Bernstein v. N.V. Nederlandsche-Amerikaansche Stoomvaart-Maatschappij

Arnold Bernstein (plaintiff) owned the stock of a German corporation, the Red Star Line. Bernstein sued N.V. Nederlandsche-Amerikaansche Sroomvaart-Maatschappij, also known as Holland-America Line (defendant) for conversion of Red Star Line’s assets. Bernstein alleged that he was imprisoned by the Nazis in 1937 and was compelled, under duress, to execute documents purporting to transfer his shares in the Red Star Line to a Nazi designee who transferred them to Holland-America Line. Bernstein’s complaint was dismissed. Bernstein appealed. Relying on the decision in Bernstein v. Van Heyghen Freres Societe Anonyme, 163 F.2d 246 (2d Cir. 1947), the Second Circuit ordered Bernstein not to allege matters that would require the court to adjudicate the validity of acts of officials of the German government. In April 1949, the United States Department of State (State Department) issued a press release and published a copy of a letter to Bernstein’s attorneys from the State Department’s acting legal advisor stating that the U.S. government was opposed to the Germans’ forcible and discriminatory acts of dispossession, it was the United States’ policy to undo the forced transfers and restitute property to victims of Nazi persecution, and it was executive policy to relieve U.S. courts from any restraint upon the exercise of their jurisdiction to adjudicate the validity of the acts of Nazi officials in connection with claims asserted in the United States for the restitution of property lost as a result of Nazi persecution.