4. Westfield v. Federal Republic of Germany

On Westfeld’s life and milieu, see generally Müller and Tatzkow (2010), pp. 86–98; Reed (2015); Schmidt (2005), pp. 273–278.

The heirs of Emilie Scheulens, Walter Westfeld’s widow, contended that they, rather than the Westfields, were the legitimate heirs to Westfeld’s estate. The dispute became moot in view of the ultimate disposition of the case against Germany.

The federal courts have non-exclusive jurisdiction over suits between American citizens and foreign states in which the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. With exceptions not relevant here, if a plaintiff brings an action in state court that could have been brought in federal court, the defendant may remove the case to federal court. 28 U.S.C. § 1441.

Germany also moved to dismiss on the ground that the action was time-barred. The courts ultimately found it unnecessary to rule on this issue.

The commercial activity exception is codified at 28 U.S.C. § 1605(a)(2). For reasons that remain unclear, the Westfields did not invoke the expropriation exception to immunity (28 U.S.C. § 1605(a)(3), encountered in the previous chapter).

Westfield v. Federal Republic of Germany, 2009 WL 2356554 (M.D. Tenn. 2009).

Republic of Argentina v. Weltover, 504 U.S. 607, 614 (1992) (italics omitted).

Westfield v. Federal Republic of Germany, 633 F.3d 409 (6th Cir. 2011).

The plaintiffs also argued that even if the commercial activity exception did not apply, Germany could not claim sovereign immunity for the Nazi government’s treatment of Westfeld, because his conviction was declared null and void after the war, and because American law generally accords no legal recognition to the acts of the Nazis. The court rejected this argument out of hand, stating only that the seizure and sale, “even though they constituted an abuse of police and prosecutorial powers by the German government at the time, were nonetheless the acts of a sovereign,” and “Congress did not create an exception for lawless activities in the Act.” 633 F.3d at 418. Because the argument was rejected without discussion, we do not address it further here. Our attention will be confined to the courts’ adjudication of the commercial activity exception to FSIA.

See Section 4.3 above.

Letter from Jack B. Tate, Acting Legal Adviser, U.S. Dept. of State, to Acting U.S. Attorney General Phillip B. Perlman, May 19, 1952, published in 26 Dept. of State Bulletin 984 (1952), reprinted in Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 711–15 (1976).

Banque roumaine de commerce et de crédit de Prague v. Etat polonais, 19 RDIP 581 (Romania, Tribunal de commerce d’Ilfov, 1920), quoted in van Alebeek (2008), p. 14 (author’s translation).

American Law Institute (1987), § 451.

Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(2).

Foreign Sovereign Immunities Act, 28 U.S.C. § 1603(d).

See European Convention on State Immunity art. 7 (state cannot claim immunity from jurisdiction of another state in which it “engages, in the same manner as a private person, in an industrial, commercial, or financial activity, and the proceedings relate to that activity”).

I Congreso Del Partido, House of Lords, 2 All Eng. Rep. 1064 ¶ 527 (House of Lords 1983). On the commercial activity exception in FSIA, see generally Dellapenna (2003), Donoghue (1992), and Foster (2014).

504 U.S. 607 (1992).

425 U.S. 682 (1976).

See Weltover, 504 U.S. at 613–14 (summarizing the plurality opinion in Dunhill, 425 U.S. at 698–75).

Dunhill, 425 U.S. at 704 (plurality opinion), quoted in part in Weltover, 504 U.S. at 614.

507 U.S. 349 (1993).

The plaintiff invoked the clause of the commercial activity exception that lifts immunity for an action “based upon a commercial activity carried on in the United States by the foreign State.” Foreign Sovereign Immunities Act, U.S.C. § 1605(a)(2).

Weltover, 504 U.S. at 614, quoted in Nelson, 507 U.S. at 360.

Lauterpacht (1952), p. 225, quoted in Nelson, 507 U.S. at 362.

556 F.3d 361 (6th Cir. 2009), cert denied, 558 U.S. 819 (2009).

It is worth noting parenthetically that in earlier cases the Sixth Circuit, like other courts, had ruled that a defendant’s behavior need not be lawful in order to qualify as commercial. Thus, an investment scam carried out by a government bank is commercial, even though it is illegal. See Keller v. Central Bank of Nigeria, 277 F.3d 811, 816 (6th Cir. 2002).

Doe, 434 F.Supp.2d at 942, quoted in O’Bryan, 556 F.3d at 380.

440 F.3d 579 (2d Cir. 2006).

452 F.3d 883 (D.C. Cir. 2006).

Foremost–McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438 (D.C. Cir. 1990).

965 F.2d 699 (1992). This case was discussed in Chap. 3 in connection with FSIA’s expropriation exception.

Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(2) (emphasis added).

See generally Nanda and Pansius (2011), § 3:12.

House Judiciary Committee, Jurisdiction of the United States Courts in Suits Against Foreign States, H.R. Rep. No. 1487, 94th Cong., 2d Sess. 19, reprinted in 1976 U.S. Code Congressional & Administrative News 6604, 6618.

American Law Institute, Restatement of the Law, Second, Foreign Relations Law of the United States § 18 (1965).

Weltover, 504 U.S. at 618 (quoting Weltover v. Republic of Argentina, 941 F.2d 145, 152 (2d Cir. 1991)).

277 F.3d 811 (6th Cir. 2002).

As the court noted, the denial of a motion to dismiss on sovereign immunity grounds is considered a collateral order that may be immediately appealed. See id. at 815. As an aside, it is worth noting that the district court dismissed the plaintiff’s fraud and misrepresentation claims “because it concluded that plaintiff, by entering into a scheme ‘that was certainly questionable, and most probably illegal,’ had ‘unclean hands’ and was barred from asserting these claims in equity.’” Id. at 815 (quoting district court judgment). However, it allowed the federal racketeering claims to go forward.

There was a sharp division among the circuits on this issue. Some circuits took the position that a legally significant act in the United States was required; others said such an act was relevant but not required; and others said it was irrelevant. See American Telecom Co., L.L.C. v. Republic of Lebanon, 501 F.3d 534, 540 (6th Cir. 2007) (collecting cases).

Antares Aircraft, L.P. v. Federal Republic of Nigeria, 999 F.2d 33, 37 (2d Cir. 1993).

Westfield, 633 F.3d at 415 (describing DRFP L.L.C. v. Republica Bolivarian de Venezuela, 622 F.3d 513 (6th Cir. 2010)).

501 F.3d 534 (6th Cir. 2007).

American Telecom, 501 F.3d at 540 (quoting Weltover, 504 U.S. at 618 (emphasis added)).

On the possible trajectories the painting might have followed out of Germany, see Reed (2015).

Museum of Fine Arts, Boston (2011).