# Opposition Brief — Hoffmann v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2002
- **Citation:** 535 U.S. 1112

## Text

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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)

IV

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
v.

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)

2

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.

3

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.

4

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

5

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

6

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

9

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.”

10

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

1]

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

12

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
Register notice of the Vesting Order were insufficient
(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

13

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

14

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).

15

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”).

16

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.

THEODORE B. OLSON
Solicitor General

ROBERT D. MCCALLUM, JR.
Assistant Attorney General

WILLIAM KANTER
HOWARD S. SCHER
Attorneys

MAY 2002

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1123%3A3. Public record. Not legal advice.