Case of the Day: Philipp v. Germany
Posted on April 6, 2017
The case of the day is Philipp v. Federal Republic of Germany (D.D.C. 2017). It involves the Guelph Treasure, the Welfenschatz. In 1929, a consortium of three Jewish art dealers, J&S Goldschmidt, I. Rosenbaum, and Z.M. Hackenbroch, purchased the Treasure from the Duke of Brunswick-Lüneberg. The Treasure included dozens of medieval reliquaries and other religious objects. The consortium sold many of the pieces to museums in the United States and Europe, and the rest were acquired by the Prussian government in 1935. The plaintiffs, heirs and successors of the members of the consortium, claim that the “sale” to the Prussian government was coerced, as was the case with many “sales” of Jewish-owned art during the Nazi era.
The plaintiffs alleged that Adolf Hitler and Hermann Göring were personally involved in the efforts to “buy” the Treasure, and that the Dresdner bank, then state-owned, negotiated with the consortium over the sale, ultimately buying it for a third of the fair market price (according to the plaintiffs), and putting the proceeds into a blocked account subject to “flight taxes” imposed on German Jews. In 1935, after the sale, Göring presented the Treasure as a surprise gift to Hitler, according to the plaintiffs.
The plaintiffs first brought a claim before the German Advisory Commission for the Return of Cultural Property Seized as a Result of Nazi Persecution, Especially Jewish Property, which determined that the sale was not coerced. The plaintiffs then sued, and Germany moved to dismiss. The claims were for declaratory relief, replevin, conversion, unjust enrichment, fraud in the inducement, breach of fiduciary duty, breach of the covenant of good faith and fair dealing, civil conspiracy, bailment, and tortious interference. The case raises three issues: FSIA immunity, comity, and forum non conveniens: I’m just going to discuss the FSIA here.
The issue was whether the expropriation exception to FSIA immunity. The exception applies if (1) the claim is one in which rights in property are at issue; (2) the property was taken in violation international law; and (3) there was a commercial-activity nexus with the United States. There’s a question about what standard the court should apply: in cases where the allegation is that the defendant expropriated the plaintiff’s property in violation of international law, the jurisdictional and pleading inquiries are the same and the plaintiff need only plead a non-frivolous claim. But when the claim is, for example, for conversion—an ordinary tort that is not in itself a violation of international law, the jurisdictional inquiry is more stringent. Which standard should apply here? The parties disagreed, but the court found, apparently correctly, that the more stringent applied, because the claim was not a direct claim for violation of international law.
The court found that some of the claims (replevin, conversion, unjust enrichment, and the claim for a declaration about ownership) did involve rights in property, while the others were tort claims that did not go to title. The plaintiff apparently conceded this point. I found this point interesting. I was reminded of some legal history. In the olden days there were the real actions (e.g., writs of right) and the personal actions (e.g., trespass). At first you tried title to land in the real actions, but as the law developed, you could try title to land in an ordinary tort case, e.g., a trespass claim. With this as background, is there a real reason, in principle, that the issue of ownership of the Treasure cannot arise in what looks like an ordinary tort claim? Is this an example of the forms of action ruling us from the grave?
The court also found that the taking alleged violated international law. International law defines genocide to include “deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part.” I won’t go into the details of the decision here, but suffice it to say that the court found that the organized effort to expropriate the property of German Jews was part of the genocide of the Jews.
On the final point, the commercial nexus, the court found the requirement was met because the plaintiffs pleaded that the Treasure was “featured in books and guidebooks produced by” an instrumentality of Germany “that are for sale in the United States, and that Germany engages in painting and exhibition loans with museums in the United States.”