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U.S. Supreme Court Rules that the Foreign Sovereign Immunity Act's Expropriation Exception Does Not Extend to Domestic Takings

In Federal Republic of Germany v. Philipp, the U.S. Supreme Court unanimously held that a country's taking of property from its own nationals does not fall within the Foreign Sovereign Immunities Act (FSIA) exception for “rights in property taken in violation of international law.” The case involved a claim that Nazi officials coerced a consortium of three art firms owned by Jewish residents of Germany to sell a collection of “medieval relics and devotional objects known as the Welfenschatz” to Prussia for “approximately one-third of their value.” The plaintiffs—descendants of the members of the consortium—argued that the coerced sale constituted genocide, thus bringing their claim within the FSIA exception. The Supreme Court disagreed, holding that “the expropriation exception is best read as referencing the international law of expropriation rather than of human rights” and that international law does not bar a state's taking of the property of its own nationals. The Court declined to reach Germany's alternative argument that international comity required dismissal of the case, and it vacated and remanded a companion case, Republic of Hungary v. Simon, that also posed the comity question.