Ambar v. Federal Republic of Germany ( 2022 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SAMI AMBAR, et al.,
Plaintiffs,
v. Civil Action No. 20-3587 (CKK)
FEDERAL REPUBLIC OF GERMANY,
Defendant
MEMORANDUM OPINION
(March 15, 2022)
This case arises from the alleged November 27, 1941 expropriation of a building located
in Berlin, Germany (the “Building”) by the Nazi regime. The Building was owned by Salo
Feuerwerk who was Jewish and resided in Austria. Plaintiffs are Mr. Feuerwerk’s grandchildren,
Sami Ambar, Laila Ambar, Shlomit Abrahamoff, Ariela N. Abrahamoff, who bring this action
against Defendant Federal Republic of Germany (“Germany”) alleging that Germany is in
wrongful possession of rent and sale proceeds related to the expropriated Building. In its pending
[9] Motion to Dismiss, Germany argues that it is immune from suit pursuant to the Foreign
Sovereign Immunities Act (“FSIA”). 28 U.S.C. §§ 1602–1611. Plaintiffs oppose Germany’s
motion, invoking the “expropriation exception” to the FSIA, which confers jurisdiction for claims
involving property rights taken in violation of international law when there exists a connection
with a commercial activity carried on in the United States. Id. § 1605(a)(3).
Upon review of the pleadings, 1 the relevant legal authority, and the record as a whole, the
Court concludes that the Complaint’s factual allegations make out a legally valid claim that the
1
The Court’s consideration has focused on the following:
x Defendant’s Motion to Dismiss (“Def.’s Mot.”), ECF No. 9;
x Plaintiffs’ Memorandum of Points & Authorities in Opposition to Defendant’s Motion to Dismiss
(“Pls.’ Opp’n”), ECF No. 11;
x Defendant’s Reply Memorandum of Points & Authorities in Support of Motion to Dismiss (“Def.’s
Reply”), ECF No. 12; and
“expropriation exception” to the FSIA applies, and therefore Germany is not immune from suit in
this case. Accordingly, the Court shall DENY Germany’s Motion to Dismiss.
I. BACKGROUND
In 1924, Mr. Feuerwerk, a Jewish Austrian citizen who had resided in Vienna, Austria
since at least 1914, purchased the Building in Berlin, Germany. Compl. ¶¶ 1, 5, 41, ECF No. 1.
As the Building’s sole owner, Mr. Feuerwerk collected rents from the Building from 1924 to 1937.
Id. ¶¶ 43, 44.
Following its rise to power in Germany, see generally id. ¶¶ 22–28, the Nazi regime
enacted a series of laws designed to diminish the rights of German Jews, known as the Nuremberg
Laws. Id. ¶¶ 29, 30. One such law, the Reich Citizenship Law, enacted in 1935, stripped German
Jews of citizenship and downgraded their legal status to one of “nationals,” distinct from “Reich
citizens.” Id. ¶ 30. It is not disputed that at the time of the Reich Citizenship Law of 1935, Mr.
Feuerwerk was a citizen and resident of Austria. Id. ¶¶ 1, 45; Def.’s Mot. at 6.
In 1937, Mr. Feuerwerk fled from Austria to Romania. Compl. ¶ 45. In March 1938,
Austria was annexed by Nazi Germany, beginning a period known as the “Anschluss.” 2 Id. ¶ 35.
In July 1938, Nazi Germany declared all Austrian citizens to be nationals of Germany, retroactive
to March 1938. Pls.’ Opp’n at 8 (citing Def.’s Mot. at 6).
In March 1940, Mr. Feuerwerk and his family fled Romania to what was then the British
Mandate of Palestine. Compl. ¶ 55.
x Plaintiffs’ Notice of Supplemental Authority (“Pls.’ Suppl. Auth.”), ECF No. 13.
In an exercise of its discretion, the Court finds that holding oral argument in this action would not be of
assistance in rendering a decision. See LCvR 7(f).
2
In using the term “Anschluss,” the Court refers to the time period of German occupation of Austria
between 1938 and 1945.
2
On November 25, 1941, Germany issued a decree denationalizing German Jewish nationals
residing abroad and confiscating all of their property, pursuant to the Reich Citizenship Law of
1935. Pls.’ Opp’n at 9 (citing Def.’s Mot. at 6).
On or about November 27, 1941, Germany took possession of Mr. Feuerwerk’s Building,
Compl. ¶ 57, and in January 1942, registered the Building in the name of the German Reich. Id.
Mr. Feuerwerk died in Mandatory Palestine in April 1942. Id. ¶ 1.
Plaintiffs contend that following the downfall of the Nazi government, ownership of the
Building passed to the German Democratic Republic and then to the Federal Republic of Germany,
each of which collected rents from the Building. See id. ¶¶ 58–71. According to Plaintiffs,
Germany sold the Building on January 3, 2006. Id. ¶ 71. Plaintiffs allege that Germany
commingled the funds from the sale of the Building with its general revenue, and that the
commingled funds were subsequently used in the United States to purchase military equipment,
maintain bank accounts and bank deposits, sell and purchase U.S. treasury bonds, and issue
German bonds and other financial instruments to U.S. investors. Id. ¶¶ 21, 71.
Plaintiffs previously sought to regain ownership of the Building pursuant to a treaty
between Austria and the German Democratic Republic in an administrative court in Berlin. See
generally id. ¶¶ 73–96. Plaintiffs have been unsuccessful in their efforts to regain ownership of
the Building and/or to recoup proceeds from the 2006 sale. Id. ¶ 95.
Plaintiffs now bring the following six claims against Germany: international expropriation
(Count I); genocide in violation of the law of nations (Count II); conversion of proceeds of the sale
(Count III); conversion of the rental income (Count IV); unjust enrichment from the proceeds of
the sale (Count V); and unjust enrichment from the rental income (Count VI). Plaintiffs seek,
3
among other things, compensatory damages and/or compensation for unjust enrichment for the
taking of the building.
Germany moved to dismiss the Complaint, contending that it is entitled to sovereign
immunity. See Def.’s Mot. That motion is now ripe for the Court’s consideration.
II. LEGAL STANDARD
Pursuant to Federal Rule of Civil Procedure 12(b)(1), a party may move for dismissal based
on “lack of subject-matter jurisdiction.” Fed. R. Civ. P. 12(b)(1). When a foreign sovereign
defendant moves for dismissal under Rule 12(b)(1) on the grounds of sovereign immunity, initially,
the plaintiff bears the burden of overcoming the presumption of sovereign immunity “by producing
evidence that an [FSIA] exception applies.” Bell Helicopter Textron, Inc. v. Islamic Republic of
Iran, 734 F.3d 1175, 1183 (D.C. Cir. 2013). After the plaintiff has met this initial burden of
production, the foreign sovereign defendant bears the “ultimate burden of persuasion” to show that
the alleged exception to sovereign immunity does not apply. Id.In resolving a motion to dismiss pursuant to Rule 12(b)(1), the court can, and often must,
go beyond the allegations in the complaint. “Where a motion to dismiss a complaint ‘present[s] a
dispute over the factual basis of the court’s subject matter jurisdiction … the court may not deny
the motion to dismiss merely by assuming the truth of the facts alleged by the plaintiff and disputed
by the defendant.” Feldman v. Fed. Deposit Ins. Corp., 879 F.3d 347, 351 (D.C. Cir. 2018)
(quoting Phoenix Consulting v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000)). Instead of
merely relying on the truth of the facts alleged in the complaint, “the court must go beyond the
pleadings and resolve any disputed issues of fact the resolution of which is necessary to a ruling
upon the motion to dismiss.” Id. (quoting Phoenix Consulting, 216 F.3d at 40).
4
III. DISCUSSION
Under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1602–1611, “a
foreign state is presumptively immune from the jurisdiction of United States courts,” and “unless
a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against
a foreign state.” Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993). The FSIA provides “the sole
basis for obtaining jurisdiction over a foreign state in the courts of this country.” Id. (quoting
Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443 (1989) (internal quotation
marks omitted)). Because “subject matter jurisdiction in any such action depends on the existence
of one of the [FSIA’s] specified exceptions . . . [a]t the threshold of every action in a District Court
against a foreign state . . . the court must satisfy itself that one of the exceptions applies.” Verlinden
B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 493–94 (1983). “In other words, U.S. courts have no
power to hear a case brought against a foreign sovereign unless one of the exceptions applies.”
Diag Human S.E. v. Czech Republic–Ministry of Health, 64 F. Supp. 3d 22, 30 (D.D.C. 2014),
rev’d on other grounds 824 F.3d 131 (D.C. Cir. 2016).
The FSIA’s exceptions to sovereign immunity are narrowly construed. Fed. Republic of
Germany v. Philipp, 141 S. Ct. 703, 713 (2021) (“Germany’s interpretation of the exception is also
more consistent with the FSIA’s express goal of codifying the restrictive theory of sovereign
immunity[.]”); Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co., 137 S.
Ct. 1312, 1320 (2017) (discussing the overarching framework of the “restrictive theory” in
codifying sovereign immunity).
Plaintiffs assert that this Court has jurisdiction under the FSIA’s “expropriation exception,”
28 U.S.C. § 1605(a)(3). Compl. ¶ 15. The FSIA’s “expropriation exception” allows a party to
proceed with a claim against a foreign sovereign:
5
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[.]
28 U.S.C. § 1605(a)(3). As such, to satisfy the FSIA’s “expropriation exception,” a plaintiff must
demonstrate that (1) “rights in property” are “in issue”; (2) the property right was “taken in
violation of international law”; and (3) there is a commercial activity nexus such that property
exchanged for the taken property “is present in the United States in connection with a commercial
activity carried on in the United States by the foreign state.” 3 Peterson v. Royal Kingdom of Saudi
Arabia, 416 F.3d 83, 86 (D.C. Cir. 2005). Here, there is no dispute that “rights in property” are
“in issue” to satisfy the first prong of the FSIA’s expropriation exception. Accordingly, the Court
must consider only whether Plaintiffs have alleged that the taking of the Building was “in violation
of international law” and whether there is a nexus between the taking (and subsequent sale) of the
Building and Germany’s commercial activity in the United States. Based on the present record,
the Court finds that Plaintiffs’ allegations are sufficient to establish both remaining prongs of the
FSIA’s expropriation exception.
A. Taken in Violation of International Law
Germany contends that Plaintiffs failed to establish that the Berlin building was “taken in
violation of international law” because Mr. Feuerwerk was a German national. As Germany
correctly notes, a “‘taking of property’ could be ‘wrongful under international law’ only where a
3
The “commercial activity” prong of the expropriation exception can also be satisfied by demonstrating
that the taken property or any property exchanged for the taken 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.” 28 U.S.C. § 1605(a)(3). The parties here do not apply this particular commercial-
activity nexus.
6
state deprived ‘an alien’ of property.” Philipp, 141 S. Ct. at 712 (quoting Restatement (Second)
Of Foreign Rels. L. U.S. § 185 (Am. L. Inst. 1965)). “[T]he phrase ‘rights in property taken in
violation of international law,’ as used in the FSIA’s expropriation exception, refers to violations
of the international law of expropriation and thereby incorporates the domestic takings rule.” Id.
at 715. “This ‘domestic takings rule’ assumes that what a country does to property belonging to its
own citizens within its own borders is not the subject of international law.” Id. at 709.
Germany’s position is that Mr. Feuerwerk was a German national, so any expropriation of
the Building constituted a “domestic” taking that was not in violation of “international” law. See
Def.’s Mot. at 5. Plaintiffs argue that Mr. Feuerwerk was not a German national at the time the
Building was confiscated by the Nazis, Compl. ¶ 103, and therefore the Building was “taken in
violation of international law,” § 1605(a)(3) (emphasis added). For the following reasons, the
Court finds that Plaintiffs have adequately alleged that the alleged taking of the Building was in
violation of international law because Mr. Feuerwerk was not a German national.
To reach this conclusion, the Court must consider: (1) whether Austrian or German law
applies; and (2) whether the Court should apply the law applicable at the time of the alleged
expropriation of the Building or apply post-World War II laws retroactively. Plaintiffs ask the
Court to consider application of either Austrian law retroactively or German law at the moment of
the taking to find that Mr. Feuerwerk was not a German national at the time of the taking. Germany
contends that an analysis of post-war German law applies retroactively, and application of such
law directs that Mr. Feuerwerk was a German national.
As to the first consideration, the Court looks to German law to determine Mr. Feuerwerk’s
nationality. Under general principles of international law, “[i]t is for each State to determine under
its own law who are its nationals[,]” and “[a]ny question as to whether a person possesses the
7
nationality of a particular State shall be determined in accordance with the law of that State.”
Convention on Certain Questions Relating to the Conflict of Nationality Laws, art. 1, 2, Apr. 12,
1930, 179 U.N.T.S. 89; see also European Convention on Nationality, art. 3, Nov. 6, 1997, E.T.S.
No. 166 (“Each State shall determine under its own laws who are its nationals.”). In other words,
the question of whether Mr. Feuerwerk was a German national is a question under German law.
As the crux of the parties’ dispute is whether Mr. Feuerwerk is a German national, German law
supplies the relevant framework.
Having concluded that German law supplies the appropriate framework to analyze Mr.
Feuerwerk’s nationality, the Court next considers whether to apply German law as it stood at the
time of the alleged expropriation of the Building in 1941 or to apply post-Nazi regime German
law retroactively. Plaintiffs argue that if German law is to be considered, then German law at the
time of the taking of the Building should be the relevant analysis, whereas Defendant contends
that only German law retroactively should apply. Neither party cites binding legal authority
directing which approach is correct, and the Court has identified none. 4 As set forth below, from
either temporal perspective, Plaintiffs have the better argument that Mr. Feuerwerk was not a
national of Germany, and therefore have sufficiently alleged that the Building was taken in
violation of international law.
1. German Law at the Time of the Taking of the Building
Under German law at the time of the taking in 1941, Germany’s annexation of Austria was
considered legal. See Def.’s Mot. at 6. Following annexation, Germany issued a decree in July
4
In Simon v. Republic of Hungary (“Simon 2021”), the court considered whether the facts alleged gave rise
to a reasonable inference that the individuals were not Hungarian nationals “at the time the property was
expropriated from them.” No. 10-cv-1770, 2021 WL 6196995, at *37 (D.D.C. Dec. 30, 2021) (emphasis
added). However, that court was not confronted with the same arguments raised by Germany in this case
about retroactive application of later laws.
8
1938 declaring all Austrian citizens to be nationals of Germany retroactive to March 1938, the
start of its annexation. Therefore, under German law, Mr. Feuerwerk became a German national
in 1938. However, he was denationalized by the 11th Decree issued by Germany on November
25, 1941. The 11th Decree denationalized German Jewish nationals residing abroad and allowed
confiscation of their property, pursuant to the Reich Citizenship Law of 1935 which degraded the
legal status of German Jews. Def.’s Mot. at 6; Pls.’ Opp’n at 9. Mr. Feuerwerk fled Austria to
Romania in 1937 and, by the time the denationalization decree was issued, he was residing in
British Mandatory Palestine. Compl. ¶¶ 45, 55. Given that Nazi regime allegedly expropriated
Mr. Feuerwerk’s building in Berlin two days after the decree, id. ¶ 57; Pls.’ Opp’n at 9, Germany
would have considered Mr. Feuerwerk to be a denationalized German Jewish national residing
abroad. Therefore, under Germany’s own laws at the time of the taking, Mr. Feuerwerk was not a
German national. 5
United States courts at the time also considered people like Mr. Feuerwerk to be non-
German nationals. For example, in United States ex rel. Schwarzkopf v. Uhl, 137 F.2d 898 (2d
Cir. 1943), the Second Circuit considered whether the relator, a Jewish man who was a “naturalized
citizen of Austria” was a “German citizen” for purposes of the Alien Enemy Act. Id. at 900,
901–02. At the time of Germany’s 1938 decree granting Germany citizenship to all Austrian
citizens, the relator in Schwarzkopf was a resident of the United States. Id. at 900. Although the
court noted that the United States had never accorded de jure or de facto recognition of Germany’s
5
See e.g., Joachim Stern and Gerd Valchars, EUDO Citizenship Observatory, Country Report: Austria 7
(2013) (“The 1938 implementation of the Nuremberg Race Laws of 1935, especially the ‘Law on the
protection of German blood and honour’ also took effect in annexed Austria in 1938 and provided inter alia:
‘A Jew cannot be a Reich citizen. He is neither entitled to vote on political matters nor may he hold public
office’. A series of discriminatory amendments to the citizenship law followed and peaked in the 11th
Decree on Citizenship: All people considered Jews outside the territory of the German Reich collectively
lost their nationality, their assets became property of the Reich.”).
9
annexation of Austria, it concluded that “under generally accepted principles of international law
Germany could impose citizenship by annexation (collective naturalization) only on those who
were inhabitants of Austria in 1938.” Id. at 901–02 (emphasis added). As with the relator in
Schwarzkopf, Mr. Feuerwerk did not reside in Austria as of 1938, and therefore would not have
been a “German” national. 6
2. Application of Later German Law Retroactively
In support of its argument that Mr. Feuerwerk was a German national at the time of the
taking, Germany contends that in 1968, it declared the 11th Decree denationalizing German Jews
retroactively null and void. Specifically, Germany relies on the German Constitutional Court’s
application of the Radbruch Formula in 1968, which declared that the Reich Citizenship Law and
denationalization decree as applied to German Jews must not be recognized as valid law because
they “contradict fundamental principles of justice so clearly that any judge who wanted to apply
them or to recognize their legal consequences would pronounce injustice instead of right” and that
those regulations are a “contradiction to justice that has reached such an unbearable level that it
must be considered null and void ab initio.” BVerfGE 23, 98 BvR 557/62, Feb. 14, 1968,
https://opinioiuris.de/entscheidung/1553 (translated quotes from Def.’s Mot. at 7). In other words,
Germany asks the Court to find that Mr. Feuerwerk would have been a German national by virtue
6
Germany suggests that the legal theory espoused in Schwarzkopf (that only inhabitants who remain in the
annexed state are deemed nationals) “is inapplicable under US law where a statute or regulation does not
limit the application of new nationality to a specific territory, and instead applies to all citizens of the
annexed state regardless of their whereabouts.” Def.’s Reply at 4. It is not entirely clear what point
Germany is raising with this argument. Germany cites an example the United States’ annexation of Hawaii
and Puerto Rico, noting that the United States did not limit a grant of citizenship only to the individuals
physically present in those territories. These comparisons are not particularly relevant. With respect to
both Hawaii and Puerto Rico, the United States specifically enacted statutes applying citizenship to
Hawaiians and Puerto Ricans who were not physically present in those territories. See 8 U.S.C. §§ 1402,
1405. Given that specific statutes carved out citizenship for Hawaiians and Puerto Ricans whereas no such
statutes are applicable in Schwarzkopf or this present case, Germany undermines its own argument by
providing examples that are consistent with the legal theory of Schwarzkopf.
10
of the Anschluss recognizing Austrian residents as Germans and the retroactive nullification of the
Nazi-era laws which denationalized Jews.
Germany is asking the Court to apply some retroactive laws in a way that allows them to
benefit from some Nazi-era laws while disclaiming others. But adopting this proposed “selective
retroactivity”—recognizing the validity of the Anschluss while nullifying the denationalization
laws—runs counter to the “fundamental principles of justice” pronounced by the German
Constitutional Court. Principles of international law would also frown upon the selective
retroactivity argued by Germany. Cf. ICJ Judge Stephen M. Schwebel, “Clean Hands, Principle,”
in Max Planck Encyclopedia of International Law (2013) (discussing Meuse Diversion of Water
Case (Netherlands v. Belgium), Judgment of June 28, 1937, 1937 P.C.I.J. ser. A/B No. 70 (“‘He
who seeks equity must do equity’ is a principle applicable in international law. . . . [I]n a proper
case and with scrupulous regard for the limitations which are necessary, a tribunal bound by
international law ought not to shrink from applying a principle of such obvious fairness.”) (Opinion
of Hudson, J. ¶¶ 323–24)).
Moreover, applying later German law retroactively may also acknowledge Austrian
citizenship for Mr. Feuerwerk. Although Germany asks the Court to consider the retroactive
nullification of the Reich Citizenship Law and 11th Decree, it does not address the retroactive
application of other laws. In 1987 for example, German courts acknowledged the validity of
Austria’s 1945 Transitional Citizenship Law. BVerfGE 4, 322 1 BVR 284/54, May 12, 1987. In
a case involving an extradition request from Austria, Germany declared that “[a]ll persons who
would have been Austrian citizens on 27 April 1945 if the Austrian Nationality Law had remained
in force without interruption have, as of that date, lost their German nationality resulting from the
11
‘annexation’ (Anschluß).” Id. 7 The Austrian Proclamation of Independence of April 27, 1945,
declared that the Anschluss, “forcibly imposed upon the Austrian People is null and void.”
Proclamation of the Second Republic of Austria of April 27, 1945, Art. II (in German). The
proclamation by itself “would probably have sufficed in order to carry out the idea of Austria’s
legal continuity in regard to nationality.” Robert E. Clute, The International Legal Status of
Austria 1938-1955 68 (Martinus Nijhoff, The Hague, 1962) (hereinafter “Clute”). Austrian
lawmakers, however, also passed the Transitional Citizenship Law of July 10, 1945, which further
defined Austrian citizenship retroactive to those who would have possessed Austrian citizenship
from March 13, 1938, to April 27, 1945. Id. at 69.
Germany points to the language of the Transitional Citizenship Law as evidence that Mr.
Feuerwerk did not regain Austrian citizenship because he was not alive in 1945. That act states in
relevant parts that Austrian citizens are, “as of April 27, 1945” or “from April 27, 1945,” those
persons who possessed Austrian citizenship from March 3, 1938. 8 The fact that Austria passed
new laws in 1945 declaring citizenship rather than merely declaring the nullification of the 1938
German laws and reverting to prior citizenship laws seems to indicate the possibility that April 27,
1945 is an effective boundary date. Germany notes that the
Austrian government could easily have used the May 29
Announcement [repealing the German Legal Provisions in the Field
of Citizenship] to declare the Ordinance of Nationality in the State
of Austria of July 3, 1938 invalid ab initio, but, it chose April 27,
1945 as the effective date, keeping the German nationality for all
Austrians intact for the period between March 13, 1938 and April
27, 1945.
7
English translated version found at https://law.utexas.edu/transnational/foreign-law-translations/
german/case.php?id=599.
8
The text of the law is in German and depending on the translation “as of” is used whereas others write
“from.” See Def.’s Reply (using “as of”); Clute at 69 (using “from”).
12
Def.’s Reply at 6. The implication from this argument is that Mr. Feuerwerk never regained
Austrian citizenship on April 27, 1945, because he died in 1942 as a “German.” The German
counterargument may seem textually convincing. See Clute at 69 (acknowledging that the
existence of the Transitional Citizenship Law raises some doubt in the theory of continuity). But
regardless of new laws on citizenship, Austrian law does not disregard the principle of legal
continuity 9 and still intends to retroactively claim continuity during this period. See Clute at 141–
52 (discussing several cases from the Austrian Supreme Administrative Court,
Verwaltungsgerichthof); see also Verwaltungsgerichtshof [VwGH] [Administrative Court of
Justice] Sept. 6, 1995, 94/01/0787 [VwSlg] 14310 A/1995 (Austria) (in German) (citing the works
of scholars Seidl-Hohenveldern and Heinl finding that the Supreme Administrative Court applied
principles of international law to treat the July 3, 1938, Nationalization Decree as “irrelevant” and
void under Austrian law, as applied to a child of an Austrian mother and ethnic German father
from the South Tyrol region who was forcibly made a German citizen during the Anschluss).
Austrian law intends to state retroactively that individuals like Mr. Feuerwerk were always
citizens of Austria. Clute at 68–71. With a declaration indicating the intent to impose the theory
of legal continuity, Austria would have no reason to consider an individual who was an Austrian
citizen before 1938 to be a German rather than as a continuous Austrian simply because he or she
9
Under Austrian law, the Anschluss “did not affect the continuity of Austria.” Clute at 68. The Austrian
authorities take the position that the Anschluss was a legal nullity that did not affect Austrian nationality
during the time of the German occupation. Id. at 68–71. Under the theory of continuity, those who were
Austrian prior to the Anschluss remained Austrian throughout the Nazi occupation. Germany argues that
an Austrian ordinance declared German nationality for all of its citizens in 1938. The Ordinance on
Nationality in the State of Austria of 3 July 1938 (Verordnung über die Staatsangehörigkeit im Lande
Österreich, RGB1. I, p. 790, http://www.documentarchiv.de/ns/1938/deutsche-staatsangehoerigkeit-
ost_vo.html) states in § 1(2) that “there shall exist only German nationality” (“Es gibt nur noch die deutsche
Staatsangehörigkeit (Reichsangehörigkeit)”). It is difficult, however, to see how this ordinance is
representative of Austrian law at the time considering that the annexation occurred in March of 1938, prior
to the Ordinance. This law seems to be declarative of German law rather than Austrian law at the time
especially since Germany considers Austria to have ceased to exist in March of 1938.
13
died in between 1938 and 1945. Austria also declared automatic citizenship for individuals, rather
than requiring them to reclaim citizenship in 1945. In contrast, current birthright laws in Austria
explicitly require those who want to claim Austrian citizenship to declare and register. 10 If Austria
had intended that only those who survived the war would be considered citizens of Austria, it
would have imposed an additional requirement to reclaim citizenship rather than declaring it. This
intention is consistent with the intention to maintain legal continuity.
Further, in creating any sort of inconsistency with legal continuity, it does not appear that
these laws intended to exclude individuals like Mr. Feuerwerk who was an Austrian citizen prior
to 1938. Even if the “use of the subjunctive mood might presuppose that the [Transitional
Citizenship Law] was not in effect” between 1938 and 1945, the evidence of continuity is to be
found in the fact that “the gain and loss of nationality during the Anschluss was regulated by the
Austrian Nationality Law of 1925.” Clute at 69. If anything, the specific wording of retroactive
Austrian laws only showed hesitancy toward full nullity because of Austrian lawmakers’ concerns
with nationality based on marriage. The lawmakers and subsequent court cases only applied the
strict reading of the post-war citizenship laws and indicated that the primary distinction in creating
these new citizenship laws were in cases addressing the Austrian women who married Germans
during the Anschluss. See Clute at 70. The post-war laws specifically “provided that if a person
were already resident in Austria prior to the Anschluss, such residence during the Anschluss could
be counted toward the requirements for naturalization” whereas “residence in Austria during the
period of the Anschluss did not count toward the residence requirements for naturalization in cases
where such residence was not commenced until after March 13, 1938.” Clute at 69 n.20. Mr.
10
See e.g., Austrian Embassy Washington, Austria Extends Citizenship to Descendants of Victims of Nazi
Persecution (Sept. 19, 2019), https://www.austria.org/the-latest/2019/10/7/austrian-citizenship-
descendants-victims-nazi-persecution (“Eligible descendants will be able to apply for Austrian
citizenship . . .” (emphasis added)).
14
Feuerwerk would not fall under this latter category because he had always been a citizen of Austria
even prior to the period between 1938 and 1945, which is what the marriage cases are concerned
with.
The application of retroactivity of German law in acknowledging Austria’s laws faces
counterarguments regarding the timing of “would have been Austrian citizens” in 1945 as outlined
above. However, since the German court is retroactively removing German nationality resulting
from the Anschluss, Mr. Feuerwerk’s supposed German nationality resulting from the Anschluss
would be removed as well. Although Mr. Feuerwerk died in 1942, he would have been an Austrian
citizen in 1945 when the Austrian Nationality Law remained in force.
***
In sum, the Court finds that application of German law under the temporal framework
posited by either party results in finding that Mr. Feuerwerk was not a German national when the
Building was expropriated. Accordingly, the Court finds that Plaintiffs have sufficiently
demonstrated that the alleged expropriation of the Building was not a “domestic” taking, but
instead a taking in violation of international law.
B. Commercial Activity
The Court must next consider whether Plaintiffs’ Complaint satisfies the “commercial
activity” prong of the FSIA’s expropriation exception. See Peterson, 416 F.3d at 86. The FSIA
defines a “commercial activity” as “either a regular course of commercial conduct or a particular
commercial transaction or act. The commercial character of an activity shall be determined by
reference to the nature of the course of conduct or particular transaction or act, rather than by
reference to its purpose.” § 1603(d).
15
Courts have narrowly construed the FSIA’s exceptions to sovereign immunity and
therefore interpret the term “commercial activity” restrictively. See Exxon Mobil Corp. v.
Corporación Cimex S.A., ---F. Supp. 3d ---, 2021 WL 4709566, at *2 (D.D.C. Oct. 8, 2021) (citing
Philipp, 141 S. Ct. at 713 (“[T]he commercial activity exception ‘comport[s] with the overarching
framework of the restrictive theory.’”)). The “touchstone of the commercial activity exception” is
not based on “the parties’ relationship to one another.” Id. at *4. “Rather, it is whether commercial
activity forms the basis or foundation for a claim; whether commercial activity gives rise to the
elements ... that if, proven, would entitle a plaintiff to relief; and whether the gravamen of the
complaint sounds in commercial activity.” Id. (cleaned up) (citing OBB Personenverkehr AG v.
Sachs, 577 U.S. 27, 36 (2015); Nelson, 597 U.S. at 357).
Another court in this jurisdiction recently considered the meaning of “commercial activity,”
as applied to claims brought by plaintiffs seeking restitution for property seized from them during
the period of Nazi rule. Simon 2021, 2021 WL 6196995. In Simon 2021, the plaintiffs were
Hungarian Jews who sought restitution for property seized from them by the Hungarian
government. In that case, the court “credited the sufficiency of plaintiffs’ allegations that Hungary
engages in commercial activity in the United States by, inter alia, issuing certain SEC-regulated
bonds and purchasing military equipment.” Simon 2021, 2021 WL 6196995, at *10. The court
concluded that the alleged “commercial activity”— “Hungary’s possession and use of commingled
proceeds from the sale of expropriated property”—was sufficient. Id. Similarly, Plaintiffs here
allege that Germany commingled the proceeds of the sale of the Building with its general budget
revenues and then used those funds for “commercial activities” in the United States, including
purchasing military equipment, maintaining bank accounts and bank deposits, sale and purchase
of U.S. treasury bonds, and issuance of German bonds and other financial instruments to U.S.
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investors. See Compl. ¶ 21; Pls.’ Opp’n at 34–35. As did the court in Simon 2021, the Court finds
that these allegations sufficiently state that Germany has engaged in commercial activity with the
United States using property exchanged for Mr. Feuerwerk’s Building.
In Simon 2021, the court applied a “plausibility” standard to determine whether the
commercial nexus element of the FSIA’s expropriation exception was satisfied. 2021 WL
6196995, at *10 (quoting Simon v. Republic of Hungary (“Simon 2020”), 443 F. Supp. 3d 88, 104
(D.D.C. 2020)) (“With respect to Hungary, the Court first found that the Second Amended
Complaint presented allegations of Hungary’s possession and use of commingled proceeds from
the sale of expropriated property, sufficient to ‘raise a plausible inference that’ Hungary possesses
such property, and that Hungary failed to defeat that inference.”). Germany asks the Court to apply
a stricter pleading standard, relying on Bolivarian Republic of Venezuela v. Helmerich & Payne
Int’l Drilling Co., 137 S. Ct. 1312 (2017) and Owens v. Republic of Sudan, 864 F.3d 751 (D.C.
Cir. 2017), vacated and remanded on other grounds sub nom. Opati v. Republic of Sudan, 140 S.
Ct. 1601 (2020). Germany argues that Helmerich instituted “a new and more demanding
standard . . . that jurisdictional facts are sufficiently pled ‘only if they do show (and not just
arguably show)’ the facts necessary to support jurisdiction.” Def.’s Reply at 11 (quoting Helmerich,
137 S. Ct. at 1324). Germany further points to Owens to affirm the Helmerich standard “requiring
a plaintiff to prove the facts supporting the court’s jurisdiction under the FSIA, rather than simply
to make a ‘non-frivolous’ claim to that effect. Owens, 864 F.3d at 779 (citing Helmerich, 137 S.
Ct. at 1316). 11
11
In Owens, the Court considered the FSIA terrorism exception, 28 U.S.C. § 1605(a)(7) rather than
subsection (a)(3). 864 F.3d at 764.
17
Germany’s argument that Helmerich and Owens created a “heightened standard” for
pleading the “commercial activity” prong of the FSIA’s “expropriation exception” is misplaced.12
The Court in Helmerich explicitly applied its “more demanding standard” to the “rights in property
taken in violation of international law” portion of § 1605(a)(3) rather than the “connection with a
commercial activity” prong. Helmerich, 137 S. Ct. at 1314. Moreover, the court in Helmerich
held “that plaintiffs asserting jurisdiction pursuant to the FSIA’s expropriation exception have to
do more than advance a ‘nonfrivolous argument,’ . . . thereby rejecting the ‘exceptionally low bar’
applied by the D.C. Circuit when FSIA’s jurisdictional question overlaps with the merits question
posed by a claim.” Simon 2020, 443 F. Supp. 3d 88, 102 n.9 (quoting Helmerich, 137 S. Ct. at
1318, 19). As the Simon 2020 court noted in response to an argument similar to the one made by
Germany here, although the “non-frivolous” pleading standard was overruled, the plausibility
standard is not an incorrect application of the standard set out in Helmerich. Id. Accordingly,
while Germany argues Simon 2021 and Helmerich/Owens are at odds regarding the applicable
pleading standard, the two are consistent. The plausibility standard set out in Simon 2021 is more
than non-frivolous and is a correct application of the heightened standard required by Helmerich
and Owens.
Here, the Court finds that the facts alleged by Plaintiffs that Germany has engaged in
commercial activity with the United States using property exchanged for the expropriated Building
satisfy the plausibility standard explained by the court in Simon 2021—which also satisfies the
“non-frivolous” standard proposed by Germany.
12
Following Owens and prior to Simon 2021, the United States Court of Appeals for the District of
Columbia Circuit has applied a “plausibility” standard in analyzing immunity exceptions under the FSIA.
See Schubarth v. Federal Republic of Germany, 891 F.3d 392, 401 (D.C. Cir. 2018); EIG Energy Fund XIV
v. Petroleo Brasileiro, 894 F.3d 339, 345 (D.C. Cir. 2018); Valambhia, 964 F. 3d 1135, 1139.
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IV. CONCLUSION
For the foregoing reasons, Plaintiffs’ allegations sufficiently invoke the FSIA’s
expropriation exception, overcoming Germany’s sovereign immunity. Accordingly, the Court
shall DENY Germany’s Motion to Dismiss. An appropriate Order accompanies this Memorandum
Opinion.
/s/
COLLEEN KOLLAR-KOTELLY
United States District Judge
Date: March 15, 2022
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