Appendix — Hoffmann v. United States
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APPENDIX A — OPINION AND ORDER OF THE
UNITED STATES COURT OF APPEALS FOR THE
FEDERAL CIRCUIT DENYING PETITION FOR
REHEARING DATED, DECIDED AND
FILED NOVEMBER 6, 2001
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
00-1131
ROBERT H. HOFFMANN, SUSANNE HUSTADT, KLAUS
VON SCHIRACH, HEIDEMARIE KRUGER, HENRIETTE
HOFFMANN VON SCHIRACH, and BILLY PRICE,
Plaintiffs-Appellants,
V.
UNITED STATES and John D. Ashcroft,
ATTORNEY GENERAL OF THE UNITED STATES,
Defendants- Appellees.
DECIDED: November 6, 2001
ON PETITION FOR REHEARING
Before MICHEL, SCHALL, and DYK, Circuit Judges.
SCHALL, Circuit Judge.
The United States has filed a petition for rehearing. In
its petition, the government points out that, in our decision
of August 16, 2001, we did not rule on the government’s
argument that all of plaintiffs-appellants’ claims are barred
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Appendix A
by the “Convention on the Settlement of Matters Arising Out
of the War and the Occupation,” 6 U.S.T. 4411, T.I.A.S. No.
3425 (October 23, 1954) (the “Settlement Convention’ y- The
government urges us to rule in its favor on the Settlement
Convention issue. In the event that we deny rehearing on the
Settlement Convention issue, the government asks us to
clarify that our August 16 decision does not preclude it from
presenting on remand the Settlement Convention issue, which
the government says it presented to the district court but the
court never addressed, as well as certain other arguments
which the government says it presented to the district court
but the court never addressed. Plaintiffs-Appellants respond
to the government’s petition as follows:
Plaintiffs agree with the government that it is not
precluded from any of its arguments with respect
to the non-vested Photographic Archive and that
the Court’s Decision should not be read to imply
such result. Similarly, all arguments previously
made by Plaintiffs with respect to the non-vested
Photographic Archive may be raised on remand.
The government’s petition for rehearing is denied.
We believe that, should it be necessary, the Settlement
Convention issue should, in the first instance, be addressed
by the district court. However, we clarify that our August 16
decision does not preclude the government from presenting
on remand (i) the Settlement Convention issue and (ii) any
additional issues that were previously raised by the
government in the district court, but that were not addressed
by the court, that are relevant to the matter of the “‘non-vested
portion of the [photographic] archive.”
3a
Appendix A
At the same time, we point out that plaintiffs-appellants
are not free to assert on remand “ail arguments previously
made” with respect to the “non-vested portion of the
[photographic] archive.” In view of our August 16 decision
and our denial today of plaintiffs-appellants’ petition for
rehearing, plaintiffs-appellants are limited in terms of the
arguments they may make on remand. The only claim that
plaintiffs-appellants may assert on remand is their claim of
an implied-in-fact contract of bailment with respect to the
“non-vested portion of the [photographic] archive.” In our
August 16 decision, we concluded that, “based upon the
material of record that has been presented to us, a genuine
issue of material fact exists as to the existence of an
implied-in-fact contract of bailment with respect to the
non-vested portion of the [photographic] archive.” We also
concluded that further proceedings were required in the
district court in order to address the government’s statute of
limitations defense. If the district court rules in the
government’s favor on its statute of limitations defense, or
if it rules in the government’s favor on any other diapoeitive
defense that, consistent with this opinion, is properly before
it, then the case will be over, subject, of course, to any appeal
by plaintiffs-appellants. If, however, plaintiffs-appellants’
action survives on remand, then, consistent with our August
16 decision, it will be necessary for the district court to
consider the merits of plaintiffs-appellants’ claim that there
was an implied-in-fact contract of bailment with respect to
the “non-vested portion of the [photographic] archive” and
that the United States breached that contract.
As stated above, the government’s petition for rehearing
is denied.
No costs.
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Appendix A
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
“ ORDER
- Before MICHEL, Circuit Judge, SCHALL, Circuit Judge,
and DYK, Circuit Judge.
A petition for rehearing having been filed by the
APPELLANTS, and a response thereto having been invited
by the court and filed by the APPELLEES,
UPON CONSIDERATION THEREOF, it is
ORDERED that the petition for rehearing be, and the
same hereby is, DENIED.
The mandate of the court will issue on November 13,
2001.
FOR THE COURT,
s/ Jan Horbaly
Jan Horbaly
Clerk
Dated: November 6, 2001
HOFFMANN V US, 00-1131
(DCT — 98-CV-857)
Sa
APPENDIX B — DECISION OF THE UNITED STATES
COURT OF APPEALS FOR THE FEDERAL CIRCUIT
DATED AND DECIDED AUGUST 16, 2001
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
No. 00-1131
ROBERT H. HOFFMANN, SUSANNE HUSTADT, KLAUS
VON SCHIRACH, HEIDEMARIE KRUGER, HENRIETTE
HOFFMANN VON SCHIRACH, and BILLY PRICE,
Plaintiffs-Appellants,
V.
UNITED STATES and John D. Ashcroft,
ATTORNEY GENERAL OF THE UNITED STATES,
Defendants-Appellees.
DECIDED: August 16, 2001
Before MICHEL, SCHALL, and DYK, Circuit Judges.
SCHALL, Circuit Judge.
DECISION
Robert Hoffmann, Susanne Hustadt, Klaus von Schirach,
Heidemarie Kruger, and Henriette Hoffmann von Schirach
(collectively, “Plaintiffs”) appeal the decision of the United
States District Court for the District of Columbia denying
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Appendix B
their claim with respect to certain property recovered by the
United States Army at the end of World War II. Hoffmann v.
United States, 53 F.Supp.2d 483 (D.D.C. 1999). Billy F. Price
appeals his dismissal as a plaintiff. The case grows out of
Plaintiffs’ efforts to obtain the return of, or compensation
for, a photographic archive and paintings formerly belonging
to Heinrich Hoffmann Sr. (“Hoffmann Sr.”). Specifically,
the property at issue before the district court consisted of
(1) four watercolors painted by Adolph Hitler; (2) a photographic
archive compiled by Hoffmann Sr. and his son, Heinrich
Hoffmann Jr. (“Hoffmann Jr.”), part of which the Attorney
General of the United States vested in 1951 pursuant to the
Trading with the Enemy Act, 50 U.S.C. App. § 1 et seq
(“TWEA”), and part of which remains non-vested but, at least
allegedly, in the possession of the United States; and (3) the
“Time-Life archive,” a photographic archive given to the
United States in the early 1980s by Time-Life, Inc.
Hoffmann Sr. and Hoffmann Jr. are both deceased.
Plaintiffs are the heirs of Hoffmann Sr.’s children, Hoffmann,
Jr. (Robert Hoffmann, Heidemarie Kruger, and Susanne
Hustadt) and Henriette Hoffmann von Schirach (Klaus von
Schirach, Executor of her estate). Price, an art investor and
author of a Hitler biography, became involved in the case in
1982 when he learned that Hoffmann Sr. had been the owner
of the watercolors. Price paid a nominal sum to the Hoffmann
heirs in exchange for their rights in the watercolors and
archives, promising to seek return of the property and to give
Plaintiffs a portion of whatever compensation he might
receive from the United States government.
7a
Appendix B
The instant case was consolidated in the United States
District Court for the Southern District of Texas on October
2, 1997, from two actions brought by Price and Plaintiffs in
that court, in 1989 and 1997. The Texas district court held
that the conveyance of an interest in the property to Price
was an improper assignment of a claim of interest against
the United States in violation of the Anti-Assignment Act,
31 U.S.C. § 3727 (1994). Accordingly, on March 24, 1998,
Price was dismissed as a plaintiff, and the case was
transferred to the District of Columbia.
The District of Columbia district court granted summary
judgment in favor of the government after rejecting Plaintiffs’
claims based on the theories of implied-in-fact contract
(bailment), Fifth Amendment takings, and tortious conversion.
On appeal, Plaintiffs challenge the order transferring the case
to the District of Columbia (the “transfer order”) and the
rulings of the district court on their claims. Price challenges
the transfer order and his dismissal from the case. We decline
to consider the issue of the transfer order, and with it Price’s
dismissal from the case, because the issue of the transfer
order was not raised in the district court. As far as the merits
of the case are concerned, we affirm the district court’s grant
of summary judgment insofar as it relates to the watercolors.
We also affirm the district court’s grant of summary judgment
with respect to the vested portion of the archive. Finally, we
vacate the grant of summary judgment insofar as it relates to
the non-vested portion of the archive and remand. We do so
in order that the district court may determine in the first
instance whether Plaintiffs’ claim relating to the non-vested
portion of the archive is barred by the applicable statute of
limitations. In the event that the court determines that the
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Appendix B
claim relating to the non-vested portion of the archive is not
barred by the statute of limitations, it will be necessary for it
to consider factual issues relating to Plaintiffs’ contention
that an implied-in-fact contract arose relating to that
property.
DISCUSSION
In May of 1945, the United States Army seized the
portion of the Hoffmann archive that was stored in
Winhoring, Germany and sent parts of what was seized to
Nuremberg for use by the War Crimes Commission. On May
31, 1951, the Assistant Attorney General and Director of
Alien Property executed an order vesting all right, title,
interest and claim in the Nuremberg portion of the archive
in the Attorney General of the United States. Plaintiffs
contend that the United States Army possesses the rest of
the Winhoring archive, as well as photographs seized at other
locations in Germany. These are the photographs that
comprise the non-vested portion of the Hoffmann archive.
In addition to the photographs, the United States Army also
seized the four Hitler watercolors. The Army transferred the
watercolors to a central collecting facility in Munich, and
subsequently shipped them to the United States.
1. Plaintiffs do not challenge the rulings of the district court
with respect to the Time-Life archive.
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Appendix B
Il.
Together with Price, Plaintiffs brought suit in the United
States District Court for the Southern District of Texas in
1983 for the return of the watercolors and the photographs
that the United States Army had seized. Alternatively, Price
and Plaintiffs sought money damages for the tortious
conversion of the property. Eventually, in 1989, the district
court entered partial summary judgment on the issue of
liability in Price’s and Plaintiffs’ favor, on the ground that
the United States had wrongfully converted the property by
refusing to return it. Price v. United States, (“Price I’), 707
F. Supp. 1465 (S.D. Tex. 1989). Subsequently, the court
awarded Price and Plaintiffs nearly $8 million in damages.
On appeal, the United States Court of Appeals for the Fifth
Circuit reversed the judgment of the district court and
remanded the case for entry of judgment of dismissal with
prejudice as to the claims for the watercolors and photographs,
other than the Time-Life archive. Price v. United States,
(“Price II’), 69 F.3d 46, 54 (Sth Cir. 1995). Regarding the
watercolors, the court ruled that evidence in the record
indicated that a tortious conversion of the paintings occurred
in Germany, when the paintings were seized and shipped to
the United States, not upon the United States’ refusal to return
the property to the Hoffmann family. /d. at 52. Regarding
the photographs, the court ruled that the vesting order placed
Plaintiffs’ claim outside the United States’ waiver of
sovereign immunity. /d. Additionally, the court held, any
challenge to the vesting order itself was barred by the statute
of limitations pursuant to 50 U.S.C. App § 33 (1988). /d. at
53. The Fifth Circuit dismissed the claim relating to the Time-
Life archive without prejudice, because Price had failed to
10a
Appendix B
exhaust his administrative remedies under the Federal Torts
Claim Act (“FTCA”), 28 U.S.C. § 2401(b) (1988). /d. On
petition for rehearing, the Fifth Circuit concluded that the
vesting order did not cover all of the photographs allegedly
seized by the United States Army. Price v. United States,
(“Price lIT’), 81 F.3d 520 (Sth Cir. 1996). Therefore, the court
dismissed the portion of the claim relating to the photographs
not subject to the vesting order. The court stated that the
dismissal was without prejudice to “a separate lawsuit
pending in the district court.” Jd. That “separate lawsuit”
was the 1989 action in the Southern District of Texas, which
subsequently was consolidated with the 1997 action in the
same court.
III.
As noted above, what was before the district court in the
District of Columbia was a consolidated complaint that
originally was filed in the Southern District of Texas. With
respect to the bailment claims, the District of Columbia court
concluded that Plaintiffs had failed to raise a genuine issue
of material fact as to whether an implied-in-fact contract of
bailment was created with respect to any of the property,
because they could not show that the United States had taken
the watercolors or any of the photographs, whether or not
covered by the vesting order, with the intention of returning
them. /d. at 489-90. Similarly, with respect to the Fifth
Amendment claims, the court determined that Plaintiffs had
failed to establish the necessary voluntary or contractual
relationship with the United States to av.ul themselves of
the Fifth Amendment as non-residents. /d. at 491. As far as
Plaintiffs’ FTCA claims were concerned, the district court
lla
Appendix B
ruled that res judicata barred review of the Fifth Circuit’s
dismissal of the claim for the watercolors. /d. at 493. With
respect to the non-vested portion of the archive, the court
concluded that the conversion claims accrued on May 20,
1949, when Hoffmann was informed of the fact that the
United States forwarded his entire archive to Washington.
Id. Therefore, the court held, Plaintiffs’ claims, to the extent
that they were grounded in tort, were barred by the statute of
limitations. /d.
The district court granted summary judgment in favor
of the government on all claims except the Time-Life archive.
Id. at 495. As noted above, subsequent to the decision,
Plaintiffs relinquished their claims against the government
with respect to the Time-Life archive.
IV.
We have jurisdiction to review the decision of a district
court that is based in whole or in part on 28 U.S.C.
§ 1346(a)(2) (1994), the Little Tucker Act. 28 U.S.C.
§ 1295(a)(2) (1994). The Little Tucker Act grants concurrent
jurisdiction in the Court of Federal Claims and the United
States district courts for any “civil action or claim against
the United States, not exceeding $10,000 in amount, founded
either upon the Constitution, or any Act of Congress, or any
regulation of an executive department, or upon any express
or implied contract with the United States.” 28 U.S.C.
§ 1346(a)(2) (1994). In their consolidated complaint,
Plaintiffs claim $9000 in contract damages for the four
watercolors, as well as $9000 for the non-vested portion of
the archive.
12a
Appendix B
The instant appeal also includes claims based not only
on the Little Tucker Act, but also on the FTCA. While we
ordinarily do not have appellate jurisdiction over FTCA
claims, see 28 U.S.C. § 1295(a)(2), “a mixed case, presenting
both a nontax Little Tucker Act claim and an FTCA claim,
may be appealed only to the Federal Circuit.” United States
v. Hohri, 482 U.S. 64, 75-76 (1987); see also Gollehon
Farming v. United States, 207 F.3d 1373, 1378 (Fed. Cir.
2000). Thus, because the district court had jurisdiction over
this case based in part on the Little Tucker Act, we retain
exclusive appellate jurisdiction over all the claims present
in the case.
V.
As noted above, the United States District Court for the
Southern District of Texas ordered the case based upon the
consolidated complaint. transferred to the District of
Columbia after it dismissed Price from the case. In arguing
that the case should not have been transferred, Plaintiffs and
Price contend that the court erred in the underlying ruling,
the dismissal of Price from the case. We decline to consider
Plaintiffs’ challenge to the order that transferred the case from
the Texas district court to the District of Columbia. Once a
motion to transfer has been granted and the action has been
transferred, the losing party must make a motion to retransfer
the case in the transferee district court in order to preserve
the issue for appeal. 17 James Wm. Moore et al., Moore’s
Federal Practice, §111.64[2][b] (3d ed. 1999). If no motion
is made, neither the transferee circuit nor the transferor circuit
has jurisdiction to review the transfer order. Jd; Hill v.
Henderson, 195 F.3d 671, 677 (D.C. Cir. 1999) (noting that
l3a
Appendix B
the term “jurisdiction” as applied to a court’s ability to review
a transfer order, refers to venue rather than subject matter
jurisdiction). In this case, it is undisputed that Plaintiffs made
no motion to retransfer the case back to the Texas district
court. Since parties may normally consent to be sued in a
court that would otherwise be an improper venue, Plaintiffs’
failure to object waives the issue. See Fed. R. Civ. P. 12(h)(1);
Hill, 195 F.3d at 677 n.2 (citing Texas Mun. Power Agency v.
EPA, 89 F.3d 858, 867 (D.C. Cir. 1996)). Accordingly, we
will not review the transfer order or the underlying ruling
dismissing Price from the case based upon a violation of the
Anti-Assignment Act.
VI.
Summary judgment “shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show —
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 56(c); Ysasi v. Rivkind, 856 F.2d 1520,
1524 (Fed. Cir. 1988). We review a grant of summary
judgment without deference. Ysasi, 856 F.2d at 1524. In
addition, we must, as the district court was required to do,
draw all reasonable factual inferences in favor of the
nonmovant. Anderson, 477 U.S. at 255.
Plaintiffs challenge all aspects of the district court’s
ruling, including the conclusion that Plaintiffs, as non-
resident aliens, cannot assert a Fifth Amendment claim for
any of the disputed properties. Plaintiffs argue that the Fifth
Amendment does not distinguish between aliens and citizens,
l4a
Appendix B
and note that the Supreme Court has held that Fifth
Amendment protection can extend to a non-enemy alien.
Russian Volunteer Fleet v. United States, 282 U.S. 481, 489
(1931). However, constitutional protections extend to aliens
only “when they have come within the territory of the United
States and developed substantial connections with this
country.” United States v. Verdugo-Urquidez, 494 U.S. 259,
270 (1990). Because Plaintiffs have failed to establish
“substantial connections” to the United States, we affirm the
district court’s decision with respect to Plaintiffs’ Fifth
Amendment claims. We therefore turn to Plaintiffs’ contract
and tort claims with respect to each of the remaining items
of property at issue.
A. Watercolors
Plaintiffs allege that an implied-in-fa contract of
bailment was created when the United States Army seized
the four paintings. “Tucker Act jurisdiction extends only to
contracts either express or implied-in-fact, and not to claims
on contracts implied in law.” Hercules Inc. v. United States,
516 U.S. 417, 423 (1996); Trauma Serv. Group v. United
States, 104 F.3d 1321, 1324-25 (Fed. Cir. 1997). Plaintiffs
allege that an implied-in-fact bailment contract was created
when the United States Army seized the four paintings from
Hoffmann’s home and removed them to the Munich Central
Collection Point in 1946. Whether a contract exists is a mixed
question of law and fact. Cienega Gardens v. United States,
194 F.3d 1231, 1239 (Fed. Cir. 1998). To prove that an
implied-in-fact bailment contract exists, a claimant must
show a “mutuality of intent to contract, offer and acceptance,
and that the officer whose conduct is relied upon had actual
15a
Appendix B
authority to bind the government in contract.” H.F: Allen
Orchards v. United States, 749 F.2d 1571, 1575 (Fed. Cir.
1984). For the United States to be bound by an implied-in-
fact contract of bailment, there must be “a promise,
representation or statement by any authorized government
official” that the property would be returned. Ysasi, 856 F.2d
at 1525. Plaintiffs contend that the Army’s conduct with
respect to the watercolors demonstrates the existence of a
bailment. Plaintiffs presented testimony that the Munich
Central Collection Point, where the paintings were held
before being shipped to the United States, was established
for the purpose of identifying seized objects for return to
their owners. Jd. at 490. The Army’s transfer of the paintings
to the collection center, Plaintiffs argue, demonstrates that
the United States intended to return the paintings to their
original owners.
While the decision of the Fifth circuit is not collateral
estoppel on this issue, we agree with the Fifth Circuit that
the evidence “will not support a conclusion that the
watercolors were held in bailment.” Price //, 69 F.3d at 52
(emphasis in the original). The district court correctly held
that evidence as to the general purpose of the Munich Central
Collection Point is insufficient to support the specific
inference that the Army brought the paintings to the collection
center with the intention of returning them to the Hoffmann
family. Plaintiffs fail to allege that an official with authority
actually bound the United States to return the paintings.
Significantly, the Army returned other artwork belonging to
Hoffmann Sr. about the same time the watercolors were
confiscated, but continued to retain possession of the
watercolors painted by Hitler. Hoffmann, 53 F.Supp.2d at
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Appendix B
492 (citing Price I], 69 F.3d at 51). The divergent conduct
indicates, if anything, an intent not to return the watercolors,
as the Army could have returned the paintings as it did the
rest of Hoffmann Sr.’s art collection. We therefore affirm
the district court’s grant of summary judgment as it relates
to the watercolors.
B. Vested Portion of the Archive
Plaintiffs challenge the district court’s ruling that they -
failed to present sufficient evidence to show that a genuine
issue of material fact existed as to whether a bailment contract
was created when the United States took a portion of the
Hoffmann family photographs for use at Nuremberg. A
bailment was created in May of 1945, Plaintiffs argue, from
the conversations between Hoffmann Jr. and certain Army
personnel at Nuremberg. In the district court, the government
argued that no implied-in-fact contract was created with
respect to the vested archive and that, in any event, any claim
based upon such a contract was barred by the applicable
statute of limitations. The district court did not address the
government’s statute of limitations argument. Instead, it
granted summary judgment based upon the merits. Even
assuming that such a contract was created, we conclude that
any claim for it is time-barred.
The Little Tucker Act sets up a jurisdictional scheme for
certain claims against the United States. Broughton Lumber
Co. v. Yeutter, 939 F.2d 1547, 1556 (Fed. Cir. 1991). The
six-year statute of limitations of the Little Tucker Act, 28
U.S.C. § 2401(a) (1994), is a limitation on the district court’s
jurisdiction. Bray v. United States, 785 F.2d 989, 992 (Fed.
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Appendix B
Cir. 1986). Because jurisdictional determinations are questions
of law, we review de novo a court’s decision to dismiss a
claim as barred by a statute of limitations. Alder Terrace,
Inc. v. United States, 161 F.3d 1372, 1377 (Fed. Cir. 1998)
(discussing 28 U.S.C. § 2501, the analogous statute of
limitations for suits against the government brought in the
Court of Federal Claims, see Hopland Band of Pomo Indians
v. United States, 855 F.2d 1573, 1577 n.3 (Fed. Cir. 1988)).
A claim first accrues for purposes of 28 U.S.C. § 2401(a),
(and its analogous 28 U.S.C. § 2501), “when all the events
have occurred which fix the liability of the Government and
entitle the claimant to institute an action.” Alder Terrace,
161 F.3d at 1377 (quoting Kinsey v. United States, 852 F.2d
556, 557 (Fed. Cir. 1988); see also Hopland, 855 F.2d at
1577 (stating that a claim accrues only when “all the events
which fix the government’s alleged liability have occurred
and the plaintiff was or should have been aware of their
existence’’). Generally, in the case of a breach of a contract,
a cause of action accrues when the breach occurs. Alder
Terrace, 161 F.3d at 1377. A breach of contact is a failure to
perform a contractual duty when it is due. 7rauma Serv.
Group, 104 F.3d at 1325. In the case of a bailment contract,
the breach, or failure to perform, occurs when the bailee
refuses to return the property at the request of the owner.
See Ysasi, 856 F.2d at 1525.
Any bailment contract that might have been created with
respect to the vested portion of the archive plainly was
breached in 1951 by the vesting order. Plaintiffs attempt to
avoid this problem, however, by challenging the validity of
the vesting order under the TWEA. The TWEA provides that
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Appendix B
‘“fa]ny person not an enemy or ally of an enemy claiming
any interest, right or title in any money or other property
which may have been conveyed, transferred, assigned,
delivered, or paid to the Alien Property Custodian or seized
by him hereunder and held by him .. . may file with the said
custodian a notice of his claim” for the President to determine
entitlement. 50 U.S.C. App. § 9(a) (1994). However, under
the TWEA, any claim that is instituted “after the expiration
of two years from the date of the seizure by or vesting in the
Alien Property Custodian, as the case may be, of the property
or interest in respect of which relief is sought” is barred. 50
U.S.C. App. § 33 (1994). The district court held that Plaintiffs
TWEA claims were barred by this statute of limitations,
because the vesting order was dated May 31, 1951.
The Fifth Circuit decided that Plaintiffs’ challenge to
the validity of the vesting order under the TWEA was barred
by the statute of limitations because the vesting order was
dated May 31, 1951. Because Plaintiffs had a full and fair
opportunity to litigate this exact issue in the first action in
Texas, and because the Fifth Circuit’s ruling on this issue
was necessary to the judgment in that action, Plaintiffs are
precluded from relitigating their challenge to the vesting
order in this action. See Jnnovad Inc. v. Microsoft Corp., 2001
WL 877583, *6 (Fed. Cir. 2001) (citing Jn re Freeman, 30
F.3d 1459, 1465, 31 USPQ2d 1444, 1448 (Fed. Cir. 1994)).
We therefore affirm the district court’s grant of summary
judgment with respect to the vested portion of the archive.
We do so on the ground that the claim is time-barred.
\
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Appendix B
C. Non-Vested Portion of the Archive
Finally, we turn to Plaintiffs’ claims that an implied-in-
fact contract of bailment was created with respect to the non-
vested portion of the archive. The district court did not
address the government’s statute of limitations argument with
respect to the non-vested portion of the archive and granted
summary judgment instead based upon the merits. As far as
the merits are concerned, Plaintiffs did not present evidence
specifically regarding the bailment of the non-vested portion
of the archive, stating merely that the evidence presented
regarding the vested portion of the archive applied to the
entire archive. Plaintiffs contended that an implied-in-fact
contract of bailment was created in May of 1945 when the
United States Army seized the entire Hoffmann photographic
collection from Germany.
Evidence in the record indicates that there is a possibility
that both members of the United States Army as well as
Hoffmann Jr. were under the impression that the non-vested
photographs were on loan to the United States. Specifically,
Plaintiffs’ presented a 1948 Opinion of Chief of the Historical
Division in Washington stating that “technically, [Hoffmann’s]
files are probably his personal property.” A March 14, 1949
memorandum of Major Raymond Hill to a Colonel Potter
noted that Major Hill “had received authority from Berlin to
transfer the entire Hoffmann photographic collection to the
Historical Division. Captain Paul stated that he had
previously been under the assumption that the collection
would revert to the ownership of Hoffmann upon completion
of its use.” Additionally, a 1949 letter from a Colonel Harris
to Colonel Potter stated that it “seems likely” that the archive
will be returned to its original owner.
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Appendix B
In February of 1950, the Army requested that Hoffmann
Jr. provide certain information “[i]n order to determine the
exact legal status of the photographic file of which you are
the alleged former owner.” The Army expressed its concern
in a January 24, 1950, letter to the Historical Division that it
did not “acquire title” to the missing archive, raising the
possibility that it “could be required to return it and fix
compensation for its use when peace is made.” Finally, in a
1951 memorandum, the Chief of the Historical Division in
Europe stated “‘[i]f it can be proven that part of the Hoffmann
photographic file does not fall within the classification of
property the existence of which is prejudicial to the United
States Government and any of its agencies, then our retention
of such property, it is believed, cannot be justified legally.”
Evidence suggesting that the legal status of the non-vested
portion of the archive was unresolved raises the possibility
of “a promise, representation or statement by any...
authorized government official,” Ysasi, 856 F.2d at 1525,
that the property was being held in bailment until its return.
In Hoffmann Jr.’s June 17, 1949 letter he wrote, “an
American jurist also assured me, after a private inquiry, that
there was a U.S. regulation in force that could not deprive
me of my archive. ... I held the opinion until 20 May 49
that my property would be returned to me.” In a May 15,
1950 letter Hoffmann Jr. wrote that “I was assured by U.S.
officials at Nuremberg that my photo archives were regarded
by the U.S. Army as a loan for the duration of the trials.” In
the highly unusual circumstances of this case, evidence of
Hoffmann’s impressions from the United States officials
demonstrates the possibility that an “authorized government
“official,” Ysasi, 856 F.2d at 1525, represented that the United
2la
Appendix B
States Army would return the photographs to Hoffmann Jr.
We therefore conclude that, based upon the material of record
that has been presented to us, a genuine issue of material
fact exists as to the existence of an implied-in-fact contract
of bailment with respect to the non-vested portion of the
archive.
At the same time, however, evidence in the record
indicates that, at some time prior to March 14, 1949, authority
was granted for the Army to transfer the “entire Hoffmann
photographic collection,” both vested and non-vested
portions, to the United States. Hoffmann Jr.’s June 17, 1949
letter to the Army’s Historical Division indicated that he was
aware of the two parts of his archive — the portion used in
Nuremberg and the rest — and protested the Army’s
possession of both portions: “On 20 May 49 I was informed
by Major Murphy, Historical Division, Frankfurt/Main, that
my entire photo archive had been forwarded to Washington
and I had no right to claim its return.” After a series of letters
exchanged between Hoffmann Jr. and the United States, the
Army shipped the entire archive to the United States without
returning any portion to the Hoffmann family. On January
29, 1951, Hoffmann Jr. again protested the Army’s
confiscation of the photographe. In March of 1956, an
attorney hired by Hoffmann Jr. asserted a claim for the return
of the photographs. The attorney was informed that the return
of the property would have to occur through “diplomatic
channels,” and “{i]f Mr. Hoffmann desires to pursue this
matter further, he may refer his claim to the German Foreign
Office.” This response to the letter from Hoffmann Jr.’s
counsel indicates the denial of the existence of any contract
of bailment with respect to the photographs, including the
22a
Appendix B
non-vested portion of the archive, which denial would be a
breach of contract. Since the breach occurred more than six
years before suit was filed, any claim based upon it relating
to the non-vested portion of the archive would be time-barred.
While the foregoing suggests merit to the government’s
statute of limitations argument, we believe that, in the first
instance, the issue should be addressed by the district court,
particularly in view of the voluminous record in this case.
The question to be addressed is, assuming that an implied-
in-fact contract of bailment existed, at what point did the
government fail to perform on the contract.
For the foregoing reasons, we affirm the district court’s
grant of summary judgment insofar as it relates to the
watercolors and the vested portion of the archive. We vacate
the grant of summary judgment insofar as it relates to the
non-vested portion of the archive and remand the case for
further proceedings consistent with this opinion.
Each party shall bear its own costs.
23a
APPENDIX C — MEMORANDUM OPINION OF THE
UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF COLUMBIA DATED
AND FILED JUNE 28, 1999
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
Civil Action 98-0857 (HHK)
ROBERT H. HOFFMANN, ESTATE OF HENRIETTE
HOFFMAN VON SCHIRACH, HEIDEMARIE KRUGER
and SUSANNE HUSTADT,
Plaintiffs,
v.
UNITED STATES OF AMERICA and JANET RENO,
as ex officio ALIEN PROPERTY CUSTODIAN,
Defendants.
MEMORANDUM OPINION
Plaintiffs, German citizens, have brought this action to
recover photographic archives and paintings formerly
belonging to Heinrich Hoffmann Sr. Their claims are for
contract damages and tort damages, and for violations of the
Fifth Amendment and the Trading With the Enemy Act.!
.1. The Consolidated Complaint also purports to state a claim
for relief under Article 53, Annex to the Hague Convention IV. Compl.
(Cont'd)
24a
Appendix C
Before the court are defendants’ motion to dismiss or for
summary judgment and plaintiffs’ motion for summary
judgment. Upon consideration of the motions, the responses
thereto, and the entire record of this case, the court concludes
that defendants’ motion for summary judgment should be
granted with respect to all claims except for those with respect
to the Time-Life archives, as described below.
I. Factual Background
This lawsuit is “simply a claim for damages resulting
from the tortious conversion of chattels” by the United States.
Price v. United States, 69 F.3d 46, 48 (Sth Cir. 1995);
cert. denied, 519 U.S. 927 (1996). The chattels consist of
photographic archives compiled by Heinrich Hoffmann
(“Hoffmann Sr.”) and his son, Heinrich Hoffmann Jr.
(“Hoffmann Jr.”) and four watercolor paintings by Adolf
Hitler. Plaintiffs are the Estate of Henriette von Schirach,
Hoffmann Sr.s daughter, Robert H. Hoffmann, Heidemarie
Kruger, and Susanne Hustadt.
According to a biographical record submitted by
plaintiffs, during World War I, Hoffmann served as a
photographer in the Bavarian army. He first met Adolf Hitler
in 1919, “the beginning of an intimate personal relationship”:
(Cont'd)
4 5. Within the counts of the complaint, however, the alleged violation
of Article 53 serves only as a predicate to the Federal Tort Claims
Act claims alleged in Count 17, and, by reference, Count 18. Compl.
{ 120, 134. The complaint does not state an independent Hague
Convention claim.
25a
Appendix C
Hitler would often visit the Hoffmanns’ home in
Munich for relaxation. It was through the
photographer that the future leader of the Third
Reich first met Eva Braun who worked in his shop,
and Hoffmann also frequently drove him to the
Wagner home in Bayreuth to see Frau Winifred
Wagner. In 1920 Hoffmann joined the [National
Socialist Workers’ Party] and soon belonged to
the inner circle of Hitler’s intimate companions.
The only man allowed to photograph the Fiihrer,
he accompanied him everywhere on his road to
power and later, during World War II, travelled
with him to all the various fronts. Hoffmann’s
two-and-a-half million photographs provide a
unique record of twenty-five years of German
history and helped to make him an enormously
wealthy man, as well as enriching Hitler himself
and enhancing his popularity. . . . It was Hoffmann’s
idea that Hitler should receive a royalty for every
photograph of himself which appeared on a
postage stamp, which led to the accumulation of
enormous sums of money to the Fihrer’s account.
Hoffmann was tried as a Nazi profiteer in 1947,
sentenced to ten years’ imprisonment (later reduced
to three, then raised to five years in 1950) and
nearly all of his personal fortune was confiscated.
He died in Munich on 16 December 1957.
Robert Wistrich, Who’s Who in Nazi Germany 155, Pl. Ex.
405, Attach. 12; see also 1 Christian Zentner & Friedemann
Bediirftig, eds., The Encyclopedia of the Third Reich 437
(Amy Hackett trans., 1991). But see Pl.’s Br. Supp. Summ. J. at
4 19 (stating that Hoffmann’s sentence was for four years).
26a
Appendix C
In addition to his work for Hitler, from 1905 to 1945
Hoffmann Sr. owned and operated his family’s photography
business in Germany, which included a portrait studio, a fine
arts press, and a well-known press photography agency.
Beginning with a collection of photographs dating from the
1860s through the early 1900s that he had obtained from his
grandfather, father, uncle, Hoffmann Sr. built a vast archive
of photographic images.
Hoffmann Jr. joined his father’s business in the mid-
1930s, and managed the press agency and a fine arts magazine
from 1940 to 1945. In 1937 Hoffmann Sr. transferred all of
his then-existing photographic archives to Hoffmann Jr. After
that date, both father and son continued to accumulate
photographs in their respective archives.
According to plaintiffs, the U.S. Army in May 1945
seized the portion of the Hoffmann archives that had been
stored in the town of WinhGring. In late 1945, the U.S. sent
part of the archives seized in Winh6ring to Niirnberg for use
by the War Crimes Commission from 1945 to 1949. This
“Nirnberg archive” was subsequently transferred to the
Army’s Historical Division in Frankfurt on April 27, 1949,
and thereafter shipped to the Army’s German Military
Documents Section in Alexandria, Virginia, on October 26,
1949. On May 31, 1951, the Assistant Attorney General and
Director of the Office of Alien Property executed an order
vesting all rights, title, interest and claim in the Niirnberg
archive in the Attorney General of the United States.
Ex. P-133. :
In addition to the photographic archive covered by the
vesting order, plaintiffs allege that the Army also continues
27a
Appendix C
to possess the remainder of the archives that were seized in
WinhGring, as well as “missing” portions of the Hoffmann
photographic archives that had been seized by the Army in
Freising and Bavaria. See Pl.’s Statement of Facts { 39-40.
Plaintiffs also allege that the Army possesses four
watercolors painted by Hitler that Hoffmann Sr. acquired
during the 1930s and 1940s. After the war, United States
troops discovered the watercolors in the village of
Dietramszell and transferred them to a central collecting
facility in Munich. The military authorities there in 1949
ordered the paintings to be transferred to Wiesbaden, from
where they were shipped to the United States. P1.’s Statement
of Facts J 68-71, 73.
Between 1949 and 1951, Hoffmann Jr. wrote various
officers of the Historical Division protesting the Army’s
transfer of his “entire photo archive” to the United States.
See Ex. P-85; see also P-93, P-97, P-99, P-105, P-109,
P-125. Unbeknownst to Hoffmann Jr., however, a further
portion of the Hoffmann photographic archives had been
taken from Hoffmann’s Berlin studio in May 1945 by a LIFE
magazine photographer. See Ex. P-163. These archives (the
“Time-Life archives”) came into the possession of the United
States in the early 1980s, when Time-Life Inc. donated it to
the U.S. Military History Institute in Carlisle, Pennsylvania.
Plaintiffs in the present case, together with Texas
businessman Billy Price, initially brought suit for the return
of the watercolors and photographic archives in the Southern
District of Texas in 1983. The district court entered a partial
summary judgment on the issue of liability in Price’s favor.
28a
Appendix C
Price v. United States, 707 F. Supp. 1465 (S.D. Tex. 1989).
On appeal, the Fifth Circuit reversed and remanded for entry
of judgment of dismissal with prejudice as to the claims for
the watercolors and the photographic archives other than the
Time-Life archives. 69 F.3d 46, 54 (Sth Cir. 1995). Finding
that Price had failed to exhaust administrative remedies with
respect to the Time-Life archives, the appeals court dismissed
the claims for those archives without prejudice. /d. On
petition for rehearing, the Fifth Circuit noted that the vesting
order did not cover all of the Hoffmanns’ photographic
archives alleged to have been seized by the Army in Germany.
81 F.3d 521 (Sth Cir. 1996). Accordingly, the Fifth Circuit
held that with respect to the archives not covered by the
vesting order, its dismissal was also without prejudice to the
present lawsuit.
The instant case was consolidated in the Southern District
of Texas on October 2, 1997, from two actions brought by
the same plaintiffs, including Price, in 1989 and 1997. That
court held that a conveyance to Price by plaintiffs von
Schirach and Hoffmann Jr. of their interests in the
_ photographic archives was an assignment of a claim against
the United States in violation of the Anti-Assignment Act.
Accordingly, on March 24, 1998, Price was dismissed as a
plaintiff, and the case was transferred to this court.
The claims remaining in the consolidated complaint are
as follows. Plaintiff Estate of von Schirach seeks damages
for breach of contract or violation of the takings clause of
the Fifth Amendment (count 3), and specific performance
_ (count 4), with respect to the watercolors. All plaintiffs seek
damages for the General Services Administration’s refusal
29a
Appendix C
to turn over the photographic archives not covered by the
vesting order to von Schirach and Hoffmann Jr. under tort
law (count 9) and the Federal Tort Claims Act (count 10).
All plaintiffs also seek damages for breach of contract or
violation of the takings clause of the Fifth Amendment (count
11), and specific performance (count 12), with respect to the
photographic archives not covered by the vesting order. For
the Army’s failure to return the Time/Life archives, plaintiffs
seek damages under tort law (count 13) and the takings clause
of the Fifth Amendment (count 14), and specific performance
(count 15). With respect to the archives covered by the vesting
order, plaintiffs seek review of the validity of the vesting
order under the Trading With the Enemy Act and the takings
clause of the Fifth Amendment (count 16), and damages for
_conspiracy and fraudulent concealment under the Federal Tort
Claims Act (count 18).
II. Standards of Review
A. Dismissal
A Rule 12(b)(6) motion “tests the legal sufficiency of
the complaint.” ACLU Foundation of Southern Calif. v. Barr,
952 F.2d 457, 472 (D.C. Cir. 1991). When reviewing such
motions, the court must take the allegations in non-movant’s
leading as true and must construe them in a light most
favorable to the non-moving party. Conley v. Gibson, 355
U.S. 41, 45-46 (1957); Sinclair v. Kleindienst, 711 F.2d 291,
293 (D.C. Cir. 1983). Reviewed in this light, a motion to
dismiss may not be granted “unless it appears that a plaintiff
can prove no facts in support of the claim which would entitle
the plaintiff to relief.” Conley, 355 U.S. at 45-46.
30a
Appendix C
B. Summary Judgment
A motion for summary judgment should be granted if
and only if it is shown “that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law.” Fed. R. Civ.-P. 56(c). The
moving party’s “initial responsibility” consists of “informing
the [trial] court of the basis for its motion, and identifying
those portions of the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence
of a genuine issue of material fact.” Celotex Corp. v. Catrett,
477 U.S. 317, 323, 106 S. Ct. 2548, 2553 (1986) (internal
quotation marks omitted).
If the moving party meets its burden, the burden then
shifts to the non-moving party to establish that a genuine
issue as to any material fact actually does exist.
See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586, 106 S. Ct. 1348, 1355 (1986). The non-moving
party is “required to provide evidence that would permit a
reasonable jury to find” in its favor. Laningham v. Navy, 813
i .2d 1236, 1242 (D.C. Cir. 1987). Such evidence must consist
of more than mere unsupported allegations or denials and
must set forth specific facts showing that there is a genuine
issue for trial. Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 322
n.3, 106 U.S. at 2552 n.3. If the evidence is “merely
colorable” or “not significantly probative,” summary
judgment may be granted. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249-50, 106 S. Ct. 2505, 2511 (1986).
3la
Appendix C
Ill. Discussion
A. The Contract/Bailment Claims
The United States is “immune from suit save as it
consents to be sued ... and the terms of its consent to be
sued in any court define that court’s jurisdiction to entertain
the suit.” United States v. Testan, 424 U.S. 392, 399 (1976)
(quotation omitted). While the Tucker Act, 28 U.S.C.
§ 1491(a), confers jurisdiction to hear and determine claims
against the United States founded upon any “express or
implied” contract with the United States, “this jurisdiction
extends only to contracts either express or implied in fact,
and not to claims on contracts implied in law.” Hercules Inc.
v. United States, 516 U.S. 417, 423 (1996). Accordingly,
plaintiffs have alleged the existence of contracts implied in
fact binding the United States to return each of the properties
in issue in this case.
1. The Archives Covered by the Vesting Order
Plaintiffs contend that an “implied-in-fact bailment” was
created between the Army and the Hoffmanns whereby there
was a “fiduciary obligation that, some day the Army would
have to return the Nirnburg photographic archives to the
Hoffmanns and pay compensation.” P1.’s Statement of Facts
{ 32 (citing Ex. P-129 and P-91, 4 5). As principal support
for this theory, plaintiffs offer the following text from a March
28, 1951, decision of the Judge Advocate General:
Assuming, as is stated in the submitted file, that
the Hoffmann photographic file was seized in
32a
Appendix C
furtherance of the objectives set out in
subparagraph 3-lll of the Potsdam Agreement, it
is the opinion of this office that the mentioned
photographic file is being legally held by the
Department of the Army.
Ex. P-129. Plaintiffs also cite a January 24, 1950,
memorandum from the Special Staff of the Historical
Division in Washington to the division’s European office
noting “the possibility, if we use the Hoffmann file, that under
the provisions of Article 53, Annex to the Hague Convention
IV, the Army could be required to return it and fix
compensation for its use when peace is made.” Ex. P-91,
{ 5.
To demonstrate an implied-in-fact contract binding the
United States within the meaning of the Tucker Act, plaintiffs
must show “mutuality of intent to contract, offer and
acceptance, and that the officer whose conduct is relied upon
had actual authority to bind the government in contract.”
Ysasi v. Rivkind, 856 F.2d 1520, 1525 (Fed. Cir. 1988)
(quoting H.F: Allen Orchards v. United States, 749 F.2d 1571,
1575 (Fed. Cir. 1984), cert. denied, 474 U.S. 818 (1985)).
Thus, an implied-in-fact contract “must be stated in the form
of an undertaking, not as a mere prediction or statement of
opinion or intention.” Cutler-Hammer v. United States, 441
F.2d 1179, 1182 (Ct. Cl. 1971). For the government to be
bound by an implied-in-fact bailment, there must be “a
promise, representation or statement by any authorized
government official” that the property would be returned.
See id. (citation omitted).
33a
Appendix C
The record, however, is devoid of any promise,
representation or statement by an authorized official to the
Hoffmanns having either the purpose or effect of
communicating an offer to return the archives. The Judge
Advocate General’s decision, far from suggesting that the
archives would be returned to the Hoffmanns, concludes that
the archives were “being legally held” by the Army. The
Historical Division’s internal memorandum notes a
“possibility” that the Army would be required to return the
archives, but nowhere contains a promise, representation or
statement that it would actually do so.
Each of the other documents offered in support of
plaintiffs’ bailment theory refers to the return of the archives
as a possibility or contingency, not as an undertaking.
See Letter from Harry J. Malony, Chief of the Historical
Division in Washington, to the Historical Division in Europe,
of 12/30/48, Ex. P-74 (opining that “technically, his files are
probably his personal property”); Memorandum from Maj.
Raymond D. Hill to Col. Potter of 3/14/49, Ex. P-79 (noting
that “Capt. Paul stated that he had previously been under the
assumption that the collection would revert to the ownership
of Hoffmann upon completion of its use”); Letter from
Lt. Col. E.M. Harris to the Historical Division in Europe,
Ex. P-87 (stating that “[i]t seems likely” that the file will
have to be returned to its original owner in Germany);
Memorandum of Judge Advocate General of 11/18/49,
Ex. P-90 (finding that the Niirnberg archive was “propaganda
which is aimed at keeping alive, reviving or promoting the
military or Nazi spirit and institutions, or glorifying war,”
within the meaning of Control Council Law No. 8, and
therefore “may not at present be returned to the owner”);
34a
Appendix C
Memorandum from W.S. Nye, Chief of Historical Division
in Europe, to Col. Hanley, Judge Advocate Division of
2/5/51, Ex. P-127 (stating that “[{i]f it can be proven that a
part of the Hoffmann Photographic File does not fall within
the classification of property the existence of which is
prejudicial to the United States Government and any of its
agencies,” retention of the Hoffmann Photographic File by
the United States cannot be justified legally). None of these
documents is addressed to the Hoffmanns or appears in any
way to have been intended as a communication to the
Hoffmanns regarding the archives. Moreover, to the extent
that these statements simply express tentative legal
conclusions as to the ownership of the archives, “this would
at most create a bailment by operation of law, not an implied-
in-fact bailment contract.” Ysasi, 856 F.2d at 1526.
Plaintiffs also present various recorded testimony of
Hoffmann Jr. to the effect that he “was assured on many
occasions by officials of the War Crimes Commission that
when the Niirnberg proceedings against German industrialists
were completed, the Hoffmann Photographic Archives at
Niirnberg would be returned to Hoffmann Jr.” P1.’s Statement
of Facts 4 21. This testimony, however, is unaccompanied
by any allegations or evidence of such officials’ authority to
bind the United States Government. See Letter of Heinrich
Hoffmann Jr., Ex. P-85 (“I repeatedly received confirmation
from various persons that interest in [the archive] would only
last for the duration of the Nuremberg Court Trials”); Letter
of Heinrich Hoffmann Jr., Ex. P-109 (stating that “I was
assured by U.S. officials at Nuremberg that my photo archives
were regarded by the U.S. Army as a loan for the duration of
the trials”); Dep. of Heinrich Hoffmann Jr., Ex. P-230, at 15
35a
Appendix C
(stating that General Potter “gave me his word that when the
books were finished, the entire archives would be brought to
location which I would designate,” but later received orders
to ship the archives to the United States); Affidavit of
Heinrich Hoffmann Jr. & Claus Offermann, Ex. P-244, at
{ 11 (stating that Hoffmann “understood that the United
States Government would conclude its use of the
photographic archives and return them to him”). Accordingly,
such testimony does not carry the burden of showing that an
implied-in-fact contract was made. Pasco Enterprises v.
United States, 13 Cl. Ct. 302, 306-07 (1987).
The court therefore finds that plaintiffs have failed to
raise a genuine issue of material fact in support of the theory
that an implied-in-fact bailment was created with respect to
the Niirnberg photographic archives.
2. The Photographic Archives Not Subject to the
Vesting Order
Plaintiffs assert that the Army also had control of the
photographic archives not subject to the vesting order under
an express or implied-in-fact bailment “with the fiduciary
duties of accounting, returning, and compensating.” Plaintiffs
do not provide specific support for a finding that such
bailments or fiduciary duties existed, but state simply that
“[t]he same principles discussed supra respecting the archives
made subject to the vesting order are applicable here.” Pl.’s
Br. Supp. Mot. Summ. J. at 118. Accordingly, the court finds
that plaintiffs have failed to raise a genuine issue of material
fact in support of the theory that an implied-in-fact bailment
was created with respect to the photographic archives not
subject to the vesting order.
36a
Appendix C
3. The Watercolors
Plaintiffs also allege that an implied-in-fact bailment was
created when the Army took possession of the four Hitler
watercolors upon occupying Schloss Dietramszell in 1945
and removed them to the Munich Central Collection Point
in May 3, 1946. PI.’s Statement of Facts 4 68, 76-77.
In support of this theory, plaintiffs do not allege that the
government ever suggested or opined, let alone represented
or promised, that the watercolors would someday be returned
to the Hoffmanns. Instead, plaintiffs cite deposition testimony
of Rosemarie Huber and Elga Bohm that the Munich Central
Collection Point was established with the purpose of
“identification and return of objects of arts to their rightful
owners.” Bohm Dep., Ex. P-239, at 10; see also Huber Dep.,
Ex. P-234, at 7 (testifying that objects of art were brought
“to Munich to be registered here, and to be returned to the
former owners”). Plaintiffs also paraphrase extensive
passages from Lynn H. Nicholas, The Rape of Europa, for
the proposition that the U.S. government had classified
certain works of art as “property of the German nation or the
private property of Germans” with the intention of serving
as a “trustee” for all such property that was removed to the
United States. Pl.’s Statement of Facts at 26-27 n.9.
Even in the light most favorable to plaintiffs, this
evidence regarding the general purpose of the Munich Central
Collection Point and the intention of the U.S. government
with respect to a general category of property is insufficient
to support the specific inference that the Army brought the
four Hitler watercolors to the Munich Central Collection
ie as 2 ane was von ee
37a
Appendix C
Point with the intention of returning them to the Hoffmanns,
let alone that such an intention was ever communicated to
the Hoffmanns. Accordingly, the court finds that plaintiffs
\._ have failed to raise a genuine issue of material fact to support
the finding of an implied-in-fact bailment with respect to
the Hitler watercolors.
B. The Fifth Amendment Claims
Plaintiffs’ takings claims are based on the proposition
that “non-resident friendly aliens are also entitled to the
protection of the Fifth Amendment’s prohibition on unlawful
taking for public use of their property in the United States
without just compensation.” See Pl]. Br. Supp. Mot. Summ. J.
at 102 (citing Russian Volunteer Fleet y United States,
282 U.S. 481, 49] (1931)). In Russian Volunteer Fleet, the
petitioner, a Russian corporation, was the assi gnee of certain
contracts for the construction of two vessels by a New York
shipbuilding corporation. 282 U.S. at 487. When the United
States requisitioned these contracts, the Court held that the
United States had exerted the power of eminent domain in
taking the petitioner’s property and thereby became bound
to pay just compensation. /d. at 489.
In finding that the Russian Volunteer Fleet was an “alien
friend,” the Court cited Wong Wing v. United States, 163 U.S.
228 (1896), a case which, while affirming the power of
Congress to exclude aliens on the basis of race (as race was
then legally constructed), permitted Fifth and Sixth Amendment
claims as minimal due process protections for those aliens
who had already established residence in the United States.
The more general proposition that non-resident friendly
|
Cn et ee eee
38a
Appendix C
aliens with no voluntary or contractual relationship with the
United States are entitled to Fifth Amendment rights,
however, was emphatically rejected by the Supreme Court
in Johnson vy. Eisentrager, 339 U.S. 763 (1950):
Such extraterritorial application of organic law
would have been so significant an innovation in
the practice of governments that, if intended or
apprehended, it could scarcely have failed to
excite contemporary comment. Not one word can
be cited. No decision of this Court supports such
a view. None of the learned commentators on our
constitution has even hinted at it. The practice of
every modern government is opposed to it.
Id. at 784; see also United States v. Verdugo-Urquidez, 494
U.S. 259, 269 (1990) (“Indeed, we have rejected the claim
that aliens are entitled to Fifth Amendment rights outside
the sovereign territory of the United States.”).
In Verdugo-Urquidez, the Court reviewed a series of
cases, including Russian Volunteer Fleet, that had been cited
by the respondent in support of the view that aliens enjoy
certain constitutional rights. Jd. at 270-71. The court
concluded that “[t]hese cases .. . establish only that aliens
receive constitutional protections when they have come
within the territory of the United States and developed
substantial connections with this country.” /d. at 271. The
respondent was “an alien who has had no previous significant
voluntary connection with the United States, so these cases
avail him not.” /d.
39a
Appendix C
Plaintiffs and their predecessors, self-described as “‘non-
resident,” have failed to establish the existence of voluntary
or contractual relationships with this country that could
reasonably be characterized as “substantial connections.” Nor
have plaintiffs alleged that the United States seized, vested
or acquired any of the property pursuant to its eminent domain
power. Accordingly, the court will dismiss plaintiffs’ Fifth
Amendment claims.
C. The Trading With the Enemy Act Claim
Plaintiffs challenge the validity of the vesting order under
the Trading With the Enemy Act, 50 U.S.C. App. § 9. That
statute provides that “[a]ny person not an enemy or ally of
enemy claiming any interest, right or title in any money or
other property which may have been conveyed, transferred,
assigned, delivered, or paid to the Alien Property Custodian
or seized by him hereunder and held by him ... may file
with the said custodian a notice of his claim... .”
As the Fifth Circuit noted, § 33 of the Act bars claims
under § 9 instituted “after the expiration of two years from
the date of the seizure by or vesting in the Alien Property
Custodian, as the case may be, of the property or interest in
respect of which relief is sought.” 69 F.3d at 53 (quoting 50
U.S.C. App. § 33 (1988)). Plaintiffs implicitly acknowledge
this time bar. See Pl.’s Br. Supp. Mot. Summ. J. at 83 (“The
only question that remains is can Hoffmann Jr. and von
Schirach and their successors commence an action in 1989
when C.A. H-89-815 was filer! ir. the Southern District of
Texas?”). They argue, however, that “[nJo statute of
limitations runs in favor of a fiduciary who steals or mistreats
40a
Appendix C
the property entrusted to him so long as the fiduciary
relationship is not expressly repudiated and such repudiation
is communicated to the beneficiary by the malfeasor-
fiduciary.” /d. Whether or not this proposed rule of law is
valid and applicable to § 33, plaintiffs have failed to offer
facts that show the existence of a fiduciary relationship
between the Army and Hoffmann Jr. regarding the vested
property. Accordingly, the court finds that plaintiffs have
failed to raise a genuine issue of material fact as to whether
the validity of the vesting order can be reviewed.’
2. While it is not necessary for the court so to find, plaintiffs’
challenge to the vesting order itself appears to be without merit.
Plaintiffs contend that vesting order authority under the Act extended
only to property that was physically located in the United States prior
to December 31, 1946, when President Truman signed a proclamation
permitting the resumption of trade between Germany and the United
States. Pl.’s Mem. Supp. Summ. J. at 75. The caselaw cited by
plaintiffs, however, does not support this proposition. See Cities
Service Co. v. McGrath, 342 U.S. 330, 333 (1952) (holding that
vesting in of debentures physically located outside of the United
States fell within “broad terms” of TWEA’s vesting authority); Rogers
v. Smith, 185 F. Supp. 401 (S.D- Ill. 1960) (same); McGrath v. Agency
of Chartered Bank, 104 F. Supp. 964 (S.D.N.Y. 1952), aff'd sub.
nom. McGranery v. Agency of Chartered Bank, 201 F.2d 368 (2d
Cir. 1953) (same); Silesian-American Corp. v. Clark, 332 U.S. 469,
475-76 (1947) (holding that seizure of alien property in time of
emergency is a proper exercise of the war power); Handelsbureau
La Mola v. Kennedy, 299 F.2d 923, 926-27 (D.C. Cir.), cert. denied,
370 U.S. 940 (1962) (holding that December 1950 vesting order was
proper because “enemy” status under TWEA did not end until the
Joint Resolution of Congress of October 19, 1951); Gmo Niehaus &
Co. v. United States, 170 F. Supp. 419, 421 €1959) (holding that
property acquired by Germans after December 31, 1946 is not subject
(Cont’d)
4la
Appendix C
D. The Tort Claims
1. The Watercolors _
In Price, the Fifth Circuit held that the Federal Tort
Claims Act did not confer jurisdiction over a claim against
the United States for conversion of the watercolors if an act
“inconsistent with [Hoffmann]’s interest in his personal
property”; i.e., the watercolors, occurred in Germany. 69 F.3d
at 50. Upon reviewing the deposition testimony, submitted
by Price, of a German citizen who processed art at the Munich
Central Collection Point, the court determined that “other
artwork in Hoffmann’s collection — artwork not by Adolf
(Cont'd)
to vesting). The Supreme Court in Cities Service Co. emphasized
the breadth of the vesting authority:
We believe that the Trading with the Enemy Act grants
the authority necessary to vest obligations evidenced by
domestic negotiable bearer debentures even though the
debentures themselves are outside the United States. By
s 7(c) of the Act, enacted during World War I, the
President is given the authority to seize all enemy
property, “including . . . choses in action, and rights and
claims of every character and description owing or
belonging to ... an enemy ....” At the beginning of
World War II, Congress made an even broader grant of
authority to the Executive through an amendment to
s 5(b), providing that “any property or interest of any
foreign country or national thereof shall vest, when, as,
and upon the terms, directed by the President... .”
342 U.S. at 333 (citations omitted).
42a
Appendix C
Hitler, but similarly labeled ‘Hoffmann’ and found along with
the Hitler watercolors and shipped to the central collecting
point in Munich—was returned to Hoffmann’s son at about
the same time that the watercolors were confiscated.” /d. at
51. For the court, the “crucial[ ]” fact was that the Army’s
conduct with respect to the watercolors diverged from its
contemporaneous treatment of similarly situated art in a
manner that was consistent with the owner’s interest:
The divergent treatment afforded various pieces
of art in the Hoffmann collection convincingly
establishes that the conversion of the watercolors,
i.e€., an act inconsistent with the Hoffmann
family’s interest in them, occurred when the
United States military authorities ordered their
transfer to Wiesbaden and their shipment to the
United States.
Id. See Restatement of Restitution § 123 cmt. c, at 508 (1937)
(“A person who, having acquired the property of another
innocently and non-tortiously but without giving value
therefor, learns of the interest of another therein, is under a
duty to restore it to the owner within a reasonable time, [a]nd
any conduct of his thereafter which is inconsistent with the
owner’s interest is a conversion ....”). The court’s finding
was further “buttressed to the extent that [the United States
Army’s rules of warfare] may have applied so as not to permit
the lawful taking of these watercolors.” Jd. Accordingly, the
Fifth Circuit concluded that the conversion claim did not
fall within the waiver of sovereign immunity granted by the
Federal Tort Claims Act. /d. at 52.
43a
Appendix C
Under established principles of res judicata, this court
is not empowered to review the Fifth Circuit’s determination
that federal courts lack subject matter jurisdiction over
plaintiffs’ claim for conversion of the watercolors. As the
Supreme Court has long recognized, “(t]he principles of res
judicata apply to questions of jurisdiction as well as to other
issues.” Underwriters National Assurance Co. y. North
Carolina Life & Accident & Health Insurance Guaranty
Association, 455 U.S. 691, 706 (1982) (citing American
Surety Co. v. Baldwin, 287 U.S. 156, 166 (1932)). Dismissal
of a suit for lack of federal subject matter jurisdiction
precludes relitigation of the same issue of subject matter
jurisdiction in a second federal suit on the same claim. Oglala
Sioux Tribe v. Homestake Mining Co., 722 F.2d 1407, 1411
(8th Cir. 1983). Accordingly, the court concludes that
plaintiffs have failed to raise a genuine issue of material fact
in support of relitigating the issue of jurisdiction under the
Federal Tort Claims Act for conversion of the watercolors.?
3. Plaintiffs contend that the Fifth Circuit's finding in Price
was erroneous to the extent that the Fifth Circuit relied on the
deponent’s testimony that the watercolors were “confiscated” in
Munich prior to their transfer to Wiesbaden and shipment to the
United States. In support of this contention, plaintiffs have submitted
new testimony to the effect that the word used by the German witness,
“beschlagnahme,” does not mean “confiscate” in the sense of state
action to deprive of ownership, but rather should be translated “taken
into possession.” See Pl.’s Statement of Facts 4 72; Ex. P-402,
{1 4-11. The court fails to see how even this translation disturbs the
conclusion that the watercolors were never returned to the Hoffmanns,
and were thereby afforded “divergent treatment” from that given
contemporaneously to the artwork that was returned to Hoffmann Jr.
44a
Appendix C
2. The Photographic Archives Not Covered by the
Vesting Order (Other Than the Time-Life Archives)
Plaintiffs’ conversion claims for the photographic
archives not covered by the vesting order are subject to the
statute of limitations under the Federal Tort Claims Act,
which provides that “[a] tort claim against the United States
shall be forever barred unless it is presented in writing to the
appropriate Federal agency within two years after such claim
- accrues or unless action is begun within six months after the
date of mailing, by certified or registered mail, of notice of
final denial of the claim by the agency to which it was
presented.” 28 U.S.C. § 2401(b).
Plaintiffs contend that the claim for conversion for
“most” of the archives not covered by the vesting order
“accrued” when plaintiffs’ “1983 and 1996 demands for the
return of those archives were denied by the government” in
January and February 1997. Pl.’s Br. Supp. Summ. J. at 138.
A claim accrues within the meaning of § 2401(b), however,
when the plaintiff becomes aware of both the existence and
the cause of his injury. United States v. Kubrick, 444 US.
111, 117 (1979). In this case, plaintiffs’ evidence indicates
that on May 20, 1949, Hoffmann Jr. was aware of both the
removal and the cause of the removal of the “entire Hoffmann
file” to the United States. Hoffmann Jr.’s letter to the Army’s
Historical Division in Europe on June 17, i949 states that:
On 20 May 49 I was informed by Major
Murphy, Historical Division, Frankfurt/Main, that
my entire photo archive had been forwarded to
Washington and I had no right to claim its return.
45a
Appendix C
Because of the foregoing, as owner, I am
compelled to lodge protest.
See Pl.’s Statement of Facts 4 34; Ex. P-85. Making clear
that by his “entire” archive Hoffmann Jr. was not merely
referring to the Niirnberg archive, the same letter also states
that “[o]ne part of the entire archive, the part that happened
to be in the American zone of occupation, was removed to
Nuremberg” and that “this part of the former entire archive
is all that I have left after the war.” Ex. P-85. The court
concludes that plaintiffs’ conversion claims for the
photographic archives taken by the Army and not covered
by the vesting order accrued on May 20, 1949. Because
plaintiffs have alleged elsewhere that the Time-Life portions
of the archives were not part of the archives taken and
transported by the Army, however, the Time-Life archives
are excluded from this determination. See P].’s Statement of
Facts J 48-51.
Plaintiffs also note that this “suit was filed within two
weeks after the last rejection of the [1996] claim.” Pl.’s Br.
Supp. Summ. J. at 138. That an action seeking judicial review
of a time-barred claim was filed promptly after an agency
denial, however, does not suffice to resurrect the claim. The
provisions of § 2401(b) are read conjunctively, as
jurisdictional requirements, not disjunctively, as independent
bases for jurisdiction. Schuler v. United States, 628 F.2d 199,
201 (D.C. Cir. 1980) (en banc) (“Though the section is not
happily drafted, common sense and the legislative history
tell us that it requires the claimant both to file the claim with
the agency within two years after accrual of the claim and
then to file a complaint in the District Court within six months
46a
Appendix C
after the agency denies the claim.”). Because there is no
genuine issue of material fact as to when the claim for
conversion of the archives not covered by the vesting order
(other than the Time-Life archives) accrued, the court will
grant summary judgment for defendants on the tort claims
as to those archives.
3. The Time-Life Archives
Plaintiffs contend that Time-Life stole part of the Berlin
portion of the Hoffmann Photographic Archives during the
war and donated some or all of the stolen archives to the
U.S. Army in 1981 and 1983, and-that Hoffmann Jr. first
learned of the existence of the stolen archives in early 1983.
In support of these allegations, plaintiffs offer letters from
employees of Time-Life Books and the United States Army
Military History Institute indicating that in 1981 and 1983,
the Institute accepted donations of some 7,000 “Heinrich
-Hoffmann prints” that had been “confiscated from
Hoffmann’s Berlin studio in May, 1945 by a LIFE magazine
photographer.” Ex. P-163, P-164, P-165, P-182A, P-183.
Plaintiffs have also filed an affidavit from Hoffmann Jr. that
he met Price in early 1983, learned of the stolen archives
from Price, and verified that the archives stored at the institute
were part of his father’s Berlin archives. Ex. P-244 at J¥ 19,
20. Finally, plaintiffs have submitted a written FTCA claim
filed by Price and Hoffmann Jr. with the Houston office of
the Department of Justice Civil Division on May 10, 1984.
Ex. P-208; Consolidated Complaint § 87.
Defendants do not contest these facts or contend that
plaintiffs’ claims regarding the Time-Life Archives are barred
47a
Appendix C
by the statute of limitations. Defendants correctly note,
however, that each and every claimant is required to file an
administrative claim in order to pursue a tort claim under
the FTCA. See Pipkin v. United States Postal Service, 95]
F.2d 272, 273 (10th Cir. 1991) (barring wife’s claim for
failure to exhaust administrative remedies, even though
husband had filed an administrative claim). Plaintiffs have
therefore conceded that the Estate of Henriette Hoffmann
von Schirach may not recover for the Time-Life Archives in
this action. Pl.’s Br. Supp. Mot. Summ. J. at 178.
Defendants also contend that plaintiffs’ claims for the
Time-Life archive should be dismissed because they have
already been the subject of the settlement of a civil action by
plaintiffs against Time, Inc. Pl.’s Resp. to Def.’s Req. for
Admission 22(a). Defendants assert that plaintiffs “have
refused to disclose either the facts underlying their claim, or
the terms: of the settlement.” Def.’s Mem. Supp. Renewed
Mot. Summ. J. at 12 n.6. Plaintiffs have not responded to
this assertion. Because “‘a final judgment, whether arrived at
by way of a settlement agreement or an adjudication on the
merits, does extinguish a party’s claim to remedies pertaining
to ‘all or any part of the transaction, or series of connected
transactions, out of which the action arose,’ ” Hydrocarbon
Trading & Transport Co., Inc. v. Dep t of Energy, 1995 WL
317424, at *5 (D.D.C. 1995) (quoting Restatement (Second)
of Judgments § 24 (1982)), defendants are entitled to know
the facts underlying plaintiffs’ claim for the Time-Life
archives and the terms of the settlement with Time, Inc..
48a
Appendix C
4. The Vested Archives
Plaintiffs allege that “Government employees and others
unknown conspired prior to the issuance of the void vesting
order to convert the Hoffmann Photographic Archives and
thus committed the tort of conspiracy,” P1.’s Br. Supp. Summ.
J. at 107, and then fraudulently concealed this conspiracy.
Consolidated Complaint 4 123. According to plaintiffs, the
substantive offense underlying this conspiracy was the
alleged breach of the Army’s fiduciary duties to return the
Hoffmann Photographic Archives and to pay for Hoffmann’s
loss of use. /d. at 108. Because plaintiffs have failed to offer
evidence that would permit the review of the validity of the
vesting order or support the finding of such fiduciary duties,
summary judgment will be granted against the conspiracy
claims and, a fortiori, the fraudulent conspiracy claims.
IV. Conclusion
For the foregoing reasons, it is this 28th day of June,
1999, hereby
ORDERED that defendants’ motion for summary
judgment is GRANTED as to counts 3, 4, 9, 10, 11, 12, 14,
16 and 18 of the Consolidated Complaint; and it is further
ORDERED that defendants’ motion for summary
judgment is DENIED as to counts 13 and 15 of the
Consolidated Complaint; and it is further
49a
Appendix C
ORDERED that the clerk shall schedule a status hearing
to address the procedure to be followed to determine whether
the settlement of the plaintiffs’ litigation against Time-Life,
Inc. precludes plaintiffs’ claims regarding the Time-Life
Archives.
s/ Henry H. Kennedy, Jr.
; Henry H. Kennedy, Jr.
US. District Judge
50a
APPENDIX D — ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF
COLUMBIA DATED AND FILED SEPTEMBER 9, 1999
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
Civil Action 98-00857
HENRIETTE HOFFMAN VON SCHIRACH,
ROBERT H. HOFFMAN, HEIDEMARIE
KRUGER and SUSANNE HUSTADT,
Plaintiffs,
v.
UNITED STATES OF AMERICA,
Defendant.
ORDER
The court has been advised by plaintiffs’ counsel that
plaintiffs have chosen to relinquish their claims to the items
referenced in the court’s June 28, 1999, Memorandum
Opinion as the Time Life Archive. Consequently, pursuant
to Fed. R Civ. P. 58 and for the reasons stated by the court
in its Memorandum Opinion, it is on this 9" day of September,
1999, hereby
a
-~
ORDERED and ADJUDGED that judgment is entered
for the defendant; and it is further
Sla
Appendix D
ORDERED and ADJUDGED that the complaint in this
case is dismissed with prejudice.
s/ Henry H. Kennedy, Jr.
Henry H. Kennedy, Jr.
United States District Judge
Dated: 9/9/99
52a
APPENDIX E — OPINION ON ASSIGNMENT OF THE
UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF TEXAS DATED
AND ENTERED MARCH 24, 1998
UnNitepD States District COURT
SOUTHERN DistrRIiCT OF TEXAS
Civic Action H-89-0815
Bitty F. Price, et al.
versus
UNITED STATES OF AMERICA
Opinion on Assignment
Billy F. Price seeks an order that the United States turn
over to him four watercolors painted by Adolf Hitler and
photographic archives originally belonging to Henrich
Hoffmann and his son. A judgment in Price’s favor was
reversed and the case was remanded by the Fifth Circuit.
Price v. United States, 69 F.3d 46 (Sth Cir. 1995), cert. denied,
117 S. Ct. 295 (1996).
1. The Fifth Circuit Mandate.
On December 12, 1996, the court of appeals entered an
order staying discovery pending a ruling on the government’s
motion to dismiss. In its December 12 order, the court of
appeals stated:
53a
Appendix E
If it is true — as the government argues — that
Price is improperly joined as a plaintiff in this
lawsuit in violation of the Anti-Assignment Act,
31 U.S.C. § 3727, the district court does not have
authority fo entertain the dispute between the
remaining parties in this venue. Because of the
likelihood that Price is improperly joined as a
plaintiff and, therefore, that venue is improper,
we are compelled to order the district court to rule
on the government’s motion to dismiss Price as a
plaintiff prior to allowing the plaintiffs to proceed
with their discovery requests. . . . [W]e note that
if it is true that plaintiff Price was assigned a
“claim” as opposed to a “judgment” in this action,
it is difficult to ascertain, in light of the Anti-
Assignment Act, how Price can remain a plaintiff
and how the district court can then remain a proper
venue of this action. Therefore, upon considering
the government’s motion to dismiss, it may
become necessary for the district court to
reconsider its decision denying the government’s
motion to change venue.
In re United States of America, No. 96-21307 (Sth Cir., Dec.
12, 1996).
2. The Anti-Assignment Act.
A transfer or assignment of a claim against the United
States “may be made only after a claim is allowed, the amount
of the claim is decided, and a warrant for payment of the
claim has been issued.” Title 31, United States Code, Section
54a
Appendix E
3727. The purpose of the Anti-Assignment Act is “to prevent
possible multiple payment of claims, to make unnecessary
the investigation of alleged assignments, and to enable the
Government to deal only with the original claimant.” United
States v. Aetna Casualty and-Surety-Co., 338 U.S. 366, 373
(1949). A claim against the United States under the Anti-
Assignment Act is any right to demand money or property
from the United States. Rosecrans v. William S. Lozier, Inc.,
142 F.2d 118, 124 (8th Cir. 1944).
The United States has had possession of the watercolors
and a large part of the photographic archives since the late
1940’s. Time, Incorporated had possession of part of the
photographic archives beginning in the late 1940’s, and
transferred possession to the United States in 1981 and 1983.
At the time the German plaintiffs transferred their interest in
the property to Price, all parties knew that the property was
in the possession of the United States. The Letter Agreement
for the sale and assignment of the photographic archives to
Price specifically assigns “such claims for damages as each
of you individually has in your own right and on behalf of
your deceased father with regard to all of those archives.”
An assignee can prevail only if the government’s taking
occurred while he was the owner of the property because
compensation is due at the time of the taking. United States
v. Dow, 357 U.S. 17, 20 (1958); United States v. 717.42 Acres
of Land, 955 F.2d 376, 379 (Sth Cir. 1992). It is undisputed
that Price was not the owner of the property at issue at the
time the United States assumed possession and control. As a
result, Price’s joinder as a plaintiff is a violation of the Anti-
Assignment Act.
55a
Appendix E
Price argues that the German plaintiffs assigned the
property to him, not merely the claims against the government.
A similar situation was presented in United States v. Shannon,
342 U.S. 288 (1952). The owner of property damaged by
United States soldiers in 1945 sold the property in 1946. The
purchasers filed a tort action against the United States for
the property damage. The Supreme Court held that the
purchasers’ claim against the United States was barred by
the Anti-Assignment Act. /d. at 290-91. Additionally, the
court of appeals stated in its January 1996 mandate that
Price’s claims were likely barred by the Anti-Assignment Act
if he “was assigned a ‘claim’ as opposed to a ‘judgment.’ ”
Price was not the property owner at the time the United
States took the property. The transfer and assignment of the
German plaintiffs’ interests in the property may be valid as
between them and Price. See Segal v. Rochelle, 382 U.S. 375
(1966) (Anti-Assignment Act does not render the assi gnment
void as between the parties). His claims against the United
States, however, are barred by the Anti-Assi gnment Act and
will be dismissed.
3. Motion to Transfer Venue.
The court of appeals suggested that, if Price were
dismissed as a plaintiff, the Court should reconsider the
government’s motion to transfer venue to the District Court
for the District of Columbia. The plaintiffs have also filed a
conditional motion to transfer venue.
Price was this case’s only connection with the Southern
District of Texas. The remaining plaintiffs are German
S6a
Appendix E
nationals or entities, and their claims would have arisen in
the District of Columbia. Venue in this judicial district is
improper. 28 U.S.C. § 1402. The case will be transferred to
the United States District Court for the District of Columbia.
28 U.S.C. § 1406.
4. Conclusion.
Price’s claims against the United States are barred by
the Anti-Assignment Act. Price must be dismissed as a
plaintiff. Without Price as a plaintiff, venue in this district is
improper. The case will be transferred to the District of
Columbia.
Signed March 24, 1998, at Houston, Texas.
s/ Lynn N. Hughes
Lynn N. Hughes
United States District Judge
S7a
APPENDIX F — TRANSFER ORDER OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF TEXAS DATED AND
ENTERED MARCH 24, 1998
UNITED States District Court
SOUTHERN District oF TEXAS
Civic AcTION H-89-0815
Bicty F. Price, et al.
versus
UNITED STATES OF AMERICA
Transfer Order
Billy F. Price is dismissed as a plaintiff (#86), and the
case is transferred to the United States District Court for the
District of Columbia (#51, #90). Aii remaining motions are
denied with leave to refile in the Washington, D.C. court.
Signed March 24, 1998, at Houston, Texas.
s/ Lynn N. Hughes
Lynn N. Hughes
United States District Judge
58a
APPENDIX G — CONS “!TUTIONAL PROVISION,
STATUTES, CONVENTIC NS AND PRESIDENTIAL
MESSAGE INVOLVED
U.S. Constitution, Fifth Amendment
No person shall be . . . deprived of life, liberty, or property,
without due process of law; nor shall private property be
taken for public use, without just compensation. _
+ =
Title 28, Judiciary and Judicial Procedure —~————
28 U.S.C. § 1331
§ 1331. Federal question
The district courts shall have original jurisdiction of all civil
actions arising under the Constitution, laws, or treaties of
the United States.
28 U.S.C. § 1346(a)(2) and (b)(1)
§ 1346. United States as defendant
(a) The district courts shall have original jurisdiction,
concurrent with the United States Court of Federal Claims,
of:
59a
Appendix G
(2) Any other civil action or claim against the
United States, not exceeding $10,000 in amount,
founded either upon the Constitution, or any Act
of Congress, or any regulation of an executive
department, or upon any express or implied
contract with the United States, or for liquidated
or unliquidated damages in cases not sounding in
tort, except that the district courts shall not have
jurisdiction of any civil action or claim against
the United States founded upon any express or
implied contract with the United States or for
liquidated or unliquidated damages in cases not
sounding in tort which are subject to sections
8(g)(1) and 10(a)(1) of the Contract Disputes Act
of 1978. For the purpose of this paragraph, an
express or implied contract with the Army and Air
Force Exchange Service-Navy Exchanges, Marine
Corps Exchanges, Coast Guard Exchanges, or
Exchange Councils of the National Aeronautics
and Space Administration shall be considered an
express or implied contract with the United States.
(b)(1) Subject to the provisions of chapter 171 of this title,
the district courts, together with the United States District
Court for the District of the Canal Zone and the District Court
of the Virgin Islands, shall have exclusive jurisdiction of civil
actions on claims against the United States, for money
damages, accruing on and after January 1, 1945, for injury
or loss of property, or personal injury or death caused by the
negligent or wrongful act or omission of any employee of
the Government while acting within the scope of his office
or employment, under circumstances where the United States,
60a
Appendix G
if a private person, would be liable to the claimant in
accordance with the law of the place where the act or
omission occurred.
28 U.S.C. § 1367(a)
§ 1367. Supplemental jurisdiction
(a) Except as provided in subsections (b) and (c) or as
expressly provided otherwise by Federal statute, in any civil
action of which the district courts have original jurisdiction,
the district courts shall have supplemental jurisdiction over
all other claims that are so related to claims in the action
within such original jurisdiction that they form part of the
same Case or controversy under Article II] of the United States
Constitution. Such supplemental jurisdiction shall include
claims that involve the joinder or intervention of additional
parties.
Title 31, Money and Finance,
31 U.S.C. § 3727(a) and (b)
§ 3727. Assignments of claims
(a) In this section, “assignment” means —
(1) atransfer or assignment of any part of a claim
against the United States Government or of an
interest in the claim; or
6la
Appendix G
(2) the authorization to receive payment for any
part of the claim.
(b) An assignment may be made only after a claim is
allowed, the amount of the claim is decided, and a warrant
for payment of the claim has been issued. The assignment
shall specify the warrant, must be made freely, and must be
attested to by 2 witnesses. The person making the assignment
shall acknowledge it before an official who may acknowledge
a deed, and the official shall certify the assignment. The
certificate shall state that the official completely explained
the assignment when it was acknowledged. An assignment
under this subsection is valid for any purpose.
* * *
Title 44, Public Printing and Documents,
44 U.S.C. § 1508
§ 15068. Publication in Federal Register as notice of
hearing ~
A notice of hearing or of opportunity to be heard, required
or authorized to be given by an Act of Congress, or which
may otherwise properly be given, shall be deemed to have
been given to all persons residing within the States of the
Union and the District of Columbia, except in cases where
notice by publication is insufficient in law, when the notice
is published in the Federal Register at such a time that the
period between the publication and the date fixed in the notice
for the hearing or for the termination of the opportunity to
be heard is —
62a
Appendix G
(1) not less than the time specifically prescribed
for the publication of the notice by the appropriate
Act of Congress; or
(2) not less than fifteen days when time for
publication is not specifically prescribed by the
Act, without prejudice, however, to the
effectiveness of a notice of less than fifteen days
where the shorter period is reasonable.
* * *
63a
Appendix G
ANNEX to the HAGUE CONVENTION (IV)
Adopted by the Geneva Protocols of 1929
Regulations Respecting the Laws
and Customs of War on Land
cd ~ 7
ARTICLE 23.
In addition to the prohibitions provided by special
Conventions, it is especially forbidden —
* * *
g. To destroy or seize the enemy’s property, unless such
destruction or seizure be imperatively demanded by the
necessities of war;
ARTICLE 28.
The pillage of a town or place, even when taken by
assault, is prohibited.
ARTICLE 46.
Family honour and rights, the lives of persons, and
private property, as well as religious convictions and practice,
must be respected.
Private property cannot be confiscated.
64a
Appendix G
ARTICLE 47.
Pillage is formally forbidden.
* * *
ARTICLE 52.
Requisitions in kind and services shall not be demanded
from municipalities or inhabitants except for the needs of
the army of occupation. They shall be in proportion to the
resources of the country, and of such a nature as not to involve
the population in the obligation of taking part in operations
of the war against their country.
Such requisitions and services shall only be demanded
on the authority of the commander in the locality occupied.
Contributions in kind shall as far as possible be paid for
in cash; if not, a receipt shall be given and the payment of
the amount due shall be made as soon as possible.
ARTICLE 53.
An army of occupation can only take possession of cash,
funds, and realizable securities which are strictly the property
of the State, depots of arms, means of transport, stores and
supplies, and, generally, all movable property belonging to
the State which may be used for operations of the war.
All appliances, whether on land, at sea, or in the air,
adapted for the transmission of news, or for the transport of
65a
Appendix G
persons or things, exclusive of cases governed by naval law,
depots of arms, and, generally, all kinds of ammunition of war,
may be seized, even if they belong to private individuals, but
must be restored and compensation fixed when peace is made.
* * *
ARTICLE 55.
The occupying State shall be regarded only as
administrator and usufructuary of public buildings, real
estate, forests, and agricultural estates belonging to the hostile
State, and situated in the occupied country. It must safeguard
the capital of these properties, and administer them in
accordance with the rules of usufruct.
ARTICLE 56.
The property of municipalities, that of institutions dedicated
to religion, charity and education, the arts and sciences, even
when State property, shall be treated as private property.
All seizure or destruction of, or wilful damage to,
institutitions of this character, historic monuments, works
of art and science, is forbidden, and should be made the
subject of legal proceedings.
~ * *
66a
Appendix G
U.S. WAR DEPARTMENT
(1940)
Rules of Land Warfare
»” x «
313. Destruction and seizure of. — It is especially
forbidden * * * to destroy or seize the enemy’s property,
unless such destruction or seizure be imperatively demanded
by the necessities of war (H.R., art. 23, par. (g)).
314. General rule as to war right to seize and destroy
property. — The rule is that in war a belligerent may destroy
or seize all property of whatever nature, public or private,
hostile or neutral, unless such property is specifically
protected by some definitive law of war, provided such
destruction or seizure is imperatively demanded by the
necessities of war.
318. Property of municipalities, etc. — The property of
municipalities. that of institutions dedicated to religion,
charity, and education, the arts and sciences, even when State
property, shall be treated as private property.
All seizures of, destruction, or willful damage done to
institutions of this character, historic monuments, works of
art, science, is forbidden and should be made the subject of
legal proceedings (H.R., art. 56).
* * *
67a
Appendix G
320. Movable property. — An army of occupation can
only take possession of cash_ funds, and realizable securities
which are strictly the propert: of the State, depots of arms,
means of transport, stores and supplies, and, generally, all
movable property belonging to the State which may be used
for military operations (H.R., art. 53, par. 1).
321. Two classes of movable property. — All movable
property belonging to the State directly susceptible of military
use may be taken possession of as booty and utilized for the
benefit of the invader’s government. Other movable property,
not directly susceptible of military use, must be respected
and cannot be appropriated.
322. Property of unknown ownership treated as public
property. — Where the ownership of property is unknown
— that is, where there is any doubt as to whether it is public
or private, as frequently happens — it should be treated as
public property until ownership is definitely settled.
PRIVATE PROPERTY
323. Must be respected — Private property * * * must
be respected (H.R., art. 46, par. 1).
324. Devastation. — The measure of permissible
devastation is found in the strict necessities of war. As an
end in itself, as a separate measure of war, devastation is not
sanctioned by the law of war. There must be some reasonably
close connection between the destruction of property and the
overcoming of the enemy’s army. Thus the rule requiring
respect for private property is not violated through damage
68a
Appendix G
resulting from operations, movements, or combats of the
army; that is, real estate may be utilized for marches, camp
sites, construction of trenches, etc. Buildings may be used
for shelter for troops, the sick and wounded, for animals, for
reconnaissance, cover defense, etc. Fences, woods, crops,
buildings, etc., may be demolished, cut down, and removed
to clear a field of fire, to construct bridges, to furnish fuel if
imperatively needed for the army.
* * *
326. Confiscation. — Private property cannot be
confiscated (H.R., art. 46, par. 2).
* * *
329. Pillage. — Pillage is formally forbidden (H.R.,
art. 47).
330. Seizure and devastation of private property. —
Private property can be seized only by way of military
necessity for the support or other benefit of the army or of
the occupant. All destruction of property not commanded by
the authorized officer, all pillage or sacking, even after taking
a town or place by assault, are prohibited under the penalty
of death or such other severe punishment as may seem
adequate to the gravity of the offense.
331. Private property susceptible of direct military
use. — All appliances, whether on land, at sea, or in the air,
adapted for the transmission of news, or for the transport of
persons or things, exclusive of cases governed by naval law,
69a
Appendix G
depots of arms, and, generally, all kinds of ammunition of
war, may be seized, even if they belong to private individuals,
but must be restored and compensation fixed when peace is
declared (H.R, art. 53, par. 2).
* * *
REQUISITIONS
335. Requisitions. — Requisitions in kind and services
shall not be demanded from municipalities or inhabitants
except for the needs of the army of occupation. They shall
be in proportion to the resources of the country, and of such
a nature as not to involve the inhabitants in the obligation of
taking part in military operations against their own country.
Such requisitions and services shall only be demanded
on the authority of the commander in the locality occupied.
Contributions in kind shall as far as possible be paid for
in cash; if not, a receipt shall be given and the payment of
the amount due shall be made as soon as possible (H.R.,
art. 52).
70a
Appendix G
2 International Law
(Department of the Army Pamphlet
27-161-2 (1962))
* * *
Ii], PROPERTY IN OCCUPIED AREAS
A. Military Commander’s Power Over Property in
Occupied Areas
The powers which a military commander may exercise
over property in enemy territory may be classified broadly
as destruction, confiscation, seizure, requisition, and control.
An analysis of the nature of each of these powers will
illustrate the lawful extent to which each may be exercised.
1. Destruction. Destruction is the partial or total damage
of property. Property of any type or ownership may be
damaged where such is necessary to, or results from, military
operations either during or preparatory to combat.
Destruction is forbidden except where there is some
reasonable connection between the destruction of the property
and the overcoming of the enemy army. Two treaties have
specifically laid down rules as to destruction, Article 23(g)
of the Hague Regulations, and Article 53 of the Geneva
Civilian Convention.
a. Article 23 (g), The Hague Regulations.
It is especially forbidden to destroy or seize the
enemy’s property, unless such destruction or seizure
be imperatively demanded by the necessities of war.
Tla
Appendix G
This rule covers all property in any territory involved in a
war, whether that property is in occupied territory or not,
and whether that property is publicly or privately owned.
Paragraph 56, FM 27-10, should be construed as illustrating
only a part of the destruction permissible under Art. 23(g),
H.R. The acts listed in paragraph 56, FM 27-10 apply to
hostilities or to invasion. However, they are not the direct
result of hostilities itself, such as damage from explosives
but are rather acts done incidental to or in preparation for
fighting (such as the use of real estate as a camp site, or as a
path of march, the use of buildings as forts or hospitals, the
demolition of crops, buildings, or roads in order to make a
landing strip, clear a field of fire, or furnish fuel). They
therefore furnish a guide to the permissible destruction in
occupied areas.” FM 27-10 offers further assistance to
permissible destruction in occupied areas by authorizing the
destruction of enemy fortifications and stores located in an
area which has surrendered.*°
Article 23(g) H.R. has been supplemented as far as
occupation is concerned by Art. 53 of the 1949 Geneva
Civilian Convention.
79. Para. 56 is the same as para. 324 of FM 27-10 (1940). It
was moved from the section on private property in occupied areas in
the 1940 edition to a spot in the 1956 edition more appropriate to
acts committed in actual combat.
80. FM 27-10, para. 41.
72a
Appendix G
2. Confiscation. Confiscation is the taking of enemy
public movable property without obligation to compensate
the State to which it belongs. The term only applies to public
property because H.R. Art. 46 specifically forbids the
confiscation of private property.®* It is further limited to
public movable property because H.R., Art. 55 permits the
Occupant to act only as an administrator and usufructuary of
public immovable property. The restrictions on confiscation
apply only to occupied areas and to the battlefield, not to the
domestic territory of the parties.
All enemy public movable property captured or found
on a battlefield may be confiscated.*° However, only certain
85. An exception is made to the rule that private property may
not be confiscated by permitting confiscation of certain items of
private property found on the battlefield (FM 27-10, para. 59 5).
With the depth and fluidity of modern battle zones it is sometimes
difficult to determine when an area becomes or ceases to be a
“battlefield” thereby increasing the danger that this exception may
partly undermine the Hague prohibition. Such private property is
called “booty of war.” See JAGW 1956/8332 (9 Nov. 1956 wherein
the opinion is expressed that Goering’s heavily armored car equipped
with bullet proof glass taken on the battlefield could be confiscated.
In JAGW 1957/5906 (15 July 1957) the question arose whether
or not expensive Hungarian horses now in the United States were
“found on the battlefield.” An extension of this idea of “booty” may
be observed in JAGA 1947/5986, JAGW 1957/2121, and JAGW
1957/1052, wherein the opinion is expressed that field marshals’
batons could be confiscated in cases where they were adorned with
swastikas and were generally symbolic of the Nazi Party.
86. FM 27-10, para. 59 a. Public property so found is also
termed “booty of war.” On “booty” generally see Freeman, “General
Note on the Law of War Booty,” 40 AJ// 795; and Smith, “Booty of
War,” 23 Brit. Year Bk. of IL 227 (1946).
73a
Appendix G
categories of public movable property may be confiscated in
~occupied areas. H.R., Art. 53(1) lists the items which can be
confiscated in occupied territory.
An army of occupation can only take
possession of cash, funds, and realizable securities -———
which are strictly the property of the State, depots
of arms, means of transport, stores and supplies,
and generally all movable property belonging to
the State which may be used for military operation.
Such public movable property need not be directly
usuable for military operations, as ammunition, but includes
property indirectly serving the same purpose. In modern total
war military value can be found in a great many items.
However, if the property cannot be used either directly or
indirectly for military operations it cannot be confiscated.
3. Seizure
a. [ts nature and limitations. Seizure is the taking
of certain types of enemy private movable property for use
of the capturing State. Such use is not confined to the needs
of the occupying army. Items seized may be employed outside
as well as within the occupied territory. The items seized
must be returned or compensation fixed when peace is made.
This is one of the principal differences between seizure and
confiscation.
The concept of seizure does not apply to public property
because movable public property of a military value may be
confiscated. Public immovable property can only be
administered, title remaining always in the enemy State.
74a
Appendix G
The concept also does not apply to private immovable
property. “Immovable private property may under no
circumstances be seized.’’*’ This general rule, which appears
absolute, is however modified in the case of railway plants,
port facilities, airfields, and telephone and telegraph plants,
all of which are closely connected with communication and
transportation systems.** ;
Article 53 (2), H.R. lists the types of private movable
property which may be seized. They are (1) appliances
adapted to the transmission of news; (2) transportation;
(3) depots of arms and all kinds of ammunition of war. The
seizure of this property is not based, as in the case of
requisitions, on the needs of the army of occupation but on
the danger of permitting property susceptible of direct
military use to remain at the disposal of private individuals.
Appliances adapted to the transmission of news include
cables, radios, television and telecommunications equipment.”
Appliances adapted as a means of transportation include
motor vehicles, railways, ships in port, barges and other
watercraft, and aircraft. |
Arms and munitions of war include all varieties of
military equipment, including that in the hands of
manufacturers, component parts of or material suitable only
87. FM 27-10, para. 407.
88. FM 27-10, para. 410 a.
89. Id.
75a
Appendix G
for use in the foregoing, and in general all kinds of war
materials.” It will be noted that many items that could be
extremely useful to a State at war are not included. Such
items in occupied areas are heavy industry not yet converted
to war production, crude oil, and other petroleum products.
Efforts to interpret broadly the term of the Hague Regulations
“ammunition of war” have not been successful.”' Private
property subject to seizure remains limited by the 1907 Hague
Regulations.
(b) Cases growing out of seizures in World War II.
(1) United States v. Krupp”
In the early part of 1941 the German High Command
instituted a new submarine building program, which was
participated in by the Krupp subsidiary of the Krupp Stahlban
in Reinhausen. One of the managers of this plant was sent to
France in the company of a naval officer of the Armament
Inspectorate of the Navy High Command in order to find
bending roll machines of greater dimensions than were
available at the Krupp plants. They immediately placed
“seized” signs upon the machines. The director of the
Alsthom plant objected on the ground that the machines were
the only ones suitable for the construction of boiler drums
90. Id.
91. See Lauterpacht, “Hague Regulations and the Seizure of
Munitions de Guerre,” 32 Brit. Year Bk. of IL 218 (1955).
92. 10 Law Reports of Trials of War Criminals, pp. 88, 89.,
IX Trials of War Criminals, pp. 1358-1361.
76a
Appendix G
and high pressure tubes. Neither had been used for military
purposes. The objections raised to the seizure were of no
avail and shortly afterwards the machines were dismantled
by Krupp workmen and carried off to Germany. They were
used in the submarine building program until the end of the
war when they were found and finally brought back to the
Alsthom plant. The removal and detention of those machines
was considered a violation of Article 46 of the Hague
Regulations.
(2) United States v. Flick et al” 2
Flick was the principal proprietor and active head of a
large group of industrial enterprises including coal and iron
mines and steel producing plants. He and some of his
associates were tried after World War II for the unlawful
seizure and exploitation of public and private property in
occupied territory. Excerpts from the judgement of the court
are as follows:
“. . Flick and his assistants Weiss, Burkart and Kaletsch
are accused of exploiting properties which for convenience
during the trial have been called Rombach in Lorraine;
Vairogs in Latvia; and Dnjepr Stahl [Dnepr Steel], in the
Ukraine. ...
93. VI Trials of War Criminals, pp. 1187-1123, at pp. 1202-
1212. Annual Digest 1947, pp. 266-274; IX LRTWC 1-59. See also
U.S. v. Krauch (1. G. Farben Inc.) VII] Trials of War Criminals
pp. 1128-1167 for the seizure of private chemical industries in
occupied areas.
77a
Appendix G
“Prior to the First World War when Lorraine was German,
a large plant was built by German capital near the town of
Rombach. After that war it was expropriated by France from
whom the title was acquired by a French corporation
dominated by the Laurent family. The enterprise consisted
in 1940 principally of blast furnaces, Thomas works, rolling
mills and cement works. . .. When the German Army invaded
Lorraine in 1940, the management fled but many of the
workers including technicians remained. . . . In any event a
public commissioner or administrator was appointed for the
Rombach plant and ultimately executed a contract with the
Friedrich Flick Kommanditgesellschaft called ‘use of
enterprise conveyance agreement’ dated 15 December 1942
but effective as of 1 March 1941 when the Flick group took
possession. . . . Flick, had the hope of ultimately acquiring
title to the respective properties and this trusteeship was sought
to that end. . . .Atno time, however, was there any definite sale
commitment and of course the hope of its realization was
frustrated by the fortunes of war.... A corporation called
Rombacher Huettenwerke, G.m.b.H, was organized by Flick
to operate the plant.... All the profits were invested in
repairs, improvements and new installations. ... The
evidence satisfied us that the trustee left the properties in
better condition than when they were taken over... .
“The seizure of Rombach in the first instance may be
defended upon the ground of military necessity. The
possibility of its use by the French, the absence of responsible
management and the need for finding work for the idle
population are all factors that the German authorities may
have taken into consideration. Military necessity is a broad
term. Its interpretation involves the exercise of some
—
78a
Appendix G
discretion. If after seizure the German authorities had treated
their possession as conservatory for the rightful owners’
interest, little fault could be found with the subsequent
conduct of those in possession.
“ .. Flick saw the possibilities resulting from the
invasion and sought to add the Rombach property to his
concern. But governmental policy was otherwise. It does not
appear upon what grounds this decision was based. There
may have been thought of the Hague Regulations under which
private property must be respected and cannot be confiscated.
But we recall no hint in the evidence that Flick or his
associates gave any thought to the international law affecting
the transaction. The Flick management of Rombach was
conservative, not, however, with the intent of benefiting the
French owners. . . . His expectation of ownership caused him
to plow back into the physical property the profits of
operation. ...
* * * * * * * * * * * * * * * * *
“While the original seizure may not have been unlawful,
its subsequent detention from the rightful owners was
wrongful. For this and other damage they may be
compensated... .
“.. In this case Flick’s acts and conduct contributed to
a violation of Hague Regulation 46 that is, that private
property must be respected. Of this there can be no doubt.
But his acts were not within his knowledge intended to
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79a
Appendix G
contribute to a program of ‘systematic plunder’ conceived
by the Hitler regime and for which many of the major war
criminal have been punished. . . .
“... They [Hague Regulations] were written in a day
when armies traveled on foot, in horse-drawn vehicles and
on railroad trains; the automobile was in its Ford model-T
stage. Use of the airplane as an instrument of war was merely
a dream. The atomic bomb was beyond the realms of
imagination. Concentration of industry into huge
organizations transcending national boundaries had barely
begun. Blockades were the principal means of ‘economic
warfare.’ ‘Total warfare’ only became a reality in the recent
conflict. These developments make plain the necessity of
appraising the conduct of defendants with relation to the
circumstances and conditions of their environment. Guilt,
or the extent thereof, may not be determined theoretically,
or abstractly. Reasonable and practical standards must be
considered.
“... The Tribunal will find defendant Flick guilty in
respect to the Rombach matter but will take fully into
consideration in fixing his punishment all the circumstances
under which he acted.
“Vairogs and Dnjepr Stahl have similar factual situations.
The former was a railroad car and engine factory in Riga,
once owned by a Flick subsidiary, sold to the Latvian State
about 1936 and expropriated in 1940 as the property of the
Soviet Government. Dnjepr Stahl was a large industrial group
——
80a
Appendix G
— three foundries, two tube plants, a rolling mill, and
machine factory — also owned by the Russian Government.
These plants had been stripped of usuable movables when
the Russian Army retreated eastward and further steps had
been taken to render them useless to the Germans. Dnjepr
Stahl particularly had been largely dismantled and
immovables seriously damaged or destroyed. Over one
million Reichsmarks of German funds at Vairogs and
20 million at Dnjepr Stahl were spent in reactivating the
plants. They were in the possession of Flick subsidiary
companies as trustees, the former for less than 2 years,
beginning in October 1942, the latter for the first 8 months
of 1943.
*... When the German civilians departed all plants were
undamaged and in the absence of evidence to the contrary
we may assume so remained when the Russians returned.
“The only activity of the individual defendants in respect
to these industries was in negotiating the procurement of
trustee contracts. ...
“These activities stand on a different legal basis from
those at Rombach. Both properties belonged to the Soviet
Government.
The Dnjepr Stahl! plant had been used for armament
production by the Russians. The other was devoted
principally to production of railroad cars and equipment.
No single one of the Hague Regulations above quoted is
exactly in point, but, adopting the method used by IMT, we
deduce from all of them, considered as a whole, the principle
oe mary:
SS
8la
Appendix G
that state-owned property of this character may be seized
and operated for the benefit of the belligerent occupant for
the duration of the occupancy. The attempt of the German
Government to seize them as the property of the Reich of
course was not effective. Title was not acquired nor could it
be conveyed by the German Government. The occupant,
however, had a usufructuary privilege. Property which the
government itself could have operated for its benefit could
also legally be operated by a trustee. We regard as immaterial
Flick’s purpose ultimately to acquire title. To covet is a sin
under the Decalogue but not a violation of the Hague
Regulations nor a war crime. We have already expressed our
views as to the evacuation of movables from these plants.
Weiss congratulated the manager of Vairogs upon his success
in moving out machinery and equipment. In this we see
nothing incriminating since Weiss neither had nor attempted
to exercise any control of the evacuation and learned of it
only after it was accomplished. We conclude, therefore, that
there was no criminal offence for which any of the defendants
may be punished in connection with Vairogs and Dnjepr
Stahl.”
(3) Singapore Oil Stocks.°* When the Japanese
occupied the Netherlands East Indies in 1942 they seized
the crude oil stocks of private oil companies. This oil, which
had to be pumped out of the ground and refined, was
transferred out of the occupied area and used to further the
Japanese war efforts in other parts of Asia. After the war,
some of this refined oil was found stored in Singapore. The
94. N.V. De Bataafsche Petroleum Maatschappli and Ors. v.
The War Damage Commission, reproduced in 51 American Journal
of International Law 802 (1957).
82a
Appendix G
British confiscated it as “booty of war.” The private oil
companies contested this act on the part of Britain on the
ground that the Japanese had no title to this on which the
British could obtain. The Court concluded as follows:
“The seizure of the oil resources of the Netherlands
Indies was economic plunder, the crude oil in the ground
was not a ‘munitions-de-guerre.’ The court also held that
any Netherlands Indies law which operated to vest title in
the refiner, here the Japanese could not purge the Japanese
of their original violation of the Hague Regulations.
Therefore judgment was given to the private owners.
4. Requisition. Requisition is the method of taking
private enemy movable and immovable property for the needs
of the army of occupation. It differs from seizure in four
respects. (a) The items taken by requisition may be used only
in the occupied territory. (b) Practically everything may be
requisitioned that is necessary for the day-to-day maintenance
of the army of occupation. The power to requisition is not
limited to certain classes of property as is seizure. (c) Private
immovable as well as private movable property may be
requisitioned. Only private movable property may be seized.
(d) The owners are to be compensated as soon as possible.
They do not have to wait for the restoration of peace.”
* * *
5. Control. All property within occupied territory may
be controlled by the occupant to the degree necessary to
95. H.R., Art. 52, and GC Art. 55, define the powers of the
occupation authorities in regard to requisitions.
ee
83a
Appendix G
prevent its use for the benefit of the enemy or in a manner
harmful to the occupant.'®' Property control is temporary in
nature. The property must be returned to the owners when
the reason for the control no longer exists. Therefore, the
control must not extend to confiscation, whether such
confiscation is accomplished by outright taking, or by subtler
methods such as forced sales and depletion.
Control may also be exercised over property of unknown
ownership or over property of individuals who are not present
to care for it themselves.
The authority of the occupant to impose such controls
does not limit its power to confiscate, seize or requisition
certain property. The power to control is broader than these
three concepts.'”
101. FM 27-10, para. 399.
102. See Military Government Law No. 52. “Blocking and
Control of Property,” (Military Government Gazette, Germany, | June
1946, pp. 24-27) for a comprehensive attempt to control property
transactions in an occupied area. German Supreme Court held on 24
June 1957 that MG Law 52 was designed to protect the property
interests of the owner as well as the security of the occupant (Case
digested in 63 Am. J. Int'l L. 457 (1957)).
84a
Appendix G
President Truman’s message of July 9, 1951
(1951 U.S.C.C.A.N. 2358-2359)
Furthermore, it is not intended that the termination of the
state of war shall in any way change or alter the program,
which Congress has authorized, of seizing, under the Trading
With the Enemy Act, German property in this country on or
before December 31, 1946, and using the proceeds to pay
just and legitimate claims arising from the war in accordance
with the War Claims Act of 1948. The vesting of German
property under this program does not extend to property
acquired since the resumption of trade with Germany on
January 1, 1947, following the cessation of hostilities. It is
limited to German property and rights located here before or
during the period of hostilities.
Most of this German property has already been identified
and vested. This Government does not intend to embark on
any new program in this field. However, some of the property
already subject to vesting [since it was in the United States
before December 31, 1946] is believed to be cloaked or
hidden and not yet discovered, and some is still under
examination or subject to legal proceedings. Most of the
property remaining unvested is involved in problems of
conflicting jurisdiction between this and other governments,
which are in the process of settlement by negotiation under
authority of legislation which was enacted in September of
last year.
Should the vesting power lapse immediately, this Government
would find it difficult to wind up this program in an orderly
way, or to carry out its commitments for the equitable
85a
Appendix G
settlement of intergovernmental differences relating to
enemy property.
Completion of the vesting of wartime enemy property, even
after the conclusion of peace, is commonly accepted practice
in connection with the settlement of claims between the
nations which were at war. Our peace treaties with Bulgaria,
Hungary, Rumania, and Italy all authorize the continued
vesting and retention of such property.
In the absence of treaty provisions, however, there may be
legal obstacles to the continued vesting of German property,
after the termination of the state of war, unless there are
changes in our existing statutes. According to the terms of
the Trading With the Enemy Act, many of its powers expire
at the ‘end of the war,” a phrase which the act defines to
mean the date of proclaiming the exchange of ratifications
of a treaty of peace, or an earlier date fixed by Presidential
proclamation. There is some doubt that the vesting powers
of the Trading With the Enemy Act can be exercised after
the termination of the state of war, unless expressly provided
for in new legislation.
This doubt should be eliminated, and it should be made clear
that the Congress intends the vesting of German property
for the purpose of paying war claims to continue.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.