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Philipp v. Federal Republic of Germany

United States Court of Appeals, District of Columbia Circuit

June 18, 2019

Alan Philipp, et al., Appellees
Federal Republic of Germany, a foreign state and Stiftung Preussischer Kulturbesitz, Appellants

          Appeals from the United States District Court for the District of Columbia (No. 1:15-cv-00266)

          Before: Garland, Chief Judge; Henderson, Rogers, Tatel, Griffith, Srinivasan, Millett, Pillard, Wilkins, Katsas [**], and Rao [*], Circuit Judges.

         On Petition for Rehearing En Banc


          PER CURIAM

         Appellants' petition for rehearing en banc, the response thereto, and the amicus curiae brief in support of rehearing en banc were circulated to the full court, and a vote was requested. Thereafter, a majority of the judges eligible to participate did not vote in favor of the petition. Upon consideration of the foregoing, it is

         ORDERED that the petition be denied.

          Katsas, Circuit Judge, dissenting from the denial of rehearing en banc:

         The panel decision in this case, together with Simon v. Republic of Hungary, 812 F.3d 127 (D.C. Cir. 2016) (Simon I), and Simon v. Republic of Hungary, 911 F.3d 1172 (D.C. Cir. 2018) (Simon II), makes the district court sit as a war crimes tribunal to adjudicate claims of genocide arising in Europe during World War II. The basis for these decisions is not any federal statute authorizing a private right of action for victims of foreign genocide, nor even any statute punishing foreign genocide under United States law. Rather, these decisions rest on a statute abrogating the jurisdictional immunity of foreign sovereigns from claims for unlawful takings of property. As a result, the district court must hear genocide claims against foreign sovereigns, but only to determine whether it has subject-matter jurisdiction over common-law tort claims for conversion and the like. Moreover, the plaintiffs bringing these genocide-based takings claims may recover neither for killings nor even for personal injuries, but only for the loss of their property. And the district court must adjudicate these claims- and thus effectively determine the scope of a genocide- without first affording the foreign sovereign an opportunity to provide redress, whether for genocide or conversion.

         Before allowing this remarkable scheme to proceed further, we should reconsider it en banc. In this case, Philipp v. Federal Republic of Germany, 894 F.3d 406 (D.C. Cir. 2018), and in Simon II, we rejected any defense of exhaustion or comity-based abstention for claims under the Foreign Sovereign Immunities Act (FSIA). These decisions create a clear split with the Seventh Circuit, are in tension with decisions from the Ninth and Eleventh Circuits, disregard the views of the Executive Branch on a matter of obvious foreign-policy sensitivity, and make the FSIA more amenable to human-rights litigation against foreign sovereigns than the Alien Tort Statute (ATS) is to human-rights litigation against private defendants abetting the sovereigns. Moreover, they clear the way for a wide range of litigation against foreign sovereigns for public acts committed within their own territories. This includes claims not only for genocide, but also for the violation of most other norms of international human-rights law. The consequences of Simon I and its progeny are thus dramatic, while their foundations are shaky.


         The FSIA provides that "a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided" in the FSIA itself. 28 U.S.C. § 1604. It then provides that a "foreign state shall not be immune from the jurisdiction of courts of the United States or of the States" when certain exceptions apply. Id. § 1605. The exception at issue here, commonly called the "expropriation exception," applies to any case

in which rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state; or that property or any property exchanged for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States.

Id. § 1605(a)(3).

         In Simon I, this Court held that the expropriation exception covers property taken as part of a genocide. We reasoned that genocide includes deliberately inflicting on a protected group "conditions of life calculated to bring about its physical destruction." 812 F.3d at 143 (quotation marks omitted). We held that the complaint at issue, which described the experience of Jews in Hungary between 1941 and 1944, adequately alleged "the requisite genocidal acts and intent," including a "systematic, 'wholesale plunder of Jewish property'" that "aimed to deprive Hungarian Jews of the resources needed to survive as a people." Id. at 143-44 (citation omitted). We recognized that the international law of expropriation applies only to takings by one sovereign of property owned by nationals of another. Id. at 144. But we distinguished the prohibition against genocide, which encompasses acts committed by a sovereign "against its own nationals." Id. at 145. We also acknowledged that, for genocide-based expropriation claims, the jurisdictional and merits inquiries diverge: Genocide must be established to create subject-matter jurisdiction, but the merits involve "garden-variety common-law causes of action such as conversion, unjust enrichment, and restitution." Id. at 141. As to damages, we noted that another FSIA exception covers claims "for personal injury or death," but only for losses "occurring in the United States." 28 U.S.C. § 1605(a)(5). So, we construed the expropriation exception to permit plaintiffs claiming genocide to "seek compensation for taken property but not for taken lives." 812 F.3d at 146 (quotation marks omitted).

         In Philipp and Simon II, this Court rejected exhaustion, abstention, and forum non conveniens defenses to the genocide-based expropriation claims recognized in Simon I. In Philipp, the panel held that the FSIA, by comprehensively codifying rules for foreign sovereign immunity, foreclosed any requirement that plaintiffs exhaust remedies available in the courts of the defendant sovereign. 894 F.3d at 414-16. Simon II reaffirmed that holding. There, we stated that, unlike other common-law defenses preserved by the FSIA, exhaustion "lacks any pedigree in domestic or international common law." 911 F.3d at 1181. We further reasoned that, if an exhaustion requirement would preclude the plaintiffs from returning to federal court (as would a comity-based abstention requirement), that would only make exhaustion more like immunity. Id. at 1180. Then, we held that the district court abused its discretion in dismissing the claims on forum non conveniens grounds, even though they involved acts perpetrated by the Hungarian government against Hungarian nationals in Hungary. Id. at 1181-90.



         The expropriation exception applies to claims for "property taken in violation of international law." 28 U.S.C. § 1605(a)(3). Simon I held that this provision encompasses property taken in violation of the international-law prohibition against genocide. In my judgment, it encompasses only property taken in violation of international takings law. The literal language could bear either meaning, but statutes must be construed in context. See, e.g., Nat'l Ass'n of Home ...

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