Heller v. Republic of Hung.

• Decision Date: 18 July 2022
• Docket Number: Civil Action 21-cv-1739 (BAH)
• Parties: STEVEN ANTHONY HELLER, et al., Plaintiffs, v. REPUBLIC OF HUNGARY, Defendant.
• Court: U.S. District Court — District of Columbia

STEVEN ANTHONY HELLER, et al., Plaintiffs, v. REPUBLIC OF HUNGARY, Defendant.

Civil Action No. 21-cv-1739 (BAH)

United States District Court, District of Columbia

July 18, 2022

MEMORANDUM OPINION AND ORDER

BERYL A. HOWELL, Chief Judge.

Plaintiffs Steven and Charles Heller are brothers and Hungarian Holocaust survivors, who initiated this lawsuit seeking long-overdue compensation for their late parents' and grandparents' property unlawfully seized by Hungary in the course of the many atrocities surrounding Hungary's treatment of its Jewish residents before and during World War II. Their entitlement to such compensation is clear as a matter of both morality and basic fairness, and the staggering magnitude of the atrocities committed by Hungary against hundreds of thousands of Jews during the Holocaust is beyond debate. This Court, however, is faced only with a jurisdictional question: whether plaintiffs can successfully thread a subject-matter-jurisdiction needle through the layers of exceptions and exceptions-to-exceptions in the Foreign Sovereign Immunities Act (“FSIA”) and pursue their claims in United States federal courts. Under the statute, as interpreted by binding case law, they cannot.

I. BACKGROUND

“During World War II, Hungary actively collaborated with Nazi Germany, as a formal ally, in its plan to eradicate European Jewry. Hungary facilitated the destruction of the vast majority of its own Jewish population at the hands of Germany.” Compl. ¶ 17, ECF No. 1. In 1 the course of this broader plan to eradicate the Jewish people, Hungary stripped Hungarian Jews of their possessions including cash, jewelry, heirlooms, art, valuable collectibles, gold and silver, real estate, and businesses, loaded them onto trains, and transported them in squalid conditions to concentration camps where most were murdered in gas chambers. See id. ¶¶ 6, 47, 56. These atrocities reached a fever pitch “near the end of the war in 1944, when the Nazis and Hungary, knowing that they had lost [the war], raced to complete the eradication of Jews and steal all their property before the Axis surrendered.” Id. ¶ 6. In a span of under two months, “over 440,000 Hungarian Jews” were “exterminated between May 15 and July 9, 1944,” after being transported in 147 trains bound to Auschwitz and other locations. Id. ¶ 44. Additionally, Hungarian public officials “went from one Jewish home to the next making detailed inventories of the property in the homes from which Jews fled,” id. ¶ 57, which property Hungary then expropriated “and converted to cash through sales and other means,” id. ¶ 58. Hungary today acknowledges that “the treatment of Hungarian Jews during the Holocaust was reprehensible.” Hung.'s Mem. Supp. Mot. Dismiss Compl. (“Def.'s Mem.”) at 8, ECF No. 9. Much more can be said about the plight of Hungarian Jewry during World War II, of course, but such exposition would extend beyond the scope necessary to resolve the instant motion.^[1]

Plaintiffs are the sole heirs of the estates of their grandparents, Joseph and Helena Spitzer (the “Spitzers”), and parents, Gedeon and Elizabeth Heller (the “Hellers”). Compl. ¶ 11.

Collectively, these six individuals, comprise the “Heller Family.” All six were born in Hungary, the last born being Steven, on September 1, 1938. Id. ¶¶ 2, 15. All were Jewish. See id. ¶¶ 6, 18.^[2] Plaintiffs do not allege that any members of the Heller Family were nationals or citizens of any other country prior to or during World War II. Before the War, the Spitzers and, to a lesser degree, the Hellers, were affluent members of Hungarian society. The Spitzers-two of plaintiffs' grandparents-owned sizable real estate holdings in Sopron, Hungary, including a substantial collection of furnishings, household and decorative items, and Joseph Spitzer operated both a law practice and a “large wine company” with employees, inventory, and a robust array of relevant equipment. Compl. ¶¶ 28-37. The Hellers-plaintiffs' parents-owned a more modest but still considerable estate, including a business (“the finest retailer in Budapest of men's and women's clothing and custom tailoring”), a home in Budapest, and a safe full of fine jewelry and accessories. Id. ¶¶ 38-43. The Spitzers' and Hellers' assets (collectively, the “Properties”) were among the properties expropriated by Hungary from Hungarian Jews during the Holocaust. See id. ¶¶ 16, 26, 43, 100-02, 118.^[3]

Members of the Heller Family “returned many times to Hungary after the War to reclaim their homes, businesses and possessions.” Compl. ¶ 68. Those efforts were largely unsuccessful, however, because they found their properties being used and occupied by other Hungarian citizens, and generally encountered impediments to securing access to relevant records about the Properties. Id. ¶¶ 69-72. Plaintiffs have, over time, found themselves unable to secure full compensation for the expropriations through various remedial measures and fora offered by treaty or Hungarian law. See id. ¶¶ 71-80, 87.

Plaintiffs filed this action in the U.S. District Court for the District of Columbia on June 30, 2021, asserting, in ten counts, common law and international law claims for expropriation in violation of international law (Count I), genocide (Count II), conversion (Count III), unjust enrichment (Count IV), recklessness (Count V), negligence (Count VI), civil conspiracy with Nazi Germany to commit tortious acts (Count VII), aiding and abetting (Count VIII), accounting (Count IX), as well as a demand for a declaratory judgment and injunctive relief providing plaintiffs with access to various records (Count X). See Compl. ¶¶ 89-134.^[4] To satisfy their burden of alleging facts sufficient to establish the requisite subject matter jurisdiction of this Court to hear these claims despite the immunity Hungary would ordinarily enjoy under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq., plaintiffs contend that defendants are not immune from suit because of the FSIA's expropriation exception, id. § 1605(a)(3). Compl. ¶¶ 24-27. The expropriation exception permits suit in United States courts against a foreign sovereign or its agencies or instrumentalities to vindicate “rights in property taken in violation of international law” when an adequate commercial nexus is present between the United States and a defendant. 28 U.S.C. § 1605(a)(3).

Hungary filed the pending motion to dismiss on February 28, 2022. See Hung.'s Mot. Dismiss Compl. Because of Its Sovereign Immunity, ECF No. 9. Briefing on the motion to dismiss was completed in May 2022, and this motion is now ripe for resolution.^[5]

II. LEGAL STANDARD

“Federal courts are courts of limited jurisdiction,” Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)), and “have only the power that is authorized by Article III of the Constitution and the statutes enacted by Congress pursuant thereto,” Johnson v. Comm'n on Presidential Debates, 869 F.3d 976, 980 (D.C. Cir. 2017) (quoting Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986)). To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), the plaintiff thus generally “bears the burden of invoking the court's subject matter jurisdiction.” Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)).

When a jurisdictional skirmish “present[s] a dispute over the factual basis of the court's subject matter jurisdiction,” the court “must go beyond the pleadings and resolve” any dispute necessary to the disposition of the motion to dismiss. Feldman v. FDIC, 879 F.3d 347, 351 (D.C. Cir. 2018) (quoting Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000)). In such situations, the “court may properly consider allegations in the complaint and evidentiary material in the record,” affording the plaintiff “the benefit of all reasonable inferences.” Id.; see also Am. Freedom L. Ctr. v. Obama, 821 F.3d 44, 49 (D.C. Cir. 2016) (“In considering a motion to dismiss for lack of subject matter jurisdiction, . . . we ‘may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction.'” (quoting Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005))). Absent “evidentiary offering[s],” Feldman, 879 F.3d at 351, however, courts must seek jurisdictional assurance by accepting as true all undisputed “factual allegations in the complaint and constru[ing] the complaint liberally,” and again “granting plaintiff the benefit of all inferences that can be derived from the facts alleged.” Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (internal quotation marks and citation omitted).

The FSIA is a “comprehensive statute containing a ‘set of legal standards governing claims of immunity in every civil action against a foreign state or its political subdivisions, agencies, or instrumentalities.'” Republic of Austria v. Altmann, 541 U.S. 677, 691 (2004) (quoting Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 488 (1983)). The FSIA “provides, with specified exceptions, that a ‘foreign state shall be immune from the jurisdiction of the courts of the United States.'” Bolivarian Republic of Venezuela v. Helmerich & Payne Int'l Drilling Co., 137 S.Ct. 1312, 1316 (2017) (quoting 28 U.S.C. § 1604). Under the FSIA's expropriation exception, 28 U.S.C. § 1605(a)(3), “United States courts may exercise jurisdiction over a foreign sovereign in any case ‘in which rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a...