[00:00:01] Speaker 02: Case number 14-7082, Rosalie Simon at L, Appellant versus Republic of Hungary at L. Mr. Gaston for the Appellant, Mr. Kilter for the Appellees. [00:00:52] Speaker 01: Good morning. [00:00:53] Speaker 01: May it please the court, I'm Paul Gaston, and with me today at council table are Liesl Schofler, Charles Fax, David Weinstein, and Mark Zell of Jerusalem. [00:01:05] Speaker 01: This case concerns claims against the one state which participated in the Holocaust, but which has to date never accepted responsibility for its role. [00:01:15] Speaker 01: Indeed, its new constitution expressly denies responsibility. [00:01:20] Speaker 01: The issues on appeal are questions related to interpretation and application of the Foreign Sovereign Immunities Act, but what is at stake is the hope for justice and accountability of the ever-dwindling number of Hungarian Holocaust survivors. [00:01:35] Speaker 01: They were deeply wronged by the acts of Hungary and its state railway, MAV, which deported over one-half million Jews to their deaths and ored to unimaginable suffering. [00:01:49] Speaker 01: The central issue on appeal is the interpretation and application of the so-called treaty exception to the FSIA, 28 U.S.C. [00:01:57] Speaker 01: 1604. [00:01:58] Speaker 01: That provision states that all the other immunity and exception to immunity provisions of the FSIA are, quote, subject to existing international agreements to which the United States is a party at the time of the enactment of this act, which was 1976. [00:02:17] Speaker 01: From the first, the treaty exception was interpreted extremely narrowly by both the Supreme Court and this court as requiring an expressed conflict between the relevant treaty provisions and the FSIA's provisions with respect to the foreign sovereign's immunity or its amenability to suit. [00:02:37] Speaker 01: The Supreme Court expressly so held in Amarada Haas, and this court followed suit in the Prince case. [00:02:44] Speaker 01: There is no such conflict here. [00:02:47] Speaker 01: Nothing in the 1947 Treaty of Peace addresses Hungary's amenability to suit or its immunity to claims such as those presented here. [00:02:58] Speaker 01: And the 1973 Executive Agreement simply does not apply to plaintiffs here who were not U.S. [00:03:03] Speaker 01: nationals at the time of the takings. [00:03:06] Speaker 00: Mr. Gaston, can I ask you this question about the 1947 treaty? [00:03:09] Speaker 00: Yes. [00:03:10] Speaker 00: First, let me just ask this. [00:03:14] Speaker 00: Article 27, I take it, does deal with something that overlaps with the claims that you're bringing in this case. [00:03:22] Speaker 01: Yes. [00:03:22] Speaker 01: Article 27 deals with discriminatory takings from those who are subject to Hungarian jurisdiction. [00:03:31] Speaker 01: And our plaintiffs were subject to Hungarian jurisdiction. [00:03:34] Speaker 00: So if Article 27 overlaps, and let's suppose that Article 27 had said the [00:03:46] Speaker 00: the claims will be handled exclusively in the manner set forth herein. [00:03:51] Speaker 00: So it's an exclusivity provision, and it says that, yes, Hungarian nationals, of course, have an entitlement to compensation and to get a return of the property if it still exists or compensation for the value of the property. [00:04:03] Speaker 00: And the way that's going to be administered is under the auspices of this treaty, and that's the exclusive way in which it's going to happen. [00:04:10] Speaker 00: Would you then take the position that this treaty exception still isn't implicated because there's not an express conflict in the sense that that doesn't specifically speak to immunity? [00:04:22] Speaker 00: Or would you say that because that sets forth an exclusive claims resolution mechanism, this is the way these claims are going to be administered, that it's incompatible with the FSIA exception and therefore the treaty would control? [00:04:34] Speaker 01: Well, if Article 27 said what you said, but also in addition said, and we are setting up a forum or a tribunal to hear these claims of people who have such claims, then I would agree there is an express conflict. [00:04:50] Speaker 01: Article 27 did nothing of the sort. [00:04:52] Speaker 01: Article 27 simply said Hungary undertakes to compensate [00:04:59] Speaker 01: those subject to Hungarian jurisdiction at the time who had discriminatory takings and other measures of sequestration and so on. [00:05:08] Speaker 01: It did not set up a tribunal. [00:05:10] Speaker 01: It did not set up any claims mechanism. [00:05:13] Speaker 01: Nobody knew about it, and certainly it wasn't even publicized at the time. [00:05:18] Speaker 01: They didn't even set up an administrative office to take care of the claims. [00:05:22] Speaker 01: So Article 27 was essentially aspirational or assortatory, but it did not do any of those things, and it certainly did not [00:05:32] Speaker 01: deal with how such claims would be administered, heard, determined, or paid. [00:05:38] Speaker 04: What was the purpose of Article 27 then? [00:05:41] Speaker 04: What was the party's intent in negotiating it and putting it into treatment? [00:05:45] Speaker 01: I think it was basically just to let Hungary know that the parties who won the war thought that what Hungary did was shameful and wrong, and Hungary should take some steps to compensate those it had injured. [00:06:00] Speaker 01: And I think it was essentially kind of like a UN charter or something like that, which sets out principles that they believe should govern the behavior of one of the signatories to the treaty. [00:06:15] Speaker 01: Article 40 does have specific measures to take if there is a dispute as to the interpretation and application of the treaty. [00:06:27] Speaker 01: But it's absolutely clear that those are measures that only the signatories to the treaty, only the sovereign entities that entered into the treaty, can take. [00:06:36] Speaker 01: It says if a dispute as to interpretation and application cannot be resolved, [00:06:42] Speaker 01: through diplomatic channels or diplomatic means, then it must be referred to the three heads of mission in Budapest. [00:06:50] Speaker 01: And if that doesn't work, then each party can appoint a representative who can then appoint a third party who can decide any possible ties. [00:06:59] Speaker 01: None of our claimants could do any of those things. [00:07:01] Speaker 01: Only Hungary could, only the United States could, only Great Britain could. [00:07:06] Speaker 01: Only the actual sovereign entities that were parties to the treaty could do anything to resolve a dispute as to interpretation of the treaty. [00:07:14] Speaker 00: But if you put Article 40 to one side just for the moment, and we only look at Article 27, then... [00:07:20] Speaker 00: In your view, if Article 27 had done all the things that we talked about, it set up a claims resolution mechanism that's going to be administered by the Hungarian government, then that would be incompatible with the FSI exception, regardless of Article 40. [00:07:33] Speaker 01: And if it also said that it was exclusive, I think Your Honor posited that. [00:07:38] Speaker 01: Yes, if it did all those things, then probably we would not object. [00:07:42] Speaker 01: We could not make the argument that we're making today. [00:07:45] Speaker 00: And Article 27, so Article 27 sub 2 does something with the property. [00:07:53] Speaker 00: So it gives the property to the organizations. [00:07:58] Speaker 01: It purports to do, once again, we consider this exorbitory or something that would be great to do and Hungary undertakes to do it. [00:08:08] Speaker 01: We don't think Hungary ever did that. [00:08:11] Speaker 01: It never actually collected or inventoried, as far as we know, this specific property at issue. [00:08:17] Speaker 01: It never opened up any offices or claims of [00:08:21] Speaker 01: forum for people to go and try to get any of their property. [00:08:25] Speaker 01: And we doubt that Hungary, we strongly doubt historically, there is no evidence that Hungary after the six-month period, which also was ridiculous in terms of post-war Hungary, but that after the six-month period, it took all this property and then put it into some separate fund or relief kind of organization. [00:08:45] Speaker 00: So suppose – I'm not going to deny that everything you said is true. [00:08:49] Speaker 00: Let's suppose that is. [00:08:50] Speaker 00: But then Article 40 exists for a state to raise those kinds of objections, as you said. [00:08:56] Speaker 00: But in terms of what Article 27 itself contemplates, does it necessarily contemplate that there's going to be a resolution mechanism under the auspices of the Hungarian government? [00:09:07] Speaker 00: The fact that it envisions that the corpus, that the property that's at issue is going to be given to organizations within Hungary, what is the upshot of that? [00:09:20] Speaker 00: Because it seems to contemplate then that the place one would go to try to retrieve the property would be something under the auspices of those organizations as administered by the Hungarian government. [00:09:33] Speaker 00: Why else would you provide for the property to go to the organization? [00:09:37] Speaker 01: I think the thought was so many people had died. [00:09:40] Speaker 01: We're talking about 500,000 people who never returned or close to that number, that they realized that there would be quite a bit of unclaimed property. [00:09:49] Speaker 01: And they wanted to do something with that and suggested that this might be a possible resolution of that issue. [00:09:58] Speaker 00: So the presupposition is that a lot of the property is going to be unclaimed for very understandable reasons. [00:10:03] Speaker 00: I believe historically that's true, yeah. [00:10:06] Speaker 01: I don't think it changes our analysis though, Your Honor, because ultimately we are looking for an express conflict as to immunity to suit or amenability to suit. [00:10:16] Speaker 01: And even if you could argue that that provision potentially, had it been honored, would have created some sort of implied conflict, it certainly never created any kind of express conflict. [00:10:30] Speaker 02: This treaty is still in effect, is it? [00:10:32] Speaker 01: Yes, it is. [00:10:33] Speaker 02: Has it ever since the early 90s and the end of the Soviet domination, has Hungary made any attempt under this treaty? [00:10:46] Speaker 01: No, Your Honor. [00:10:46] Speaker 01: In fact, after the Soviet domination ended in 1991 and 92, Hungary went through the motions of passing and enacting some legislation that it thought would basically [00:11:00] Speaker 01: absolve itself of any further responsibility. [00:11:05] Speaker 01: Hungary's own expert said that that was partial compensation only. [00:11:11] Speaker 01: And in 1993, after the legislation was enacted, the Hungarian Constitutional Court itself said that Hungary had not yet fully complied with the terms of the 1947 treaty. [00:11:25] Speaker 01: Later on, I forget if it was much more recently, in the 2000s, or I think it was 1997, [00:11:31] Speaker 01: Hungary did open another so-called Jewish Restoration Fund and funded it with some millions of dollars. [00:11:41] Speaker 01: Did it do it pursuant to this treaty? [00:11:43] Speaker 01: I think they did it with the idea that they were redressing the Hungarian Constitutional Court's finding that they had not complied with the treaty. [00:11:54] Speaker 01: So I think they made an attempt to do so. [00:11:58] Speaker 01: But as we say, the compensation was paltry. [00:12:02] Speaker 01: It was partial under Hungary's own expert witnesses' analysis. [00:12:07] Speaker 01: And it really did nothing for the particular claimants here. [00:12:12] Speaker 01: I mean, as laudable as it may be to fund a Jewish restoration fund, it has nothing to do with restoring the property to its rightful owners or to compensate them. [00:12:23] Speaker 01: In fact, our information is, and we've alleged this in the complaint, that the Jewish restoration funds were not used to actually help Jews or Jewish organizations except very rarely. [00:12:35] Speaker 00: Can I ask one other question about the treaty exception and the implication of Article 27? [00:12:39] Speaker 00: This isn't your case and these are not your clients, but suppose there were U.S. [00:12:46] Speaker 00: nationals [00:12:47] Speaker 00: or united countries other than Hungary, the nationals of countries other than Hungary who came forward with claims in U.S. [00:12:55] Speaker 00: court. [00:12:56] Speaker 00: Then Article 26 comes directly into issue. [00:12:59] Speaker 00: And do you read Article 26 to preclude the bringing of claims by non-Hungarian nationals because Article 26 presupposes a dispute resolution mechanism and sets forth that two-thirds compensation will be paid and things of that nature? [00:13:15] Speaker 00: So do you think there's a difference between a Hungarian national and a non-Hungarian national with respect to the treaty exception, or do you think that they stand or fall together? [00:13:22] Speaker 01: I don't recall, perhaps my memory is faulty, but I don't recall Article 26 setting forth a dispute resolution mechanism. [00:13:32] Speaker 00: I don't know that it does by terms, but it seems, I guess the question would be how much does it obviously contemplate one? [00:13:41] Speaker 01: I'm not an expert in Article 26, but my general impression is that standing on its own, it did nothing more than Article 27, and that in fact the executive agreement in 1973 did do something toward implementing Article 26, because it did deal with the [00:14:02] Speaker 01: nationals of the United States. [00:14:04] Speaker 01: Quick note in our reply brief, at page 3 we did make an error and I'd like to bring that to the court's attention. [00:14:11] Speaker 01: We incorrectly stated that the executive agreement made no reference to the 47 treaty, in fact it does and we regret that misstatement. [00:14:20] Speaker 01: I did try to reserve two minutes. [00:14:22] Speaker 01: So if the court has further questions, I'd be happy to address them. [00:14:26] Speaker 01: If not, I'll reserve. [00:14:28] Speaker 02: I'd like to ask you about the expropriation exception and your allegations of the nexus between expropriated property and property here in the US. [00:14:42] Speaker 02: And I understand the railway has [00:14:48] Speaker 02: something to do with, I think, tourism business. [00:14:51] Speaker 02: How about the sovereign itself? [00:14:55] Speaker 01: We can meet the requirements of the expropriation exception if we show either of two nexuses. [00:15:04] Speaker 01: Either we have to show that the sovereign, the state of Hungary, does business in the United States and uses the expropriated property or property exchange for that property in connection with that business, or we can show that [00:15:21] Speaker 01: the instrumentality does business in the United States and it has property or property exchange for that property anywhere in the world. [00:15:30] Speaker 01: And we have made specific allegations with respect to the instrumentality because we have alleged they take tickets and they take reservations and they have an office for that in the United States. [00:15:42] Speaker 01: We don't have quite as specific an allegation with respect to the sovereign and we would need to flesh out our [00:15:48] Speaker 01: our allegation with respect to the sovereign with some discovery. [00:15:52] Speaker 01: But our basic position is it really doesn't matter. [00:15:55] Speaker 01: We get jurisdiction over both the sovereign and the instrumentality if we show either of those two disjunctive nexii are true. [00:16:06] Speaker 00: I have another question about the expropriation exception, unless you do it. [00:16:09] Speaker 00: Sure. [00:16:12] Speaker 00: Which is this, that the relationship between A5 and A3, the non-commercial tort exception, so under the non-commercial tort exception, although the acts that are set forth in the complaint obviously constitute torts, to say the least, [00:16:31] Speaker 00: there could be no recovery under that exception because of the limitation that the contact had to occur on US soil. [00:16:37] Speaker 01: That's right. [00:16:37] Speaker 00: And so it seems like there's a disconnect between Congress having thought about the extent to which torts could provide a basis for recovery under A5 and precluding recovery in the circumstances of this case, including for property loss, because I think A5 specifically refers to damages for loss of property. [00:16:59] Speaker 00: But then [00:17:01] Speaker 00: reading the statute to say, but nonetheless, claims like this can come within A3 that are property-based. [00:17:08] Speaker 00: It seems like there's a little bit of a disconnect because Congress thought about the extent to which torts that give rise to loss in property could be actionable under A5 and said, only thus far. [00:17:18] Speaker 00: Whereas under your theory, those claims would nonetheless, property-based claims would nonetheless come in under A3. [00:17:24] Speaker 01: Yes, Your Honor, and there are two answers to that. [00:17:28] Speaker 01: One, under the Supreme Court's recent decision in NML Capital, it made it crystal clear that the Court should apply the FSIA as written. [00:17:37] Speaker 01: There is no shading one way or shading another way. [00:17:41] Speaker 01: If the provision of the FSIA supports an absence of immunity or a piercing of immunity, it should be applied that way. [00:17:49] Speaker 01: Second, there is not necessarily a disconnect. [00:17:53] Speaker 01: It could be that Congress thought that in the commercial activity exception, there has to be some sort of impact on the United States because we're talking about one kind of exception that dates from the Tate letter and has a whole history behind it. [00:18:10] Speaker 01: Whereas in the expropriation exception, what we're talking about is something that almost always happens abroad. [00:18:17] Speaker 01: and is derived from concerns related to American investment abroad. [00:18:23] Speaker 01: And if, for example, a foreign country such as in the McKesson case expropriates your interest in a dairy in Iran, [00:18:33] Speaker 01: Well, does that interest have to come into the United States for you to be able to state a claim under 1605A3? [00:18:42] Speaker 01: Not necessarily, because your interests are impacted regardless of where the expropriated property is. [00:18:52] Speaker 00: And one follow-up with regard to the domestic takings issue. [00:18:55] Speaker 00: So is your argument on domestic takings the one that the Seventh Circuit [00:19:00] Speaker 00: adopted, which is that domestic, the general understanding that domestic takings don't raise an issue of international law, it doesn't apply in a situation in which the domestic takings were in facilitation of genocide. [00:19:15] Speaker 01: Yes, absolutely, but also I'd like to mention the DeChapelle case, Judge Huvel's opinion in the court below, which held to the same effect, but added the additional rationale that [00:19:28] Speaker 01: these Hungarian Jews were completely stripped of all appurtenances of citizenship, all rights of citizenship, and not treated as citizens, so why should the domestic taking exception deprive them in this situation? [00:19:41] Speaker 00: Right, which the Seventh Circuit didn't agree with, but they had another basis for. [00:19:44] Speaker 00: So on that issue, on the Seventh Circuit's rationale, so the statute says, in any case in which rights and property taken in violation of international law are an issue, [00:19:52] Speaker 00: And it seems like what the Second Circuit was saying was not that the rights and property are taken in violation of international law, but that rights and property were taken in facilitation of a violation of international law. [00:20:04] Speaker 00: And so there is, it does seem to stop one step short of what the statute itself contemplates, which is that the rights and property are themselves taken in violation of international law. [00:20:14] Speaker 00: Or would you disagree with that? [00:20:16] Speaker 01: I think there are a couple of answers to that. [00:20:19] Speaker 01: One, there is no question that every court that has looked at this issue, including Judge Hugh Mill below, has held that when it's part of a program of extermination and so on, then yes, there's no question there's a violation of international law. [00:20:35] Speaker 01: Second, we have made an argument that was not made in the Seventh Circuit, and I think it's important to consider the argument that the Treaty of Triennon, which was signed in 1920 and which applied all this time, was also violated as soon as any of these rights and property were taken on a discriminatory, racial, or religious basis. [00:20:59] Speaker 01: And under that treaty, [00:21:01] Speaker 01: You know, once that violation of international law happens, it doesn't really matter who the taking was from, whether it was your own citizen or not, because the treaty clearly applied to Hungary's treatment of its own citizens. [00:21:16] Speaker 04: Was that argument made below? [00:21:18] Speaker 01: Yes, yes, absolutely. [00:21:20] Speaker 01: We cited in our reply brief exactly the joint appendix where it was made, exactly the record where it was made. [00:21:31] Speaker 02: All right, we'll give you some time to reply. [00:21:33] Speaker 02: Thank you. [00:21:33] Speaker 02: Thank you, Your Honor. [00:21:44] Speaker 05: May it please the Court, Conrad Kelter, on behalf of Hungary and Hungarian National Railways. [00:21:50] Speaker 05: Your Honors, the 1947 treaty does present an express conflict with the immunity provisions of the FSIA. [00:22:02] Speaker 02: Why should we not, after 68 years, say, Hungary, you've treated this treaty as a dead letter? [00:22:10] Speaker 05: Well, they haven't treated this treaty as a dead letter. [00:22:14] Speaker 05: I think that if you look at the Constitutional Court decision in 1993, what the Hungarian Constitutional Court looked at was the treaty and whether or not there had been compliance with 27.1 and 27.2. [00:22:31] Speaker 05: As to 27.1, the Hungarian Constitutional Court found that there was compliance. [00:22:38] Speaker 05: and that there was compensation that had been offered in a number of reparations programs that had been enacted. [00:22:48] Speaker 05: I think there were two of them applying to takings and injuries that occurred during World War II. [00:22:58] Speaker 05: And there had been compliance in the provision of fair compensation. [00:23:05] Speaker 05: And there the Constitutional Court interpreted fair compensation to include not 100 cents on the dollar, but what is it that Hungary can provide given the current economy and state of affairs in Hungary, having just come out of the communist era and trying to rebuild itself. [00:23:25] Speaker 05: Then looking at 27.2, what the Constitutional Court said, there had not been strict compliance with 27.2. [00:23:33] Speaker 05: And I think what's important about the treaty is 27.2 said, [00:23:41] Speaker 05: not that it's a laudatory that Hungary should give unclaimed property to relief organizations to provide aid, but the treaty said they shall provide the unclaimed property to relief organizations. [00:23:59] Speaker 05: And looking at that, [00:24:01] Speaker 05: the Constitutional Court of Hungary said there had not been strict compliance. [00:24:06] Speaker 05: So what happened after that was the Hungarian government then had already committed millions of dollars to [00:24:16] Speaker 05: a relief organization to provide relief to Hungarian survivors of the Holocaust, first for those living in Hungary and then for those living abroad. [00:24:27] Speaker 05: But they took and they donated additional millions of dollars to fund this relief organization. [00:24:35] Speaker 05: So there still is a relief organization that was [00:24:40] Speaker 05: formed pursuant to the treaty to comply with the treaty obligations in terms of providing relief to survivors. [00:24:51] Speaker 00: So how does that create an express conflict? [00:24:53] Speaker 00: Because I think the argument that's being made on the other side by Mr. Gassen is that although Article 27 does overlap, it speaks to the question of the disposition of this property and it gives rise to a right [00:25:09] Speaker 00: to recover. [00:25:11] Speaker 00: It doesn't have a dispute resolution mechanism embedded within it. [00:25:14] Speaker 00: It doesn't prescribe how that's supposed to happen. [00:25:17] Speaker 00: And it doesn't say that anything that it even contemplates is going to be exclusive. [00:25:21] Speaker 00: So if all that's true, then what's the conflict with [00:25:23] Speaker 05: Well, Your Honor, I think you have to read Article 27 in its entirety together with Article 40 of the treaty. [00:25:33] Speaker 05: What Article 27 contemplates is first, in 27.1, [00:25:40] Speaker 05: that any unclaimed property that was taken for religious reasons needs to be returned. [00:25:49] Speaker 05: And to the extent that it cannot be returned, then fair compensation must be paid. [00:25:55] Speaker 05: But then you go to 27.2. [00:25:58] Speaker 05: And what 27.2 says is that if the property remains unclaimed after six months, [00:26:08] Speaker 05: then that property must, I'm sorry, SHALL be given to relief organizations who were then contemplated would provide the support to the Hungarian survivors of the Holocaust to make provisions for them. [00:26:26] Speaker 05: Importantly, what 27.2 says, and it's in the last sentence, it says, any unclaimed property after six months from 27.1, the first provision, shall also be included in this and must be given to the relief organizations. [00:26:45] Speaker 05: So what Article 27 does is it essentially takes the claims of the Hungarian nationals and requires Hungary to give them to these relief organizations. [00:26:59] Speaker 05: And so whatever rights there were to the property have now been given to the relief organization. [00:27:05] Speaker 05: So where Article 40 comes in is if there's a dispute about how that was done or if there's a dispute about what should have been turned over, you have to refer to the dispute provisions in Article 40 of the treaty. [00:27:24] Speaker 05: That's what creates the express conflict. [00:27:26] Speaker 05: It sets up an express forum [00:27:28] Speaker 05: that you have to deal with claims arising out of the execution of the treaty, and that express forum is not a court in the United States. [00:27:39] Speaker 04: So you're saying that any Hungarian citizen could invoke Article 40? [00:27:47] Speaker 05: No, what I'm saying, Your Honor, is the proper way to proceed under Article 40 is that the Hungarian citizens, if they're a Hungarian citizen, can go to their own government and seek relief. [00:28:01] Speaker 05: If the plaintiffs that are now United States citizens, they can go to the State Department and then ask the State Department to step in for them. [00:28:10] Speaker 05: If they're from Israel or Canada, they can go to their respective [00:28:14] Speaker 05: foreign ministries and ask those foreign ministries to get involved. [00:28:19] Speaker 05: And in fact, that's exactly what happened. [00:28:22] Speaker 05: It led to the 1973 agreement that led to a resolution of claims. [00:28:28] Speaker 00: But it seems like Article 40 only matters if you assume that Article 27 envelops all the claims. [00:28:34] Speaker 00: Because what Article 40 tells you, even under the most charitable reading for you, [00:28:37] Speaker 00: is that the exclusive method by which you could complain about something that happens under Article 27 and anything else in the treaty is by this special procedure that we've set up at the state-to-state procedure. [00:28:48] Speaker 00: But if the claims are never subsumed by Article 27 to begin with, then it doesn't matter that the way you complain about Article 27 is through Article 40, because these claims just weren't disposed of under Article 27. [00:28:59] Speaker 00: They persist. [00:29:01] Speaker 05: Well, but Article 27 does dispose of these claims. [00:29:04] Speaker 00: So I think you have to establish that proposition in order for Article 40 to do work. [00:29:10] Speaker 00: And on that antecedent proposition, which is the notion that Article 27 actually disposed of the claims, [00:29:17] Speaker 00: it doesn't say anything about. [00:29:19] Speaker 00: There's other treaties, World War II era treaties, where it's absolutely clear from the face of the treaty that claims are being espoused and disposed of. [00:29:29] Speaker 00: I'm not sure that the language of Article 27 says that. [00:29:33] Speaker 05: Well, respectfully, Your Honor, I think that if you look at the way the whole treaty is set up and all the various things that Hungary was responsible for and had to do and claims that Hungary waived, focusing in on 27, what it says and what it contemplated was [00:29:53] Speaker 05: Hungary is going to be responsible for either returning property or providing fair compensation. [00:30:00] Speaker 05: But they envisioned, rightly or wrongly, a six-month period by which the survivors would have to make claims for their property. [00:30:11] Speaker 05: After that six-month period of time, what the treaty says is that [00:30:18] Speaker 05: If it's unclaimed, hungry shall not would be a good thing for them to do, would be a laudable thing for them to do. [00:30:29] Speaker 05: It says they shall give that unclaimed property to relief organizations. [00:30:35] Speaker 05: And then the relief organizations will provide whatever aid or assistance that they set up and can do. [00:30:44] Speaker 00: So suppose, let me just do a very basic question. [00:30:46] Speaker 00: Suppose that you're a claimant. [00:30:48] Speaker 00: your property's gone and then the property isn't part of the corpus that's transferred because the property just doesn't exist anymore. [00:30:56] Speaker 00: So your claim is not for property, it's for compensation because your property's been taken away and you never got any funds for that. [00:31:03] Speaker 00: The property doesn't exist anymore. [00:31:05] Speaker 00: So then under 27.2, nothing's transferred that's relevant to your claim because there is no property by hypothesis. [00:31:11] Speaker 00: What you want is compensation. [00:31:13] Speaker 00: How does 27 preclude a claim for compensation for property that's been gone if the property doesn't exist anyways? [00:31:20] Speaker 00: All 27.2 does is transfer the property. [00:31:22] Speaker 05: Well, no, I think that if you look at 27.1, what 27.1 says is that Hungary had to either return property or provide fair compensation. [00:31:35] Speaker 05: Then you go to the last sentence of 27.2, and it specifically says, any property contemplated. [00:31:42] Speaker 05: And it's really more than properties. [00:31:44] Speaker 05: If you look at Article 27, it talks about rights and property. [00:31:52] Speaker 05: You had to transfer any of those rights, properties, whatever interest they had, including deferred compensation, that had to be given to the relief organizations. [00:32:04] Speaker 05: So in effect, even though the property itself may not exist, the right to that compensation [00:32:11] Speaker 05: to provide for it because it doesn't exist anymore has to go to the relief organizations. [00:32:19] Speaker 05: It has to be funded by money. [00:32:21] Speaker 05: And that's essentially what Hungary has done in providing the millions of dollars they've provided to support the relief organization that is providing assistance to survivors. [00:32:34] Speaker 05: And so that's why there is, I would submit, there's an express conflict. [00:32:39] Speaker 05: Because essentially what it says, here's what the treaty required Hungary to do. [00:32:45] Speaker 05: It required them to take the rights, interests, and the property, including payment to property that no longer exists, and give it to relief organizations. [00:32:56] Speaker 05: So there is no claim anymore. [00:32:58] Speaker 05: And so to the extent that there are disputes about how Hungary carried out those responsibilities, or whether they provided enough compensation for the properties that they couldn't return, [00:33:13] Speaker 05: That's a dispute about the execution of the treaty. [00:33:16] Speaker 05: That's something that has to be decided under Article 40's dispute resolution provision. [00:33:22] Speaker 05: As I said before, looking at the 1973 agreement between the United States and Hungary and some of the other dispute resolution or some of the other [00:33:33] Speaker 05: resolution provisions I talked about for Canada, Great Britain, and some of the other countries in our brief. [00:33:40] Speaker 05: That's what was done. [00:33:41] Speaker 05: That's what the countries did. [00:33:43] Speaker 05: They had direct [00:33:44] Speaker 05: government-to-government negotiations, which led to resolution agreements. [00:33:51] Speaker 05: That's how the countries envisioned that this treaty would work. [00:33:55] Speaker 05: In fact, looking at how wars have been settled throughout history, throughout the United States history, this is how it's been done. [00:34:06] Speaker 05: the governments get together, the governments negotiate a treaty set forth in a number of provisions, and they settle claims both for the countries and for the nationals of the countries. [00:34:18] Speaker 00: That's how... But almost without exception, that I think is an accurate recounting of the way treaties usually work, but almost without exception, it's that a country settles the claims of its national against the other country. [00:34:31] Speaker 00: This one deals with the claims of Hungarian nationals. [00:34:35] Speaker 00: That seems to me to be different, because yes, countries often espouse the claims of their own nationals and tell the other country with which they're at war, we're going to settle all the claims of our nationals. [00:34:45] Speaker 00: This one is an imposition of an obligation by other countries in the world that says to Hungary, [00:34:51] Speaker 00: We object to the way that you've treated your own citizens. [00:34:55] Speaker 00: We're creating an enforceable obligation not on behalf of our own nationals or a settlement of claims on behalf of our nationals. [00:35:00] Speaker 00: We're putting an imposition on you vis-a-vis your own citizens. [00:35:03] Speaker 00: That seems, it seems different than the history that you're recounting. [00:35:07] Speaker 05: Well, Your Honor, respectfully, I don't know that it's any different because if you look to the preamble of the 1947 treaty, what it says is the countries that are parties to the treaty are resolving any unresolved issues that arose out of the war from 1939 all the way to 1945. [00:35:32] Speaker 05: One of the issues that the parties discussed was how do we deal with the taking of property in Hungary by the Hungarians for religious reasons or other reasons. [00:35:51] Speaker 05: And what the parties agreed is this is how we're going to resolve it. [00:35:55] Speaker 05: You have Article 26, which deals with resolution of the allies and their nationals. [00:36:02] Speaker 05: And then you have 27. [00:36:03] Speaker 05: And how is 27 going to deal with Hungarians? [00:36:09] Speaker 05: That's how the treaty was set up. [00:36:12] Speaker 05: That's what the parties agreed to. [00:36:14] Speaker 05: That's what they bargained for. [00:36:15] Speaker 05: And that's why, to the extent that this court were to try to rule differently, then that creates, I believe, a political question. [00:36:29] Speaker 05: And that's why. [00:36:30] Speaker 02: But it didn't stop the Seventh Circuit. [00:36:34] Speaker 05: Well, Your Honor, I think where the Seventh Circuit went wrong is in looking at the treaty, what they didn't look at was the full, all of 27.1. [00:36:44] Speaker 05: They only really focused on the first part of 27, which is 27.1, and what the rights, or the agreement by Hungary to return property [00:36:54] Speaker 05: or to the extent they couldn't return it to provide fair compensation. [00:36:59] Speaker 05: They did not focus on the second part of 27-27-2, which required Hungary to take that property to the extent it wasn't unclaimed, to the extent that it was unclaimed after six months, and give it to relief organizations, in effect distinguishing the claims. [00:37:17] Speaker 04: Did the 1973 treaty explicitly incorporate Article 26? [00:37:24] Speaker 05: Yes, it explicitly incorporated both Article 26 and 27. [00:37:31] Speaker 05: I believe it's in the record at Joint Appendix 107. [00:37:38] Speaker 05: It's Article 2, Paragraph 3. [00:37:42] Speaker 05: And I see that my time is up, Sophie. [00:37:45] Speaker 00: Can we talk just a moment about the expropriation exception? [00:37:48] Speaker 00: Yes, Your Honor. [00:37:50] Speaker 00: So the expropriation exception says a case in which rights and property taken in violation of international law are an issue. [00:37:56] Speaker 00: And the Seventh Circuit, as we were discussing with counsel on the other side, [00:38:03] Speaker 00: said that the domestic takings exception doesn't apply because the rights and property were taken to enable the perpetration of genocide. [00:38:13] Speaker 00: And I guess I'm wondering if there's even a stronger argument than that, which is that it's not just that rights and property were taken in order to facilitate the commission of genocide, it's that the taking of rights and property was the commission of genocide. [00:38:28] Speaker 00: And because if you look at the way the genocide is defined under the Genocide Convention and under U.S. [00:38:34] Speaker 00: law, one part, integral part of the commission of genocide is the taking of everything that's a material resource to the victims, because that's part and parcel of the process of extinguishment. [00:38:49] Speaker 00: So that argument would say it fits directly within the text of A3, because it's a case in which rights and property were taken in violation of international law, in the sense that the taking of the property was a violation of international law. [00:39:03] Speaker 00: It was the perpetration of genocide. [00:39:07] Speaker 00: Do you have a reaction to that logic? [00:39:09] Speaker 05: Well, I guess my reaction to that is it goes back to the domestic takings exception, which under international law, where regardless of how egregious some act may be by a country, where it involves just the country and its nationals, that doesn't rise to the level of international law, because typically international law involves dealings among countries. [00:39:39] Speaker 05: And so the reaction would be that to the extent that you are going to ignore the domestic taking law even in the face of genocide, and I think this is really what the Seventh Circuit was getting at, is to the extent that you're going to do that, [00:39:57] Speaker 05: that it's only appropriate under international law to first give that country's courts and court system a chance to handle that before another country gets involved. [00:40:13] Speaker 00: So that's exhaustion. [00:40:15] Speaker 00: I guess I'm asking questions that precede exhaustion. [00:40:20] Speaker 05: But I think that they're interrelated. [00:40:22] Speaker 05: Because to the extent that you're going to use genocide and the taking of property to Trump, the domestics taking exception, then that's why you would need to apply the exhaustion requirement as a means of comedy to other nations. [00:40:39] Speaker 05: I mean, I would just give the example that the Senate Circuit did. [00:40:41] Speaker 00: I guess my only point is that then I don't hear you taking issue with the proposition that [00:40:46] Speaker 00: a case in which rights and property are taken in violation of international law would be a case involving genocide because it's not just that the taking of property facilitates genocide, it's that the taking of property is part of the commission of genocide. [00:40:59] Speaker 00: And then you get to the question of whether there's an exhaustion requirement embedded within either the FSIA or the principles of international law. [00:41:06] Speaker 00: That's your right to raise that issue, I take that point, and the Seventh Circuit [00:41:10] Speaker 00: ruled on that, but I guess I'm just asking the predicate question that even sets up the question of exhaustion, which is, is this occasion which rights and property are taken in violation of international law because the commission of genocide, part and parcel of the commission of genocide is taking rights and property? [00:41:29] Speaker 05: I'm not sure that it rises to that level yet. [00:41:32] Speaker 05: I don't know that there's been any other court that's held that. [00:41:35] Speaker 05: I think that at least the cases that I'm aware of that have looked at genocide have looked more to the killings and maltreatment as opposed to the taking of property and this is really [00:41:50] Speaker 05: Ultimately, it's the strict taking of the property issue. [00:41:56] Speaker 02: Thank you. [00:41:57] Speaker 05: Thank you, Your Honor. [00:41:59] Speaker 02: Does Mr. Gaston have any time? [00:42:02] Speaker 02: All right, why don't you take three minutes. [00:42:05] Speaker 02: and longer if we have questions. [00:42:09] Speaker 01: I'd like to start out by coming back to Judge Srinivasan's question about 1605A5. [00:42:15] Speaker 01: I may have misunderstood that. [00:42:17] Speaker 01: I thought you were talking about the commercial activity exception, and I realize you were talking about the tort exception. [00:42:22] Speaker 01: And I do think the tort exception has very different standards. [00:42:25] Speaker 01: because the tort has to take place in the United States. [00:42:29] Speaker 01: That's not the case with commercial activity where the effect has to be in the United States, and it's not the case with the expropriation exception either. [00:42:37] Speaker 01: So the FSIA is a finely tuned and finely calibrated statute that looks at various different situations. [00:42:45] Speaker 01: and tries to address the policy considerations underlying each one. [00:42:49] Speaker 04: But just so that I'm clear, your complaint, you relied on the expropriation exception? [00:42:54] Speaker 01: Yes, 1605A3, yes. [00:42:57] Speaker 04: Not the commercial activity exception? [00:42:58] Speaker 01: Not the commercial activity exception and not the tort exception. [00:43:05] Speaker 01: Another point I'd like to mention and expand on is that, as I understand Hungary's argument, they're always talking about, well, if you read this in connection with that, and if you look at the treaty and what really should have happened, whether it did or not, you have some sort of conflict. [00:43:22] Speaker 01: But this is no different than the kind of conflict that Amarada has, Prince, and [00:43:32] Speaker 01: McKesson held do not rise to the level of invoking the treaty exception. [00:43:38] Speaker 01: It has to be an express conflict and it has to be with respect to the country's amenability to suit. [00:43:45] Speaker 01: Now whether or not after six months the property was transferred or not, it really doesn't matter. [00:43:50] Speaker 01: It has nothing to do with Hungary's amenability to suit. [00:43:53] Speaker 01: Our claim is not pursuant to the treaty. [00:43:58] Speaker 04: What happens if your suit were to go forward? [00:44:02] Speaker 04: in Hungary were at that point to say, well, the property that issue was disposed of in accordance with the treaty and has been given to these relief organizations. [00:44:14] Speaker 04: What is the court supposed to do at that point? [00:44:17] Speaker 01: Well, our suit is for compensation, so there's always a possibility of compensation. [00:44:23] Speaker 01: We don't believe anything like that actually happened. [00:44:26] Speaker 01: I think there's a little confusion here. [00:44:27] Speaker 01: I think what my opposing counsel was referring to was what happened supposedly in 1997. [00:44:34] Speaker 01: with the establishment of the Jewish Restoration Fund. [00:44:37] Speaker 01: Nobody disputes that nothing happened in 1947. [00:44:42] Speaker 01: But certainly, if there were a particular bracelet that somebody can find and say, look, I'm sorry, that's in the Jewish Restoration Fund, they can still get compensation for that. [00:44:51] Speaker 01: I think that's a very far-fetched possibility. [00:44:54] Speaker 00: What about the argument that under 27, as opposing counsel rightly puts out, encompasses not just the property but also the rights, which could be the shows as an action. [00:45:02] Speaker 00: So you do, it sets up a right to get recovery and then a transfer to that right to the relief organizations. [00:45:10] Speaker 01: Yeah, but once again, that does not preclude us from suing to recover either the property or compensation for the property. [00:45:18] Speaker 01: It simply says, this is what we think should happen. [00:45:22] Speaker 01: It didn't happen. [00:45:23] Speaker 01: Even if it did happen, it doesn't matter to us. [00:45:26] Speaker 01: Our claim is not under the treaty. [00:45:28] Speaker 01: Our claim is for our property. [00:45:30] Speaker 01: The treaty itself had no exclusivity provision. [00:45:33] Speaker 01: Article 27 doesn't say, even if everything had been done exactly the way Article 27 suggests, nothing precludes a claimant today from saying, even if he had been compensated, nothing would preclude him from saying, we have a right to bring this suit against Hungary. [00:45:50] Speaker 01: Perhaps on the merits, there would be a set off or something, but nothing affects the jurisdiction of the court as to his right to bring this suit. [00:45:57] Speaker 00: Because it doesn't speak in terms of exclusivity. [00:46:01] Speaker 01: Or extinguishment. [00:46:03] Speaker 00: So on extinguishment, if it in fact says that the cause of action is transferred to the relief organizations, then the relief organizations have that cause of action and they're supposed to administer that, the entitlement to recovery in some fashion, whatever system is developed. [00:46:20] Speaker 00: Then that cause, it's gone away. [00:46:24] Speaker 00: Hasn't it? [00:46:24] Speaker 00: Because the cause that's created by 27.1. [00:46:27] Speaker 01: Well, but I don't think you can read the cause of action to be transferred just because it says property and rights and property. [00:46:34] Speaker 01: A cause of action has to be specifically named. [00:46:37] Speaker 01: Shows in action or something like that. [00:46:39] Speaker 01: There's no mention of that in the treaty. [00:46:42] Speaker 01: What they mean by property or rights and property is simply if you have shares in a corporation, you have rights in that corporation. [00:46:50] Speaker 01: I'm sure that's all that was meant there. [00:46:53] Speaker 02: Can I ask you something? [00:46:57] Speaker 02: I asked you if this treaty is still in effect and you said yes, but thinking about it, have you argued that the treaty was violated because they didn't do anything within the six months, they didn't do anything in the first year, so whatever may be in effect from that treaty, they violated it, so we don't [00:47:17] Speaker 02: Are you arguing that we don't even have to consider it? [00:47:21] Speaker 02: Your opponent relies on this language that everybody knows was never followed, and he stresses shall [00:47:33] Speaker 02: so forth, nothing ever happened. [00:47:36] Speaker 02: It was violated. [00:47:37] Speaker 02: Those duties were violated. [00:47:39] Speaker 02: Do you argue that? [00:47:40] Speaker 01: Yes, I think we do, Your Honor. [00:47:42] Speaker 01: I mean, our argument actually goes beyond that and says it really doesn't matter if it was violated or not violated. [00:47:48] Speaker 01: The treaty just does not bear on this issue. [00:47:51] Speaker 01: However, it is an important historical fact that it was violated, so even if the treaty [00:47:56] Speaker 01: exhorted Hungary and asked Hungary to undertake certain obligations, it never did so. [00:48:03] Speaker 01: So yes, that's a very big part of our argument. [00:48:04] Speaker 02: I mean, it seems to me that the treaty exception assumes that it's going to be honored. [00:48:11] Speaker 02: Otherwise, we go to the FSIA, and this treaty was never honored in the time it was supposed to be, and I don't see why we have to consider it. [00:48:23] Speaker 01: I agree. [00:48:26] Speaker 01: My co-counsel and I are here before you this morning as the voice of those who are too old or too weak to speak for themselves. [00:48:35] Speaker 01: It may well be that our voices are inadequate, but we ask the Court to remand this case to the District Court so that their hope for justice against Hungary can be pursued further.