Philipp v. Federal Republic of Germany
248 F. Supp. 3d 59
D.D.C.2017Background
- In 1929 a consortium of three Jewish-owned Frankfurt art dealers acquired the medieval Welfenschatz (82 objects). By 1935 the consortium still owned 42 pieces, which were sold to the State of Prussia via Dresdner Bank on June 14, 1935 for 4.25 million RM; payment arrangements included blocked accounts and commissions.
- Plaintiffs are successors to the consortium owners and allege the 1935 sale was coerced as part of Nazi persecution and therefore a taking in violation of international law; the Welfenschatz is now held by Stiftung Preussischer Kulturbesitz (SPK) and displayed in Berlin.
- Plaintiffs submitted the claim to Germany’s non‑binding Advisory Commission (established under Washington Principles); the Commission recommended against restitution after hearing Plaintiffs’ experts.
- Plaintiffs brought ten state‑law claims in D.C. federal court and invoked the FSIA expropriation exception (28 U.S.C. § 1605(a)(3)) to overcome sovereign immunity.
- Defendants moved to dismiss on sovereign immunity (FSIA), preemption/foreign‑policy conflict, non‑justiciability/comity, and forum non conveniens grounds; the court dismissed five non‑property claims for lack of FSIA jurisdiction and allowed five property‑based claims to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FSIA expropriation exception applies | The 1935 sale was a coerced, genocidal taking in violation of international law, so §1605(a)(3) provides jurisdiction | Plaintiffs plead common‑law torts not property claims; expropriation exception doesn't apply | Court: five property‑based claims (declaratory relief, replevin, conversion, unjust enrichment, bailment) satisfy §1605(a)(3); five non‑property claims dismissed for lack of jurisdiction (conceded) |
| Standard for showing "taken in violation of international law" | Need only non‑frivolous showing because the taking is genocidal | Plaintiffs plead garden‑variety common‑law claims so higher showing required | Court: plaintiffs must plead more than non‑frivolous; nevertheless, pleadings sufficiently connect the sale to genocidal policies under Simon, so taking alleged plausibly violates international law |
| Commercial‑activity nexus under §1605(a)(3) (state vs. instrumentality) | A single nexus (instrumentality activity) suffices for both Germany and SPK | Different clauses apply to foreign state and to instrumentality; plaintiffs must independently satisfy nexus for Germany | Court: follows D.C. Circuit precedent and permits claims to proceed because nexus to SPK’s U.S. commercial activity is conceded; leaves open further briefing later |
| Whether U.S. foreign‑policy preempts or bars suit (Garamendi line) | Washington Principles and subsequent U.S. statements do not require exclusive ADR or bar litigation; plaintiffs may litigate | Foreign policy favors ADR/internal processes; the Advisory Commission decision should preclude or preempt U.S. litigation | Court: Garamendi is distinguishable (involved executive agreement and exclusivity); Washington Principles are non‑binding and encourage ADR but do not preempt litigation; claims not dismissed on preemption |
| Whether comity or exhaustion of German remedies requires dismissal | Plaintiffs used the Advisory Commission and allege it was a sham; exhaustion not required for individuals | International comity (prudential exhaustion) favors litigating in Germany first | Court: declines to impose a prudential exhaustion requirement here; plaintiffs’ allegations that the German process was inadequate are sufficient at pleading stage |
| Forum non conveniens — should case be dismissed in favor of Germany | Plaintiffs: U.S. forum proper (two plaintiffs are U.S. residents), enforcement and convenience favor U.S. courts | Germany is a more connected forum; documents and witnesses are in Germany; German law predominates | Court: balance of private/public interests does not justify dismissal; denies forum non conveniens motion |
Key Cases Cited
- Simon v. Republic of Hungary, 812 F.3d 127 (D.C. Cir.) (takings tied to genocide can satisfy FSIA expropriation exception)
- Agudas Chasidei Chabad v. Russian Fed'n, 528 F.3d 934 (D.C. Cir. 2008) (interpretation of alternative commercial‑activity clauses in §1605(a)(3))
- American Ins. Ass'n v. Garamendi, 539 U.S. 396 (2003) (state action preempted where it conflicted with executive‑branch foreign‑policy agreements)
- Sinochem Int'l Co. v. Malay. Int'l Shipping Corp., 549 U.S. 422 (2007) (forum non conveniens is discretionary and defendant bears heavy burden)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) (forum non conveniens deference principles)
- Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480 (1983) (FSIA is the sole basis for jurisdiction over foreign states)
- de Csepel v. Republic of Hungary, 169 F. Supp. 3d 143 (D.D.C. 2016) (discussion of expropriation exception overlap and exhaustion issues)