By Louis M. Solomon
of the Hungarian Holocaust v. Hungarian State Railways (HSR), No. 10 C 868 (N.D. Ill. July 2011)
[enhanced version available to lexis.com subscribers ], address claims against an instrumentality
of the Government of Hungary that allegedly "played a role in the looting and plundering
of Jewish possessions and the expropriation of Jewish funds during the Holocaust".
The District Court denied a motion to dismiss and addressed several international
litigation practice issues.
First, the Court determined that the
expropriation exception to the FSIA was properly plead by the complaint alleging
that "(1) rights in property are in issue; (2) that the property was 'taken'; (3)
that the taking was in violation of international law; and (4) that one of the two
nexus requirements is satisfied". Those nexus requirements are (a) "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 (b) "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 is engaged in a commercial activity in the United States".
The District Court found the pleading sufficient and said that it was not "adjudicating
HSR's defense of sovereign immunity under the FSIA on the merits" since, according
to the Court, the issue was "not ripe for adjudication at the motion to dismiss
stage". Yet the District Court never determined - at least never stated
- what the railway company did in the aiding and abetting of the looting.
We have posted on what appears to be an increasing number of what we desribe as "indirect" takings claims
that have been found sufficient to constitute an exception to the FSIA.
Second, the District Court also rejected
as premature HSR's contention that the claims in the complaint presented a nonjusticiable
political question as well as the contention that the claims were barred by
the act of state doctrine.
Court applied the pleading standard enunciated in Bell Atlantic Corp. v. Twombly,
550 U.S. 544 (2007) [enhanced version / unenhanced version available from lexisONE Free Case Law], and in Ashcroft v. Iqbal, 129
S.Ct. 1937 (2009) [enhanced version / unenhanced version ], and determined that the complaint stated enough facts to survive
a motion to dismiss. The Court did not go behind the allegations even to adjudicate
the FSIA defenses.
Fourth, the Court rejected a forum non
conveniens defense, finding that even if Hungarian courts "provide an available
and adequate alternative forum. Defendants
have not shown that the convenience of the parties, nor the interests of justice
would be best served by a dismissal of the instant action". The Court also
found no basis for imposing an exhaustion of remedies requirement before asserting
a claim relying on an exception to the FSIA.
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