Court Opinion

ID: 3033025
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:48:53.587754+00
Date Added: 2024-06-11T12:08:58.052574
License: Public Domain

FILED
                     UNITED STATES COURT OF APPEALS                            FEB 10 2010

                                                                          MOLLY C. DWYER, CLERK
                             FOR THE NINTH CIRCUIT                          U .S. C O U R T OF APPE ALS

EMIL ALPERIN; et al.,                              No. 08-16060

              Plaintiffs - Appellants,             D.C. No. 99-cv-04941-MMC
                                                   Northern District of California,
  v.                                               San Francisco

VATICAN BANK, aka Institute of
Religious Works aka Instituto per le Opere         ORDER
Di Religione (IOR,

              Defendant - Appellee.

Before: B. FLETCHER, THOMAS and N.R. SMITH, Circuit Judges.

       The panel has elected to amend the memorandum disposition, filed on

December 29, 2009. With the amendment, the petition for panel rehearing and

rehearing en banc is DENIED. No further petitions for rehearing or rehearing en

banc may be filed.

       Section II of the Memorandum Disposition, is deleted in its entirety, with the

following inserted in lieu thereof:

                                           II

       The district court did not err in holding that the international takings

exception does not apply to remove FSIA immunity. Where the defendant

sovereign succeeds in “establish[ing] a prima facie case of immunity, the burden of
production shifts to the plaintiff to offer evidence that an exception applies.”

Phaneuf, 106 F.3d at 307.

      FSIA's international taking exception provides that:

      A foreign state shall not be immune from the jurisdiction of the courts
      of the United States . . . in any case . . . (3) in which rights in property
      taken in violation of international law are in issue and [1] 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 [2] that property or any
      property exchanged for such property is owned or operated by an
      agency or instrumentality of the foreign state and that agency or
      instrumentality is engaged in a commercial activity in the United
      States.

28 U.S.C. § 1605(a).

      The takings exception requires plaintiffs to plead that either the expropriated

property or property exchanged for the expropriated property has a jurisdictional

nexus to the United States. The Complaint must contain allegations as to the

current status of the expropriated property or property exchanged for such

property; either an allegation that such property is currently present in the United

States or an allegation that such property, although perhaps not located in the

United States, is currently owned or operated by an agency or instrumentality of

the foreign state.

                                            2
      Alperin does not allege that the expropriated property or property exchanged

such property is currently in the United States. While we recognize that it could be

difficult to prove that fungible articles, such as the gold alleged to have been taken

in this case, are currently present in the United States, Alperin does not even make

such an allegation in the pleadings. Therefore, assuming without deciding that the

first clause of § 1605(a) applies to both foreign states and their instrumentalities,1

jurisdiction cannot be established under the first clause.

      Nor has jurisdiction been established under the second prong of §

1605(a)(3). Alperin does not allege that the IOR currently owns or operates the

expropriated property or any property exchanged for the expropriated property.

The Complaint alleges that the defendants (in this multi-defendant case) laundered,

converted, and retained a “significant portion” of the property illegally

expropriated by the Ustasha regime; it does not allege that this portion included

property illegally taken from the Alperin plaintiffs. Assuming it did, the

Complaint alleges only that Alperin's property was in the past laundered,

converted, and retained by the IOR; it makes no allegation as to the current

      1
        Cf. Garb v. Republic of Poland, 440 F.3d 579 (2d Cir. 2006) (suggesting
that the first clause of the international takings exception applies to foreign states,
while the second applies to their agencies and instrumentalities). But see 28 U.S.C.
§ 1603(a) (“A ‘foreign state’ . . . includes . . . an agency or instrumentality of a
foreign state . . . .”).

                                           3
location of that property or property exchanged for that property.2 Because Alperin

makes no allegation as to the current status of the expropriated property or property

exchanged therefore, jurisdiction has not been established under the second prong

of § 1605(a)(3).

      2
       Indeed, the Complaint suggests that the expropriated property or property
exchanged for such property is not currently owned or operated by the IOR, as
most of it was held by the IOR before being sent on to Swiss banks. See, e.g.,
Compl. ¶ 159.

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