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Federal Appellate Court Allows Hungarian Holocaust Survivors to Pursue Claims

Published online by Cambridge University Press:  09 April 2019

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On December 28, 2018, the Court of Appeals for the District of Columbia Circuit held in Simon v. Republic of Hungary that fourteen Hungarian Jewish survivors of the Holocaust could continue to pursue their claims against Hungary and its state-owned railway. In a 2–1 decision authored by Judge Millett, the D.C. Circuit reversed the district court decision that had dismissed the case on two alternative grounds—the principle of international comity and the doctrine of forum non conveniens. The D.C. Circuit thus remanded the long-running case for further proceedings.

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Type
Private International Law
Information
American Journal of International Law , Volume 113 , Issue 2 , April 2019 , pp. 404 - 407
Copyright
Copyright © 2019 by The American Society of International Law 

On December 28, 2018, the Court of Appeals for the District of Columbia Circuit held in Simon v. Republic of Hungary that fourteen Hungarian Jewish survivors of the Holocaust could continue to pursue their claims against Hungary and its state-owned railway.Footnote 1 In a 2–1 decision authored by Judge Millett, the D.C. Circuit reversed the district court decision that had dismissed the case on two alternative grounds—the principle of international comity and the doctrine of forum non conveniens.Footnote 2 The D.C. Circuit thus remanded the long-running case for further proceedings.Footnote 3

In 2010, the plaintiffs filed suit against Hungary and its government-owned railway, Magyar Államvasutak Zrt. (MÁV), seeking restitution for the seizure and expropriation of their property during Hungary's genocidal campaign against the Jewish people.Footnote 4 “In 1944 alone, a concentrated campaign by the Hungarian government marched nearly half a million Jews into Hungarian railroad stations, stripped them of all their personal property and possessions, forced them onto trains, and transported them to death camps like Auschwitz, where 90% of them were murdered upon arrival.”Footnote 5 The plaintiffs thus sought restitution for the expropriation of their property by the Hungarian government and MÁV.Footnote 6

An earlier round of litigation established presumptive subject matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA) with respect to MÁV, while leaving the door open for an eventual finding of subject matter jurisdiction with respect to Hungary.Footnote 7 On remand from a prior appeal, the district court did not further address subject matter jurisdiction, but instead dismissed the case against both defendants on two alternative grounds.Footnote 8 First, relying on the concept of international comity, the court held that the plaintiffs were required to exhaust remedies in Hungary before adjudicating claims in the United States.Footnote 9 Second, applying the doctrine of forum non conveniens, the court concluded that the claims would be more appropriately brought in Hungary.Footnote 10

The D.C. Circuit reversed both holdings. With respect to international comity, the court reasoned that dismissal on the basis of comity was incompatible with the FSIA in the absence of a statutory requirement of exhaustion. The court explained:

[W]hile we need not definitively resolve the question, there is a substantial risk that the Survivors’ exhaustion of any Hungarian remedy could preclude them by operation of res judicata from ever bringing their claims in the United States. …

So understood, enforcing what Hungary calls “prudential exhaustion” would in actuality amount to a judicial grant of immunity from jurisdiction in United States courts. But the FSIA admits of no such bar. … To the contrary, the whole point of the FSIA was to “abate[] the bedlam” of case-by-case immunity decisions, and put in its place a “comprehensive set of legal standards governing claims of immunity in every civil action against a foreign state.” …

… Hungary's exhaustion-cum-immunity argument has no anchor in the FSIA. … [T]he FSIA is explicit that, if a statutory exception to immunity applies—as we have squarely held it does at least to MÁV— … “[a] foreign state shall not be immune from the jurisdiction of courts of the United States or of the States.” Courts cannot end run that congressional command by just relabeling an immunity claim as “prudential exhaustion.”Footnote 11

The D.C. Circuit also reversed the district court's ruling on forum non conveniens, concluding that the lower court committed several legal errors in its analysis and thus abused its discretion in dismissing the case.Footnote 12 Judge Millett's opinion emphasized that under forum non conveniens, courts should place a “‘strong presumption in favor of the plaintiff's choice,’” which can only be overcome “‘when the private and public interest factors clearly point’” to the other forum.Footnote 13 “[T]he district court's failure to hold Hungary to that task makes this among ‘the rare case[s]’ in which a district court's balancing of factors amounts to an abuse of discretion.”Footnote 14

In reversing the district court, the D.C. Circuit emphasized several points. One was that the district court paid too little consideration to the preferences of the plaintiffs, particularly the four U.S. citizen plaintiffs and their “weighty interest [as] Americans [of] seeking justice in their own courts.”Footnote 15 Another was that, with respect to the private interests at stake, the district court was “too quick to credit Hungary's claims and too slow to value the Survivors’ evidence” with respect to issues like the location of evidence, the challenges of translation, and the convenience of witnesses.Footnote 16 The D.C. Circuit further considered that the district court misconstrued the public interests at stake when it “concluded that those factors weighed in favor of a Hungarian forum because of Hungary's ‘stronger’ moral interest in resolving the dispute, the likelihood that Hungarian law would apply to the Survivors’ claims, and the administrative burden the litigation could impose on the court.”Footnote 17 The D.C. Circuit noted that “Hungary has had over seventy years to vindicate its interests in addressing its role in the Holocaust” and that in any event “neither party argues that current Hungarian law should apply.”Footnote 18 Finally, the court observed that although the United States did not take a position in the district court proceedings, it had filed a brief during the appeal that “advised [the] court that it ha[d] no specific foreign policy or international comity concerns that warrant dismissal of [the] case in favor of a Hungarian … forum.”Footnote 19

Judge Katsas dissented from the majority's conclusion with respect to forum non conveniens but did not address the court's holding with respect to international comity. In his view, the district court “permissibly applied the settled law of forum non conveniens” in “conclud[ing] that this foreign-cubed case—involving wrongs committed by Hungarians against Hungarians in Hungary—should be litigated in Hungary.”Footnote 20 Emphasizing the “narrow” standard of review, he deemed the district court's evaluation of the interests at stake and of the balance among them to be within its discretion.Footnote 21

The decision in Simon comes at a time when the concept of international comity and the doctrine of forum non conveniens are also at issue in other cases involving the expropriation of property during the Holocaust. As one example, a case with similarities to Simon—Scalin v. Société Nationale des Chemins de Fer Français—is presently before the Court of Appeals for the Seventh Circuit.Footnote 22 The plaintiffs in Scalin had sued the French national railway for the expropriation of property during the Holocaust but the district court dismissed on the grounds that the plaintiffs had failed to exhaust their remedies and had an alternative forum available to them.Footnote 23 In an earlier case involving Hungarian Holocaust survivors, the Seventh Circuit concluded that “principles of international comity make clear that these plaintiffs must attempt to exhaust domestic remedies before foreign courts can provide remedies for those violations.”Footnote 24 It remains to be seen whether the tension between the approaches taken in the D.C. and Seventh Circuits will at some point be addressed by the U.S. Supreme Court. In the meantime, both international comity and forum non conveniens are the subjects of ongoing attention in legal scholarship.Footnote 25

References

1 Simon v. Republic of Hungary, 911 F.3d 1172, 1176 (D.C. Cir. 2018).

2 Id. at 1176.

3 Id. at 1190.

4 Id. at 1175–76; Complaint at 3–4, Simon v. Republic of Hungary, 37 F. Supp. 3d 381 (D.D.C. 2014) (No. 10-cv-01770). The plaintiffs also sued a third defendant, Rail Cargo Hungaria Zrt. but the company was dismissed due to lack of personal jurisdiction. Simon v. Republic of Hungary, 37 F. Supp. 3d 381, 444 (D.D.C. 2014).

5 Simon, 911 F.3d at 1175.

6 Id.

7 Several years after the suit was filed, the district court dismissed the case against Hungary and MÁV for lack of subject matter jurisdiction, and the plaintiffs appealed. Simon, 37 F. Supp. 3d at 397. The D.C. Circuit then reversed in part the lower court's dismissal, relying on the FSIA's exception to sovereign immunity with respect to the expropriation of property taken in violation of international law. Simon v. Republic of Hungary, 812 F.3d 127, 147–48, 151 (D.C. Cir. 2016). The court held that the plaintiffs adequately alleged jurisdiction over MÁV as an initial matter, while noting that MÁV might later be able to rebut this jurisdiction if it showed that it no longer possessed either “the property or proceeds thereof.” Id. at 147. As to Hungary, the D.C. Circuit made this same point but further concluded that the plaintiffs had not adequately pled a commercial activity nexus with the United States. Id. at 147–48; see also de Cespel v. Republic of Hungary, 859 F.3d 1094, 1104–08 (2017) (further refining circuit case law with respect to what constitutes such a nexus). On remand, the plaintiffs amended their complaint to make more specific allegations with respect to Hungary and the commercial activity nexus. See Simon v. Republic of Hungary, 277 F. Supp. 3d 42, 52 (D.D.C. 2017).

8 Simon, 277 F. Supp. 3d at 54; see also id. at 52 n.6 (declining to address the issue of subject matter jurisdiction in light of its finding other grounds for dismissal).

9 Simon, 911 F.3d at 1175.

10 Id.

11 Id. at 1180–81 (second alteration in original) (emphasis in original) (omitting internal citations).

12 Id. at 1182.

13 Id. (emphasis in original) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981)).

14 Id. at 1185.

15 Id. at 1183.

16 Id. at 1186–87.

17 Id. at 1187 (citing Simon, 277 F. Supp. 3d at 66–67).

18 Id. at 1187–89.

19 Id. at 1189 (internal citations omitted).

20 Id. at 1190 (Katsas, J., dissenting).

21 Id. at 1190–94 (Katsas, J., dissenting).

22 Notice of Appeal, Scalin v. Société Nationale des Chemins de Fer Français, No. 15-cv-03362, 2018 WL 1469015 (N.D. Ill. Apr. 24, 2018).

23 No. 15-cv-03362, 2018 WL 1469015, at *1 (N.D. Ill. Mar. 26, 2018).

24 Fischer v. Magyar Államvasutak Zrt., 777 F.3d 847, 852 (7th Cir. 2015); see also Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661, 684 (2012) (reaching a similar holding in a still-earlier case).

25 E.g., Dodge, William S., International Comity in American Law, 115 Colum. L. Rev. 2071, 2110 (2015)Google Scholar (surveying the concept of international comity and emphasizing its domestic legal grounding); Gardner, Maggie, Retiring Forum Non Conveniens, 92 N.Y.U. L. Rev. 390, 391 (2017)Google Scholar (arguing for the abolition of the doctrine of forum non conveniens).