Holzer (plaintiff), a Jewish German national, entered into a three-year employment contract beginning January 1, 1932 with Schenker & Co. (Schenker), a German transportation company. Schenker was controlled by Deutsche Reichsbahn-Gesellschaft (DRG) and other German corporations (defendants). Holzer’s work was to take place in Germany and in other locations outside of New York. The contract provided that defendants would pay Holzer or his heirs a certain sum in the event of Holzer’s death or his incapacity to work, if at no fault of his own. In April 1933, Holzer was placed in a concentration camp by the German government for approximately six months. At or around the same time, the German government enacted various laws requiring non-Aryan persons to be terminated from their employment. In June 1933, defendants terminated Holzer from his employment as of October 31, 1933. Holzer sued defendants in a New York court, claiming damages of approximately $50,000 for the period following his termination and $50,000 for the period of his incarceration. As a defense, DRG claimed that it was required to terminate Holzer under German law and that German law controlled because the contract was entirely made and performed there. Holzer moved to dismiss that defense. The Special Term of the Supreme Court granted Holzer’s motion. The Appellate Division affirmed and certified two questions to the Court of Appeals: (1) was DRG’s defense sufficient on its face as a matter of law, and (2) did the complaint state sufficient facts to establish a cause of action?