SCOTUS Decides on Immunity in Welfenschatz Case [1]
On February 3, 2021, the U.S. Supreme Court handed down its unanimous judgment in Federal Republic of Germany et al. v. Philipp et al [3]. The case concerned the rightful ownership of a collection of medieval relic known as the Welfenschatz. The respondents in the case are the heirs of German Jewish art collectors and claim that the Nazi government coerced their art collector relatives into selling the collection to Prussia for much less than its value. The heirs brought several property law-based claims in the U.S. courts against Germany, which argued that it was immune from suit under the Foreign Sovereign Immunities Act (FSIA) and its exception to immunity where "property [is] taken in violation of international law." Germany's justification for this position was that it took its own nationals' property, which is not a violation of international law. The heirs argued that the FSIA exception applied more broadly and that the taking of the property was an act of genocide, which is a violation of international law. In an opinion drafted by Chief Justice Roberts, the Supreme Court sided with Germany, limiting the exception to the international law of expropriations. In so holding, the Court cited the International Court of Justice in Germany v. Italy: "a State is not deprived of immunity by reason of the fact that it is accused of serious violations of international human rights law." It further noted that "Germany's interpretation of the exception is also more consistent with the FSIA's express goal of codifying the restrictive theory of sovereign immunity . . . [under which] immunity extends to a sovereign's public but not its private acts." The Court also discussed the various specific exceptions in the FSIA, for example, in relation to injuries related to torture or death, stating that "[t]hese restrictions would be of little consequence if human rights abuses could be packaged as violations of property rights and thereby brought within the expropriation exception to sovereign immunity." Finally, the Court reiterated its general recognition that "United States law governs domestically but does not rule the world" and in that vein, the Court "interpret[s] the FSIA as [it does] other statutes affecting international relations: to avoid, where possible, 'producing friction in our relations with [other] nations and leading some to reciprocate by granting their courts permission to embroil the United States in expensive and difficult litigation.'" The Court did not consider the heirs' alternative argument "that the sale of the Welfenschatz is not subject to the domestic takings rule because [their relatives] were not German nationals at the time of the transaction" (because at the time, Jewish people were not considered German citizens); rather, the Court directed the Court of Appeals to instruct the District Court to consider that argument.