Holocaust Victims of v. Magyar Nemzeti Bank
692 F.3d 661
7th Cir.2012Background
- Holocaust survivors and heirs sue Hungarian National Bank and Hungarian State Railways in the U.S. for expropriation of property used to fund genocide.
- Plaintiffs invoke FSIA expropriation exception §1605(a)(3) and, for the bank, waiver under §1605(a)(1); railways rely on expropriation exception only.
- District court denied dismissals; banks and railway appealed under collateral-order doctrine criminal (immunity) defenses.
- Plaintiffs seek multi-billion-dollar class relief; district court ordered exhaustion and discovery considerations on compliance with Hungarian remedies.
- Court holds appellate jurisdiction exists over sovereign-immunity defenses but remands to address exhaustion of Hungarian remedies and US-commercial-activity nexus.
- Key issue: whether exhaustion of Hungarian remedies is required and whether the expropriation nexus and treaty defenses permit U.S. jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Expropriation exception applicability | Expropriation of property violated international law; nexus satisfied. | No exhaustion or nexus established; sovereign immunity bars suit. | Remanded for exhaustion analysis and nexus development; not yet under FSIA immunity. |
| Rights in property include intangible property | Intangible property (bank accounts) qualifies as 'rights in property'. | Intangible rights not owned/operated by the bank; Nemariam controls. | Bank accounts may constitute rights in property; remand to develop facts on ownership/operation. |
| Violation of international law requirement | Genocide and expropriation constitute international-law violations. | Domestic takings rule applies; may not violate international law; exhaustion required. | Genocide-linked expropriation plausibly a violation; exhaustion and domestic-remedies analysis required; not precluded at this stage. |
| Expropriation nexus: commercial activity in the United States | NS banks/railway engage in US commercial activity; nexus satisfied. | Limited or no US activity; railways’ evidence disputed. | Bank: nexus satisfied; Railway: remanded for jurisdictional discovery on US activity. |
| Treaty-based defenses vs FSIA | Treaties do not expressly conflict with FSIA immunities. | 1947 Treaty and 1973 Agreement create broader immunity or discharge claims. | Treaty defenses do not express conflict; treaty exception does not deprive jurisdiction; claims proceed subject to exhaustion remand. |
Key Cases Cited
- Behrens v. Pelletier, 516 U.S. 299 (1996) (collateral-order appealability of immunity denials)
- Mitchell v. Forsyth, 472 U.S. 511 (1985) (denial of qualified immunity immediately appealable)
- Nixon v. Fitzgerald, 457 U.S. 731 (1982) (absolute immunity denial immediately appealable)
- Sampson v. Federal Republic of Germany, 250 F.3d 1145 (7th Cir. 2001) (jus cogens, genocide as international-law violation; not passive waiver)
- Altmann v. Austria, 541 U.S. 677 (2004) (expropriation/commercial-activity nexus; exhaustion considerations)
- Weltover, Inc. v. Republic of Argentina, 504 U.S. 607 (1992) (commercial activity test under FSIA expropriation)
- Khorrami v. Rolince, 539 F.3d 782 (7th Cir. 2008) (district court not required to rule on all defenses to obtain jurisdictional review)
- Cassirer v. Kingdom of Spain, 616 F.3d 1019 (9th Cir. 2010) (exhaustion and private rights under FSIA considerations)