Supreme Court Decision Impacts Holocaust Restitution and Sovereign Immunity Rules

U.S. Supreme Court building with statues and columns.

The U.S. Supreme Court unanimously blocks a lawsuit against Hungary for seizing assets during the Holocaust, citing a lack of commercial connection to the United States.

Quick Takes

Supreme Court rules 9-0 against Holocaust survivors suing Hungary in U.S. courts
Justice Sotomayor writes opinion, emphasizing need for commercial nexus to U.S.
Lawsuit sought compensation for property confiscated during World War II
Court rejects “commingling theory” as insufficient for FSIA exception
Decision leaves open possibility for legal redress in other forums

Supreme Court’s Unanimous Decision

In a significant ruling, the U.S. Supreme Court has unanimously decided that a group of Holocaust survivors and their families cannot sue Hungary in American courts over asset seizures during World War II. The case, Republic of Hungary v. Simon, centered on the interpretation of the Foreign Sovereign Immunities Act (FSIA) and its application to Holocaust-era restitution claims.

Justice Sonia Sotomayor, writing for the court, emphasized that the plaintiffs failed to establish a clear commercial connection between the seized property and business activity in the United States, a crucial requirement under the FSIA’s expropriation exception stating in the letter that “The issue presented in this case is whether alleging commingling of funds alone can satisfy the commercial nexus requirement of the expropriation exception of the FSIA. The Court holds that it cannot.” This ruling effectively shields Hungary from facing litigation in U.S. courts over these historical claims.

The Supreme Court unanimously sided with Hungary on Friday by rejecting a group of Holocaust survivors’ legal theory that sought to haul the country into American courts to pay compensation. https://t.co/sFYcrZMS4l

— WOWK 13 News (@WOWK13News) February 22, 2025

The Lawsuit’s Background

The lawsuit, initially filed in 2010, sought compensation for property confiscated by Hungary and its railway system during the Holocaust. The case had a complex legal journey, with lower courts offering differing interpretations of the FSIA’s requirements. A federal district court initially dismissed the lawsuit, citing a peace treaty between the U.S. and Hungary. However, the U.S. Court of Appeals for the D.C. Circuit reversed this decision, allowing the case to proceed.

The Supreme Court’s decision focused on the plaintiffs’ “commingling theory,” which argued that because Hungary had issued bonds in the U.S. from its general fund, which presumably included proceeds from seized assets, there was a sufficient commercial connection to the United States. The Court rejected this argument as insufficient to meet the FSIA’s strict requirements.

Implications of the Ruling

This decision has significant implications for international claims for restitution in U.S. law. It sets a high bar for establishing a commercial nexus under the FSIA’s expropriation exception, making it more challenging for foreign plaintiffs to bring similar cases in American courts. The ruling aligns with a previous Supreme Court decision favoring Germany in a case involving the Guelph Treasure, further limiting the avenues for Holocaust-era restitution claims in U.S. courts.

“Today’s decision concerns only what plaintiffs must plead to bring suit against foreign sovereigns for their actions abroad in the courts of the United States. 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”, Justice Sonia Sotomayor went on to explain. While the Supreme Court’s decision blocks this particular lawsuit from proceeding in U.S. courts, Justice Sotomayor’s opinion leaves open the possibility for the plaintiffs to seek legal redress in other forums. This suggests that while U.S. courts may not be the appropriate venue for such claims, other legal avenues may still be available to Holocaust survivors and their families seeking justice for historical wrongs.

The Broader Context

This case highlights the ongoing challenges faced by Holocaust survivors and their descendants in seeking restitution for assets seized during World War II. The lawsuit aimed to be a class action against Hungary and its railway, which was responsible for transporting over 400,000 Hungarian Jews to Auschwitz in 1944. While the Supreme Court’s decision is based on legal technicalities rather than the merits of the claims, it underscores the complexities of addressing historical injustices through modern legal systems.

As the case returns to the U.S. Court of Appeals for the District of Columbia Circuit for further proceedings consistent with the Supreme Court’s opinion, the future of this and similar lawsuits remains uncertain. The ruling serves as a reminder of the enduring impact of the Holocaust and the ongoing quest for justice, while also highlighting the legal and diplomatic challenges involved in addressing historical wrongs across international boundaries.