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United States Court of Appeals for the Second Circuit
October 20, 2020, Argued; June 8, 2021, Decided
Nos. 19-3457, 19-3481
Richard J. Sullivan, Circuit Judge:
] Foreign governments and their instrumentalities are ordinarily immune from suit in American courts under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1602, et seq. (the "FSIA"). There are, however, several statutory exceptions to that general rule. One of those exceptions is the "expropriation exception," which may be invoked in certain cases involving property taken by a foreign government or its instrumentality in violation of international law. See id. § 1605(a)(3).
The question before us is whether that exception applies to property that was seized as part of an ongoing law enforcement investigation. We hold that such seizures ordinarily do not constitute a taking at all, much less a taking in violation of international law. And while there are a handful of narrow circumstances in which a seizure can fall within the scope of the expropriation exception, none applies to this case. Accordingly, we AFFIRM the judgment of the district court (Abrams, J.)
Lynda and William Beierwaltes are art collectors who are citizens and residents of Colorado. During the 1990s, the Beierwalteses assembled one of the world's leading private collections of ancient art. [*4] By the early-aughts, the couple found themselves in severe financial straits. So, in 2006, they engaged an art gallery based in Geneva, Switzerland - Phoenix Ancient Art S.A. ("Phoenix") - to help them sell their collection.
Phoenix was founded in 1998 by Hicham Aboutaam (together with the Beierwalteses, the "Art Owners") and his brother, Ali Aboutaam. Since then, Ali has overseen Phoenix's day-to-day operations, while Hicham has managed an affiliated gallery based in New York, where he is a citizen and resident. Over time, Hicham himself has acquired a large personal collection of antiquities, many pieces of which are stored with or consigned for sale to Phoenix in Geneva.
In December 2016, a border patrol officer for the Federal Customs Administration of the Swiss Confederation (the "Swiss Customs Administration") stopped a Land Rover registered to Phoenix that was entering the country across the French border.2 During a routine inspection of the SUV, the officer identified what appeared to be an illegally imported antique oil lamp along with receipts for a storage warehouse in Geneva. The driver and passenger were questioned and eventually released around 2:00 AM the following morning. [*5] At about the same time, surveillance footage of the storage warehouse listed on those receipts captured what appeared to be Ali's wife, Biljana Aboutaam, participating in "several movements of merchandise." Aboutaam App'x at 56.
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2021 U.S. App. LEXIS 16942 *; __ F.3d __; 2021 WL 2324544
LYNDA BEIERWALTES, WILLIAM BEIERWALTES, Plaintiffs-Appellants, v. L'OFFICE FEDERALE DE LA CULTURE DE LA CONFEDERATION SUISSE (FEDERAL OFFICE OF CULTURE OF THE SWISS CONFEDERATION), L'ADMINISTRATION FEDERALE DES DOUANES DE LA CONFEDERATION SUISSE (FEDERAL CUSTOMS ADMINISTRATION OF THE SWISS CONFEDERATION), LA REPUBLIQUE ET CANTON DE GENEVE (REPUBLIC AND CANTON OF GENEVA), Defendants-Appellees.HICHAM ABOUTAAM, Plaintiff-Appellant, v. L'OFFICE FEDERALE DE LA CULTURE DE LA CONFEDERATION SUISSE (FEDERAL OFFICE OF CULTURE OF THE SWISS CONFEDERATION), L'ADMINISTRATION FEDERALE DES DOUANES DE LA CONFEDERATION SUISSE (FEDERAL CUSTOMS ADMINISTRATION OF THE SWISS CONFEDERATION), LA REPUBLIQUE ET CANTON DE GENEVE (REPUBLIC AND CANTON OF GENEVA), Defendants-Appellees.1
Prior History: [*1] Appeals from the United States District Court for the Southern District of New York. Nos. 18-cv-8248, 18-cv-11167, Ronnie Abrams, Judge.
In 2017, Swiss law enforcement officers seized more than a thousand pieces of ancient art owned by the plaintiffs as part of an ongoing investigation into illegal trafficking of cultural property in Switzerland. The plaintiffs sued the defendant Swiss government entities and instrumentalities in the Southern District of New York, alleging that the seizure was arbitrary and made without probable cause. The district court (Abrams, J.) dismissed the cases, holding that it lacked jurisdiction over the defendants under the Foreign Sovereign Immunities Act. The plaintiffs now appeal, arguing that jurisdiction is proper under the statute's "expropriation exception," which applies in cases involving property taken by a foreign state in violation of international law. See 28 U.S.C. § 1605(a)(3). We disagree and AFFIRM the district court.
A routine law enforcement seizure does not ordinarily constitute a taking at all, let alone a taking in violation of international law, because it falls within a state's traditional police powers. And while there are a handful of narrow exceptions [*2] to that general rule, such as when the seizure (i) is not rationally related to a public purpose, (ii) is a pretextual attempt to nationalize property without compensation, or (iii) has continued for an unreasonable amount of time, none of those exceptions applies here. Accordingly, the seizure was not a taking in violation of international law, and the Foreign Sovereign Immunities Act therefore does not vest the district court with jurisdiction.
Aboutaam v. L'Office Federale de la Culture de la Confederation Suisse, 2019 U.S. Dist. LEXIS 163427, 2019 WL 4640083 (S.D.N.Y., Sept. 24, 2019)
seizure, international law, expropriation, seized, courts, foreign state, Customs, sovereign immunity, law enforcement, district court, immunity, public purpose, discovery, quotation, imported, cases, marks, foreign sovereign, illegal taking, police power, domestic, instrumentality, Agencies, circumstances, deprivations, antiquities, authorities, exhaustion, ongoing, comity
International Law, Sovereign Immunity, Foreign Sovereign Immunities Act, Construction & Interpretation, Exceptions, Expropriation, Business & Corporate Compliance, International Trade Law, Forfeitures & Penalties, Proceedings, Criminal Law & Procedure, Stolen Property, Receiving Stolen Property, Elements, Evidence, Burdens of Proof, Allocation, Burdens of Proof, Preponderance of Evidence, Jurisdiction, In Personam Jurisdiction, Comity Doctrine, Comity Doctrine Procedures, Discretion Regarding Procedures, Subject Matter Jurisdiction, Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Appellate Review of Decisions, De Novo Review, Clearly Erroneous Review, Commercial Activities, Nexus With Cause of Action, Terrorism, Substantial Contacts, Governments, Legislation, Interpretation, Police Powers, Special Proceedings, Eminent Domain Proceedings, State Condemnations, Sources of International Law, Remedies, Forfeitures, Sentencing, Constitutional Law, Fundamental Rights, Search & Seizure, Scope of Protection, Discovery, Methods of Discovery, Foreign Discovery, Courts, Judicial Comity