Hirsh v. State of Israel

• Citation: 962 F.Supp. 377
• Decision Date: 08 April 1997
• Docket Number: No. 95 Civil 9460 (JFK).,95 Civil 9460 (JFK).
• Parties: Weinberg HIRSH, Henry Eisler, Theodore Hilsenrath, Benzion Berkowitz, and Others, Plaintiffs, v. STATE OF ISRAEL and State of Germany, Defendants.
• Court: U.S. District Court — Southern District of New York

Page 377

962 F.Supp. 377

Weinberg HIRSH, Henry Eisler, Theodore Hilsenrath, Benzion Berkowitz, and Others, Plaintiffs, v. STATE OF ISRAEL and State of Germany, Defendants.

No. 95 Civil 9460 (JFK).

United States District Court, S.D. New York.

April 8, 1997.

Teddy I. Moore, Flushing, NY, for Plaintiffs.

Arnold & Porter, New York City (Peter L. Zimroth, Kent A. Yalowitz, of counsel) for State of Israel.

Thomas Re & Partners, New York City, (Stuart A. Jackson, of counsel) Berliner, Corcoran & Rowe, Washington, DC, (Peter Heidenberger, Thomas G. Corcoran, Jr., of counsel) for State of Germany.

OPINION and ORDER

KEENAN, District Judge.

Defendants State of Israel ("Israel") and Federal Republic of Germany ("Germany") move to dismiss this action pursuant to Fed. R.Civ.P. 12(b)(1), (2), (4), and (5). For the reasons set forth below, the Court grants Defendants' motions to dismiss for lack of subject matter jurisdiction, pursuant to Fed. R.Civ.P. 12(b)(1).

BACKGROUND

Plaintiffs Weinberg Hirsh, Henry Eisler, Theodore Hilsenrath, and Benzion Berkowitz bring this action on behalf of themselves and a putative class of Holocaust survivors to recover reparation payments allegedly due them pursuant to the terms of a treaty Germany and Israel entered into in 1952 known as the Luxembourg Agreement.¹ According to the complaint, the government of West Germany assumed an obligation under the treaty to compensate Holocaust survivors for their loss of freedom, loss of income, pain and suffering, bodily injury, and property damages at the hands of the Nazis during World War II. See Compl. ¶ 4. Plaintiffs also aver that Israel assumed an obligation to make payments to Holocaust survivors who immigrated to Israel out of a fund established by West Germany pursuant to the treaty. See id.

Plaintiffs charge in this action that Israel and Germany have failed to compensate Holocaust survivors in accordance with the Luxembourg Agreement. Specifically, Plaintiffs claim that Israel has failed to make adequate payments because it has grossly mismanaged or embezzled the funds provided by West Germany. See id. ¶¶ 4, 6. Plaintiffs allege that Germany is liable for this shortfall as Israel's "principal" with respect to payment of Holocaust survivors. See id. ¶ 5. Plaintiffs also claim that the Federal Republic of Germany, which was formed in 1990 with the reunification of the former East and West Germany, is obligated to pay additional compensation to Holocaust survivors on behalf of the former East Germany, which allegedly has never paid reparations to Holocaust victims. See id. ¶¶ 4-5. Plaintiffs seek a total of $40 billion in damages against Defendants. See id. ¶¶ 7-8.

DISCUSSION

Defendants Israel and Germany move to dismiss this action for lack of subject matter jurisdiction and personal jurisdiction, and for insufficiency of process and service of process. Plaintiffs oppose the motions in a three-page memorandum of law entitled "Memorandum of Law by Plaintiffs" ("Pl. Mem.") and a seven-page memorandum entitled "Response by Plaintiffs" ("Pl.Resp.").² Plaintiffs have not submitted affidavits in opposition to the motions. The Court must first consider whether it has subject matter jurisdiction to adjudicate this action. See Cargill Int'l, S.A. v. M/T Pavel Dybenko, 991 F.2d 1012, 1016 (2d Cir.1993) ("Subject matter jurisdiction must be ascertained first.") (citing FSIA legislative history in House Report 13, reprinted in 1976 U.S.C.C.A.N. at 6612).

I. The Foreign Sovereign Immunities Act

The Foreign Sovereign Immunities Act of 1976 (the "FSIA"), 28 U.S.C. § 1602 et. seq., provides the exclusive source of subject matter jurisdiction over suits against foreign states brought in United States courts.³ See Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 610-11, 112 S.Ct. 2160, 2164-65, 119 L.Ed.2d 394 (1992); Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443, 109 S.Ct. 683, 693, 102 L.Ed.2d 818 (1989). The statute confers original jurisdiction on federal district courts

without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity....

28 U.S.C. § 1330(a). However, the general rule is that a foreign state is presumptively immune from jurisdiction unless a court finds that one of the specific exceptions to immunity provided in sections 1605 to 1607 of the FSIA applies. See id. § 1604; see also Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 488-89, 103 S.Ct. 1962, 1968-69, 76 L.Ed.2d 81 (1983).

It is undisputed that Defendants Germany and Israel are "foreign states" within the meaning of section 1603(a) of the FSIA. See 28 U.S.C. § 1603(a). Therefore, Plaintiffs have the burden of going forward with evidence demonstrating that their claims fall within one of the statutory exceptions to sovereign immunity, although the ultimate burden of persuasion remains with the foreign state. See Drexel Burnham Lambert Group, Inc. v. Committee of Receivers for Galadari, 12 F.3d 317, 325 (2d Cir.1993) (citing Cargill Int'l, 991 F.2d at 1016), cert. denied, 511 U.S. 1069, 114 S.Ct. 1644, 1645, 128 L.Ed.2d 365 (1994). Absent a showing by Plaintiffs that an exception to foreign sovereign immunity exists, the Court is without subject matter jurisdiction over this action.

Although the allegations in Plaintiffs' complaint and arguments in their motion papers are vague and almost entirely conclusory, the Court construes Plaintiffs as claiming five separate exceptions under the FSIA to Israel's and Germany's presumptive sovereign immunity: the waiver exception in section 1605(a)(1), the commercial activity exception in section 1605(a)(2), the property exception in section 1605(a)(3), the noncommercial tort exception in section 1605(a)(5), and the arbitration exception in section 1605(a)(6). Plaintiffs also claim that the Alien Tort Statute, 28 U.S.C. § 1350, provides a basis for subject matter jurisdiction. The Court examines whether Plaintiffs' claims fall within any of these asserted exceptions.

II. Analysis

A. The Waiver Exception

The FSIA provides that a foreign state is not immune from jurisdiction where it has "waived its immunity either explicitly or by implication." 28 U.S.C. § 1605(a)(1).⁴ Plaintiffs do not contend that either Defendant explicitly waived its rights to immunity in this action. Instead, Plaintiffs argue that Defendant Germany waived its immunity (1) by submitting a letter to the Court that failed to raise the defense of immunity; and (2) by violating jus cogens norms. In reviewing Plaintiffs' contentions, the Court is cognizant of the Second Circuit's admonition that the FSIA's implied waiver exception must be "construed narrowly." Shapiro v. Republic of Bolivia, 930 F.2d 1013, 1017 (2d Cir.1991) (citing legislative history and collecting cases).

The Court first addresses the contention that Germany implicitly waived immunity in this action by "appearing first in court in writing ... without denying any allegations including `immunity'." Pl.Mem. ¶ 17(a). What Plaintiffs characterize as Germany's "first appearance" in this action is Germany's January 5, 1996 letter to the Court advising it that Germany considered Plaintiffs' attempted service of process upon Germany's Consulate in New York invalid. See Germany Mem., Exh. 1. Germany's letter provides that the letter "is not intended and may not be construed as an appearance of [Germany] in this action or as waiving any rights whatsoever." Id.

Contrary to Plaintiffs' assertions, Germany's letter to the Court cannot be construed as an "appearance" that waives Germany's sovereign immunity defense. Although an implied waiver may be found where a foreign state files a responsive pleading that fails to raise the defense of sovereign immunity, Cargill Int'l, 991 F.2d at 1017, Germany's letter is not a "responsive pleading." Moreover, the express assertion in the letter that it was not intended as a waiver precludes a finding that the letter is an "unmistakable" and "unambiguous" waiver of sovereign immunity, as required to invoke section 1605(a)(1) of the FSIA. See Shapiro, 930 F.2d at 1017. The Court finds that Germany preserved its defense of sovereign immunity by raising it in the instant motion to dismiss the complaint. See Drexel Burnham Lambert, 12 F.3d at 325-27.⁵

The Court next addresses Plaintiffs' contention that Germany "has waived its immunity under the Jus Cogens Norm because this is the will of the international community of states (see Hugo Princz v. Federal Republic of Germany ... )." Pl.Mem. at 3. Although it is difficult to ascertain the basis of Plaintiffs' theory from this single reference to jus cogens, the Court shall assume that Plaintiffs intended to assert that Germany implicitly waived immunity by acting in violation of the law of nations by failing to honor its treaty obligations.⁶

Jus cogens norms "proscribe a limited set of activities so universally condemned by the international community that they cannot be undertaken under any circumstances." Denegri v. Republic of Chile, Civ. A. No. 86-3085, 1992 WL 91914, at *3 (D.D.C. Apr.6, 1992). A foreign state violates jus cogens when it participates in such blatant violations of fundamental human rights as "genocide, slavery, murder, torture, prolonged arbitrary detention, and racial discrimination." Committee of U.S. Citizens in Nicaragua v. Reagan, 859 F.2d 929, 941 (D.C.Cir.1988).

Recently, in Smith v. Socialist People's Libyan Arab Jamahiriya, 101 F.3d 239 (2d Cir.1996), petition for cert. filed, 65 U.S.L.W. 3599 (U.S. Feb. 24, 1997) (No. 96-1357), the Second Circuit had the opportunity to address the precise question at issue here: whether a nation's violation of jus cogens norms constitutes an implicit waiver of sovereign immunity under section 1605(a)(1) of the FSIA. The plaintiffs in that...