David De Csepel v. Republic of Hungary
404 U.S. App. D.C. 358
| D.C. Cir. | 2013Background
- Herzog Collection looted during WWII; Hungary and Nazi collaborators confiscated it and centralised custody in museums.
- Postwar, Herzog heirs allege bailment agreements were created to retain possession and protect the works, with obligations to return on demand.
- Since 1989, heirs pursued return; Hungary partially returned some pieces but kept masterworks in national galleries.
- In 1999, Martha Nierenberg sued in Hungary; later US district court allowed this US suit to proceed with bailment, conversion, unjust enrichment claims against Hungary and Hungarian institutions.
- District court partially denied Hungary’s dismissal; it granted comity to eleven pieces in the Hungarian proceedings, which the Herzog family cross-appealed.
- This court reviews de novo the jurisdiction and Rule 12(b)(6) rulings, and reviews comity rulings for abuse of discretion or de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FSIA jurisdiction under commercial activity | Bailment breach is a commercial activity abroad with direct US effect. | Bailment claims are sovereign acts or expropriation outside commercial activity. | Commercial activity exception supports jurisdiction; direct-US-effect shown. |
| Treaty exception conflicts with FSIA | Treaties do not preclude US jurisdiction for postwar bailment breaches. | Peace Treaty or 1973 Agreement foreclose suits; exclusive forum for restitution. | No conflict; bailment breaches fall outside treaty scope; FSIA applicable. |
| Statute of limitations accrual | Accrual occurred when demand was refused, January 2008; timely filing within three years. | Accrual earlier, e.g., 1999 Hungarian suit; equitable tolling improper here. | Complaint alleges accrual in January 2008; timely filed; limitations defense fails. |
| Political question and act of state | Claims concern private bailment breaches, not sovereign acts; political question inapplicable. | Matters implicate treaty-era disputes and sovereign conduct; may invoke political question/act of state. | No political question or act-of-state bar; claims proceed as commercial-bailment actions. |
| Comity of foreign judgment | Hungarian judgment based on due process concerns; comity not warranted for eleven pieces. | Judgment should be given conclusive effect under Hilton; due process concerns bar relief. | Remand for further fact development; comity not fully proper at Rule 12 stage. |
Key Cases Cited
- Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (U.S. 1992) (direct-effect test for commercial activity FSIA exception)
- Garb v. Republic of Poland, 440 F.3d 579 (2d Cir. 2006) (distinguishes sovereign acts from commercial activity in FSIA analysis)
- Janini v. Kuwait University, 43 F.3d 1534 (D.C. Cir. 1995) (private parties’ contractual repudiation as commercial activity)
- Agudas Chasidei Chabad of U.S. v. Russian Federation, 528 F.3d 934 (D.C. Cir. 2008) (recognizes deference to foreign judgments and comity standards)
- Rong v. Liaoning Province Government, 452 F.3d 883 (D.C. Cir. 2006) (FSIA commercial activity exception analysis; direct effect considerations)
- Westfield v. Federal Republic of Germany, 633 F.3d 409 (6th Cir. 2011) (direct-effect requirement in direct restitution context)
- Hilton v. Guyot, 159 U.S. 113 (U.S. 1895) (comity standard and full-and-fair-trial prerequisites for foreign judgments)