Karen Scalin v. Societe Nationale SNCF SA ( 2021 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18-1887
KAREN SCALIN, ROLAND CHERRIER, and JOSIANE PIQUARD,
Plaintiffs-Appellants,
v.
SOCIÉTÉ NATIONALE SNCF SA, formerly known as Société Na-
tionale des Chemins de fer Français,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 15 C 3362 — Andrea R. Wood, Judge.
____________________
ARGUED JANUARY 18, 2019 — DECIDED AUGUST 6, 2021
____________________
Before EASTERBROOK and SCUDDER, Circuit Judges.*
EASTERBROOK, Circuit Judge. During World War II the Nazi
regime in Germany and nations under its domination killed
millions of Jews. Plaintiffs in this suit are descendants of Jews
* Associate Justice Barrett heard argument in this appeal while she was
a member of this court. She did not participate in the decision, which is
being rendered by a quorum of the panel. 28 U.S.C. §46(d).
2 No. 18-1887
rounded up in France after it signed an armistice with Ger-
many in 1940. According to the complaint, persons being sent
to death camps were loaded on trains operated by the French
national railroad, now known as Société Nationale SNCF. The
passengers’ belongings were stolen by railroad workers and
handed over to the Nazis. This suit seeks compensation for
those thefts.
One can imagine many possible responses, including the
statute of limitations. World War II ended more than 75 years
ago. Then there is the fact that the complaint does not allege
any misconduct within the United States or by a U.S. national.
The crimes were commi]ed in Europe, by Europeans, against
Europeans. The only defendant, SNCF, operates its railroad
in Europe and is not alleged to have commi]ed any wrong in
the United States. Still, plaintiffs insist, victims and their de-
scendants may use the U.S. courts to seek damages for foreign
wrongs, when the allegations concern “rights in property
taken in violation of international law”. 28 U.S.C. §1605(a)(3).
This is the expropriation exception to the Foreign Sovereign
Immunities Act (FSIA). The Act generally forbids courts of
this nation to award damages against foreign sovereigns (in-
cluding their instrumentalists, such as SNCF), but the expro-
priation exception is one of several exceptions to this norm.
The district court dismissed the complaint, but not for any
of these reasons. It held instead that plaintiffs must seek their
remedy under a French administrative-claims system that has
been devised to compensate victims of the Nazi occupation
and the Vichy regime. 2018 U.S. Dist. LEXIS 48805 (N.D. Ill.
Mar. 26, 2018). It relied on Abelesz v. Magyar Nemzeti Bank, 692
F.3d 661 (7th Cir. 2012), and Fischer v. Magyar Államvasutak
Zrt., 777 F.3d 847 (7th Cir. 2015), which conclude that, to the
No. 18-1887 3
extent foreign nationals can seek compensation in U.S. courts
for property expropriated during a campaign of genocide, a
federal tribunal may abstain in favor of compensation sys-
tems offered in the nation where the wrongs occurred. Abelesz
and Fischer sometimes referred to this as exhaustion of admin-
istrative remedies, but the opinions did not contemplate a fol-
low-up in which a federal judge would superintend the deci-
sions of the foreign tribunals. Comity-based abstention is
therefore a more apt description. Whether the French system
of compensation for wartime thefts justifies abstention was
the principal subject briefed and argued in our appeal.
Before the appeal was argued here, the D.C. Circuit disa-
greed with Abelesz and Fischer, holding that abstention is
never proper. See Philipp v. Germany, 894 F.3d 406 (D.C. Cir.
2018), rehearing en banc denied, 925 F.3d 1349 (2019); Simon
v. Hungary, 911 F.3d 1172 (D.C. Cir. 2018). We deferred reso-
lution of the appeal while the Supreme Court considered
those cases. But the eventual opinion bypassed the possibility
of abstention and held that the expropriation exception can-
not be used by a person whose own nation took property. Ger-
many v. Philipp, 141 S. Ct. 703 (2021).
Shortly after the Justices released the opinion in Philipp,
plaintiffs asked us to remand so that the district court could
consider the possibility that one or more of the plaintiffs’ pre-
decessors in interest was not a French citizen at the time of the
thefts, either because the victim was a citizen of some other
nation who had become a refugee in France or because the
Vichy regime and the German forces that administered the
occupied zone in France treated Jews as stateless. A remand
for that purpose also would have posed the question whether
the issue had been forfeited by plaintiffs’ delay in raising the
4 No. 18-1887
subject of the victims’ citizenship. And it would have left open
the principal question briefed on appeal—whether interna-
tional comity means that plaintiffs’ claims should be resolved
in France.
A remand also would have left open a subject that had
been discussed at oral argument and in post-argument briefs:
What is the plaintiffs’ claim in the first place? This is a triple-
foreign suit: plaintiffs allege that nationals of a country other
than the United States were injured by a foreign entity (SNCF)
in a foreign nation (France). Plaintiffs say that one of their
number is a U.S. citizen, but they do not contend that any of
them was injured by wrongful acts in France. They describe
themselves as the heirs (children or grandchildren) of the vic-
tims. The fact that a foreign national’s claim has been trans-
ferred to a U.S. citizen does not make it less a foreign claim.
Suppose B accuses A of a tort (such as conversion) in Mas-
sachuse]s. B dies, and the claim passes to C as a ma]er of
state law. May C then sue A in Illinois, where C lives but none
of the wrongful conduct occurred? The answer is no. The
proper location of a suit depends on the original acts, not on
the plaintiff’s current residence. See, e.g., Walden v. Fiore, 571
U.S. 277 (2014); Stafford v. Briggs, 444 U.S. 527 (1980). The prin-
ciple is the same when the tort of conversion occurs in France
rather than Massachuse]s.
In light of these considerations, we told the parties that we
would wait for the Supreme Court’s decision in Nestlé USA,
Inc. v. Doe, 141 S. Ct. 1931 (2021), which might shed light on
where triple-foreign suits may be litigated. Nestlé turned out
to reiterate the proposition that the Alien Tort Statute, 28
U.S.C. §1350, does not provide a remedy for triple-foreign
events and does not apply when the wrongful acts are
No. 18-1887 5
unconnected to the United States or its citizens. See Kiobel v.
Royal Dutch Petroleum Co., 569 U.S. 108 (2013). Nestlé adds that
this rule cannot be sidestepped by asserting that a company
in the United States aided and abe]ed foreign wrongs. Cf.
Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) (no
jurisdiction in United States over triple-foreign securities of-
fenses). Likewise it cannot be sidestepped by transferring to a
U.S. citizen a foreign national’s claim against a foreign entity
for injury suffered abroad. What’s more, Jesner v. Arab Bank
PLC, 138 S. Ct. 1386 (2018), holds that a foreign corporation
such as SNCF cannot be a defendant in a suit under §1350.
Section 1350 therefore does not offer plaintiffs a claim for
relief in federal court. Nor does state law. The problem is not
simply that Illinois (the state in which the federal court sits,
and to whose law it would look) has not created any claim
against foreign nationals for foreign acts. It is also that no state
possesses regulatory jurisdiction over such ma]ers. The Su-
preme Court made that point long ago in Bonaparte v. Tax
Court, 104 U.S. 592, 594 (1881). See also BMW of North America,
Inc. v. Gore, 517 U.S. 559, 571 (1996).
In a memorandum filed after Nestlé, plaintiffs tell us that
it, its predecessors, and all other triple-foreign decisions, are
irrelevant. This is so, plaintiffs assert, because their claim rests
on the expropriation exception to the Foreign Sovereign Im-
munities Act. To state this position is to expose the problem:
How can a substantive claim rest on an exception to a statute
that in the main denies jurisdiction to domestic courts?
Section 1604 states the basic rule: “Subject to existing in-
ternational agreements to which the United States is a party
at the time of enactment of this Act a foreign state shall be im-
mune from the jurisdiction of the courts of the United States
6 No. 18-1887
and of the States except as provided in sections 1605 to 1607
of this chapter.” Section 1605(a)(3), the expropriation excep-
tion, is an exception to §1604. But that’s all. Section 1605(a)(3)
does not create a substantive claim. A provision that a foreign
nation lacks sovereign immunity to a particular claim leaves
a plaintiff in need of both jurisdiction and of a substantive en-
titlement to relief. This is the norm in domestic law. A waiver
of sovereign immunity does not create a substantive claim;
the plaintiff still needs jurisdiction and a statute authorizing
relief. See, e.g., United States v. Navajo Nation, 556 U.S. 287, 290
(2009). Nothing in the Foreign Sovereign Immunities Act im-
plies a different approach.
Jurisdiction in a suit such as this comes from 28 U.S.C.
§1330(a), which grants jurisdiction of suits against foreign na-
tions whenever the Foreign Sovereign Immunities Act per-
mits. This allows litigation even with respect to acts that oc-
curred during or shortly after World War II (and thus before
the Act was adopted). See Austria v. Altmann, 541 U.S. 677(2004). But the need for a substantive claim remains. To re-
peat: That is the norm for domestic waivers of sovereign im-
munity (see Navajo Nation). The Foreign Sovereign Immuni-
ties Act is about, well, sovereign immunity. All of the Su-
preme Court’s decisions about the Act treat §1605 as a juris-
dictional provision, not as a source of substantive rights. See,
e.g., Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 489
(1983); Venezuela v. Helmerich & Payne International Drilling Co.,
137 S. Ct. 1312, 1318–19 (2017).
The expropriation exception to §1604 sits near 28 U.S.C.
§1605A(c), which does create a substantive claim for injuries
a]ributable to terrorism. See Opati v. Sudan, 140 S. Ct. 1601(2020). Section 1605A(c) begins: “A foreign state that is or was
No. 18-1887 7
a state sponsor of terrorism as described in subsection
(a)(2)(A)(i), and any official, employee, or agent of that foreign
state while acting within the scope of his or her office, em-
ployment, or agency, shall be liable … .” The difference in the
language of §1605(a)(3) and §1605A(c) is stark, and a court
should not read the jurisdictional words of the former to do
the substantive work of the la]er.
Section 1350 is the only general grant of authority for the
federal courts to provide a remedy in an alien’s tort action, yet
plaintiffs concede that it does not support their suit. For many
victims of expropriation, state law could supply the claim for
relief. A citizen of the United States who invests in foreign
property through a domestic contract may have a claim based
on that contract if a foreign nation expropriates the property.
For other takings a federal statute also may provide relief, as
§1605A(c) does for terrorism. Many if not most of the expro-
priation claims litigated under §1605(a)(3) have a strong do-
mestic link that may support both jurisdiction and a right of
action in this nation. Perhaps federal common law, incorpo-
rating customary international law, would supply a substan-
tive claim when the expropriation has a link to the United
States, but plaintiffs have not invoked federal common law.
(They mention international law but do not contend that it has
been incorporated into the common law of the United States.)
Sometimes the expropriated property, or assets traceable to it,
is present in the United States, so that an alien’s claim under
§1350 (or a citizen’s claim under state law) could proceed. But
triple-foreign claims such as this suit lack a domestic link.
As far as we can see, neither the Supreme Court nor any
court of appeals has treated §1605(a)(3) as creating a substan-
tive claim. We do not try to fight against the statute’s
8 No. 18-1887
jurisdictional language, so we hold that §1605(a)(3) is not sub-
stantive. Plaintiffs need a substantive claim for relief and have
not pointed to one. Their complaint mentions conversion and
unjust enrichment but does not identify a source of law, and
we have explained why federal common law, state law, and
§1350 all fall short in a triple-foreign suit such as this. Plain-
tiffs have only the language of the expropriation exception,
which is not enough.
If plaintiffs had articulated a substantive claim, then we
would agree with the district court that the remedies available
in France justify abstention. The United States filed a brief ar-
ticulating the view of the State Department, which agrees
with the district court that international comity calls for ab-
stention. We are reluctant to authorize litigation that calls into
question the relations between the United States and one of
its allies—for, as both the district court and the amicus brief
observe, the French system was adopted in 1999 following
consultation with the United States and other nations that had
been allied against the Nazis during World War II. Cf. Levin
v. Commerce Energy, Inc., 560 U.S. 413 (2010) (discussing ab-
stention in the interest of comity).
A system in which a single district judge could counter-
mand the decisions of multiple nations about what remedies
are appropriate for wartime injuries inflicted in Europe would
be unfortunate. The Executive Branch, not the Judicial Branch,
is responsible for foreign relations. One can only imagine the
fury in this nation if a French judge were to prescribe how
much the United States must pay, and to whom, for the re-
moval of Japanese Americans from the West Coast during
World War II or the Trail of Tears in the nineteenth century.
Each nation can decide for itself (unilaterally or through
No. 18-1887 9
treaties) whether reparations for long-past injuries are appro-
priate. But because plaintiffs lack a substantive claim in this
triple-foreign suit, it is unnecessary to say more about inter-
national comity.
AFFIRMED