International human rights litigation naturally involves seeking justice against a foreign state. That is, simply stated, the name of the game. Unfortunately, even in the 21st century, there are still governments around the world that fail to comply with basic human rights’ conventions that we sometimes take for granted. Moreover, due to a plethora of circumstances, past human rights violations – the Holocaust being just one example – are only recently beginning to find their way into courts to in an effort to bring some relief to the victims and their heirs. Therefore, a deep understanding of the Foreign Sovereign Immunities Act, 28 U.S.C. §1601 et seq. (“FSIA”) – the sole means by which foreign sovereigns and their instrumentalities can be sued in U.S. court – is ever the more relevant and important.
One question that has become relevant lately is whether a plaintiff, prior to suing to foreign government in a U.S. court, must first attempt to sue in the courts of the foreign country. That is the question we will deal with in this post.
In a pair of decisions handed down by the United States Court of Appeals for the District of Columbia Circuit, at least one of which may be headed for the Supreme Court, the D.C. Circuit has answered this question in the negative: all else being equal, private litigants suing a foreign sovereign are not required to pursue their action first in the foreign sovereign’s courts on the grounds of international comity. These decisions stand in stark contrast to two decision from the Seventh Circuit which have come to the exact opposite conclusion.
While all four cases arose in the context of Holocaust-related disputes, the question of how international comity interplays with the FSIA is one that may potentially affect dozens of cases against foreign governments and their instrumentalities. The implications, therefore, are of considerable importance to counsel for both claimants and foreign sovereigns.
In Philipp v. Federal Republic of Germany, 894 F.3d 408 (D.C. Cir. 2018), plaintiffs brought a claim to recover a celebrated collection of medieval paintings and relics that their Jewish predecessors-in-interest had owned prior to the rise of the Nazi regime in Germany. Alternatively, they claimed damages of $250 million. Germany moved to dismiss on several grounds, including the defense that international comity required the U.S. court to decline jurisdiction until the plaintiffs exhausted their claims in German courts. The district court rejected this defense and the D.C. Circuit affirmed. Later, that same court denied en banc review over a vigorous dissent by Judge Gregory Katsas. Philipp v. Federal Republic of Germany, 2019 WL 2508983 (D.C. Cir., June 18, 2019)[denying rehearing en banc].
The second case, Simon v. Republic of Hungary, 911 F.3d 1172 (D.C. Cir. 2018) is a class action suit against the Republic of Hungary and its wholly-owned and operated national railway by survivors of the Holocaust seeking damages for the expropriation of their personal property by the Hungarian government and the railroad in connection with Hungary’s collaboration in the German genocide of the Jewish People.
The district court, choosing to follow the rationale of two Seventh Circuit cases, Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661 (7th Cir. 2012) and Fischer v. Magyar Allamvasutak Zrt., 777 F.3d 847 (7th Cir.), cert. denied, 135 S.Ct. 2817 (2015), dismissed the case on the grounds international comity required the plaintiffs to bring their claims in Hungarian courts. On appeal the D.C. Circuit reversed, holding that the FSIA left no room for an “exhaustion” defense based on international comity. Hungary has since filed a petition for writ of certiorari which is pending as of this writing.
Until the recent D.C. Circuit cases it was widely believed that federal courts could dismiss claims that would otherwise be subject to federal subject matter jurisdiction under the FSIA where considerations of international comity so dictated. However, the holdings in both Philipp and Simon have upended the conventional wisdom and precluded federal courts (at least in the D.C. Circuit) from divesting themselves of expropriation and other cases against foreign governmental defendants on the grounds that comity requires the foreign sovereign to attempt to resolve the dispute in its own judicial and quasi-judicial forums.
Until such time as the Supreme Court ultimately settles the issue, counsel should be aware that judicial abstention in cases against foreign governments and their instrumentalities on comity grounds is not viable in the District of Columbia Circuit, while the opposite holds true in cases originating in the Seventh Circuit.