The Supreme Court on Friday unanimously ruled against a group of Jewish survivors of the Holocaust, saying they could not sue Hungary in the United States to recover the proceeds of property stolen by its state-owned railway. The company robbed hundreds of thousands of Jews before sending them to Nazi death camps in 1944.
The question for the justices was whether the suit was barred by the Foreign Sovereign Immunities Act, a 1976 law that generally forbids suits against foreign states. The law has some exceptions, including one for the expropriation of property. But that exception requires proof that the stolen property was “exchanged for” property in the United States in connection with a commercial activity.
More than half a million Hungarian Jews were murdered in a matter of months near the end of World War II. The genocidal campaign was accompanied by mass theft of Jewish property spearheaded by Hungary’s national railway after a government declaration that all valuable objects owned by Jews, except for a few personal items, were part of the nation’s wealth.
The plaintiffs, including survivors and their families, argued that the stolen property had been liquidated, commingled with other money and used decades later in many transactions with the United States, including the issuance of bonds and the purchase of military equipment.
That connection was too attenuated, Justice Sonia Sotomayor wrote for the court.
“Hungary has made countless transactions throughout several institutional collapses and regime changes, resulting in billions in revenues flowing in and out of its treasury,” she wrote. “Against this historical backdrop, it is implausible to say that the commingling Hungary did in the 1940s, on its own, establishes that the money it spent in the United States in the 2000s was ‘exchanged for’ the property Hungary allegedly expropriated.”
It was one thing, the justice said, to trace a stolen piece of art traded for another piece of art, but different to sell the art and deposit the cash in a bank account used for commercial transactions.
“That mere fact does not relieve plaintiffs from alleging some facts that enable the reasonable tracing of those proceeds to the United States,” she wrote.
Justice Sotomayor acknowledged there was a “moral imperative” to provide justice for Holocaust victims while they still live, but she said the plaintiffs’ broad reading of the 1976 law would “undermine the United States’ foreign relations and reciprocal self-interest.”
The United States is a frequent target of lawsuits abroad, with some 1,800 actions against it pending in the courts of more than 100 countries at any given time. Since some of those nations grant the same immunity to the United States that it grants to them, a brief from the Biden administration supporting Hungary said, “protecting foreign states from civil suits in U.S. courts can help to avoid embroiling the United States in expensive and difficult litigation abroad.”
Justice Sotomayor said there might be other forums that could provide victims’ compensation, citing the government’s brief in the case, Republic of Hungary v. Simon, No. 23-867.
The brief said respect for the limits set by the 1976 law aided the United States’ efforts “to persuade foreign nations to establish appropriate redress and compensation mechanisms for human-rights violations, including the horrendous human-rights violations perpetrated during the Holocaust.”
It said those efforts had yielded limited success, noting that the Hungarian government had provided some compensation to victims of the Holocaust and Nazi persecution.
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