Alan Philipp v. Federal Republic of Germany (ORDER IN SLIP OPINION FORMAT) , 925 F.3d 1349 ( 2019 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed On: June 18, 2019
No. 17-7064
ALAN PHILIPP, ET AL.,
APPELLEES
v.
FEDERAL REPUBLIC OF GERMANY, A FOREIGN STATE AND
STIFTUNG PREUSSISCHER KULTURBESITZ,
APPELLANTS
Consolidated with 17-7117
Appeals from the United States District Court
for the District of Columbia
(No. 1:15-cv-00266)
On Petition for Rehearing En Banc
Before: GARLAND, Chief Judge; HENDERSON,
ROGERS, TATEL, GRIFFITH, SRINIVASAN, MILLETT, PILLARD,
WILKINS, KATSAS**, AND RAO*, Circuit Judges.
ORDER
Appellants’ petition for rehearing en banc, the
response thereto, and the amicus curiae brief in
2
support of rehearing en banc were circulated to the full court,
and a vote was requested. Thereafter, a majority of the judges
eligible to participate did not vote in favor of the petition.
Upon consideration of the foregoing, it is
ORDERED that the petition be denied.
Per Curiam
FOR THE COURT:
Mark J. Langer, Clerk
BY: /s/
Ken R. Meadows
Deputy Clerk
* Circuit Judge Rao did not participate in this matter
** A statement by Circuit Judge Katsas, dissenting from the
denial of rehearing en banc, is attached.
KATSAS, Circuit Judge, dissenting from the denial of
rehearing en banc:
The panel decision in this case, together with Simon v.
Republic of Hungary, 812 F.3d 127 (D.C. Cir. 2016) (Simon I),
and Simon v. Republic of Hungary, 911 F.3d 1172 (D.C. Cir.
2018) (Simon II), makes the district court sit as a war crimes
tribunal to adjudicate claims of genocide arising in Europe
during World War II. The basis for these decisions is not any
federal statute authorizing a private right of action for victims
of foreign genocide, nor even any statute punishing foreign
genocide under United States law. Rather, these decisions rest
on a statute abrogating the jurisdictional immunity of foreign
sovereigns from claims for unlawful takings of property. As a
result, the district court must hear genocide claims against
foreign sovereigns, but only to determine whether it has
subject-matter jurisdiction over common-law tort claims for
conversion and the like. Moreover, the plaintiffs bringing these
genocide-based takings claims may recover neither for killings
nor even for personal injuries, but only for the loss of their
property. And the district court must adjudicate these claims—
and thus effectively determine the scope of a genocide—
without first affording the foreign sovereign an opportunity to
provide redress, whether for genocide or conversion.
Before allowing this remarkable scheme to proceed
further, we should reconsider it en banc. In this case, Philipp
v. Federal Republic of Germany, 894 F.3d 406 (D.C. Cir.
2018), and in Simon II, we rejected any defense of exhaustion
or comity-based abstention for claims under the Foreign
Sovereign Immunities Act (FSIA). These decisions create a
clear split with the Seventh Circuit, are in tension with
decisions from the Ninth and Eleventh Circuits, disregard the
views of the Executive Branch on a matter of obvious foreign-
policy sensitivity, and make the FSIA more amenable to
human-rights litigation against foreign sovereigns than the
Alien Tort Statute (ATS) is to human-rights litigation against
2
private defendants abetting the sovereigns. Moreover, they
clear the way for a wide range of litigation against foreign
sovereigns for public acts committed within their own
territories. This includes claims not only for genocide, but also
for the violation of most other norms of international human-
rights law. The consequences of Simon I and its progeny are
thus dramatic, while their foundations are shaky.
I
The FSIA provides that “a foreign state shall be immune
from the jurisdiction of the courts of the United States and of
the States except as provided” in the FSIA itself. 28 U.S.C.
§ 1604. It then provides that a “foreign state shall not be
immune from the jurisdiction of courts of the United States or
of the States” when certain exceptions apply. Id. § 1605. The
exception at issue here, commonly called the “expropriation
exception,” applies to any case
in which rights in property taken in violation of
international law are in issue and that property or any
property exchanged for such property is present in the
United States in connection with a commercial
activity carried on in the United States by the foreign
state; or that property or any property exchanged for
such property is owned or operated by an agency or
instrumentality of the foreign state and that agency or
instrumentality is engaged in a commercial activity in
the United States.
Id. § 1605(a)(3).
In Simon I, this Court held that the expropriation exception
covers property taken as part of a genocide. We reasoned that
genocide includes deliberately inflicting on a protected group
3
“conditions of life calculated to bring about its physical
destruction.” 812 F.3d at 143 (quotation marks omitted). We
held that the complaint at issue, which described the experience
of Jews in Hungary between 1941 and 1944, adequately alleged
“the requisite genocidal acts and intent,” including a
“systematic, ‘wholesale plunder of Jewish property’” that
“aimed to deprive Hungarian Jews of the resources needed to
survive as a people.” Id. at 143–44 (citation omitted). We
recognized that the international law of expropriation applies
only to takings by one sovereign of property owned by
nationals of another. Id. at 144. But we distinguished the
prohibition against genocide, which encompasses acts
committed by a sovereign “against its own nationals.” Id. at
145. We also acknowledged that, for genocide-based
expropriation claims, the jurisdictional and merits inquiries
diverge: Genocide must be established to create subject-matter
jurisdiction, but the merits involve “garden-variety common-
law causes of action such as conversion, unjust enrichment, and
restitution.” Id. at 141. As to damages, we noted that another
FSIA exception covers claims “for personal injury or death,”
but only for losses “occurring in the United States.” 28 U.S.C.
§ 1605(a)(5). So, we construed the expropriation exception to
permit plaintiffs claiming genocide to “seek compensation for
taken property but not for taken lives.” 812 F.3d at 146
(quotation marks omitted).
In Philipp and Simon II, this Court rejected exhaustion,
abstention, and forum non conveniens defenses to the
genocide-based expropriation claims recognized in Simon I. In
Philipp, the panel held that the FSIA, by comprehensively
codifying rules for foreign sovereign immunity, foreclosed any
requirement that plaintiffs exhaust remedies available in the
courts of the defendant sovereign. 894 F.3d at 414–16. Simon
II reaffirmed that holding. There, we stated that, unlike other
common-law defenses preserved by the FSIA, exhaustion
4
“lacks any pedigree in domestic or international common law.”
911 F.3d at 1181. We further reasoned that, if an exhaustion
requirement would preclude the plaintiffs from returning to
federal court (as would a comity-based abstention
requirement), that would only make exhaustion more like
immunity. Id. at 1180. Then, we held that the district court
abused its discretion in dismissing the claims on forum non
conveniens grounds, even though they involved acts
perpetrated by the Hungarian government against Hungarian
nationals in Hungary. Id. at 1181–90.
II
A
The expropriation exception applies to claims for
“property taken in violation of international law.” 28 U.S.C.
§ 1605(a)(3). Simon I held that this provision encompasses
property taken in violation of the international-law prohibition
against genocide. In my judgment, it encompasses only
property taken in violation of international takings law. The
literal language could bear either meaning, but statutes must be
construed in context. See, e.g., Nat’l Ass’n of Home Builders
v. Defs. of Wildlife, 551 U.S. 644, 666 (2007). Here, several
contextual considerations support the narrower reading.
To begin, genocide is not about the taking of property.
Rather, it involves the attempted extermination of a national,
ethnic, racial, or religious group. A United Nations convention
defines genocide as:
any of the following acts committed with intent to
destroy, in whole or in part, a national, ethnical, racial,
or religious group, as such: (a) Killing members of
the group; (b) Causing serious bodily or mental harm
5
to members of the group; (c) Deliberately inflicting on
the group conditions of life calculated to bring about
its physical destruction in whole or in part.
Convention on the Prevention and Punishment of the Crime of
Genocide art. 2, Dec. 9, 1948, 78 U.N.T.S. 277. Simon I
reasoned that takings may have a genocidal intent, and thus
meet the last prong of this definition. 812 F.3d at 143–44. But
they still must be intended to cause the “physical destruction”
of a group—what matters is the attempted mass murder. And
if genocide involves attempted mass murder, a provision keyed
to “property taken” would be a remarkably elliptical way of
addressing it. See, e.g., Whitman v. Am. Trucking Ass’ns, 531
U.S. 457, 468 (2001).
It would be even stranger for Congress to address genocide
as exclusively a property offense. The FSIA’s expropriation
exception encompasses only claims for “property,” 28 U.S.C.
§ 1605(a)(3), whereas its separate tort exception, which
encompasses claims “for personal injury or death,” covers only
harms “occurring in the United States,” id. § 1605(a)(5). So,
Simon I approved an exceedingly odd type of genocide claim—
one for property harms but not for personal injury or death.
Moreover, the expropriation exception requires a connection
between the property taken and commercial activity in the
United States: the property or its proceeds must either be
“present in the United States in connection with a commercial
activity carried on in the United States by the foreign state,” or
“owned or operated by an agency or instrumentality of the
foreign state” that is itself “engaged in a commercial activity in
the United States.” Id. § 1605(a)(3). These requirements
would make little sense in a provision addressed to human-
rights abuses such as genocide, rather than to purely economic
wrongdoing.
6
As strange is the mismatch between jurisdiction and
merits. Simon I requires proof of genocide to abrogate
sovereign immunity—which must be determined at the outset.
See Bolivarian Republic of Venezuela v. Helmerich & Payne
Int’l Drilling Co., 137 S. Ct. 1312, 1318–24 (2017). But
abrogating immunity does not create a private right of action,
Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024,
1033 (D.C. Cir. 2004), and there is no common-law right of
action for genocide. Instead, the merits here involve “‘garden-
variety common-law’ claims,” such as “replevin, conversion,
unjust enrichment, and bailment.” Philipp, 894 F.3d at 410–11
(citation omitted); see also Simon I, 812 F.3d at 141. This
scheme oddly matches the jurisdictional equivalent of a
thermonuclear weapon (determining the scope of a genocide)
to the merits equivalent of swatting a fly (determining whether
there was a common-law conversion). And it is in marked
contrast to the FSIA’s terrorism exception, which applies to
claims for various specified acts, 28 U.S.C. § 1605A(a)(1), and
which creates a cause of action for those acts, id. § 1605A(c).
Broader statutory context creates further difficulties. The
FSIA’s other primary exceptions are narrow ones covering
waiver, commercial activity in the United States, rights to
property in the United States, torts causing injury in the United
States, and arbitration. 28 U.S.C. § 1605(a)(1)–(6). The
Supreme Court has described these exceptions as collectively
codifying the pre-FSIA “restrictive” theory of foreign
sovereign immunity, which covers a sovereign’s “public acts”
but not its commercial ones. See Helmerich & Payne, 137 S.
Ct. at 1320–21; Verlinden B.V. v. Cent. Bank of Nigeria, 461
U.S. 480, 486–89 (1983). In a case specifically involving the
expropriation exception, the Court “found nothing in the
history of the statute that suggests Congress intended a radical
departure from these basic principles.” Helmerich & Payne,
137 S. Ct. at 1320. Abrogating immunity for public acts
7
committed by a foreign sovereign against its own nationals
within its own territory would be just such a radical departure.
The international law of foreign sovereign immunity cuts
in the same direction. Here is its “Basic Rule”: “Under
international law, a state or state instrumentality is immune
from the jurisdiction of the courts of another state, except with
respect to claims arising out of activities of the kind that may
be carried on by private persons.” Restatement (Third) of the
Foreign Relations Law of the United States § 451 (1987) (Third
Restatement). Like the FSIA, international law provides
narrow exceptions to immunity for claims arising out of
commercial activity, id. § 453(1); torts causing injuries within
the forum state, id. § 454(1); property claims involving
commercial activities, gifts, or immovable property in the
forum state, id. § 455(1); and waiver, id. § 456(1). None of
these exceptions covers the genocide-based takings claims
recognized in Simon I. So, Simon I construes the FSIA to
conflict with international law—which is to be avoided if
possible. See Murray v. Schooner Charming Betsy, 6 U.S. (2
Cranch) 64, 118 (1804). Of course, none of this suggests that
genocide or other violations of international human-rights law
should go unremedied; but such violations typically are
addressed either through diplomacy or in international
tribunals, rather than in the domestic tribunals of another
sovereign. See Third Restatement § 906 & cmt. b.
Consistent with these principles, the courts have rejected
attempts to shoehorn modern human-rights law into the FSIA
exceptions. For example, in Saudi Arabia v. Nelson, 507 U.S.
349 (1993), the Supreme Court held that the commercial-
activity exception did not cover claims that Saudi Arabia
illegally detained and tortured a United States citizen employed
by a Saudi government hospital. The Court construed the
exception to track the restrictive theory of sovereign immunity:
8
[T]he intentional conduct alleged here (the Saudi
Government’s wrongful arrest, imprisonment, and
torture of Nelson) could not qualify as commercial
under the restrictive theory. The conduct boils down
to abuse of the power of its police by the Saudi
Government, and however monstrous such abuse
undoubtedly may be, a foreign state’s exercise of the
power of its police has long been understood for
purposes of the restrictive theory as peculiarly
sovereign in nature.
Id. at 361. In Princz v. Federal Republic of Germany, 26 F.3d
1166 (D.C. Cir. 1994), we likewise construed the FSIA’s
waiver exception, which includes waivers “by implication,” 28
U.S.C. § 1605(a)(1), to track the restrictive theory. We held
that Germany did not impliedly waive its foreign sovereign
immunity by using slave labor during the Nazi era. 26 F.3d at
1173. And we did so despite recognizing that slavery—like
genocide—violates a jus cogens norm of international human-
rights law, i.e., “a norm from which no derogation is
permitted.” Id. (quotation marks omitted).
The only deviation from this pattern is the FSIA’s
terrorism exception, which covers a significant class of cases
involving the public acts of a foreign sovereign. But the
differences between the terrorism and expropriation exceptions
are striking: The terrorism exception meticulously describes
and limits the possible plaintiffs (United States nationals,
members of the United States armed forces, and United States
employees or contractors), 28 U.S.C. § 1605A(a)(2)(A)(ii); the
possible defendants (generally, foreign states formally
designated as sponsors of terrorism), id. § 1605A(a)(2)(A)(i);
the acts triggering the exception (“torture, extrajudicial killing,
aircraft sabotage, hostage taking, or the provision of material
support or resources for such an act”), id. § 1605A(a)(1); the
9
associated private cause of action (covering the same parties
and acts), id. § 1605A(c); and the damages available (for
personal injury, death, or foreseeable property loss), id.
§ 1605A(a)(1), (d). This carefully reticulated framework is far
different from a provision keyed only to “property taken in
violation of international law.” Id. § 1605(a)(3).
B
The grave consequences of Simon I bear not only on its
correctness, but also on the appropriateness of en banc review.
Most obviously, Simon I requires federal courts to
determine the scope of genocide committed by various foreign
countries during World War II. We suggested that this
determination may sometimes be straightforward—as in the
case of Hungarian Jews in the early 1940s. See 812 F.3d at
142–44. Even so, each individual plaintiff must prove not only
that there was a genocide, but also that he or she (or a decedent)
was subjected to a genocidal taking. Sometimes, this will be
far from clear. For example, the Philipp panel concluded that
a coerced sale of art in 1935, for “barely 35% of its actual
value,” could be an act of genocide. 894 F.3d at 409, 413–14
(quotation marks omitted). Germany objected that the
plaintiffs’ theory would transform into genocide any
“‘transaction from 1933–45 between’ a Nazi-allied
government and ‘an individual from a group that suffered Nazi
persecution.’” Id. at 414. The panel envisioned something
only slightly less concerning—case-by-case adjudications of
which commercial transactions were sufficiently coercive,
unfair, and improperly motivated to be genocide. Id. Such
claims could be made against a number of European nations.
See, e.g., Republic of Austria v. Altmann, 541 U.S. 677 (2004);
Cassirer v. Kingdom of Spain, 616 F.3d 1019 (9th Cir. 2010)
(en banc); Alperin v. Vatican Bank, 410 F.3d 532 (9th Cir.
10
2005); Freund v. Republic of France, 592 F. Supp. 2d 540
(S.D.N.Y. 2008). And they would create massive exposure.
For example, in a case that, like Simon, involved Jews who lost
property in the Hungarian Holocaust, the damages sought were
some $75 billion—“nearly 40 percent of Hungary’s annual
gross domestic product in 2011.” Abelesz v. Magyar Nemzeti
Bank, 692 F.3d 661, 682 (7th Cir. 2012).
Moreover, the reasoning of Simon I cannot be limited to
genocide. International law sharply distinguishes between the
law of expropriation, which restricts only the takings by one
sovereign of property belonging to the nationals of another, see
Third Restatement § 712, and human-rights law, which now
governs one sovereign’s treatment of its own nationals within
its own borders, id. § 701. Under the latter,
A state violates international law if, as a matter of state
policy, it practices, encourages, or condones
(a) genocide, (b) slavery or slave trade, (c) the murder
or causing the disappearance of individuals,
(d) torture or other cruel, inhuman, or degrading
treatment or punishment, (e) prolonged arbitrary
detention, (f) systematic racial discrimination, or (g) a
consistent pattern of gross violations of
internationally recognized human rights.
Id. § 702. The first six of these seven categories are jus cogens
norms—the most serious ones, which are binding even in the
face of an international agreement to the contrary. Id. cmt. n.
Most of them—including not only genocide, but also slavery,
murder, degrading treatment, and systemic racial
discrimination—can involve harms to property. Under the
reasoning of Simon I, all of these could be the subject of
litigation through the expropriation exception.
11
To appreciate the gravity of this, consider if the shoe were
on the other foot. Imagine the United States’ reaction if a
European trial court undertook to adjudicate a claim for tens of
billions of dollars for property losses suffered by a class of
American victims of slavery or systemic racial discrimination.
Yet that is a precise mirror image of Simon. Given the stakes,
what we once said about the waiver exception rings true here:
We think that something more nearly express is
wanted before we impute to the Congress an intention
that the federal courts assume jurisdiction over the
countless human rights cases that might well be
brought by the victims of all the ruthless military
juntas, presidents-for-life, and murderous dictators of
the world, from Idi Amin to Mao Zedong. Such an
expansive reading of § 1605(a)(1) would likely place
an enormous strain not only upon our courts but, more
to the immediate point, upon our country’s diplomatic
relations with any number of foreign nations. In many
if not most cases the outlaw regime would no longer
even be in power and our Government could have
normal relations with the government of the day—
unless disrupted by our courts, that is.
Princz, 26 F.3d at 1175 n.1.
III
Philipp and Simon II magnify the concerns about Simon I
and come with their own analytical difficulties.
A
On the merits, Philipp and Simon II held that the FSIA
forecloses any exhaustion or comity-based abstention defense.
894 F.3d at 414–16; 911 F.3d at 1180–81. But far from
12
foreclosing these defenses, the FSIA affirmatively
accommodates them. It provides that, for any claim falling
within an immunity exception, “the foreign state shall be liable
in the same manner and to the same extent as a private
individual under like circumstances.” 28 U.S.C. § 1606. A
“private individual” under “like circumstances” would be one
facing claims for aiding and abetting violations of international
human-rights law. Such claims would be brought under the
ATS, which provides that “[t]he district courts shall have
original jurisdiction of any civil action by an alien for a tort
only, committed in violation of the law of nations or a treaty of
the United States.” 28 U.S.C. § 1350. Another like
circumstance might involve private individuals sued for
wrongful death, battery, or conversion. In either instance,
exhaustion and abstention defenses would likely be available.
The Supreme Court has at least hinted that an ATS
plaintiff must exhaust local remedies before litigating an
international-law tort claim in federal district court. In Sosa v.
Alvarez-Machain, 542 U.S. 692 (2004), the Court explained:
the European Commission argues … that basic
principles of international law require that before
asserting a claim in a foreign forum, the claimant must
have exhausted any remedies available in the
domestic legal system, and perhaps in other forums
such as international claims tribunals. We would
certainly consider this requirement in an appropriate
case.
Id. at 733 n.21 (citations omitted). Four justices have embraced
exhaustion more definitively—without provoking any
disagreement. See Jesner v. Arab Bank, PLC, 138 S. Ct. 1386,
1430–31 (2018) (Sotomayor, J., dissenting); Kiobel v. Royal
Dutch Petroleum Co., 569 U.S. 108, 133 (2013) (Breyer, J.,
13
concurring in the judgment). The Ninth Circuit has held that
exhaustion is required in ATS cases if local remedies are
adequate. See Sarei v. Rio Tinto, PLC, 550 F.3d 822, 828–32
(9th Cir. 2008) (en banc) (plurality opinion); id. at 833–37
(Bea, J., concurring); id. at 840–41 (Kleinfeld, J., concurring).
Private defendants also may seek comity-based abstention.
For example, Mujica v. AirScan, Inc., 771 F.3d 580 (9th Cir.
2014), involved ATS and state-law claims against defendants
alleged to have abetted the bombing of a Colombian village by
the Colombian government. See id. at 584. After dismissing
the ATS claims as impermissibly extraterritorial, the Ninth
Circuit dismissed the state-law claims “based on the doctrine
of international comity.” Id. at 596–97. As the court explained,
“[i]nternational comity is a doctrine of prudential abstention,
one that ‘counsels voluntary forbearance when a sovereign
which has a legitimate claim to jurisdiction concludes that a
second sovereign also has a legitimate claim to jurisdiction
under principles of international law.’” Id. at 598 (citation
omitted). Likewise, in Ungaro-Benages v. Dresdner Bank AG,
379 F.3d 1227 (11th Cir. 2004), the Eleventh Circuit dismissed
on comity-based abstention grounds a claim by an American
citizen that two German banks, during the 1930s and early
1940s, had stolen her family property “through the Nazi
Regime’s program of ‘Aryanization.’” Id. at 1229, 1237–40.
Comity interests are heightened where, as here, the claims
“arise from events of historical and political significance” to
the foreign sovereign. Republic of Philippines v. Pimentel, 553
U.S. 851, 866 (2008). Like exhaustion, comity-based
abstention presupposes an adequate forum in the offending
country. See, e.g., Mujica, 771 F.3d at 603–04. But Philipp
and Simon II rejected exhaustion and abstention defenses as
categorically unavailable in FSIA cases, not on the narrower
ground that fora in Germany and Hungary were inadequate.
14
The Philipp panel reasoned that because the FSIA
comprehensively sets forth immunity defenses, Republic of
Argentina v. NML Capital, Ltd., 573 U.S. 134, 141–42 (2014),
but does not expressly provide for exhaustion or abstention
defenses, it must implicitly have foreclosed those defenses.
894 F.3d at 415–16. But foreign sovereign immunity—which
eliminates subject-matter jurisdiction—is distinct from non-
jurisdictional defenses such as exhaustion and abstention. As
shown above, these defenses are available to private defendants
no less than to foreign sovereigns. In that critical respect, the
defenses are less akin to immunity than to generally applicable,
judge-made defenses such as forum non conveniens, the act-of-
state doctrine, and the political-question doctrine—none of
which is mentioned in the text of the FSIA, but all of which
survived its enactment. See, e.g., Agudas Chasidei Chabad v.
Russian Federation, 528 F.3d 934, 951 (D.C. Cir. 2008);
Hwang Geum Joo v. Japan, 413 F.3d 45, 48 (D.C. Cir. 2005).
Exhaustion and abstention are also different from arbitration.
So, the inclusion of an arbitration requirement in the terrorism
exception, 28 U.S.C. § 1605A(a)(2)(A)(iii); see Philipp, 894
F.3d at 415, says nothing about exhaustion or abstention.
Simon II further reasoned that exhaustion “lacks any
pedigree in domestic or international common law.” 911 F.3d
at 1181. But international law requires an individual “claiming
to be a victim of a human rights violation” to “exhaust[ ]
available remedies under the domestic law of the accused state”
before another state may espouse his claim. See Third
Restatement § 703 cmt. d. Likewise, individual victims
generally have international remedies only as provided by
agreement, see id. cmt. c, and international agreements “also
generally require that the individual first exhaust domestic
remedies,” id. cmt. d. To be sure, the Third Restatement does
not expressly apply the same rule to instances where the victim
seeks redress in the courts of a foreign sovereign. See Philipp,
15
894 F.3d at 416. But the drafters would have had no occasion
to address exhaustion in that specific circumstance, given the
overwhelming likelihood that, under international standards,
sovereign immunity would have barred the claims. See Third
Restatement §§ 451–56. Moreover, the logic for requiring
exhaustion is even stronger in the context of actions filed in
domestic courts; “if exhaustion is considered essential to the
smooth operation of international tribunals whose jurisdiction
is established only through explicit consent from other
sovereigns, then it is all the more significant in the absence of
such explicit consent to jurisdiction.” Sarei, 550 F.3d at 830
(plurality opinion). As for domestic exhaustion rules, federal
courts have crafted them for over a century, out of respect for
other sovereigns such as states or Indian tribes. See, e.g., Iowa
Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 14–15 (1987); Ex parte
Royall, 117 U.S. 241, 251 (1886).
Finally, Simon II reasoned that exhaustion might, by
operation of res judicata, bar plaintiffs from ever bringing
claims in the United States. 911 F.3d at 1180. That is not
necessarily true, at least if the plaintiff reserves the right to
litigate international claims in the United States after pursuing
domestic tort claims elsewhere. Cf. England v. La. State Bd. of
Med. Exam’rs, 375 U.S. 411, 413–19 (1964). In any event,
there is nothing anomalous with exhaustion triggering
preclusion. See, e.g., Iowa Mut., 480 U.S. at 19. Moreover,
the same objection would apply to exhaustion under the ATS,
yet the Ninth Circuit still adopted it. Comity-based abstention
does prevent a plaintiff from litigating in a United States forum,
yet the courts have applied it to cases involving private
defendants facing foreign-centered human-rights claims. The
FSIA makes the same defenses also available to foreign
sovereigns.
16
B
Philipp and Simon II warrant rehearing en banc for several
reasons. First, they create a circuit split on a sensitive foreign-
policy question. The Seventh Circuit has required Hungarian
Holocaust survivors to exhaust remedies in Hungary before
seeking to litigate under the FSIA’s expropriation exception.
Fischer v. Magyar Államvasutak Zrt., 777 F.3d 847, 856–66
(7th Cir. 2015); Abelesz, 692 F.3d at 678–85. After describing
the nearly existential threat of a $75 billion lawsuit, the Seventh
Circuit held that “Hungary, a modern republic and member of
the European Union, deserves a chance to address these
claims.” Abelesz, 692 F.3d at 682. The Philipp panel
acknowledged creating a circuit split. 894 F.3d at 416.
Second, Philipp rejected the position advanced by the
United States. See 894 F.3d at 416. In Simon II, the United
States argued at length that “[d]ismissal on international comity
grounds” was consistent with the FSIA and “can play a critical
role in ensuring that litigation in U.S. courts does not conflict
with or cause harm to the foreign policy of the United States.”
Br. for Amicus Curiae United States at 14–15, Simon v.
Republic of Hungary (No. 17-7146); see also id. at 14–24. The
United States again took the same position in supporting
rehearing en banc in Philipp. Br. for United States as Amicus
Curiae in Support of Rehearing En Banc at 3–14. Given the
Executive Branch’s “vast share of responsibility for the
conduct of our foreign relations,” Am. Ins. Ass’n v. Garamendi,
539 U.S. 396, 414 (2003) (quotation marks omitted), we should
consider its views on this issue with special care.
Third, by eliminating various defenses, these decisions
heighten concern about Simon I. Two important defenses—
exhaustion and abstention—are now foreclosed. And if it was
an abuse of discretion to dismiss on forum non conveniens
17
grounds the foreign-cubed claims in Simon II, see 911 F.3d at
1182, then few of these human-rights cases will qualify for that
defense. Other possible doctrines for limiting the expropriation
exception, see Altmann, 541 U.S. at 713 (Breyer, J.,
concurring), are also unlikely to have much effect: Personal
jurisdiction requirements do not apply to foreign sovereigns.
Price v. Socialist People’s Libyan Arab Jamahiriya, 294 F.3d
82, 96 (D.C. Cir. 2002). Venue is always proper in the District
of Columbia for actions “brought against a foreign state or
political subdivision thereof.” 28 U.S.C. § 1391(f)(4). The
act-of-state doctrine may not apply to Nazi-era claims, see First
Nat’l City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 764
(1972) (plurality opinion); Bernstein v. N.V. Nederlandsche-
Amerikaansche Stoomvaart-Maatschappij, 210 F.2d 375 (2d
Cir. 1954) (per curiam), and generally does not apply to
expropriation claims arising after January 1, 1959, see 22
U.S.C. § 2370(e)(2). Statutes of limitation may bar some
claims arising from World War II, despite inevitable tolling or
concealment arguments, but they will have no effect on claims
arising from recent alleged human-rights abuses. Finally,
Simon I itself held that the political-question doctrine does not
bar the claims that it approved. See 812 F.3d at 149–51.
Fourth, these decisions make the FSIA more receptive to
human-rights litigation than is the ATS. Under Simon I’s broad
interpretation of the expropriation exception, most modern
ATS claims could be recast as FSIA ones. And after Philipp,
recasting has significant advantages. For example, ATS claims
that a defendant had abetted crimes against humanity by Papua
New Guinea must be exhausted. See Sarei, 550 F.3d at 824
(plurality opinion). Yet under Philipp, the same lawsuit would
face no exhaustion requirement if filed directly against Papua
New Guinea. ATS claims of abetting atrocities committed by
a foreign sovereign within its own territory are impermissibly
extraterritorial. See Kiobel, 569 U.S. at 111–12, 124–25. Yet
18
under Philipp, the same lawsuits, if filed directly against the
foreign sovereigns, might survive on the theory that common-
law tort claims have no territorial limit. Compare Mujica, 771
F.3d at 591–96 (dismissing ATS claims as extraterritorial),
with id. at 596–615 (dismissing state-law claims only on
comity grounds). Such results are perverse, for FSIA actions
against foreign sovereigns raise even greater foreign-policy
concerns than do ATS actions against private parties who may
abet them.
Finally, the mismatch noted above between jurisdictional
and merits issues under Simon I makes exhaustion even more
important. If the federal courts must resolve the scope of a
genocide in order to decide garden-variety conversion claims,
then so much the better if the foreign sovereign can perhaps
resolve the claims by addressing only the merits.
* * * *
For these reasons, I would grant rehearing en banc to
reconsider the approach to the FSIA’s expropriation exception
set forth in Simon I, Philipp, and Simon II.