Federal Republic of Germany v. Philipp

The expropriation exception to the Foreign Sovereign Immunities Act incorporates the domestic takings rule, which makes a sovereign’s taking of its own nationals’ property a domestic affair.

Respondents are the descendants of Jewish art dealers who owned a collection of medieval relics.  Respondents claimed that Nazi Germany forced their ancestors to sell the collection in 1935 at one third of its value.  Respondents participated unsuccessfully in proceedings in Germany for the return of the collection and subsequently filed suit in America.  Petitioner, the German government, argued that it was immune from the American courts’ jurisdiction under the Foreign Sovereign Immunities Act (FSIA).  Petitioner moved to dismiss, but the D.C. District Court denied Petitioner’s motion and the D.C. Circuit affirmed.  On appeal, the Supreme Court of the United States held that the FSIA’s expropriation exception—28 U.S.C. §1605(a)(3)— “incorporates the domestic takings rule,” which means that a sovereign’s taking of the property of its own nationals is a domestic affair.  The Supreme Court reasoned, based on the text, context, and history of the expropriation exception, that the exception referred to “violations of the international law of expropriation,” not the violation of international human rights law as Respondents argued.  The international law of expropriation “does not cover expropriations of property belonging to a country’s own nationals.”  Republic of Austria v. Altmann, 541 U. S. 677, 713 (2004) (BREYER, J., concurring).  Therefore, Respondents’ suit does not fall within the expropriation exception to FSIA.  VACATED and REMANDED.