[00:00:00] Speaker 01:
Case number 24-1745, David L. Decibel et al, at balance, versus Republic of Hungary, the foreign state et al.

[00:00:09] Speaker 01:
Ms.

[00:00:09] Speaker 01:
Benedetti for the at balance, Mr. Brian for the at police.

[00:00:13] Speaker 05:
I should have mentioned it before, but if the podium is uncomfortably high or low for you, there's a button down on your right.

[00:00:20] Speaker 05:
Thank you, Your Honor.

[00:00:22] Speaker 05:
It's fine, from our perspective.

[00:00:28] Speaker 03:
Good morning.

[00:00:30] Speaker 03:
Good morning, Your Honors.

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May it please the court.

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I am Alicia Benanati of Kazowitz LLP on behalf of the appellants David DeChepple, Angela Herzog, and Julia Herzog.

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With me is my co-counsel, Agnes Parastegui, and Mr. David DeChepple and his family are here in the courtroom with us today.

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This is our fourth time before this court on a Rule 12b1 motion to dismiss.

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The facts are largely undisputed.

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The 28 artworks at issue in these two interrelated appeals belong to the Herzog family before World War II and were taken from the family during the war as part of a broader campaign of genocide directed against Hungarian Jews.

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And while defendants boast that the artworks have been in their possession for the last 70 some odd years since the war ended, that only shows the great lengths to which they have gone

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to avoid returning the art to the family.

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The question before this court today is whether Mr. De Cepul and his relatives can pursue their claims to these artworks in the United States.

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In particular, the primary question on both appeals is whether jurisdiction exists under the expropriation exception to the FSIA, 28 USC 1605A3.

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Back in 2017, this court answered that question affirmatively, holding that a foreign state seizure of property in furtherance of genocide constituted a taking in violation of international law, irrespective of whether the property belonged to citizens of the foreign state.

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However, in 2021, the Supreme Court held in Federal Republic of Germany v. Philip

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that the domestic taking rule applies and forecloses jurisdiction where a foreign state seizes property from its own nationals, and that conduct in violation of the international law of genocide is not alone sufficient to overcome the domestic takings rule.

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Now, the Philip decision came down a few months before we last appeared before this court for oral argument in the fall of 2021.

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And as Judge Pillard may recall, Judge Tatel specifically asked Defendants' Council at oral argument whether the Philip Court's interpretation of the phrase, rights and property taken in violation of international law, had any effect on this case.

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And Defendants' Council agreed with Judge Tatel that it was the position of the Hungarian defendants at that time that Philip was not relevant to the fundamental jurisdiction of the courts here.

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But as you can see from these appeals, the Hungarian defendants later changed their position following remand.

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They first moved to dismiss all but one of the remaining artworks based on the domestic takings rule as articulated in Philip.

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And then after the district court granted that motion, they then accepted the district court's invitation to also move to dismiss plaintiff's claims to the last remaining artwork, the Santa Barbara sculpture, on various grounds, including subject matter jurisdiction and form nonconvenience.

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I want to start with the domestic takings rule, which defendants have argued forecloses jurisdiction over 27 of the 28 artworks at issue.

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Basically, all of them except

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the Santa Barbara sculpture that is the subject of its own separate appeal.

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And defendants base this argument on the fact that the available documentary evidence, including inventory records, other similar historical lists, contain only Hungarian names and do not specifically identify any German Nazi personnel involved in the takings.

[00:04:09] Speaker 05:
Let me ask you just at the threshold as you're getting into the various arguments for German responsibility.

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I take it in one respect, one of the sort of cleanest and most categorical, least factually granular arguments is that the German occupation of Hungary was itself sufficient to attribute all of the violations of international law to the occupier, thereby

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um, displacing a domestic takings bar.

[00:04:41] Speaker 03:
That's correct, Your Honor.

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That is one of the two theories and perhaps the primary one that we've put forward at this point that the existence of the German occupation of Hungary, which was not an issue in Philip and not addressed by the court there because that involved different facts, different time periods, different takings, that the fact of of occupation

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lifts this case outside of the purview of the domestic takings rule.

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And what kinds of occupations, only certain occupations?

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We have a precedent, as you know, the Schubarth case, which dealt with the Soviet occupation of Germany post-war.

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So how do we understand which occupations

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a foreign by a foreign sovereign would count.

[00:05:40] Speaker 03:
Sure.

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And I thank you for bringing up the Schubarth decision because I think that that decision should dispose of defendants domestic takings argument here.

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Obviously Schubarth had slightly different facts in so far as it involved

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the occupation of Germany by the Allied and Soviet authorities at the end of the war.

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However, there's no dispute that Hungary was under occupation in 1944 at the time that these artworks were taken.

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So all the artwork was taken during Germany's wartime occupation of Hungary?

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Correct.

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There's no dispute as to the artworks that remain in the case.

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Not the Santa Barbara?

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Well, the Santa Barbara is also part of that.

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The Santa Barbara, which I will speak to whenever your honors wish, involves slightly different facts insofar as it is the one artwork that defendants have acknowledged there exists at least some evidence of direct

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German Nazi involvement since it was found in a salt mine in Austria at the end of the war.

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And I will certainly talk about that.

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But as to the other artworks, there's no dispute that they were all taken in 1944.

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There's a handful of artworks.

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Can I ask you though, I think the focus here is the word occupation.

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Correct.

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And so it seems like occupations are on a spectrum.

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They're not all

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the Soviet control of East Germany.

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And where does this fall on the spectrum, and what are the limits?

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It seems to me that Schubarth made a kind of a sweeping statement where it said that during an occupation, the authority of the legitimate power has, in fact, passed into the hands of the occupant.

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And that seems to suggest that any occupation

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would put the occupier on the hook.

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But that is citing Article 43 of the Hay Convection, which doesn't say that.

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It says, the authority of the legitimate power having in fact passed into the hands of the occupant, the latter shall take all measures in his power to restore, et cetera.

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But what it relies on seems to be if the authority of legitimate power has in fact passed into the hands of the occupant.

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then you're on the hook.

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Schubart seems to have made it more sweeping than the authority it rests upon would allow.

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And I'm just wondering for our purposes, I mean, I think that's dictum.

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I think that could be corrected.

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But for our purposes here, how do we look at occupation, decide what occupations count, as Judge Pillard said?

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Well, I would say first that I don't think there's any dispute that Hungary's

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invasion and occupation, the Germany's invasion and occupation of Hungary was, you know, subject to the Hague Convention of 1907.

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This happened, Germany invaded in March of 1944 during the middle of the war and while

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while Germany- Has it all power of the Hungarian government passed into the hands of Germany?

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I think as we set forth in the two expert declarations that we submitted from Dr. Kende and Dr. Kadar, who were both experts in this period of Hungarian history, that while Hungary

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Hungary's government was not entirely displaced.

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It was effectively a puppet government of Nazi Germany at the time, and that all of the relevant decrees, particularly with respect to the taking of Jewish property.

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But does that fit the standard that the authority of the legitimate power was in fact passed into the hands of the occupant?

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I think it does for purposes of assessing who bears responsibility under international law, broadly, for acts of- Didn't Hungary embark on its own campaign against Jews before it was occupied?

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Yes.

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But as, again, as the two declarations explain, those policies changed dramatically when the Germans came into power.

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Hungary certainly was already

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mistreating its Jewish citizens as part of its effort to curry favor with Nazi Germany.

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You know, unlike many of the other countries in Western Europe who've been the subject of Holocaust claims, you know, in United States courts, Hungary ultimately was on the side of Nazi Germany and considered an ally and an enemy by the United States at periods of time.

[00:10:27] Speaker 05:
I think a difficulty for you in this case relates to the case where we've given you separate argument time for, which is where Judge Bates held that to the extent that it's a wartime taking by Germany during the war from Jews in Hungary, that the restatement doesn't apply and that it

[00:10:54] Speaker 05:
therefore is not a taking in violation of international law within the meaning of the expropriation exception to the Foreign Sovereign Immunities Act.

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And I know that was not decided in this case by Judge Bates because of the

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way that the litigation proceeded.

[00:11:15] Speaker 05:
But if he's right in the Santa Barbara decision, wouldn't that, by the same token, bar the domestic taking, bar the FSIA claim here as well?

[00:11:32] Speaker 03:
Well, if I may, I want to just touch upon a point from the Schubarth decision, because in terms of drawing a distinction, it is in response to this question, yes.

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Can you say yes or no?

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Well, yes, it would impact these artworks.

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But I think that, and as I'll get to, that Judge Bates misread Philip in his holding that you cannot have a taking of property

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that violates both the law of armed conflict as set forth within the Hague Convention and the law of property.

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Because, and this is where I'm coming back to Schubarth, the Schubarth court

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found that essentially Germany and the Soviet Union both existed as sovereigns during the period of the Soviet occupation at the end of World War II, but that for purposes of the domestic takings rule, the taking of property of German citizens within the occupied Soviet zone

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basically turn them into aliens as a get for purposes of the domestic takings rule.

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So it said the domestic takings rule does not apply.

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The Schubert Court did not then take the additional step.

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to determine whether or not the taking of property in that case was also a violation of international law.

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It said the domestic takings rule doesn't apply here, but we're remanding for the district court to look at the specific facts of this case.

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Here, that's not necessary, because the district court has already had a full factual record.

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We already know what happened.

[00:13:09] Speaker 02:
I still don't see how this answers Judge Pillers' question.

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Why isn't this a wartime taking?

[00:13:15] Speaker 05:
I mean, you say even if, and I think this is how I read your brief, you say that taking can be both a violation of the international law of war and the international law of expropriation.

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Exactly.

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But I guess the narrower question is whether, given the limitations

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in the restatement, and given the fact that you rely centrally on the second restatement, and that restatement disclaims that it covers any actions taken.

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It says we speak only to peacetime.

[00:13:57] Speaker 03:
The restatement says that wartime is beyond the scope, but it does not say and nor does the text of the FSIA and nor does the legislative history of the FSIA say at any point.

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that a taking cannot violate more than one body of law simultaneously.

[00:14:15] Speaker 05:
I understand that that says maybe there's an opening theoretically, but where on the 12v1, the interminable 12v1 litigation, it is your burden to establish jurisdiction.

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The question is,

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Is there any law you can identify that fills that opening, that occupies the space that your brief says is at least theoretically open?

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Is there anything that says a taking like this that was in wartime that it could nonetheless be a violation of the international law of expropriation?

[00:14:59] Speaker 03:
Yes, because as Congress explained in enacting the FSIA, takings that are arbitrary or discriminatory in nature fall within the purview of the expropriation exception.

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Those criteria, there's nothing that Congress says that those criteria go away simply because the taking happens during wartime.

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And if you look at the Ninth Circuit's decision

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in Altman before the case went up on appeal to the Supreme Court, the Ninth Circuit specifically categorized the Nazi taking of property in those cases as arbitrary and discriminatory and contrary to international law.

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You also have pre-dating.

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What source of international law did they rely on in that case?

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The court was relying on the legislative history of the FSIA and its description of what constitutes a violation of international law.

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In that case, they were looking at the fact you had an alien whose property was taken because there

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It was the taking of property belonging to a Czechoslovakian citizen in Austria, which is the same sort of taking that the Supreme Court here in Phillips said that the taking of an alien's property during the Nazi era would be sufficient to overcome the domestic takings rule.

[00:16:30] Speaker 03:
The defendants will say that Philip occurred at a different point in time, but the United States, both the Supreme Court and Congress and the State Department in some of its statements has never drawn a distinction with respect to, sorry.

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They never drawn a distinction with respect to.

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With respect to when during the Nazi period there was actual war and conflict versus the over, they generally lumped the period of time into 1933 to 1945, irrespective of what was going on in a particular country at a particular point.

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So is it fair to say that because the restatement has this

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provision that says if this is during wartime, none of these, I guess, provisions will apply to that situation.

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You have to find sources of international law that is not the restatement to support your claim that this falls under the FSIA.

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And so you are relying on this Ninth Circuit case.

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And what are the best sources of law that you can rely on that are not the restatement?

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You also need to look at the Hague Convention itself of 1907.

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While the Hague Convention may specifically deal with the laws and customs of war on land, that does not mean it does not also address property.

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So what are your best sources of international law to support your claim?

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That's not the restating.

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The Hague Convention of 1907 and the specific articles that say that

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that the taking of private property is forbidden, pillage is forbidden.

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And I want to be clear, we're not seeking to make claim under the Hague Convention against Germany.

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But as this court recognized in Simon, just as- So is that it, just the Hague Convention?

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Anything else?

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you're relying on as sources of international law?

[00:18:23] Speaker 03:
As sources of international law?

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Of expropriation, I guess has to be the international law.

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Yeah, I mean, I think that we think that the principles informing the restatement are not excluded from their application.

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Just because the restatement says that

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Acts that occur during war beyond the scope does not mean that those same principles articulated in the restatement should not also apply where appropriate.

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The fact that a taking that I'm sorry.

[00:18:58] Speaker 02:
So you're saying that although the restatement says it's not intended to apply, we should apply it anyway.

[00:19:04] Speaker 03:
I think the restatement should still apply anyway, regardless.

[00:19:07] Speaker 02:
It says it's beyond the scope.

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I guess I'm reading a distinction into saying it doesn't say these rules only apply in peacetime.

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It just says we're not addressing the special circumstances of what also applies during war because the rules may be different.

[00:19:25] Speaker 05:
I thought what you were saying was not that you would then rest on the restatement, but that the fact that the restatement says we only speak to peacetime doesn't mean there might be the same substantively, the same rule against expropriation, but just found in another source.

[00:19:45] Speaker 05:
But I guess the reason you don't go there is going to be my next question, which is when the Supreme Court in Philip reversed this court having

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held that there were genocidal takings and that their genocidal character made them takings in violation or expropriation, violation of international law.

[00:20:05] Speaker 05:
The Supreme Court said, no, the expropriations that the FSIA exemption is concerned with are expropriations

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in violation of international law.

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And by international law, they were speaking more narrowly, not of all the law that sort of under the umbrella sense of international law, international human rights, the laws of war, and sort of formal international law, meaning law between states, but only the latter.

[00:20:37] Speaker 05:
And if that's true, and if the restatement which restates that law

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doesn't include the Hague Convention protections for private property against pillage and confiscation, then I think we're back with the question whether there are any sources of international law in the narrower sense, in the Philip sense, that support your client's claims in Hungary under German military occupation.

[00:21:12] Speaker 03:
Well, I think there isn't a primary source

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The FSIA includes not only the restatement, but it also includes existing treaties to which the US is a party.

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And I would say that that would include the Hague Convention, which certainly long predated the enactment of the FSIA.

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And Congress was certainly aware of its provisions.

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And as we pointed out in our brief, Congress would also have been aware of

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the 1949 pronouncement by the executive branch that United States courts should not feel any restraint to pass upon the validity of the acts of Nazi officials for the taking of property.

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I don't think you can fairly cabin, and I don't think Philip was trying to do this, to cabin property law, international humanitarian law, and

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The law of war into 3 separate buckets that can never have intertwining facts and that was as much as coming back to what this court held in the 2023.

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Simon decision when it was considering some of these issues in a slightly different context was that this court can still look to the law of genocide and human rights to determine other issues such as

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nationality of the plaintiffs.

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It does not mean you can never look at it.

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It just cannot be the primary source for a violation of international law.

[00:23:05] Speaker 05:
To accept that position, we would have to reverse Judge Bates in the Santa Barbara opinion.

[00:23:10] Speaker 05:
That's correct.

[00:23:12] Speaker 05:
That's correct.

[00:23:20] Speaker 05:
So on the on the questions that you argued about.

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directing control and about coercion under the RCWA.

[00:23:34] Speaker 05:
Do you contest the district court's articulation of those standards under Article 1719, or is it really the focus is more on its conclusions, its factual conclusions about whether the evidence shows sufficiently that Germany in fact exercised nation control, coercion?

[00:23:55] Speaker 03:
I think we made the point in our briefs that I think the district court incorrectly framed the issue as purely one of German derivative responsibility for Hungary's actions, as opposed to also looking at the fact that as the occupying power,

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Germany had its own primary responsibilities under the Hague Convention.

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So I think they're two interrelated concepts.

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We don't quarrel with the district court's basic articulation of the RCWA principles.

[00:24:36] Speaker 03:
I think the district court misunderstood to a point some of Dr. Kendi's

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uh opinions that hungary itself was basically acting as an organ of germany under the direction and control of germany and um you know the district court took the position here it seems that unless you have a specific

[00:25:03] Speaker 03:
order that says Hungarian officials go to this house, take these listed artworks that that would not that you could not have a situation then that's sufficient to satisfy German responsibility for these takings.

[00:25:21] Speaker 05:
So is this your de facto state organ theory that Hungary is state organ of Germany?

[00:25:29] Speaker 05:
Or is this your direct German responsibility theory?

[00:25:31] Speaker 05:
Or is there a material distinction between the two?

[00:25:34] Speaker 03:
I don't think there's a material distinction between those two.

[00:25:37] Speaker 05:
OK.

[00:25:38] Speaker 05:
And they really flow from the nature of the military occupation by Germany as sufficient to make

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Germany responsible for the takings?

[00:25:50] Speaker 05:
Is anything more required to be shown in a situation like that?

[00:25:53] Speaker 03:
Well, I think it might be a different scenario to reach the threshold.

[00:26:00] Speaker 03:
We're not here trying to hold Germany responsible for these takings.

[00:26:04] Speaker 03:
There's many other legal issues that come into play there, peace treaties and other agreements.

[00:26:09] Speaker 03:
And that's been some of the things that have come up in some of the international cases that we've seen.

[00:26:16] Speaker 03:
What we're trying to say here is that it's enough to show that this was outside the bounds of a domestic taking.

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That this taking was not purely Hungary coming in and taking the property of its own citizens during the war.

[00:26:34] Speaker 03:
This was acts that were being done while Hungary was the puppet of another state.

[00:26:40] Speaker 03:
to in an arbitrary and discriminatory manner towards its Jewish population in a way that in any conceivable circumstance is precisely the sort of arbitrary and discriminatory taking that the FSIA should be meant to address.

[00:26:58] Speaker 03:
And in fact, if you look at the later amendments to the FSIA that have been done.

[00:27:03] Speaker 02:
It does have to be a taking by Germany, though.

[00:27:07] Speaker 02:
I don't think it does.

[00:27:09] Speaker 02:
It has to be in effect.

[00:27:11] Speaker 02:
Because that's the Schubarth case.

[00:27:15] Speaker 02:
Back to the question of occupation and what level of occupation counts and how should we look at that, which I don't think we've really resolved.

[00:27:21] Speaker 03:
But the panel in Schubert found that it didn't matter whether the actual physical taking of the property was performed by German officials or by Soviet officials, because as the supreme power in place.

[00:27:33] Speaker 02:
It's just a different kind of occupation, right?

[00:27:36] Speaker 02:
That's the question.

[00:27:38] Speaker 02:
How do we look at occupations?

[00:27:39] Speaker 02:
Occupations are on a spectrum.

[00:27:41] Speaker 02:
There's an international law report.

[00:27:43] Speaker 03:
Well, I think, you know, as we've cited in our brief there, the United States recognized Hungary to be an occupied nation when Germany, after following the German invasion, and certainly during the months during which these takings occurred, which was all in the summer of 1944 during the peak of the German occupation.

[00:28:02] Speaker 05:
I'm having with is like the RC or the commentary for example to article 17 that I take the common-sense reasoning of what you're saying you know there's a there's a Nazi German occupation of Hungary people who may appear to be doing things you know zealously and one might say voluntarily maybe

[00:28:27] Speaker 05:
You know, that may raise an inference that they're doing it without coercion, but the overall circumstances would seem to also potentially support an inference that they're not doing it without coercion.

[00:28:40] Speaker 05:
But the RCWA commentary, and I'm looking particularly to Article 17, 6 and 7, and a couple also in,

[00:28:54] Speaker 05:
Article 18, that talk about the power to exercise direction and control in Article 17 is not a sufficient basis for attributing to it any wrongful acts of the occupied state.

[00:29:08] Speaker 05:
And again, control has to be domination over the commission of the wrongful act, not merely exercise of oversight, influence, or concern, a state that directs

[00:29:25] Speaker 05:
It's not enough to incite or suggest, but they have to actually direct in an operative way.

[00:29:31] Speaker 05:
It just seems hard to see evidence of that here.

[00:29:36] Speaker 05:
And I recognize that this is threshold, but it also, under the case law, is an evidentiary determination.

[00:29:44] Speaker 03:
I know it's difficult with the passage of time, and we're dealing with a historical record here.

[00:29:50] Speaker 03:
I think Dr. Kende and Dr. Kadar have explained the historical context in which these regulations arose.

[00:30:04] Speaker 02:
But they never say that there was direction of what happened.

[00:30:09] Speaker 03:
We do not have.

[00:30:12] Speaker 03:
an order specifically directing the takings of these specific artworks.

[00:30:18] Speaker 02:
What would be the limits of the standard that you want us to adopt?

[00:30:22] Speaker 02:
Because Judge Bates also says in his opinion, you know, most of Europe was occupied by Germany in some sense during this period.

[00:30:28] Speaker 02:
Europe was occupied.

[00:30:29] Speaker 02:
Everybody is a

[00:30:30] Speaker 03:
Europe was occupied in different ways and in different times.

[00:30:34] Speaker 03:
So I don't think you can you can generalize necessarily, you know, most other countries that were under German occupation at one point or another in time.

[00:30:48] Speaker 03:
did not so enthusiastically, or at all, take the property of their own Jewish citizens to assist and collaborate with the Nazis.

[00:31:03] Speaker 03:
I think it's as set forth in the Hague Convention and, you know.

[00:31:11] Speaker 02:
So any country occupied by Germany that takes the possessions of its citizens.

[00:31:18] Speaker 03:
If you look at the degree of power, I don't think the Hague Convention says that one sovereign has to have been entirely displaced by another.

[00:31:28] Speaker 03:
But where you have a situation here where Germany is basically the puppeteer,

[00:31:32] Speaker 03:
Pulling the strings in Hungary following its invasion.

[00:31:36] Speaker 02:
I'm just trying to like get it.

[00:31:38] Speaker 02:
What is the holding you want from us?

[00:31:39] Speaker 02:
Like anytime Germany's the puppeteer, like what are we supposed to say?

[00:31:44] Speaker 03:
I think when the conditions of a sufficient transfer of control over the state itself,

[00:31:51] Speaker 03:
pass into the district court did not dispute that Germany had control over all of the upper echelons of the Hungarian government during the relevant period.

[00:32:03] Speaker 03:
It's a question of how far that trickles down.

[00:32:05] Speaker 03:
And I don't think the standard should be in a property taking case such as this, that you have to have a paper trail that connects a German directive signed by a German

[00:32:18] Speaker 03:
to the taking of a particular artwork.

[00:32:20] Speaker 03:
And in fact, even with Santa Barbara, we don't exactly have that.

[00:32:23] Speaker 06:
What is the language in the Hague Convention on which you belong?

[00:32:35] Speaker 03:
Bear with me, Your Honor.

[00:32:38] Speaker 03:
So under Article 43 of the Hague Convention,

[00:32:45] Speaker 03:
The convention says, the authority of the legitimate power having, in fact, passed into the hands of the occupant.

[00:32:53] Speaker 03:
The latter shall take all the measures in his power to restore and ensure, as far as possible, public order and safety while respecting, unless absolutely prevented, the laws enforced in the country.

[00:33:06] Speaker 03:
And then further down in Article 46,

[00:33:10] Speaker 03:
It goes on to say, family, honor, and rights, the lives of persons in private property, as well as religious convictions and practice, must be respected.

[00:33:17] Speaker 03:
Private property cannot be confiscated.

[00:33:22] Speaker 06:
Now, all right.

[00:33:23] Speaker 06:
So what I'm getting at, as you obviously know, is a point that Judge Pillard raised earlier.

[00:33:33] Speaker 06:
Namely, there was a lot of evidence here about what hunger

[00:33:37] Speaker 06:
was doing to its Jewish population and what it was requiring its Jewish population to do with its property.

[00:33:53] Speaker 06:
And the German occupation came, but it left all of the Hungarian officials in place.

[00:34:02] Speaker 06:
And presumably, had they done something that Germany didn't approve of, it would have acted.

[00:34:13] Speaker 06:
But that's not this case, is it?

[00:34:16] Speaker 06:
I mean, given the evidence of what Hungary was doing, and in particular with regard to the original collector of all

[00:34:32] Speaker 03:
So the decrees that authorized the registration and seizure of Jewish property only came into effect a month after the German invasion.

[00:34:44] Speaker 03:
Up until that point, while other things were going on in Hungary, the seizure and taking of Jewish property and artworks specifically was not at issue until after the German occupation.

[00:35:00] Speaker 06:
Your whole answer to my question in the order came into effect after the German occupation, which to me is somewhat inconsistent with the argument you're making as to the effect of German occupation.

[00:35:24] Speaker 03:
What we're saying is that, and I think Dr. Kendi puts this forward in his declaration

[00:35:30] Speaker 03:
that when Diesenmaier was appointed to take over in Hungary, it was that everything that happened was supposed to be under his command within the country and then they come into power.

[00:35:44] Speaker 03:
And all of a sudden, all these new laws and decrees start being passed.

[00:35:49] Speaker 03:
And I think simply because that was done through the auspices of local or lower level Hungarian officials does not remove Germany from its responsibility as the occupying force.

[00:36:06] Speaker 06:
So let me be clear.

[00:36:09] Speaker 06:
This court have not found

[00:36:13] Speaker 06:
that declaration persuasion.

[00:36:22] Speaker 03:
This issue has not squarely been before any judge other than Judge Bates.

[00:36:28] Speaker 03:
In the prior history of this case, this court agreed dating back years that the extent of saying evidence could be submitted.

[00:36:42] Speaker 06:
All right, but it wasn't saying that the evidence which had been.

[00:36:48] Speaker 06:
was.

[00:36:48] Speaker 03:
There was no.

[00:36:51] Speaker 03:
There was this court found in its 2017 decision it agreed with the district court at the time.

[00:36:58] Speaker 03:
that the taking of the artworks as part of a campaign of genocide that was undertaken by Hungary and its Nazi allies was sufficient.

[00:37:05] Speaker 03:
And that was because we did not yet have Philip's clarification that a taking in the course of genocide was not alone sufficient to overcome the domestic takings rule.

[00:37:16] Speaker 03:
The fact of which sovereign performed the taking or which sovereign directed and controlled the taking was never at issue until after Philip.

[00:37:28] Speaker 03:
And to my knowledge, has not come up.

[00:37:32] Speaker 06:
You say at issue, but the evidence was in the record as to who was doing what and who was ordering what, correct?

[00:37:44] Speaker 06:
And that hasn't changed.

[00:37:46] Speaker 03:
The document discovery was completed, I believe we completed discovery, fact discovery after the initial determination of jurisdiction under the expropriation exception based on genocide because the defendants did not contest that the

[00:38:08] Speaker 03:
artworks at issue that were a certain subset of them that were taken during World War II and never returned to the family.

[00:38:16] Speaker 03:
And so the circumstances of that didn't at that time bear on the jurisdictional inquiry.

[00:38:23] Speaker 03:
And then even when we were in front of the district court in 2020 on the prior motion to dismiss

[00:38:31] Speaker 03:
jurisdiction had already been established.

[00:38:33] Speaker 03:
Jurisdiction did not become an issue again until after the Philip decision in 2021.

[00:38:39] Speaker 03:
And while we briefly appeared in front of this court in October of that year to discuss the appeal of the prior motion to dismiss the Philip decision had not yet been inserted and its meanings into this case.

[00:38:54] Speaker 05:
I know we've kept you up for a long time, and you've got a little more time to go.

[00:38:57] Speaker 05:
But I just wanted to ask you about the other prong of your effort to establish that the domestic takings bar does not apply, which is the statelessness point.

[00:39:10] Speaker 05:
And I wonder whether

[00:39:13] Speaker 05:
you have any authoritative materials that you've cited or that you'd focus us on that establish that the references in the second restatement to stateless persons applies not only to de jure stateless but also to de facto stateless persons as you argue your clients

[00:39:38] Speaker 05:
were.

[00:39:39] Speaker 05:
We voided that in Simon three, but I think we'd have to confront that question if we were to to take you up on this this theory.

[00:39:49] Speaker 03:
Yeah, I mean, there's there is there is no dispute that plaintiff's predecessors remained at all times de jure Hungarian citizens.

[00:40:00] Speaker 03:
We've argued that they were de facto

[00:40:03] Speaker 03:
stripped of the rights and privileges of their citizenship by the anti-Semitic measures taken by Hungary during this period, the court does not need to reach the de facto statelessness argument if it agrees that the fact of German occupation takes the case outside of the domestic takings rule.

[00:40:27] Speaker 05:
That has the issues of the

[00:40:33] Speaker 05:
wartime taking and the confiscation of pillage.

[00:40:37] Speaker 05:
In the context of wartime, the remedies might be quite different.

[00:40:41] Speaker 05:
And under Philip, it could be that the FSIA really doesn't apply.

[00:40:46] Speaker 05:
So I'm just looking at this separate question.

[00:40:49] Speaker 05:
And maybe you don't really rest on it.

[00:40:53] Speaker 05:
In fact, I don't think I saw you taking it up even after the district court mentions this in its opinion at note 20 and then the defendants make the argument and they're brief.

[00:41:05] Speaker 03:
We did brief the issue as the alternate basis for avoiding the domestic takings rule in the main appeal with respect to the 27 artworks.

[00:41:16] Speaker 03:
We understand that the court in Simon

[00:41:21] Speaker 03:
had considered the argument and as the district court here had assumed that perhaps the Hungarian claimants in that case could claim de facto statelessness but found that the absence of a remedy under international law was fatal to their claims.

[00:41:39] Speaker 03:
Of course international law was predicated, it's traditionally predicated on the concept of espousal and you know we understand that

[00:41:48] Speaker 03:
in a framework where one state has to espouse the claims of another, that if you have a stateless person, there is necessarily no state to espouse those claims.

[00:41:59] Speaker 03:
But I think the argument that we make here is that the FSIA's expropriation exception and the framework of the exceptions to immunity in general already takes

[00:42:13] Speaker 03:
these cases slightly outside that traditional framework of international law, because you don't need a state to espouse a claim for a private litigant to get jurisdiction under the expropriation exception.

[00:42:26] Speaker 03:
If that were not the case, if you go back and look at the Altman decision,

[00:42:31] Speaker 03:
The Supreme Court held in that case that the FSIA applied even to takings that occurred prior to its enactment at a time when absolute immunity existed and nobody, including aliens, had a private remedy for taking a violation

[00:42:48] Speaker 03:
the taking in violation of international law.

[00:42:50] Speaker 03:
So the absence of a remedy under traditional sources of international law should not defeat jurisdiction under the FSIA.

[00:43:01] Speaker 03:
When the text of the FSIA contains no language regarding the requirement of a remedy in this provision, it does in some of the other provisions of the FSIA, 1605 capital A.

[00:43:12] Speaker 03:
And 1606, when remedies are relevant, they're mentioned.

[00:43:16] Speaker 03:
That's not the case here.

[00:43:18] Speaker 03:
And I think that, again, we're talking about taking something outside of a purely domestic takings context.

[00:43:33] Speaker 03:
Here we have Hungary trying to say that, well, these were our citizens, and therefore we could do whatever we wanted.

[00:43:39] Speaker 03:
And these are unusual circumstances where you are really not treating these people legally as your citizens anymore.

[00:43:46] Speaker 03:
You're treating them as some sort of lesser category of residents in your country.

[00:43:57] Speaker 05:
And on the specific point about whether the secondary statements discussion about

[00:44:03] Speaker 05:
stateless persons applies to de facto stateless as well as de jure stateless.

[00:44:10] Speaker 05:
There's nothing you're aware of that you would want to bring to our attention that confirms.

[00:44:14] Speaker 05:
No, Your Honor.

[00:44:21] Speaker 05:
Okay, thank you.

[00:44:21] Speaker 05:
Thank you.

[00:44:56] Speaker 05:
Good morning.

[00:44:57] Speaker 05:
Good morning.

[00:45:00] Speaker 07:
Good morning, your honors.

[00:45:02] Speaker 07:
May it please the court.

[00:45:03] Speaker 07:
My name is Aaron Bryan.

[00:45:04] Speaker 07:
I'm here with my colleague, Thaddeus Stauber, on behalf of the Hungarian Gallery, the Hungarian National Gallery and other Hungarian art museums and Hungarian State Holding Company.

[00:45:15] Speaker 07:
Supreme Court in Philipp V. Germany confirmed the expropriation exception to the Foreign Sovereign Immunity Act requires an underlying violation of the law of expropriation.

[00:45:27] Speaker 07:
The Supreme Court further confirmed the law of expropriation incorporates the domestic takings rule.

[00:45:33] Speaker 07:
Thus, states taking of property from its own nationals does not give rise to jurisdiction under the Foreign Sovereignty Act.

[00:45:41] Speaker 07:
To avoid the domestic takings rule, appellants argue their predecessors were de facto stateless persons and were not Hungarian nationals when Hungary took the artworks at issue here.

[00:45:53] Speaker 07:
This court in Simon v. Hungary considered the same argument

[00:45:57] Speaker 07:
and held that although Philip does not foreclose such a theory, the claimant must provide sources of positive international law showing this theory has crystallized into an international norm.

[00:46:09] Speaker 07:
With the benefit of this court's decision in Simon, the district court below requested supplemental briefing on that very question, inviting the appellants to provide sources of international law to support their theory.

[00:46:21] Speaker 07:
The district court found appellants did not provide any such source of international law.

[00:46:26] Speaker 07:
And in fact, the appellees, the defendants at the district court level, provided multiple sources of international law showing that a state's taking of property from a de facto stateless person does not violate the law of expropriation.

[00:46:44] Speaker 07:
That decision was well-founded.

[00:46:46] Speaker 07:
It's supported by numerous sites to sources of international law and should be affirmed.

[00:46:52] Speaker 07:
This court should also affirm the district court's well-reasoned rejection of petitioner's secondary argument, which pivots from holding Hungary responsible and instead argues that Germany is in fact responsible for Hungary's taking of the artworks.

[00:47:06] Speaker 07:
Even if this theory was a viable method for establishing jurisdiction under the expropriation exception, Judge Bates' detailed actual findings confirm that Germany is not responsible for these takings under international law.

[00:47:22] Speaker 07:
What's different about this case from Simon and some of the others that have percolated to the courts is the party's completed fact discovery before the briefing on this issue.

[00:47:31] Speaker 07:
Judge Bates had a fully developed factual record, had volumes of evidence and source documents to consider, and his detailed findings based on that record is that Germany did not direct, control, or coerce Hungary's takings of the artworks.

[00:47:49] Speaker 05:
about the occupation point and our decision in Schubart finding that occupation of Germany by the Soviet Union was in fact enough to vitiate the domestic takings bar?

[00:48:05] Speaker 07:
In the post-war situation in Germany, as we've seen in, as Judge Beas considered this decision, considered that case and found it important

[00:48:19] Speaker 07:
that Germany's statehood had effectively been abolished, that the Soviets, Russia, was the supreme organ of power in place at the time, and that the German authorities that were newly created could only act as auxiliaries of Soviet power.

[00:48:37] Speaker 07:
There's no evidence supporting any finding like that in this case.

[00:48:41] Speaker 07:
There's evidence of influence.

[00:48:43] Speaker 07:
There's perhaps evidence of cooperation.

[00:48:45] Speaker 07:
There's evidence of perhaps aligned ideologies.

[00:48:48] Speaker 07:
But there is no evidence that when Germany came into Hungary, it occupied Hungary in that manner or that method or to that degree.

[00:48:58] Speaker 07:
And Judge Bates detailed findings on the specific takings in question here show that there's not even evidence that Germany was involved in these takings.

[00:49:08] Speaker 07:
And so the idea that they could have supreme power over the entirety of Hungary such that they are the responsible party for everything that takes place in Hungary, there's no evidence to support that finding.

[00:49:22] Speaker 07:
And Judge Bates correctly found that mere occupation, even understanding there's degrees of occupation perhaps, alone does not, under international law,

[00:49:34] Speaker 07:
make Germany responsible for these takings.

[00:49:37] Speaker 02:
If you look at our source for the standard that you articulate, which is Germany would have to direct control or coerce the taking.

[00:49:45] Speaker 07:
That's a combination of Article 17 and 18 of our SEWA.

[00:49:49] Speaker 07:
Article 18 talks about coercion.

[00:49:52] Speaker 07:
Article 17 talks about direction and control.

[00:49:56] Speaker 07:
And it is more than influence, it is more than incitement, it is more than assistance, it is an operative direction of the particular act in question.

[00:50:07] Speaker 07:
So here would be the takings of these 27 artworks and then separately the Santa Barbara.

[00:50:13] Speaker 07:
And so what Judge Bates did was formulate a test for what could make Germany responsible under these derived theories of responsibility.

[00:50:24] Speaker 07:
and found that there's just no evidence that rises to that level.

[00:50:28] Speaker 05:
Deal with the fact that Hungary, I mean part of the reason for the German occupation and the historical record and the record in this case are clear that part of the reason was they didn't think that Hungary was dealing harshly enough with its Jews and when Germany

[00:50:47] Speaker 05:
occupied Hungary, they really accelerated things precisely like the harms that are complained of in this case, the expropriation of property, the systemic efforts to eliminate their culture and the people themselves.

[00:51:08] Speaker 05:
If the aim of the German occupation here was to subjugate the Jews and bring about things like these takings, it's a little bit hard to square that with a kind of general claim that the level of control was not enough.

[00:51:26] Speaker 07:
I don't know that there's evidence that that was the primary reason for their.

[00:51:30] Speaker 05:
So if it's just a substantial reason.

[00:51:32] Speaker 05:
No, no, no.

[00:51:33] Speaker 07:
But I'm saying there were issues with the Soviet army coming from the East.

[00:51:38] Speaker 07:
So it wasn't merely to come into Hungary for this particular purpose.

[00:51:42] Speaker 07:
So that was my.

[00:51:43] Speaker 05:
But none of these actions was contrary to German policy when it was in charge of.

[00:51:48] Speaker 07:
Correct.

[00:51:48] Speaker 07:
Correct.

[00:51:49] Speaker 07:
Well, with one exception in the record regarding artwork that was taken from one of the Herzog family's palaces.

[00:51:58] Speaker 07:
There were German troops stationed at that location that did try to interfere with the Hungarians removing artwork.

[00:52:05] Speaker 07:
And there were arguments that took place about how and what could be taken.

[00:52:09] Speaker 07:
So it was not entirely 100% cooperative.

[00:52:13] Speaker 07:
But yes, it was in line with what the German forces were also

[00:52:18] Speaker 05:
So.

[00:52:21] Speaker 05:
So is that the primary factual event that you point to to show that Hungarian officials did have some degree, retained some degree of practical agency under the German occupation?

[00:52:35] Speaker 07:
That's one piece of evidence that exists in the record.

[00:52:38] Speaker 07:
There's also a lack of evidence of any German control or direction or authority over this conduct.

[00:52:43] Speaker 07:
These were carried out.

[00:52:44] Speaker 05:
Well, over these specific things.

[00:52:47] Speaker 05:
Correct.

[00:52:47] Speaker 05:
But pretty close to the extent that

[00:52:51] Speaker 05:
Germany came in in order to accelerate the taking of things of value from the Jews and to subjugate and exterminate the Jews.

[00:53:04] Speaker 05:
And they put leadership in Hungary that would effectuate that.

[00:53:08] Speaker 05:
They drafted policies that authorized these takings.

[00:53:15] Speaker 05:
And I mean, the Nazis kept very detailed records, but typically in international conflicts, you might have just a policy and people carrying it out.

[00:53:26] Speaker 05:
That's not enough under a SEWA?

[00:53:29] Speaker 07:
No, it's not under either 17 or 18.

[00:53:33] Speaker 07:
They require, 18 requires a total.

[00:53:37] Speaker 07:
as if the state could not have done it without the coercion of the coercer.

[00:53:42] Speaker 05:
And if it's a policy, if it's a general policy that squarely applies, isn't that granular enough?

[00:53:53] Speaker 07:
Under Arcewa, no.

[00:53:55] Speaker 07:
Under Arcewa, incitement even?

[00:53:56] Speaker 05:
Incitement is different.

[00:53:59] Speaker 05:
Incitement might be somebody giving a speech.

[00:54:01] Speaker 05:
But if you had a policy that said,

[00:54:05] Speaker 05:
Hungarian government under our control go and find all these things and do this and this the fact that it's written in general terms, but directed to the to the exact back scenario.

[00:54:16] Speaker 05:
That's not enough.

[00:54:17] Speaker 07:
I don't think there's evidence in the record, even though any any

[00:54:24] Speaker 05:
taking that would operate through a general edict, an authoritative and enforceable edict, but that would be written in general terms would not be enough?

[00:54:33] Speaker 05:
I read RC1.

[00:54:34] Speaker 05:
I think that might be.

[00:54:36] Speaker 07:
When I read RC1, as Judge Bates formulated the test for this case, is whether there is evidence that Germany, the state to be held derivative responsible for Hungary's taking, actively directed or controlled

[00:54:53] Speaker 07:
that taking.

[00:54:53] Speaker 07:
So one artwork at a time, not a general statement, not a general edict.

[00:54:59] Speaker 07:
But specifically, did they force that conduct to occur?

[00:55:04] Speaker 05:
But they don't make this general particular distinction that you're talking about.

[00:55:09] Speaker 05:
I think you're right that the distinction is

[00:55:14] Speaker 05:
you know, incitement or suggestion is not enough, you have to have actual direction.

[00:55:19] Speaker 05:
But nothing in the commentary that, as I read it, prevents the actual direction of an operative kind from being more general than your briefing and your argument suggests.

[00:55:36] Speaker 05:
You can help.

[00:55:37] Speaker 07:
Yeah, nothing less than conduct which forces the will of the coerced state will suffice.

[00:55:43] Speaker 05:
Right, and that's in the coercion.

[00:55:45] Speaker 05:
I'm looking at direction and control and where it talks about dominion over the commission, domination over the commission of wrongful conduct, not just oversight.

[00:55:58] Speaker 05:
So if somebody comes in, authoritative leader, and says, you will do this any time you are dealing with a

[00:56:07] Speaker 05:
Jewish household and search for all the things of value and take them and take them to this place.

[00:56:14] Speaker 05:
I mean, the fact that it would be written in that way to me does not fall short.

[00:56:21] Speaker 05:
Because it's talking about direction.

[00:56:24] Speaker 05:
And if you think about how military leaders direct their troops, they don't tend to say, and then when you turn left and you find this person, you shoot them.

[00:56:32] Speaker 05:
The direction tends to be, in this category of encounter, you do X. In that category of encounter, you do Y. And that is direction.

[00:56:40] Speaker 07:
Oversight.

[00:56:41] Speaker 07:
Well, OK, I take your point.

[00:56:44] Speaker 07:
But what we didn't find is any evidence of that.

[00:56:48] Speaker 07:
What we found and what was produced in the factual record and what Judge Bates found in his findings on 10 to 11 pages of his decision is that Hungarians were doing this.

[00:56:59] Speaker 07:
This was done by Hungarians pursuant to Hungarian legislation.

[00:57:03] Speaker 07:
The artworks were moved to Hungarian museums and then by Hungarian troops taken out of the country.

[00:57:10] Speaker 07:
This was not an operation that was directed, forced, or coerced by the Germans.

[00:57:17] Speaker 07:
whether there was an alignment of thoughts or not, there just was no evidence that Germany was telling Hungary to do this, directing Hungary to do this.

[00:57:26] Speaker 06:
Recall to me, what was the evidence about the SS troops?

[00:57:32] Speaker 07:
The SS troops, it comes into play with the Santa Barbara sculpture.

[00:57:36] Speaker 06:
And that's the only place?

[00:57:37] Speaker 07:
Correct.

[00:57:42] Speaker 06:
Well, under your argument, is that enough?

[00:57:47] Speaker 07:
Yeah, let me let me there was the question of international law and and whether a violation of the law of war sufficient for a violation of expropriation.

[00:58:05] Speaker 07:
There is internet sources of international law that say that is not that they are not the same.

[00:58:12] Speaker 07:
And there's an ICJ arbitration decision, Germany versus Italy.

[00:58:17] Speaker 07:
that's cited by the Supreme Court in Philip.

[00:58:20] Speaker 07:
The Supreme Court focused on language where the court said, a state does not lose its immunity by violating the laws of human rights.

[00:58:31] Speaker 07:
That quote continues.

[00:58:33] Speaker 07:
The Supreme Court cut it off there, but as Judge Bates noted, that quote continues, or the law of war.

[00:58:39] Speaker 07:
So that's one source of international

[00:58:42] Speaker 07:
where you find that the law of war is treated differently than the law of expropriation for whether or not we have a violation of the law of expropriation.

[00:58:52] Speaker 07:
There were cases from the 19th century, the bombardment of Valparaiso.

[00:58:58] Speaker 07:
We're going back in time, but in that situation, the belligerent,

[00:59:02] Speaker 07:
Spain was found to be subject to the law of war.

[00:59:06] Speaker 07:
The host nation, Chile, that was bombed, was found to be subject to the law of expropriation.

[00:59:13] Speaker 07:
So you've got this separate tracks developed for separate reasons.

[00:59:18] Speaker 07:
And what I heard from the bombardment of Valparaiso.

[00:59:24] Speaker 02:
And where is that?

[00:59:27] Speaker 07:
It's cited in our papers.

[00:59:30] Speaker 07:
And then a separate but similar, same timeframe, same kind of issue deals with the independent free state of gray town, which is near Nicaragua.

[00:59:41] Speaker 07:
In that situation, it was our forces that were bombing and causing damage to gray town.

[00:59:47] Speaker 07:
French residents, French nationals made stink about it.

[00:59:52] Speaker 07:
And our secretary of state said, they have no claim

[00:59:56] Speaker 07:
There is no violation of the law of expropriation here.

[01:00:00] Speaker 07:
This was done within the context of war.

[01:00:03] Speaker 05:
And so there's- So it's war related remedies that you deal with that through treaties, through claims tribunals and the like.

[01:00:11] Speaker 07:
It's war related.

[01:00:12] Speaker 05:
After a conflict.

[01:00:13] Speaker 07:
Correct, but it also is a reminder that under Philip, what we are talking about is whether there is a violation of the law of expropriation.

[01:00:21] Speaker 05:
So back into the second restatement, there is this reference in the second restatement to aliens, and aliens include stateless persons.

[01:00:31] Speaker 05:
What are we supposed to do with that?

[01:00:34] Speaker 07:
Well, the restatement did some of it for us.

[01:00:36] Speaker 07:
By the time the third version came out, they rewrote that.

[01:00:39] Speaker 05:
But the second restatement is what is considered authoritative with respect to the FSIA.

[01:00:45] Speaker 07:
Correct.

[01:00:45] Speaker 07:
Changes in language, though, have also been deemed important by this court in Helmerich.

[01:00:51] Speaker 07:
when they were looking at a difference between language and examples in commentary between the second and the restatement, the fact that it was removed between those two revisions was significant.

[01:01:03] Speaker 07:
Here, you had a redefinition.

[01:01:06] Speaker 07:
The term alien was replaced with national of a foreign state.

[01:01:11] Speaker 07:
And in the commentary, I believe it's commentary D, where it starts with stateless, it says specifically there is no protection under these rules

[01:01:21] Speaker 07:
for someone who is stateless, who does not have a national state.

[01:01:26] Speaker 07:
And so I understand that there was some ambiguity because of how 185 and 171 were written.

[01:01:33] Speaker 07:
That was discussed by this court in Simon.

[01:01:37] Speaker 07:
That's not a novel argument.

[01:01:39] Speaker 07:
But the fact that there is no source of international law that supports the theory, even if it's viable, there is no source of international law that supports the theory.

[01:01:51] Speaker 07:
that taking property from a de facto stateless person is a violation of the law of expropriation.

[01:01:56] Speaker 07:
So we end up back where this court was in Simon, which is a viable theory.

[01:02:01] Speaker 07:
And arguably, under the derived responsibility of Germany, it could be a viable theory.

[01:02:08] Speaker 07:
But the evidence does not exist to support it.

[01:02:12] Speaker 05:
Now, how about in the, I mean, just conceptually, we have, I think, you know, one of the powerful supports for your position is that because international law is state to state, and, you know, a state espouses a violation, when you have stateless persons, it's a tough hit to even find the rights, let alone remedies, but the third restatement does separate

[01:02:41] Speaker 05:
harms from remedies to some extent.

[01:02:43] Speaker 05:
If you compare section 712, state responsibility for economic injuries, and then 713, remedies.

[01:02:55] Speaker 05:
And if the body or the restatement of this body of law itself recognizes the difference between harms and remedies, why not in the situation where you have

[01:03:09] Speaker 05:
aliens, stateless persons who are harmed.

[01:03:12] Speaker 05:
They might not have an espousal remedy, but as counsel for the plaintiffs was saying, as an altman, you know, the court has in some instances recognized that the FSIA could provide a remedy even where international law itself doesn't.

[01:03:27] Speaker 07:
I think that as this court discussed inside, the fact that a stateless person may not have a remedy

[01:03:35] Speaker 07:
may or may not preclude that this is a violation of international law.

[01:03:39] Speaker 07:
But again, we go back to whether there is a source that supports that.

[01:03:44] Speaker 07:
And so we're left again with a viable theory.

[01:03:46] Speaker 07:
Perhaps it's supported, but there's no actual source of international law that says that is the case.

[01:03:53] Speaker 07:
In fact, everything on this point goes in the opposite direction.

[01:03:57] Speaker 07:
whether you look at arbitration decisions, the UN study from 1949, the more recent monographs that talk about stateless persons and what rights they do have, they certainly have rights under other laws and other systems.

[01:04:14] Speaker 07:
But as it relates to the law of expropriation, which as you note is state to state, and that's how it has historically developed, there is no protection for stateless persons.

[01:04:27] Speaker 00:
Thank you.

[01:04:30] Speaker 05:
Did council reserve rebuttal time?

[01:04:35] Speaker 05:
You don't have to take the whole five minutes.

[01:04:41] Speaker 05:
In fact, I mean, you could.

[01:04:46] Speaker 05:
Go ahead, do rebuttal.

[01:04:47] Speaker 05:
It feels a little bit artificial to have two separate arguments.

[01:04:50] Speaker 05:
So go ahead and do rebuttal and then we'll let you stay up and start the next story.

[01:04:53] Speaker 03:
Okay.

[01:04:54] Speaker 03:
I wasn't sure if you're, you know, to what extent your honors wanted to hear more on the takings point with respect to

[01:05:06] Speaker 03:
the Santa Barbara sculpture in particular, I'm happy to move into that and to fold any other arguments that I would have into the argument of that appeal if it is easiest to do that.

[01:05:17] Speaker 03:
I think, you know, we've already touched upon some of the issues already with respect to whether a taking that occurs during wartime

[01:05:35] Speaker 03:
falls within the expropriation exception to the FSIA.

[01:05:40] Speaker 03:
And that is squarely at issue in the Santa Barbara appeal because that sculpture was found in a salt mine in Austria after the war.

[01:05:53] Speaker 03:
And a contemporaneous interview by the mayor of the town said it was brought to the salt mine by German SS units.

[01:06:04] Speaker 03:
you know, we submit that sufficient to meet our burden to show at least some evidence of direct Nazi German involvement in the taking of that sculpture.

[01:06:18] Speaker 03:
And defendants' primary argument in the court below was that they thought that the Supreme Court was going to shift the burden when it heard the Simon appeal

[01:06:32] Speaker 03:
and that it was going to put the burden on the plaintiffs to prove sovereign immunity rather than keeping it as it has been that we have a burden of producing evidence.

[01:06:41] Speaker 03:
But the sovereign bears the ultimate burden of persuasion on sovereign immunity.

[01:06:47] Speaker 03:
Despite some commentary at oral argument, the Supreme Court did not change the burden in the Simon decision.

[01:06:53] Speaker 03:
And it remains as has always been articulated in the prior decisions of this court.

[01:07:00] Speaker 03:
As I touched upon before,

[01:07:05] Speaker 03:
While Philip held that a violation of the laws of human rights alone cannot supply the basis for abrogating sovereign immunity, it did not hold that you can never have a taking just because the conduct at issue may violate more than one body of law.

[01:07:21] Speaker 03:
And this court recognized that in Simon when it held that Philip, that this court could still consider

[01:07:33] Speaker 03:
the fact of the takings having occurred during a period of genocide in Hungary as part of considering whether there were facts that would come to bear with respect to aliens in Hungary as to the wartime takings in that case.

[01:07:54] Speaker 03:
I don't know to what extent your honors have additional questions on the takings or if you'd like me to address the forum non-convenience.

[01:08:02] Speaker 03:
issue that was the district courts alternative basis for dismissing the Santa Barbara sculpture.

[01:08:13] Speaker 03:
That form nonconvenience dismissal was predicated on the courts prior dismissal of the claims to the other 27 artworks.

[01:08:21] Speaker 05:
I guess just before you move on to to form nonconvenience on the

[01:08:25] Speaker 05:
And you've argued that the ICJ opinion that is cited favorably in Philip was only being used to distinguish international human rights law.

[01:08:36] Speaker 05:
But doesn't the same sentence talk about international human rights law and the law of armed conflict as not the law that the FSIA is referencing when it talks about expropriation and violation of international law?

[01:08:50] Speaker 03:
It's talking about how a violation of these other buckets of law cannot provide the exclusive basis for holding a sovereign liable under international law.

[01:09:01] Speaker 03:
But the issues here are different.

[01:09:02] Speaker 03:
We're talking about jurisdiction, not liability.

[01:09:07] Speaker 03:
We're talking about the facts that you can look at to determine.

[01:09:12] Speaker 05:
How does that make a difference, jurisdiction rather than liability?

[01:09:16] Speaker 05:
Because like there's a, it's not such a clear distinction in, at least in this, on this issue.

[01:09:28] Speaker 03:
Because you need to show simply for purposes of the FSIA that there has been a taking in violation of international law.

[01:09:37] Speaker 03:
You don't need to be suing the sovereign that performed

[01:09:41] Speaker 03:
the taking.

[01:09:42] Speaker 05:
And you can prove the extent of damages and those kinds of things at a merits hearing.

[01:09:47] Speaker 05:
But you do have to show that it's the kind of action, the kind of tort, if you will, that is cognizable.

[01:09:57] Speaker 03:
And so Congress, when it enacted the FSIA in its legislative history, specifically referred to takings that are not only

[01:10:09] Speaker 03:
You know, without proper compensation, but that are arbitrary or discriminatory in nature.

[01:10:14] Speaker 03:
And this is consistent with the State Department's position in 1949 that 19 that Nazi era takings were out that Nazi takings were outside the boundaries of.

[01:10:28] Speaker 03:
Act of State concerns because US courts were free to pass upon the validity of the acts of Nazi officials in evaluating these sort of discriminatory and uncompensated takings.

[01:10:39] Speaker 05:
So to say that- Didn't the court in Philip already talk about that that doesn't support an FSA sovereign immunity waiver?

[01:10:50] Speaker 05:
maybe a more... We're not arguing a waiver of sovereign immunity here on... Or a sovereign immunity abrogation by Congress.

[01:10:57] Speaker 05:
I mean, the FSAA authorizing suits where sovereign would otherwise be immune.

[01:11:03] Speaker 05:
Philip, I thought, distinguished those as... And so they're not... They're not bases for us to read the FSAA as allowing suits on those grounds.

[01:11:12] Speaker 03:
Philip was not... Philip was focused on whether conduct that violates the laws of

[01:11:20] Speaker 03:
genocide takes the case outside the domestic takings rule.

[01:11:24] Speaker 03:
And the Supreme Court did not address the impact of any other body of law or expressly discuss whether or not a violation can be both.

[01:11:39] Speaker 03:
However, the Supreme Court left the door open that the taking of an alien's property

[01:11:47] Speaker 03:
would during the Nazi era would be outside the domestic takings rule.

[01:11:51] Speaker 03:
And it remanded the case for the court to find out if the Philip plaintiffs had adequately preserved their argument on nationality, et cetera.

[01:11:59] Speaker 03:
But that remand would not have been necessary if the court thought

[01:12:05] Speaker 03:
that these two bodies of law were entirely exclusive, that even if you have an alien whose property is taken well, if it's really a violation of human rights law, you can't bring a property claim.

[01:12:17] Speaker 03:
Similarly, in Simon, it would be unnecessary for this court to have found that the handful of plaintiffs who were able to establish that they did not have Hungarian nationality at the time of the wartime takings

[01:12:34] Speaker 03:
could continue to pursue their claims if wartime takings, under any circumstances, are outside the boundaries of the expropriation exception.

[01:12:44] Speaker 03:
If a taking is uncompensated and arbitrary and discriminatory and would otherwise meet all of the criteria for a taking in violation of international law, it simply defies logic to say that just because that taking happened,

[01:13:00] Speaker 03:
during a period where there's also a war going on, takes it outside the boundaries.

[01:13:05] Speaker 03:
And if you look at the plain text of the SSIA itself, whenever Congress has had occasion, as they did in amending section 1605H to cover certain exemptions for art displays in the United States,

[01:13:22] Speaker 03:
They did not distinguish between the Nazi period when it involved active war versus simply the years, 1933 to 1945.

[01:13:30] Speaker 03:
It has always been the position of the United States government that these claims are discriminatory and wrongful.

[01:13:40] Speaker 03:
And the fact that they occurred in a period of active war or not should not remove an otherwise actionable claim

[01:13:51] Speaker 03:
from the scope of the expropriation exception.

[01:13:53] Speaker 03:
There's simply nothing in the language that supports that.

[01:14:01] Speaker 03:
Turning back to form nonconvenience, as I said, the court based its dismissal of the claims on the fact that the other 27 artworks had already been dismissed.

[01:14:14] Speaker 03:
So if this court finds that that decision was

[01:14:18] Speaker 03:
improper and that the other 27 artworks come back in, the basis for the district court's forum nonconvenience dismissal largely falls away.

[01:14:26] Speaker 03:
We had addressed forum nonconvenience at the very outset of this case on the first motion to dismiss back in 2011 and this court's first appeal back in 2013 when everyone found that, you know,

[01:14:40] Speaker 03:
that these claims should stay here in the United States.

[01:14:43] Speaker 03:
And it was only after the court dismissed the bulk of the artworks and we were down to one sculpture owned by the two Italian plaintiffs that the court found that that was sufficient to change the analysis.

[01:14:56] Speaker 03:
We respectfully agree.

[01:14:57] Speaker 03:
We think the court wrongly shifted the burden to the plaintiffs.

[01:15:01] Speaker 03:
to prove that the United States was the better forum rather than keeping it the burden on the defendants as it should be to show that this action is really more appropriate in Hungary.

[01:15:16] Speaker 03:
A foreign plaintiff is still entitled to a strong presumption in favor of its choice of forum.

[01:15:26] Speaker 05:
You didn't contest that Hungary was an adequate alternative forum.

[01:15:33] Speaker 03:
I don't think that's a fair reading of our papers.

[01:15:35] Speaker 03:
I know that's what the district court said.

[01:15:37] Speaker 03:
And this came up particularly in the context of the exhaustion argument.

[01:15:43] Speaker 03:
We had consistently argued that while Hungary may provide a judicial forum that is capable of hearing certain claims, that pursuing

[01:15:57] Speaker 03:
further litigation in Hungary would have been futile.

[01:16:00] Speaker 03:
The family tried for a good decade or more before they ever brought claims here in the United States to pursue certain claims to artworks in Hungary.

[01:16:09] Speaker 03:
And along the course of this very lengthy appeal, there was a period of time where Hungary had set up a new special procedure

[01:16:20] Speaker 03:
that was supposed to make it simpler for claimants to adjudicate art claims in Hungary and change the balance of decision making a little bit.

[01:16:29] Speaker 03:
That was instituted during the course of this case and fairly promptly repealed.

[01:16:35] Speaker 03:
It no longer exists.

[01:16:36] Speaker 03:
So I think, I'm not sure the district court appreciated all of those nuances because, you know, by the time we were re-litigating this, it was at a different stage after many decisions had already found that the plaintiff should not be required to litigate further in Hungary.

[01:16:53] Speaker 03:
We had had prior motion practice in front of Judge Huvel, who retired in the middle of this case.

[01:17:00] Speaker 03:
with expert declarations and all of that on why the procedures in Hungary were inadequate.

[01:17:06] Speaker 02:
What remedies would there be?

[01:17:08] Speaker 02:
I'm sorry?

[01:17:08] Speaker 02:
What remedies might there be?

[01:17:10] Speaker 03:
So my understanding is that a claimant can go to the Hungarian courts and file a lawsuit, and that the Hungarian government entities are not immune from suit.

[01:17:24] Speaker 03:
But the Hungarian courts have already made it clear

[01:17:30] Speaker 03:
that cases of this nature, there has yet to really be a successful Jewish restitution case in Hungary.

[01:17:40] Speaker 03:
Doctrines such as adverse possession come into play, where the fact they've held these artworks for as long as they have is enough, and other issues.

[01:17:54] Speaker 02:
And there's no other forum like the International Report

[01:18:00] Speaker 03:
Well, defendants have not argued that this case belongs anywhere else than Hungary.

[01:18:04] Speaker 03:
And I want to know.

[01:18:05] Speaker 02:
I'm just wondering.

[01:18:06] Speaker 02:
Yeah.

[01:18:06] Speaker 02:
The argument is that I'm just wondering, is there relief for these plaintiffs if not here?

[01:18:12] Speaker 03:
No.

[01:18:12] Speaker 03:
I don't think there is, Your Honor.

[01:18:14] Speaker 03:
Not at this point.

[01:18:16] Speaker 03:
And the two Italian plaintiffs who own the Santa Barbara sculpture are of a very advanced age.

[01:18:25] Speaker 03:
One is in her 90s.

[01:18:26] Speaker 03:
The other one, I believe, late 80s.

[01:18:28] Speaker 03:
They are the daughters of Andras Herzog, who originally owned the sculpture and was sent to the Russian front and killed during World War II.

[01:18:37] Speaker 03:
So they are of quite an advanced age.

[01:18:39] Speaker 03:
And the only person for whom a Hungarian forum would be more convenient is the defendants themselves.

[01:18:45] Speaker 03:
I mean, their council is here.

[01:18:47] Speaker 03:
They are in Italy, not Hungary.

[01:18:49] Speaker 03:
Fact discovery has already been completed here in the United States.

[01:18:53] Speaker 03:
There's simply no reason to turn

[01:18:57] Speaker 03:
you know, the case over whether it's one artwork or 28 artworks back over to the Hungarian courts when, you know, there's there's no evidence that that sense of how much these paintings or this these artworks are worth.

[01:19:12] Speaker 03:
In our complaint, when we started out with the 44, we had alleged that they are worth in excess of $100 million.

[01:19:22] Speaker 03:
The 28 that are left in one form or another between these two appeals still have a very substantial value.

[01:19:30] Speaker 03:
If we were down to the one sculpture, I don't think I could put a value on that.

[01:19:34] Speaker 03:
It's been a long time since an appraisal was done.

[01:19:36] Speaker 03:
And obviously, the one is worth less than the

[01:19:42] Speaker 03:
the 28 together, but some of the artworks that remain in the case are among the most valuable.

[01:19:47] Speaker 05:
I have a single piece of art that I noticed just this morning, a reference to the piece in the studio, that it was on deposit with Hungary.

[01:19:59] Speaker 05:
Yes.

[01:19:59] Speaker 05:
Even though I think Hungary thinks that ownership transferred to it

[01:20:05] Speaker 05:
half a century ago.

[01:20:07] Speaker 05:
Can you just clarify what the status is of that?

[01:20:13] Speaker 03:
So Hungary maintains, as we established in discovery, they maintain two separate inventories for artworks that are held in their state-owned museums.

[01:20:24] Speaker 06:
Could I just be clear before we go back to that?

[01:20:26] Speaker 06:
Because there are two other pieces of art.

[01:20:29] Speaker 06:
One of them is in the studio, the other in the church.

[01:20:34] Speaker 06:
And those don't change the environment.

[01:20:36] Speaker 03:
I'm sorry, I couldn't hear you.

[01:20:37] Speaker 06:
Judge Bates made findings on those two other pieces of art.

[01:20:41] Speaker 03:
He did, he did.

[01:20:42] Speaker 06:
In the first case.

[01:20:44] Speaker 03:
Yes.

[01:20:45] Speaker 06:
I just want to be clear in the sculpture case, what is the status of the litigation?

[01:20:52] Speaker 06:
Where are you?

[01:20:53] Speaker 06:
Any discovery, true discovery?

[01:20:55] Speaker 03:
Yes, the Santa Barbara sculpture was part of fact discovery along with all of the other artworks.

[01:21:02] Speaker 06:
So what left

[01:21:04] Speaker 06:
to be done to resolve the case.

[01:21:07] Speaker 03:
So if the cases are remanded to the district court, the parties have reserved rights on expert discovery.

[01:21:14] Speaker 03:
So there may be some expert, you know.

[01:21:17] Speaker 06:
And we have a long way to go.

[01:21:19] Speaker 03:
Potentially, yeah.

[01:21:20] Speaker 03:
There's still expert discovery and summary judgment and, you know.

[01:21:23] Speaker 04:
Expert discovery into.

[01:21:25] Speaker 04:
Merits.

[01:21:26] Speaker 04:
Valuation or into.

[01:21:27] Speaker 03:
The merits, which would include, you know,

[01:21:32] Speaker 03:
I don't know to what extent we would need it on the merits, certainly to the value of the artworks.

[01:21:39] Speaker 03:
But we've remained at a rule 12 stage for 15 years.

[01:21:42] Speaker 03:
So we have not yet, there's been a handful of motions for summary judgment on discrete issues that have been denied, you know, as in the context of the Santa Barbara case, the statute of limitations motion was denied, but there hasn't.

[01:21:54] Speaker 06:
Well, I'm just trying to understand, you know, 15 years would be years still at filing.

[01:21:59] Speaker 06:
complaint that status rights is in the district court.

[01:22:01] Speaker 06:
That's not where you are.

[01:22:03] Speaker 03:
No, because in this case, because we've had so many Rule 12b1 motions because of Hungary's sovereign status and their ability to bring an interlocutory appeal every time they lose on the question of jurisdiction, the first time they lost on the question of jurisdiction and the court sustained jurisdiction,

[01:22:22] Speaker 03:
the parties all agreed to proceed with fact discovery.

[01:22:25] Speaker 03:
So there's been a complete document production with respect to all of the artworks.

[01:22:31] Speaker 03:
There were depositions of Hungarian personnel and of one of the plaintiffs back in, I want to say it was 2018.

[01:22:39] Speaker 03:
You'll forgive me if my memory's a little fuzzy on exactly which year.

[01:22:42] Speaker 03:
But it's been a while.

[01:22:44] Speaker 03:
And it was certainly before both the 2020 round of

[01:22:50] Speaker 03:
motion practice in the district court and this most recent 2024 round in front of Judge Bates.

[01:23:00] Speaker 03:
So there's no there's no dispute at this point as to what the facts are.

[01:23:05] Speaker 06:
And so these two cases out there before us would proceed as two separate cases in the district court?

[01:23:15] Speaker 03:
No, it's all one case.

[01:23:16] Speaker 03:
What what happened here, Your Honor, is that that's all I need.

[01:23:20] Speaker 03:
Yeah, the defendants had moved to dismiss only the 27.

[01:23:25] Speaker 03:
Thank you.

[01:23:30] Speaker 05:
Okay, so you had asked me about in the studio and you had started to say that there were that the Hungarians maintained two separate inventories, right?

[01:23:39] Speaker 03:
So there is an inventory of state owned artworks.

[01:23:43] Speaker 03:
And then there's what's called the deposit inventory.

[01:23:46] Speaker 03:
And when we did discovery, the testimony of the Hungarian witnesses was generally that artworks that are on the deposit inventory are considered not to be state property.

[01:24:00] Speaker 03:
And I think that's fairly typical with museums of this nature that they have their

[01:24:05] Speaker 03:
their core collection that they believe to be state-owned, and then there are other artworks that are placed with them on deposit for one reason or another by private parties.

[01:24:16] Speaker 03:
And so in the studio, as of the time that Mr. De Cephal's aunt Martha Nierenberg started negotiations with the Hungarians in the late 90s, was still on

[01:24:30] Speaker 03:
the museum's deposit inventory.

[01:24:33] Speaker 03:
And this is outside the record of these appeals.

[01:24:36] Speaker 03:
It was an issue on some of the prior motions.

[01:24:39] Speaker 03:
There were minutes of meetings with an experts committee that Hungary had formed in which a representative of the museums agreed, at least at that time, that it appeared that that artwork was not state property.

[01:24:53] Speaker 03:
Obviously, defendants have taken a different position in this case, notwithstanding the fact that the artwork, as I understand it to this day, remains on the deposit inventory, along with, I may add, some of the other artworks in the case.

[01:25:06] Speaker 03:
It's not the only one, but there's been different legal reasons for why different artworks have come and gone out of this case.

[01:25:15] Speaker 03:
You know, our argument was that there was, with respect to this sculpture in this most recent decision in front of Judge Bates, was that there was no reason for the district court to reopen and accept defendants footnote argument that it should reconsider jurisdiction over these two artworks when there'd been no change in the facts or the law with respect to those.

[01:25:37] Speaker 03:
And they were just taking advantage of the fact they had a different judge who was, you know.

[01:25:44] Speaker 03:
Only as to the Zitterbarth piece, not as to in the studio.

[01:25:51] Speaker 03:
But it was not new evidence in the sense of evidence that wasn't available to them at the time of the original motion.

[01:25:57] Speaker 03:
It was just they went.

[01:25:57] Speaker 06:
The court had not, but Judge Bates hadn't seen any of it before because he hadn't.

[01:26:07] Speaker 03:
That's correct.

[01:26:07] Speaker 03:
Judge Huvel had not seen that particular document.

[01:26:10] Speaker 03:
Yeah.

[01:26:11] Speaker 03:
Either.

[01:26:12] Speaker 03:
Yes.

[01:26:13] Speaker 06:
So it was new evidence in that sense?

[01:26:16] Speaker 03:
In that sense, yes.

[01:26:20] Speaker 06:
All right.

[01:26:21] Speaker 06:
Then as to in the studio, what's your argument?

[01:26:25] Speaker 06:
I understand your first argument, the district court never should have gone into this again, but he did.

[01:26:31] Speaker 06:
So now we're into it.

[01:26:32] Speaker 06:
So what is your response and argument as to why he

[01:26:37] Speaker 03:
The argument is that the facts are, as before, show that there's no evidence that this artwork was taken prior to the entry of the 1973 agreement between the United States and Hungary.

[01:26:51] Speaker 03:
And so if it was taken into state ownership at all, it was taken after that agreement was executed at a period of time when its owner was indisputably a United States citizen.

[01:27:03] Speaker 03:
And because it post dated the 1973 agreement,

[01:27:06] Speaker 03:
should not have been treated as a taking covered by that agreement and would, as a taking, if it occurred sometime post-December 1973, be something that could squarely give rise to jurisdiction under the expropriation exception as a taking of property by Hungary that belonged to a United States citizen.

[01:27:30] Speaker 06:
What is your understanding when the district court said that evidence is meagre?

[01:27:35] Speaker 03:
My understanding of.

[01:27:36] Speaker 06:
The district court judge based statement that the evidence on which judge all had relied with me here.

[01:27:45] Speaker 03:
I think he just took a different view of the same evidence.

[01:27:49] Speaker 03:
I don't he wasn't looking at anything different, just a different interpretation of the same.

[01:27:56] Speaker 06:
Well, the same documents he refers does he not to.

[01:28:00] Speaker 06:
And I don't remember the person's name, but it's one of the surviving sisters' claims that was filed.

[01:28:09] Speaker 06:
And he refers to a lawsuit in Hungary.

[01:28:12] Speaker 03:
That's the Nierenberg lawsuit that I was mentioning before that occurred in the late 90s.

[01:28:16] Speaker 03:
Yes, the artwork was part of the negotiations going into that lawsuit.

[01:28:23] Speaker 03:
But the

[01:28:27] Speaker 03:
I don't think he was looking at a different set of facts than what Judge Huvel had considered on the prior motion.

[01:28:41] Speaker 03:
Thank you, Your Honor.

[01:29:02] Speaker 07:
Thank you.

[01:29:03] Speaker 07:
I'll pick up with the last two artworks that were just being discussed unless you have another area you'd like to start with.

[01:29:11] Speaker 07:
The District Court Judge Bates acknowledged in his decision that he was reexamining the evidence and found that this was a timing issue, whether or not these artworks were taken when Erzsébet was an American citizen or still Hungarian.

[01:29:29] Speaker 07:
and on the other artwork, whether it was taken when the two sisters were still Hungarian or had relocated and become Italian nationals.

[01:29:37] Speaker 07:
What he found is that the evidence showed in 1959, prior to the 1973 settlement agreement with the U.S., Erzsébet had made a claim for this particular artwork.

[01:29:49] Speaker 07:
This provided support for the finding, this factual finding, that it predated the settlement agreement and thus would have been resolved by the settlement agreement.

[01:29:59] Speaker 05:
It being the taking.

[01:30:00] Speaker 07:
Yeah, it being the taking.

[01:30:02] Speaker 07:
She was already claiming it in 1959 as having been taken from her.

[01:30:07] Speaker 07:
So it would have been resolved by the 1973 settlement agreement, or at least would have been taken prior to that.

[01:30:14] Speaker 06:
What I'm trying to understand, though, is if she was mistaken about that, how could she have recovered a claim?

[01:30:23] Speaker 06:
Because claims would be what she would have been.

[01:30:26] Speaker 07:
If she was mistaken about

[01:30:29] Speaker 06:
about the studio having been taken.

[01:30:33] Speaker 07:
If she was mistaken, then it had not yet actually been taken.

[01:30:36] Speaker 07:
What we know from the record is that she was claiming it in 1959 as having been taken.

[01:30:45] Speaker 07:
And so Judge Bates was- That's my point.

[01:30:48] Speaker 06:
You file a claim, the property of mine was taken.

[01:30:53] Speaker 06:
And the authority says, we've looked at this.

[01:30:57] Speaker 06:
You're wrong.

[01:30:58] Speaker 06:
It was never taken.

[01:31:02] Speaker 06:
So you don't recover anything.

[01:31:05] Speaker 06:
I'm just trying to understand the weight that is properly given to this evidence that Judge Page relied on.

[01:31:12] Speaker 06:
He says there was this claim.

[01:31:14] Speaker 06:
He says there's a case in Hungary.

[01:31:18] Speaker 07:
No, sorry.

[01:31:18] Speaker 07:
This was a claim that was submitted to be resolved as part of a settlement agreement between Hungary and American citizens.

[01:31:27] Speaker 07:
And so the claim was not necessarily made to Hungary to respond or deny.

[01:31:31] Speaker 07:
So it was part of a process.

[01:31:33] Speaker 06:
That's because you submit a claim, you automatically succeed.

[01:31:40] Speaker 06:
That's all I'm trying to understand.

[01:31:41] Speaker 07:
I don't know if you actually succeed or not.

[01:31:44] Speaker 05:
The question is timing.

[01:31:46] Speaker 05:
She's not privy to where exactly and under what terms the artwork is being held.

[01:31:54] Speaker 05:
So I think all Judge Roger is saying is if she has some reason to believe that

[01:32:00] Speaker 05:
it might have at that point been owned by Hungary, then she would file a claim, kind of a protective claim.

[01:32:07] Speaker 05:
And if it is, then I can get it.

[01:32:10] Speaker 05:
If it's not, then I might not.

[01:32:12] Speaker 05:
But the existence of a claim by someone who isn't in a position necessarily to know all the facts at the particular time isn't as positive of the actual ownership or status of the art at that time.

[01:32:29] Speaker 05:
I mean, I'm just trying to.

[01:32:31] Speaker 07:
Yeah, no, I understand.

[01:32:32] Speaker 07:
I understand the distinction.

[01:32:33] Speaker 07:
What Judge Bates was trying to do, at least as he's explained in his decision, is looking at the evidence.

[01:32:40] Speaker 06:
I understand that.

[01:32:41] Speaker 06:
All he's saying is, is the weight that he gave the evidence reasonable?

[01:32:48] Speaker 06:
Or was it clearly around him?

[01:32:51] Speaker 00:
I don't believe it.

[01:32:51] Speaker 06:
He filed a claim, and somebody else filed a lawsuit.

[01:32:55] Speaker 06:
That's all I'm asking.

[01:32:57] Speaker 06:
He doesn't say anything.

[01:33:00] Speaker 06:
but found these as facts.

[01:33:02] Speaker 06:
Claim was filed.

[01:33:04] Speaker 06:
There was a lawsuit in Hungary.

[01:33:07] Speaker 06:
My only question.

[01:33:13] Speaker 07:
As to the other artwork, similarly, he was looking at whether or not that had been taken based on the factual record before or after the two Herzog sisters had become Italian nationals.

[01:33:26] Speaker 07:
He found that based on the facts,

[01:33:29] Speaker 07:
in his review of those facts, it took place while they were still Hungarian.

[01:33:33] Speaker 07:
So it's barred by the domestic takings rule.

[01:33:36] Speaker 07:
So that was his decision on the other artwork.

[01:33:39] Speaker 06:
By the other, you mean the architect?

[01:33:41] Speaker 06:
The architect, correct.

[01:33:42] Speaker 06:
Yes.

[01:33:43] Speaker 06:
Well, he had that letter, too, that I was talking with counsel about.

[01:33:47] Speaker 06:
And I'm just, I was just asking about the in the studio funding by the district court.

[01:33:54] Speaker 06:
But you don't have any response other than who cited these things.

[01:33:59] Speaker 07:
There was evidence, I don't have it all in front of me, but if you look at his decision in the studio, there was evidence that it had passed into Hungarian state ownership and was covered by the 1973 agreement.

[01:34:13] Speaker 07:
One of the documents I know he relied upon was the 1959 claim made by the owner of the artwork.

[01:34:22] Speaker 07:
I don't have in front of me anything else he relied on, but it would be in the record and in his decision.

[01:34:26] Speaker 06:
Well, I think Judge Huvel must have opened

[01:34:30] Speaker 06:
wasn't clear in any event.

[01:34:32] Speaker 06:
You don't have any new record evidence to point me to.

[01:34:37] Speaker 06:
Thank you.

[01:34:41] Speaker 07:
On the issue of forum non-convenience.

[01:34:46] Speaker 07:
Judge Bates gave the plaintiffs the correct amount of deference, acknowledged that plaintiffs have the right to pick their forum, but agreed that it was not the same deference that would be provided to an American plaintiff.

[01:35:01] Speaker 07:
These are now foreign plaintiffs.

[01:35:02] Speaker 07:
If we're only talking about the Santa Barbara sculpture, these are now two foreign plaintiffs.

[01:35:10] Speaker 07:
There's no connection with the artwork in the United States.

[01:35:13] Speaker 06:
Well, the forum is not

[01:35:17] Speaker 06:
an irrelevant factor, even where the plaintiff is not an American citizen or lives in Italy.

[01:35:27] Speaker 07:
Correct.

[01:35:28] Speaker 07:
It's not irrelevant.

[01:35:30] Speaker 06:
The judge didn't mention that, other than that their age.

[01:35:33] Speaker 07:
It's not irrelevant, but it's given different weight when you're comparing.

[01:35:37] Speaker 06:
It is still a factor.

[01:35:38] Speaker 07:
It is still a factor.

[01:35:39] Speaker 06:
And the judge considered it.

[01:35:41] Speaker 07:
the judge considered, and then he walked through all of the public and private factors explaining.

[01:35:47] Speaker 06:
That they were old, that they'd been litigating.

[01:35:52] Speaker 07:
Well, that they are in Italy, which is not more convenient to the United States than it is to Budapest, that there will be issues of international law, that there will be additional expert facts that will need to be resolved, expert discovery.

[01:36:08] Speaker 06:
That's his opinion.

[01:36:10] Speaker 06:
coming to the United States may be much more convenient than going forward to all kinds of things.

[01:36:19] Speaker 07:
I don't know.

[01:36:19] Speaker 07:
There's no evidence in the record.

[01:36:21] Speaker 06:
No, but I'm just getting at how he addressed these facts.

[01:36:26] Speaker 06:
I mean, they're serious facts.

[01:36:28] Speaker 07:
They're serious facts.

[01:36:30] Speaker 07:
And he, this court gives him substantial deference when he works through a reasoned analysis of the factors.

[01:36:39] Speaker 07:
looks at the evidence and the arguments put forward, and found that all 10 factors, public and private, weigh in favor of convenience in Hungary over convenience in the United States, for the reasons he explained and which are, again, given substantial deference.

[01:36:57] Speaker 07:
I don't think it was just a few of the factors.

[01:37:00] Speaker 07:
He went through all of them.

[01:37:02] Speaker 07:
issues of what law will be applied, what additional translations will be needed, what expert testimony will be needed on how those laws are to be interpreted, use of Hungarian attorneys in the proceedings, those were all considered by him in addition to the geographic proximity.

[01:37:20] Speaker 05:
I assume if we thought that the art that had Elizabeth's artwork is back in play in the case, that we should just remand the former non-convenience issue to the district court to consider.

[01:37:33] Speaker 05:
Yeah, that was.

[01:37:34] Speaker 05:
Or I mean, I assume that it was a prior form non-convenience analysis earlier in the case that held it because of Americans.

[01:37:41] Speaker 05:
Yes, yes.

[01:37:43] Speaker 07:
If the 27 artworks

[01:37:46] Speaker 07:
The situation changes from how it is right now, and those are back in the case.

[01:37:49] Speaker 07:
And then, yes, the forum non-convenience argument changes, too.

[01:37:54] Speaker 05:
And just going back to the wartime takings issue, are there any takings that occur during wartime that legitimately fall under the expropriation exception post the Supreme Court's decision in Philip?

[01:38:15] Speaker 07:
If you look at the restatement, no.

[01:38:17] Speaker 07:
The restatement says that these sections which detail the law of expropriation do not apply in a time of war.

[01:38:25] Speaker 05:
It just seems odd.

[01:38:26] Speaker 05:
I mean, we've had dozens and dozens of cases and myriad opinions that assume the contrary.

[01:38:35] Speaker 05:
And it just feels like a rash move to say they were all operating under a categorical

[01:38:44] Speaker 05:
misapprehension of the field of law that apply?

[01:38:49] Speaker 07:
I don't think you need to get to that question.

[01:38:51] Speaker 07:
I think you can affirm on other grounds.

[01:38:54] Speaker 07:
But when you look at how the law of expropriation was developed, it was a law to protect property of aliens, property of other people coming into a host country.

[01:39:07] Speaker 07:
And it regulated what that host country could do and when they would be

[01:39:12] Speaker 07:
responsible for harm to that property.

[01:39:15] Speaker 07:
So the dynamic, like the classic was in Sabatino, where you have Cuba nationalizing property belonging to Americans, the properties located in Cuba.

[01:39:26] Speaker 07:
So you have not only in the introduction to the restatement part four, you have the language that this does not apply in times of war, it's meant to apply in times of peace,

[01:39:36] Speaker 07:
It also talks about a state's jurisdiction.

[01:39:39] Speaker 07:
This is meant to regulate a state's conduct within its jurisdiction.

[01:39:44] Speaker 07:
And so whether or not it is a categorical, it can never apply in a time of war.

[01:39:50] Speaker 07:
I agree no court has looked at that.

[01:39:52] Speaker 07:
Judge Bates acknowledged war rages differently at different places at different times.

[01:39:57] Speaker 07:
Whether or not you would find a state of war inside of a country that is

[01:40:02] Speaker 07:
taking property from its own people, whether it would apply in a situation like Austria that was annexed?

[01:40:09] Speaker 07:
Was there active war going on?

[01:40:10] Speaker 07:
I think there are nuanced issues that need to be resolved to say something categorically like that.

[01:40:17] Speaker 07:
But here you have German troops arguably being held responsible, Germany being held responsible

[01:40:26] Speaker 07:
for its wartime conduct in allegedly occupying Hungary.

[01:40:31] Speaker 07:
This is squarely within the rules of war.

[01:40:35] Speaker 07:
They've cited the Hay Convention, prohibitions against pillage.

[01:40:40] Speaker 07:
Those are issues in the area of armed conflict and the law of war.

[01:40:44] Speaker 07:
Those are not issues you see in the law of expropriation, which deals a specific.

[01:40:50] Speaker 05:
So you're not just talking about the Santa Barbara now, or are you?

[01:40:53] Speaker 07:
No, I was just responding to your question about we haven't seen this in other cases.

[01:40:58] Speaker 05:
And then, but so if we, you're not proposing that we do something different from what Judge Bates did and apply the work, the limitation.

[01:41:11] Speaker 05:
of the restatement and of international law to peacetime in the other cases, in the other appeal.

[01:41:20] Speaker 05:
I know it's all one case, but in the other appeal, instead of reviewing the grounds on which Judge Bates decided.

[01:41:30] Speaker 07:
I think you could go in that direction if you felt, if you were interested in doing that.

[01:41:36] Speaker 07:
What we briefed for Judge Bates on, we'll call it the 27,

[01:41:40] Speaker 07:
was squarely under Philip the domestic takings argument.

[01:41:44] Speaker 07:
That the plaintiff had alleged throughout this case, Hungary was responsible for taking these artworks.

[01:41:50] Speaker 07:
And pursuant to Philip and this court later in Simon, that did not amount to a taking and violation of international law because they were Hungarian citizens.

[01:42:00] Speaker 07:
So the domestic takings rule applied.

[01:42:03] Speaker 07:
And then we dealt with the de facto stateless argument.

[01:42:06] Speaker 02:
The most efficient way

[01:42:10] Speaker 02:
to deal with, well, I'll call it the chapel two, which is what we're talking about now, is we don't even have to address the wartime takings issue if we just rule on forum non-convenience.

[01:42:22] Speaker 07:
Correct.

[01:42:23] Speaker 07:
You don't need to address the wartime takings issue on the 27 or on the Santa Barbara.

[01:42:28] Speaker 07:
Correct.

[01:42:31] Speaker 05:
And is there no weight given in the forum non-convenience analysis to the fact that plaintiffs,

[01:42:40] Speaker 05:
DC District Court has had jurisdiction over this case for many, many years and put a lot of work into it, as have parties.

[01:42:51] Speaker 05:
And because at a late stage, certain plaintiffs are eliminated, the whole thing starts over again somewhere else?

[01:43:02] Speaker 07:
I don't think it starts over again someplace else.

[01:43:04] Speaker 07:
In fact, discovery has been completed.

[01:43:06] Speaker 07:
So they wouldn't have to restart every piece of the litigation.

[01:43:10] Speaker 07:
The Hungarian courts could certainly make their own determinations.

[01:43:17] Speaker 07:
What we know is in the Hungarian courts, there's no statute of limitations for claims based on war times takings.

[01:43:23] Speaker 07:
There's no question of jurisdiction.

[01:43:25] Speaker 07:
And the plaintiffs have due process rights.

[01:43:28] Speaker 07:
And we did have litigation in the 2000s.

[01:43:31] Speaker 07:
We're part of the de Sheppell family, the Herzog family participated, not all of them, the two Italian sisters.

[01:43:38] Speaker 07:
in fact, chose not to participate and said they would not participate or provide documentation.

[01:43:43] Speaker 07:
So how that litigation might turn out, I don't think we can predict or say.

[01:43:48] Speaker 07:
But it is an adequate form in that it provides the courthouse for the plaintiffs to file their claim.

[01:43:55] Speaker 06:
To your question, I'm sorry.

[01:43:59] Speaker 06:
I haven't been on these cases.

[01:44:01] Speaker 06:
But in a usual form, none.

[01:44:04] Speaker 06:
Should the case be here?

[01:44:10] Speaker 06:
in Italy.

[01:44:12] Speaker 06:
The law of Italy has been steady.

[01:44:14] Speaker 06:
We haven't had the convulsion of a world war.

[01:44:18] Speaker 06:
What's going on in Hungary now and its legal system is different than what happened from 15 years ago.

[01:44:26] Speaker 06:
That's all I'm getting.

[01:44:31] Speaker 06:
Even though they've been waiting in good faith and litigating here for 15 years,

[01:44:36] Speaker 06:
They have to go to another jurisdiction, new filing processes, new fees to pay, new motions.

[01:44:43] Speaker 06:
I mean, it's just.

[01:44:46] Speaker 07:
Well, we're not ready for trial tomorrow in this case either, Your Honor.

[01:44:49] Speaker 07:
We still have to determine choice of law.

[01:44:51] Speaker 07:
We still have to go through expert discovery.

[01:44:53] Speaker 07:
There's a significant amount of work, which I think the plaintiffs acknowledge, before this is trial ready.

[01:44:59] Speaker 07:
That also has to be done in Hungary.

[01:45:02] Speaker 06:
So the sisters are 90 years old.

[01:45:05] Speaker 07:
As I understand it.

[01:45:07] Speaker 06:
I don't know.

[01:45:08] Speaker 06:
Who are the heirs of the sisters?

[01:45:09] Speaker 06:
We don't know.

[01:45:10] Speaker 02:
I don't know.

[01:45:14] Speaker 02:
So the Santa Barbara sculpture is, that's the only thing that was the subject of the Forum Non-Comedians.

[01:45:23] Speaker 02:
Correct.

[01:45:23] Speaker 02:
Ruling.

[01:45:25] Speaker 02:
But if we dismiss as to the other 27, would, I guess it's maybe a question for the other side.

[01:45:34] Speaker 02:
Did they bring actions in Hungary then?

[01:45:37] Speaker 07:
On the 27?

[01:45:38] Speaker 07:
Yeah.

[01:45:39] Speaker 07:
I'm not an expert on Hungarian law and whether res judicata or collateral stopple would be available to them, but there would be some ruling on the merits that could be argued.

[01:45:49] Speaker 07:
I can't say that.

[01:45:50] Speaker 02:
So the cause of action would be the same, it would be under international law, et cetera, in Hungary or is this something different?

[01:45:56] Speaker 07:
It would be the same theory that the heart of the family brought with regard to other artworks in 2000.

[01:46:02] Speaker 07:
that they were wrongfully taken and that they should be returned.

[01:46:05] Speaker 02:
Okay, I see, I see.

[01:46:06] Speaker 02:
And that, but that, with the 27 part of that lawsuit or those other changes?

[01:46:11] Speaker 07:
No, that was part of prior briefing in this case.

[01:46:14] Speaker 07:
Some of them overlapped, but those were resolved through prior motions.

[01:46:20] Speaker 02:
I see.

[01:46:24] Speaker 06:
Okay.

[01:46:26] Speaker 05:
All right.

[01:46:27] Speaker 05:
Thank you.

[01:46:32] Speaker 05:
And I think, Ms.

[01:46:33] Speaker 05:
Berenatti, you have one more rebuttal.

[01:46:35] Speaker 03:
I want to thank you all for the time and dedication that this court has shown to this case, not just today, but over the past decade and a half.

[01:46:54] Speaker 03:
It's been a journey.

[01:46:56] Speaker 03:
I just want to note that,

[01:46:59] Speaker 03:
Both this court on a prior appeal and the district court have found that plaintiffs would likely have no opportunity to receive the relief that they seek if this suit were dismissed on grounds of forum non.

[01:47:13] Speaker 03:
And as we say in our papers, I don't think the fact that we're down to the one sculpture should change that prior analysis.

[01:47:21] Speaker 02:
So is it true that if we dismiss as to the 27, there's no recourse anywhere else you couldn't bring or even try to bring?

[01:47:29] Speaker 03:
You could try, perhaps, you know.

[01:47:32] Speaker 03:
Like Mr. Brian, I'm not an expert on Hungarian law.

[01:47:37] Speaker 03:
You know, my understanding is that the

[01:47:40] Speaker 03:
special procedures that were sort of in place that might have made it easier to bring a claim at one point in time in the course of this litigation no longer exists.

[01:47:49] Speaker 03:
So you're back to where the family tried and failed in the 90s to have these claims adjudicated in the Hungarian courts.

[01:48:00] Speaker 03:
What's possible today, we would have to see.

[01:48:04] Speaker 03:
Um, you know, I don't think it's, uh, it's defendants burden to prove that Hungary is an adequate form, not our burden to show that it's, that it's not.

[01:48:15] Speaker 03:
And, um, I don't think they met that burden here.

[01:48:18] Speaker 03:
Um, so I just want to leave one final point, which kind of goes back on the, um, the occupation issue we were talking about is that Hungary's own constitution.

[01:48:32] Speaker 03:
states that Hungary lost its self-determination during the period at issue.

[01:48:37] Speaker 03:
They put that in their recent constitution, not some historical artifact.

[01:48:44] Speaker 03:
So I think for them to now come into court and say that

[01:48:50] Speaker 03:
You know, these are all domestic matters.

[01:48:53] Speaker 03:
We're insulated, or it's wartime, and you can't look at it is at odds with this idea that what they have represented in their own Constitution.

[01:49:04] Speaker 03:
Thank you again very much.

[01:49:05] Speaker 03:
Unless the court has further questions, I'll rest.

[01:49:09] Speaker 05:
Thank you.

[01:49:09] Speaker 05:
The case is submitted.

[01:49:11] Speaker 03:
Thank you.