Supreme Court majority appears skeptical of allowing Holocaust survivors to sue Hungary in US courts

By John Fritze, CNN

(CNN) — A majority of the Supreme Court on Tuesday appeared skeptical that Holocaust victims and their families are permitted to haul Hungary into American courts to recover property stolen during World War II, with several justices fearing that would open the United States up to a flood of similar litigation from abroad.

More than a dozen victims of the Holocaust and their families have been fighting the Republic of Hungary and its national railway for nearly 15 years over whether they may continue their lawsuit in federal courts under a narrow exception to the general prohibition on suing foreign governments in the United States.

Hungary “stole respondents’ property while forcing them onto cattle cars,” Shay Dvoretzky, representing the families, told the Supreme Court during about 90 minutes of arguments. When Hungary then used the money it received from selling that property to buy equipment in the United States, “it put into the United States property that had been exchanged for the expropriated property.”

The appeal appeared likely to split the Supreme Court along nonideological lines, with both conservatives and liberals concerned about the implications of a decision for the families.

Foreign nations generally have what’s known as sovereign immunity that bars parties from suing them in domestic courts. But federal law in the United States includes an exception when a case involves expropriated property that is present in the US. The families say the money Hungary received when it liquidated the property it stole from Jewish families was comingled with other funds and that some portion of that money was then spent in the US.

Because of that, the families argue, the exception should apply.

But their position drew sharp questioning from Chief Justice John Roberts and Justice Brett Kavanaugh, two conservatives who sit at the center of the court and most often wind up with the majority when decisions are handed down.

“This is really just throwing out the whole sovereign immunity principles under which the rest of the world operates,” Roberts said. “Congress had in mind a much narrower exception than that.”

Kavanaugh said he was concerned about the foreign policy implications of a ruling for the families, worrying other nations might reciprocate and make it easier for people to sue the United States.

“No other country in the world has an expropriation exception to begin with, right?” Kavanaugh pressed Dvoretzky. “It’s a big deal to haul a foreign country into US court.”

Several of the court’s liberals also appeared to have reservations with the families’ argument. Justice Sonia Sotomayor recounted a hypothetical about a parent depositing $100 to start a bank account for a newborn and then arguing that same money remained part of the account after a lifetime worth of transactions.

“It’s an interesting concept that that $100 that my mother put in that account the day I was born – that a piece of it is still there 60 years, or 70 years or 80 years later,” Sotomayor said. “It’s a fiction that takes quite an imagination.”

Justices Elena Kagan and Samuel Alito, a liberal and conservative, respectively, worried that immunizing foreign countries that simply mix expropriated property into general funds would render the exception Congress approved useless because countries would have an easy path to avoiding scrutiny from federal courts.

“Doesn’t this provide a roadmap to any country that wants to expropriate property?” Kagan asked the attorney representing Hungary, Joshua Glasgow. “In other words, just sell the property, put it into your national treasury – insulate yourself from all claims for all time?”

At one point Alito appeared to brush aside Kavanaugh’s concerns about foreign reciprocation, questioning whether Washington would really have to worry about such suits.

“Is the United States going around expropriating the property of foreign nationals?” Alito asked an attorney representing the Biden administration, which has sided with the Hungary in the appeal.

Kavanaugh snapped back, suggesting his concern was that expanding the exception would make the United States vulnerable to suits for historical actions as well.

“Justice Alito asked the question about suits against the United States,” he said. “I assume those would be backward-looking suits for things that happened long ago.”

“I would assume so,” said Sopan Joshi, representing the Biden administration.

The victims initially filed their lawsuit in 2010, and the case has been bouncing around federal courts for so long that it previously reached the Supreme Court four years ago. In that instance, the justices ultimately sent the matter back to lower courts for additional review – tossing out a federal appeals court ruling for the families in the process.

A federal appeals court in Washington, DC, sided with the victims last year, and Hungary appealed to the Supreme Court.

A decision in the case, Hungary v. Simon, is expected next year.

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