The Supreme Court ruled Friday in *Republic of Hungary v. Simon*, a case that clarifies the scope of the Foreign Sovereign Immunities Act's expropriation exception and its impact on Holocaust-era property claims. The decision addresses when survivors and their heirs can pursue litigation against foreign governments in U.S. courts for property seized during World War II.
The case centers on the Foreign Sovereign Immunities Act of 1976, which provides foreign states with presumptive immunity from lawsuits in the United States. Under 28 U.S.C. § 1604, plaintiffs must satisfy one of several exceptions to immunity to sue a foreign sovereign in U.S. courts.
The respondents are Jewish survivors of the Hungarian Holocaust and their heirs who sued Hungary and its national railway, MÁV, in federal court seeking damages for property allegedly seized during World War II. The plaintiffs' complaint alleged that Hungary and MÁV liquidated the expropriated property, commingled the proceeds with other government funds, and later used funds from those commingled accounts in connection with commercial activities in the United States.
The legal dispute focused on the FSIA's expropriation exception, codified in § 1605(a)(3), which permits claims when "rights in property taken in violation of international law are in issue" and either the property itself or any property "exchanged for" the expropriated property has a commercial nexus to the United States.
The central question before the court was whether the plaintiffs' "commingling theory" satisfied the commercial nexus requirement under § 1605(a)(3). Under this theory, the survivors argued that Hungary's liquidation of seized property and subsequent commingling of those proceeds with other government funds, which were later used for U.S. commercial activities, established the necessary connection to American commerce.
The U.S. District Court initially determined that this commingling theory satisfied the commercial nexus requirement under § 1605(a)(3). The D.C. Circuit Court of Appeals affirmed this decision, reasoning that requiring plaintiffs to trace the particular funds from the sale of their specific expropriated property to the United States would create an insurmountable burden for Holocaust survivors seeking justice.
The case represents a significant development in the ongoing legal efforts by Holocaust survivors and their descendants to recover property and obtain compensation for assets seized by Axis powers and their collaborators during World War II. These claims often face substantial legal hurdles, including statutes of limitations, sovereign immunity protections, and the practical difficulties of proving ownership and tracing assets after more than 80 years.
The Foreign Sovereign Immunities Act has been a crucial legal framework for such cases since its enactment in 1976. The statute replaced the previous system where sovereign immunity determinations were made by the executive branch with a judicial framework based on specific statutory exceptions. The expropriation exception specifically addresses situations where foreign governments have taken property in violation of international law.
The commercial nexus requirement within the expropriation exception has been the subject of considerable litigation as courts have grappled with how direct the connection between expropriated property and U.S. commercial activity must be. Some courts have required plaintiffs to demonstrate a direct link between specific seized assets and subsequent U.S. commercial activities, while others have accepted broader theories of connection.
The Supreme Court's decision in *Hungary v. Simon* will likely have implications beyond Holocaust-era claims, potentially affecting how courts analyze commercial nexus requirements in other expropriation cases involving foreign governments. The ruling may also influence ongoing litigation by other groups seeking to recover property seized by foreign governments.
Hungary has been the subject of numerous lawsuits related to Holocaust-era property seizures. The Hungarian government and its agencies, including the national railway MÁV, have faced claims not only for direct property confiscation but also for their role in facilitating deportations and the systematic plundering of Jewish assets during the Nazi occupation.
The case was argued before the Supreme Court on December 3, 2024, and decided on February 21, 2025. The decision comes as part of the court's October 2024 term and represents one of several recent Supreme Court cases addressing questions of foreign sovereign immunity and international law.
The implications of this decision will likely be closely watched by both plaintiffs' attorneys representing Holocaust survivors and legal counsel for foreign governments facing similar claims in U.S. courts. The ruling may also influence diplomatic discussions about historical property restitution and the ongoing efforts to address unresolved issues from World War II.
As this is a preliminary print of the Supreme Court decision, the final published version may contain formal revisions before the bound volume is released. The full text of the opinion and any concurring or dissenting views will provide additional guidance on how lower courts should apply theseprinciples in future sovereign immunity cases involving expropriated property.