Opposition Brief — Hoffmann v. United States

Supreme Court brief2002

Ask Donna

What actually matters in this document.

Text

No. O1-1111

Jn the Supreme Court of the Cited States

ROBERT H. HOFFMANN, ET AL., PETITIONERS

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

THEODORE B. OLSON

Solicitor General

Counsel of Record

ROBERT D. MCCALLUM, JR.

Assistant Attorney General

WILLIAM KANTER

HOWARD S. SCHER

Attorneys

Department of Justice

Washington, D.C. 20580-0001

(202) 514-2217

QUESTION PRESENTED

Whether petitioners may assert any valid claim

against the United States with respect to paintings by

Adolf Hitler and a photographic archive that were

owned by one of Hitler’s associates and seized in Ger-

many at the end of World War II.

(I)

ST eens be om eee

TABLE OF CONTENTS

Page

Opinions below ........scssssssssseesersesssecseesssnsessenensesensensnsessssessscessenseeess l

rh scestanpenninteigilinaneisineneousenannnnetye 1

I= ssieslebpanceneaenesnenemeneneuventatetumestnaenrecmeneueenenenet 2

ATZUMENL ...00cececerererorsrseereccveveecoveersrereresoresesenesrsssesesssrecsesescscssoreseres 8

EE Lo .csuusntadentensnnrenabemanentteonmeneinecencennitnent 16

TABLE OF AUTHORITIES

Cases:

Brown v. Felsen, 442 U.S. 127 (1979) ......cccccccseceeereeereereees 15

Cities Serv. Co. v. McGrath, 342 U.S. 330

a 13

Guessefeldt v. McGrath, 342 U.S. 308 (1952) .......ceceeeeees 8,9

™ Johnson v. Eisentrager, 339 U.S. 763 (1950) «0.0... \

N.V. Handelsbureau La Mola v. Kennedy, 299 F.2d

923 (D.C. Cir.), cert. denied, 370 U.S. 940 (1962) ............. 12

Price v. United States, 707 F. Supp. 1465 (S.D. Tex.

1989), rev’d, 69 F.3d 46, modified on reh’g, 81 F.3d

520 (5th Cir. 1995), cert. denied, 519 U.S. 927 (1996) ...... mF

4,5,8,9, 15

Radzanower v. Touche Ross & Co., 426 U.S. 148

a 10

Russian Volunteer Fleet v. United States, 282 U.S.

I III D <ccsnscencuensuntenentioonsentenehestunimeeniveretecnenstnneiertemrevemnenapeess 8,9

Uebersee Finanz-Korporation, A.G. v. McGrath, =

BE Oe I CD cccenescenccseninersinetnsccentecseneenececonsrennetomensenven 12

United States v. Hohri, 482 U.S. 64 (1987) .....:ccccccceesseees 15

United States v. Shannon, 342 U.S. 288 (1952) ......ccec0+ 14

United States v. Verdugo-Urquidez, 494 U.S. 259

STITT aooscilsderchaiseurtetechencennbsesouvesvetonateiarsisiammbenicenontmmiearemrensnsttenens 8,9

(111)

Constitution, treaty and statutes: Page

U.S. Const.:

PAY cctictecsnstneennmannmerenmiemninninnmnisasininninianiins 5,8

CD ccetatseicnittcieinnitinininiindeininimadgunitaintitl 5

Convention on the Settlement of Matters Arising

Out of the War and the Occupation, Oct. 23, 1954,

ein. Sly cet IN ME ilaicietennicnitacstnennneienipdintetin 10

Anti-Assignment Act, 31 U.S.C. 3727 oo... ccccccccseseeceseseseeees 5,14

Se ea TED cccsesintcsiedtahehiaieieansipaianinieimnniipgiaiahiaes 14

Be es SIE. sanstansdesecenisetibuassiictinteennincnnndennisaiseiieeninoenite 14

Federal Tort Claims Act:

SEPT ats MITE cicciiassisneeaadiaciaaeniniibiidiltanisieataniasipineidieniidsbaibanainiias 3

Be eels SIE scisicichtcnectocesenaunnsnieneaiialiahaiihanemiaaneeccionpienircinnes 3,4

Si TPIT UIT crsdaresiess ania dbeteedacisgegeietmaeanilaciiadanlanentnnieaians 3,4

H.R.J. Res. 289, 82d Cong., Ist Sess., 65 Stat. 451

SS UTIED -aisnscatcisnedietcecibieiadiarbianabdanmen eabaeaiadininneeianneiiasnivanianeiiiiieans 13

Little Tucker Act, 28 U.S.C. 1346(a)(2) ........cccecccesseeseeeeees 3,5 |

Trading with the Enemy Act, 50 U.S.C. App. 1 et seq.:

ee ree BRI MID cicesicncnsscsrernstestntipiansinceciensinininntnnsihinmes 13

Ba es FN, CITE cecsicsneesssiniccobneunionncenisseceensetenteniinnts 13

Beer ek: SE I ceinerissensrnnnsvessaninnsiainienniotinmmncasiniientan 12

Be CA FI GE cccseresciccentcsnininesstatnininerantnamtesnnnsinnh 2

Be ee BI GOD siarrecccninscsennsitrneninintsanenniendconinncamiinss 2

a ee an IIE siisiellonicctchetibceevamnininamastanstieintateongbilanetiitiaintanieasicniniieia 7,9

Miscellaneous:

3 Charles Bevans, Treaties and Other International

Agreements of the United States of America 1776-

1949 (Yalta and Potsdam Conferences) ..........csessseeeeees 11

Vesting Order No. 17,952, 16 Fed. Reg. 6162 (1951) ..........

Office of Military Government for the United States,

Military Government Regulations, Monuments,

Fine Arts and Archives (1947) .........ccccccscccocscscccsscccssecsessees 11

Jn the Supreme Court of the Anited States

No. 01-1111

ROBERT H. HOFFMANN, ET AL., PETITIONERS

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

\\ | OPINIONS BELOW

Thelop nion of the court of appeals (Pet. App. 5a-22a)

is not reported in the Federal Reporter, but is pub-

lished at 17 Fed. Appx. 980. The opinion of the court of

appeals on rehearing (Pet. App. la-4a) is unreported.

The memorandum opinion of the United States District

Court for the District of Columbia (Pet. App. 23a-49a) is

reported at 53 F. Supp. 2d 483. The opinion of the

United States District Court for the Southern District

of Texas (Pet. App. 52a-57a) is unreported.

JURISDICTION

The judgment of the/court of appeals was entered on

August 16, 2001. A petition for rehearing was denied

on November 6, 2001 (Pet. App. 4a). The petition for a

writ of certiorari was filed on January 29, 2002. The

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

(1)

STATEMENT

1. This case involves claims with respect to four

watercolors painted by Adolf Hitler, which were ac-

quired from him by his personal photographer, Heinrich

Hoffmann, and to a photographic archive compiled by

Hoffmann and his son, which contains images from the

Third Reich. The claims relate both to an archive that

was vested in the United States in 1951 (the “vested”

archive) and to an additional archive that petitioners

allege is in the United States’ possession (the “missing”

or “non-vested” archive). See Pet. App. 8a, 24a-29a;

Price v. United States, 69 F.3d 46, 48-50, modified on

reh’g, 81 F.3d 520 (5th Cir. 1995), cert. denied, 519 U.S.

927 (1996).

At the end of World War II, the United States Army

discovered the watercolors and photographic archive in

Germany, and took possession of them. The water-

colors were transferred to the United States in 1945.

The photographic archive was used during the Nurem-

berg War Crimes Trials. In 1951, the United States

Office of Alien Property vested ownership of the

archive in the Attorney General pursuant to the

Trading with the Enemy Act, 50 U.S.C. App. 41, 42.

Vesting Order No. 17,952, 16 Fed. Reg. 6162 (1951)

(Vesting Order). See Pet. App. 8a; Price, 69 F.3d at

48-52, 54.

The plaintiffs below, and petitioners here, are five

citizens and residents of Germany, who claim to be the

heirs of Hoffmann and the owners of the watercolors

! Petitioners relinquished their claims against the United

States with respect to a distinct Hoffmann archive given to the

United States in the early 1980s by Time-Life Inc. See Pet. App.

lla, 50a-5la. Consequently, this brief will not describe the lower

courts’ rulings with respect to that archive.

and photographic archive, and Billy F. Price, an Ameri-

can businessman who claims to have purchased the

legal rights to those properties from Hoffmann’s heirs.

See Pet. App. 5a-6a; Price, 69 F.3d at 48-50.

2. In 1983, petitioners filed their original complaint

in the United States District Court for the Southern

District of Texas, seeking the return of the watercolors

and the photographic archive or, in the alternative,

money damages for their conversion. They proffered

two bases for the government’s waiver of sovereign

immunity—the Federal Tort Claims Act (FTCA), 28

U.S.C. 2674, 2680(e) and (k), based on the tort of con-

version, and the Little Tucker Act, 28 U.S.C. 1346(a)(2),

based on a violation of an implied contract of bailment.

See Price v. United States, 707 F. Supp. 1465, 1468-1473

(S.D. Tex. 1989), rev’d, 69 F.3d 46 (5th Cir. 1995).

The district court held, based on a tort theory, that

the United States retained the properties for nearly 40

years in bailment for petitioners and wrongfully con-

verted the properties in 1982 by refusing petitioners’

request to return them. The court awarded petitioners

nearly $8 million in damages. See Price, 69 F.3d at 49;

C.A. App. 46 (docket entry 142).

3. The Court of Appeals for the Fifth Circuit re-

versed. Price, 69 F.3d at 49-54.”

The court of appeals held that it had subject-matter

jurisdiction over the case, because petitioners were

2 The government filed simultaneous notices of appeal in the

Fifth Circuit and the Federal Circuit, because it was uncertain

whether the district court’s decision had been based in whole or in

part on the Little Tucker Act, 28 U.S.C. 1346(a)(2). After deter-

mining that the district court’s decision had not been based on the

Little Tucker Act, the government moved the Federal Circuit to

stay its proceedings. The Federal Circuit dismissed the appeal

without prejudice.

asserting only tort claims under the FTCA, and not

contract claims under the Little Tucker Act. Price, 69

F.3d at 49-50. The court noted that, “[a]lthough [peti-

tioners] pressed several theories of recovery in [the]

original complaint, [petitioners’] position before us is

that the United States converted the watercolors and

archives when they refused |petitioners’] demands for

their return in the early 1980s.” Jd. at 49.

The court of appeals dismissed with prejudice peti-

tioners’ conversion claim with respect to the water-

colors. The court explained that the claim was based

upon an alleged conversion that occurred in Germany.

Accordingly, the court concluded that the claim was

barred by 28 U.S.C. 2680(k), the “foreign country” ex-

ception to the FTCA’s waiver of sovereign immunity.

See Price, 69 F.3d at 50-52.

The court of appeals also dismissed with prejudice

petitioners’ claim with respect to the “vested” archive.

The court explained that the Vesting Order was issued

pursuant to the Trading with the Enemy Act. The

court concluded that, because 28 U.S.C. 2680(e) pro-

vides an exception to the FTCA for acts and omissions

of government employees under the Trading with the

Enemy Act, petitioners’ claim was “outside of the

subject matter jurisdiction of the district court.” The

court observed that petitioners’ exclusive remedy for

the recovery of the “vested” archive was under the

Trading with the Enemy Act, but that the two-year

period for filing a claim under the Act had long since

expired. See Price, 69 F.3d at 52-53.

On rehearing, the court of appeals dismissed without

prejudice petitioners’ claim with respect to the “mis-

sing,” or “non-vested,” archive because petitioners had

failed to file an administrative claim under the FTCA.

The court stated that all arguments with respect to that

archive could be considered in a separate suit by

petitioners that was pending in the district court. See

Price, 81 F.3d at 521.

Petitioners filed a petition for a writ of certiorari

challenging the Fifth Circuit’s decision. This Court

denied the petition. Price v. United States, 519 U.S.

927 (1996).

4. Subsequently, in the separate suit, the district

court concluded that Price’s interest in the properties

was based on an alleged assignment that was invalid

under the Anti-Assignment Act, 31 U.S.C. 3727, be-

cause “Price was not the owner of the property at issue

at the time the United States assumed possession and

control.” Pet. App. 54a. Accordingly, the court con-

cluded that Price was not a proper plaintiff, and that

venue was not proper in Texas. Jd. at 55a-56a. The

court dismissed Price, denied all remaining motions

without prejudice, and transferred the case to the

United States District Court for the District of

Columbia. /d. at 56a, 57a.

5. After the transfer, the district court granted the

government’s motion for summary judgment in all

respects relevant here. The court held that petitioners

could not assert a claim under the Little Tucker Act, 28

U.S.C. 1346(a)(2), because no evidence had been pre-

sented of an implied-in-fact contract of bailment be-

tween petitioners and the government. Pet. App. 3la-

37a. The court also held that petitioners could not

assert a claim under the Takings Clause, because the

Hoffmann heirs, as non-resident aliens, were not en-

titled to the protections of the Fifth Amendment in the

circumstances presented here. /d. at 37a-39a. The

court further held that petitioners had no basis for re-

covery under the FTCA or the Trading with the

Enemy Act. Jd. at 39a-48a. Subsequently, the court

entered judgment in favor of the government. /d. at

50a-5la. ;

6. The United States Court of Appeals for the

Federal Circuit affirmed in substantial part. Pet. App.

5a-22a.”

The court of appeals declined to consider petitioners’

challenge to Price’s dismissal from the case because

petitioners had failed to preserve the issue for appeal.

The court explained that “[o}nce 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.” Pet. App. 12a. The court noted

that petitioners had made no such motion. /d. at 13a.

The court of appeals held that summary judgment

was properly granted with respect to petitioners’ claim

under the Little Tucker Act that the government had

breached an implied-in-fact contract of bailment with

respect to the watercolors. Pet. App. 14a-l6a. The

court rejected petitioners’ contention that the Army’s

conduct with respect to the watercolors demonstrated

the existence of such a contract, observing that peti-

tioners had failed “to allege that an official with

authority actually bound the United States to return

3 The court of appeals concluded that it had subject-matter

jurisdiction over the appeal, because petitioners had asserted

claims under the Little Tucker Act as well as the FTCA. Pet. App.

lla-12a. Petitioners had filed notices of appeal to the Fifth Circuit,

the District of Columbia Circuit, and the Federal Circuit, chal-

lenging the Texas district court’s transfer order and the District of

Columbia district court’s summary judgment decision and final

judgment. The Fifth Circuit dismissed the appeal. The District of

Columbia Circuit stayed proceedings pending the disposition of the

appeal in the Federal Circuit and then dismissed the appeal after

the Federal Circuit issued its decision on rehearing.

the paintings.” Jd. at 15a. In addition, the court ob-

served that the Army had returned other art belonging

to the Hoffmanns at about the same time that the

watercolors were confiscated, and concluded that such

“divergent conduct indicates, if anything, an intent not

to return the watercolors.” Jd. at 16a.

The court of appeals held that summary judgment

was also proper With respect to petitioners’ claim that

the government had breached a contract of bailment

with respect to the “vested” archive. The court rea-

soned that, even if such a contract was created, any

claim based on it was barred under the Little Tucker

Act’s six-year statute of limitations, 28 U.S.C. 2401(a).

Pet. App. 16a-18a. The court explained that “[a]ny bail-

ment contract that might have been created with

respect to the vested portion of tne archive plainly was

breached in 1951 by the vesting order.” Jd. at 17a. The

court rejected petitioners’ challenge to the validity of

the Vesting Order, concluding that such a challenge

was barred by the res judicata effect of the Fifth Cir-

cuit’s decision. Jd. at 18a.

Finally, with respect to the “missing” archive, the

court of appeals found the facts sufficiently in dispute to

preclude a summary judgment disposition. Pet. App.

19a-22a. The court observed that, even if an implied

contract of bailment could be found to have existed,

petitioners’ claim appeared to be barred by the statute

of limitations, and directed the district court to consider

that issue on remand. /d. at 2la-22a. In denying the

government’s petition for rehearing, the court clarified

that all of the government’s defenses with respect to

the “missing” archive were open for consideration on

remand. See id. at la-3a.

ARGUMENT

The decision of the court of appeals is correct, does

not conflict with any decision of this Court or any other

court of appeals, and turns on the unique facts of this

case. This Court declined to review an earlier version of

this ease. Price v. United States, 519 U.S. 927 (1996).

The same result is warranted here.

1. Petitioners contend (Pet. 14-17) that the court of

appeals erred in holding that the Hoffmann heirs, as

non-resident aliens, could not assert a Takings Clause

claim against the United States in the circumstances of

this case. This Court has recognized, however, that Bill

of Rights protections do not apply when the United

States acts outside its territory with respect to aliens

who have no connection to this country. See, ¢.g.,

United States v. Verdugo-Urquidez, 494 U.S. 259 (1990)

(Fourth Amendment does not apply to a search and

seizure of property owned by a non-resident alien and

located outside the United States); Johnson v. Eisen-

trager, 339 U.S. 763 (1950) (Fifth Amendment right to

due process does not apply to non-resident © ‘ens

arrested and imprisoned abroad). Nothine .1 this

Court’s decisions provides any reason to dis. ..guish, as

petitioners suggest (Pet. 15), between non-resident

aliens’ personal rights and property rights with respect

to the extraterritorial application of the Bill of Rights.

Nor do this Court’s decisions in Guessefeldt v. Mc-

Grath, 342 U.S. 308 (1952), and Russian Volunteer

Fleet v. United States, 282 U.S. 481 (1931), provide any

support for petitioners. Those cases involved aliens and

property with connections to the United States that are

absent here. In Guessefeldt, the petitioner, although a

German citizen, had lived in the United States for more

than 50 years; the Court held that the mere fact that he

was detained in Germany while vacationing there at the

outset of World War II did not prevent him from

challenging a seizure of his property in the United

States under the Trading with the Enemy Act. See 342

U.S. at 310-311, 320. In Russian Volunteer Fleet, the

petitioner, through its predecessor in interest, had

entered into a contract with a United States company

for the construction of ships in the United States. See

282 U.S. at 487; Pet. Br. 2-3 in Russian Volunteer Fleet,

supra. Thus, as the Court has explained, such cases

“establish only that aliens receive constitutional pro-

tections when they have come within the territory of

the United States and developed substantial connec-

tions with this country.” Verdugo-Urquidez, 494 U.S.

at 271. The Hoffmann heirs do not satisfy that descrip-

tion.

Petitioners attempt to avoid the distinction recog-

nized in Verdugo-Urquidez between the rights of re-

sident aliens and the rights of non-resident aliens by

arguing (Pet. 15) that this case involves “property that

is physically located within the United States.” There

is no reason, in law or logic, to conclude that the Hoff-

mann heirs, although non-resident aliens, became

vested with constitutional rights merely because the

properties, which the United States seized in Germany,

were eventually transferred to the United States. See

Price, 69 F.3d at 50-52 (recognizing that any conversion

of the watercolors occurred in Germany); accord Pet.

App. 15a-16a.

2. Petitioners next contend (Pet. 17-20) that the

court of appeals erred in holding that the Little Tucker

Act’s six-year statute of limitations, 28 U.S.C. 2401(a),

barred their claim to the “vested” archive because “a

statute of limitations does not exist when a thief is in

litigation over the stolen property with his victim.”

Pet. 17 (capitalization omitted). Petitioners’ argument

rests on the erroneous premise that international

law, specifically the “Hague Treaties,” prohibited the

United States from acquiring title to property seized in

Germany during World War II.

In the first place, petitioners’ argument cannot be

reconciled with the Convention on the Settlement of

Matters Arising Out of the War and the Occupation

(Settlement Convention), Oct. 23, 1954, 6 U.S.T. 4411,

T.LA.S. No. 3425. In the Settlement Convention, Ger-

many waived “claims of any kind” of its nationals

“arising out of acts or omissions * * * which took

place in respect of Germany, German nationals or

German property” between June 5, 1945, and October

23, 1954. Gov’t C.A. Addendum 22a (ch. 9, art. 3, para. 2

of Settlement Convention). The Settlement Convention

supersedes any general principles of law on which

petitioners purport to rely. Cf. Radzanower v. Touche

Ross & Co., 426 U.S. 148 (1976) (specific statute con-

trols over general).

Moreover, the Settlement Convention and the Hague

Treaties address different subjects. The Settlement

Convention addresses the resolution of claims arising

out of “actions taken or authorized” as a result of the

“existence of a state of war in Europe” or the sub-

sequent occupation. Gov’t C.A. Addendum 21a-22a (ch.

9, arts. 1 and 3 of Settlement Convention). The Hague

Treaties address the conduct of war. The Hague

Treaties do not prescribe what arrangements two

nations formerly at war with each other may agree to in

establishing a new peacetime relationship.

Finally, petitioners are incorrect in characterizing

the United States as a common “thief” with respect to

the watercolors and the photographic archive. The

United States, in acquiring those properties, was

making quintessential public policy decisions. The

properties at issue were, and are, considered to be

“Nazi Art,” which the United States and its allies,

pursuant to international agreements at the Yalta and

Potsdam Conferences, determined should be confis-

cated in order to “denazify” Germany. See 3 Charles

Bevans, Treaties and Other International Agreements

of the United States of America 1776-1949, at 1005

(Yalta Conference), 1207 (Potsdam Conference). The

United States’ seizure of the properties fell within the

scope of the Military Government Regulation imple-

menting those international agreements. See Office of

Military Government for the United States, Military

Government Regulations, Monuments, Fine Arts and

Archives § 18-401.6 (1947) (authorizing seizure of “(alll

collections of works of art or other cultural objects the

intent and purpose of which are the perpetuation of

Militarism or Nazism”). The subsequent vesting of the

photographic archive was the result of the same public

policy judgments. See, eg., C.A. App. 1867-1868

(government letter of May 10, 1951, stating, inter alia,

that the Hoffmann photographic archive fell within the

purview of Potsdam Agreement and consequently

should be vested).

3. Petitioners further contend (Pet. 21-25) that the

court of appeals erred in holding that they had failed to

challenge the Vesting Order, which was issued in 1951,

within the two-year limitations period provided under

the Trading with the Enemy Act. According to peti-

tioners, the statute of limitations did not begin to run

until 1989, when petitioners claim to have first learned

of the Vesting Order. As the court of appeals con-

cluded, however, petitioners’ claim is barred by res

judicata, because they had a “full and fair opportunity

to litigate th[e] exact issue in the first action” in the

Fifth Circuit. Pet. App. 18a. -

In any event, petitioners’ contention (Pet. 25) that

they did not learn of the Vesting Order until 1989 is

factually incorrect. Henriette Hoffmann was told of the

vesting in 1964. See C.A. App. 2207; see also C.A. App.

2205, 2211, 2265-2272. And, in 1983, the General Ser-

vices Administration denied petitioners’ request to

return the photographic archive, stating that, pursuant

to the Vesting Order, the United States owned the

archive and the interests of all German nationals in the

archive had been divested. See C.A. App. 2228-2229,

2245-2246, 2263-2264. Thus, even if the 1951 Federal

(which it was not), petitioners had only until 1985, at

the latest, to file a challenge to the Vesting Order under

the Trading with the Enemy Act. They failed to do so.

Moreover, petitioners, as “enemies” of the United

States under the Trading with the Enemy Act at the

time that the properties were seized and vested, are not

entitled to challenge the Vesting Order. See 50 U.S.C.

App. 9(a) (allowing suit for recovery of assets seized

under the Act by “[a]ny person not an enemy or ally of

[an] enemy”); Uebersee Finanz-Korporation, A.G. v.

McGrath, 343 U.S. 205 (1952); see also N.V. Handels-

bureau La Mola v. Kennedy, 299 F.2d 923, 926-927

(D.C. Cir.) (enemy status of Germany nationals did not

end until Oct. 19, 1951), cert. denied, 370 U.S. 940

(1962).

Finally, even if petitioners could challenge the

Vesting Order, the challenge would fail on the merits.

Petitioners suggest (Pet. 21-22) that no vesting order

could validly have issued with respect to German prop-

erty after January 1, 1947, when trade resumed be-

tween Germany and the United States. That argument

cannot be reconciled with the relevant statutory

authority. Under the Trading with the Enemy Act,

enemy property may be vested in the United States

“(djuring the time of war,” 50 U.S.C. App. 5(b)(1)—a

period beginning at “midnight ending the day on which

Congress has declared or shall declare war” and ending

on “the date of proclamation of exchange of ratifications

of the treaty of peace, unless the President shall, by

proclamation, declare a prior date,” 50 U.S.C. App. 2(c).

Although there is still no treaty of peace with Germany,

Congress passed the Termination of the State of War

Between the United States and Germany on October

19, 1951, providing that:

any property or interest which prior to January 1,

1947, was subject to vesting * * *, or which has

heretofore been vested or seized under [the Trading

with the Enemy Act] * * * shall continue to be

subject to the provisions of that Act in the same

manner and to the same extent as if this resolution

had not been adopted and such proclamation had not

been issued. Nothing herein and nothing in such

proclamation shall alter the status, as it existed

immediately prior hereto, under that Act, of Ger-

many or of any person with respect to any such

property or interest.

H.R.J. Res. 289, 82d Cong., Ist Sess., 65 Stat. 451 (1951)

(emphasis added). Thus, property vested before the

termination of war on October 19, 1951—which includes

property subject to the Vesting Order at issue here,

which was dated May 31, 1951—was validly vested.’

4 Contrary to petitioners’ assertion (Pet. 21), vesting authority

applies to property both inside and outside the boundaries of the

United States. See Cities Serv. Co. v. McGrath, 342 U.S. 330, 333

(1952) (vesting of debentures physically located outside the United

4. Petitioners finally contend (Pet. 25-27) that the

court of appeals denied them due process by declining

to review on the merits the Texas district court’s dis-

missal of Price as a plaintiff. No reason exists to dis-

turb the court of appeals’ case-specific holding that

petitioners failed to preserve their challenge to the

dismissal order.

In any event, the district court correctly held that

the Anti-Assignment Act, 31 U.S.C. 3727, barred Price

from becoming a plaintiff in the case. The Act prohibits

any “transfer or assignment of any part of a claim

against the United States Government or of an interest

in the claim,” 31 U.S.C. 3727(a)(1), and provides that

“faJn 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.” 31

U.S.C. 3727(b). In short, only the equivalent of a judg-

ment may be assigned, not, as here, the potential for a

judgment.

It makes no difference whether, as petitioners

argued below, the Hoffmann heirs made an assignment

of property to Price, as opposed to an assignment of

their claims against the United States. This Court has

recognized that the Anti-Assignment Act applies to

claims by a person who acquires property after a claim

against the government arose. See United States v.

Shannon, 342 U.S. 288 (1952) (Anti-Assignment Act

prevented plaintiffs, who purchased property damaged

by the United States Army, from pursuing previous

owners’ FTCA claim).

5. This case does not warrant the Court’s review for

a final reason. All of petitioners’ claims with respect to

States fell within the “broad terms” of the Attorney General’s

vesting authority under the Trading with the Enemy Act).

the watercolors and the “vested” archive are barred on

additional grounds not reached by the court of appeals.

Accordingly, even if the Court were to review and

reverse any of the court of appeals’ rulings, the ulti-

mate outcome of the case would be the same.

First, petitioners’ claims are barred under the doc-

trine of res judicata, or claim preclusion, because they

were raised, or could have been raised, in the prior

proceeding in the Fifth Circuit. As this Court has ex-

plained, “[rJes judicata prevents litigation of all grounds

for, or defenses to, recovery that were previously avail-

able to the parties, regardless of whether they were

asserted or determined in the prior proceeding.”

Brown v. Felsen, 442 U.S. 127, 131 (1979).°

Second, petitioners’ claims are also barred by the

Settlement Convention between the United States and

Germany. As noted above (at 10), the Settlement Con-

vention waives German nationals’ “claims of any kind”

against the United States for “acts or omissions * * *

in respect of Germany, Germany nationals or Germany

property” that occurred between June 5, 1945, and

October 23, 1954. Gov’t C.A. Addendum 22a (ch. 9, art.

° Petitioners cannot avoid the application of claim preclusion on

the ground that the Fifth Circuit could not have exercised appel-

late jurisdiction over claims under the Little Tucker Act. Peti-

tioners invoked the Little Tucker Act in the original case in

district court. If petitioners had continued to rely on the Little

Tucker Act on appeal, the district court’s judgment would have

been reviewable in the Federal Circuit, rather than the Fifth

Circuit. See United States v. Hohri, 482 U.S. 64, 75-76 (1987).

Petitioners, however, explicitly informed the Fifth Circuit that

they were pressing only FTCA claims. See Price, 69 F.3d at 50

(“(tJhe parties are in agreement that only 28 U.S.C. § 1346(b) [the

FTCA] could have provided a basis for subject matter jurisdiction

in this case”).

3, para. 2 of Settlement Convention); see id. at 21a (ch.

9, art. 1 of Settlement Convention) (waiving claims aris-

ing between September 1, 1939, and June 5, 1945).

Accordingly, as the United States informed an attorney

for Heinrich Hoffmann, Jr., in 1956, return of the prop-

erties to the Hoffmann heirs could occur only though

“diplomatic channels.” Pet. App. 21a.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.