Abrams v. Societe Nationale Des Chemins

• Decision Date: 13 June 2003
• Docket Number: Docket No. 01-9442.
• Citation: 332 F.3d 173
• Parties: Raymonde ABRAMS, Nicole B. Silberkleit, Janet Herman, Lily Redner, Bernard Caron, Ernest Haar, Harry Cybulski, Yvonne Litman, Cassandra Kirby Conahay Freund, Jean Jacques Fraenkel, Liliane Lichtenstein, Marie Weinrauch, Plaintiffs-Appellants, v. SOCIÉTÉ NATIONALE DES CHEMINS DE FER FRANCAIS, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

Page 173

332 F.3d 173

Raymonde ABRAMS, Nicole B. Silberkleit, Janet Herman, Lily Redner, Bernard Caron, Ernest Haar, Harry Cybulski, Yvonne Litman, Cassandra Kirby Conahay Freund, Jean Jacques Fraenkel, Liliane Lichtenstein, Marie Weinrauch, Plaintiffs-Appellants, v. SOCIÉTÉ NATIONALE DES CHEMINS DE FER FRANCAIS, Defendant-Appellee.

Docket No. 01-9442.

United States Court of Appeals, Second Circuit.

Argued October 3, 2002.

Decided June 13, 2003.

Professor Malvina Halberstam, Benjamin Cardozo School of Law, New York, New York (Harriet Tamen, Hurt, Levine & Papadakis, New York, New York; Stephen T. Rodd, Abbey Gardy, LLP, New York, New York; Professor Richard H. Weisberg, Benjamin Cardozo School of Law, New York, New York; Professor Lucille A. Roussin, New York, New York; Gregory L. Tesoro, New York, New York, of counsel), for Plaintiffs-Appellants.

Professor Andreas F. Lowenfeld, New York University School of Law, New York, New York (Professor Linda J. Silberman, New York University School of Law, New York, New York, of counsel), for Defendant-Appellee.

Martin Mendelsohn, Washington, D.C. (Law Office of Martin Mendelsohn, Washington, D.C., of counsel), filed a brief for Simon Wiesenthal Center as amicus curiae.

Before: CARDAMONE, MINER, and SOTOMAYOR, Circuit Judges.

CARDAMONE, Circuit Judge.

The named plaintiffs have brought this action individually and on behalf of other similarly situated Holocaust victims and their heirs against the French railroad company Société Nationale des Chemins de Fer Francais (SNCF or railroad). The action arises out of SNCF's 1942-1944 operation of trains that transported tens of thousands of French civilians to the infamous Nazi death and slave labor camps. Plaintiffs allege that in so doing SNCF committed war crimes and crimes against humanity under customary international law and the law of nations. Customary international law, plaintiffs further allege, is enforceable in federal district court as federal common law.

Plaintiffs filed their complaint in the United States District Court for the Eastern District of New York before Judge David G. Trager on September 12, 2000. When SNCF moved to dismiss it for lack of subject matter jurisdiction, the district court granted the motion, ruling that SNCF was an "agency or instrumentality of a foreign state" as that term is defined in the Foreign Sovereign Immunities Act of 1976 (FSIA or Act), 28 U.S.C. § 1603(b), and that, because plaintiffs' claims did not fall within any of the Act's exceptions to foreign sovereign immunity, it was without jurisdiction to adjudicate them. Abrams v. Société Nationale des Chemins de Fer Francais, 175 F.Supp.2d 423, 428-29, 450 (E.D.N.Y.2001). On appeal, as in district court, plaintiffs urge that the FSIA does not apply to this case because it arises out of events predating the statute's 1976 enactment.

BACKGROUND

The following facts are alleged in the complaint and are accepted as true, as they must be at this stage of the litigation. SNCF, the national railway of France, was created in the late 1930s by consolidation of five then-existing French regional rail networks. Today it is operated as a separate legal entity wholly-owned by the French government. During the Nazi occupation of France the railroad remained under civilian control and preserved its independence by collaborating with the German authorities and by accommodating their transportation needs.

In March 1942 at the request of those authorities, SNCF began to operate trains deporting Jews and other so-called "undesirables" from France to Nazi concentration camps. In exchange for this assistance, the railroad was allowed to continue its operations and was paid for the transport it provided. The conditions inside the deportation trains were inhumane and frequently fatal to passengers who were often carried in cattle cars. Sanitation facilities were limited or nonexistent and passengers had to endure extreme heat and cold. Many did not live to the journey's end. By the time the Nazi occupation of France was over, SNCF had conveyed more than 72 deportation convoys, taking to concentration camps 75,000 Jews and tens of thousands of others. Fewer than three percent of those deported survived. The trains' ultimate destinations included unspeakable places like Dachau and Auschwitz, and these destinations and the conditions of travel were well known to those running the railroad.

The named plaintiffs are either survivors of those deportations or their heirs and descendants. They commenced suit against SNCF both in their individual capacities and on behalf of a putative class of all members of the civilian population of France transported by SNCF to the Nazi camps, and their respective heirs and beneficiaries. The complaint sought compensatory and punitive damages as well as disgorgement of wrongfully obtained profits.

The railroad moved to dismiss the complaint on two grounds: first, it asserted that federal courts in the United States had no subject matter jurisdiction over plaintiffs' causes of action; second, it contended it was entitled to sovereign immunity, both under the FSIA and under the laws in effect during World War II. In support of its motion, SNCF submitted affidavits from its attorneys containing information regarding the railroad's present organization and ownership. The railroad's attorneys confirmed that it is now organized as a separate legal entity, which is wholly-owned and controlled by the French government.

In opposing the motion to dismiss their complaint, plaintiffs contended that applying the Act to their claims would be impermissibly retroactive, and that questions of jurisdiction and immunity should be resolved based on laws in effect in the 1940s at the time the railroad's underlying conduct occurred. Under those laws, plaintiffs maintain, SNCF was not entitled to sovereign immunity because it was organized as a corporate entity separate and distinct from the French government. Plaintiffs also cross-moved for discovery, declaring that whether SNCF is entitled to immunity cannot be resolved based on the existing record.

In granting SNCF's motion to dismiss and denying plaintiffs' cross-motion for discovery the district court first found that the railroad fits on all fours into the definition of an agency or instrumentality of a foreign state under the terms of the Act. Substantially adopting the reasoning in Princz v. Federal Republic of Germany, 26 F.3d 1166 (D.C.Cir.1994), it further ruled that, to the extent that the Act defines the scope of federal courts' jurisdiction over claims against foreign states, the statute applies to actions commenced after its enactment regardless of when the underlying conduct occurred. The district court further ruled that the FSIA's jurisdictional grant does not encompass plaintiffs' cause of action. Abrams, 175 F.Supp.2d at 450. It found it unnecessary to decide whether plaintiffs could have brought their cause under laws in effect in the 1940s. Id. at 446.

Although we agree with the district court that SNCF is an agency or instrumentality of France under the FSIA, the existing record is insufficient for us to resolve the question of whether that Act's application to plaintiffs' causes of action would be impermissibly retroactive. Hence, we vacate and remand.

DISCUSSION

I Standard of Review

Upon reviewing a district court's determination with respect to its subject matter jurisdiction under the FSIA, we examine the court's legal conclusions de novo and its factual findings for clear error. Robinson v. Gov't of Malay., 269 F.3d 133, 138 (2d Cir.2001). Because the district court did not have to make any factual findings, and dismissed the complaint solely on its resolution of questions of law, our review is de novo.

II Foreign Sovereign Immunity in Federal Courts

A. Prior to the FSIA's Enactment

Foreign sovereign immunity has been a recognized doctrine of American law since the seminal Supreme Court case The Schooner Exchange v. McFaddon, 11 U.S. (7 Cranch) 116, 3 L.Ed. 287 (1812). In The Schooner Exchange, two American citizens claimed ownership of a ship they alleged had been wrongfully seized by the French navy. The United States Attorney for the District of Pennsylvania filed a suggestion of immunity with the district court, thereby raising a question of sovereign immunity. Id. at 117-18. The Supreme Court agreed that immunity existed and dismissed the Americans' claim to the ship. Id. at 147. In an opinion by Chief Justice Marshall, the Court explained that the "perfect equality and absolute independence" of sovereign nations required that United States courts refrain from exercising jurisdiction over claims against other states. Id. at 137.

From that beginning until the FSIA's enactment in 1976, the executive branch played a prominent role in deciding whether a foreign sovereign was immune from suit in American courts. See Verlinden B.V. v. Cent. Bank of Nig., 461 U.S. 480, 486-87, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983); Restatement (Third) of Foreign Relations Law of the United States [hereafter Restatement 3d] pt. IV, ch. 5, subch. A, introductory note (1987). Foreign states sued in the United States often requested that the Department of State ask the Department of Justice to file a suggestion of immunity with the courts. See Restatement 3d, pt. IV, ch. 5, subch. A, introductory note.

Courts, for their part, usually deferred to the decision of the executive, reasoning that the preferable method of resolving disputes with friendly foreign states is not litigation but diplomatic negotiation, a matter within the authority and expertise of the executive branch. See Ex parte Republic of Peru, 318 U.S. 578, 586-87, 63 S.Ct. 793, 87 L.Ed. 1014 (1943); see also Republic of Mexico v. Hoffman, 324 U.S. 30, 35, 65 S.Ct. 530, 89 L.Ed. 729 (1945) (reasoning that "the courts should not so act as to embarrass the executive arm in its conduct of foreign affairs"). In...