

therefore subject to the FSIA’s protections. See 28 U.S.C. 1603(b). Al-
though respondent’s complaint alleges that the Republic and the Gallery
had separate legal identities at the time of suit, see Compl. para. 5, respon-
dent concedes that, “both before and after the recent ‘privatization,’” the
Gallery “was and is an organ of the Austrian Ministry of Education of
Culture” that satisfies the FSIA definition of “agency or instrumentality.”
Plaintiff Maria Altmann’s Memorandum of Points and Authorities in
Opposition to Defendants’ Motion to Dismiss Under Fed. R. Civ. P. 12(b)
at 17n.9. The district court stated, without explanation, that “the Gallery
* * * (was] no longer an organ of the Republic” when suit was filed, Pet.
App. 64a, but neither party apparently shares that view.

“unfriendly” nations to compel the return of property seized
in violation of international law. See id. at 18a-19a.*

SUMMARY OF ARGUMENT

Congress enacted the FSIA to provide statutory rules
governing the scope of foreign sovereign immunity and to
grant the courts responsibility for making immunity deter-
minations pursuant to those legislatively prescribed prin-
ciples. In part, the FSIA codified the immunity practices
that the State Department had announced in 1952. But the
FSIA also established new substantive rules of sovereign
immunity, including a new exception from the general rule of
immunity allowing United States courts to exercise juris-
diction, in certain circumstances, over suits arising from a
foreign nation’s taking of property in violation of inter-
national law.

Respondent is mistaken in urging that the FSIA, and the
expropriation provision in particular, should be applied re-
troactively to allow individuals to sue foreign states in
United States courts based on conduct occurring sixty years
ago. This Court’s decisions governing non-retroactivity
establish that, in the absence of a clear statement of contrary

The court also relied on three additional considerations. First, the
court reasoned that, because Austria had itself accepted the restrictive
theory of immunity prior to World War II, opening American courts to
hear claims against Austria merely affected “where a suit may be brought,
not whether it may be brought at all.” Pet. App. 20a (quoting Hughes
Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 951 (1997)).
Second, the court stated that other judicial decisions holding that the
FSIA does not apply retroactively to pre-1952 conduct had involved
“economic transactions” in which the foreign state had not recognized the
restrictive theory of immunity at the time of the conduct at issue. /d. at
20a. Finally, the court distinguished those decisions on the ground that a
foreign government’s commercial activity is entitled to greater protection
from retroactive legislation than are its sovereign acts taken in violation of
international law. Id. at 2la.

intent not present here, federal legislation does not apply
new rules of substantive law to events long past. That
principle has particular force in this case, where the type of
conduct at issue is extensively addressed through treaties,
agreements, and separate legislation that were all adopted
against the background assumption that such claims could
not be litigated in United States courts.

The court of appeals’ retroactivity analysis rests on a
fundamental misunderstanding of the United States’ law and
practice regarding foreign sovereign immunity before the
1952 Tate Letter. Contrary to that court’s impression, the
United States adhered to the “absolute” theory of immunity
at the time of Austria’s challenged conduct and did not
recognize an exception to immunity for expropriations or
other violations of international law. The United States did
not follow any established exception allowing this Nation’s
courts to exercise jurisdiction over “unfriendly” nations.
Indeed, even today, the FSIA does not provide any such
categorical exception. The courts should not engage in an
attempt to surmise whether, more than half a century ago,
the Executive Branch would have denied immunity to a
particular foreign state on some extraordinary or ad hoc
basis, such as punishment for particularly egregious conduct.
The courts of that era would never have presumed the
authority to make such inherently political decisions, and the
FSIA does not provide the courts of this era authority to
speculate retroactively on what the Executive and the
courts might have done.

|

ARGUMENT

THE FSIA DOES NOT AUTHORIZE UNITED
STATES COURTS TO EXERCISE JURISDICTION
OVER AN EXPROPRIATION CLAIM AGAINST A
FOREIGN STATE BASED ON CONDUCT THAT
OCCURRED BEFORE ENACTMENT OF THE FSIA

The court of appeals erred in two fundamental respects.
First, it failed to give proper account to this Court’s retro-
activity decisions, which counsel that the FSIA’s expropria-
tion exception should not be applied retroactively to conduct
that predated enactment of the FSIA and, indeed, predated
the United States’ adoption of the restrictive theory of for-
eign sovereign immunity in 1952. Second, the court erred by
relying on its own speculation that, notwithstanding the
United States’ pre-1952 adherence to the doctrine of abso-
lute sovereign immunity, the Executive Branch would have
departed from the United States’ practice during that period
in the case of Holocaust claims.

A. This Court's Retroactivity Decisions Preclude Appli-
cation Of The FSIA’s Expropriation Exception To
Claims That Arose Before Enactment Of The FSIA

1. The FSIA is subject to established retroactivity prin-
ciples. This Court’s decisions establish that any statute that
“would impair rights a party possessed when he acted, in-
crease a party’s liability for past conduct, or impose new
duties with respect to transactions already completed,” is
presumed to apply prospectively only. Landgraf v. USI
Film Prod., 511 U.S. 244, 280 (1994). That presumption ap-
plies to statutes that, although termed “jurisdictional,”
change the law in a way that “eliminates a defense to * * *
suit.” Hughes Aircraft Co. v. United States ex rel. Schumer,
520 U.S. 939, 948 (1997). Such a change “does not merely
allocate jurisdiction among forums.” Id. at 951. “Rather, it

10

creates jurisdiction where none previously existed; it thus
speaks not just to the power of a particular court but to the
substantive rights of the parties as well.” Ibid. “Such a
statute, even though phrased in ‘jurisdictional’ terms, is as
much subject to [the] presumption against retroactivity as
any other.” Ibid.

The defense of foreign sovereign immunity is a matter of
“substantive federal law,” Verlinden 461 U.S. at 493
(emphasis added). See Ex parte Republic of Peru, 318 U.S.
at 588 (describing foreign sovereign immunity as “an over-
riding principle of substantive law”). As in Hughes, Con-
gress's elimination of such a defense is subject to the pre-
sumption against retroactive legislation. Indeed, every
court of appeals that has squarely addressed the issue has
concluded that the abolition of a foreign state’s previously
recognized immunity from suit constitutes a substantive
change that is subject to the presumption against retro-
activity. See Joo v. Japan, 332 F.3d 679, 684 (D.C. Cir. 2003)
(“The commercial activity exception to the FSIA, by quali-
fying what previously had been the absolute immunity of
foreign sovereigns, * * * ‘creates jurisdiction where none
previously existed’ and therefore affects the substantive
rights of the concerned parties.” (quoting Hughes, 520 U.S.
at 951)); Carl Marks & Co. v. Union of Soviet Socialist
Republics, 841 F.2d 26, 27 (2d Cir.) (“retroactive application
of the FSIA [to claims based on bearer bonds issued in 1916]
would affect adversely the USSR’s settled expectation
* * * of immunity from suit in American courts”), cert.
denied, 487 U.S. 1219 (1988); Jackson v. People’s Republic of
China, 794 F.2d 1490, 1497-1498 (11th Cir. 1986) (“to give the
Act retrospective application to pre-1952 events would
interfere with antecedent rights of other sovereigns” and
would be “manifestly unfair”), cert. denied, 480 U.S. 917
(1987).

—

ot

1]

2. The application of those retroactivity principles de-
pends on the particular FSIA provision at issue. Federal
statutes are frequently an amalgam of procedural and sub-
stantive provisions. As a result, retroactivity principles
must be applied in light of the content of the particular pro-
visions at issue. On the one hand, some provisions of a
statute may be properly characterized as procedural or as
not affecting substantive rights, and they are properly ap-
plied to all pending cases. On the other hand, provisions that
create new substantive obligations and liabilities are prop-
erly presumed to apply only prospectively unless Congress
clearly expresses a contrary intent. See, e.g., INS v. St. Cyr,
533 U.S. 289 (2001).°

In the case of the FSIA, some provisions—such as the
service-of-process and removal provisions—are readily
identifiable as procedural and presumptively apply to all
litigation filed after the FSIA’s effective date. See St. Cyr,
533 U.S. at 318. Other provisions, such as the FSIA’s codifi-
cation of the general rule of foreign sovereign immunity, 28
U.S.C. 1604, and the common-law exceptions regarding
waiver and counterclaims that existed before the FSIA and,
indeed, before the Tate Letter, see, e.g., Ex parte Republic
of Peru, 318 U.S. at 589; Guaranty Trust Co., 304 U.S. at
134-135, simply restate pre-existing principles and apply
regardless of when the challenged conduct occurred. See,
e. g., Joo, 332 F.3d at 686-687 (considering but rejecting pro-
position that Japan’s violation of fundamental international

5 In St. Cyr, the Court analyzed the question of retroactivity sepa-
rately for each provision of the statute at issue, concluding that some
provisions would present no question of retroactivity while others, which
affected substantive rights, were subject to a presumption against retro-
active application. See 533 U.S. at 318-320. In undertaking this provision-
by-provision analysis, the Court concluded that statements of congres-
sional intent as to the retroactive application of some provisions did not
imply a similar intent with regard to other provisions. See ibid.

12

law norms in the 1930s and 1940s would constitute an
implied waiver of immunity under 28 U.S.C. 1605(a)(1)); Carl
Marks, 841 F.2d at 27 (noting that a pre-1952 claim against
the Soviet Union could have proceeded under the FSIA if
the Soviet Union had “consented to suit”).

Other provisions of the FSIA, however, require a dif-
ferent result. Most significantly, new exceptions to the
general rule of foreignmsovereign immunity that abrogate
past protections from suit are properly viewed under
Hughes as abridging substantive rights. In that situation,
however, care must be taken in examining the character of
the right in question. For example, the FSIA’s “commercial
activity” exception (28 U.S.C. 1605(a)(2)), for the most part,
codified past practice, but only as it had existed since the
issuance of the Tate Letter in 1952, which announced that a
foreign state’s commercial activities could provide a predi-
cate for a cause of action in United States courts. See
Verlinden, 461 U.S. at 488. Consequently, the FSIA’s com-
mercial activity exception generally can be applied, without
raising retroactivity concerns, to conduct occurring after
1952. See Joo, 332 F.3d at 684; Carl Marks, 841 F.2d at 27;
Jackson, 794 F.2d at 1497-1498.

3. The FSIA’s expropriation exception created a new
substantive liability that is subject to the presumption of
non-retroactive application. Under the absolute theory of
sovereign immunity, a foreign state, by definition, was not
subject to liability for expropriations within its own borders.
And even under the restrictive theory, a foreign state’s act
of expropriation was a public or “sovereign” act, as to which
the foreign state retained its sovereign immunity. The
expropriation exception very clearly did not exist in 1952
and, indeed, was a new development in the doctrine of sover-
eign immunity when the FSIA was enacted 24 years later.

The Second Circuit directly addressed that question in
Victory Transport Inc. v. Comisaria General de Abasteci-

13

mientos y Transportes, 336 F. 2d 354 (1964), cert. denied, 381
U.S. 934 (1965). The court explained that, even under the
restrictive theory of sovereign immunity, foreign states
continued to enjoy immunity with respect to suits chal-
lenging “strictly political or public acts about which sover-
eigns have traditionally been quite sensitive,” which in-
cluded, in particular, suits respecting the “nationalization” of
property. Id. at 360.“ The Second Circuit’s analysis in Vic-
tory Transport was recognized at the time as an “authorita-
tive statement of the sovereign immunity doctrine in the
United States.” Andreas F. Lowenfeld, The Sabbatino
Amendment-International Law Meets Civil Procedure, 59
Am. J. Int’l L. 899, 907 (1965). Indeed, this Court has
frequently cited the Victory Transport decision as illustrat-
ing the pre-FSIA application of the restrictive theory of
sovereign immunity. See Saudi Arabia v. Nelson, 507 U.S.
349, 361 (1993); Republic of Argentina, 504 U.S. at 613;
Alfred Dunhill, 425 U.S. at 703 (plurality opinion).

6 See Note, Avoiding Expropriation Loss, 79 Harv. L. Rev. 1666, 1666
(June 1966) (“Since expropriation is not a ‘private’ state act for purposes of
the restrictive doctrine of sovereign immunity announced in the Tate
Letter, a United States investor is not able to litigate his claim by ob-
taining quasi-in-rem jurisdiction over an expropriating state’s assets in
the United States.” (footnotes omitted)); Note, The Castro Government in
American Courts: Sovereign Immunity and the Act of State Doctrine, 75
Harv. L. Rev. 1607, 1618 (June 1962) (“Since expropriation is a govern-
mental act, sovereign immunity will frustrate attempts to sue the state.”).

7 See also Comment, American Oil Investors’ Access to Domestic
Courts in Foreign Nationalization Disputes, 123 U. Pa. L. Rev. 610, 625
(1975) (noting that “no judicial opinion has challenged” Victory Trans-
port’s conclusion that expropriations were jure imperii as to which a
foreign state retained its immunity). See, g., Chemical Natural Res.,
Inc. v. Republic of Venezuela, 215 A.2d 864 (Pa. 1966) (dismissing expro-
priation claim in which State Department filed suggestion of immunity;
Rich v. Naviera Vacuba S.A., 197 F. Supp. 710, 724-725 (E.D. Va.)
(accord), aff d 295 F.2d 24 (4th Cir. 1961); but ef. Stephen v. Zivnostenska

14

The Victory Transport decision rested on the pre-FSIA
understanding that private complaints about foreign expro-
priations were simply not matters for resolution in United
States courts. Rather, they were to be resolved through (1)

“negotiation,” (2) “remedies in the local courts” of the expro⸗

priating government, or (3) State Department espousal, in
which case the State Department would seek compensation
“through either diplomatic negotiation or adjudication before
an arbitral body or international court.” Note, Avoiding Ex-
propriation Loss, 79 Harv. L. Rev. 1666, 1666 (June 1966).
There are numerous pre-FSIA examples of such executive
agreements through which the State Department espoused
and settled private expropriation claims. See generally
Dames & Moore v. Regan, 453 U.S. 654, 679-683 (1981).

4. There is no basis for overcoming the presumption
that the FSIA’s expropriation exception is non-retroactive.
Respondent would have the courts infer that Congress in-
tended the FSIA’s expropriation exception to authorize liti-
gation of all expropriation claims, including claims that arose
when the United States adhered to the absolute theory of
immunity. There is no basis for doing so.

Banka, 15 A.D. 2d 111, 119-120 (N.Y. App. Div. 1961), aff’d, 186 N.E.2d
676 (1962).

8 See, e.g., Yugoslavia: Claims of U.S. Nationals, Nov. 5, 1964, U. S-
Yugo., 16 U. S. T. 1; Bulgaria: Claims, Jul. 2, 1963, U.S.-Bulg., 14 U. S. T. 969;
Poland: Settlement of Claims of U.S. Nationals, Jul. 16, 1960, U.S.-Pol., 11
U.S.T. 1953; Romania: Settlement of Claims of U.S. Nationals and Other
Financial Matters, Mar. 30, 1960, U.S.-Rom., 11 U.S.T. 317. As a further
example, when Congress chose to provide unilateral relief to United
States citizens whose property was expropriated by Czechoslovakia, it did
so through an :dministrative scheme funded with proceeds from the sale
of blocked foreign state assets; it did not encourage wholesale litigation
against the foreign state. See International Claims Settlement Act
Amendments of 1958, Pub. L. No. 85-604, 72 Stat. 527 (22 U.S.C. 1642
et seq.).

2
|
5
i

15

This Court has made clear that it will not infer that Con-
gress intended retroactive application of a substantive pro-
vision in the absence of a “clear indication” of congressional
intent. St. Cyr, 533 U.S. at 316. Rather, a law will be given a
“truly ‘retroactive’ effect” only where the “statutory lan-
guage * * * [is] so clear that it could sustain only one
interpretation.” Lindh v. Murphy, 521 U.S. 320, 328 n.4
(1997). The FSIA does not contain the “clear indication” that
would be required to upset a foreign state’s reasonable ex-
pectations of continued immunity from suit based on alleged
expropriations occurring before the FSIA was enacted. The
FSIA is simply bare of any unambiguous indication that
Congress intended the expropriation exception, or like sub-
stantive provisions, to reach conduct that occurred during
World War II. See Joo, 332 F.3d at 685-686; see also
Abrams v. Societe Nationale des Chemins de Fer Francais,
332 F.3d 173, 184 (2d Cir. 2003), petition for cert. pending,
No. 03-284 (filed Aug. 19, 2003).

9 Some courts have attempted to determine Congress’s intention by
reference to a statement in the FSIA’s “Findings and declaration of pur-
pose” that “[c]laims of foreign states to immunity should henceforth be
decided by courts of the United States and of the States in conformity
with the principles set forth {in the FSIA].” 28 U.S.C. 1602 (emphasis
added). That statement, however, provides no clear guidance. The “most
probable meaning of the sentence is that the State Department would no
longer consider petitions for sovereign immunity” and that such deter-
minations would thereafter be decided by the courts. Joo, 332 F.3d at 686;
see H.R. Rep. No. 1487, 94th Cong., 2d Sess. 7, 14 (1976). In doing so, the
courts could be expected to apply usual rules of statutory construction, in-
cluding the presumption against retroactive application of new sub-
stantive rules. In any event, Section 1602 manifests no clear intent to
deny immunity that would have been recognized for past sovereign
conduct. See Jackson, 794 F.2d at 1497 (this language “appeared to be
prospective” only and counseled against retroactive application); see also
Abrams, 332 F.3d at 184 (noting that “[clourts have in fact reached
diametrically opposite conclusions regarding Congressional purpose“).

16

By contrast, Congress has provided “clear indication,” in
subsequent FSIA amendments, when it has sought to give
substantive FSIA provisions retroactive effect. See, e.g.,
Antiterrorism and Effective Death Penalty Act of 1996, Pub.
L. No. 104-132, § 221(c), 110 Stat. 1243 (providing that the
immunity exception for designated state sponsors of ter-
rorism “shall apply to any cause of action arising before, on,
or after the date of the enactment of this Act”). Those
specifications not only provide clear guidance on the proper
application of the provisions at issue, but also indicate that
Congress is attentive to the need to designate clearly those
substantive provisions that shall have retroactive effect. See
St. Cyr, 533 U.S. at 318-319 (Halnother reason for declining”
to adopt a retroactive reading of § 304(b) “is provided by
Congress’ willingness, in other sections of IIRIRA, to
indicate unambiguously its intention to apply specific pro-
visions retroactively”). "°

10 This Court's in rem decisions, which recognize that a federal court’s
jurisdiction is not barred by a mere suggestion of a foreign government's
ownership of a res, are inapposite to the inquiry here. See California v.
Deep Sea Research, Inc., 523 U.S. 491, 507 (1998); note 2, supra. As this
Court has explained, there is a critical distinction between adjudicating
legal title over disputed property that is present within the court's terri-
torial jurisdiction, even where one of the claimants is a foreign govern-
ment, and resolving a separate claim of wrongdoing against a foreign
sovereign through in personam or quasi in rem jurisdiction. See The
Santissima Trinidad, 20 U.S. (7 Wheat.) 283, 351 (1822) (recognizing
“the exemption of a public ship from proceedings in rem, in our Courts for
illegal captures on the high seas,” but holding that no similar rule
“exempts her prizes in our ports from the ample exercise of our juris-
diction”). See also Wulfsohn v. Russian Socialist Federated Soviet
Republic, 138 N.E. 24, 25 (N.Y. 1923) (distinguishing between proceedings
respecting “title to property situated within the jurisdiction of our courts”
and suits where t hhe government itself is sued for an exercise of sover-
eignty within its own territories”).

17

5. Retroactive application of the FSIA’s expropriation
exception would be inconsistent with international norms.
This Court may usefully consult international norms in
assessing whether the expropriation provision is retroactive.
The general understandings of the international community
support the conclusion that the expropriation exception
should not be given retroactive effect. For example, in cases
before the International Court of Justice, a party’s obliga-
tions and liabilities arising from past conduct “must be
appraised * * * in the light of the rules of international law
as they existed at the time, and not as they exist today.”
Gerald Fitzmaurice, The Law and Procedure of the Inter-
national Court of Justice, 1951-54: General Principles and
Sources of Law, XXX British Year Book of International
Law 5 (1953). See, e.g., Ambatielos Case (Greece v. United
Kingdom), 1952 1.C.J. 28, 40 (Preliminary Objection of Jul. 1)
(rejecting an argument of Greece that “would mean giving
retroactive effect to Article 29 of the Treaty of 1926”).

The presumption against projecting new legal develop-
ments onto past acts in the international arena is directly

11 Similarly, international commentators have recognized “the general
principle that a juridical fact must be appreciated in light of the law con-
temporary with it.“ 1 Robert Jennings & Arthur Watts, Oppenheim’s
International Law 1281-1282 (9th ed. 1992). That principle also finds
expression in Article 28 of the Vienna Convention on the Law of Treaties
(entitled “Non-retroactivity of treaties”), which provides that, “[uJnless a
different intention appears from the treaty or is otherwise established, its
provisions do not bind a party in relation to any act or fact which took
place or any situation which ceased to exist before the date of the entry
into force of the treaty with respect to that party.” Although the United
States has not ratified the Vienna Convention, the United States
generally recognizes the Convention as an authoritative guide to prin-
ciples of treaty interpretation. See, eg. Fujitsu Ltd. v. Federal Express
Corp., 247 F.3d 423, 433 (2d Cir.), cert. denied, 534 U.S. 891 (2001); see also
Vienna Convention on the Law of Treaties, S. Exec. Doc. L. 92d Cong., Ist
Sess. 1, 19 (1971).

18

relevant in the case of World-War-Il-era claims. Long
before the FSIA established the expropriation exception for
the first time, the United States had entered into numerous
treaties and executive agreements that addressed claims
relating to the conduct of Germany and its Axis allies, as
well as Austria, during World War II.” The United States
and other foreign nations entered into those agreements
against the background assumption that foreign states could
not be sued in United States courts. The retroactive applica-
tion of the FSIA to pre-1952 conduct therefore would intro-
duce significant new issues that the negotiators of those
instruments could not have foreseen.”

12 See, e.g., State Treaty for the Re-establishment of an Independent
and Democratic Austria, May 15, 1955, art. 26, 6 U.S.T. 2369, 2435 (pro-
viding for return by Austria of all property confiscated on account of the
racial origin or religion of the owner); Dep’t St. Bull., July 9, 1956, at 66
(announcing Austrian law procedures for compensation of persons who
had fled Austria); Austria: Settlement of Certain Claims Under Article 26
of the Austrian State Treaty, May 22, 1959, U.S.-Aus., 10 U.S.T. 1158
(establishing administrative settlement fund for certain property claims);
Convention on the Settlement of Matters Arising out of the War and the
Occupation, as amended, Oct. 23, 1954, 6 U.S.T. 4411 (Germany); Treaty of
Peace with Japan, Sept. 8, 1951, 3 U.S.T. 3169; War Claims Act of 1948, ch.
826, 62 Stat. 1240 (50 U.S.C. App. 2001 et seg.) (administrative system for
making payments from vested enemy assets to prisoners of war). In 2001,
the United States and Austria also concluded an agreement under which
the Government of Austria committed to the establishment of a fund to
make payments to certain people with Holocaust-related claims. See
American Ins. Ass n v. Garamendi, 123 S. Ct. 2374, 2383 & n.3 (2003).
That agreement excludes claims, such as the one in this case, for artwork.
See Agreement Relating to the Agreement of Oct. 24, 2000, Concerning
the Austrian Fund “Reconciliation, Peace, and Cooperation”, Jan. 23, 2001,
U.S.-Aus., 2001 WL 935261, Annex A (Reconciliation Fund). Austria has,
however, adopted a domestic administrative mechanism to review art
restitution claims. See Pet. App. 7a, 46a.

13 For instance, in Joo, the plaintiffs sued Japan respecting that
nation’s conduct during World War II. See 332 F.3d at 680. The plaintiffs

— ..

19

In short, both domestic and international law principles
lead to the same result. The FSIA “provides the sole basis
for obtaining jurisdiction over a foreign state in the courts of
this country,” Saudi Arabia, 507 U.S. at 355 (quoting Argen-
tine Republic v. Amerada Hess Shipping Corp., 488 U.S.
428, 443 (1989)), and the FSIA exceptions can be applied
retroactively to override the rule of immunity set forth in
Section 1604 only where the particular exception at issue
was recognized by the United States at the time of the
challenged conduct. Because the United States did not rec-
ognize an expropriation exception before the FSIA’s adop-
tion, respondent cannot invoke that exception as the basis
for asserting jurisdiction, particularly with respect to an
alleged expropriation during the 1930s or 19408.“

urged that their claims fell within the FSIA’s exceptions and that the 1951
Japan Peace Treaty did not speak with sufficient clarity to cut off their
right to litigate war-related claims in United States courts. The drafters,
however, had no reason to provide such clear language in the Treaty
because they could not reasonably have conceived of war-related claims
being litigated in the courts of the United States or other allied powers.
See id. at 684-685.

14 This result is consistent with the approach of other countries that
have adopted statutes similar to the FSIA. Typically, those enactments
expressly provide that the exceptions to immunity are not retroactive or
have been so construed by the courts. See State Immunity Act, 1978, § 23
(Eng.) (reprinted in 17 I.L.M. 1123 (1978)); Foreign States Immunities
Act, 1985, § 7 (Austl.) (reprinted in 25 I.L.M. 715 (1986)); State Immunity
Act, 1979, § 1 (Sing.) (available at http://agevldb4.age.gov.sg/); State
Immunity Act, 1982 (Can.) (reprinted in 21 I.L.M. 798 (1982)); see Tritt v.
United States, [1989] Ont. Sup. C.J. Lexis 455, at * 6 (stating that the
Canadian statute is non-retroactive); accord Carrato v. United States,
[1982] 40 O.R. (2d) 459 (H.C.), judgment endorsed and appeal dismissed,
File No. 22/83 (Ont. Ct. App. Oct. 17, 1983) (unreported). While the for-
eign statutes post-date the FSIA, Congress presumably was aware of the
governing principle, which also appeared in the European Convention on
State Immunity. See Council of Europe: European Convention on State
Immunity and Additional Protocol, art. 35(3), 11 I.L.M. 470, 482 (1972)

20

B. The Court Of Appeals Erred By Relying On Unfounded
Speculation That, Before Enactment Of The FSIA, The
Executive Branch Would Have Abridged A Foreign
State’s Sovereign Immunity In The Instance Of Holo-
caust Claims

1. The court of appeals erred in attempting to surmise
whether the Executive Branch would have recognized a
special exception for Holocaust claims before enactment of
the FSIA. Because Congress did not clearly express an
intent that the FSIA’s expropriation exception would have
retroactive effect, the judicial inquiry into the availability of
that exception for pre-FSIA conduct should be at an end.
Instead, the court of appeals mistakenly attempted to divine
whether, before enactment of the FSIA, the Executive
Branch might have departed from established sovereign
immunity principles on a country-specific or case-specific
basis. The FSIA, which directs the courts to resolve foreign
sovereign immunity claims “in conformity with the principles
set forth in the [FSIA],” 28 U.S.C. 1602, provides no room
for such speculation, which would usurp, retroactively, the
Executive’s foreign policy responsibility with respect to
foreign sovereign immunity at that time. See Verlinden, 461
U.S. at 486. In any event, the court’s conjectures are with-
out foundation.”

(“Nothing in this Convention shall apply to proceedings arising out of, or
judgments based on, acts, omissions or facts prior to the date on which the
present Convention is opened for signature.”); see also H.R. Rep. No.
1487, supra, at 23, 25 (referring generally to the European Convention).

15 The Second Circuit has adopted a similarly mistaken approach in
Garb v. Republic of Poland and Whiteman v. Austria, 72 Fed. Appx. 850,
854 (2003) (“we remand for determinations of the Department of State’s
policy prior to FSIA with respect to sovereign immunity for Poland and
Austria in the circumstances presented in each of the instant cases”),
petitions for cert. pending, Nos. 03-500 & 03-517. The Court should

21

2. The United States did not condition a foreign state’s
right to absolute immunity on whether the state was an
“unfriendly” nation. The court of appeals mistakenly sug-
gested that, before enactment of the FSIA, only “friendly”
nations qualified for sovereign immunity. See Pet. App. 14a-
15a (quoting Verlinden, 461 U.S. at 486). Although the term
“friendly foreign sovereigns” does appear in some decisions
from the time when the United States applied the absolute
theory of immunity, there was no generally recognized
exception to immunity for “unfriendly” sovereigns. That
language has its origin in in rem cases and refers only to the
unremarkable fact that the United States would not refrain
from seizing an enemy’s warships or other property during
time of war! There is no support in this Court’s decisions
for the proposition that United States courts would have
reached out to exercise in personam or quasi in rem juris-
diction over a foreign state for sovereign acts taken within

therefore hold those petitions and dispose of them in accordance with its
disposition of this case.

16 The Court’s references to “friendly” foreign states (Verlinden, 461
U.S. at 486) can be traced through past in rem cases, including Hoffman,
324 U.S. at 34, and Ex parte Republic of Peru, 318 U.S. at 588, to The
Schooner Exchange. In that case, the Court stated the general principle
that “the person of the sovereign lis immune] from arrest or detention
within a foreign territory” if he enters “with the knowledge and license of
its sovereign.” 11 U.S. (7 Cranch) at 137. The Court then discussed
whether that immunity extended to a foreign sovereign’s warship that had
entered an American harbor. The Court observed that “the ports of a
friendly nation are considered as open to the public ships of all powers
with whom it is at peace,” id. at 141, and it held, therefore, that immunity
also extends to “national ships of war, entering the port of a friendly
power open for their reception.” Id. at 145-146. The implicit indication
that the United States would not refrain from seizing a belligerent
nation’s warships if they entered a United States port during time of war
says nothing about whether that nation would be subject to private suit in
United States courts during the hostilities or after they ceased.

22

its own territory simply because the United States was not
on “friendly” terms with that government during the period
of the challenged conduct.”

Contrary to the court of appeals’ mistaken impression,
the United States has not followed a practice of withholding
sovereign immunity from “unfriendly” foreign states.
Rather, the United States’ longstanding policy and practice
is to prevent courts from becoming entangled in the conduct
of foreign relations and to resolve war-related claims
through diplomatic or political, rather than judicial, means.”
Creating an exception for “unfriendly” nations would likely
cause the very type of “embarrass[ment] * * * [to] the

Government in conducting foreign relations” that the doc--

17 The United States, on occasion, has taken steps to freeze, seize, or
divest an enemy nation’s assets within this country so as to deprive the
enemy of their use. See, eg, International Emergency Economic Powers
Act, 50 U.S.C. 1701 et seg. Trading with the Enemy Act, ch. 106, 40 Stat.
411 (50 U.S.C. App. 1 et seg). But such actions cannot be equated with
authorizing United States courts to adjudicate claims directly against a
non-consenting, unfriendly sovereign with respect to acts committed
within its own territory, including after normal relations between nations
had resumed. See Wulfsohn, 138 N.E. at 25.

18 See note 8, supra; see also, e., Johnson v. Eisentrager, 339 U.S.
763, 789 n.14 (1950) (“the rights of our citizens [under the Geneva Con-
vention relating to prisoners of war) are vindicated only by Presidential
intervention”); Joo, 332 F.3d at 684-685 (noting policy that World War II
claims against Japan be resolved exclusively through diplomatic means);
ef. Garamendi, 123 S. Ct. at 2380-2382; Dames & Moore, 453 U.S. at 679-
680; Ricaud v. American Metal Co., 246 U.S. 304, 310 (1918); Oetjen, v.
Central Leather Co., 246 U.S. 297, 308 (1918); Underhill v. Hernandez, 168
U.S. 250, 252 (1897). Indeed, when Congress itself has acted to provide
redress for war-related claims, as after World War II, it has done so
through administrative war claims commissions, not through the courts.
See, e. g., War Claims Act of 1948, ch. 826, 62 Stat. 1240 (50 U.S.C. App.
2001 et seq.); International Claims Settlement Act Amendments of 1955,
ch. 645, 69 Stat. 562 (22 U.S.C. 1641 et seg.)

— — —

23

trine of immunity is intended to avoid. See Ex parte Repub-
lic of Peru, 318 U.S. at 588.”

Indeed, even if the United States had followed a pre-
FSIA practice of withholding immunity from “unfriendly”
nations, the responsibility for drawing lines among foreign
governments and determining when to strip them of im-
munity would have belonged with the political Branches that
are charged with responsibility for this Nation’s foreign rela-
tions. The court of appeals’ approach would require courts to
establish their own definition of “friendly,” to assess histori-
cal relationships of the United States under that definition,
and to decide how to weigh changes in relations during the
period when suit might have been brought. That approach is
not only unprecedented, but it is fraught with difficulties.”

The FSIA does not permit courts to draw such lines, but
instead continues the United States’ historic policy and
practice. It contains no exception to the general rule of
foreign sovereign immunity for “unfriendly” sovereigns.
The court of appeals’ mistaken understanding would subject
foreign nations to suit on precisely those claims that the

19 As a practical matter, an in personam suit could be meaningfully
pursued only once the hostilities are over and the warring nations have
resumed friendly relations. If the conclusion of battlefield operations
signaled the start of new hostilities in each nation’s courts, those nations
would find it far more difficult, if not impossible, to move past their former
antagonisms and build constructive new relations. See Ware v. Hylton,
3 U.S. (3 Dall.) 198, 230 (1796) (opinion of Chase, J.).

2° For example, contrary to the court of appeals’ view, the United
States was not at war with the State of Austria during World War II.
Indeed, the United States took the view that Austria was the first country
to be occupied by Nazi Germany. See Declaration on Austria at Moscow,
quoted in S. Exec. Rep. No. 8, 84th Cong., Ist Sess. 3 (1955). Such subtle
distinctions in our Nation’s foreign relations highlight the problem with
courts undertaking the kinds of assessments that the court of appeals’

24

courts have heretofore consistently recognized to lie at the
core of a foreign state’s sovereign immunity.”

3. The United States did not depart from the governing
principles of sovereign immunity in the case of Holocaust-
related claims. The court of appeals further concluded that,
before enactment of the FSIA, the United States would have
rejected a foreign nation’s assertion of sovereign immunity
from Holocaust-related claims based on the extraordinary
character of those claims. Pet. App. 15a-2la. The court re-
lied on government statements, documents, and actions
expressing the United States’ strong condemnation of Nazi
atrocities. Those expressions, however, do not suggest,
much less establish, a policy of the United States that the
vast universe of potential private claims against the foreign
states that formerly had Nazi governments should be re-
solved through litigation in United States courts.

Before enactment of the FSIA, United States courts
clearly understood that questions of sovereign immunity
would be decided “in conformity to the principles accepted
by the department of the government charged with the
conduct of our foreign relations.” Hoffman, 324 U.S. at 34-35
(emphasis added). Those courts would not have taken it
upon themselves to try to discern, from public pronounce-
ments that do not address the question of foreign sovereign
immunity, whether the State Department might announce a
new immunity exception, with potentially serious conse-
quences for the United States’ foreign relations. This Court
has previously rejected the notion that the scope of foreign

21 See Saudi Arabia v. Nelson, 507 U.S. at 361-363, 362 n.5 (noting
that, under the restrictive theory, foreign sovereigns retained their
immunity “with respect to claims involving the exercise of the power of
the police or military”); Victory Transport, 336 F.2d at 360 (restrictive
theory retains immunity for “public acts about which sovereigns have
traditionally been quite sensitive,” such as “acts concerning the armed
forces”).

— eee ae se —

25

sovereign immunity can be pared back by reference to
statements that have little or nothing to do with the issue.
See Amerada Hess Shipping, 488 U.S. at 442 (holding that
even a treaty “stat[ing] that compensation shall be paid for
certain wrongs” by a foreign government does not imply an
abrogation of immunity from private suit). The Court should
likewise reject the notion that such statements are useful in
determining the retroactive scope of the FSIA.

For example, the court of appeals believed that the fact
that Nazi atrocities had violated international law, see Pet.
App. 15a, and that the chief architects of the Holocaust had
been tried before the international court at Nuremberg, see
id. at 19a-20a, was evidence that “the international commun-
ity, and particularly the United States . would not have
supported a broad enough immunity to shroud the[se] atroci-
ties” from suit, ibid. (quoting Princz v. Federal Republic of
Germany, 26 F.3d 1166, 1179 (D.C. Cir. 1994) (Wald, J., dis-
senting), cert. denied, 513 U.S. 1121 (1995)). But the other
courts of appeals that have encountered such arguments,
including the D.C. Circuit in Princz, have rejected them.

The majority in Princz held that the FSIA did not provide
an exception to immunity that reached the Nazis’ slave labor
atrocities, and it rejected Judge Wald’s contention that vio-
lations of fundamental human rights should be deemed an
“implied waiver” of immunity under 28 U.S.C. 1605(a)(1).
Princz, 26 F.3d at 1171-1175. The majority reasoned that
“something more nearly express is wanted before we impute
to the Congress an intention that the federal courts assume
jurisdiction over the countless human rights cases that
might well be brought by the victims of all the ruthless
military juntas, presidents-for-life, and murderous dictators
of the world.” Id. at 1174-1175 n. I.

The Seventh Circuit, in Sampson v. Federal Republic of
Germany, 250 F.3d 1145 (2001), also rejected the argument
that the Nazi slave labor atrocities warranted creating an

26

exception from immunity. The court stated that “(t]he
potential scope of a customary international law exception to
foreign sovereign immunity * * * would allow for a major,
open-ended expansion of our jurisdiction into an area with
substantial impact on the United States’ foreign relations.”
Id. at 1156. Similarly, the Second Circuit rejected such
arguments in holding that a foreign state retained its im-
munity from suit alleging that the state was responsible for a
terrorist bombing of an airliner. See Smith v. Socialist
People’s Libyan Arab Jamahiriya, 101 F.3d 239, 244 (1996).
The court of appeals also placed mistaken reliance on the
act of state doctrine and, in particular, the so-called “Bern-
stein” exception to that doctrine. See Pet. App. 16a-18a.
The act of state doctrine and the Bernstein exception say
nothing about the scope of foreign sovereign immunity.
Indeed, the Bernstein litigation (note 22, supra), which led to
the recognition of the Bernstein exception, involved a Dutch
corporation, not a foreign government. The State Depart-

2 The act of state doctrine is a rule of decision, founded on con-
siderations of comity and deference to the Executive Branch's conduct of
foreign relations, that “precludes the courts of this country from inquiring
into the validity of the public acts of a recognized foreign sovereign power
committed within its own territory.” Banco Nacional de Cuba v.
Sabbatino, 376 U.S. 398, 401 (1964). See W.S. Kirkpatrick & Co. v.
Environmental Tectonics Corp., Int l, 493 U.S. 400 (1990). The Bernstein
exception arose from a private plaintiff's attempt to recover commercial
property, originally seized by the Nazis, from a Dutch corporation. See
Bernstein v. N. V. Nederlandsche-Amerikaansche, 173 F. 2d 71, 72 (2d Cir.
1949). The plaintiff's claims raised questions respecting the validity of
acts of Nazi officials in Germany. The Second Circuit initially concluded
that the act of state doctrine precluded inquiry into those questions. Ibid.
The State Department thereafter issued the so-called Bernstein Letter
stating a policy “to relieve American courts from any restraint upon the
exercise of their jurisdiction to pass upon the validity of the acts of Nazi
officials.” See Bernstein v. Nederlandsche-Amerikaansche, 210 F 2d 375,
376 (2d Cir. 1954).

27

ment’s Bernstein Letter addressed solely whether it was
appropriate for a United States court to “pass upon the
validity of the acts of Nazi officials” in Germany. Bernstein
v. N.V. Nederlandsche-Amerikaansche, 210 F.2d 375, 376
(2d Cir. 1954). The Bernstein Letter does not speak at all to
the susceptibility of the German government, let alone the
Austrian government, to suit in United States courts for acts
in Austria. See Letter from Legal Adviser Monroe Leigh to
the Solicitor General (Nov. 26, 1975) (describing the Bern-
stein Letter as “advis[ing] that the act of state doctrine need
not apply to a class of cases involving Nazi confiscations”
(emphasis added)), reprinted in Alfred Dunhill, 425 U.S. at
706, 708.”

In focusing on irrelevant matters, such as the Bernstein
exception to the act of state doctrine, the court of appeals
ignored the concrete steps the United States has actually
taken to redress Nazi-era wrongs. The United States did
not encourage private litigation against foreign states in

3 This Court has itself recognized that, while the act of state doctrine
“shares with the immunity doctrine a respect for sovereign states,” the
doctrines are distinct and serve different purposes. Sabbatino, 376 U.S. at
438. See Zwack v. Kraus Bros. & Co., 237 F.2d 255, 259-261 (2d Cir. 1956)
(declining, with reference to the Bernstein Letter, to recognize the
validity of Hungary's uncompensated expropriation, while, at the same
time, recognizing that the Hungarian government itself was “not subject
to the jurisdiction of the court below unless its should voluntarily
appear”). The distinction between the doctrines is also evident in the so-
called Second Hickenlooper Amendment, which, in response to Sabbatino,
eliminated the act of state doctrine in certain cases concerning expro-
priations in violation of international law. 22 U.S.C. 2370(e)(2). It was
widely understood that this legislation was “restricted entirely to the act
of state doctrine” and did not “deny the foreign defendant its defense of
sovereign immunity.” Comment, supra, 123 U. Pa. L. Rev. at, 623 n.64.
See also Andreas F. Lowenfeld, supra, 59 Am. J. Int’l L. at, 907; American
Hawaiian Ventures, Inc. v. M.V.J. Laturharhary, 257 F. Supp. 622
(D.N.J. 1966).

28

United States courts as the appropriate means of remedying
those wrongs. Instead, the United States committed con-
siderable energy to obtaining redress through other means.
It entered into post-war treaties with both Germany and
Austria, obtaining promises on the part of those govern-
ments to provide for the return of confiscated property. See
note 12, supra. It also negotiated agreements or provided,

through legislation, for the payment of certain claims. See

note 18, supra. Those arrangements envisioned restitution
or compensation under schemes adopted as part of domestic
German or Austrian law, through diplomatic arrangements,
or through domestic administrative schemes, such as
Austria’s recent program to review claims for the return of
art. See Pet. App. 7a, 46a. In no case has the United States
created “a private right of action against our wartime
enemies or their nationals.” Deutsch v. Turner Corp., 324
F.3d 692, 712 (9th Cir.), cert. denied, 124 S. Ct. 105 (2003).

4. Austria did not lose its right to absolute sovereign
immunity in United States courts by adopting the restric-
tive theory of foreign sovereign immunity. The court of
appeals incorrectly concluded that application of the FSIA
expropriation exception to Austria was not impermissibly
retroactive because it “affect[s] only where a suit may be
brought, not whether it may be brought at all.” Pet. App. 20a
(quoting Hughes, 520 U.S. at 951). The court of appeals
reached that conclusion on the mistaken understanding that,
because Austria had itself adopted the restrictive theory of
foreign sovereign immunity in the 1920s, it “could have had
no reasonable expectation of immunity in a foreign court.”
Id. at 19a. But, as previously explained, the restrictive
theory preserved a foreign state’s immunity from claims con-
cerning its distinctly public acts, “such as nationalization.”
Victory Transport, 336 F.2d at 360. Consequently, the
timing of Austria’s adoption of the restrictive theory of
immunity is irrelevant.

29

Moreover, Austria’s application of the restrictive theory
of immunity to foreign states in its own courts would not
have precluded it from asserting absolute immunity in other
countries that continued to adhere to that doctrine. The
United States continued through the 1960s to invoke abso-
lute immunity in countries that followed that theory, despite
the fact that the United States had applied restrictive
immunity principles since 1952. See H.R. Rep. No. 1487,
supra, at 9. Austria likewise was entitled to invoke sover-
eign immunity from claims of expropriation in United States
courts until the United States provided an exception from
that claim of immunity in the FSIA.™

* * * * *

The United States has strongly condemned the Nazi
atrocities, and it has sought to rectify Nazi wrongs through
diplomatic and other means. But the United States has not
authorized United States courts to serve as the fora for
resolving war-related claims against the governments of
Germany, its Axis allies, or other nations, such as Austria,
that Germany occupied during the war. In the absence of
such authorization, the courts would not, on their own, have
created an exception to the doctrine of absolute immunity.
The court of appeals’ contrary conclusion is mistaken, it de-
parts from settled understandings in the international com-
munity, and it may have serious consequences for the United
States’ conduct of its foreign relations, including reciprocal
treatment of the United States in foreign courts.

24 Austria was also entitled to invoke its right to sovereign immunity in
United States courts even though Austria had enacted laws allowing re-
spondent to litigate her takings claim in Austrian courts. A nation’s
waiver of its sovereign immunity in its own courts does not constitute a
waiver of its sovereign immunity in another sovereign’s courts. See, e.g.,
Minnesota v. United States, 305 U.S. 382, 388-389 (1939).

30

CONCLUSION

The judgment of the court of appeals should be
reversed.

Respectfully submitted.
THEODORE B. OLSON
Solicitor General
PETER D. KEISLER
Assistant Attorney
General
EDWIN S. KNEEDLER
Deputy Solicitor General
JEFREY P. MINEAR
WILLIAM H. Tarr, IV Assistant to the Solicitor
Legal Adviser General
JONATHAN B. SCHWARTZ MARK B. STERN
Deputy Legal Adviser DouGLAS HALLWARD-DRIEMEIER
ELIZABETH M. TEEL Attorneys
Attorney-Adviser
Department of State

NOVEMBER 2003

APPENDIX

The expropriation exception of the Foreign Sovereign
Immunities Act provides:

(a) A foreign state shall not be immune from the
jurisdiction of courts of the United States or of the
States in any case—

* * * * *

(3) in 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.

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

(la)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0692%3A11. Public record. Not legal advice.