Philipp v. Fed. Republic of Ger.

• Decision Date: 29 January 2020
• Docket Number: Civil Action No. 15-00266 (CKK)
• Citation: 436 F.Supp.3d 61
• Parties: Alan PHILIPP, et al., Plaintiffs, v. FEDERAL REPUBLIC OF GERMANY and Stiftung Preussischer Kulturbesitz, Defendants.
• Court: U.S. District Court — District of Columbia

436 F.Supp.3d 61

Alan PHILIPP, et al., Plaintiffs,

v.FEDERAL REPUBLIC OF GERMANY and Stiftung Preussischer Kulturbesitz, Defendants.

Civil Action No. 15-00266 (CKK)

United States District Court, District of Columbia.

Signed January 29, 2020

Nicholas M. O'Donnell, Sullivan & Worcester LLP, Boston, MA, for Plaintiffs.

Jonathan M. Freiman, Pro Hac Vice, Benjamin M. Daniels, Pro Hac Vice, David Roth, Pro Hac Vice, Tahlia Townsend, Pro Hac Vice, Wiggin & Dana LLP, New Haven, CT, David L. Hall, Pro Hac Vice, Wiggin and Dana LLP, Philadelphia, PA, for Defendants.

MEMORANDUM OPINION

COLLEEN KOLLAR-KOTELLY, UNITED STATES DISTRICT JUDGE

Pending before this Court is Defendants' [43] Motion to Stay Pending Petition for Writ of Certiorari to the United States Supreme Court ("Defs' Mot.").¹ Defendants Federal Republic of Germany and Stiftung Preussischer Kulturbesitz request that this Court stay this case pending resolution of their Petition for a Writ of Certiorari, which was filed in the United States Supreme Court on September 16, 2019.² See Notice of Filing, ECF No. 46.

I. Background

Plaintiffs, who are the legal successors of the estates of three art dealer firms in Frankfurt, Germany (the "Consortium"), filed suit against Defendants the Federal Republic of Germany ("Germany") and Stiftung Preussischer Kulturbesitz ("SPK"), an instrumentality of Germany, alleging that the SPK is in wrongful possession of a collection of medieval relics, known as the "Welfenschatz," because the 1935 sale by the Consortium was coerced as part of the Nazi persecution of the Jewish sellers. Defendants moved to dismiss each of Plaintiffs' ten claims.

On March 31, 2017, the Court entered an [25] Order granting in part and denying in part Defendants' Motion to Dismiss the First Amended Complaint. See Philipp v. Fed. Rep. of Germany , 248 F. Supp. 3d 59 (D.D.C. 2017). Specifically, the Court dismissed five of Plaintiffs' ten claims, but denied Defendants' request to dismiss the following five claims: declaratory relief (Count I); replevin (Count II); conversion (Count III); unjust enrichment (Count IV); and bailment (Count IX). In reaching this holding, the Court found that: (1) Plaintiffs sufficiently pled these five claims under the expropriation exception to the Foreign Sovereign Immunities Act ("FSIA"), codified at 28 U.S.C. § 1605(a)(3) ("FSIA claims"); (2) Plaintiffs' claims are not preempted or non-justiciable, nor should they be dismissed under the doctrine of forum non conveniens ("non-FSIA claims"). Defendants filed an interlocutory appeal as of right before the United States Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") with respect to the FSIA issue. See, e.g. , Kilburn v. Socialist People's Libyan Arab Jamahiriya , 376 F.3d 1123, 1126 (D.C. Cir. 2004) ("The denial of a motion to dismiss on the ground of sovereign immunity ... is ... subject to interlocutory review.").

On July 10, 2018, the D.C. Circuit issued its Opinion in Philipp v. Federal Republic of Germany , 894 F.3d 406 (D.C. Cir. 2018). The Circuit panel relied upon the reasoning in Simon v. Republic of Hungary , 812 F.3d 127 (D.C. Cir. 2016), recognizing that "a foreign sovereign's taking of its own citizens' property... does not violate the international law of takings" and ordinarily is not subject to the FSIA's expropriation exception. Philipp , 894 F.3d at 410 (citing Simon , 894 F.3d at 144). But the Simon court held ultimately that a foreign state could face suit in the United States where the alleged taking "amounted to the commission of genocide." Philipp , 894 F.3d at 410-11 (citing Simon , 812 F.3d at 142 ). In Philipp , the panel held further that the FSIA bars any consideration of international comity, even when a plaintiff could have pursued his claims in the foreign state's courts. Philipp , 894 F. 3d at 410. The panel rejected the position to the contrary that was advanced by the United States and acknowledged that it was split with the Seventh Circuit's recent decision on the same issue. Id. at 416.

Defendants petitioned the Circuit Court for a rehearing en banc , and the United States filed an amicus brief in support of a rehearing, asserting that courts can and should consider international comity. The petition for rehearing was denied as was the Defendants' request that the D.C. Circuit stay the mandate. Defendants then asked the Supreme Court to stay proceedings, but that application was denied "without prejudice to petitioners filing a new application after seeking relief in the district court." Def.'s Mot., ECF No. 43, at 9.³

The July 16, 2019 [39] Mandate from the D.C. Circuit references the July 10, 2018 Judgment affirming "the denial of the motion to dismiss," with instructions that, on remand, "the district court must grant the motion to dismiss with respect to the Federal Republic of Germany ..." See Judgment, ECF No. 39-1. On July 30, 2019, this Court issued an Order dismissing with prejudice Defendant Federal Republic of Germany. See ECF No. 40.

On August 28, 2019, the Court held a Status Conference in this case, where the Defendants' pending Motion to Stay was discussed. This Court indicated that Defendants were permitted to file a reply in support of their Motion to Stay, subsequent to the Status Conference, and further, that the Court would consider the pleadings and issue an order. Now pending before this Court are Defendants' [43] Motion to Stay Pending Petition for Writ of Certiorari to the United States Supreme Court ("Defs' Mot."); Plaintiffs' [44] Opposition to the Motion to Stay (Pls.' Opp'n.); and Defendants' [45] Reply in Support of Motion to Stay ("Defs.' Reply").

Upon consideration of the Defendants' [43] Motion to Stay and Plaintiffs' Opposition thereto, for the reasons explained herein, the Court shall STAY this civil action pending a determination on Defendants' Petition for a Writ of Certiorari to the Supreme Court.

II. Legal Standard

In making determinations on motions to stay, courts "exercise [ ] judgment" and "weigh competing interests." U.S. ex rel. Vermont Nat'l Tel. Co. v. Northstar Wireless, L.L.C. , 288 F. Supp. 3d 28, 31 (D.D.C. 2017) (Kollar-Kotelly, J.) (quoting Air Line Pilots Ass'n v. Miller , 523 U.S. 866, 879 n.6, 118 S.Ct. 1761, 140 L.Ed.2d 1070 (1998) ). Courts look at four factors to determine whether to issue a stay:

(1) the likelihood that the party seeking the stay will prevail on the merits of the appeal;

(2) the likelihood that the moving party will be irreparably harmed absent a stay;

(3) the prospect that others will be harmed if the court grants the stay; and

(4) the public interest in granting the stay.

Cuomo v. United States NRC , 772 F. 2d 972, 974 (D.C. Cir. 1985). The Court will consider each factor in turn.

III. Legal Analysis

A. Likelihood of Success on the Merits/Presentation of a Serious Legal Question

Plaintiffs argue that Defendants are unlikely to prevail on either the expropriations or comity argument. Plaintiffs focus on the fact that the Court of Appeals denied a stay of the mandate, and the Supreme Court also denied a stay; however, the Court of Appeals remanded the case to this Court, and the Supreme Court's denial was without prejudice to filing a new application to stay proceedings after Defendant sought a stay in this Court. Accordingly, the effect of these denials was to leave resting with this Court the decision whether or not to grant a stay. Plaintiffs assert further that the likelihood of success is slim because the Supreme Court grants certiorari in only one to four percent of cases, Pls.' Opp'n, ECFN o. 44, at 9; however, this statistical percentage is misleading as it fails to distinguish between meritorious petitions (involving serious legal issues) and frivolous petitions, and it doesn't focus on the particular issues in this case.

In considering the likelihood of success factor, this Court notes that the Circuit's decision in Philipp , 894 F.3d 406, was comprehensive, well-reasoned, and fully supported by relevant statutory and case law. The opinion addressed in detail the arguments raised by both sides, and Defendants' request for en banc consideration was denied. As such, on that basis, the "likelihood of success" factor would weigh in favor of Plaintiffs. Although it is this Court's view that its decision affirmed by the appellate court should be upheld, a "likelihood of success" analysis in this context requires that this Court assume the posture of engaging in speculation as to what the Supreme Court is likely to do.

Defendants contend that this Court "need not take the additional step of predicting whether, if the Supreme Court grants certiorari, it will reverse or affirm." Defs.' Reply, ECF No. 45, at 8. Defendants assert that instead of considering the "likelihood of success," the question here is "whether Defendants have raised a serious legal question [as to]whether certiorari will be granted" based on its allegations that the petition is:

brought by a foreign sovereign, challenging a panel decision addressing the scope of an FSIA exception and the comity doctrine of abstention; where the panel decision created a circuit split; where the panel decision rejected the express views of the Executive Branch on both issues; and where the circuit's denial of rehearing en banc provoked a lengthy dissent noting the far-ranging implications of the panel decision.

Defs.' Reply, ECF No. 45, at 7. See Loving v. I.R.S. , 920 F. Supp. 2d 108, 110 (D.D.C. 2013) (finding that "so long as the other factors strongly favor a stay, such remedy is appropriate if ‘serious legal question is presented’ ") (citing CREW v. Office of Admin. , 593 F. Supp.2d 156, 160 (D.D.C. 2009) (Kollar-Kotelly, J.)).

In Washington Metropolitan Area Transit Commission v. Holiday Tours, Inc. , 559 F.2d 841, 844 (D.C. Cir. 1977), this Circuit found that the "serious legal question" standard may replace the "likelihood of success on the merits" standard. The Circuit Court opined that:

We

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