Justices reject “commingled fund” theory in Hungarian Holocaust survivor’s compensation suit
OPINION ANALYSIS
A unanimous Supreme Court threw out on Friday the ruling of a federal appellate court that allowed survivors of the Hungarian Holocaust’s lawsuit to proceed. Justice Sonia Sotomayor explained that allegations that a foreign government has commingled funds from confiscated property are not enough to allow a case to proceed. Justice Sonia Sotomayor, speaking for the court, explained that allegations of a foreign government commingling funds from confiscated properties are not enough to allow a case to be brought. The Foreign Sovereign Immunities Act prohibits lawsuits in U.S. court against foreign governments. However, a special exception is made for cases where property was taken in violation of international laws. The U.S. Court of Appeals, District of Columbia Circuit, agreed with the survivors and said that their case was admissible. The Supreme Court rejected this rationale on Friday. Sotomayor argued that simply claiming that money from the sale confiscated property was deposited in a government bank account and that it was later used for commercial purposes by the United States does not prove that the funds were “present” And that could lead to “retaliatory or reciprocal actions” against the United States in foreign courts, she observed.
The court pushed back against the survivors’ contention that because money is fungible, a ruling for Hungary will allow foreign governments to easily circumvent the expropriation exception by selling confiscated property and then depositing it in their general treasury accounts.
Friday’s decision, Sotomayor emphasized, means only that plaintiffs like the survivors “cannot rely on a commingling theory alone” to show a commercial connection to the United States. It does not, she wrote, rule out other scenarios in which – for example – “commingling allegations may be part of broader allegations that collectively satisfy” the commercial nexus requirement.
And more broadly, the court stressed, the fact that “a particular claim cannot satisfy the expropriation exception means only that it cannot be brought here, not that it cannot be brought in any forum. The court stressed that the fact that “a particular claim cannot satisfy the expropriation exception” does not mean it cannot be brought in any forum.
