United States: Appeals Court Rules Property Claims out of Early 20th Century Acts of Genocide Do Not Satisfy Jurisdictional Requirements in Foreign Sovereign Immunities Act

(Feb. 5, 2021) On September 24, 2020, the U.S. Court of Appeals for the Second Circuit affirmed a lower court’s decision dismissing a complaint for lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1602 et seq. (Rukoru v. Federal Republic of Germany, No. 19-609 (2d Cir. Sept. 24, 2020) (Case).) The case involved members of the Ovaherero (also referred to as the Herero) and Nama peoples of Namibia bringing a class action claim against the German government for property taken in the late 19th century when Germany occupied what was then German South West Africa (present day Namibia). While the appellate court agreed with the lower court decision dismissing the complaint, it also found that the lower court’s analysis of the facts related to the jurisdiction question was erroneous. Specifically, the court did not accept the district court’s analysis of the ownership of the real property at issue in the case. The lower court had found that it might be possible to trace the real property (in New York City) owned by the German government to the proceeds of land expropriated during the German occupation of Namibia. The appellate court disagreed, stating that the allegations made by the plaintiffs did not satisfy the pleading standard (Case at 3.)

Background to the Case

The plaintiffs were descendants of both the Ovaherero and Nama indigenous peoples of Namibia. During the late 19th century and early 20th century, the lands of the Ovaherero and Nama were occupied and colonized by Germany. (Case at 6.) The United Nations eventually determined in 1985 that the treatment of these people was genocide. (Case at 7.) In 2019, high-level German authorities stated that acts of genocide had been carried out against the Ovaherero and Nama people. Among various claims, the plaintiffs alleged that German authorities had stolen land, livestock, and personal property, which was subsequently sold or leased to private parties. (Case at 8.) The plaintiffs further alleged that funds received for those transactions were eventually commingled into the German treasury and used to purchase real estate in New York City. (Case at 8–9.) The plaintiffs alleged that this real estate was used by the German government for commercial purposes and satisfied the jurisdictional requirements of the FSIA. (Case at 9–10.)

Foreign Sovereign Immunities Act—Subject Matter Jurisdiction

The FSIA functions as a jurisdictional statute allowing individuals or groups to bring a suit against foreign governments in United States federal courts when certain conditions are satisfied. Generally, a foreign government would be immune to lawsuits in U.S. courts; however, the FSIA provides several exceptions to the general rule allowing lawsuits to be brought against foreign sovereigns. The plaintiffs in this case argued that the court had jurisdiction under two exceptions: engagement in commercial activity and the expropriation of property in violation of international law. (28 U.S.C. § 1605(a)(2) and § 1605(a)(3).)

Appellate Court Decision and Discussion

The appellate court decision focused on the expropriations portion of the FSIA. The court relied on a four-part test for jurisdiction under the expropriation exception set forth in Zappia Middle East Const. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 251 (2d Cir. 2000). That test required that a plaintiff show that a right in property was at issue, the property had been taken, the taking was in violation of international law, and one of the two nexus requirements was satisfied. (Case at 12.) The nexus requirement deals with whether the property is used commercially in the United States by a foreign state or owned by an agency or instrumentality of a foreign state conducting a commercial activity in the United States. (Case at 12–13.) The court went on to explain that, under Bolivarian Republic of Venezuela v. Helmerich & Payne International Drilling Co., 137 S. Ct. 1312, 1316,  No. 15-423, slip op. at 1–2 (May 1, 2017), there must be a valid argument supporting the notion that the underlying property was taken in violation of international law. The court further explained that while it may sometimes be possible to trace commingled property in this manner, in this case the facts and pleadings did not arise to the valid-argument standard. (Case at 16.)

The appellate court further found that the properties allegedly purchased from the proceeds of the expropriated property were not properties in use for a commercial purpose. Specifically, the court explained that the properties at issue were used by Germany’s mission to the United Nations in New York City. (Case at 17.) The court affirmed the lower court decision that the types of activities the German Mission to the United Nations engaged in were not commercial activities under U.S. law.

First, the court explained that the properties were used to propagate German culture and that entry into contracts for repair and maintenance of those buildings by American companies did not meet the requirements of the FSIA. (Case at 17–18.) Second, the court found that the cultural propagation did not have the ultimate goal of creating commercial growth for Germany. (Case at 18.) Finally, the court held that the district court had been correct in its analysis that the taking of the plaintiff’s land, livestock, and personal property was done in connection with the genocide and was not a commercial activity under the FSIA. (Case at 20–21.)

In its overall conclusion, the court explained that, while the genocide of the Ovaherero and Nama peoples was a terrible act, the U.S. court system was not the proper vehicle for the affected parties to seek justice on their claims. (Case at 23.)

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