Federal Republic of Germany v. Philipp

(1) Whether the “expropriation exception” of the Foreign Sovereign Immunities Act, (“FSIA”) 28 U.S.C. § 1605(a)(3), which abrogates foreign sovereign immunity when “rights in property taken in violation of international law are in issue,” provides jurisdiction over claims that a foreign sovereign has violated international human-rights law when taking property from its own national within its own borders, even though such claims do not implicate the established international law governing states’ responsibility for takings of property. (2) Whether the doctrine of international comity is unavailable in cases against foreign sovereigns, even in cases of considerable historical and political significance to the foreign sovereign, and even where the foreign nation has a domestic framework for addressing the claims.

In 1934, art pieces (“Collection”) were sold to the Prussian state. In 2008, heirs (“Respondents”) asserted the sale as invalid under duress. Pursuant to international law (“Washington Principles”) requiring alternative dispute resolution, the matter was put to arbitration, where the sale was found to be equitable and without duress. Respondents sued in district court. The court denied Petitioners’ motion to dismiss. The DC Circuit Court of Appeals affirmed and held that, under FSIA’s “expropriation exception,” even an otherwise legitimate taking can fall within United States jurisdiction “where… [it] amounted to the commission of genocide.” See 28 U.S.C. §1605(a)(3). Petitioner raises two assignments of error on appeal to the Supreme Court. First, the court misconstrued FSIA’s “expropriation exception.” Petitioner contends that the exception allows U.S. courts jurisdiction over foreign takings of U.S. citizens, but not over takings domestic to another government; here, the Collection sale was domestic to Germany because it was conducted between German citizens and the German state and on German soil. Because the FSIA exception is inapplicable, sovereign immunity forecloses the matter. Second, Petitioner argues that the principle of comity requires U.S. courts to forgo judgement on the matter until it is settled in German courts whom are also subject to Washington Principles.