N. v. Handelsbureau La Mola v. Kennedy, Attorney General

1962-06-25

Headline: Trading-with-the-enemy seizure left in place as Court denies review, leaving a Dutch company’s U.S. bank accounts confiscated and clouding allied foreigners’ property rights.

Holding: The Court refused to review the lower court’s decision, leaving in place the confiscation of a Dutch company's U.S. bank accounts under the Trading with the Enemy Act.

Real World Impact:

Leaves confiscation judgment in place for the Dutch company's U.S. bank accounts.
Creates precedent that clouds property rights of allied foreign nationals.
May make it harder for allied companies to recover seized assets.

Topics: seizure of foreign assets, property rights, wartime government powers, foreign companies' rights

Summary

Background

A Dutch trading company owned four bank accounts in the United States. During World War II Germany occupied the Netherlands from 1940 until 1945, and the United States recognized a Netherlands government-in-exile. In 1951 the Alien Property Custodian, invoking the Trading with the Enemy Act, seized and confiscated those four U.S. bank accounts. The Court of Appeals upheld the confiscation, and the Supreme Court declined to review that decision.

Reasoning

The central question was whether the Trading with the Enemy Act allowed confiscation of property belonging to nationals of friendly countries long after enemy occupation ended. Justice Black explained the Act authorizes seizures "during the time of war" but also provides that non-enemies may sue to recover property. He argued the Court of Appeals wrongly treated any corporation present in occupied territory as automatically an "enemy," and pointed out that one seized account did not even exist until 1948, after lawful government returned in 1945. He warned this reading raises serious Fifth Amendment concerns about uncompensated takings.

Real world impact

Because the Supreme Court refused to review the case, the Court of Appeals’ judgment stands as precedent for lower courts. That leaves a legal cloud over the property rights of foreign citizens and corporations whose countries were occupied during the war. The ruling could make it harder for allied foreigners to recover property seized under the Act unless the issue receives full review later.

Dissents or concurrances

Justice Black dissented from the denial of review. He believed the Act did not authorize this confiscation and stressed constitutional protections for friendly aliens, citing earlier decisions that protect innocent owners.