Back in the blogger's seat, today I review Republic of Austria v. Altmann. In that case, the U.S. Supreme Court decided that the Foreign Sovereign Immunity Act applied retroactively in an individual's suit against Austria.
But why examine this public international law issue on a private international law blog? As you will see, the case demonstrates nicely how public and private international law can intersect. Namely, the sovereign immunity issue here almost affected the inheritor of several Klimt paintings (one of which ultimately sold for 88 million dollars at auction!).
Let's start with the facts. A nosy Austrian journalist poked around the Austrian Gallery's files, finding that the Gallery had illegitimately kept some valuable Klimt paintings. The Gallery had gotten these paintings during World War II, when a Jewish art collector fled Austria as the the Nazis marched in. Though the Jewish art collector bequeathed these paintings to his nieces and nephew, the Austrian government kept the paintings in the Gallery's hands. The reporter publicized his findings in the Austrian media.
One surviving niece, Maria Altmann, lived in California since WWII but caught wind of her rights to this painting. She unsuccessfully attempted to recover the painting under Austrian law. Then she turned to U.S. law, suing Austria in Federal Court to get her paintings.
To establish jurisdiction, Maria relied on the Foreign Sovereign Immunities Act ("FSIA"). Very generally speaking, foreign nations are not subject to jurisdiction in U.S. courts. However, the FSIA provides jurisdiction over "any claim for relief in personam with respect to which the foreign state is not entitled to immunity," which includes actions related to "rights in property taken in violation of international law"--a.k.a the "expropriation exception." 28 U. S. C. § 1330(a), 1605(a)(3). Here, Maria asserted that Austria violated international law by taking the paintings that her uncle gave to her in his will.
Austria however argued that the FSIA, passed in 1976, could not apply retroactively to actions that occurred before Congress passed the FSIA. Because the Gallery got the paintings during WWII, the FSIA couldn't apply. This was the the issue that the U.S. Supreme Court granted certiorari to decide.
The Court's reasoning began by taking it back to 1812, when Justice Marshall wrote the opinion in Schooner Exchange v. McFadden. In that case, Marshall laid down the general rule that despite the ability to assert jurisdiction as the U.S. government sees fit, courts should--as a matter of comity--waive jurisdiction as "a matter of grace and comity" between nations.
As a result, courts in the U.S. adopted the general policy to assert jurisdiction only upon recommendation from the Executive branch. See, Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480 (1983). The Executive--through the State Department--decided not to assert jurisdiction over foreign nations until 1952.
That policy shifted in 1952, when Legal Adviser Tate sent a letter. In that letter he defined sovereign immunity in two ways. First, he described the classical or absolute definition of sovereign immunity: "a sovereign cannot, without his consent, be made a respondent in the courts of another sovereign." Second, Tate outlined the newer, restrictive theory of sovereign immunity: "the immunity of the sovereign is recognized with regard to sovereign or public acts (jure imperii) of a state, but not with respect to private acts (jure gestionis)." Tate endorsed the newer theory.
This letter did little except confuse courts and send sovereign immunity determinations into disarray.
In turn, Congress passed the FSIA to fix what had become a problem between the Judicial and Executive branches. A major facet of the FSIA was the expropriation exception that Maria relied on this case--essentially a private act. Again, the issue was not whether the expropriation exception applied, but whether it applied retroactively.
The courts below relied primarily on the Supreme Court's decision in Landgraf v. USI Film Products, 511 U.S. 244 (1994). That case stated that, absent clear language indicating retroactivity, courts should presume that laws do NOT apply retroactively. However, if the case involved only procedural--as opposed to substantive--provisions, then the statute should apply retroactively. Without fully defining the difference between procedural and substantive provisions here, trust me--an the Court--when I report that "the FSIA defies such categorization." (In Altmann, jurisdiction--largely procedural--impacted the parties' substantive property rights). So, Landgraf did not apply here.
Instead, the Court relied on the FSIA's text and the purpose to determine whether to apply the law retroactively. The FSIA reads:
"Claims of foreign states to immunity should henceforth be decided by courts of the United States and of the States in conformity with the principles set forth in this chapter." 28 U. S. C. § 1602.
Thus, the FSIA applies to claims--not parties' actions. Regardless of when the Austrians' acts at issue occurred, Maria's claim occured after the FSIA's passing. Also, the word "henceforth" strongly suggested that any claims after the FSIA's passing would apply retroactively.
Moreover, the FSIA's purpose supported retroactive application in Altmann. After all, "[m]any of the Act's provisions unquestionably apply to cases arising out of conduct that occurred before 1976." Further, "applying the FSIA to all pending cases regardless of when the underlying conduct occurred is most consistent with two of the Act's principal purposes: clarifying the rules that judges should apply in resolving sovereign immunity claims and eliminating political participation in the resolution of such claims." Thus, the Court issued the narrow holding that the FSIA applied retroactively in this case.
As a result, the case would stay in the courts, with Maria ultimately getting her paintings back. So, as you see, public international law can play a role in an estates case!