Republic of Hungary v. Simon, 2025 U.S. LEXIS 549 (U.S. Supreme Court, February 21, 2025) (Sotomayer, J.)
The Foreign Sovereign Immunities Act of 1976 (FSIA) provides foreign states with presumptive immunity from suit in the United States. 28 U. S. C. §1604. To sue a foreign sovereign in United States courts, plaintiffs must satisfy one of the exceptions to immunity set forth in the FSIA. The FSIA’s expropriation exception permits claims when “rights in property taken in violation of international law are in issue” and either the property itself or any property “exchanged for” the expropriated property has a commercial nexus to the United States. 28 U. S. C. §1605(a)(3).
Respondents, Jewish survivors of the Hungarian Holocaust and their heirs, sued Hungary and its national railway (MÁV) in federal court, seeking damages for property allegedly seized during World War II. Respondents’ complaint alleged that Hungary and MÁV liquidated the expropriated property, commingled the proceeds with other government funds, and later used funds from those commingled accounts in connection with commercial activities in the United States. The District Court determined that this “commingling theory” satisfied §1605(a)(3)’s commercial nexus requirement. The D. C. Circuit affirmed, reasoning that requiring plaintiffs to trace the particular funds from the sale of their specific expropriated property to the United States would make the exception a “nullity” in cases involving liquidated property.
Winston Churchill described the Hungarian Holocaust as probably the greatest and most horrible crime ever committed in the history of the world. During World War II, Hungary abetted the murder of 500,000 Hungarian Jews. Nowhere was the Holocaust executed with such speed and ferocity as it was in Hungary. Hungary’s genocidal campaign included the mass confiscation of Jewish property. The Hungarian government declared all valuable objects owned by Jews except for their most personal items, part of the national wealth of Hungary. Respondents in this case are a group of Jewish survivors of the Hungarian Holocaust and their heirs. By the 2000’s Hungary allegedly used funds from its treasury from which included money from the Jews [to issue bonds to the United States and to purchase military equipment here]. Hungary also engaged in commercial activity in the United States.
The Court granted certiorari to decide whether historical comingling of assets suffices to establish that proceeds as property have a commercial nexus with the United States under the expropriation exception to the Foreign Sovereign Immunities Act.
A Plaintiff does not make the necessary showing by alleging only that the foreign sovereign deposited the proceeds from the sale of expropriated property into an account at some time and eventually used that account in a commercial activity in the United States.
There are scenarios in which a Plaintiff might satisfy the statutes’ commercial nexus requirement when expropriated property has been exchanged for cash, and that cash has been comingled with other funds. There may be other circumstances as well that the Court does not address.
If respondents’ commingling theory were accepted, §1605(a)(3) would impose a far greater limitation on foreign sovereign immunity, expanding the set of circumstances in which foreign sovereigns could be sued in United States courts for public acts involving expropriation.
For the foregoing reasons, the Court concludes that a commingling theory, without more, cannot satisfy the commercial nexus requirement of §1605(a)(3). The judgment of the Court of Appeals for the D. C. Circuit is vacated, and the case is remanded for further proceedings consistent with this opinion.
