New Scholarship on the FSIA

Vivian Grosswald Curran (University of Pittsburgh) has a draft article up on SSRN entitled Nazi Stolen Art: Uses and Misuses of the Foreign Sovereign Immunities Act.  Many important FSIA cases have involved great works of art stolen by the Nazis including the Supreme Court’s 2003 decision in Altmann v. Republic of Austria concerning the ownership of Woman in Gold, the stunning painting of Adele Bloch-Bauer by Gustav Klimt.  Professor Curran’s article describes more recent cases involving other art stolen or arguably expropriated by the Nazis, including the Supreme Court’s 2021 decision in Federal Republic of Germany v. Philipp about the coerced sale of the Welfenschatz and the D.C. Circuit’s recent decision in De Csepel v. Republic of Hungary involving the Herzog Collection. Here is her abstract:

U.S. courts in Foreign Sovereign Immunities Act (“FSIA”) cases must interpret a comprehensive statute which has been said to stand or fall on its terms. At the same time, in Nazi-looted art cases, they do not ignore entirely the backdrop of the U.S.’ adoption of international principles and declarations promising to ensure the return of such art. To some extent, such an undertaking has been incorporated into a statutory amendment of the FSIA. The years 2021 and 2022 have seen major developments in the FSIA both at the U.S. Supreme Court and in the D.C. Circuit Court of Appeals in cases involving Nazi looted art. The Supreme Court ended what had been a judicially created exception to foreign state immunity for genocide, refocused attention on whether the victim of property expropriation had been a de facto citizen, rather than a formal one for purposes of the statute’s domestic takings exception, and decided that there is no federal common law applicable to FSIA conflict of laws cases. The D.C. Circuit reaffirmed prior caselaw that the FSIA does not require exhaustion of local remedies in a decision supported by both the statute and international customary law, but leaving a potential inter-circuit conflict if the Seventh Circuit should reaffirm its contrary prior caselaw. In an opinion difficult to reconcile either with the FSIA’s express terms or with precedential authority, the D.C. Circuit also decided to increase the difficulties to obtaining jurisdiction against a state, as opposed to a state instrumentality. 

The cases discussed by Professor Curran raise interesting legal questions about the distinction between agencies and instrumentalities and the foreign state itself – a distinction of particular significance for the expropriation section of the FSIA – and whether exhaustion is required before bringing an FSIA suit.  Most interesting, however, is her discussion of how lower courts have interpreted the “domestic takings” rule for expropriations since the Philipp case, which held (in some tension with the Art Museum Clarification Act) that genocidal takings do not come within the expropriation exception to the FSIA. Under that rule, a government’s taking of property from its own citizens is not a violation of international law and thus does not come within the exception (28 U.S.C. 1605(a)(3)).  The Court left open, however, the difficult question of how to determine “citizenship.” In the context of Nazi Germany, Jewish people may have had formal legal status as “citizens” but yet were stripped of the substantive protections that accompany citizenship.  Professor Curran has a helpful analysis of recent lower court cases addressing the issue.