Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-14-07082/USCOURTS-caDC-14-07082-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 10, 2015 Decided January 29, 2016

No. 14-7082

ROSALIE SIMON, ET AL.,

APPELLANTS

v.

REPUBLIC OF HUNGARY, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:10-cv-01770)

Paul G. Gaston argued the cause for appellants. With 

him on the briefs were Charles S. Fax, Liesel Schopler, L. 

Marc Zell, and David H. Weinstein.

Konrad L. Cailteux argued the cause for appellees. With 

him on the briefs was Gregory Silbert.

Before: HENDERSON, SRINIVASAN and WILKINS, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge SRINIVASAN.

Concurring opinion filed by Circuit Judge HENDERSON.

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SRINIVASAN, Circuit Judge: This case arises out of one 

of humanity’s darkest hours. In the summer of 1944, upon

the arrival of German troops in Nazi-allied Hungary, the 

Hungarian government implemented an accelerated campaign 

to deport Hungarian Jews to Nazi death camps for 

extermination before the War’s end. At the outset of the War, 

the Jewish population in Hungary numbered more than 

800,000. By the end of the War, more than two-thirds of that 

population had been murdered, with the lion’s share of 

victims killed at Auschwitz in a mere three-month period in 

1944. Winston Churchill described the brutal, mass

deportation of Hungarian Jews for extermination at Nazi 

death camps as “probably the greatest and most horrible crime 

ever committed in the history of the world.”

The wartime wrongs inflicted upon Hungarian Jews by 

the Hungarian government are unspeakable and undeniable. 

The issue raised by this appeal is whether those wrongs are 

actionable in United States courts. Plaintiffs, fourteen Jewish 

survivors of the Hungarian Holocaust, bring various causes of 

action against the Republic of Hungary and the Hungarian 

state-owned railway arising from the defendants’ participation 

in—and perpetration of—the Holocaust. The district court 

dismissed the suit, holding that the Foreign Sovereign 

Immunities Act’s treaty exception grants the Hungarian 

defendants immunity. The court concluded that the 1947 

Peace Treaty between the Allied Powers and Hungary set 

forth an exclusive mechanism for Hungarian Holocaust 

victims to obtain recovery for their property losses, and that 

permitting the plaintiffs’ lawsuit to proceed under the FSIA 

would conflict with the peace treaty’s terms.

We hold that the peace treaty poses no bar to the 

plaintiffs’ lawsuit. While the treaty secures an obligation by 

Hungary to provide compensation for property interests

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confiscated from Hungarian Jews during the War, that 

obligation is not exclusive of other, extra-treaty means of 

recovery like the causes of action asserted in this case. As a 

result, the FSIA’s treaty exception does not preclude this 

action.

Plaintiffs, however, still must overcome the FSIA’s 

default grant of immunity to foreign sovereigns. We hold that 

the FSIA’s expropriation exception affords plaintiffs a 

pathway to pursue certain of their claims: those involving the 

taking of the plaintiffs’ property in the commission of

genocide against Hungarian Jews. Because those

expropriations themselves amount to genocide, they qualify as 

takings of property “in violation of international law” within 

the meaning of the FSIA’s expropriation exception. We 

further hold that the plaintiffs’ claims do not constitute nonjusticiable political questions falling outside of the Judiciary’s 

cognizance. We leave for the district court to consider on 

remand whether, as a matter of international comity, the 

plaintiffs must first exhaust available remedies in Hungary 

before proceeding with their claims in United States courts.

I.

A.

The Hungarian government, a wartime ally of Nazi 

Germany, began a systematic campaign of discrimination 

against Hungarian Jews as early as 1941. Hungary stripped 

some Hungarian Jews of their Hungarian citizenship, forced

others into internment camps or slave labor battalions, 

expelled others from public or professional employment, and 

pressed still others into exile. But as of 1944—“on the very 

eve of triumph over the barbarism which their persecution 

symbolize[d]”—Hungarian Jews, “while living under 

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persecution[,] ha[d] at least found a haven” from widespread 

extermination in the Holocaust. Franklin D. Roosevelt, 

Statement on Opening Frontiers to War Victims and Justice 

for War Crimes, The American Presidency Project (Mar. 24, 

1944). That reprieve from the Holocaust’s very worst horrors 

would not persist.

In 1943, the Soviet Red Army dealt the Nazi Wehrmacht 

and its allies a decisive blow at the battle of Stalingrad (now 

Volgograd). The complete destruction of the German Sixth 

Army turned the tide of war on the Eastern Front. And on the 

Western Front, less than twenty-six months later—after the 

Normandy landing and ensuing battles—American and Soviet 

forces would meet at the Elbe River, in Torgau, Germany. 

Within three days of that meeting, Adolf Hitler would be dead 

by his own hand. 

The Hungarian government sensed the sea change 

attending the crushing defeat of the Nazis at Stalingrad. 

Fearing the imminent Soviet advance, Hungary sought to 

negotiate a separate peace with the United States, Great 

Britain, and the other Western Allies. But Germany, 

desperate to stave off Hungarian capitulation, rushed Nazi 

troops into Hungary in March 1944. The Hungarian 

parliament then ousted the existing government and installed 

the fanatically anti-Semitic Döme Sztójay as Prime Minister.

The new Sztójay government, in collaboration with 

German Nazis, embarked on a policy of total destruction of 

Hungary’s Jewish population. “Nowhere was the Holocaust 

executed with such speed and ferocity as it was in Hungary.” 

Compl. ¶ 1. Within a period of three months in 1944, nearly 

half a million Hungarian Jews were murdered.

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First came persecution. Building on previous efforts to 

marginalize Jews in society, the new Hungarian government 

forbade Jews from traveling, wearing military or school 

uniforms, eating in public restaurants, or using public pools. 

Hungary banned books by Jewish authors from schools and 

libraries. As of April 5, 1944, all Jews had to wear the 

identifying yellow star.

Next came property confiscation and ghettoization. 

Pursuant to government decrees, Hungary forced all Jews into 

ghettos, where they were “stripped of protective clothing, 

exposed to the elements, [and] deprived of sanitary facilities.”

Id. ¶ 101. Hungarian officials went home to home,

inventorying and confiscating Jewish property.

Finally came extermination in the death camps. With the 

Hungarian government rapidly implementing Hitler’s Final 

Solution, incarceration in the ghettos lasted but a few weeks. 

Hungarian authorities marched Jews from the ghettos to 

railroad stations, where they were divested of what little 

property—typically suitcases, clothes, and hidden valuables—

they had managed to retain to that point. Within a mere three

months, the majority of Hungarian Jews had been transported 

via railroad from the ghettos to Auschwitz and other death 

camps. Ninety percent of those sent to Auschwitz and the 

other camps were murdered upon arrival.

By January 17, 1945, Soviet troops had arrived in 

Budapest. But by then, over 560,000 Hungarian Jews—out of 

a pre-War population of nearly 825,000—had perished. The 

overwhelming majority of those deaths came from the 

roughly 430,000 Hungarian Jews deported to Auschwitz and 

other camps during those three months in 1944.

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B.

Because this case comes to us on a grant of dismissal in 

favor of the defendants on grounds of sovereign immunity, we 

assume the factual allegations in the complaint to be true. See 

Price v. Socialist People’s Libyan Arab Jamahiriya, 294 F.3d 

82, 93 (D.C. Cir. 2002). The named plaintiffs in this case are 

fourteen Jewish survivors of the Hungarian Holocaust. All 

fourteen were Hungarian nationals during World War II, but 

have since adopted other nationalities. Twelve of the 

plaintiffs were among the hundreds of thousands transported 

to Auschwitz, but they beat the overwhelming odds and 

survived.

The plaintiffs filed suit in the United States District Court 

for the District of Columbia against the Republic of Hungary 

(Hungary), the state-owned Hungarian railway, Magyar 

Allamvastuak Zrt. (MÁV, and, with Hungary, referred to as 

the Hungarian defendants), and Rail Cargo Hungaria Zrt. 

(RCH), an Austrian freight-rail company that is the successorin-interest to MÁV’s World War II-era freight division. The 

plaintiffs allege that the Republic of Hungary collaborated 

with the Nazis to exterminate Hungarian Jews and to 

expropriate their property. The defendant railways, the 

plaintiffs contend, voluntarily played an integral role in that 

effort—specifically by transporting Hungarian Jews to death 

camps, and, at the point of embarkation, confiscating the 

property of those about to be deported. The complaint asserts 

causes of action ranging from the common law torts of 

conversion and unjust enrichment for the plaintiffs’ property 

loss, to false imprisonment, torture, and assault for their 

personal injuries, to international law violations. The 

complaint seeks certification of a class of plaintiffs and, as 

relief, seeks compensatory damages, punitive damages, and 

various forms of equitable relief.

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The defendants moved for dismissal of the claims. The 

Hungarian defendants argued as alternate grounds for 

dismissal: that they were immune from suit under the Foreign 

Sovereign Immunities Act (FSIA), 28 U.S.C. §§ 1603 et seq.;

that the case presented a non-justiciable political question;

and that the case should be dismissed under the doctrine of 

forum non conveniens. The district court concluded that the 

FSIA granted the Hungarian defendants immunity from suit. 

See Simon v. Republic of Hungary, 37 F. Supp. 3d 381, 408-

24 (D.D.C. 2014). Accordingly, the court dismissed the 

claims against the Hungarian defendants for lack of subjectmatter jurisdiction. Fed. R. Civ. P. 12(b)(1). (The court also 

dismissed the claims against RCH based on the lack of 

personal jurisdiction over the company, 37 F. Supp. 3d at 

425-44; see Fed. R. Civ. P. 12(b)(2), but the plaintiffs raise no 

challenge to the dismissal of RCH in this appeal.)

II.

The plaintiffs appeal the dismissal of their claims against 

the Hungarian defendants—the Republic of Hungary and 

MÁV. We review de novo the district court’s dismissal of the 

claims for lack of subject-matter jurisdiction. El Paso Nat.

Gas Co. v. United States, 750 F.3d 863, 874 (D.C. Cir. 2014). 

“When reviewing a plaintiff’s unchallenged factual 

allegations to determine whether they are sufficient to deprive

a . . . defendant of sovereign immunity, we assume those 

allegations to be true.” Price, 294 F.3d at 93.

The parties agree that, for purposes of qualifying for

sovereign immunity under the FSIA, the Republic of Hungary 

is a “foreign state,” and MÁV, a corporation wholly-owned 

by the Republic of Hungary, is an “agency or instrumentality” 

of the Hungarian state. 28 U.S.C. § 1603(a)-(b). In the 

United States, the sole avenue for a court to obtain 

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jurisdiction over claims against a foreign state or its agencies 

and instrumentalities is through the FSIA, 28 U.S.C. §§ 1603 

et seq. See Peterson v. Royal Kingdom of Saudi Arabia, 416 

F.3d 83, 86 (D.C. Cir. 2005).

The FSIA establishes a default rule granting foreign 

sovereigns immunity from the jurisdiction of United States 

courts. See 28 U.S.C. § 1604; Mohammadi v. Islamic 

Republic of Iran, 782 F.3d 9, 13 (D.C. Cir. 2015). That 

baseline grant of immunity, however, is subject to a number 

of exceptions. See 28 U.S.C. §§ 1605-07; see also id. § 1604. 

The plaintiffs argue that their claims fit within the FSIA’s 

“expropriation exception,” which provides jurisdiction over 

certain claims involving “rights in property taken in violation 

of international law.” Id. § 1605(a)(3). The Hungarian 

defendants contend that the expropriation exception is 

inapplicable here. They further argue that the FSIA’s “treaty 

exception,” see id. § 1604, in any event divests the district 

court of any jurisdiction it might otherwise have under the 

expropriation exception.

We first address the treaty exception, the ground upon 

which the district court rested its decision to dismiss the 

plaintiffs’ claims. Finding the treaty exception inapplicable, 

we next examine whether the plaintiffs’ claims implicate the 

FSIA’s expropriation exception, which, as noted, creates an 

exception to foreign sovereign immunity for claims involving 

property “taken in violation of international law.” Id. § 

1605(a)(3). We hold that in the particular circumstances of 

this case—involving confiscations of property that themselves 

constitute the commission of genocide—certain of plaintiffs’ 

claims against the Hungarian defendants may proceed under

the FSIA’s expropriation exception.

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A.

The FSIA’s baseline grant of immunity to foreign 

sovereigns is “[s]ubject to existing international agreements to 

which the United States [was] a party at the time of enactment 

of th[e] Act.” 28 U.S.C. § 1604. That proviso is known as 

the FSIA’s treaty exception. Under the treaty exception, “if 

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.” de Csepel v. 

Republic of Hungary, 714 F.3d 591, 601 (D.C. Cir. 2013) 

(quoting Moore v. United Kingdom, 384 F.3d 1079, 1085 (9th 

Cir. 2004) (punctuation omitted)). “Any conflict between a 

[pre-existing] treaty and the FSIA immunity provisions, 

whether toward more or less immunity, is within the treaty 

exception.” Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661, 

669 (7th Cir. 2012); accord Moore, 384 F.3d at 1084-85. As 

a result, in a case like this one, in which a pre-existing treaty 

is said to confer more immunity than would the FSIA, the 

treaty exception would override any of the FSIA’s exceptions 

to immunity under which the claims otherwise could go 

forward.

1.

In this case, the Hungarian defendants’ claim of 

immunity under the treaty exception rests on the 1947 Peace 

Treaty between Hungary and the Allied Powers (including the 

United States). Treaty of Peace with Hungary (1947 Treaty), 

Feb. 10, 1947, 61 Stat. 2065, 41 U.N.T.S. 135. The 1947 

Treaty is an “international agreement[] to which the United 

States [was] a party at the time of the enactment of” the FSIA 

(in 1976). 28 U.S.C. § 1604. The treaty settled myriad issues

arising out of wartime hostilities, covering topics as varied as 

the location of Hungary’s post-war frontiers and the 

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regulation of Hungarian railway rates. See 1947 Treaty arts. 

1, 34.

The 1947 Treaty also contained provisions addressing the 

payment of compensation for (or the restoration of) property 

rights and interests seized by the Hungarian government 

during the war. Article 26 pertained to property rights and 

interests formerly held by non-Hungarian nationals. Article 

27 addressed “persons under Hungarian jurisdiction”—

Hungarian nationals. Id. art. 27(1).

Article 27 is of particular salience here. In that article, 

Hungary agreed:

[T]hat 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 . . . confiscation . . . on account of the racial 

origin or religion of such persons, the said 

property, legal rights and interests shall be 

restored . . . or, if restoration is impossible, that 

fair compensation shall be made therefor.

Id. If any such property held by the Hungarian government

remained unclaimed six months after the treaty’s effective 

date, Article 27 further provided that the property would be 

transferred to relief organizations representing Holocaust

victims. Id. art. 27(2). The transferred property was then to 

“be used by such organisations for purposes of relief and 

rehabilitation of surviving” victims. Id.

Article 40 of the treaty specified a three-tiered process for 

resolving “any dispute concerning the interpretation or 

execution of the Treaty.” Id. art. 40(1). At the first stage, the 

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treaty signatories engaged in the dispute—e.g., the United 

States and Hungary—would seek resolution through “direct 

diplomatic negotiations.” Id. If negotiations failed, the 

second stage would refer the dispute to the chief diplomats of 

the United States, Soviet Union, and United Kingdom, who 

were assigned to represent the Allied Powers “in dealing with 

the Hungarian Government in all matters concerning the 

execution and interpretation of” the treaty. Id. arts. 39, 40(1). 

Should those “Heads of Mission” fail to reach a resolution 

within two months, the dispute would move to the third stage, 

in which a three-member commission—one representative 

from each aggrieved party plus an independent third party—

would render a final resolution. Id. art. 40(1).

2.

The Hungarian defendants argue that the 1947 Treaty 

precludes jurisdiction over the plaintiffs’ claims via the 

FSIA’s treaty exception. Article 27, the defendants observe,

expressly obligates Hungary to provide compensation or 

restitution for property rights and interests taken from 

Hungarian Holocaust victims. See id. art. 27(1)-(2). 

Consequently, the defendants’ argument goes, the plaintiffs’ 

actions seeking recovery for Hungary’s taking of their 

property necessarily amount to a challenge to the adequacy of 

Hungary’s efforts to comply with its treaty obligations under 

Article 27. Any challenge to the adequacy of Hungary’s 

measures under Article 27, the defendants contend, must be 

pursued through Article 40, which provides for an exclusive, 

non-judicial dispute resolution process for “any dispute 

concerning the interpretation or execution of the Treaty.” Id.

art. 40(1). Because the plaintiffs seek relief outside of Article 

40’s dispute resolution framework, the defendants conclude, 

the plaintiffs’ claims conflict with the 1947 Treaty and are 

foreclosed by the FSIA’s treaty exception.

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Addressing essentially the same argument (on the same 

facts), the Seventh Circuit, in a brief analysis, rejected the 

defendants’ argument that the 1947 Treaty overrides any 

otherwise available bases for jurisdiction under the FSIA. 

Abelesz, 692 F.3d at 695-96. The district court here, in a 

comprehensive and thoughtful decision, reached the opposite 

conclusion, accepting the Hungarian defendants’ argument 

that Articles 27 and 40 of the 1947 Treaty, via the FSIA’s 

treaty exception, bar the plaintiffs’ action. We ultimately 

agree with the Seventh Circuit and hold that the 1947 Treaty 

does not preclude the plaintiffs’ suit.

For the Hungarian defendants to prevail in their argument 

under the FSIA’s treaty exception, they would need to show

that Article 27 of the 1947 Treaty establishes the exclusive 

means by which Hungarian Holocaust victims can seek

compensation for (or restoration of) property taken from them

during the War. If Article 27 establishes an exclusive means 

of recovery, a Hungarian Holocaust victim could seek relief 

only through that mechanism. If she believes that the relief 

available through Article 27 is deficient in some manner, her 

concerns could be aired only through Article 40’s state-tostate, dispute resolution process—the exclusive means of 

resolving any dispute about Hungary’s implementation of the 

treaty. See 1947 Treaty, art. 40(1). But if Article 27’s 

establishment of an obligation by Hungary to provide 

compensation for expropriated property is not exclusive of 

other means of recovery that may exist, see id. art. 27(1), 

Article 40 then would not foreclose the plaintiffs’ suit: while 

Article 40 sets out the sole means of resolving disputes 

concerning implementation of the 1947 Treaty, it has no 

bearing on any claims arising outside the treaty’s auspices. 

We adopt that latter understanding of Article 27. In 

particular, we understand Article 27 to establish a minimum

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obligation by Hungary to provide restoration or compensation 

to Hungarian Holocaust victims for their property losses. But 

while Article 27 secures one mechanism by which Hungarian 

victims may seek recovery, it does not establish the exclusive

means of doing so. 

“The interpretation of a treaty . . . begins with its text.” 

Medellin v. Texas, 552 U.S. 491, 506 (2008). The terms of 

Article 27 do not speak in the language of exclusivity. 

Although Article 27 provides certain rights to the Hungarian 

victims of the Holocaust pertaining to their property losses, it 

says nothing about whether those rights are exclusive of other 

claims Hungarian Holocaust victims might bring, such as the 

causes of action asserted by the plaintiffs here.

Other treaties concluding World War II hostilities, by 

contrast, contain language expressly establishing a final and

exclusive resolution of war-related claims. The treaty ending 

the War in the Pacific “recognized that Japan should pay 

reparations to the Allied Powers for the damage and suffering 

caused by it during the war.” Treaty of Peace with Japan art. 

14(a), Sept. 8, 1951, 3 U.S.T. 3169. After elaborating on the 

contours of that obligation—including the entitlement of the 

Allied Powers to seize and retain certain property rights and 

interests of Japan and Japanese nationals—the treaty 

explicitly foreclosed extra-treaty claims against Japan: 

“Except as otherwise provided in the present Treaty, the 

Allied Powers waive all reparations claims of the Allied 

Powers [and] other claims of the Allied Powers and their 

nationals arising out of any actions taken by Japan and its 

nationals in the course of the prosecution of the war.” Id. art. 

14(b); see Joo v. Japan, 413 F.3d 45, 49-50 (D.C. Cir. 2005). 

Article 27 of the 1947 Treaty contains no comparable 

waiver of extra-treaty claims against Hungary. The absence 

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of any such waiver language in Article 27 is all the more 

notable given that the 1947 Treaty itself contains an express 

waiver of certain other claims (albeit claims by Hungary 

rather than claims against it): “Hungary waives all claims of 

any description against the Allied and Associated Powers on 

behalf of the Hungarian Government or Hungarian nationals 

arising directly out of the war.” 1947 Treaty art. 32(1); see id. 

art. 30(4).

The context of Article 27 further weighs against 

construing it to foreclose extra-treaty claims by Hungarian 

Holocaust victims. A sovereign generally has the authority to 

espouse and “settle the claims of its nationals against foreign 

countries.” Dames & Moore v. Regan, 453 U.S. 654, 679 

(1981). That authority may be exercised in the terms of a 

peace treaty. As the treaty with Japan illustrates, a signatory 

may resolve the claims of its nationals against its wartime 

enemy in a peace treaty, including by waiving any alternate, 

extra-treaty means of relief. In fact, the Supreme Court long 

ago suggested that a treaty of peace, by its very nature, may 

be seen to have the effect of finally settling the wartime 

claims of one signatory nation (and its nationals) against the 

other party. See Ware v. Hylton, 3 U.S. 199, 230 (1796)

(Chase, J.). If so, any treaty provisions addressing such 

claims necessarily would be exclusive of extra-treaty relief.

Article 27 of the 1947 Treaty involves a fundamentally 

different situation, however. Article 27 does not address the 

claims of one signatory nation (and its nationals) against the 

other side to the agreement. Rather, Article 27 secures a 

means by which one signatory’s nationals (Hungarian

Holocaust victims) can obtain relief against their own

government. We have been made aware of no precedent for 

understanding such a provision to preclude extra-treaty 

claims. After all, while a sovereign can espouse and 

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extinguish the claims of its own nationals, it has no authority 

to espouse and extinguish the claims of another state’s 

nationals.

As a result, the United States and the other Allied Powers 

who executed the 1947 Treaty with Hungary lacked the power 

to eliminate (or waive) the claims of another state’s—i.e., 

Hungary’s—nationals in the treaty’s terms. They could, and 

did, impose an obligation on Hungary to provide a minimum

means of recovery to Hungarian victims for Hungary’s 

wartime wrongs, which is our understanding of Article 27. 

But they could not render that means of recovery an exclusive

one because they had no power to settle or waive the extratreaty claims of another country’s (Hungary’s) nationals. And 

while the Allied powers did possess the narrower power to 

control the use of their own courts as forums for the 

presentation of such claims, we do not read Article 27 to 

speak to the use of an Allied nation’s courts for extra-treaty 

wartime claims by Hungarian victims: Article 27 contains no 

language addressing where any extra-treaty claims by 

Hungarian victims may be brought, or specifying whether

Allied nations’ courts may be used as forums for such claims.

The Hungarian defendants point to the settlement of 

certain wartime, property-related claims in various countries’ 

bilateral agreements with Hungary, including a 1973 

Executive Agreement between the United States and Hungary

that addressed the property claims of United States nationals 

against Hungary. See Agreement Between the Government of 

the United States of America and the Government of the 

Hungarian People’s Republic Regarding the Settlement of 

Claims, Mar. 6, 1973, 24 U.S.T. 522. Those 

intergovernmental accords, the defendants contend, show that 

the only way of resolving claims outside of an Article 27 

mechanism is through Article 40’s process of direct state-toUSCA Case #14-7082 Document #1596075 Filed: 01/29/2016 Page 15 of 45
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state negotiations, not through extra-treaty, judicial causes of 

action brought by individuals. 

Again, however, those bilateral agreements involved one 

nation’s espousal and settlement of its own nationals’ claims 

against another nation (Hungary). There is little reason to 

suppose that the parties to the 1947 Treaty would have 

similarly relied on the Article 40 process of state-to-state 

negotiations as the exclusive means of resolving claims 

encompassed by Article 27—i.e., claims by Hungarian 

nationals against Hungary itself. Because those claims lay

against their own government, Hungarian victims in 1947 

would have had no obvious nation to speak and negotiate on 

their behalf against Hungary in any Article 40, state-to-state

process. We thus conclude that the Allied Powers envisioned 

Article 27 as securing at least one means by which Hungarian 

victims could seek recovery against Hungary, but not to the 

exclusion of any alternate, extra-treaty actions that might be 

available to them.

The Hungarian defendants also emphasize Article 27(2)’s 

requirement that “[a]ll property . . . remaining heirless or 

unclaimed for six months after the coming into force of the 

present Treaty, shall be transferred by the Hungarian 

Government to organisations in Hungary representative of 

such persons, organisations or communities,” for further 

distribution to Holocaust victims. 1947 Treaty art. 27(2). 

Because that provision calls for the distribution of “[a]ll” 

property confiscated from Hungarian Holocaust victims and 

retained by the Hungarian government, the defendants argue, 

Article 27 must provide the exclusive source of relief for 

those victims. Otherwise, the defendants contend, Hungary 

might face a double-penalty: once when it distributed

property to relief organizations under Article 27, and a second 

time when a plaintiff seeks compensation for the same 

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property in an extra-treaty action even though Hungary no 

longer possesses it. We are unpersuaded by the defendants’ 

argument.

Much of the property confiscated by Hungary from its 

nationals during the War was lost or destroyed in the 

conflict—indeed, the defendants themselves argue as much. 

See Appellees’ Br. 38. Hungary therefore would have had

nothing to transfer to relief organizations under Article 27(2)

with regard to many of the potential claims by Holocaust 

victims. Article 27(2)’s requirement that Hungary transfer 

confiscated property to relief organizations thus was not 

intended to foreclose extra-treaty means of recovery. It 

instead apparently was aimed to assure that the Hungarian 

government would devote any remaining property to relief 

efforts for Hungarian victims rather than retain the property 

for a different use. In fact, even if Article 27 were construed 

to establish an exclusive mechanism for recovery, Hungary 

would still confront the possibility of the same sort of doublepenalty: Article 27(1) requires Hungary to provide 

compensation to victims whose property cannot be restored, 

see 1947 Treaty art. 27(1), as would be the case when a 

claimant seeks recovery pursuant to Article 27(1) for property 

already transferred to a relief organization. 

For those reasons, we hold that Article 27 secures one

means by which Hungarian victims can seek recovery against 

Hungary for their wartime property losses, but not to the 

exclusion of other available remedies. Because the plaintiffs 

in this case have brought causes of action arising outside of 

the 1947 Treaty, their action creates no express conflict 

between an “existing international agreement[]” and the 

FSIA’s other immunity exceptions for purposes of the FSIA’s 

treaty exception. 28 U.S.C. § 1604.

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B.

Although the FSIA’s treaty exception does not foreclose 

jurisdiction over the plaintiffs’ claims, the plaintiffs still must 

overcome the FSIA’s default rule granting immunity to the 

Hungarian defendants. The plaintiffs argue that the FSIA’s 

expropriation exception, see 28 U.S.C. § 1605(a)(3), allows 

for jurisdiction over their claims. We agree that jurisdiction 

exists as to those of the plaintiffs’ claims that directly 

implicate rights in property.

The FSIA’s expropriation exception strips a foreign 

sovereign’s immunity against claims:

[I]n 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.

Id. A claim thus must meet three requirements to fit within 

the FSIA’s expropriation exception: (i) the claim must be one 

in which “rights in property” are “in issue”; (ii) the property 

in question must have been “taken in violation of international 

law”; and (iii) one of two commercial-activity nexuses with

the United States must be satisfied. See Peterson, 416 F.3d at 

86; see also Abelesz, 692 F.3d at 671.

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Because the district court concluded that the FSIA’s 

treaty exception bars jurisdiction over the plaintiffs’ action, 

the court did not reach any holding on the FSIA’s 

expropriation exception. See Simon, 37 F. Supp. 3d at 407

n.21. While we ordinarily do not decide an issue unaddressed 

by the district court, the parties have thoroughly briefed and 

presented the applicability of the expropriation exception and 

asked us to decide it. We think it appropriate in the 

circumstances to take up the parties’ invitation and resolve 

that issue in the first instance. 

At the outset, we address the standards by which to assess 

whether the plaintiffs’ claims fall within the terms of 

§1605(a)(3). In prior FSIA cases involving the expropriation

exception, this court has held that, in assessing whether 

“rights in property taken in violation of international law are 

in issue,” the plaintiff need only make a “non-frivolous” 

showing at the jurisdictional stage. See Helmerich & Payne 

Int’l Drilling Co. v. Bolivarian Republic of Venezuela, 784 

F.3d 804, 811-12 (D.C. Cir. 2015); Agudas Chasidei Chabad 

of U.S. v. Russian Fed’n, 528 F.3d 934, 940-41 (D.C. Cir. 

2008). That is because, in those cases, the plaintiff’s claim on 

the merits directly mirrored the jurisdictional standard. The 

plaintiff brought a basic expropriation claim asserting that its 

property had been taken without just compensation in 

violation of international law. See Helmerich, 784 F.3d at 

810; Chabad, 528 F.3d at 938, 941; see also Restatement 

(Third) of the Foreign Relations Law of the United States §

712(1) (Am. Law Inst. 1987). The same showing must be 

made to establish jurisdiction under the FSIA’s expropriation 

exception, which likewise calls for assessing whether the 

property was “taken in violation of international law.” 28 

U.S.C. § 1605(a)(3). When the jurisdictional and merits 

inquiries fully overlap in that fashion, a plaintiff need not 

prove a winning claim on the merits merely to establish

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jurisdiction. Rather, the plaintiff need only show that its 

claim is “non-frivolous” at the jurisdictional stage, and then

must definitively prove its claim in order to prevail at the 

merits stage. See Bell v. Hood, 327 U.S. 678, 682 (1946); 

Helmerich, 784 F.3d at 811-12; Chabad, 528 F.3d at 940-42.

This case differs from those prior cases involving the 

FSIA’s expropriation exception. Here, the plaintiffs’ claim on 

the merits is not an expropriation claim asserting a taking

without just compensation in violation of international law. 

The plaintiffs instead seek recovery based on garden-variety 

common-law causes of action such as conversion, unjust 

enrichment, and restitution. The plaintiffs plead a “violation 

of international laws” only to “give rise to jurisdiction” under 

the FSIA’s expropriation exception, Compl. ¶ 207, not to 

establish liability on the merits. Unlike in our prior cases, 

consequently, the international-law violation at issue here—

genocide—bears solely on jurisdiction under § 1605(a)(3).

When, as here, the jurisdictional and merits inquiries do 

not overlap, there is no occasion to apply the “exceptionally 

low bar” of non-frivolousness at the jurisdictional stage. 

Helmerich, 784 F.3d at 812. To establish jurisdiction in such 

a situation, we therefore ask for more than merely a nonfrivolous argument. Instead, we assess whether the plaintiffs’ 

allegations satisfy the jurisdictional standard. See Chabad, 

528 F.3d at 940. We now examine whether that showing has 

been made under the FSIA’s expropriation exception.

1.

Our analysis begins with the expropriation exception’s 

first requirement: that the claims are ones in which “rights in 

property” are “in issue.” 28 U.S.C. § 1605(a)(3). The 

plaintiffs have alleged numerous causes of action, ranging

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21

from conversion of their property, to torture, to wrongful 

death. The FSIA’s expropriation exception is not so broad as 

to cover all of the plaintiffs’ claims. 

We make FSIA immunity determinations on a claim-byclaim basis, see Abelesz, 692 F.3d at 697; Fagot Rodriguez v. 

Republic of Costa Rica, 297 F.3d 1, 13 (1st Cir. 2002); 

Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 

706 (9th Cir. 1992), and “[c]laims against foreign sovereigns 

that do not fall within the ambit of an FSIA exception are 

barred.” Abelesz, 692 F.3d at 697. Section 1605(a)(3) applies 

only to claims implicating “rights in property.” The

exception therefore affords no avenue by which to “bring 

claims for personal injury or death”—or any other nonproperty-based claims. Abelesz, 692 F.3d at 697; see id. at 

677. Because the plaintiffs offer no alternate jurisdictional

basis for their non-property-based causes of action, we affirm 

the district court’s determination that it lacked jurisdiction 

over those claims.

Certain of the plaintiffs’ claims, however, place “rights in 

property . . . in issue” within the meaning of the expropriation 

exception. 28 U.S.C. § 1605(a)(3). Their conversion claim, 

for instance, asserts that they “had the right to possess 

personal property that was taken from them by the 

defendants.” Compl. ¶ 165 (Count I). Their unjust 

enrichment claim likewise contends that they “were deprived 

of their personal property by the defendants” and that “[i]t 

would be inequitable and unconscionable for the defendants 

to continue to enjoy the benefits of possession and use of the 

plaintiffs’ personal property.” Id. ¶¶ 170, 172 (Count II). In 

the same vein, their restitution claim alleges that their 

“personal property was taken . . . , denying them the use and 

enjoyment thereof,” and that the “defendants have wrongfully 

used and profited from that property.” Id. ¶ 203 (Count XV). 

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Those sorts of claims place “rights in property . . . in issue” 

within the meaning of the FSIA’s expropriation exception.

Decisions applying another FSIA exception—the 

immovable-property exception, 28 U.S.C. § 1605(a)(4)—are 

instructive. That exception similarly turns on whether “rights 

in property” are “in issue,” allowing for jurisdiction when

“rights in immovable property situated in the United States 

are in issue.” Id. In Permanent Mission of India v. City of 

New York, the Supreme Court held that an action seeking to 

establish the validity of a tax lien imposed on real property 

falls within the immovable-property exception. 551 U.S. 193 

(2007). A tax lien on property qualifies as a property interest, 

the Court explained, and “a suit to establish the validity of a 

lien” thus “implicates rights in . . . property.” Id. at 199. Our 

court has similarly concluded that “disputes directly 

implicating property interests or rights to possession” are ones 

in which “rights in . . . property” are “in issue” for purposes of 

the immovable-property exception. Asociacion de 

Reclamantes v. United Mexican States, 735 F.2d 1517, 1520-

22 (D.C. Cir. 1984) (Scalia, J.). 

Here, a number of the plaintiffs’ claims seek recovery 

arising from the Hungarian defendants’ confiscation of the 

plaintiffs’ property. We leave it to the district court on 

remand to determine precisely which of the plaintiffs’ claims 

“directly implicat[e] property interests or rights to 

possession,” id., thus satisfying the “rights in property . . . in 

issue” requirement of § 1605(a)(3).

2.

The next question is whether the plaintiffs’ claims 

involve property “taken in violation of international law.” 28 

U.S.C. § 1605(a)(3). We conclude that the answer is yes. 

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The alleged takings of property in this case amounted to the 

commission of genocide, and genocide violates international 

law. The plaintiffs’ property therefore was “taken in violation 

of international law.” Id.

a.

It is undisputed that genocide itself is a violation of 

international law. See, e.g., Tel-Oren v. Libyan Arab 

Republic, 726 F.2d 774, 791 n.20 (D.C. Cir. 1984) (Edwards, 

J., concurring); accord Abelesz, 692 F.3d at 675-76 

(collecting authority). The question then becomes whether 

the takings of property described in the complaint bear a 

sufficient connection to genocide that they amount to takings 

“in violation of international law.” 28 U.S.C. § 1605(a)(3). 

We hold that they do. In our view, the alleged takings did 

more than effectuate genocide or serve as a means of carrying

out genocide. See Abelesz, 692 F.3d at 675-76. Rather, we 

see the expropriations as themselves genocide. It follows 

necessarily that the takings were “in violation of international 

law.” 28 U.S.C. § 1605(a)(3).

The legal definition of genocide encompasses the 

expropriations alleged in this case. The Convention on the 

Prevention of the Crime of Genocide, adopted by the United 

Nations in the immediate aftermath of World War II and

ratified or acceded to by nearly 150 nations (including the 

United States), defines genocide as follows:

[A]ny of the following acts committed with 

intent to destroy, in whole or in part, a 

national, ethnical, racial or religious group, as 

such:

(a) Killing members of the group;

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(b) Causing serious bodily or mental harm to 

members of the group; [or]

(c) Deliberately inflicting on the group 

conditions of life calculated to bring about its 

physical destruction in whole or in part . . .

Convention on the Prevention and Punishment of the Crime 

of Genocide (Genocide Convention), art. 2, Dec. 9, 1948, 78 

U.N.T.S. 277 (emphasis added). That definition is “generally 

accepted for purposes of customary [international] law.” 

Restatement (Third) of the Foreign Relations Law of the 

United States § 702 cmt. d. It appears not only in the 

Genocide Convention itself, but also in numerous other 

international treaties. See, e.g., Rome Statute of the 

International Criminal Court art. 6, July 17, 1998, 2187 

U.N.T.S. 90; Statute of the International Tribunal for Rwanda 

art. 2 (1994); Statute of the International Criminal Tribunal 

for the Former Yugoslavia art. 4 (1993). The offense of 

genocide under our domestic law uses the same definition. 

See 18 U.S.C. § 1091(a).

For our purposes, the pivotal acts constituting genocide 

are those set out in subsection (c) of the definition. The 

complaint describes takings of property intended to 

“[d]eliberately inflict[] on the group conditions of life 

calculated to bring about its physical destruction in whole or 

in part.” Genocide Convention art. 2(c). Indeed, the 

Genocide Convention’s history indicates that paragraph (c) 

aimed precisely to capture the practice of expropriation and 

ghettoization in the Holocaust. A delegate to the drafting 

committee specifically “referred to the destructive living 

conditions in the Jewish Ghettos within German[-]occupied 

territory during the Second World War as an example of the 

sort of conditions falling within the purview of (a draft 

version) of paragraph (c).” Christian J. Tams, Lars Berster & 

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Bjorn Schiffbauer, Convention on the Prevention of 

Genocide: A Commentary 122 (2014) (citing [U.N. Doc. 

E/AC 25/SR 414]); see also Int’l Criminal Court, Elements of 

Crimes, art. 6(c) n.4 (2011) (stating that genocide under 

paragraph (c) “may include, but is not necessarily restricted 

to . . . systematic expulsion from homes”). 

The Holocaust’s pattern of expropriation and 

ghettoization entailed more than just moving Hungarian Jews 

to inferior, concentrated living quarters, or seizing their 

property to finance Hungary’s war effort. Those sorts of 

actions would not alone amount to genocide because of the 

absence of an intent to destroy a people. The systematic, 

“wholesale plunder of Jewish property” at issue here, 

however, aimed to deprive Hungarian Jews of the resources 

needed to survive as a people. de Csepel, 714 F.3d at 594. 

Expropriations undertaken for the purpose of bringing about a 

protected group’s physical destruction qualify as genocide.

The complaint describes the plaintiffs’ experiences in just 

those terms. As the complaint sets out, the Hungarian 

Holocaust proceeded in a series of steps and included the

taking of property and ghettoization at various points in that 

process: “The Nazis . . . achieved [the Final Solution] by first 

isolating [Jews], then expropriating the Jews’ property, then 

ghettoizing them, then deporting them to the camps, and 

finally, murdering the Jews and in many instances cremating 

their bodies.” Compl. ¶ 91. The ghettoization effort 

included, as an integral component, the confiscation of the 

Jews’ personal property. Id. ¶ 3. “Hungarian officials 

stripped Jews . . . of their valuable possessions when they 

were transferred into the Jewish [ghettos],” id. ¶ 82, and, once

in the ghettos, Jews were “stripped of protective clothing, 

exposed to the elements, [and] deprived of sanitary facilities,” 

id. ¶ 101. The plaintiffs’ individual experiences with 

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ghettoization exemplified that pattern. See id. ¶¶ 23, 29, 31, 

42, 66, 73, 80. And the defendants confiscated any personal 

property remaining in the victims’ possession before 

transferring them via railroad to the Nazi death camps. See 

id. ¶¶ 12, 16, 19, 32, 39, 43, 54, 68, 74, 80.

Because the plaintiffs thereby allege the requisite 

genocidal acts and intent, their jurisdictional allegations 

suffice as a legal matter to bring their property-based claims 

within the FSIA’s expropriation exception. See Phoenix 

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

Cir. 2000). If the defendants were to challenge the factual 

basis of those allegations on remand, the district court would 

need to go beyond the pleadings and resolve the factual 

dispute. See id. For present purposes, it is enough to note 

that the complaint describes takings of property that are 

themselves genocide within the legal definition of the term. 

Such expropriations constitute “tak[ings] in violation of 

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

b.

The defendants nonetheless contend that the 

expropriations of property set out in the complaint were not 

“in violation of international law.” The defendants rely on the 

so-called “domestic takings rule,” under which, “generally, a 

foreign sovereign’s expropriation of its own national’s 

property does not violate international law.” Helmerich, 784 

F.3d at 812; see United States v. Belmont, 301 U.S. 324, 332 

(1937). Because the plaintiffs were Hungarian nationals at 

the time of Hungary’s alleged expropriations, the defendants 

argue, the domestic takings rule renders those takings nonactionable under international law. We disagree. The 

domestic takings rule has no application in the unique 

circumstances of this case, in which, unlike in most cases 

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involving expropriations in violation of international law,

genocide constitutes the pertinent international-law violation.

International law has long prohibited a sovereign from 

expropriating the property of another state’s nationals without 

payment of just compensation. See, e.g., Restatement (Third) 

of the Foreign Relations Law of the United States § 712(1); 

Restatement (Second) of the Foreign Relations Law of the 

United States §§ 185, 186 (Am. Law Inst. 1965). That basic

international-law prohibition against uncompensated 

expropriations, however, has always generally exempted 

intrastate takings. A sovereign’s expropriation of its own 

national’s property might violate the state’s own domestic 

laws, but it is ordinarily not a concern of international law. 

See Belmont, 301 U.S. at 332; Helmerich, 784 F.3d at 812. 

That understanding, captured by the domestic takings rule, 

manifests the broader reluctance of nations to involve 

themselves in the domestic politics of other sovereigns. See 

Abelesz, 692 F.3d at 674-75. The domestic takings rule 

means that, as a general matter, a plaintiff bringing an 

expropriation claim involving an intrastate taking cannot 

establish jurisdiction under the FSIA’s expropriation 

exception because the taking does not violate international 

law. See Republic of Austria v. Altmann, 541 U.S. 677, 712 

(2004) (Breyer, J., concurring); Siderman, 965 F.2d at 711.

In this case, however, the plaintiffs do not bring a basic

international-law expropriation claim. Accordingly, the 

international-law violation on which the plaintiffs premise 

their argument for jurisdiction under § 1605(a)(3) is not the 

traditional prohibition against uncompensated takings. 

Rather, the relevant international-law violation for 

jurisdictional purposes is genocide. See Compl. ¶ 207. 

Genocide perpetrated by a state against its own nationals of 

course is a violation of international law. See generally 

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Genocide Convention art. 2; see, e.g., Kadic v. Karadzic, 70 

F.3d 232, 241-42 (2d Cir. 1995). The international-law 

prohibition against genocide in fact was a direct reaction to

the actions of sovereigns against their own citizens. The 

Hungarian Holocaust is a paradigmatic example. Genocidal 

expropriations of the property of a sovereign’s own nationals 

thus are “tak[ings] in violation of international law” for 

purposes of the FSIA’s expropriation exception. 28 U.S.C. § 

1605(a)(3). In short, the domestic takings rule has no 

applicability in the discrete circumstances of this case.

The text of § 1605(a)(3), as we have explained, applies

foursquare to genocidal takings committed by a state against 

its nationals. And nothing in the provision’s history or 

context compels us to read the statute in a manner at odds 

with its plain terms. To be sure, international law 

traditionally did not regulate conduct between a sovereign and 

its subjects. See 1 Oppenheim’s Int’l Law 849. But World 

War II marked a change in that landscape, leading to 

recognition of certain international-law norms that “protect

individuals from inhuman treatment by states, even if the 

[offending] state is that state whose nationality the individual 

has.” Id. at 851. In particular, “the condemnation of 

genocide as contrary to international law quickly achieved 

broad acceptance by the community of nations” in the 

aftermath of the War and the Nuremberg Trials. Kadic, 70 

F.3d at 241; see Princz v. Federal Republic of Germany, 26 

F.3d 1166, 1173-74 (D.C. Cir. 1994). By the time of the 

expropriation exception’s enactment in 1976 as part of the 

FSIA, genocide had long been identified as an internationallaw crime—as evidenced by the Genocide Convention, article 

2, adopted in 1948.

Section 1605(a)(3)’s reference to “violation[s] of 

international law” therefore includes genocide

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notwithstanding that a sovereign’s actions against its own 

citizens traditionally fell outside the purview of international 

law. Judicial interpretation of the Alien Tort Statute, 28 

U.S.C. § 1350, confirms that understanding. Even though 

international human rights law did not even exist when the 

First Congress enacted the Alien Tort Statute in 1789, the 

statute’s reference to “law of nations” encompasses conduct 

universally accepted as violating international law today, see 

Sosa v. Alvarez-Machain, 542 U.S. 692, 732-33 (2004), 

including genocide and certain other offenses committed by a 

sovereign against its own subjects, e.g., Kadic, 70 F.3d at 242 

(genocide); Abebe-Jira v. Negewo, 72 F.3d 844, 845-46 (11th 

Cir. 1996) (torture); Tel-Oren, 726 F.2d at 791 n.20 (Edwards, 

J., concurring) (genocide, torture, summary execution, 

slavery). It follows a fortiori that the term “international law” 

in the FSIA’s expropriation exception—enacted by the 94th 

Congress well after the development of international human 

rights law—likewise encompasses genocide. As with the 

Alien Tort Statute, there are sound reasons for caution before 

concluding that a state’s actions against its own nationals 

infringe a prohibition of sufficiently universal acceptance to 

amount to a “violation of international law” within the 

meaning of § 1605(a)(3). See Sosa, 542 U.S. at 727-28. We 

hold here only that genocide is such a crime.

Unsurprisingly, there is no indication in the legislative 

history that Congress affirmatively considered § 1605(a)(3)’s 

applicability in the distinctive context of genocidal takings. 

Rather, the general international-law prohibition against 

expropriations without just compensation would have been

foremost in Congress’s mind. See H.R. Rep. No. 94-1487, at 

19-20 (1976). But in the absence of any indication that 

Congress would have desired to exclude genocidal takings

from the statute’s scope, and in light of the established status 

of genocide as an international-law crime by the time of the 

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FSIA’s enactment, we adhere to the expropriation exception’s

plain terms in holding that genocidal expropriations constitute

“tak[ings] in violation of international law.” 28 U.S.C. § 

1605(a)(3).

We recognize one seeming anomaly, also noted by the 

Seventh Circuit in addressing parallel claims arising from the 

Hungarian Holocaust: that the FSIA scheme, as we construe 

it, enables the plaintiffs to “seek compensation for taken 

property but not for taken lives.” Abelesz, 692 F.3d at 677. 

But that is a byproduct of the particular way in which

Congress fashioned each of the various FSIA exceptions. 

See id. Those exceptions were designed to deal generally 

with the full range of cases that might arise under them. 

There is no reason to assume that, in every discrete context in 

which those exceptions might be applied (such as claims

arising from genocide), there would be perfect coherence in 

outcome across all of the exceptions. Congress determined as 

a general rule that, for non-commercial torts, jurisdiction 

would exist against foreign sovereigns only for “personal 

injury or death . . . occurring in the United States.” 28 U.S.C. 

§ 1605(a)(5). Congress established no such limitation for

claims involving “property taken in violation of international 

law.” Id. § 1605(a)(3). The unavailability of jurisdiction for 

personal-injury claims under a different, independent

exception affords no reason to deny jurisdiction for propertyrelated claims fitting squarely within the terms of the 

expropriation exception.

3.

We turn finally to § 1605(a)(3)’s commercial-activity 

nexus requirements. The nexus requirement differs somewhat 

for claims against the foreign state itself (e.g., Hungary) as 

compared with claims against an agency or instrumentality of 

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the foreign state (e.g., MÁV). See Chabad, 528 F.3d at 947. 

As to the claims against Hungary, the question is whether the 

“property [in issue] 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.” 28 U.S.C. § 1605(a)(3). As to the claims 

against MÁV, the question is whether the “property [in issue] 

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.” Id. Considered at a more 

general level, both kinds of claims require: (i) that the 

defendants possess the expropriated property or proceeds 

thereof; and (ii) that the defendants participate in some kind 

of commercial activity in the United States.

The Hungarian defendants argue that the plaintiffs’ 

factual allegations fail to satisfy § 1605(a)(3)’s nexus 

requirements. When a “defendant challenges . . . the legal 

sufficiency of the plaintiff’s jurisdictional allegations,” we 

must “take the plaintiff’s factual allegations as true and 

determine whether they bring the case within . . . the [FSIA] 

exception[] to immunity invoked by the plaintiff.” Phoenix 

Consulting Inc., 216 F.3d at 40. Here, the Hungarian 

defendants would be entitled to a dismissal for failure to 

establish jurisdiction only if “no plausible inferences can be 

drawn from the facts alleged that, if proven,” would satisfy 

the expropriation exception’s nexus requirements. Price, 294 

F.3d at 93. Applying that standard, we find that the plaintiffs’ 

allegations suffice to withstand dismissal as to the claims 

against MÁV but not as to the claims against Hungary.

With respect to the requirement that defendants possess 

the expropriated property or proceeds thereof, the complaint 

alleges that the Hungarian defendants liquidated the stolen

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property, mixed the resulting funds with their general 

revenues, and devoted the proceeds to funding various 

governmental and commercial operations. Those allegations 

suffice to raise a “plausible inference[]” that the defendants 

retain the property or proceeds thereof, absent a sufficiently 

convincing indication to the contrary. Id. The defendants 

suggest that the United States might have confiscated the 

expropriated property from Hungary; that Hungary might 

have turned over all of the confiscated property to a relief 

organization in compliance with its obligations under the 

1947 Treaty; or that Hungary might have liquidated all of the 

proceeds on other government operations. That speculation 

fails to demonstrate the implausibility of the plaintiffs’ 

claims. 

The Seventh Circuit rejected similar arguments made by 

Hungarian defendants facing claims brought by Hungarian 

Holocaust victims under the expropriation exception. 

Abelesz, 692 F.3d at 688. There, as here, the defendants 

“offered no case or fact that demonstrates conclusively that 

the value of the expropriated property is not traceable to their 

present day cash and other holdings”; they thus failed to 

defeat the plausibility of the plaintiffs’ claims. Id. at 689. 

Although “[i]t is certainly possible that the value of plaintiffs’ 

expropriated property was lost during one or more of these 

[intervening events],” it “is also plausible that defendants 

retain the value of plaintiffs’ expropriated property.” Id. 

Of course, the plaintiffs ultimately “may or may not be 

able to prove the point.” Id. at 688. Upon any factual 

challenge by the Hungarian defendants—e.g., concerning 

whether the defendants in fact still possess the property or 

proceeds thereof—the plaintiffs will bear the burden of 

production, and the defendants will bear the burden of 

persuasion to “establish the absence of the factual basis by a 

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preponderance of the evidence.” Chabad, 528 F.3d at 940. 

We conclude only that the “[p]laintiffs’ claims that [the] 

defendants currently own or operate their expropriated 

property (or property exchanged for such property) are not so 

implausible as to permit resolution on the pleadings alone.” 

Abelesz, 692 F.3d at 689.

With respect to the requirement that the defendants be 

engaged in commercial activity in the United States, the 

plaintiffs allege that MÁV maintains “an agency for selling 

tickets, booking reservations, and conducting similar business 

in the United States.” Compl. ¶ 85. Because defendants make 

no attempt to argue that the rail company fails to “engage[] in 

a commercial activity in the United States,” the nexus 

requirement is satisfied as to MÁV. 28 U.S.C. § 1605(a)(3). 

But as to Hungary, by contrast, the plaintiffs put forward 

only the bare, conclusory assertion that “property is present in 

the United States in connection with commercial activity 

carried on by Hungary within the United States.” Compl. ¶ 

83. There is nothing more. Although the plaintiffs “need not 

set out all of the precise facts on which the[ir] claim[s] [are]

based in order to survive a motion to dismiss,” Price, 294 

F.3d at 93, here, they allege precisely zero facts concerning

what commercial activity, if any, Hungary carries on in the 

United States. Our inquiry is “similar to that of Rule 

12(b)(6),” id., under which “[t]hreadbare recitals of the 

elements of a cause of action, supported by mere conclusory 

statements, do not suffice,” Ashcroft v. Iqbal, 556 U.S. 662, 

678 (2009). That is all the plaintiffs have advanced here. We 

express no view on whether they can (or should be allowed 

to) amend the complaint in this regard on remand. But as it 

stands, the complaint’s allegations about Hungary’s 

commercial activity fail to demonstrate satisfaction of 

§1605(a)(3)’s nexus requirement.

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4.

As a final argument against the applicability of the 

FSIA’s expropriation exception, the Hungarian defendants 

argue that there can be no jurisdiction under § 1605(a)(3) 

unless the plaintiffs first demonstrate that they have exhausted

available domestic remedies in Hungary. It is important to 

place that exhaustion argument in proper perspective. The 

defendants could in theory assert (at least) three forms of an 

exhaustion argument in this case. Only one of those 

arguments is before us, and we reject it.

First, the defendants might contend that the FSIA itself 

obligates a plaintiff to exhaust domestic remedies before 

attempting to bring suit against a foreign sovereign in United 

States courts. This court, however, has held that the FSIA 

itself imposes no exhaustion requirement. See Chabad, 528 

F.3d at 948-49; accord Abelesz, 692 F.3d at 678. The 

Hungarian defendants thus understandably make no such 

argument before us.

Second, the defendants could argue that, with regard to 

the FSIA’s expropriation exception in particular, a plaintiff

cannot show a “violation of international law” as required by

§ 1605(a)(3) without exhausting domestic remedies in the 

defendant state (or showing the absence of any need to do so). 

That is the argument presented by the Hungarian defendants 

here, and we find it unpersuasive in the circumstances.

In certain situations, exhaustion may be required before 

an expropriation gives rise to a violation of international law. 

When a case involves a basic international-law expropriation 

claim asserting a taking of a foreign national’s property 

without payment of just compensation, there may be no 

violation until the plaintiff seeks (and is denied) compensation 

USCA Case #14-7082 Document #1596075 Filed: 01/29/2016 Page 34 of 45
35

through the sovereign defendant’s domestic laws. See 

Altmann, 541 U.S. at 714 (Breyer, J., concurring); Fischer v. 

Magyar Allamvasutak Zrt., 777 F.3d 847, 857 (7th Cir. 2015); 

Restatement (Third) of the Foreign Relations Law of the 

United States § 712. That would parallel the rule applicable 

to domestic claims asserting a taking of property without just 

compensation under the Fifth Amendment, as to which there 

is no constitutional violation until the plaintiff unsuccessfully 

attempts to obtain compensation through local remedies. See 

Williamson Cty. Reg’l Planning Comm’n v. Hamilton Bank of 

Johnson City, 473 U.S. 172, 194-95 (1985). 

Any comparable rule under international law would have

no application here, however. As we have explained, the 

relevant international-law violation in this case for purposes 

of § 1605(a)(3) is not the basic prohibition against an 

uncompensated expropriation of a foreign national’s property. 

Rather, the takings of property in this case violate 

international law because they constitute genocide. In the 

context of a genocidal taking, unlike a standard expropriation 

claim, the international-law violation does not derive from 

any failure to provide just compensation. The violation is the 

genocide itself, which occurs at the moment of the taking, 

whether or not a victim subsequently attempts to obtain relief

through the violating sovereign’s domestic laws. See Fischer, 

777 F.3d at 852, 857. In this case, the challenged takings 

therefore “violat[e] [] international law” within the meaning 

of § 1605(a)(3) regardless of whether the plaintiffs exhausted 

Hungarian remedies.

This brings us to the third type of exhaustion argument 

that the Hungarian defendants could assert in this case. The 

defendants could contend that, even if the claims at issue fit 

within § 1605(a)(3) so as to enable the exercise of 

jurisdiction, the court nonetheless should decline to exercise 

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36

jurisdiction as a matter of international comity unless the 

plaintiffs first exhaust domestic remedies (or demonstrate that 

they need not do so). See id. at 858; Restatement (Third) of 

the Foreign Relations Law of the United States § 713 cmt. f. 

The Seventh Circuit found that prudential argument to be 

persuasive in closely similar circumstances, see Fischer, 777 

F.3d at 859-66, but the argument is not before us in this 

appeal. The plaintiffs briefly contend in their reply brief that 

no exhaustion requirement should apply here because of the 

inadequacy of available Hungarian remedies, but the 

defendants have not argued (and have had no occasion to 

argue) the point in this court. Instead, the sole contention 

before us is that the plaintiffs cannot show a “violation of 

international law” under § 1605(a)(3) without exhausting 

Hungarian remedies, an argument we have rejected. We 

leave it to the district court to consider on remand, should the 

defendants assert it, the third form of exhaustion argument: 

whether, as a matter of international comity, the court should 

decline to exercise jurisdiction unless and until the plaintiffs 

exhaust available Hungarian remedies.

III.

To this point, we have concluded that the FSIA’s treaty 

exception does not preclude consideration of the plaintiffs’ 

claims, and that jurisdiction over their property-based claims

exists under the FSIA’s expropriation exception. The 

Hungarian defendants, however, also urge us to dismiss the

case for reasons apart from foreign sovereign immunity. 

They contend that the case presents a non-justiciable political 

question. Although the district court did not reach that issue, 

both sides ask us to address it and present arguments in their 

briefing. We conclude that, at least on the record before us at 

this time, the case does not present a non-justiciable political 

question.

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37

“In general, the Judiciary has a responsibility to decide 

cases properly before it, even those it ‘would gladly avoid.’” 

Zivotofsky ex rel. Zivotofsky v. Clinton, 132 S. Ct. 1421, 1427 

(2012) (quoting Cohens v. Virginia, 19 U.S. 264, 404 (1821)). 

The political question doctrine constitutes a narrow exception 

to that rule, and, when properly invoked, deprives a court of 

authority to decide the issues before it. Id. A controversy 

“involves a political question . . . where there is a textually 

demonstrable constitutional commitment of the issue to a 

coordinate political department; or a lack of judicially 

discoverable and manageable standards for resolving it.” Id.

(quoting Nixon v. United States, 506 U.S. 224, 228 (1993)) 

(internal quotation marks omitted) (ellipsis in original). A 

political question may also arise where there is “the 

impossibility of a court’s undertaking independent resolution 

without expressing lack of the respect due coordinate 

branches of government; or an unusual need for 

unquestioning adherence to a political decision already made; 

or the potentiality of embarrassment from multifarious 

pronouncements by various departments on one question.” 

Baker v. Carr, 369 U.S. 186, 217 (1962). None of those 

considerations leads us to conclude that this case presents a 

non-justiciable political question.

The Hungarian defendants point to the 1947 Peace Treaty 

and also the aforementioned 1973 Executive Agreement 

between the United States and Hungary. Those agreements, 

in the defendants’ view, demonstrate that the issue of 

compensation for Hungary’s wartime actions has been

textually committed to the political branches and that judicial 

consideration of the issue could undermine the Executive 

Branch’s resolution. We disagree.

With regard to the question of textual commitment to the 

political branches, “it is error to suppose that every case or 

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38

controversy which touches foreign relations lies beyond 

judicial cognizance.” Id. at 211. There is no across-the-board 

constitutional bar preventing the Judiciary’s consideration of

actions arising out of the wartime conduct of a foreign 

sovereign. See, e.g., Altmann, 541 U.S. at 701-02; Alperin v. 

Vatican Bank, 410 F.3d 532, 546-58 (9th Cir. 2005). The 

plaintiffs’ property-based claims in this case generally “seek 

restitution for looted assets,” and “[r]eparation for stealing, 

even during wartime, is not a claim that finds textual 

commitment in the Constitution.” Alperin, 410 F.3d at 551;

id. at 551-52.

Nor do the 1947 Peace Treaty or the 1973 Executive 

Agreement raise any significant risk that judicial 

consideration of this case could undermine Executive Branch 

actions. As we have explained in rejecting the Hungarian 

defendants’ arguments under the FSIA’s treaty exception, the 

1947 Peace Treaty does not serve as the exclusive mechanism 

by which former Hungarian nationals can seek compensation 

for the wartime expropriation of their property. Because the 

plaintiffs’ claims arise outside the 1947 Treaty, judicial

consideration of the claims does not undermine the 

Executive’s negotiated resolution in that instrument. The 

1973 Executive Agreement, meanwhile, is a bilateral accord 

between the United States and Hungary. It addresses, at most, 

the claims of current United States nationals. See de Csepel, 

714 F.3d at 602-03. The agreement did not—and could not—

effect any Executive Branch resolution of the claims of nonUnited States nationals, who make up the majority of the 

plaintiffs in this case. As a result, regardless of the possible 

implications of the agreement for the ultimate merits of the 

claims asserted by United States nationals, it affords no basis 

for declaring the entire case a non-justiciable political 

question.

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39

The Executive Branch, moreover, has given no indication 

that adjudication of the plaintiffs’ lawsuit would encroach on 

those agreements or raise any broader foreign relations 

concerns. The Executive often files a statement in court if it 

believes that judicial consideration of a case would interfere 

with the operation of the United States’s treaties and

agreements or would otherwise impinge on the conduct of 

foreign relations. See Alperin, 410 F.3d at 556-57. Notably, 

the United States filed a statement of interest in this case, but 

not with respect to the plaintiffs’ claims against the Hungarian 

defendants. 

In the district court, the government submitted a 

statement pursuant to 28 U.S.C. § 517 in which it urged

dismissal of the suit against Austrian defendant RCH “on any 

valid legal ground.” Statement of Interest of the United States 

of America at 16 (July 15, 2011). The United States’s foreign 

policy interests, the government averred, would be best served 

by continuing its “long-standing, and ongoing, pursuit of 

cooperative compensation arrangements with Austria and 

other governments.” Id. at 15. The district court granted 

dismissal of the claims against RCH on grounds of personal 

jurisdiction, and the plaintiffs did not appeal that dismissal. 

The government’s statement of interest conspicuously made 

no argument—and raised no concerns—about the claims 

against the Hungarian defendants, the subject of this appeal. 

That silence by the government, when it otherwise made 

known its concerns about this case, fortifies our conclusion 

that the claims against the Hungarian defendants do not 

present a non-justiciable political question. 

* * * * * 

For the foregoing reasons, we affirm in part and reverse 

in part the district court’s decision. While we find that the 

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40

FSIA’s treaty exception does not preclude the plaintiffs’ 

claims, we affirm the district court’s dismissal of the 

plaintiffs’ non-property claims because they do not come 

within the FSIA’s expropriation exception. We reverse the 

dismissal of the property-based claims, however, for which 

jurisdiction exists under that exception. We leave it to the 

district court to consider on remand whether, as a matter of 

international comity, it should refrain from exercising 

jurisdiction over those claims until the plaintiffs exhaust

domestic remedies in Hungary. The district court may also 

elect to consider any other arguments that it has yet to reach 

and that are unaddressed in our opinion today, such as the 

defendants’ forum non conveniens arguments.

So ordered.

USCA Case #14-7082 Document #1596075 Filed: 01/29/2016 Page 40 of 45
KAREN LECRAFT HENDERSON, Circuit Judge, concurring: 

While I join the Court’s opinion in full, I write separately to 

emphasize the baselessness of Hungary’s invocation of the 

Treaty Exception to the Foreign Sovereign Immunities Act 

(FSIA).

1

 Implicit in Hungary’s argument is the premise that

it made a good-faith promise to return (within six months’ 

time), or to provide compensation for, the unlawfully 

expropriated property belonging to the survivors of Hungary’s 

attempted extermination of over one-half million Jewish 

nationals in the last months of World War II. The signatories 

to the 1947 Peace Treaty further agreed that any property that 

remained unclaimed after six months would be given to 

Holocaust relief organizations. According to Hungary, as a 

result of those provisions, the 1947 Peace Treaty insulates

Hungary from the jurisdictional reach of the FSIA.

There is no suggestion that Hungary made any timely 

attempt to satisfy its obligations under the 1947 Peace Treaty. 

Indeed, the Hungarian Constitutional Court recognized that 

even in 1993 Article 27’s requirements remained unfulfilled. 

And given the unprecedented chaos of post–World War II 

Europe, the commitment that property seized—and often 

liquidated—by the Nazis could be located and returned in sixmonths’ time, or that fair compensation for the seized 

property could be paid within any reasonable time, was 

illusory. Although looking back seventy years may make it 

easy to assume that recovery from continent-wide, almost 

decade-long devastation progressed smoothly, nothing could 

be more inaccurate: 

Imagine a world without institutions. It is a 

world where borders between countries seem 

to have dissolved, leaving a single, endless 

landscape over which people travel in search 

 1

 Specifically, I agree with the Court’s treatment of, and 

conclusions regarding, Articles 27 and 40 of the 1947 Peace Treaty.

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2

of communities that no longer exist. There are 

no governments any more, on either a national 

scale or even a local one. . . . No one has seen 

a newspaper for weeks. There are no railways 

or motor vehicles, no telephones or telegrams, 

no post office, no communication at all except 

what is passed through word of mouth. . . .

Law and order are virtually non-existent, 

because there is no police force and no 

judiciary. In some areas there no longer seems 

to be any clear sense of what is right and what 

is wrong. People help themselves to whatever 

they want without regard to ownership—

indeed, the sense of ownership itself has 

largely disappeared. Goods belong only to 

those who are strong enough to hold on to 

them, and those who are willing to guard them 

with their lives. Men with weapons roam the 

streets, taking what they want and threatening 

anyone who gets in their way. . . . For modern 

generations it is difficult to picture such a 

world . . . . However, there are still hundreds 

of thousands of people alive today who 

experienced exactly these conditions—not in 

far-flung corners of the globe, but at the heart 

of what has for decades been considered one of 

the most stable and developed regions on earth. 

In 1944 and 1945 large parts of Europe were 

left in chaos for months at a time. The Second 

World War—easily the most destructive war in 

history—had devastated not only the physical 

infrastructure, but also the institutions that held 

countries together. The political system had 

broken down to such a degree that American 

observers were warning of the possibility of 

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3

Europe-wide civil war. The deliberate 

fragmentation of communities had sown an 

irreversible mistrust between neighbours; and 

universal famine had made personal morality 

an irrelevance. “Europe”, claimed the New 

York Times in March 1945, “is in a condition 

which no American can hope to understand.”

It was “The New Dark Continent”. 

KEITH LOWE, SAVAGE CONTINENT: EUROPE IN THE 

AFTERMATH OF WORLD WAR II xiii–xiv (St. Martin’s Press 

2012). Well into the 1950s, Europe remained “economically, 

politically and morally unstable.” Id. at 69. Even the Allied 

nations—the only group “universally recognized as untainted 

by association with the Nazis”—were “completely unprepared 

to deal with the complicated and widespread challenges that 

faced them in the immediate aftermath of the war.” Id. at 69–

70.

Hungary was no exception. First occupied by Germany 

in 1944 and then “liberated” by Stalin’s troops as the war 

drew to a close, Hungary’s “[e]stablished state institutions 

collapsed as their officials fled in the face of the Red Army’s 

advance, forcing the country’s new occupiers to construct a 

new state almost from scratch.” Mark Pittaway, The Politics 

of Legitimacy and Hungary’s Postwar Transition, in

CONTEMPORARY EUROPEAN HISTORY 453, 455 (Cambridge 

University Press 2004). Indeed, “[t]he last six months of the 

war left Hungary devastated,” resulting in the destruction of 

“40 percent of Hungary’s national wealth,” damage to 90 per

cent of Hungary’s industrial plants and loss of 40 per cent of 

Hungary’s rail network and 70 per cent of Hungary’s railway 

vehicles. LÁSZLÓ BORHI, HUNGARY IN THE COLD WAR, 1945–

1956: BETWEEN THE UNITED STATES AND THE SOVIET UNION 

53–54 (Central European University Press 2004). The task of 

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4

rebuilding Hungarian society fell to the Soviet Union, which, 

as the district court noted, had little interest in complying with 

the terms of a treaty that did not further the interest of the 

communist state. See Simon v. Republic of Hung., 37 

F. Supp. 3d 381, 391 (D.D.C. 2014).

No group felt the effects of this upheaval more than the

Jewish survivors of Hitler’s death camps, the majority of 

whom “believed it their duty to return to their countries of 

origin and try to rebuild their communities the best they 

could.” LOWE, supra at 191. Given the rampant antiSemitism that plagued the former Nazi-occupied areas, “[t]he 

historiography of this period in Europe is littered with stories 

of Jews trying, and failing, to get back what was rightfully 

theirs.” Id. at 198. “[T]he property of Jews was dispersed” 

far and wide “through a combination of confiscation, plunder, 

theft and resale.” Id. Indeed, “[i]n larger cities like 

Budapest,” this state of affairs “often rendered it impossible 

for returning Jews to trace their property.” Id. at 198–99. 

And even in smaller, rural towns where property could be 

traced, the Hungarian courts often “ruled that horses and other 

livestock plundered from Jewish farms should remain with 

those who had ‘saved’ them.” Id. at 200. 

Much ink has been spilled on the general upheaval in 

post-World War II Europe2 and the chaos that befell the 

Soviet-occupied nations in particular.3 Against this backdrop,

Hungary asks this Court to trust that it in fact intended to 

restore expropriated property to its rightful owners within six 

months, or to pay them fair compensation, in “all cases.”

Treaty of Peace, U.S.-Hung., art. 27, Feb. 10, 1947, T.I.A.S. 

 2 See, e.g., LOWE, supra.

3

 See, e.g., Pittaway, supra; BORHI, supra. 

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5

No. 1651 (emphasis added). In Hungary’s view, the 1947 

Peace Treaty represents the exclusive means by which 

Hungarian Jewish victims of the Holocaust could obtain 

recovery for property seized from them. It revises history—

and defies reality—to claim that Hungary had any intent or 

ability to effectuate Article 27 of the 1947 Peace Treaty. 

Accordingly, it would be unthinkable to conclude that the 

1947 Peace Treaty fits within the FSIA’s Treaty Exception. 

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