Federal Republic of Germany v. Philipp

Three Jewish art-dealing firms owned the Welfenschatz — a collection of medieval religious relics with deep roots in German history. The complaint alleges that after the Nazis rose to power, Hermann Goering used political persecution and physical threats to force the consortium to sell the remaining pieces to Prussia in 1935 for roughly a third of their value. The heirs, tracing their lineage to the original owners, sought $250 million from Germany and the Prussian Cultural Heritage Foundation, which now displays the collection in Berlin.

Can the heirs of Jewish art dealers who were allegedly forced by Nazi Germany to sell a medieval treasure collection sue Germany in U.S. courts under a federal law that strips foreign governments of immunity when property is "taken in violation of international law"?

No — the heirs cannot use the Foreign Sovereign Immunities Act's expropriation exception to bring their claims in U.S. courts. The exception strips foreign governments of immunity in cases involving "property taken in violation of international law," but that phrase refers specifically to the international law of property — which has long held that a government's treatment of its own citizens' property is a purely domestic matter, not subject to international law. Because the art dealers were German nationals and the transaction occurred inside Germany, the "domestic takings rule" places this dispute outside the exception.

The Court rejected the heirs' argument that the forced sale violated the law of genocide, making international human rights law the relevant body of law. Reading the exception to cover any international norm — including genocide — would transform it into an open-ended tool for litigating all manner of human rights abuses against foreign governments, undermining the carefully designed structure of the Act. The case was sent back to the lower courts to consider a still-open question: whether the consortium members actually qualified as German nationals at the time of the sale.

Holocaust survivors and their heirs who were German nationals when their property was seized generally cannot use U.S. federal courts to seek compensation directly from Germany. Those claims must go through Germany's own compensation programs or alternative dispute mechanisms. The ruling prevents U.S. courts from becoming a venue for adjudicating a wide range of human rights abuses committed by foreign governments against their own citizens.

The D.C. Circuit's ruling is vacated and the case is sent back to the lower courts to address a question the Supreme Court left open: whether the consortium members were actually German nationals at the time of the 1935 sale. If they were not, the domestic takings rule might not apply and the heirs could potentially proceed. The Court also left unresolved Germany's argument that the lower court should have declined to hear the case as a matter of international respect between nations. The underlying claim of $250 million in compensation has not been decided on the merits.

The Court did not decide whether the Nazi-era forced sale was an act of genocide, whether the consortium members were actually German nationals at the time (which could change the outcome), or whether U.S. courts should decline to hear the case out of deference to Germany as a matter of international comity. Those questions return to the lower courts.