Hungary v. Simon
The Supreme Court ruled unanimously that Holocaust survivors cannot sue Hungary in U.S. courts by alleging that Hungary mixed the proceeds from their stolen property into general government funds that were later used in the United States — plaintiffs must trace the specific stolen property or its proceeds to the U.S.
The decision narrows when victims of foreign government property seizures can bring claims in American courts, and puts a hard limit on how far a 'commingling' argument alone can go to connect decades-old thefts to modern U.S. commercial activity.
How it got here: The District Court and D.C. Circuit both held the commingling theory satisfied the FSIA's commercial nexus requirement; Hungary and MÁV asked the Supreme Court to step in, and the Court agreed to hear the case.
The Case in Depth
What happened
During World War II, Hungary and its national railway (MÁV) confiscated property from hundreds of thousands of Hungarian Jews before deporting them to Nazi death camps. A group of survivors and their heirs sued Hungary and MÁV in U.S. federal court decades later. They argued that because Hungary liquidated the stolen property, deposited the proceeds into its government treasury, and later used treasury funds for U.S. commercial activities — like issuing bonds and buying military equipment in the 2000s — U.S. courts had jurisdiction to hear their claims.
The question before the Court
Could Jewish survivors of the Hungarian Holocaust sue Hungary in U.S. courts simply by showing that Hungary mixed the proceeds from their stolen property into government accounts that were later used for U.S. business activities?
The Court's answer
No — the Court ruled unanimously that simply alleging commingling of funds cannot establish the required commercial link between expropriated property and the United States. Under the Foreign Sovereign Immunities Act's expropriation exception, plaintiffs must trace either the specific stolen property or the particular proceeds from selling it to the United States. An allegation that a foreign government liquidated property in the 1940s, mixed the proceeds into its national treasury, and at some later point used treasury funds for U.S. business activities does not plausibly establish that the specific proceeds ever reached the United States.
The Court left open the possibility that commingling-based claims might succeed in narrower circumstances — for example, if a government spent all the funds from a commingled account on U.S. commercial activity shortly after the commingling. But the sweeping theory the survivors advanced here, spanning decades and a national treasury processing billions in worldwide transactions, cannot on its own satisfy the statute.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Holocaust survivors and heirs seeking to hold Hungary accountable in U.S. courts will need more than evidence that Hungary blended stolen-property proceeds into its national treasury. The same limit applies to any future plaintiff suing a foreign government over expropriated property that was liquidated and commingled, making those cases significantly harder to bring in the United States.
What changes now
The D.C. Circuit's ruling is vacated and the case is sent back for further proceedings. The survivors may attempt to satisfy the commercial nexus requirement through more specific tracing of their property's proceeds to the United States; if they cannot, their claims may be dismissed. The Court also left open for a future case whether common-law tracing principles from trust or property law could help plaintiffs in commingling situations, provided any such approach is consistent with the FSIA's overall framework.
What this does not decide
The Court did not bar all commingling-based claims — only the theory that commingling alone is enough. It also left open whether common-law tracing rules from trust or property law could help future plaintiffs, what pleading standard applies to FSIA expropriation claims, and who bears the ultimate burden of persuasion on the commercial nexus element.
How the Court got there
The legal reasoning, step by step
- The FSIA's expropriation exception allows people to sue a foreign government in U.S. courts over stolen property, but only if they can show that the specific stolen property — or the specific property 'exchanged for' it — has a commercial connection to the United States. The statute's plain text treats tangible property (like artwork) and fungible property (like cash) the same way: both require some form of tracing to the U.S.
- When a foreign government sells expropriated property, the cash proceeds are the relevant 'property exchanged for' the stolen items. Depositing those proceeds into a larger account — commingling them — does not transform the entire account into property 'exchanged for' the stolen items. The statute's phrase 'exchanged for' refers only to the specific thing received in the transaction, not to everything in any account that later touched those proceeds.
- An allegation that a government mixed proceeds into its national treasury decades ago, and at some later point used treasury funds for U.S. commercial activity, cannot plausibly establish that those specific proceeds ever reached the United States. When a treasury cycles billions of dollars in and out across countless worldwide transactions over many decades, there is no more reason to believe the relevant proceeds ended up in the U.S. than anywhere else in the world.
- This reading fits the FSIA's broader structure. The Act generally shields foreign governments from being sued in U.S. courts for their public acts — like expropriation — with only narrow exceptions. The Court had previously held in Federal Republic of Germany v. Philipp (2021) that the expropriation exception was not meant to be a 'radical departure' from that protective framework. Accepting the broad commingling theory would vastly expand the circumstances in which foreign governments could face U.S. lawsuits for public conduct.
- The historical roots of the exception reinforce the same conclusion. Congress modeled the FSIA provision on the Second Hickenlooper Amendment, which was passed after Banco Nacional de Cuba v. Sabbatino (1964). In Sabbatino, the expropriated sugar's proceeds were specifically traceable to a segregated New York escrow account — exactly the kind of connection the Court says the statute requires. Congress also added a commercial nexus requirement not found in the Amendment, tightening rather than loosening the tracing obligation.
- Finally, the Court invoked the U.S. government's interest in reciprocal fair treatment abroad. The expropriation exception was drafted to conform 'fairly closely' with international law and to avoid inviting foreign courts to subject the United States to comparable suits. Accepting a broad commingling theory would dramatically expand foreign sovereign exposure to U.S. lawsuits for public acts, risking retaliatory measures against the United States in foreign courts — a risk the government said it specifically worked to prevent when drafting the exception.
Doctrinal impact
Cases affected by this decision
Reaffirms Federal Republic of Germany v. Philipp (592 U.S. 169)
Reaffirmed that the FSIA expropriation exception was not meant to radically depart from restrictive sovereign immunity principles.
Distinguishes Banco Nacional de Cuba v. Sabbatino (376 U.S. 398)
Distinguished because the proceeds in Sabbatino were traceable to a specific, segregated New York account, unlike the commingled treasury funds here.