The court’s justices said the theory was a bridge too far
Aquest by a group of Holocaust survivors to sue Hungary in America for property stolen from them in the war was halted by the Supreme Court. In a unanimous opinion, the justices held fast to the court doctrine recognizing narrow limits on holding foreign nations responsible in US courts.
The plaintiffs’ case focused on the 1976 Foreign Sovereign Immunities Act (FSIA), which set guidelines for when countries are immune from legal actions in the United States. The act authorizes attempts to gain compensation for Nazi war crimes and acts of terrorism. The act also makes exception to a nation’s legal immunity when property was taken in violation of international law and then found a “nexus” in the US — e.g., the nation used the stolen assets in an economic transaction in the United States. That transaction must be directly traceable to the original theft.
But what if the guilty country liquidated the property, so the stolen assets are no longer directly traceable? The plaintiffs argued liquidated property should be exempt from the tracing requirement, since otherwise bad actors would easily be able to subvert the FSIA’s exception. Attorneys for the survivors claimed that since their property was taken by the Hungarian government, sold and mixed with its general funds, and that the nation (several regimes later in the early 2000s) sold bonds in America, the standard of “exchanged” property had been met.
However, the court’s justices said the theory was a bridge too far.
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