Alan Philipp v. Stiftung Preussischer Kulturbesitz ( 2023 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 18, 2023 Decided July 14, 2023
No. 22-7126
ALAN PHILIPP, ET AL.,
APPELLANTS
V.
STIFTUNG PREUSSISCHER KULTURBESITZ,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:15-cv-00266)
Nicholas M. O’Donnell argued the cause and filed the briefs
for appellants.
Jonathan M. Freiman argued the cause for appellee. With
him on the brief were David L. Hall and David R. Roth.
Before: PILLARD and CHILDS, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.
Opinion for the court filed PER CURIAM.
PER CURIAM: In 1935, in Nazi Germany, a consortium of
three German art firms, each having Jewish owners, sold dozens
2
of medieval relics and devotional objects to Prussia. In 2015,
two citizens of the United States and one citizen of the United
Kingdom brought an action in the federal district court seeking
either return of the artifacts or monetary compensation. The
plaintiffs trace their lineages to three of the owners of the art
firms. They claim that members of the Nazi government
coerced the consortium members into selling the collection for
far less than its true market value. Their initial complaint named
as defendants the Federal Republic of Germany and its agency
– SPK, for short – that now administers the museum where the
artifacts are on display.1
This appeal is the latest chapter dealing with SPK’s
immunity defense under the Foreign Sovereign Immunities Act.
The case has generated five lengthy judicial opinions, first by
the district court rejecting the defendant’s claim of immunity as
to a subset of the plaintiffs’ claims; then by our court on appeal,
largely agreeing with the district court; then by the Supreme
Court vacating and remanding; and now two more opinions of
the district court on remand, both of which are the subject of this
appeal. The citations to the opinions are, in sequence: Philipp v.
Federal Republic of Germany (Philipp I), 248 F. Supp. 3d 59(D.D.C. 2017); Philipp v. Federal Republic of Germany (Philipp
II), 894 F.3d 406 (D.C. Cir. 2018); Federal Republic of
Germany v. Philipp (Philipp III), 141 S. Ct. 703 (2021);
Philipp v. Stiftung Preussischer Kulturbesitz (Philipp IV),
No. 15-00266, 2021 WL 3144958 (D.D.C. July 26, 2021); and
Philipp v. Stiftung Preussischer Kultirbesitz (Philipp V), 628 F.
Supp. 3d 10 (D.D.C. 2022). We shall assume familiarity with
these opinions.
In the initial round in the district court and on the appeal to
1
Plaintiffs later filed an amended complaint dropping
Germany from the suit.
3
our court, plaintiffs consistently maintained that the art firms
were all “in Frankfurt,” e.g. Brief for Appellees at 6, Philipp II,
894 F.3d 406 (D.C. Cir. 2018) (No. 17-7064), and never denied
that the three art firms were German companies owned by
Jewish German nationals in 1935 when the art firms sold the
artifacts to Prussia. The Supreme Court, in giving the
background to the case, stated that “[t]wo of the consortium
members fled the country following the sale, and the third died
in Germany shortly thereafter.”2 Philipp III, 141 S. Ct. at 708.
The Supreme Court, in a unanimous opinion, noted that the
Foreign Sovereign Immunities Act, 28 U.S.C. § 1604 et seq.,
created a presumption of immunity from suit for foreign states,
see Philipp III, 141 S. Ct. at 709. The Court held that “the
phrase ‘rights in property taken in violation of international
law,’ as used in the [Act’s] expropriation exception, refers to
violations of the international law of expropriation and thereby
incorporates the domestic takings rule.” Id. at 715. Under that
rule, foreign states and their agencies remain immune in cases
dealing with “a foreign sovereign’s taking of its own nationals’
property.” Id. at 709. To avoid this bar, plaintiffs had for the
first time in the litigation suggested to the Supreme Court that
their ancestor art firm owners were not really German nationals
at the time of the 1935 sale. In vacating and remanding the case,
the Supreme Court instructed our court to “direct the District
Court to consider this argument, including whether it was
adequately preserved below.” Id. at 716.
The district court, Kollar-Kotelly, J., determined in a
thorough opinion that plaintiffs had not preserved their not-
German-nationals claim because they failed to raise it in their
2
The Court doubtless meant, not that two of the art firms
“fled” from Germany, but that two of the firms’ owners did so
and that the third owner died in Germany.
4
original complaint, or in their amended complaint, or at any
point in the lengthy proceedings in the district court, or in their
brief or oral argument the first time this case went on appeal to
this court. See Philipp V, 628 F. Supp. 3d at 22. Judge Kollar-
Kotelly also denied plaintiffs leave to amend their complaint to
add additional allegations regarding the nationality of the art
firm owners. See Philipp IV, 2021 WL 3144958, at *8. We
agree with both rulings.
To preserve a claim, a party must raise it “squarely and
distinctly.” Bronner on Behalf of Am. Stud. Ass’n v. Duggan,
962 F.3d 596, 611 (D.C. Cir. 2020) (quoting Schneider v.
Kissinger, 412 F.3d 190, 200 n.1 (D.C. Cir. 2005)). Plaintiffs
had every opportunity to claim in their first set of district court
and appellate proceedings that the owners of the art firms were
not German nationals at the time of the 1935 transaction. They
did not do so, even though the defendants moved to dismiss their
complaint on the ground that domestic takings do not come
within the Act’s immunity exception. See Philipp I, 248 F.
Supp. 3d at 72. Plaintiffs’ position was that SPK lacked
immunity in view of a separate doctrine derived from this
Court’s decision in Simon v. Republic of Hungary, 812 F.3d 127(D.C. Cir. 2016), see Philipp II, 894 F.3d at 411, a doctrine the
Supreme Court rejected in Philipp III, see 141 S. Ct. at 715.
Plaintiffs respond that “they were not required to
preserve—and did not waive—an alternate argument . . . which
no court could have reached until the Supreme Court” ruled in
Philipp III. Appellants’ Brief at 43. They are incorrect. From
the very beginning, plaintiffs could have raised their not-
German-nationals theory alongside their original, Simon-based
theory. Either theory, if accepted, could have defeated SPK’s
claim of immunity, and both the district court and our court
could have reached the not-German-nationals theory even before
the Supreme Court’s decision in Philipp III.
5
As to plaintiffs’ motion for leave to amend their complaint,
the district court did not abuse its discretion in refusing to grant
the motion. The case came back to the district court on remand
following the Supreme Court’s ruling in Philipp III. Under the
“mandate rule,” the district court “had no ‘power or authority to
deviate from the mandate.’” Role Models Am., Inc. v. Geren,
514 F.3d 1308, 1311 (D.C. Cir. 2008) (quoting Briggs v. Pa.
R.R. Co., 334 U.S. 304, 306 (1948)). Our mandate, which
mirrored the Supreme Court’s, directed the district court to
determine whether plaintiffs had “adequately preserved” their
argument that the art firm owners were non-German nationals at
the time of the taking. Philipp v. Fed. Republic of Germany,
839 F. App’x 574 (D.C. Cir. 2021); Philipp III, 141 S. Ct. at
716.
The district court correctly understood those mandates to
preclude plaintiffs from amending their pleadings with
allegations to support arguments not preserved on the existing
record. The Supreme Court’s mandate directed us to instruct the
district court to determine whether plaintiffs preserved their not-
German-nationals argument. That mandate would make little
sense if it also allowed the district court to permit plaintiffs to
cure any failure to preserve that argument by amending their
complaint.
Affirmed.