[00:00:00] Speaker 00: Case number 22-7010, Ed Al. [00:00:03] Speaker 00: Rosalie Salomon, Ed Al. [00:00:04] Speaker 00: Versus Republic of Hungary and Magyar Alan Basutak, ZRT, MAB ZRT at balance. [00:00:10] Speaker 00: Mr. Silbert for the Dependence at Balance Cross-Saphalese Republic of Hungary, Ed Al. [00:00:15] Speaker 00: Ms. [00:00:15] Speaker 00: Giselle for the Plaintiff's Appellee's Cross-Saphalese Republic of Hungary, Rosalie Salomon, Ed Al. [00:00:19] Speaker 00: and Plaintiffs of Balance Stephen Heller et al. [00:00:21] Speaker 00: Nationality issues. [00:00:23] Speaker 00: Mr. Weinstein for the Plaintiffs of Balance Rosalie Simon et al. [00:00:27] Speaker 00: and Plaintiffs of Balance Stephen Heller et al. [00:00:30] Speaker 00: Lack of immunity under the 1920 Trillion Dollar Treaty. [00:00:37] Speaker 03: Good morning, Mr. Silbert. [00:00:38] Speaker 03: You may proceed when you're ready. [00:00:40] Speaker 07: Thank you, Your Honor. [00:00:40] Speaker 07: Good morning, and may it please the Court, Greg Silbert, for Hungary. [00:00:45] Speaker 07: So there are only two possibilities. [00:00:49] Speaker 07: Either the plaintiffs were Hungarian nationals at the time of the alleged takings, or the plaintiffs were not Hungarian nationals. [00:00:57] Speaker 07: And either way, there is no jurisdiction over their plaintiffs. [00:01:02] Speaker 07: If the plaintiffs were Hungarian nationals, which is what they asserted and this court held in Simon 1, then there's no jurisdiction under the Supreme Court's decision in Philip. [00:01:13] Speaker 07: If plaintiffs were not Hungarian nationals, [00:01:16] Speaker 07: That means they were either Czechoslovak nationals or states. [00:01:22] Speaker 07: So let's first assume that there were Czechoslovak national plaintiffs. [00:01:27] Speaker 07: Now, as you know, we've argued in our briefs there were not Czechoslovak national plaintiffs, but let's assume that there were some. [00:01:36] Speaker 07: In that event, their claims would be barred by the treaty exception [00:01:40] Speaker 07: because Article 26 of the 1947 Peace Treaty provides the exclusive remedy for the same property losses that plaintiffs assert. [00:01:52] Speaker 03: But part of our reasoning in Simon 1 was that the Treaty of Peace remedies were not exclusive. [00:02:01] Speaker 03: And why doesn't that stand, whether the plaintiffs fall under Article 27, because under Hungarian jurisdiction, which might not exclude people who are Czechoslovak nationals, and or apply if they are Czechoslovak nationals and therefore governed by Article 26? [00:02:22] Speaker 07: So thank you for two reasons. [00:02:26] Speaker 07: And as the court, I think your question acknowledged, someone one made that termination of non exclusivity as to Article 27. [00:02:34] Speaker 07: Article 26 is a different provision. [00:02:37] Speaker 07: Article 40 also. [00:02:40] Speaker 07: Well, Article 40 was the provision of the treaty that involves state-to-state negotiations for disputes under Article 27. [00:02:48] Speaker 07: There's a separate provision of the treaty that involves disputes under Article 26. [00:02:54] Speaker 07: Those are not fed to Article 40. [00:02:57] Speaker 07: But I think most importantly, there is unique text of Article 26. [00:03:02] Speaker 07: And also, the court's analysis in Simon 1 depended very heavily on the plaintiff's Hungarian nationality. [00:03:09] Speaker 07: So let me begin with the text of Article 26. [00:03:12] Speaker 07: There are several unique provisions of Article 26, not in Article 27, that show that Article 26 was exclusive. [00:03:22] Speaker 07: Number one, Article 26-8 says that Hungary and the property owner may agree [00:03:30] Speaker 07: on alternative arrangements in lieu of the provisions of Article 26. [00:03:35] Speaker 07: Now if Article 26 were not exclusive, [00:03:39] Speaker 07: and a claimant, a plaintiff were free to assert claims for the same property losses without agreement by Hungary, then a provision saying that the property owner and Hungary could agree on alternative arrangements would make no sense and do nothing. [00:03:58] Speaker 07: So that provision shows that Article 26 is exclusive. [00:04:02] Speaker 07: In addition, [00:04:04] Speaker 07: Article 26 contains a substantive compromise of rights. [00:04:09] Speaker 07: It says that in situations where the property cannot be returned, which is what the plaintiffs allege here, that the claimant will receive in Hungarian currency two-thirds of the replacement value of the property. [00:04:27] Speaker 07: Again, if the plaintiffs were free to assert claims in another forum for 100% of the value of the property, which is what the plaintiffs are doing here, that substantive compromise would have no effect, right? [00:04:42] Speaker 07: If Article 26 says you get, if the property cannot be returned, you get two-thirds of the value of the property, they have to be assuming that that provision will have some effect [00:04:54] Speaker 07: on the plaintiff's recovery, and that means that the recovery is in Article 26 and not an alternative forum. [00:05:02] Speaker 07: In addition to that, there is an express forum requirement and time requirement to bring the Article 26 claim. [00:05:14] Speaker 07: So Article 26 says all these provisions that I'm referring, again, are unique to Article 26, not in Article 27, not in the Port Simon 1 decision. [00:05:24] Speaker 07: Article 26 says the application shall be made to the Hungarian authorities. [00:05:32] Speaker 07: This application before you today was not made to the Hungarian authorities. [00:05:37] Speaker 07: It also says [00:05:39] Speaker 07: that the application shall be made within one year of the coming into force of the treaty unless the claimants can show that it would not have been possible to bring the claim. [00:05:53] Speaker 07: So Article 26, unique text, contains a time requirement and a specific form. [00:06:02] Speaker 07: And again, those provisions show that the intent of the treaty was for Article 26 to provide an exclusive remedy. [00:06:12] Speaker 07: In addition to that, those are all textual clues about Article 26. [00:06:16] Speaker 07: In addition to that, as we've said and as this Court acknowledged in Simon 1, it is in the nature of a peace treaty to resolve claims by the signatory nations and their nationals against the belligerent nation [00:06:32] Speaker 07: The only reason that the court found that Article 27 was not an exclusive remedy was that Article 27 addressed claims by Hungarian nation. [00:06:45] Speaker 03: I don't read that to be the only reason. [00:06:47] Speaker 03: I think that they said in its terms it wasn't exclusive. [00:06:50] Speaker 03: And the same could be said about 26. [00:06:53] Speaker 03: I appreciate the arguments you've made about the text. [00:06:56] Speaker 06: Fair enough, Your Honor. [00:06:57] Speaker 06: But that decision has been vacated. [00:07:02] Speaker 06: Yes, it has. [00:07:03] Speaker 07: So what precedential value? [00:07:05] Speaker 07: Well, Simon 1, no, Simon 2 was vacated. [00:07:10] Speaker 07: Simon 1 was not vacated. [00:07:14] Speaker 07: The holding of Simon 1 was reversed in Philip. [00:07:16] Speaker 07: But the decision itself has not been vacated. [00:07:19] Speaker 06: To what extent does the executive agreement bear on your argument? [00:07:23] Speaker 06: On the executive agreement, the 1947? [00:07:26] Speaker 07: 1973, was it? [00:07:29] Speaker 07: Oh, the 1973 treaty. [00:07:31] Speaker 07: The 1973 treaty is an example of a state-to-state negotiation under the terms of Article 26 that show how Article 26 is enforced. [00:07:44] Speaker 07: So Article 26, it gives a private right of action for claimants to seek redress from Hungary by applying to the Hungarian authorities [00:07:53] Speaker 07: The treaty also says that if there's any dispute about the rights under Article 26, then there is a state-to-state process by which the interested governments can resolve claims for themselves and their nationals. [00:08:09] Speaker 07: So there have been a number of those state-to-state agreements pursuant to Article 26 where, in addition to whatever private claims were made, [00:08:17] Speaker 07: Hungary paid additional restitution to the governments of nationals whose property was taken. [00:08:27] Speaker 07: And that executive agreement that Your Honor refers to, the 1973 agreement, is one such agreement between Hungary and the United States. [00:08:34] Speaker 07: Hungary entered into other Article 26 agreements with other nations, including the United Kingdom, including Canada, a number of different nations. [00:08:43] Speaker 07: So there have been, in addition to whatever private claims were paid [00:08:47] Speaker 07: There was a number of payments made under those state-to-state agreements. [00:08:52] Speaker 07: What that shows again is that the scheme that is envisioned by Article 26 is a scheme of direct claims made to the Hungarian authorities or, alternatively, state-to-state negotiations. [00:09:06] Speaker 07: It leaves no room for the litigation that you have in front of you. [00:09:11] Speaker 07: which complies with none of the restrictions of Article 26, does not meet the form requirement, does not meet the time requirement, does not, I just not said that they would be limited to two-thirds of the value of the claim. [00:09:25] Speaker 07: This is a separate kind of proceeding to address the exact same property losses that Article 26 does not allow. [00:09:33] Speaker 03: You argue quite at length about the commercial nexus requirement and the question of tracing the property that plaintiffs have identified back to the originally expropriated property, if the burden [00:09:52] Speaker 03: is, as you say, on the plaintiff from beginning to end, wouldn't that effectively nullify the FSIA's expropriation exception if just all a nation state would need to do is liquidate the property and it would become [00:10:09] Speaker 03: impossible to trace. [00:10:10] Speaker 03: And as I understood it, there's a burden shift to take account of that where the plaintiff needs to come forward, but then the burden is on the nation state to show that the property is not traceable. [00:10:30] Speaker 03: Sorry, is traceable. [00:10:32] Speaker 07: Thank you. [00:10:33] Speaker 07: Yes. [00:10:34] Speaker 07: So as to that provision, this is a, this is a sexual interpretation question, right? [00:10:41] Speaker 07: So the analysis begins with the text of the statute. [00:10:44] Speaker 07: The relevant text is property exchanged for such property. [00:10:50] Speaker 07: So there has to be an exchange relationship, a path of exchange that exists between the property that the plaintiffs rely on to create FSA jurisdiction and the specific property that was taken from a plaintiff. [00:11:05] Speaker 07: Now, Your Honor asked about the burdens there and nullification. [00:11:10] Speaker 07: two points on that first point remember this is a foreign cubed lawsuit right this is a a foreign the allegation is that a foreign defendant armed a foreign plaintiff in a foreign right so in in the ordinary course there would be no u.s jurisdiction over that kind of claim for u.s jurisdiction to exist which is the exception [00:11:34] Speaker 07: It would have to be some kind of substantial connection to the United States. [00:11:39] Speaker 07: And that's what this exchange relationship gets at, right? [00:11:43] Speaker 07: So as to what that connection is and then what the burden is, it's not any property in a sovereign's possession. [00:11:53] Speaker 07: after an expropriation that creates a substantial connection between the United States and wrongdoing that occurred decades earlier. [00:12:02] Speaker 07: And let's be accurate. [00:12:03] Speaker 03: So the defendant would be able to show, no, no, the property in question does not trace back to the expropriated property because [00:12:17] Speaker 03: Here's what we did with the expropriated property. [00:12:19] Speaker 03: It has nothing to do with these contemporary connections with the US that the plaintiffs are pointing to. [00:12:27] Speaker 03: I mean, that's something that is really only in the capability of the defendants. [00:12:32] Speaker 03: to do. [00:12:33] Speaker 03: And so if a defendant wanted to protect against any situations in which defendants, nation states, companies, individuals want to shield themselves from jurisdiction, they're the only ones who are really in a position to make that showing. [00:12:48] Speaker 03: And in the absence of that, doesn't our case law basically say you've commingled, and now you have this commercial relationship, raises a presumption that's on the defendant's side. [00:13:00] Speaker 07: that there is this that the commercial activities of uh of the defendant are using that so i don't think this court's case law goes so far judge pullard but even if it did this court's case law that you're referring to i think simon one was before helmer right so remember then we have the intervening decision by the spring court in helmer and helmer said it's not enough [00:13:24] Speaker 07: that there might be jurisdiction or that you have a good argument that the jurisdictional facts are present. [00:13:31] Speaker 07: You have to show that the plaintiff has to make any valid claim that the jurisdictional facts are in fact [00:13:38] Speaker 07: prove, right? [00:13:39] Speaker 03: Eventually, the facts have to be proved. [00:13:41] Speaker 03: And it is on the district court to establish the jurisdictional facts early. [00:13:47] Speaker 03: So were we to remand, it would be up to the district court as a factual matter to play this, too. [00:13:53] Speaker 03: But I'm not sure I agree with your reading of Helmrich. [00:13:56] Speaker 03: It seems to me that Helmrich is about the distinct situation where the merits and the jurisdictional issue really are overlapping. [00:14:08] Speaker 03: We, I guess, looked for some way to see daylight between those. [00:14:13] Speaker 03: We said, well, plausible claim, a la Bell versus Hood, is enough to establish jurisdiction. [00:14:19] Speaker 03: And then you have to have a valid claim for purposes of 12b6. [00:14:22] Speaker 03: That's all in legal terms, whether something could be plausible or valid. [00:14:27] Speaker 03: I don't think it touches the twig ball, if you will, plausibility standard, which is about facts. [00:14:34] Speaker 03: And I take your point that the facts, we're in an immunity domain, so the facts need to be resolved. [00:14:43] Speaker 03: But those haven't been resolved by the district court here. [00:14:47] Speaker 03: And why isn't it open to the district court, and in fact the obligation of the district court, to address this next question as a factual matter? [00:14:56] Speaker 03: based on the police. [00:14:58] Speaker 07: So, um, there's sort of two questions there. [00:15:00] Speaker 07: Let me take them in turn, your honor. [00:15:02] Speaker 07: I understand. [00:15:02] Speaker 07: I think that reading of homework that you're pointing to, there's some additional language in helmet that talks about, um, kind of the front to a foreign sovereign of [00:15:13] Speaker 07: exercising jurisdiction over claims when the jurisdictional facts are not actually there, not actually present. [00:15:20] Speaker 07: The predicates for jurisdiction might exist, but don't actually exist. [00:15:24] Speaker 07: So let me take that back to the statutory language. [00:15:27] Speaker 07: The statutory language is property exchange for such property. [00:15:32] Speaker 07: So there has to actually be an exchange relationship between those two pieces of property. [00:15:37] Speaker 03: But that's something that just can't be resolved other than through factual determination. [00:15:42] Speaker 03: If it's plausibly pleaded and that gets back to the discussion we were having about the shifting. [00:15:48] Speaker 07: Very sorry to interrupt you, Judge Pillard. [00:15:49] Speaker 07: Yes, that goes exactly to the burden-shifting framework that you mentioned earlier. [00:15:55] Speaker 07: The initial burden, as this court said in Wyoak, is on the plaintiffs. [00:16:00] Speaker 07: And plaintiffs have to both make allegations and produce evidence that an exception applies. [00:16:07] Speaker 07: At that point, the burden shifts to Hungary. [00:16:10] Speaker 07: So we don't think, with respect to property tracing, that the plaintiffs have [00:16:15] Speaker 07: alleged or produced evidence that any exchange relationship exists between property United States and Hungary's property, but even if they had Hungary did produce evidence as the district were noted from [00:16:29] Speaker 07: a number of respected scholars showing that it would be impossible to trace any property in the United States or currently in Hungary's possession to property that was expropriated from these named plaintiffs. [00:16:41] Speaker 03: But I think we can agree that the district court has not made fact findings on this. [00:16:46] Speaker 03: The district court, I think, erroneously rested on allegations on this point. [00:16:51] Speaker 03: where if the pleading is sufficient, she needs to go a step further. [00:16:57] Speaker 07: Do you agree with that? [00:16:58] Speaker 07: I do agree with that. [00:16:59] Speaker 07: I don't think the pleadings were sufficient. [00:17:02] Speaker 07: I hear you. [00:17:03] Speaker 07: Yeah. [00:17:03] Speaker 07: I know you know our point on that, Your Honor. [00:17:05] Speaker 07: And I would just say that Your Honor's observation is correct, not only of property tracing, but of other aspects, too, including the court's findings of Czechoslovak nationality, right? [00:17:17] Speaker 07: The court said, well, it's not impossible that somebody might have been [00:17:21] Speaker 07: a Czechoslovak national, but that wouldn't do it. [00:17:24] Speaker 07: If she is going to pin jurisdiction on Czechoslovak nationality, which again, we don't think she can for the reasons I started with, treaty exception, [00:17:34] Speaker 07: There would have to be an actual finding that the plaintiffs were Czechoslovak nationals, not just that the pleadings don't 100% exclude that possibility, which is essentially what she found. [00:17:46] Speaker 03: And on that, on the Czechoslovak nationality, you lean heavily on this permit requirement, but aren't you over reading that to apply to plaintiffs in this [00:17:58] Speaker 03: situation, doesn't Article 62 and the permit requirement you talk about just apply to individuals who acquired rights of citizenship of the state that previously controlled territory, for instance, Hungary, between 1910 and 1918? [00:18:12] Speaker 07: Well, I think that means acquired rights of citizenship in Czechoslovakia after 1910, which all of these plaintiffs would have, because they were born after 1910. [00:18:24] Speaker 03: But what if they acquired them after 1918, then that permit [00:18:29] Speaker 07: I don't think it cuts, there's no, it just says anyone who acquired a rights of citizenship after 1910, which would be all of these plaintiffs. [00:18:36] Speaker 07: And then the thing about article 62 that is significant is it applies the permit requirement specifically to people who have required rights of citizenship in territory that was ceded to Czechoslovakia by the Trianon tree. [00:18:52] Speaker 07: So it's not, it's not all of, [00:18:55] Speaker 07: Czechoslovakia. [00:18:56] Speaker 07: It's that specific territory. [00:18:57] Speaker 07: And if you look at page 22 of the plaintiff's reply, or certify, I guess it is, they tell you that the territory that they're talking about, subcarpathian Ruthenia, was seeded by the Treaty on Treaty, and they give you some specific treaty provisions to do that. [00:19:14] Speaker 07: So that Article 62, I'm sorry, you want to ask me a question. [00:19:18] Speaker 03: I think I have my dates and my sequence wrong. [00:19:20] Speaker 03: But when I was reading the briefs, my impression was that [00:19:24] Speaker 03: that it wasn't clear that that requirement of getting a permit was applicable. [00:19:33] Speaker 07: I believe that it is. [00:19:35] Speaker 07: I don't think that even the plaintiffs have argued any kind of hate restriction on that provision. [00:19:41] Speaker 07: So I don't think that issue is for you. [00:19:43] Speaker 07: But even if you wanted to raise it to respond to, I think that what the I don't have it right in front of me. [00:19:50] Speaker 07: But I think with the [00:19:51] Speaker 07: What that provision says is acquired rights of citizenship after 1910, which all of these places would have. [00:19:59] Speaker 03: In what's your position with respect to statelessness? [00:20:01] Speaker 03: You started out early. [00:20:02] Speaker 07: Thank you very much. [00:20:03] Speaker 07: And then we're almost out of time here, but we'll give you time. [00:20:08] Speaker 07: Thank you. [00:20:09] Speaker 07: I appreciate it. [00:20:11] Speaker 07: So as to statelessness, here's what the Supreme Court said. [00:20:15] Speaker 07: It said, [00:20:16] Speaker 07: The taking of a foreigner's property implicates the international legal system because it constitutes an injury to the alien state of nationality. [00:20:27] Speaker 07: And that is the principle of international law that is reflected in the domestic take control. [00:20:33] Speaker 07: So a stateless person, by definition, is someone who does not have a state of nationality. [00:20:40] Speaker 07: right. [00:20:41] Speaker 07: So a taking from a stateless person is an injury to that individual. [00:20:46] Speaker 07: It is not an injury to another sovereign state and the international law of expropriation is triggered [00:20:54] Speaker 07: solely by injuries to another sovereign state. [00:20:58] Speaker 07: That's what the third restatement tells you explicitly at Section 713. [00:21:05] Speaker 07: Our friends on the other side, they point you to the second restatement, Section 175. [00:21:11] Speaker 07: That provision also refutes their article. [00:21:15] Speaker 07: So if you look at Section 175, it's in a sequence, 174, 175, right? [00:21:22] Speaker 07: 174 and these are general provisions about international law overall, not the law of expropriation in particular, but even even as to international law, generally section 174 says a violation of international law may be asserted by the nation of which the individual is a is a natural, but not any other. [00:21:45] Speaker 07: Right. [00:21:46] Speaker 07: Um, and then [00:21:47] Speaker 07: 175 follows up and says, it may not be asserted by an individual against the state, except, and then it gives you three exceptions, right? [00:22:00] Speaker 07: A, B, and C. Now, none of those exceptions are the international law of expropriation. [00:22:08] Speaker 07: which is the Supreme Court told us in Philip, the body of law that the expropriation exception references. [00:22:15] Speaker 03: So I have a question that may or may not be a bit academic. [00:22:20] Speaker 03: OK. [00:22:20] Speaker 03: I mean, I take it that on whatever theory of statelessness the plaintiffs here want to proceed, they have to point to law, likely customary international law, to support it. [00:22:34] Speaker 03: And that's a steep climb. [00:22:37] Speaker 03: But just conceptually, isn't the question about whether you're stateless or the national of another state, doesn't that go more to remedy than to the [00:22:54] Speaker 03: illegality or not of taking. [00:22:56] Speaker 03: In other words, international law remits individuals to state to state discourse to receive or leave. [00:23:08] Speaker 03: So someone who is stateless might not have a remedy under international law because they have no sponsor, no state to speak for them. [00:23:17] Speaker 03: But arguably, the Foreign Sovereign Immunities Act is itself [00:23:24] Speaker 03: a congressionally created remedy. [00:23:27] Speaker 03: And therefore, if I'm right in my suggestion that the expropriation may be just as unlawful but not have a remedy in international law itself, why wouldn't that suffice to provide a remedy if the FSIA [00:23:47] Speaker 03: explicitly creates one. [00:23:49] Speaker 07: So it's more than remedy, Your Honor. [00:23:51] Speaker 07: International law governs the relation between states. [00:23:55] Speaker 07: Now, as the Supreme Court pulled us in Philip, after the war in particular, there were some developments, especially in the areas of human rights law, where international law came to address the treatment of individuals. [00:24:07] Speaker 07: Human rights. [00:24:08] Speaker 07: In the human rights context. [00:24:09] Speaker 07: But in the property context, which is the context that's relevant here for expropriation, international law governs the relationship [00:24:17] Speaker 07: between sovereign states. [00:24:19] Speaker 07: So if there is no affront to another sovereign state, there is no violation of international law. [00:24:25] Speaker 07: There may be violations of local law, as Article 175 tells us. [00:24:30] Speaker 07: There may be, if there's a separate treaty or a local law or an agreement with an individual, that may allow an individual to have rights or claims. [00:24:42] Speaker 07: But international law itself [00:24:44] Speaker 07: requires a relationship between two sovereign states. [00:24:48] Speaker 07: That's what the Fifth Circuit, I'm sorry, the Eleventh Circuit explained in Meserhane. [00:24:53] Speaker 07: And it's what Supreme Court held in Philip when it addressed the expropriation exception, right? [00:25:01] Speaker 07: There has to be an injury to another sovereign. [00:25:05] Speaker 07: And within international law, the individual and his or her property have no independent existence. [00:25:12] Speaker 07: It's the sovereigns. [00:25:14] Speaker 06: Isn't it also the case that, at least I think we have, that FISA is not a remedy statute. [00:25:21] Speaker 06: It's a jurisdictional statute. [00:25:24] Speaker 06: And in order to obtain jurisdiction, because of sovereign immunity, you have to fit yourself within one of the exceptions. [00:25:34] Speaker 06: One of the exceptions is expropriation. [00:25:37] Speaker 06: But the Supreme Court held that the expropriation exception doesn't apply if the individual is not a citizen of another state. [00:25:49] Speaker 07: That is exactly correct, Your Honor. [00:25:51] Speaker 07: And that was the second leg of my answer to your question, Judge Fuller. [00:25:54] Speaker 07: I'm sorry I didn't get to it. [00:25:55] Speaker 07: But you said it, Judge Randolph. [00:25:57] Speaker 07: So in McKesson, this court held that the FSIA does not provide any remedy. [00:26:02] Speaker 07: This is purely a jurisdictional stand. [00:26:05] Speaker 07: And so it can't be that the FSA provides a remedy or or cause of action for a claim that would otherwise remedy. [00:26:16] Speaker 07: But but more importantly jurisdictionally there is such Randolph said there there has to be a violation of international law. [00:26:24] Speaker 07: The international law regulates the relationship between states. [00:26:29] Speaker 07: If one nation takes property of the national of another nation, it reduces the wealth of the other nation, and therefore it is in front to that other nation. [00:26:42] Speaker 07: And therefore, the Supreme Court told us in Phillip, [00:26:47] Speaker 07: Well, if a nation takes property from its own national or a stateless person, that may be a grave injustice to that individual. [00:26:56] Speaker 07: And we all know there were grave injustices committed here. [00:27:00] Speaker 07: But it is not a violation of international law because it does not take the rights. [00:27:06] Speaker 06: Before you sit down, on the judicial stoppage, what is the prejudice that your clients would experience [00:27:18] Speaker 06: I mean, the elements of judicial estoppel or one of the elements is prejudice to the party. [00:27:26] Speaker 07: Well, that's right, Your Honor. [00:27:28] Speaker 07: And I think unfairness, I think, is the way the test puts it. [00:27:32] Speaker 07: I think, you know, remember, the very first decision in this case was a decision that dismissed the complaint. [00:27:42] Speaker 07: And this court in Simon 1, the very first appeal, were now on [00:27:46] Speaker 07: appeal number three, right? [00:27:48] Speaker 07: But in the very first appeal, this court reversed that decision, sent the entire case back, and you had a sovereign defendant litigating for a number of years now at every level of the federal court system, district court, this court, supreme court, all based on the premise that these plaintiffs were Hungarian [00:28:11] Speaker 07: I don't think there's any way you can read Simon 1. [00:28:13] Speaker 07: And I take your point, Your Honor. [00:28:14] Speaker 07: There was more to that decision. [00:28:16] Speaker 07: But repeatedly, in Judge Srinivasan's decision there, the court says these were Hungarian nationals. [00:28:24] Speaker 07: The Article 27 is a fundamentally different provision because it deals with Hungarian nationals. [00:28:30] Speaker 03: But as the district court held, this is a balance of equities, and we look at that under a discretion standard. [00:28:37] Speaker 03: And the up and down to our court and to the Supreme Court is a prerogative of your client. [00:28:47] Speaker 03: a requirement could have stayed in the district court and had factual determinations and perhaps been done a long, long time ago. [00:28:55] Speaker 03: So we're reviewing this issue on an abusive discretion standard, right? [00:29:00] Speaker 07: You are, Your Honor. [00:29:01] Speaker 07: In an era of laws, of course, always abusive discretion. [00:29:04] Speaker 07: With respect to finishing out for Judge Randolph's question about unfairness or prejudice, I think you have to view this. [00:29:12] Speaker 06: Well, I just want to follow up on that, because I wondered, [00:29:15] Speaker 06: What we're dealing with is a sovereign immunity step, right? [00:29:20] Speaker 06: And there are plenty of cases, Harlow versus Fitzgerald comes to my mind, a Supreme Court decision, that talks about what the prejudice is for someone who claims immunity and yet has to go through discovery and so on and so forth. [00:29:35] Speaker 06: And the whole purpose of sovereign immunity is to prevent that. [00:29:38] Speaker 06: So the very fact that you have to [00:29:41] Speaker 06: to go again for the third time is prejudicial under Supreme Court precedents, including Harlow versus Fitzgerald, because you're being required to do something that sovereign immunity is supposed to prevent. [00:29:55] Speaker 06: Thank you, Judge Randolph. [00:29:56] Speaker 07: That was the point I was going to try to make. [00:29:58] Speaker 07: I don't think I would have made it as eloquently as you would have. [00:30:02] Speaker 07: But yeah, that was exactly it. [00:30:03] Speaker 07: So you have to view the prejudice question in the context of the FSIA. [00:30:07] Speaker 07: And the basic objective of the FSIA is to free foreign sovereign defendants from suit, not just from liability, but from suit. [00:30:17] Speaker 07: And so to hail a foreign sovereign into a US court, require the foreign sovereign to [00:30:22] Speaker 07: participate in discovery and litigation to bear the expense to bear what is viewed as an affront to the sovereign power of another nation to submit itself to the courts of the United States. [00:30:34] Speaker 07: Those are issues that all nations face with respect to one another. [00:30:39] Speaker 07: There are standards that are set by the FSIA and those standards are generally that [00:30:45] Speaker 07: a sovereign defendant should be free from suit as soon as possible when a defense is available. [00:30:50] Speaker 07: And so I think if the whole premise of Simon 1 was that they were Hungarian nationals, now if we're suddenly saying they're not, then we've been subjected to years of litigation without any basis. [00:31:04] Speaker 07: That adds up to prejudice for purposes of the FSIA. [00:31:11] Speaker 03: Right. [00:31:11] Speaker 03: We will give you. [00:31:13] Speaker 03: Let me just ask this one thing. [00:31:14] Speaker 03: What's the additional discovery that would have to be in the case? [00:31:18] Speaker 07: Well, I think that goes to Judge Pillard's observation before that the district court seemed to base its conclusions on the meetings and not on actual fact finding. [00:31:32] Speaker 07: There already was discovery. [00:31:34] Speaker 07: So I don't know that there would be an opportunity for additional discovery, but certainly the [00:31:40] Speaker 07: to find facts. [00:31:42] Speaker 07: Here, the court said, well, if you look at it, this plaintiff says that they were born at some point in Ruthenia, so it's not impossible that their parents lived in Ruthenia 10, 20 years earlier. [00:31:55] Speaker 07: That's not a finding of fact. [00:31:58] Speaker 07: And Judge Pillard is, I think we certainly agree on this point, Judge Pillard. [00:32:03] Speaker 07: For the court to assume jurisdiction, the facts must actually show. [00:32:09] Speaker 07: that all of the jurisdictional prerequisites are satisfied that includes. [00:32:15] Speaker 03: So that discovery was affected on the nationality issue. [00:32:19] Speaker 07: There was well there was discovery. [00:32:22] Speaker 07: There was discovery. [00:32:23] Speaker 07: I don't know that frankly there was that either side had we don't have facts about the nationality. [00:32:31] Speaker 07: I don't know that they put in discovery about [00:32:35] Speaker 07: the actual individual plaintiffs nationally. [00:32:37] Speaker 07: But my colleague here, who is trial counsel, may correct me on that while we sit down. [00:32:41] Speaker 07: And I may come back here and revise that when I come up again. [00:32:44] Speaker 07: But I don't know, as I stand here right now, I don't know if there was specific discovery on that. [00:32:50] Speaker 07: There was discovery on other issues, including property tracing. [00:32:55] Speaker 02: Thank you. [00:32:55] Speaker 07: Thank you. [00:33:04] Speaker 03: Morning, Mr. Zell. [00:33:05] Speaker 04: Morning, Judge Pillar. [00:33:08] Speaker 04: And may it please the court. [00:33:14] Speaker 04: Before I respond to my friend's comments during his oral argument, I'd like to note that we have with us today some special guests, the family of Rosalie Simon, the lead named plaintiff in this case. [00:33:32] Speaker 04: Rosalie herself could not be here. [00:33:34] Speaker 04: because she's teaching high school students about the Holocaust on this Holocaust Remembrance Day. [00:33:42] Speaker 04: But she is, she did send her children, Mitch and Ruth Simon, and her daughter-in-law, Deborah Cohen Simon, and her great-grandson, who's writing a report about this case, Louis Simon. [00:34:00] Speaker 04: Also with us today is the daughter of [00:34:05] Speaker 04: Rosalie's sister, Charlotte Weiss. [00:34:09] Speaker 04: Your Honor, and may I also say that for the record that my name is Mark Zell and I'm representing the plaintiffs along with my colleague, David Weinstein. [00:34:20] Speaker 02: And we welcome you all to court today. [00:34:24] Speaker 02: Thank you for being here. [00:34:25] Speaker 04: And my colleagues, Chuck Fax, Charles Fax, and Paul Gaston. [00:34:29] Speaker 04: To be honest, just a few hours ago, in my home in Israel, millions of people dropped everything they were doing, even the lighting from their vehicles in the middle of the highway, to stand in silence. [00:34:46] Speaker 04: For the memory of the six million, today, amazingly, when we're hearing these arguments, is Yom HaShoah, Holocaust Remembrance Day. [00:34:57] Speaker 04: Before I address the issues of statelessness and nationality under Philip, I'd like to respond quickly to some points that my colleague, my friend, made during his oral argument regarding the rules of international law, expropriation and law under the restatement second. [00:35:22] Speaker 04: First, I would point out very clear from the Philip opinion that [00:35:27] Speaker 04: The source, the proper source or description of international laws that existed at the time the Foreign Sovereign Immunities Act was enacted in 1976 is not the third restatement, but rather the second restatement. [00:35:41] Speaker 04: And the second restatement has, and this was quoted by the Supreme Court in Philip, [00:35:48] Speaker 04: two sections that are directly pertinent. [00:35:50] Speaker 04: These are the sections quoted by the Supreme Court in Philadelphia. [00:35:53] Speaker 04: One is section 185, which says that the taking by a state of property of an alien, I'll come back to that point in a moment, is wrongful under international law. [00:36:04] Speaker 04: If either it is not for a public purpose, and we would add under section 166 of that same restatement, is discriminatory. [00:36:14] Speaker 04: And discriminatory, the concept of discrimination is described in the restatement second, and it clearly applies to the facts of this case. [00:36:22] Speaker 04: And also you have to show, or you may show that there's not been just compensation and so on. [00:36:27] Speaker 04: That definitely hasn't happened in this case. [00:36:29] Speaker 04: The Philip Court also cited Restatement Section 192, which defines the meaning of taking a property. [00:36:39] Speaker 04: Again, a principle of international expropriation law. [00:36:43] Speaker 04: And that says the conduct attributable to a state that is intended to and does effectively deprive an alien. [00:36:51] Speaker 04: of substantially all the benefit of his interests and property that constitutes a taking in violation of international law. [00:36:57] Speaker 03: But Mr. Zell, under the second restatement, you're right that there are these references to a person being an alien for purposes of the responsibility of the state for the injury under the domestic takings rule. [00:37:13] Speaker 03: But it also goes on, and this is the second restatement, [00:37:17] Speaker 03: Um, in section 175 to talk about responsibility of a state under international law for an injury to an alien. [00:37:27] Speaker 03: Uh, and comment D of section 175 specifically references that a stateless alien is without a remedy since there is no state withstanding to espouse his claim. [00:37:46] Speaker 04: So your honor s [00:37:47] Speaker 04: question along these lines during my colleague's argument. [00:37:51] Speaker 04: I think Your Honor put her finger on it correctly when she suggested that the qualifications in section 175 go to remedies under international law. [00:38:03] Speaker 04: But they don't contradict what Congress did under the FSIA in 1976. [00:38:09] Speaker 04: Recall that the Supreme Court in Philip also said that the expropriation exception is unique [00:38:16] Speaker 04: in the world in terms of state practice and international expropriation law. [00:38:23] Speaker 04: There are no other countries on the earth that have a provision in their law limiting immunity in a case of expropriations, as we do here in the United States. [00:38:34] Speaker 04: When Congress enacted that particular exception, it was cognizant of the situation in the state of international law. [00:38:46] Speaker 04: And nevertheless, clearly created the possibility of an action. [00:38:51] Speaker 04: In other words, and here I have to clarify again, the Foreign Sovereign Immunities Act, Judge Randolph, is not only a jurisdictional statute. [00:38:59] Speaker 04: It has jurisdictional ramifications. [00:39:01] Speaker 04: But it gives, as Judge Kagan said recently in the Casir case, that it deals with the amenability of foreign sovereigns. [00:39:10] Speaker 04: That is the core of the statute. [00:39:13] Speaker 04: Of course, if they are [00:39:16] Speaker 04: within an exception, then the court has jurisdiction to proceed under Section 1330, Title 28. [00:39:23] Speaker 04: But Section 175 is a remedial concept. [00:39:28] Speaker 04: And it doesn't say, and what it goes on to say, by the way, that the responsibility of a state under international law for an injury to an alien cannot be invoked directly by the alien. [00:39:38] Speaker 04: This is not only stateless aliens, by any alien. [00:39:41] Speaker 04: against the state, except as provided by the law of the expropriating state, international agreement about which my colleague David Weinstein will have more to say during his argument, and an agreement between the state and the alien, which does not exist here. [00:39:56] Speaker 03: So you're relying on B there? [00:40:00] Speaker 04: No, we will be relying on B. I'm not arguing that particular point at the moment. [00:40:04] Speaker 04: This is dealing with the effect of the Triennon Treaty of 1920 on [00:40:09] Speaker 04: of this section, but we are relying on the expropriation exception of the FSIA. [00:40:17] Speaker 04: Okay, because think about this. [00:40:18] Speaker 03: So how does that fit within 175? [00:40:21] Speaker 03: Because the FSIA itself incorporates [00:40:26] Speaker 03: a requirement that the property be taken in violation of international law. [00:40:33] Speaker 03: And the Supreme Court was well cognizant of the point that you just made about the uniqueness of the FSIA piercing of national immunity for purposes of recovering for expropriations. [00:40:47] Speaker 03: It was quite attentive to keeping that [00:40:53] Speaker 03: extraordinary cause of action narrow. [00:40:56] Speaker 03: And so I guess the bottom line question is, where in customary international law is there any support for the notion that a stateless individual would be outside of the domestic taking rule? [00:41:14] Speaker 04: I have a couple of answers to that. [00:41:15] Speaker 04: The first one deals with section 171 of the restatement. [00:41:20] Speaker 04: Second, which defines the term alien. [00:41:23] Speaker 04: When you look at that particular section, you'll see that it clearly defines it in a way, a person is an alien for purposes of the responsibility of a state for injury to an alien relating to the issues in section 175, if he is not a national of the respondent state. [00:41:44] Speaker 04: Now, and then it goes on to say in comment G to that very section, your honors. [00:41:51] Speaker 04: that a stateless person comes within the definition of alien, but the responsibility is limited as provided in section 175, and our argument is under section 175, Congress has superseded customary international law on this point by allowing an alien, including stateless aliens, to bring a claim against a respondent foreign state. [00:42:22] Speaker 04: What I'd like to add to that is that what would happen, let's take the case of a foreign national alien. [00:42:32] Speaker 03: Let me just stop you there, though, because if you say that Congress has superseded customary international law, that seems to me that that would have given a platform to plaintiffs [00:42:50] Speaker 03: in Philip and given them a remedy that would have negated the Supreme Court's narrowing reading. [00:43:00] Speaker 04: I respectfully don't agree. [00:43:03] Speaker 04: But what Congress did in enacting this exception, let's take the example that I think will illustrate this point. [00:43:12] Speaker 04: Suppose the alien we're talking about is not a state alien, but rather [00:43:17] Speaker 04: the a citizen of a foreign state other than the respondent state okay under the reading that we have a section 175 that alien would also not have a recourse a remedy under international law well international law supports and i think that this is clearest in uh helmer we walk through why expropriation is a violation of international [00:43:45] Speaker 03: So there is established law that an expropriation by one nation state of the property of another nation state is in violation of international law. [00:43:59] Speaker 04: That's true. [00:44:01] Speaker 04: You called my colleague citing the language in Philip, which was basically historic, as Chief Justice Roberts was reviewing the genesis of the domestic takings rule. [00:44:14] Speaker 04: said that under international law, individuals in the traditional sense were never the subjects of international law. [00:44:20] Speaker 04: Only states had rights under international law, and individuals couldn't bring action. [00:44:24] Speaker 04: That changed with the Congress's enactment of the FSA. [00:44:27] Speaker 04: It was an extraordinary provision. [00:44:29] Speaker 04: And it's true that Peller says we have to be careful about extending it, but at the same time, we can't deny the fact that aliens who are the victims of an expropriation, either because they're citizens of a foreign state or stateless, now have recourse under, at least they have the right to argue that the respondent state no longer is entitled to immunity. [00:44:57] Speaker 04: Now, whether they have a cause of action, that's not something you have to say. [00:45:02] Speaker 03: Let me ask you more concretely about the claims, the claims that the district court allowed to go ahead and the claims that it dismissed. [00:45:12] Speaker 03: On the Lebovitch sisters, if we were to look at Article 6 of the Saint Germain Treaty as a place to start to determine the non-dismissed survivors, nationality, [00:45:26] Speaker 03: How the Lebovich sisters plausibly alleged that they would have acquired Czechoslovakian nationality pursuant to that provision? [00:45:37] Speaker 03: And if so, exactly where would you point us? [00:45:39] Speaker 04: That's an excellent question. [00:45:41] Speaker 04: Let me answer it in this way. [00:45:45] Speaker 04: The Saint Germain Treaty of September 10, 1919 provided, and the Trinone Treaty in Article 61, [00:45:55] Speaker 04: Billy says that anyone residing in the territories are received by the former Kingdom of Hungary to the newly formed state of Czechoslovakia. [00:46:04] Speaker 04: By the way, let me just point them out on this. [00:46:12] Speaker 04: the purple areas and the light blue areas on the map are the areas we're talking about. [00:46:18] Speaker 04: All those areas were part of Czechoslovakia until Hungary illegally invaded them in 1938 and 1939 and purported to annex them, an annexation that was never recognized by the government of the United States or the allied powers in World War II. [00:46:34] Speaker 04: In any case, [00:46:36] Speaker 04: what the St. [00:46:37] Speaker 04: Germain Treaty says and what the Trinone Treaty also says is if you were a resident of these areas, at the time that the state of Czechoslovakia was formed, which was 1918, and then let's say that we'll extend that to 1920 because that's when the actual nationality law was enacted by the Czechoslovak state, those people became citizens of Czechoslovakia notwithstanding [00:47:02] Speaker 04: the fact that they were Hungarian citizens beforehand. [00:47:06] Speaker 04: Now, by the way, just so we're clear on the chronology here, none of the named plaintiffs was alive when Czechoslovakia became a state. [00:47:16] Speaker 04: The oldest one, the oldest of the Lebovich sisters, Helen, who may she rest in peace, was born in 1922, and Rosalie Simon was born in 1931. [00:47:29] Speaker 04: And Charlotte Weiss was born in 1928. [00:47:32] Speaker 04: I don't remember the exact date. [00:47:34] Speaker 04: Okay, all of them were born in Czechoslovakia. [00:47:37] Speaker 04: Now, there is a provision, which my colleague referred to, completely out of context. [00:47:44] Speaker 04: And we addressed this in our brief, that Article 62 of the Chinon Treaty says, if you were a person that came into these areas, [00:47:59] Speaker 04: between 1910 and 1918, then you needed to get the permission of Czechoslovakia to obtain Czechoslovakian citizenship. [00:48:09] Speaker 04: But if your parents, for example, were living in those areas before 1910, and you were born to such parents after the Czechoslovakian state arose, you were a Czechoslovakian citizen. [00:48:26] Speaker 03: Do we have an allegation that the Lebovich sisters were born in Czechoslovakia? [00:48:33] Speaker 03: You just stated that they were all born in Czechoslovakia, but I didn't see an allegation. [00:48:37] Speaker 04: There is an allegation that they were born in particular at a town called Tarachot, I think is the name. [00:48:42] Speaker 04: The court can take judicial notice of the fact that that town was in Subcarpathian Ruthenia. [00:48:49] Speaker 04: And that's the case with all of the other nine. [00:48:51] Speaker 04: In particular, I'd like just to point out that there is in the record [00:48:54] Speaker 04: Two very interesting declarations with a joint appendix 212 and a joint appendix 226. [00:49:00] Speaker 04: One is by Jaffa Proper Adeskal, who was born in those areas, and also Tzviza Lukovits, who the district court mistakenly excluded from the class of plaintiffs who were allowed to continue. [00:49:20] Speaker 04: Both of those declarations [00:49:23] Speaker 04: state specifically, that their parents were born in these areas, and we gave you the date of birth, 1899, 1895, whatever. [00:49:33] Speaker 03: For the Lebovits sisters, it says they were raised in Terekoc, in the Hungarian annex within it. [00:49:41] Speaker 03: It doesn't say they were born there. [00:49:43] Speaker ?: OK. [00:49:44] Speaker 04: Your Honor, when this lawsuit was filed, and when these declarations [00:49:53] Speaker 04: The law about nationality in terms of the domestic takings rule was unsettled around the country and in this circuit. [00:50:02] Speaker 04: All the indications were based on the Khabad case in 2008, that this circuit was going to take a different approach. [00:50:10] Speaker 04: And the Seventh Circuit, in the Abellos case and the Fisher case afterwards, also took the position that these domestic takings rule wasn't... And you took the position that you're... [00:50:23] Speaker 06: that your clients were Hungarian, as a result of which the Simon 1 opinion spent four or five pages dealing with the 1947 treaty as a result of your representations. [00:50:39] Speaker 04: Your Honor, with due respect, we never, except perhaps in one oblique reference in a reply memorandum, certainly not in the second amended complaint, [00:50:53] Speaker 04: We never, well the second minute complaint wasn't filed until after assignment, of course, but we never contended that our clients were all Hungarian nationals. [00:51:01] Speaker 04: It just wasn't necessary. [00:51:02] Speaker 06: We did say what was necessary. [00:51:05] Speaker 06: No. [00:51:06] Speaker 06: It was necessary, maybe not under the expropriation law in this circuit at the time, but it was necessary to sort out the treaty of. [00:51:15] Speaker 04: OK. [00:51:16] Speaker 04: Is that right? [00:51:17] Speaker 04: No. [00:51:18] Speaker 04: And again, I'm sorry to disagree with you. [00:51:20] Speaker 04: OK. [00:51:21] Speaker 04: The treaty obligation that Simon Moncourt focused on was Article 27. [00:51:27] Speaker 04: And what is the operative language in Article 27, Your Honor? [00:51:32] Speaker 04: Persons under Hungarian jurisdiction. [00:51:35] Speaker 04: Didn't say anything about Hungarian nationals. [00:51:38] Speaker 04: Persons under Hungarian jurisdiction. [00:51:40] Speaker 04: All of the plaintiffs in this case, all of them were under Hungarian jurisdiction to their chagrin when these massive expropriations took place in 1941 and 1944. [00:51:54] Speaker 03: because the greater Hungary had annexed. [00:51:59] Speaker 04: Had attacked these areas and annexed them illegally. [00:52:03] Speaker 04: Yes, in 1938 and 1939. [00:52:05] Speaker 04: That's exactly the fact. [00:52:07] Speaker 04: They were under Hungarian jurisdiction. [00:52:10] Speaker 04: The court in Simon 1 [00:52:14] Speaker 04: was imprecise when it, for example, it says in the opening paragraph to the decision that 14 plaintiffs, all the main plaintiffs were Hungarian nationals, simply not true. [00:52:25] Speaker 04: And they were not. [00:52:26] Speaker 04: And it wasn't really necessary for the court to delve into that. [00:52:29] Speaker 04: The only important point was the expropriated property was located, and the people themselves were located in these illegally annexed areas, the light blue and the purple. [00:52:41] Speaker 04: And that is the case. [00:52:43] Speaker 04: I don't mean to disagree with you, Judge Randolph, but I'm trying to... That's what we're here for. [00:52:50] Speaker 04: There's a lot of imprecision on both sides, frankly, in this case. [00:52:54] Speaker 04: It's confusing. [00:52:55] Speaker 04: And the law is shifting. [00:52:58] Speaker 04: We've had, since Simon 1, we've had Helmerick, we've had [00:53:03] Speaker 04: Philip and, you know, and now last year, Sierra, where the plaintiff in Sierra was a German national whose property was expropriated by Germany. [00:53:16] Speaker 04: And the Supreme Court reached the issue of choice of law after trial. [00:53:22] Speaker 04: They never addressed the questions. [00:53:25] Speaker 04: Well, they didn't address it specifically, but that's the underlying predicate. [00:53:28] Speaker 04: Okay. [00:53:28] Speaker 04: And they must have been very well aware of it. [00:53:30] Speaker 04: The other thing I'd like to point out is that during oral argument on the Philip case, something is very interesting. [00:53:36] Speaker 04: When you look at the transcripts of the oral argument, I have them here. [00:53:40] Speaker 04: four, probably five of the justices all asked questions about what would be the result if Hungary or Germany, in the case of Philip, completely stripped these plaintiffs of their citizenship. [00:54:01] Speaker 04: So why would they ask that question? [00:54:03] Speaker 04: Why would [00:54:03] Speaker 04: I think the judge, Justice Gorsuch, in our case, in the argument to ask our counsel, that question almost a page of the transcript deals with this precise question. [00:54:13] Speaker 04: Our counsel had to say, listen, Your Honor, that issue is not before the court now. [00:54:19] Speaker 04: It wasn't briefed, it wasn't raised, and certainly in the Simon case it wasn't presented, but we need to deal with it on remand. [00:54:27] Speaker 04: If the court had wanted to say that these kinds of inquiries are [00:54:33] Speaker 04: not permitted or beyond the expropriation exception, it could have easily done so. [00:54:40] Speaker 04: Rather, they didn't do that. [00:54:43] Speaker 04: They specifically remanded Philip and, by extension, our case for a determination on the question of nationality. [00:54:52] Speaker 03: Mr. Zell, let me just ask you on the question of Hungary's commercial activity, do you need us to reach both the issuance of bonds and the military purchases [00:55:04] Speaker 03: or would it have any effect on the litigation going forward if we were to only reach one? [00:55:10] Speaker 04: With your permission, Your Honor, I'd like to defer that question to my colleague, because that's one of the areas in his bailiwick. [00:55:22] Speaker 03: All right. [00:55:23] Speaker 03: Thank you. [00:55:24] Speaker 04: Thank you. [00:55:25] Speaker 03: And we'll hear now from Mr. Weinstein. [00:55:39] Speaker 05: and thank you for asking that question. [00:55:43] Speaker 05: May it please the court, I am David Einstein, co-counsel with Mr. Dell and Professor Fax and Astin. [00:55:53] Speaker 05: I expected to start off by talking about the Treaty of Prima, 1920 Treaty, which provides an additional reason why Hungary has no immunity in this case. [00:56:08] Speaker 05: However, I do want to address as well the concerns of you members of the panel who have raised questions about the treaty exception and whether or not it is applicable here. [00:56:26] Speaker 05: And since the panel had questions about that, I'd like to put it to rest. [00:56:31] Speaker 05: First of all, we know that Article 26 does not explicitly say that it is providing an exclusive remedy. [00:56:41] Speaker 05: That's a conclusion that Hungary would like the court to draw from what's in the treaty. [00:56:51] Speaker 05: They do not, however, look to other provisions in the treaty. [00:56:56] Speaker 05: And I'm referring specifically to Article 27. [00:57:01] Speaker 05: If indeed Article 26 were exclusive, Article 27 would not have been written the way it is. [00:57:12] Speaker 05: Article 27 talks in terms of all cases, ellipses, of persons under Hungarian jurisdiction irrespective of their nationality. [00:57:30] Speaker 05: So it is clear that Article 27 would not be dealing with all cases of discriminatory taking. [00:57:40] Speaker 05: If in fact the intention was not to include all cases, but instead to look or require the parties to look exclusively to Article 26. [00:57:55] Speaker 05: And consequently, [00:57:59] Speaker 05: It cannot be the case that Article 26 is an exclusive provision. [00:58:04] Speaker 05: And indeed, there would have been no need for the 1973 executive agreement, Judge Randolph, as you asked, if in fact Article 26 were exclusive. [00:58:18] Speaker 05: On the contrary, it would be a nullity because Article 26 would have been exclusive. [00:58:26] Speaker 05: So with that to rest, [00:58:29] Speaker 05: I do want to come back to the Trinon Treaty because it provides a separate additional reason why there's no immunity. [00:58:39] Speaker 05: The Trinon Treaty is the treaty between the allied powers and Hungary at the end of the First World War. [00:58:51] Speaker 05: There were similar treaties entered into by the allied parties [00:58:57] Speaker 05: powers, excuse me, with other countries, including, for example, Austria and Czechoslovakia. [00:59:07] Speaker 05: The article, the portion of the treaty specifically refers to the protection of minorities. [00:59:16] Speaker 05: And if, well, let me put it this way. [00:59:22] Speaker 05: Article 58 specifically says [00:59:26] Speaker 05: Hungarian nationals who belong to racial, religious, or linguistic minorities shall enjoy the same treatment and security in law and in fact as the other Hungarian nationals. [00:59:45] Speaker 05: It doesn't say, oh, except with regard to property or except with right to vote or any other condition of [00:59:56] Speaker 03: So the difficulty, I think, is with the Supreme Court's decision in Philip. [01:00:05] Speaker 03: And I mean, I hear you that the reading, that the rationale there is, you know, we're going to set aside as a potential source of international law, international human rights law, and we're going to look only to international law, meaning state-to-state law, and a treaty is [01:00:26] Speaker 03: state to state in that sense. [01:00:27] Speaker 03: So that would support your reliance on Trinon. [01:00:31] Speaker 03: But the court also repeatedly, repeatedly, and in material ways in the Philippine opinion, refers to the international law of expropriation as the only international law that the expropriation exception refers to. [01:00:51] Speaker 03: And I don't see any reference. [01:00:55] Speaker 03: In the Trianon Treaty provisions you say, to property, to expropriation, it's hard to see it as a source of international law of expropriation. [01:01:10] Speaker 05: Well, the answer from our perspective, Your Honor, is that all cases means all cases. [01:01:20] Speaker 05: And that has to include [01:01:23] Speaker 05: a subset of the all cases being those cases involving property. [01:01:33] Speaker 05: By its nature, that division is exclusive in the sense of saying every kind of case. [01:01:41] Speaker 05: So whether or not it might also refer to what your honor has called human rights law, [01:01:49] Speaker 05: It doesn't eliminate the fact that it also involves property rights. [01:01:56] Speaker 05: And it's the taking of rights in property in violation of international law that section 1605A3 says. [01:02:07] Speaker 05: And we are saying that this involves rights in property. [01:02:14] Speaker 05: And it's also clear that the treaty [01:02:20] Speaker 05: by its expressed vision says that it is addressing matters of international concern. [01:02:27] Speaker 05: So we, as your honor indicated, we are aware that this is a matter of international state to state legal provision. [01:02:47] Speaker 05: Your honor, I had asked Mr. Zell a question in a different area of the law having to do with the commercial exception, and he deferred any questioning of that to me. [01:03:06] Speaker 05: And I'll be prepared to address, I would appreciate your restating it. [01:03:11] Speaker 05: It's a little bit harder for me to hear the question when I'm sitting over at council table. [01:03:17] Speaker 05: But I certainly don't want that question to go unanswered. [01:03:21] Speaker 03: So I guess the question that I had asked Mr. Zell was whether it has implications for the case going forward, if we were to accept your allegations about commercial nexus, whether we would look to the issuance of the bonds, these would be the United States or the military purchases. [01:03:45] Speaker 03: Does it matter if we accept only one or for the litigation or the litigation to proceed? [01:03:54] Speaker 03: We have two bases. [01:03:56] Speaker 05: I think the answer to it is at least at this stage, the district court made a factual finding based upon stipulated evidence. [01:04:07] Speaker 05: There was limited discovery, and that can answer the question you asked opposing council. [01:04:13] Speaker 05: There was limited discovery in this case only after the second remand, and it was to develop the question of that your honor has addressed today. [01:04:27] Speaker 05: That is to say whether there was a commercial activity. [01:04:32] Speaker 05: And the parties resolved much of that [01:04:36] Speaker 05: with a stipulation when we got into a debate about the motion to compel production of evidence that we had to file because of objections filed by Hungary. [01:04:49] Speaker 05: It was all resolved by a rather extensive stipulation that's in the record. [01:04:54] Speaker 05: And the evidence therefore is there. [01:04:59] Speaker 05: So whether one later on will need to do anything further on that specific point is probably doubtful at this point, because that is a stipulation of the parties as to the fact. [01:05:14] Speaker 05: So therefore, the military purchases and the sale of bonds in the United States are fact. [01:05:22] Speaker 03: But the defendants point to, in terms of the military purchases, whether that is really the kind of activity that would fall outside the restrictive theory of immunity. [01:05:35] Speaker 03: And with respect to the sale of bonds, they assert that there is an intermediary that's really responsible for that. [01:05:41] Speaker 03: So there are issues where they're defending against one or the other in ways that have to do with, I think, as yet unresolved legal questions. [01:05:50] Speaker 05: There may be undeveloped questions in regard to the agency, but I'm not so sure that that's the case because the evidence of agency, for example, that the entity that allegedly issued the bonds didn't because they were issued in the name of the Republic of Hungary and the person from the [01:06:12] Speaker 05: alleged agency actually was signing in his capacity as the attorney for the Republic of Hungary. [01:06:21] Speaker 05: Those kinds of factual questions are there. [01:06:24] Speaker 05: If after remand there still remains some [01:06:27] Speaker 05: lacuna of evidence that needs to be developed. [01:06:32] Speaker 05: I'm sure the district court can address those issues. [01:06:35] Speaker 05: But I believe what remain are the conclusions that Judge Howell reached concerning what actually was the case. [01:06:45] Speaker 05: And the other issues are legal issues that are already squarely before the court in our briefs and Hungary's briefs. [01:06:56] Speaker 05: All right. [01:06:57] Speaker 05: So if I may just in conclusion, we asked that the court affirm the denial of the motion to dismiss with respect to those, um, survivors who were from Czechoslovakian territory. [01:07:15] Speaker 05: And we asked the court vacate the dismissal with respect to all other plaintiffs, both in this case and in the Heller case. [01:07:25] Speaker 05: case be remanded for further proceedings, including finally an answer to be filed by the two defendants. [01:07:33] Speaker 05: Thank you, Your Honor. [01:07:34] Speaker 03: Thank you. [01:07:38] Speaker 03: So I believe that we, Mr. Silbert ran out of time, but as I said, we would give you some time for rebuttal. [01:07:48] Speaker 03: We'll give you three minutes. [01:07:49] Speaker 07: Thank you, Your Honor. [01:07:51] Speaker 07: I appreciate that, and I will try to be quick. [01:07:53] Speaker 07: I believe I heard my friend, Mr. Zell, clarify the plaintiff's position that Congress superseded customary international law in the S.I.A. [01:08:03] Speaker 07: I don't think that can be right. [01:08:04] Speaker 07: It expressly incorporated international law, and that was clear in the Supreme Court's decision in Philip. [01:08:10] Speaker 07: Judge Randolph, you asked whether it mattered, was necessary that the plaintiffs were Hungarian nationals for purposes of the argument in Simon 1. [01:08:20] Speaker 07: It absolutely does. [01:08:21] Speaker 07: And one reason you can see that is by reading section 26 of the 1947 peace agreement, it deals specifically with the case of Czechoslovak nationals who lost property by reason of force or duress in territory that was annexed by Hungary, you can see from the map [01:08:45] Speaker 07: plaintiffs have brought you that they lived in exactly that territory. [01:08:48] Speaker 07: So if they were Czechoslovak nationals rather than Hungarian nationals, then by the expressed terms of Article 26, their claims would be covered by Article 26, not by Article 27, which is the provision the court analyzed. [01:09:05] Speaker 06: Did they argue that Article 26 was irrelevant to their claims? [01:09:09] Speaker 07: They did, Your Honor, and that relates to their response to your question about the executive agreement. [01:09:15] Speaker 07: I think what I believe I heard Mr. Weinstein say here is that those executive agreements were separate from Article 26. [01:09:24] Speaker 07: They were not. [01:09:25] Speaker 07: And in fact, in the plaintiff's reply brief, and we quote this in Simon 1, and we quote this to you at page, I believe it is 48, but I know the clerks will check me. [01:09:35] Speaker 07: of our reply brief, the plaintiffs argued that those international agreements, including the 1973 executive agreement, all relate to Article 26. [01:09:48] Speaker 07: They were right the first time. [01:09:50] Speaker 07: Those are agreements that are addressing Article 26 rights. [01:09:54] Speaker 07: Nothing in Article 26 prevents state-to-state negotiations about [01:10:00] Speaker 07: It's article 35 of the of the 1947 peace agreement deals with. [01:10:15] Speaker 07: disputes involving Article 26. [01:10:17] Speaker 07: But all of these provisions allow for state-to-state negotiations and agreements with respect to those rights. [01:10:25] Speaker 07: What they don't allow for, Article 26 does not allow for, is a private cause of action in a United States court for the same property rights that are addressed by Article 26. [01:10:37] Speaker 06: Yes. [01:10:43] Speaker 06: I'd like to hear your response to the argument about the restating 171 and 175 aliens. [01:10:50] Speaker 07: So for some purposes, a stateless person may be considered an alien because he or she is not a national of that state. [01:11:03] Speaker 07: But the international law of expropriation, the Supreme Court told us, is implicated because the taking of property from the foreigner constitutes an injury to the foreigner's state of nationality. [01:11:20] Speaker 07: in comment D of section 175, which is the very comment that my friends and plaintiffs rely on. [01:11:29] Speaker 07: It says a stateless person would have no remedy if they do not come within that exception. [01:11:34] Speaker 07: Now, I believe if you combine Mr. Zell's and Mr. Weinstein's argument, Mr. Zell confirmed that the provision of the exception of 175 that the plaintiffs are relying on is D, treaty, right? [01:11:48] Speaker 07: And the treaty that they're relying on is [01:11:50] Speaker 07: And I think it was clear from the colloquy with Judge Pillard and others with Mr. Zell, the Trianon Treaty is not the customary international law of expropriation that the Supreme Court referenced in Philip. [01:12:06] Speaker 07: So their 175 argument really [01:12:09] Speaker 07: comes down to their triennon treaty argument. [01:12:12] Speaker 07: They say the triennon treaty is what triggers the exception, but that triennon treaty, or triennon, I'm not sure how it's pronounced, but you know the treaty I mean. [01:12:21] Speaker 07: That treaty is not the customary international law of expropriation, which is the only law referenced. [01:12:29] Speaker 03: You're not arguing that it can only be customary international law. [01:12:33] Speaker 03: There were a treaty about expropriation. [01:12:36] Speaker 03: than that would apply under B. You're just saying this is not that treaty. [01:12:39] Speaker 07: That may be, Your Honor, but that question is not even before you. [01:12:42] Speaker 07: And it wasn't before the Supreme Court. [01:12:44] Speaker 03: So it's not limited. [01:12:45] Speaker 03: We can't really fairly read the Supreme Court's bill of opinion to be limited to customary international law. [01:12:52] Speaker 03: That's just the only argument that was put forward there. [01:12:56] Speaker 07: Maybe true, Your Honor, but again, that question is not before you even in this appeal because the provisions of the Trianon Treaty that [01:13:04] Speaker 07: Plaintiffs rely on, which specifically are articles 55 and 58, make no reference to property. [01:13:11] Speaker 07: What the plaintiffs say is, well, they protect civil rights, political rights, free exercise. [01:13:16] Speaker 07: Those things may have in them property protections. [01:13:19] Speaker 07: OK. [01:13:20] Speaker 07: I don't see that. [01:13:21] Speaker 07: I think where the treaty addressed property rights, it said so. [01:13:25] Speaker 07: And those were the provisions dealing with a UN national. [01:13:29] Speaker 07: But in any event, those provisions are not expropriation law. [01:13:34] Speaker 07: They are civil rights law and free exercise law. [01:13:37] Speaker 07: So under the Supreme Court's decision and fill up, they do not come within the expropriation. [01:13:44] Speaker 03: Thank you. [01:13:45] Speaker 07: Thank you, Your Honor. [01:13:46] Speaker 07: Thank you very much. [01:13:53] Speaker 03: And Mr. Zell, I think you have one minute. [01:13:58] Speaker 04: Your Honor. [01:13:59] Speaker 04: One of the points that I was unable to make during my very extended argument, for which I thank you, concerns the position that our amica curiae, Professor Vivian Hearn, who's here today with us, she made about the Philip case two years before Philip. [01:14:22] Speaker 04: She said Simon 1 was not an appropriate [01:14:27] Speaker 04: interpretation of the rights and property in violation of international law language. [01:14:34] Speaker 04: Rather, she said, the appropriate focus needs to be on nationality. [01:14:39] Speaker 04: And the nationality issue, she said, needs to be resolved in what she described as a concept of substantive citizenship. [01:14:48] Speaker 04: I'll boil that down to one phrase, and that is [01:14:53] Speaker 04: The question is, with regard to the nationality of the Jews from Prinal and Hungary, that white area, is did Hungary at the time of the expropriations in 1944, in their case, consider its Jewish population as Hungarian nationals? [01:15:14] Speaker 04: I submit to your honor that the answer to that question is unequivocally no. [01:15:20] Speaker 04: And with the result that those people were stateless and for the reasons that I've discussed earlier, the stateless persons are outside the domestic takings rule. [01:15:32] Speaker 04: Thank you. [01:15:33] Speaker 03: Thank you. [01:15:37] Speaker 03: The case is submitted.