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Foreign Sovereign Immunity and International Comity at the U.S. Supreme Court

Last week, the United States Supreme Court heard arguments in Republic of Hungary v. Simon and Federal Republic of Germany v. Philipp. The basic question in these cases is whether the plaintiffs (Holocaust survivors and the heirs of Holocaust victims) can pursue claims in U.S. federal court seeking compensation from European countries and their agencies or instrumentalities for takings of property during the Second World War. The more nuanced question presented to the Supreme Court by the Governments of Hungary and Germany is whether U.S. federal courts may abstain from resolving such claims on the grounds of “international comity” – the principle that courts must respect the legislative, executive and judicial acts of a foreign sovereign – when jurisdiction is based on the expropriation exception of the Foreign Sovereign Immunities Act (“FSIA”). Germany presents the additional question of whether that exception “provides jurisdiction over claims that a foreign state 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 customary international law addressing states’ expropriation of property.”

The factual background of these cases has been fully recounted elsewhere, but the basic storyline is well known. The case against Germany involves the Welfenschatz (or the Guelph Treasure), a collection of medieval art that was owned by a consortium of German-Jewish art dealers, but purchased in 1935 by a group of Nazis for less than the art’s true value. After a Government-sponsored mediation process failed in Germany, the heirs of the original owners (including citizens of the United States) filed suit in U.S. federal district court against Germany and the Prussian Cultural Heritage Foundation, which has held the collection since after World War II. The district court denied motions to dismiss; the U.S. Court of Appeals for the District of Columbia Circuit affirmed. The case against Hungary is a federal class action filed by 14 former Hungarian nationals who claim to be the successors-in-interest to Hungary’s state-owned railroad; they seek compensation for the property taken from them and base jurisdiction on the expropriation exception to the FSIA. The district court dismissed the claims for lack of subject-matter jurisdiction (and against the railroad for lack of personal jurisdiction), but the D.C. Circuit reversed. When the case was remanded, the district court again dismissed the case on comity abstention and forum non conveniens grounds; a divided panel of the D.C. Circuit again reversed, which put the case before the Supreme Court.

Germany and Hungary argued before the Court that the source of jurisdiction does not affect the availability of international comity abstention, and nothing in the text of the FSIA shows that Congress removed international comity as a basis for abstention, especially because it left in place analogous comity-based doctrines such as forum non conveniens.. Indeed, the FSIA states that, when a foreign state lacks sovereign immunity, it “shall be liable in the same manner and to the same extent as a private individual under like circumstances.” Because private litigants can seek dismissal based on international comity, the argument goes, states that have lost sovereign immunity must be able to obtain dismissal on the same grounds. And, the two state-litigants add, the comity implications loom large here: to wit, a State’s responsibility to its Holocaust victims is of “profound historical and political importance,” implicating budgetary, taxation and policy priorities; these cases often involve historical artifacts that hold a unique position in local history and culture; and the United States has limited factual ties to such disputes.

The United States appears as amicus curiae in support of both countries and was granted argument time in both cases. It argued that that the D.C. Circuit erred in concluding that the FSIA leaves “no room” for discretionary international comity abstention. The United States also identified several potential harms to foreign-relations interests if comity abstention is categorically unavailable in FSIA cases, the most notable of which is that the United States will have greater difficulty persuading foreign partners to establish mediation and compensation mechanisms for human-rights violations if those schemes will receive no deference in later-filed U.S. litigation.

For their part, both sets of plaintiffs argued that Congress codified pre-existing principles of international comity in enacting the FSIA in 1976, granting or withholding immunity as principles of comity dictated. In their view, allowing comity to creep back into the FSIA’s comprehensive scheme would conflict with the FSIA’s purpose of ensuring uniform sovereign-immunity determinations based on clear legal standards, and hasten a return to the pre-FSIA regime that Congress sought to displace. Put simply, when the Act provides jurisdiction over a foreign sovereign, it is because Congress determined that international comity does not call for immunity in those circumstances. Congress left no room for application of a discretionary and atextual doctrine of international-comity-based abstention when the FSIA provides jurisdiction. The Hungary plaintiffs continue that abstention, even if it is within the court’s discretion, is not appropriate here because the United States’ has a clear foreign-policy interest in providing justice to Holocaust survivors where the Defendant State has failed to establish a mechanism for resolving such claims.

The arguments drew a number of pointed questions from the bench; a fulsome discussion of the questions posed to the advocates can be found elsewhere, but some of the more interesting exchanges were about the historical background to the FSIA and its purposeful shift of immunity determinations from the executive to the judicial branch. For instance, Justices Gorsuch and Kagan wondered whether the States’ arguments replicated the pre-FSIA days, when executive-driven sovereign immunity determinations were unpredictable. Justice Sonia Sotomayor noted that in enacting the FSIA, Congress took sovereign immunity issues out of the executive’s hands; she wondered if abstaining substitutes the judicial determination that a case does not belong in federal court for the FSIA-codified congressional determination that it does. Chief Justice John Roberts pressed the United States on why it “has scrupulously avoided taking a position” on what the courts should do in the Simon case on whether abstention is warranted, suggesting that the executive branch is expecting the courts to do the difficult and sensitive work that comity abstention requires. For further commentary on this blog regarding international comity as well as an approach to international comity abstention, see here, here, here, and here.

A decision is expected before June 2020.

Ron Brand on “The Hague Judgments Convention in the United States”

In an article available here and forthcoming in the University of Pittsburgh Law Review, Professor Ronald A. Brand discusses the purposeful structure of the Hague Judgments Convention and how that structure can aid the implementation and operation of the Convention in countries with existing liberal and non-discriminatory approaches to judgments recognition—like the United States. In sum, the Convention is built on a list of “jurisdictional filters” in Article 5(1) and grounds for non-recognition in Article 7; if the former is satisfied, the judgment may circulate under the Convention, subject only to the grounds for non-recognition found in the latter. However, and importantly, Article 15 allows the recognition or enforcement of judgments under national law. For countries like the United States, with very liberal existing law on the recognition of foreign judgments, Article 15 may in fact provide a more efficient, effective, and economical approach, even under the Convention. This article addresses this concept.

Ulla Liukkunen on  Employment and Private International Law

Written by Ulla Liukkunen, Professor of Labour Law and Private International Law at the University of Helsinki

The volume ´Employment and Private International Law´, edited by Ulla Liukkunen, has been published in the Private International Law Series (series editor: Symeon C. Symeonides)

of Edward Elgar Publishing in December 2020.

This edited collection gathers together a set of articles that address labour law and labour protection issues that are central to understanding the complex development of private international law and its tasks as well as broadening challenges of this field. The introduction by the editor, Ulla Liukkunen, Professor of Labour Law and Private International Law at the University of Helsinki, draws attention to characteristics of major developments in the field but also assesses the broader regulatory framework and challenges under way to traditional approaches. These challenges relate to both transnational labour law developments that require reassessment of the role of private international law and developments that derive from the ongoing transformation of substantive employment law itself, unfolding the limitations of protection restricted to a certain pre-determined legal status of the weaker party only.

With the legal landscape of labour protection changing, Liukkunen examines how private international law should be affected. According to her, old conceptions on which protection in private international law is traditionally based are becoming too narrow to be solely prioritized. Liukkunen discusses the importance of viewing the role private international law has assumed in the transnational dimension of collective bargaining and employee participation. Especially in the EU, regulatory approaches have been adopted that use private international law rules in a coordinative way so that labour rights can be upheld despite the pressures of the market.

The particular role of private international law as the ´mediator´ between labour law and company law in EU legislation reflects the expanding materialization of private international law. According to Liukkunen, it also relates to the use of conflicts law in order to enable establishment of transnational institutional structures that reduce obstacles to private regulatory authority. Moreover, the article analyses private self-regulation and related governance structures from the perspective of private international law, stressing a need for response to collisions posed by transnational normativities involved.