Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-12-07025/USCOURTS-caDC-12-07025-0/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 23, 2013 Decided April 19, 2013

No. 11-7096

DAVID L. DE CSEPEL, ET AL.,

APPELLEES/CROSS-APPELLANTS

v.

REPUBLIC OF HUNGARY, A FOREIGN STATE, ET AL.,

APPELLANTS/CROSS-APPELLEES

Consolidated with 12-7025, 12-7026

Appeals from the United States District Court

for the District of Columbia

(No. 1:10-cv-01261)

Thaddeus J. Stauber argued the cause for 

appellants/cross-appellees. With him on the briefs were D. 

Grayson Yeargin and Sarah E. André. David D. West entered 

an appearance. 

Michael S. Shuster argued the cause for appellees/crossappellants. With him on the briefs were Dorit Ungar Black, 

Sheron Korpus, Alycia Regan Benenati, Michael D. Hays, and 

Daniel D. Prichard. Agnes Peresztegi and Alyssa T. Saunders

entered appearances.

USCA Case #12-7025 Document #1431629 Filed: 04/19/2013 Page 1 of 29
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Before: TATEL, Circuit Judge, WILLIAMS and SENTELLE, 

Senior Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: As part of the wholesale plunder 

of Jewish property carried out during the Holocaust, the 

Hungarian government, acting in collaboration with Nazi 

Germany, confiscated the “Herzog Collection”—one of 

Europe’s largest and finest private art collections. Plaintiffs, 

descendants of the Collection’s owner, claim that following 

World War II the Hungarian government entered into 

bailment agreements with them to retain possession of the 

Collection and later breached those agreements by refusing to 

return the artwork. Finding Hungary’s bevy of arguments in 

support of dismissal unpersuasive, we affirm the district 

court’s partial denial of its motion to dismiss. But because we 

agree with plaintiffs that the district court prematurely 

dismissed several of their claims on international comity 

grounds, we reverse that portion of the decision. 

I.

Baron Mór Lipót Herzog was a “passionate Jewish art 

collector in pre-war Hungary” who assembled a collection of 

more than two thousand paintings, sculptures, and other 

artworks. Compl. ¶ 38; see Atherton v. District of Columbia 

Office of Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009) (in 

reviewing district court’s ruling on motion to dismiss, we 

accept the complaint’s allegations as true). Known as the 

“Herzog Collection,” this body of artwork was “one of 

Europe’s great private collections of art, and the largest in 

Hungary,” and included works by renowned artists such as El 

Greco, Diego Velázquez, Pierre-Auguste Renoir, and Claude 

Monet. Compl. ¶ 38. Following Herzog’s death in 1934 and 

USCA Case #12-7025 Document #1431629 Filed: 04/19/2013 Page 2 of 29
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his wife’s shortly thereafter, their daughter Erzsébet and two 

sons István and András inherited the Collection. Id. ¶ 39.

Then came World War II, and Hungary joined the Axis 

Powers. In March 1944, Adolf Hitler sent German troops into 

Hungary, and SS Commander Adolf Eichmann entered the 

country along with the occupying forces and established 

headquarters at the Majestic Hotel in Budapest. Id. ¶¶ 51, 60.

During this time, Hungarian Jews were subjected to antiSemitic laws restricting their economic and cultural 

participation in Hungarian society and deported to German 

concentration camps. Id. ¶¶ 44, 47, 52. As an integral part of 

its oppression of Hungarian Jews, “[t]he Hungarian 

government, including the Hungarian state police, authorized, 

fully supported and carried out a program of wholesale 

plunder of Jewish property, stripping anyone ‘of Jewish 

origin’ of their assets.” Id. ¶ 54. Jews “were required to 

register all of their property and valuables” in excess of a 

certain value, and the Hungarian government “inventoried the 

contents of safes and confiscated cash, jewelry, and other 

valuables belonging to Jews.” Id. ¶ 55. “[P]articularly 

concerned with the retention of artistic treasures belonging to 

Jews,” the Hungarian government established “a so-called 

Commission for the Recording and Safeguarding of 

Impounded Art Objects of Jews . . . and required Hungarian 

Jews promptly to register all art objects in their possession.” 

Id. ¶ 56. “These art treasures were sequestered and collected 

centrally by the Commission for Art Objects,” headed by the 

director of the Hungarian Museum of Fine Arts. Id. 

In response to widespread looting of Jewish property, the 

Herzogs “attempted to save their art works from damage and 

confiscation by hiding the bulk of [them] in the cellar of one 

of the family’s factories at Budafok.” Id. ¶ 58. Despite these 

efforts, “the Hungarian government and their Nazi[]

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collaborators discovered the hiding place” and confiscated the 

artworks. Id. ¶ 59. They were “taken directly to Adolf 

Eichmann’s headquarters at the Majestic Hotel in Budapest 

for his inspection,” where he “selected many of the best 

pieces of the Herzog Collection” for display near Gestapo 

headquarters and for eventual transport to Germany. Id. ¶ 60. 

“The remainder was handed over by the Hungarian 

government to the Museum of Fine Arts for safekeeping.” Id.

After seizure of the Collection, a pro-Nazi newspaper ran an 

article in which the director of the Hungarian Museum of Fine 

Arts boasted that “[t]he Mór Herzog collection contains 

treasures the artistic value of which exceeds that of any 

similar collection in the country. . . . If the state now takes 

over these treasures, the Museum of Fine Arts will become a 

collection ranking just behind Madrid.” Id. ¶ 59. 

“Fearing for their lives, and stripped of their property and 

livelihoods, the Herzog family was forced to flee Hungary or 

face extermination.” Id. ¶ 63. Erzsébet Herzog (Erzsébet 

Weiss de Csepel following her marriage) fled Hungary with 

her children, first reaching Portugal and eventually settling in 

the United States, where she became a U.S. citizen in 1952. 

Id. István Herzog was nearly sent to Auschwitz but “escaped 

after his former sister-in-law’s husband . . . arranged for him 

to be put in a safe house under the protection of the Spanish 

Embassy.” Id. ¶ 42. Several members of his family escaped to 

Switzerland while others remained in Hungary. Id. ¶ 64. 

István Herzog died in 1966, leaving his estate to his two sons, 

Stephan and Péter Herzog, and his second wife, Mária 

Bertalanffy. Id. ¶ 42. András Herzog was “sent . . . into forced 

labor in 1942 and he died on the Eastern Front in 1943.” Id.

¶ 41. His daughters, Julia Alice Herzog and Angela Maria 

Herzog, fled to Argentina and eventually settled in Italy. Id.

¶ 64.

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Following the end of World War II, the Herzog family 

began a seven-decade struggle to reclaim the Collection. The 

complaint alleges that, “[u]pon information and belief,” some 

pieces of the Herzog Collection remained in Hungary after the 

war, while others were shipped to Germany or elsewhere. Id.

¶¶ 60–62. As to the artwork remaining in Hungary, “at least 

forty works of art . . . are known to be in the . . . possession of 

the Museum of Fine Arts (Szépmüvészeti Múzeum), 

Budapest, the Hungarian National Gallery, and the Museum 

of Applied Arts, Budapest . . ., as well as the Budapest 

University of Technology and Economics.” Id. ¶ 2. According 

to the complaint, several of these pieces “were being openly 

exhibited” on the walls of these museums with “tags under the 

paintings identif[ying] them as ‘From the Herzog 

Collection.’ ” Id. ¶ 77.

During the Communist era, which began in the late 

1940s, “little information could be obtained about the state of 

the Herzog Collection.” Id. ¶ 75. After the fall of Communism 

in 1989, Erzsébet Weiss de Csepel, then 89 years old, began 

negotiations with the Hungarian government for return of the 

Herzog Collection. Id. ¶ 78. Weiss de Csepel, however, was 

only able to obtain seven pieces of lesser value, and “[t]he 

identifiable masterworks remained in the Museum of Fine 

Arts and the Hungarian National Gallery.” Id. Following 

Weiss de Csepel’s death in 1992, her daughter, Martha 

Nierenberg, continued negotiating with the Hungarian 

government for return of the artwork. Id. ¶ 79.

In 1999, Martha Nierenberg, seeking return of twelve 

pieces of the Herzog Collection, filed suit in Hungary. See de 

Csepel v. Republic of Hungary, 808 F. Supp. 2d 113, 125 

(D.D.C. 2011) (discussing the Hungarian litigation). Shortly 

after that litigation began, the Museum of Fine Arts returned 

one painting to her without explanation. Id. Other members of 

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the Herzog family—András’s daughters Angela and Julia 

Herzog, as well as István’s sons—later intervened as 

defendants due to a dispute, now resolved, about which 

members of the Herzog family owned certain pieces of the 

Collection. Id. The Budapest Metropolitan Court initially 

found in Martha Nierenberg’s favor, ordering that all but one 

of the paintings be returned to her. Id. at 126. After several 

appeals and many more years of litigation, however, the 

Metropolitan Appellate Court ultimately dismissed the action 

in 2008. As the district court here explained, the Metropolitan 

Appellate Court held that “Ms. Nierenberg’s claim had been 

extinguished by [an executive agreement settling certain

claims by U.S. nationals against Hungary], and that additional 

defendants had acquired title through adverse possession.” Id.

at 145. 

On July 27, 2010, several members of the Herzog family 

filed this suit in the United States District Court for the 

District of Columbia against the Republic of Hungary, the 

Hungarian National Gallery, the Museum of Fine Arts, the 

Museum of Applied Arts, and the Budapest University of 

Technology and Economics (collectively “Hungary”), 

asserting claims for bailment, conversion, constructive trust, 

accounting, declaratory relief, and restitution based on unjust 

enrichment. Plaintiffs are David L. de Csepel, a United States 

citizen who is the grandson of the late Erzsébet Weiss de 

Csepel, and Angela Maria and Julia Alice Herzog, Italian 

citizens who are the daughters of the late András Herzog 

(collectively “the Herzog family”). Id. ¶¶ 6–8. Having

“authority to represent all of the Herzog Heirs in this action,”

id., plaintiffs seek the return of “at least forty works of art” 

from the original Herzog Collection still allegedly in 

Hungary’s possession, id. ¶ 2. Their primary claim is one for 

bailment. Specifically, they allege that “[i]n the years 

immediately following [World War II], the Museums and the 

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University, acting at Hungary’s direction, became custodians 

of artworks” that had been looted during the war and 

“arranged with representatives of the Herzog Heirs to retain 

possession of most of the Herzog Collection . . . so that the 

works could continue to be displayed in Hungary.” Id. ¶ 36. 

According to the family, this arrangement gave rise to a 

bailment agreement, whereby Hungary assumed “a duty of 

care to protect the property and to return it to [the Herzog 

family]” upon their demand. Id. ¶ 101. The family claims that 

Hungary breached these duties in 2008 when it refused their 

demand to return the Herzog Collection. Id. ¶ 104. 

Hungary moved to dismiss pursuant to Federal Rules of 

Civil Procedure 12(b)(1) and 12(b)(6), arguing that the district 

court lacked jurisdiction under the Foreign Sovereign 

Immunities Act (“FSIA”), 28 U.S.C. §§ 1602 et seq., that the 

complaint failed to state a claim for bailment, and that the 

family’s claims were barred by the FSIA’s “treaty exception,” 

the applicable statute of limitations, the political question 

doctrine, the act of state doctrine, and the doctrines of forum 

non conveniens and international comity.

The district court granted the motion in part and denied it 

in part. Invoking the doctrine of international comity, the 

court dismissed the family’s claims to the eleven pieces of 

artwork at issue in the Nierenberg litigation. de Csepel, 808 F. 

Supp. 2d at 144–45. In all other respects, the district court 

denied the motion to dismiss. Id. at 145. The court also 

certified its order for immediate appeal pursuant to 28 U.S.C. 

§ 1292(b). 

Hungary now appeals the partial denial of its motion to 

dismiss, reiterating many of the arguments it made in the 

district court. The Herzog family cross-appeals the dismissal 

of their claims to eleven pieces of artwork on international 

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comity grounds. Unless specified otherwise, our review is de 

novo. See Owens v. Republic of Sudan, 531 F.3d 884, 887 

(D.C. Cir. 2008) (denial of foreign sovereign’s motion to 

dismiss for lack of subject matter jurisdiction is reviewed de 

novo); Bombardier Corp. v. Nat’l Railroad Passenger Corp., 

333 F.3d 250, 252 (D.C. Cir. 2003) (denial of motion to 

dismiss under Rule 12(b)(6) is reviewed de novo). Moreover, 

and critical to many of the issues before us, in reviewing the 

district court’s denial of Hungary’s motion to dismiss for 

failure to state a claim under Rule 12(b)(6), “we must accept 

as true all material allegations of the complaint, drawing all 

reasonable inferences from those allegations in plaintiffs’ 

favor.” LaRoque v. Holder, 650 F.3d 777, 785 (D.C. Cir. 

2011) (internal quotation marks omitted). 

II.

We begin with Hungary’s appeal of the district court’s

partial denial of its motion to dismiss. 

A. 

Hungary first contends that the district court lacked 

subject matter jurisdiction under the FSIA. Under that statute, 

“a foreign state shall be immune from the jurisdiction of the 

courts of the United States” unless one of several enumerated 

exceptions applies. 28 U.S.C. § 1604. The Herzog family 

invokes the statute’s “expropriation” and “commercial 

activity” exceptions. See id. § 1605(a)(3), 1605(a)(2). 

Because Hungary “challenges only the legal sufficiency of the 

[family’s] jurisdictional allegations,” we “take the [family’s] 

factual allegations as true and determine whether they bring 

the case within” either of these exceptions. Phoenix 

Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. 

Cir. 2000).

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The district court found it had jurisdiction under the 

expropriation exception, which abrogates sovereign immunity 

in any case where “rights in property taken in violation of 

international law are in issue.” 28 U.S.C. § 1605(a)(3). 

Although agreeing with Hungary that “a state’s taking of the 

property of its own citizens, no matter how egregious, does 

not constitute an international law violation,” the district court 

nonetheless found that this principle posed no bar to 

application of the expropriation exception because “Hungary 

did not consider Ms. Nierenberg and Ms. Weiss de Csepel to 

be Hungarian citizens at the time of the seizures.” de Csepel, 

808 F. Supp. 2d at 129–30. Pointing to the host of “antiSemitic laws passed by Hungary during World War II,” the 

district court concluded that the country had “de facto 

stripped [Ms. Nierenberg], Ms. Weiss de Csepel, and all 

Hungarian Jews of their citizenship rights” and that “the 

alleged Hungarian ‘citizenship’ of plaintiffs’ predecessors” 

thus did “not preclude the application of the expropriation 

exception in this case.” Id. at 130. Moreover, the district court 

reasoned, even if “the seizure of the Herzog Collection by 

Hungary alone would not constitute a violation of 

international law,” the Herzog family’s allegations regarding 

“the active involvement of German Nazi officials in the 

taking of at least a portion of the Herzog Collection” 

distinguished this case from one where a sovereign acting 

alone confiscates its own nationals’ property. Id.

Of course, we have no quarrel with the historical 

underpinnings of the district court’s analysis. During World 

War II, the Hungarian government did indeed enact a series of 

anti-Semitic laws “designed to exclude Jews from meaningful 

roles in Hungarian society.” Compl. ¶ 44. This exclusion was 

both symbolic, through the requirement that Jews “wear 

distinctive signs identifying themselves as Jewish,” de Csepel, 

808 F. Supp. 2d at 129, and physical, through expulsion “to 

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territories under German control where they were mistreated 

and massacred,” Compl. ¶ 49. According to the complaint, 

moreover, the Hungarian government did not act alone when 

it seized the Herzog Collection. Instead, it was “the 

Hungarian government and their Nazi[] collaborators” that 

“discovered the hiding place” of the Herzog Collection and 

confiscated the artwork, acting “as part of a brutal campaign 

of genocide” against Hungarian Jews. Compl. ¶¶ 1, 59. 

In their complaint, however, the Herzog family seeks to 

recover not for the original expropriation of the Collection, 

but rather for the subsequent breaches of bailment agreements 

they say they entered into with Hungary. Specifically, the 

complaint alleges that Hungary’s “possession or re-possession 

of any portion of the Herzog Collection following [World 

War II] constituted an express or implied-in-fact bailment 

contract,” under which Hungary assumed “a duty of care to 

protect the property and to return it to [the Herzog family],” 

and which Hungary breached by refusing to return the 

Collection in 2008. Id. ¶¶ 100–01, 104. The family’s claims, 

they reiterate, are nothing “more than straightforward 

bailment claims that are cognizable in a United States court.” 

Appellees’ Br. 26. Indeed, every one of their other substantive 

claims—conversion, constructive trust, accounting, restitution 

based on unjust enrichment—appears to stem from the alleged 

repudiation of the bailment agreements. Moreover, as we shall 

explain below, in responding to Hungary’s arguments that 

their claims are barred by the FSIA’s “treaty exception,” the 

statute of limitations, the political question doctrine, and the 

act of state doctrine, the family repeatedly emphasizes that 

their claims are firmly rooted in bailment. Given that 

plaintiffs are “masters of the complaint” with the power to 

bring those claims they see fit, see Caterpillar, Inc. v. 

Williams, 482 U.S. 386, 395 (1987), it is incumbent upon us 

to address Hungary’s jurisdictional challenge in light of the 

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bailment claims the family actually brings. Viewed this way,

and without ruling on the availability of the expropriation 

exception, we believe the family’s claims fall comfortably 

within the FSIA’s commercial activity exception. See Carney 

v. American University, 151 F.3d 1090, 1096 (D.C. Cir. 1998) 

(explaining that “we can affirm a district court judgment on 

any basis supported by the record”).

The Herzog family invokes the provision of the 

commercial activity exception that abrogates sovereign 

immunity in any case where “the action is based . . . upon an 

act outside the territory of the United States in connection 

with a commercial activity of the foreign state elsewhere and 

that act causes a direct effect in the United States.” 28 U.S.C. 

§ 1605(a)(2). To satisfy this exception, “1) the lawsuit must 

be based upon an act that took place outside the territory of 

the United States; 2) the act must have been taken in 

connection with a commercial activity[;] and 3) the act must 

have caused a direct effect in the United States.” Rong v. 

Liaoning Province Government, 452 F.3d 883, 888–89 (D.C. 

Cir. 2006). Because Hungary’s actions obviously occurred 

outside the United States, the exception’s applicability turns 

on (1) whether Hungary’s repudiation of bailment agreements 

with respect to the Collection constitutes an act taken in 

connection with a commercial activity and (2) whether this 

act caused a “direct effect” in the United States.

Under the first inquiry, we assess “[t]he commercial 

character of an activity . . . by reference to the nature of the 

. . . particular transaction or act, rather than by reference to its 

purpose.” 28 U.S.C. § 1603(d). We must examine “not 

whether the foreign government is acting with a profit motive 

or instead with the aim of fulfilling uniquely sovereign 

objectives” but “whether the particular actions that the foreign 

state performs (whatever the motive behind them) are the type

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of actions by which a private party engages in trade and 

traffic or commerce.” Republic of Argentina v. Weltover, Inc., 

504 U.S. 607, 614 (1992) (internal quotation marks omitted). 

Hungary’s alleged breach of bailment agreements easily 

satisfies this standard. A bailment is a form of contract, and a 

foreign state’s repudiation of a contract is precisely the type 

of activity in which a “private player within the market” 

engages. Saudi Arabia v. Nelson, 507 U.S. 349, 360 (1993) 

(internal quotation marks omitted); see also Janini v. Kuwait 

University, 43 F.3d 1534, 1537 (D.C. Cir. 1995) (“Private 

parties often repudiate contracts in everyday commerce and 

may be held liable therefor.”). Moreover, the alleged contract 

addresses and establishes commercial relations with respect to 

artwork, for “[t]here is nothing ‘sovereign’ about the act of 

lending art pieces . . . . Loans between and among museums 

(both public and private) occur around the world regularly.” 

Malewicz v. City of Amsterdam, 362 F. Supp. 2d 298, 314 

(D.D.C. 2005) (interpreting the term “commercial activity” in 

section 1605(a)(3) of the FSIA). 

Hungary contends that its alleged repudiation of these 

bailment agreements constitutes a sovereign act not subject to 

the commercial activity exception. See Janini, 43 F.3d at 1536 

(explaining that the commercial activity exception “cannot 

confer jurisdiction over a foreign state ‘where a claim rests 

entirely upon activities sovereign in character, . . . regardless 

of any connection the sovereign acts may have with 

commercial activity’ ” (alteration in original) (quoting Nelson, 

507 U.S. at 358 n.4)). As Hungary sees it, the bailment 

obligations alleged by the family arise from a World War II 

Peace Treaty with the Allied Powers that requires Hungary to 

restore or provide compensation for certain property 

expropriated during the Holocaust. See Treaty of Peace with 

Hungary art. 27, Feb. 10, 1947, 61 Stat. 2065, 41 U.N.T.S. 

135 (“the Peace Treaty”). As a result, Hungary contends, any 

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breach of these bailment obligations would amount to 

sovereign conduct, for “failure to adequately address war 

reparations as required by a treaty does not constitute a 

commercial activity.” Appellants’ Br. 42. 

Contrary to Hungary’s argument, however, the complaint 

does not rely on the Peace Treaty as the sole source of the 

bailment obligations. Instead, the complaint contains 

allegations that the parties directly agreed to a bailment 

relationship, with Hungary “arrang[ing] with representatives 

of the Herzog Heirs to retain possession of most of the 

Herzog Collection” and the Herzog family “agree[ing] to 

allow the artworks to be ‘returned’ to the Museums or the 

University for safekeeping.” Compl. ¶¶ 36, 72. Although the 

complaint refers to the Peace Treaty, it nowhere alleges that

the Treaty is the source of the bailment obligations. Instead, it 

clarifies that Hungary obtained only a custodial interest in 

looted property, rather than ultimate ownership rights. See id.

¶ 31 (“Pursuant to the 1947 Treaty of Peace between Hungary 

and the Allies . . . , Hungary received only a custodial interest 

in art that had been looted during the war and subsequently 

returned to Hungary by the Allies, including the Herzog 

Collection.”); id. ¶ 69 (“The 1947 Peace Treaty . . . confirmed 

that Hungary was to act solely as a custodian or trustee of 

looted or heirless property [and] under no circumstances 

could Hungary itself possess any right, title or interest in that 

property.”). Accordingly, as the district court explained, 

although “plaintiffs’ bailment claim is consistent with 

Hungary’s representations in the 1947 Peace Treaty, plaintiffs 

do not assert that the bailment was created by virtue of the 

Peace Treaty.” de Csepel, 808 F. Supp. 2d at 136 (citation 

omitted). It is true, as Hungary emphasizes, that certain 

statements in the family’s district court briefs seem to suggest 

that the bailment arose from the Peace Treaty. But as the 

district court noted, the family subsequently “clarified that 

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they do not rely upon or challenge the terms, conditions, or 

validity of the Peace Treaty, or seek to claim directly under 

the Peace Treaty,” id. at 136 n.6 (internal quotation marks 

omitted), and nothing in the complaint contradicts this 

assertion. Accordingly, the Peace Treaty provides no basis for 

converting the commercial act of contract repudiation into the 

sovereign act of “treaty participation,” as Hungary urges. 

Appellants’ Br. 42. 

Nor does the fact that the Herzog Collection was initially 

expropriated by the Hungarian government compel a contrary 

conclusion. To be sure, expropriation “constitute[s] a 

quintessentially sovereign act” falling outside the scope of the 

commercial activity exception. Rong, 452 F.3d at 890. Here, 

however, the particular conduct upon which the family’s suit 

is “based” for purposes of the commercial activity exception 

is not the initial expropriation of the Collection during the 

Holocaust but instead Hungary’s creation and repudiation of 

subsequently formed bailment agreements. See Appellees’ Br. 

49 (“Here, the relevant ‘act’ or ‘acts’ for purposes of Section 

1605(a)(2) . . . is the creation of a bailment with respect to 

each of the artworks described in the Complaint.”). Taking 

issue with the family’s characterization of their claims, 

Hungary insists that “[a]lthough Plaintiffs attempt to dress 

their claim as a bailment, it is simply a claim that Hungary 

took property from Hungarian citizens near the end of World 

War II and . . . refused to restitute specific items.” Appellants’ 

Reply Br. 35. This is inaccurate. The complaint actually 

alleges that, by entering into bailment agreements to retain 

possession of the expropriated artwork and later breaching 

those agreements by refusing to return the artwork, Hungary 

took affirmative acts beyond the initial expropriation to 

deprive the family of their property rights in the Collection. 

These allegations distinguish this case from one “in essence 

based on disputed takings of property” and thus outside the 

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purview of the commercial activity exception. Garb v. 

Republic of Poland, 440 F.3d 579, 588 (2d Cir. 2006); see 

Agudas Chasidei Chabad of U.S. v. Russian Federation, 528 

F.3d 934, 944–45 (D.C. Cir. 2008) (endorsing theory of a 

separate deprivation of property rights apart from initial 

expropriation where court decree required return of the 

property and foreign state allegedly frustrated enforcement of 

the decree).

Turning to the second inquiry—whether the act in 

question caused a “direct effect” in the United States—we ask 

whether the complaint alleges that Hungary promised to 

perform specific obligations in the United States. See 

Weltover, 504 U.S. at 619 (“Because New York was . . . the 

place of performance for Argentina’s ultimate contractual 

obligations, the rescheduling of those obligations necessarily 

had a ‘direct effect’ in the United States: Money that was 

supposed to have been delivered to a New York bank for 

deposit was not forthcoming.”); cf. Peterson v. Royal 

Kingdom of Saudi Arabia, 416 F.3d 83, 90 (D.C. Cir. 2005) 

(finding the requisite “direct effect” lacking where plaintiff 

failed to allege “that Saudi Arabia was supposed to refund his 

GOSI contribution to him in the United States” (internal 

quotation marks omitted)). Applying this standard, the Sixth 

Circuit found that Nazi Germany’s seizure of a German 

resident’s artwork caused no “direct effect” in the United

States where plaintiffs had “not alleged that Germany ever 

promised to deliver [the] art collection to the United States.” 

Westfield v. Federal Republic of Germany, 633 F.3d 409, 415 

(6th Cir. 2011). Here, by contrast, the family alleges that 

Hungary promised to return the artwork to members of the 

Herzog family it knew to be residing in the United States and 

then breached that obligation by refusing to do so. See Compl. 

¶¶ 36, 101 (alleging that Hungary “knew at all relevant times 

that the Herzog Heirs owned the Herzog Collection and that 

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certain of the Herzog Heirs resided in the United States”;

“owed the Herzog Heirs a duty of care to protect the property 

and to return it to them” under the bailment contract; and 

breached that obligation by “fail[ing] to restitute the Herzog 

Collection following demand by the U.S. Herzog Heirs”).

Although the complaint never expressly alleges that the return 

of the artwork was to occur in the United States, we think this 

is fairly inferred from the complaint’s allegations that the 

bailment contract required specific performance—i.e., return 

of the property itself—and that this return was to be directed 

to members of the Herzog family Hungary knew to be 

residing in the United States. See id. Indeed, Hungary does 

not argue that the bailment contract envisioned performance 

outside the United States, nor did it seek jurisdictional 

discovery in the district court with respect to the contract’s

place of performance. Accordingly, drawing all reasonable

inferences from the complaint in the family’s favor, as we 

must at this stage of the proceedings, see Council for 

Urological Interests v. Sebelius, 668 F.3d 704, 713 (D.C. Cir. 

2011), we find that the family has alleged facts that, if true,

would satisfy the commercial activity exception’s requirement 

of a “direct effect” in the United States.

B.

We next turn to Hungary’s contention that the FSIA’s 

“treaty exception” deprived the district court of subject matter 

jurisdiction. Because FSIA immunity is “[s]ubject to existing 

international agreements to which the United States [was] a 

party at the time of enactment of [the FSIA],” 28 U.S.C. 

§ 1604, “[i]f there is a conflict between the FSIA and such an 

agreement regarding the availability of a judicial remedy 

against a contracting state, the agreement prevails,” Moore v. 

United Kingdom, 384 F.3d 1079, 1085 (9th Cir. 2004). “This 

existing-treaty exception applies, however, only if there is an 

express conflict between the treaty and the FSIA exception.” 

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Wyatt v. Syrian Arab Republic, 266 F. App’x 1, 2 (D.C. Cir. 

2008). 

According to Hungary, two international agreements 

create such an “express conflict”: the above-mentioned Peace 

Treaty between Hungary and the Allied Powers; and the 

Agreement Between the Government of the United States of 

America and the Government of the Hungarian People’s 

Republic Regarding the Settlement of Claims, U.S.-Hungary, 

Mar. 6, 1973, 24 U.S.T. 522 (“the 1973 Agreement”). 

We begin with the Peace Treaty. Hungary contends that 

the Treaty conflicts with its amenability to suit under the 

FSIA because the Treaty precludes litigation against it for 

claims, like the Herzog family’s, that seek restitution of 

property expropriated during World War II. In support, 

Hungary cites two provisions of the Treaty. Article 27, as 

noted above, requires Hungary to restore or provide 

compensation “in all cases where the property, legal rights or 

interests in Hungary of persons under Hungarian jurisdiction 

have, since September 1, 1939, been the subject of measures 

of sequestration, confiscation or control on account of the 

racial origin or religion of such persons.” Peace Treaty, art. 

27. Article 40, in turn, provides that “any dispute concerning 

the interpretation or execution of the Treaty” that “is not 

settled by direct diplomatic negotiations” is to be “referred to 

the Three Heads of [Diplomatic Missions from the Soviet 

Union, the United Kingdom, and the United States].” Id. art. 

40. Taken together, Hungary contends, these provisions 

establish an exclusive treaty-based mechanism for resolving 

all claims seeking restitution of property discriminatorily 

expropriated during World War II from individuals subject to 

Hungarian jurisdiction.

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Hungary’s argument falters for the simple reason that the 

Herzog family’s claims fall outside the Treaty’s scope. Article 

27 concerns property discriminatorily expropriated during 

World War II. As we have explained, however, the family’s 

claims rest not on war-time expropriation but rather on 

breaches of bailment agreements formed and repudiated after 

the war’s end. See supra at 10–11. Accordingly, the Peace 

Treaty presents no conflict with Hungary’s amenability to suit 

under the FSIA. 

Hungary makes a similar challenge with respect to the 

1973 Agreement, contending that the Agreement bars 

litigation against it for claims based on expropriation of 

property during World War II. The 1973 Agreement, on 

which the Hungarian Metropolitan Appellate Court relied in 

dismissing the Nierenberg litigation, effectuated a “full and 

final settlement and . . . discharge” of certain specified claims 

against Hungary by “nationals and the Government of the 

United States,” including, as relevant here, claims for 

“property, rights and interests affected by Hungarian 

measures of nationalization, compulsory liquidation, 

expropriation, or other taking on or before the date of this 

Agreement” and claims for “obligations of the Hungarian 

People’s Republic under Articles 26 and 27 of the [Peace 

Treaty].” 1973 Agreement, arts. 1–2. According to Hungary, 

“[b]ecause (1) Plaintiffs’ predecessor (Erzsébet Weiss de 

Csepel) was a U.S. national at the time the Agreement went 

into effect, (2) Plaintiffs’ claims related to Hungarian property 

lost as a result of World War II, and (3) Plaintiffs’ claims are 

subject to Article 27 of the Peace Treaty, the 1973 Agreement 

. . . bars Plaintiffs’ claims.” Appellants’ Br. 36 (internal 

quotation marks omitted). 

The district court rejected this argument, finding that the 

1973 Agreement settled only claims of “persons who were 

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United States citizens at the time of their injury” and thus 

could not have barred the claims of Erszébet Weiss de Csepel, 

who was instead a Hungarian citizen at the time of the alleged 

expropriation. de Csepel, 808 F. Supp. 2d at 133–34. 

Vigorously disputing this interpretation, Hungary argues that 

the 1973 Agreement applies to all individuals who were U.S. 

nationals at the time the Agreement was executed, regardless 

of their nationality when injured.

We need not settle the question of whom the Agreement 

covers because we can easily resolve the issue by examining 

what claims the Agreement covers. To repeat, the Herzog 

family seeks to recover for breaches of bailment agreements 

formed and repudiated after World War II, not for the initial 

expropriation of their property during the war. But because 

the 1973 Agreement settles claims for property expropriated 

by Hungary prior to the date of the Agreement, it has no 

application to bailment agreements allegedly repudiated in 

2008. Thus, nothing in the Agreement conflicts with 

Hungary’s amenability to suit under the FSIA. 

C.

Next, Hungary argues that the Herzog family’s claims are 

time-barred. As both parties recognize, the relevant statute of 

limitations is the District of Columbia’s three-year limitations 

period for claims relating to “the recovery of personal 

property or damages for its unlawful retention.” D.C. Code 

§ 12-301(2); see Gilson v. Republic of Ireland, 682 F.2d 1022, 

1024 n.7 (D.C. Cir. 1982) (“The applicable statute of 

limitations [in an FSIA case] is determined by the local law of 

the forum.”). A bailment claim accrues “when the plaintiff 

demands the return of the property and the defendant refuses, 

or when the defendant takes some action that a reasonable 

person would understand to be either an act of conversion or 

inconsistent with a bailment.” Malewicz v. City of Amsterdam, 

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517 F. Supp. 2d 322, 335 (D.D.C. 2007) (citing In re 

McCagg, 450 A.2d 414, 416 (D.C. 1982)). In order to trigger 

the statute of limitations, a defendant’s refusal to return the 

property “must be absolute and unconditional.” Id. (internal 

quotation marks omitted). Given this, the family’s claims are 

barred if Hungary “absolute[ly] and unconditional[ly]” 

refused to return the property prior to July 27, 2007—three 

years before they filed their complaint.

Hungary argues that the Herzog family’s bailment claims 

accrued in 1999 when Martha Nierenberg filed suit in 

Hungary. According to Hungary, that litigation was prompted 

by its “refus[al] to negotiate with Ms. Nierenberg” and thus 

marked a clear repudiation of the bailment agreements. 

Appellants’ Br. 63 n.18. Though not addressing the question 

of accrual, the district court equitably tolled the family’s 

claims during the pendency of the Nierenberg litigation in 

order to account for their efforts to exhaust remedies in the 

Hungarian courts. de Csepel, 808 F. Supp. 2d at 141–42. 

Hungary challenges this decision, arguing that because 

equitable tolling is appropriate only where plaintiffs are 

unaware of the basis for their claims, tolling should not apply 

here given that the Herzog family demonstrated knowledge of 

their claims by suing in Hungary. Moreover, Hungary asserts, 

equitable tolling designed to account for exhaustion of 

remedies should have no application to the claims of Angela 

and Julia Herzog “as there can be no assertion that they were 

prosecuting their rights (and exhausting their remedies) when 

they were brought into the Hungarian lawsuit.” Appellants’ 

Reply Br. 39 n.14.

We have no need to wade into these equitable-tolling 

waters because nothing in the complaint indicates that the 

family’s claims did in fact accrue in 1999 when Martha 

Nierenberg filed suit in the Hungarian court. As our case law 

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makes clear, “because statute of limitations issues often 

depend on contested questions of fact, dismissal is appropriate 

only if the complaint on its face is conclusively time-barred.” 

Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996). 

The complaint nowhere alleges that Martha Nierenberg sued 

because Hungary refused to engage in further negotiations. 

Cf. Compl. ¶ 79 (alleging only that “Martha Nierenberg . . . 

continued her mother’s efforts to recover portions of the 

Herzog Collection, ultimately pursuing legal proceedings in 

Hungary”). Indeed, although litigation is often filed in 

response to refusal of a demand, it can also serve as a vehicle 

for increasing pressure to settle during ongoing negotiations. 

See David C. Croson & Robert H. Mnookin, Scaling the 

Stonewall: Retaining Lawyers to Bolster Credibility, 1 Harv. 

Negot. L. Rev. 65, 65 (1996) (explaining that a “plaintiff 

might hope to extract a settlement by threatening suit in pretrial negotiations”); Juliet Macur, Government Joins Suit 

Against Armstrong, N.Y. Times, Feb. 22, 2013, at D1 

(quoting an attorney who explained that the government may 

“have brought the case [against Armstrong] to try to increase 

their leverage in working out a deal”).

For statute of limitations purposes, the critical point is 

that the complaint alleges that Hungary’s refusal of the 

family’s demand for the Collection did not occur until 

January 2008, when “Hungary issued its final decision that it 

would not honor its obligation to return the Herzog Collection 

to the Herzog Heirs.” Compl. ¶ 94. It was only then, the 

complaint alleges, that Hungary “made clear that any further 

demand by the Herzog Heirs for restitution of any portion of 

the Herzog Collection would be futile.” Id. At summary 

judgment, Hungary may well be able to show that the 

family’s bailment claims accrued either when the Nierenberg 

litigation was filed or at some other point prior to 2008. But at 

the motion to dismiss stage, we look only at the complaint, in 

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which we see nothing that conflicts with the family’s 

allegation that their bailment claims accrued in January 2008. 

Because the family filed their complaint within three years of 

that date, we reject Hungary’s statute of limitations argument. 

D. 

We can easily dispose of Hungary’s remaining 

arguments. 

Hungary contends that the Herzog family’s claims are 

barred by the political question doctrine. As the district court 

explained, this argument is “based entirely on the notion that 

plaintiffs’ claims are addressed and settled by the 1947 Peace 

Treaty and the 1973 Agreement between Hungary and the 

United States,” but the Herzog family instead “charge[s] that 

Hungary has breached certain agreements regarding specific 

artwork in a manner that does not implicate existing 

international compensatory frameworks at all.” de Csepel, 

808 F. Supp. 2d at 143–44. Given this, the family’s claims 

raise no “separation-of-powers concerns that would justify 

invocation of the political question doctrine.” Id. at 144.

We are equally unpersuaded by Hungary’s reliance on 

the act of state doctrine. This doctrine, which “requires 

American courts to presume the validity of an official act of a 

foreign sovereign performed within its own territory,” 

Republic of Austria v. Altmann, 541 U.S. 677, 713 (2004) 

(internal quotation marks omitted), applies only to “conduct 

that is by nature distinctly sovereign, i.e., conduct that cannot 

be undertaken by a private individual or entity,” McKesson 

Corp. v. Islamic Republic of Iran, 672 F.3d 1066, 1073 (D.C. 

Cir. 2012). Given that the family seeks to recover for breaches 

of bailment agreements, the district court got it just right: their 

claims challenge “not sovereign acts, but rather commercial

acts” entitled to no “deference under the act of state doctrine.” 

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de Csepel, 808 F. Supp. 2d at 143 (internal quotation marks 

omitted).

Hungary next argues that the complaint fails to state a 

claim for bailment because it nowhere alleges the necessary 

element of “mutual consent of the parties.” Appellants’ Br. 59

(internal quotation marks omitted). Reiterating its contention 

that the family’s bailment claims rest solely on the Peace 

Treaty, Hungary insists that “an international treaty to end a 

world war” cannot demonstrate intent to form a bailment 

agreement. Appellants’ Reply Br. 37. But as we have 

explained, supra at 13, the complaint contains allegations that 

the parties directly agreed to a bailment relationship, with 

Hungary “arrang[ing] with representatives of the Herzog 

Heirs to retain possession of most of the Herzog Collection” 

and the Herzog family “agree[ing] to allow the artworks to be 

‘returned’ to the Museums or the University for safekeeping.” 

Compl. ¶¶ 36, 72. 

According to Hungary, however, any showing of consent 

is negated by the complaint’s allegations that the Herzog 

family “had no choice but to agree to allow most of the works 

belonging to the Herzog Collection to remain in the physical 

possession of the Museums and the University” because they 

were “harassed and threatened” by Hungarian government 

officials. Id. ¶¶ 72–73. We disagree. Even if the family’s 

consent was induced by duress—a conclusion we would be 

reluctant to draw at the motion to dismiss stage—that would 

mean only that the family could disclaim the agreement, not 

that the agreement was invalid. See Restatement (Second) of 

Contracts § 175(1) (1981) (“If a party’s manifestation of 

assent is induced by an improper threat by the other party that 

leaves the victim no reasonable alternative, the contract is 

voidable by the victim.”); see also U.S. ex rel. Siewick v. 

Jamieson Science & Engineering, Inc., 214 F.3d 1372, 1378 

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(D.C. Cir. 2000) (explaining that voidable contracts only 

become invalid if injured party exercises right to disclaim). 

Thus, for purposes of a motion to dismiss, the family has 

adequately pleaded the element of consent. 

Finally, Hungary argues that the doctrine of forum non 

conveniens requires dismissal of the family’s claims. The 

forum non conveniens analysis calls for the court to consider 

“(1) whether an adequate alternative forum for the dispute is 

available and, if so, (2) whether a balancing of private and 

public interest factors strongly favors dismissal.” Chabad, 

528 F.3d at 950. Here, the district court assumed that Hungary 

was an adequate alternative forum but found that it “failed to 

show that the balance of private and public factors favors 

dismissal in this case.” de Csepel, 808 F. Supp. 2d at 138. We 

review the district court’s balancing of these factors for “clear 

abuse of discretion.” Chabad, 528 F.3d at 950 (internal 

quotation marks omitted).

In determining that the private interest factors did not 

favor dismissal, the district court acknowledged Hungary’s 

contention that the events at issue took place in Hungary but 

reasoned that “many relevant witnesses—namely, plaintiffs 

themselves as well as Martha Nierenberg—all live outside 

Hungary.” de Csepel, 808 F. Supp. 2d at 139. As a result, the 

district court concluded that “[l]anguage concerns . . . do not 

shift the balance in favor of Hungary, as relevant depositions 

and documents would require translation regardless of where 

this matter is heard.” Id. With respect to the public interest 

factors, although Hungary claimed “an interest in having local 

controversies decided at home” and a superior ability “to 

interpret and apply both current and historical Hungarian 

laws,” the district court relied, among other public interest 

factors, on the FSIA’s designation of the United States 

District Court for the District of Columbia as a forum for 

USCA Case #12-7025 Document #1431629 Filed: 04/19/2013 Page 24 of 29
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actions brought under the statute to conclude that dismissal 

was unwarranted. Id.

On appeal, Hungary argues that witnesses and 

documentary evidence are likely to be located in Hungary and 

that translations would be needed if trial is held here. Hungary 

also argues that it has a strong interest in the subject matter of 

the litigation and a greater familiarity with the applicable 

laws. But as explained above, the district court considered all 

of these arguments, and although Hungary obviously 

disagrees with the district court’s analysis, it has failed to 

show any “clear abuse of discretion.” Chabad, 528 F.3d at 

950 (internal quotation marks omitted).

III. 

This brings us to the family’s cross-appeal. Recall that 

Martha Nierenberg filed a lawsuit in Hungary seeking return 

of certain pieces of the Herzog Collection and that the 

Hungarian Metropolitan Appellate Court dismissed the case. 

The district court granted comity to the Hungarian judgment 

and dismissed the family’s claims to the eleven pieces of 

artwork at issue in that litigation. This court has never

expressly addressed the standard by which we review a 

district court’s decision to grant comity to a foreign judgment, 

and other courts of appeals have divided as between de novo 

and abuse of discretion review. See Asvesta v. Petroutsas, 580 

F.3d 1000, 1009–10 (9th Cir. 2009) (noting divergence 

among courts of appeals with respect to the proper standard of 

review). We need not resolve this question, however, because 

we would reverse under either standard. 

The term “ ‘[c]omity’ summarizes in a brief word a 

complex and elusive concept—the degree of deference that a 

domestic forum must pay to the act of a foreign government 

not otherwise binding on the forum.” Laker Airways Ltd. v. 

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Sabena, Belgian World Airlines, 731 F.2d 909, 937 (D.C. Cir. 

1984). In determining whether to grant comity to a foreign 

judgment, we look to the Supreme Court’s decision in Hilton 

v. Guyot, 159 U.S. 113 (1895). There, the Court explained 

that “the merits of the case should not, in an action brought in 

this country upon the judgment, be tried afresh” based “upon 

the mere assertion of the party that the judgment was 

erroneous in law or in fact,” provided

there has been opportunity for a full and fair trial 

abroad before a court of competent jurisdiction, 

conducting the trial upon regular proceedings, after 

due citation or voluntary appearance of the 

defendant, and under a system of jurisprudence 

likely to secure an impartial administration of justice 

between the citizens of its own country and those of 

other countries, and there is nothing to show either 

prejudice in the court, or in the system of laws under 

which it was sitting, or fraud in procuring the 

judgment, or any other special reason why the 

comity of this nation should not allow it full 

effect . . . .

Id. at 202–03. In addition to the due process concerns 

identified by Hilton, the case law recognizes a narrow “public 

policy” exception to the doctrine of comity where the foreign 

judgment is “repugnant to fundamental notions of what is 

decent and just in the State where enforcement is sought.”

Tahan v. Hodgson, 662 F.2d 862, 864 (D.C. Cir. 1981) 

(internal quotation marks omitted). 

The district court found no basis for declining to grant 

comity to the Hungarian judgment, explaining that “ ‘[t]he 

central precept of comity teaches that, when possible, the 

decisions of foreign tribunals should be given effect in 

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domestic courts.’ ” de Csepel, 808 F. Supp. 2d at 145 (quoting 

Laker Airways, 731 F.2d at 937). It found unpersuasive the 

Herzog family’s claim that the Hungarian court violated 

United States public policy by misinterpreting the 1973 

Agreement, viewing this argument as nothing more than a 

request to reexamine the merits of the Hungarian judgment.

Id. The district court also believed that the family had failed 

to assert that it lacked “an ‘opportunity for a full and fair trial’ 

in Hungary ‘before a court of competent jurisdiction, 

conducting the trial upon regular proceedings.’ ” Id. (quoting 

Hilton, 159 U.S. at 202). Accordingly, the court dismissed the 

family’s claims to the eleven pieces of artwork at issue in the 

Hungarian proceedings.

On appeal, the family renews their contention that the 

Hungarian judgment violated the United States’ “strong 

public interest in ensuring that its executive agreements . . . 

are interpreted correctly” by adopting an “indefensible” 

construction of the 1973 Agreement under which Martha 

Nierenberg’s claims were deemed barred. Appellees’ Br. 74–

75. As the district court explained, however, this claim “is 

precisely the type of ‘mere assertion’ by a party that a foreign 

judgment ‘was erroneous in law or in fact’ that the Supreme 

Court has held may not be grounds for declining to respect the 

results of foreign judgments.” de Csepel, 808 F. Supp. 2d at 

145 (quoting Hilton, 159 U.S. at 203); see also Medellin v. 

Dretke, 544 U.S. 660, 670 (2005) (“It is the long-recognized 

general rule that, when a judgment binds or is respected as a 

matter of comity, a ‘let’s see if we agree’ approach is out of 

order.”).

The family also claims that comity is inappropriate 

because the Hungarian judgment was rendered “as a result of 

proceedings that were not conducted in accordance with 

internationally recognized standards of due process or in 

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accordance with international law.” Compl. ¶ 79. Granting 

comity would certainly be inappropriate if the Hungarian 

proceedings in fact failed to satisfy Hilton’s requirements of

an “opportunity for a full and fair trial” under “a system of 

jurisprudence likely to secure an impartial administration of 

justice.” Hilton, 159 U.S. at 202; see also Bank Melli Iran v. 

Pahlavi, 58 F.3d 1406, 1410 (9th Cir. 1995) (“It has long 

been the law of the United States that a foreign judgment 

cannot be enforced if it was obtained in a manner that did not 

accord with the basics of due process.”); Restatement (Third) 

of the Foreign Relations Law of the United States § 482(1)

(1987) (“A court in the United States may not recognize a 

judgment of the court of a foreign state if . . . the judgment 

was rendered under a judicial system that does not provide 

impartial tribunals or procedures compatible with due process 

of law . . . .”). The family contends that they “should have 

been given the opportunity to develop [the] factual record” 

regarding these alleged due process violations “further past 

the Rule 12 stage.” Appellees’ Br. 76. We agree. The 

complaint’s allegations of due process violations present just 

the kind of fact-intensive issues inappropriate for resolution 

on a Rule 12(b)(6) motion. 

Hungary argues that the family’s complaint fails to 

specify any “cognizable allegations of wrongdoing” and is 

thus “devoid of any allegations sufficient to demonstrate (or 

even suggest) that [Martha Nierenberg] was not afforded due 

process.” Appellants’ Reply Br. 55. But “comity is an 

affirmative defense” for which the party seeking recognition 

of the judgment bears the burden of proof, see Taveras v. 

Taveraz, 477 F.3d 767, 783 (6th Cir. 2007) (internal quotation 

marks and alteration omitted), and although it is certainly true 

that plaintiffs must plead the elements of their claims with 

specificity, they are “not required to negate an affirmative 

defense in [their] complaint,” Flying Food Group, Inc. v. 

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NLRB, 471 F.3d 178, 183 (D.C. Cir. 2006) (internal quotation 

marks omitted); see also Kim v. United States, 632 F.3d 713, 

718–19 (D.C. Cir. 2011) (concluding that a plaintiff need not 

plead exhaustion of statutory remedies under the Taxpayer 

Bill of Rights because failure to exhaust is an affirmative 

defense); Davis v. Indiana State Police, 541 F.3d 760, 763–64 

(7th Cir. 2008) (explaining that the Supreme Court’s decision 

in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), did 

not alter the principle that “[c]omplaints need not anticipate, 

and attempt to plead around, potential affirmative defenses”). 

Instead, as long as a plaintiff’s potential “rejoinder to the 

affirmative defense [is not] foreclosed by the allegations in 

the complaint,” dismissal at the Rule 12(b)(6) stage is 

improper. Goodman v. Praxair, Inc., 494 F.3d 458, 466 (4th 

Cir. 2007) (en banc); see also Smith-Haynie v. District of 

Columbia, 155 F.3d 575, 578 (D.C. Cir. 1998) (explaining 

that an affirmative defense may only “be raised by pre-answer 

motion under Rule 12(b) when the facts that give rise to the 

defense are clear from the face of the complaint”). Because 

nothing in the complaint contradicts the family’s claims of 

due process violations, dismissal at this stage was 

inappropriate. Of course, we express no opinion as to whether 

the due process violations alleged by the family actually 

occurred or, if so, whether they amounted to such “outrageous 

departures from our notions of civilized jurisprudence” as to 

require non-recognition of the Hungarian judgment. Bird v. 

Glacier Electric Cooperative, Inc., 255 F.3d 1136, 1142 (9th 

Cir. 2001) (internal quotation marks omitted). These issues 

are properly addressed at summary judgment or trial. 

IV.

For the foregoing reasons, we affirm in part and reverse 

in part. 

 So ordered.

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