U.S. Supreme Court Hears Arguments in Holocaust-era Cases Against Germany and Hungary

On December 7, 2020, the U.S. Supreme Court heard oral arguments in two cases involving Holocaust survivors and property that had been taken from them before and during World War II. Both cases reached the High Court, not for final adjudication, but to resolve the question of whether or not the cases should be heard in U.S. courts in the first place.

The first case the Court heard, Republic of Hungary v. Simon, is one of several class actions being brought on behalf of a group of Hungarian Holocaust survivors. In the suit, they seek restitution from Magyar Államvasutak Zrt., the Hungarian state railway, for property that was stripped from them as they were forced onto trains bound for concentration camps, on grounds that “without the mass transportation provided by the defendant, the scale of the Final Solution in Hungary would never have been possible.”

Those defendants, now the petitioners, maintain that the case has no place in U.S. courts due to the doctrine of international comity. Far from being an abstract platitude about goodwill among nations, comity is an important factor in international relations with ample juridical and diplomatic consequences. As the petition observed: “in recent years, this Court has repeatedly expressed concerns over cases that could have adverse foreign policy consequences if heard in U.S. courts—like foreign-cubed litigation in which foreign plaintiffs allege that foreign defendants injured them on foreign soil.”

Oral arguments produced an interesting counterargument on the part of the respondents: comity such as is being invoked in this case violates the separation of powers. Diplomacy, counsel argued, belongs to the executive branch of government: the neutral judiciary should not be called upon to make diplomatic decisions and decide when and if comity applies.

Three minutes after submission of the Hungary case, the Court turned its attention to Federal Republic of Germany v. Philipp, which involves a collection of medieval reliquaries, the Guelph Treasure, purchased by a consortium of Jewish art dealers in 1929 and then valued at $255 million. The owners were able to sell half the collection during the Depression; the other half was stored in the Netherlands. In 1934, the Nazi-controlled Dresdner Bank offered to purchase it on behalf of an unidentified client that turned out to be the State of Prussia. A price of $1.7 million was agreed upon in 1935; since then, the articles have been on display almost continuously in a Berlin museum.

The sale went uncontested until 2008 when a group of successors in interest alleged that the sale was forced and the price below market value. The transaction was therefore illegal. The German government responded that “in this particular instance the Collection was sold for fair-market value, after arms-length negotiations, not under duress, at a price reflecting the effect of the world economic crisis on the art market.”

Rejecting those findings, the plaintiffs sued, choosing the U.S. courts as the venue for the suit. The case reached the Supreme Court for precisely the same reason as the Hungary case: do the American courts have jurisdiction when it comes to adjudicating claims of a foreign government taking foreign nationals’ property on foreign soil?

At the heart of the Germany case lies a 1976 law, the Foreign Sovereign Immunities Act (FSIA) that establishes that “a foreign state shall be immune from the jurisdiction of the courts of the United States.” An exception to the rule is the so-called “expropriation exemption,” which applies to property that was taken in violation of international law.

Petitioners brought two questions before the court. Firstly, can the expropriation amendment be seen to apply in the case of a country taking property from its own nationals within its own borders, and, secondly, can the doctrine of international comity be seen to apply in this case as well?

In its petition to the court, the German government maintained that this case is a faulty application of the expropriation exemption and that because the Consortium and its art dealer firms were German nationals, the alleged taking of the Collection by a German state was a domestic taking, and would fall outside the expropriation exception.

At stake is also the question of whether the takings here contravene international law. While there is no question that Germany was guilty of genocide, there is a question as to whether the taking of half the Guelph Treasure in 1935 was in itself an act of genocide. In the Hungary case, defendants allege that “Hungary took every single thing they owned, including things that were necessary for survival, ” which made for “more clearly a genocidal type of taking perhaps than the takings that are alleged in .”

While the expropriation exemption was the main issue under discussion before the Court, the issue of comity was also discussed, from a slightly different perspective than in the Hungary case. Here, the petition explained that “comity lets courts avoid trampling on foreign sovereigns’ unique interest in resolving disputes about their own actions within their own borders affecting their own nationals.” Moreover, comity is a thing of reciprocity, and opening the door to litigation such as these two cases could lead foreign courts to assume jurisdiction over matters of internal U.S. affairs.

As such, the Court’s decisions should prove interesting and could potentially set a precedent that would open floodgates of litigation against foreign sovereigns in U.S. courts. While similar, the two cases are different, thanks to the different nature of the takings and the undeniably genocidal nature of the takings in the Hungary case. Both cases also show that the legal issues posed by the Holocaust remain unresolved, even in arguments brought 79 years to the day after the United States’ entry into World War II.