Alien tort statute

2Volume 21, January–March 2015 international law update
© 2015 International Law Group, LLC. All rights reserved. ISSN 1089-5450, ISSN 1943-1287 (on-line) |
Seventh Circuit affirms dismissals
without prejudice of lawsuits by
Holocaust victims against Hungarian
national railway, Hungarian national
bank, and other private banks for
their complicit role during World
War II; international comity requires
that Plaintiffs first exhaust available
Hungarian remedies
Holocaust survivors and heirs of Holocaust
victims (Plaintis) brought suits against the
Hungarian national railway, the Hungarian national
bank, and several private banks (Defendants) for the
roles they or their predecessors played in carrying
out genocide against Hungarian Jews during World
War II.
Plaintis’ complaints described the seizure,
transport, and murder of hundreds of thousands of
Hungarian Jews during 1944 and 1945. Plaintis’
claims for takings of property during this period
70 years ago were asserted against both foreign
sovereign entities and private banks with relatively
few ties to the United States. ey brought
two separate suits: one against the Hungarian
banks seeking to hold them jointly and severally
responsible for damages of approximately $75
billion; and another against the Hungarian national
railway seeking damages of approximately 1.25
billion. Plaintis alleged seven causes of action
against the banks: genocide, aiding and abetting
genocide, bailment, conversion, unjust enrichment,
constructive trust, and accounting; and nine causes
of action against the national railway: takings in
violation of international law, aiding and abetting
genocide, complicity in genocide, violations of
customary international law, unlawful conversion,
unjust enrichment, fraudulent misrepresentations,
accounting, and declaratory relief pursuant to the
Foreign Sovereign Immunities Act, 28 U.S.C. §
Plaintis relied on several bases of U.S. courts’
jurisdiction, including the Foreign Sovereign
Immunities Act, 28 U.S.C. § 1330(a), the
Alien Tort Statute, 28 U.S.C. § 1350, diversity
jurisdiction under the Class Action Fairness Act
(CAFA), 28 U.S.C. § 1332(d), and federal question
jurisdiction, 28 U.S.C. § 1331.
e Foreign Sovereign Immunities Act (“FSIA”)
“bars jurisdiction in United States federal courts
against foreign sovereigns for claims for death or
personal injury or damage to or loss of property that
does not occur in the United States. See Abelesz v.
Magyar Nemzeti Bank, 692 F.3d at 677, citing 28
U.S.C. § 1605(a)(5).” However, “the FSIA permits
jurisdiction over foreign sovereigns for claims for
takings of property in violation of international law.
28 U.S.C. § 1605(a)(3).” Plaintis’ claims focus
on the role that the Hungarian banks played in
expropriating money and other property from Jews
alleging that these expropriations were essential to
nance the continued German war eort and the
Hungarian genocide itself.
In the 2012 appeals in these cases the Court
held that the national railway and national bank
could be sued on these claims in the United States
federal court “only if plaintis could demonstrate
on remand that they had exhausted any available
Hungarian remedies or had a legally compelling
reason for their failure to do so. Abelesz v. Magyar
Nemzeti Bank, 692 F.3d 661 (7th Cir.2012).” On
remand the District Court held that plaintis had
not exhausted Hungarian remedies and had not
provided a legally compelling reason for not doing
so, and dismissed the claims against the national
bank and national railway. Furthermore, the
District Court also dismissed Erste Group Bank AG
(“Erste Bank” – a private Austrian bank that had
acquired a Hungarian bank that Plaintis alleged
had participated in the Holocaust) from suit on
forum non conveniens grounds. Plaintis appealed.
e U.S. Court of Appeals for the Seventh
Circuit arms all the dismissals. e key issue
here is whether the district court has subject matter
jurisdiction over a foreign state instrumentality
under the expropriation exception to the Foreign
Sovereign Immunities Act.

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