Republic of Hungary v. Simon

FSIA AND INTERNATIONAL COMITY

Petitioners Republic of Hungary, et al. (“Hungary”) contend that federal courts can decline jurisdiction in this case because the FSIA does not destroy the federal court’s discretion to exercise international-comity-based abstention. Brief for Petitioners, Republic of Hungary, et al. at 19, 26. Hungary explains that comity-based-abstention allows U.S. courts to avoid “judicial interference in the conduct of foreign policy.” Id. at 25. Such abstention, Hungary continues, gives another, more appropriate sovereign the first opportunity to address a dispute relating to that sovereign. Id. at 29. Hungary points out that federal courts have often relied on—and continue to rely on—international comity to decline jurisdiction when foreign sovereign interests are implicated to ensure that U.S. litigation does not cause international friction. Id. at 23. Hungary argues that the FSIA only determines whether federal courts have subject-matter jurisdiction, and not whether they should exercise such jurisdiction. Id. at 26. Furthermore, Hungary argues, that FSIA undisputedly preserved other common law doctrines such as forum non conveniens as basis for abstention, and since forum non conveniens and international comity have similar roots, international comity too remains a valid basis for abstention. Id. at 27–28. Thus, Hungary concludes, FSIA does not preclude federal courts from exercising comity-based-abstention. Id.

Respondents Rosalie Simon, et al. (“Simon”) argue that federal courts should not exercise jurisdiction based on international comity because Congress explicitly displaced such common law doctrines by codifying the FSIA. Brief of Respondents, Rosalie Simon, et al. at 18–20. Simon asserts that the FSIA comprehensively codifies comity principles, and that comity concerns are not relevant if the FSIA provides a basis for jurisdiction. Id. at 14. Simon explains that the FSIA was intended to stop case-by-case, factor-intensive determinations of sovereign immunity that resulted in non-uniform standards and uncertainty. Id. at 14–16, 21. And today, Simon asserts, any immunity defense must stand or fall on FSIA’s text. Id. at 16–17. Furthermore, Simon argues, the use of forum non conveniens as a valid basis for abstention in some cases cannot justify the application of a separate doctrine, international-comity-based abstention, because the two doctrines having common roots is not a sufficient reason to assume that comity too is a valid basis for abstention. Id. at 26. The traditional considerations behind these two doctrines, Simon continues, are different. Id. at 25–26. Simon argues that the FSIA explicitly states that no foreign sovereign is immune unless a statutory exception applies. Id. at 17.

ADJUDICATIVE & PRESCRIPTIVE COMITY

Hungary argues that adjudicative comity, or comity of the courts, can be used to decline jurisdiction over a matter that is more appropriately brought in a different forum. Brief for Petitioners at 24. Adjudicative comity, Hungary explains, is when “judges decline to exercise jurisdiction over matters more appropriately adjudged elsewhere.” Id. For example, Hungary continues, when a foreign sovereign’s interests outweigh those of the U.S., judges may hold that the matter should be addressed in a foreign forum. Id. at 34–35. Hungary posits that this case involves such adjudicative comity because Hungary has a stronger interest than the U.S. in regulating conduct that took place in Hungary between its government and Hungarian nationals. Id. at 35. Hungary asserts that federal courts are ill-equipped to balance the interests of the survivors in this case and that applying common-law conversion claims would devastate the Hungarian economy. Id. at 39. Furthermore, Hungary argues, the U.S. explicitly extinguished its interest in settlement of any WWII-confiscated property when it became party to the 1947 Peace Treaty. Id. at 42. Apart from its extinguished interest in settlement, Hungary points out that the U.S. has little interest in this case other than the mere corporate presence of Hungary in the United States. Id. at 40–42. Finally, Hungary asserts that it should be granted adjudicative comity because it can provide an adequate forum to litigate the dispute, as per the District Court’s determination. Id. at 43.

Hungary also explains that prescriptive comity—where sovereigns limit the application of their laws to other states out of respect—provides another basis for federal courts to decline jurisdiction. Id. at 24, 46. Hungary asserts that prescriptive comity warrants dismissal here because this case revolves around the conduct of a foreign sovereign within the territory of that sovereign against nationals of that sovereign. Id. at 46. Hungary argues that the Supreme Court has previously held it unreasonable to apply a federal statutes in such situations. Id. at 46.

On the other hand, Simon argues that abstention on the basis of adjudicatory comity is limited to situations where there is a pending or completed parallel proceeding in another forum. Brief for Respondents at 27–28. Simon argues that abstention is only necessary to avoid contemporaneous exercise of concurrent jurisdiction. Id. Since there is no such parallel proceeding in Hungary, Simon concludes, adjudicatory comity does not kick in. Id. Furthermore, Simon argues that, in this case, abstention is outweighed by the inadequacy of Hungary's judicial forums for hearing such cases and the U.S.’s strong interests in ensuring available remedies to victims of the Holocaust. Id. at 38–39. Simon notes that Hungary has failed to provide a mechanism for resolving the survivor’s claims, pointing to a State Department report asserting that Holocaust-era property claims face too many procedural challenges to make a judicial remedy possible in Hungary. Id. at 40. Additionally, Simon alleges that the compensation available to Holocaust survivors in Hungary is inadequate and only provided in the form of vouchers to purchase Hungarian state property. Id. Thus, Simon argues that declining jurisdiction based on adjudicatory comity is not appropriate. Id. at 27.

Simon argues that federal courts should not decline jurisdiction based on prescriptive comity because legislatures exercise prescriptive comity when they enact laws, not by the courts. Id. at 40. Simon argues that prescriptive comity is applied only to ambiguous statutes, not the FSIA which explicitly contemplates conduct occurring outside the U.S.—especially the expropriation of property without just compensation. Id. at 41. Furthermore, Simon argues that this is not a “foreign-cubed case,” four of the named survivors in this case are U.S. citizens who were stripped of their Hungarian nationality before being sent to Nazi camps. Id. Thus, Simon argues that prescriptive comity cannot be used as a basis for declining jurisdiction. Id. at 40.

PRIVATE DEFENDANTS v. SOVEREIGNS

Hungary contends that federal courts should not exercise jurisdiction because §1606 of the FSIA puts foreign states who lack sovereign immunity in the same litigatory position as private defendants, who can obtain dismissals in cases where another forum is more appropriate. Brief for Petitioners at 29. Because international comity is available to private parties in litigation, Hungary argues that it must also be extended to suits involving sovereign defendants under the FSIA. Id. at 30–31. To bolster its argument, Hungary points to Kiobel v. Royal Dutch Petroleum Co., where the Supreme Court held that courts hearing Alien Tort Statute (“ATS”) cases did not have the authority to enforce a norm of international law if all the relevant conduct took place outside the U.S. Id. at 32. Hungary argues that, just as federal courts should not exercise jurisdiction over private defendants in foreign-centered controversies in ATS cases, they should not exercise jurisdiction over sovereign defendants in FSIA cases. Id. Hungary notes that it would be contradictory to respect foreign-policy concerns for private defendants but not sovereigns. Id. at 33.

Simon argues that federal courts should exercise jurisdiction over sovereign states because federal courts cannot use §1606 to justify abstention. Brief for Respondents at 24. Simon asserts this because section §1606 only governs the extent of liability, and not whether a U.S. court has the discretion to exercise jurisdiction over a foreign sovereign defendant. Id. Simon also distinguishes between the ATS and the FSIA, as the ATS does not clearly specify the types of claims that fall within the jurisdiction granted by it. Id. at 31. Simon argues that private-defendant cases may be dismissed if courts are wary of expanding the substantive scope of the ATS. Id. Simon asserts that the Court in Kiobel restrained the use of the ATS because Congress was silent on the issue, believing that courts should not recognize new causes of action that would have potential foreign policy implications. Id. at 32. However, Simon argues, the judicial restraint doctrines that apply to ATS cases do not apply to foreign sovereigns under FSIA, because the FSIA comprehensively covers jurisdiction over sovereigns. Id. at 31. Thus, Simon argues that federal courts should exercise jurisdiction over foreign sovereigns. Id.