On February 3, 2021, the United States Supreme Court ruled Federal Republic of Germany v. Philipp, n ° 19-351, considering that the exception of expropriation to the Law on Foreign Sovereign Immunities (FSIA) does not apply to a seizure of national property of the own citizens of a country.
Under the FSIA, “foreign nations are presumed immune” from prosecution in US courts. The FSIA’s expropriation exception, however, makes a limited exception for prosecutions involving disputes over property “taken in violation of international law.”
In 1935, a consortium of Jewish art dealers sold a collection of medieval art to Prussia. This sale was allegedly forced by the Nazi government. After World War II, the United States took possession of the art collection before finally ceding it to Germany. Many years later, three heirs to the Jewish art dealers sued Germany in a US district court, claiming that Germany’s purchase of this art (for about a third of its fair market value) violated the international law of genocide. Germany decided to dismiss the case on the grounds that it was immune from prosecution under the FSIA, but the U.S. District Court for the District of Columbia dismissed Germany’s petition and, in call, DC Circuit confirmed. The DC Circuit “agreed with the heirs that the exception for property taken in violation of international law was satisfied because” genocide perpetrated by a state even against its own nationals is a violation of international law.
The Supreme Court unanimously quashed and returned. To begin with, “international law usually concerns the relations between sovereign states, and not the relations between states and individuals.” In accordance with this idea, the “rule of national levies” provides that “what a country does with property belonging to its own citizens within its own borders is not subject to international law”. A seizure of property “could only be ‘unlawful under international law’ when a State has deprived ‘a foreigner’ of property.
“The domestic levy rule has deep roots not only in international law but also in US foreign policy. It was recognized in a 1938 letter from a US Secretary of State to the Mexican Ambassador and was not subsequently repealed by human rights documents after World War II such than the Universal Declaration of Human Rights or the Convention for the Prevention of Genocide. Nor did Congress purport to change this rule when it passed the Second Hickenlooper Amendment to the Foreign Assistance Act of 1964 or to the FSIA. Thus, the American courts finally concluded that “the reference of the exception of expropriation to the” violation of international law “does not cover the expropriations of property belonging to the own nationals of a country”.
The Supreme Court refused to “change course” in this case. Even though the heirs argued that “the forced sale of the art of their ancestors constituted an act of genocide,” the court read the FSIA’s exception for expropriation “as referring to international expropriation law. And not to the entire body of international human rights law. . On the one hand, the expropriation exception “repeatedly emphasizes property and property rights, while the injuries and acts that we might associate with genocide are particularly lacking”. In addition, the deletion proposed by the heirs of the rule of national levies “would derogate from[e] the preservation by international law of sovereign immunity for violations of human rights law. Notably, too, in other parts of the FSIA where Congress has provided limited exceptions for human rights claims, Congress “has done so explicitly and precisely.”
The Court also considered two counter-arguments raised by the heirs. First, when Congress amended the FSIA in 2016 to generally protect foreign state participation in U.S. art exhibitions, it ruled out claims against Germany as a result of the Nazi era. The heirs argued that this “demonstrates that Congress intended to repeal immunity for any Nazi-era claims.” The Court disagreed. The 2016 amendment was an attempt to ” to preserve sovereign immunity in a narrow and specific context: art exhibitions. As such, it does not support ‘the broad elimination sovereign immunity in all areas of law. Second, while it is true that Congress has passed several laws to promote restitution to Holocaust victims, these laws generally encourage victims to seek redress “outside of public justice systems.” And none of these statutes “speak of sovereign immunity”, which “is the responsibility of the FSIA”.
Chief Justice Roberts delivered the opinion for a unanimous Court.