Federal Republic of Germany v. Philipp

The Welfenschatz was a collection of valuable medieval religious objects. In the late 1920s, a consortium of three art firms purchased the Welfenschatz. The firms were owned by Jewish residents of Frankfurt. In 1935, after the rise of the Nazi government, the firms were pressured into selling many of the Welfenschatz pieces to Prussia for about one-third of the objects’ value. Heirs to the original owners, including Alan Philipp (collectively, the heirs) (plaintiffs), submitted a claim to the German Advisory Commission (commission) in 2014, alleging that the acquisition of the objects by the Federal Republic of Germany (Germany) (defendant) was unlawful. The commission denied the claim on the grounds that the objects had been sold for a fair price. The heirs sued Germany in federal district court in Washington, D.C., alleging that Germany was not immune from suit because the Foreign Sovereign Immunities Act (FSIA) exempted property taken in violation of international law (the expropriation exemption, also known as the Second Hickenlooper Amendment). The heirs argued that Germany had taken their property in carrying out a genocide, a violation of international law. Amendments to the FSIA in 2016 (the 2016 amendments) specified that a sovereign’s involvement in art-exhibition activities was not a commercial activity but stipulated that this rule did not apply in actions against Germany arising between 1933 and 1945. The heirs argued that the 2016 amendments showed that Congress intended the expropriation exemption to be applied to their claims against the German government. Germany argued that the expropriation exception did not apply because a sovereign nation’s expropriation of its own citizen’s property did not violate international law, a principle known as the domestic-takings rule. The district court denied Germany’s motion to dismiss, ruling in favor of the heirs. A panel of the District of Columbia Circuit Court of Appeals affirmed on grounds that genocide was a violation of international law.