Holocaust victims suing Germany and Hungary have their day at the Supreme Court

The Supreme Court on Monday delved into atrocities committed during World War II and heard two cases brought by victims and their family members who are seeking compensation for property they say was stolen from them during the Holocaust.

The justices will ultimately decide whether the cases against Germany and Hungary can proceed in US courts.

During more than two hours of arguments, the justices grappled with the reach of a federal law that allows suits against a foreign government when property is taken “in violation of international law.”

The court’s decision could open the door to the possibility of similar lawsuits against foreign countries but also raises difficult questions about entangling the judiciary in matters concerning sensitive foreign policy questions.

The US Justice Department is siding with lawyers for Germany and Hungary arguing the cases should be dismissed, but has declined to outline the specific foreign policy issues that could arise.

That irritated some of the justices, led by Chief Justice John Roberts.

“Your client, the United States has scrupulously avoided taking a position on what the court should do given the international relations context,” Roberts told Assistant to the Solicitor General Benjamin Snyder in reference to the first case concerning Hungary. “This is the perfect time for you to fill that void.”

Roberts added: “Why hasn’t the government told the court what the foreign relations impact on the United States is?”

Snyder replied that “the State Department simply doesn’t feel that it has sufficient information to provide the court with a recommendation.”

The lawsuit against Hungary was initially brought in 2010 by 14 Jewish survivors, including four United States citizens, who sued Hungary and its state-run railway company seeking compensation for property that was stolen from their families in 1941. They say their possessions and those of their families were taken from them as they boarded trains destined for concentration camps and they seek to represent a class of victims who have been injured in similar ways.

While the Foreign Sovereign Immunities Act generally provides immunity to foreign states from suits in US courts, the plaintiffs argue their case falls into an exception because the goods were stolen in violation of international law.

“Hungary committed in the 1947 peace treaty to fully compensate its victim and it has never done so,” Sarah Harrington, a lawyer for the victims, said in an interview. “Congress said courts could hear these claims and even the United States has said there is a moral imperative to provide justice for Holocaust victims in their lifetime.”

But a lawyer for Hungary said that such litigation would interfere with the foreign policy of the United States, and that US courts have long dismissed such claims so as to avoid international discord.

“The United States long ago settled its claims against Hungary for wartime property confiscations,” Gregory Silbert said. He warned that if the court were to rule in favor of the challengers when the shoe was on the other foot, the United States could face analogous claims in foreign courts.

In court papers Silbert stressed that Hungary has made “substantial, additional payments to Holocaust victims and Jewish organizations.” The “tens of billions of dollars” the plaintiffs might seek would “devastate Hungary’s economy,” Silbert argues.

In questioning Harrington, Justice Elena Kagan took an interest in the international implications of the case and asked why courts should not take that into consideration. She noted that one lawsuit with damages that could amount to “40% of Hungary’s GDP.” Kagan said that such a lawsuit could “essentially bankrupt a foreign nation.”

For his part Snyder told the justices that for “well over a century this Court has recognized that when an American court encounters a case that raises serious foreign relations concerns” that it can abstain from exercising its jurisdiction in order to take account of American and foreign interests.

Justice Clarence Thomas noted that the law was passed to bring clarity to how such cases should be handled. He asked the Trump administration whether its position “takes us right back to the case-by-case approach” practiced before Congress acted.

A district court dismissed the lawsuit — and declined to get involved — holding that the survivors should have first tried to file suit in Hungary. A US Court of Appeals for the District of Columbia Circuit reversed that ruling.

Welfenschatz collection

The second case, Germany v. Phillipp, takes a closer look at the reach of the law as it applies to the heirs of several Jewish art dealers who did business in Germany in the 1930s.

They seek to recover an art collection of medieval relics and devotional art dated from the 11th to 15th centuries. In court papers their heirs say they were forced to sell the art to the Nazi-controlled State of Prussia at a price much less than the art was worth, a point that is disputed by the German agency currently in possession of the property.

The victims and family members lost a claim in Germany after an advisory commission concluded that the sale of the art “was not a compulsory sale due to persecution.” They then filed suit in US courts seeking the return of the art, or $250 million, or both

Nicholas M. O’Donnell, a lawyer for the victims, said that in 1935 the “Nazis — led by Hermann Goering and for Hitler’s personal benefit — forced the sale of the collection at issue in this case,” known as the Welfenschatz.

“If such a coerced sale is not a taking in violation of international law, then nothing is,” he said.

The DC Circuit Court of Appeals held that under the Foreign Sovereign Immunities Act, the suit could go forward.

Monday, Roberts probed whether there may be a distinction between the two cases because the German case dealt with a “property right” and as such may not trigger the exception to the law in which “genocide” is a pertinent issue.

Jonathan Freiman, a lawyer for Germany, told the justices that the FSIA shouldn’t apply in the case because it involved a foreign sovereign’s taking of its own national property within its borders. He said such a “taking” could not fall within the exception of the law aimed at violations of international law.

This story has been updated with details from oral arguments.