Courts Cite Foreign Relations 4th

Two courts recently cited the Restatement of the Law Fourth, The Foreign Relations Law of the United States, the official text of which is now available. Summaries of those opinions are provided below.

In Philipp v. Federal Republic of Germany, 894 F.3d 406 (D.C. Cir. 2018), the U.S. Court of Appeals for the District of Columbia Circuit cited Restatement of the Law Fourth, The Foreign Relations Law of the United States – Sovereign Immunity § 455 (Tentative Draft No. 2, 2016).

In that case, heirs of several Jewish art dealers who were based in Frankfurt, Germany in the 1930s brought an action against the Federal Republic of Germany and the agency that administered the museum where a valuable art collection was being exhibited, seeking to recover the art collection and/ or $250 million. The plaintiffs alleged that the collection was taken by the Nazis through the art dealers’ sale of the collection to the Nazi-controlled State of Prussia for barely 35 percent of its actual value. A German commission that had been created to resolve Nazi-era art claims had previously concluded ‘“that the sale of the [collection] was not a compulsory sale due to persecution’ and [that] it therefore could ‘not recommend the return of the [collection] to the heirs.’” The district court denied the defendants’ motion to dismiss, in which they claimed that they were immune from suit under the Foreign Sovereign Immunities Act (FSIA), that international comity required the court to decline jurisdiction until the plaintiffs exhausted their remedies in German courts, and that the plaintiffs’ state-law causes of action were preempted by U.S. foreign policy. The Court of Appeals affirmed in part and remanded, holding, inter alia, that the plaintiffs had no obligation to exhaust their remedies in Germany.

The Court of Appeals rejected the defendants’ argument that allowing the plaintiffs to bypass Germany’s courts before they exhausted their remedies would undermine Germany’s dignity as a foreign state. In making its decision, the court looked to the U.S. Supreme Court’s decision in Republic of Argentina v. NML Capital, Ltd., 134 S. Ct. 2250 (2014), in which the Court rejected Argentina’s claim of immunity from post-judgment discovery as a matter of international comity, explained that nothing in the FSIA’s plain text provided for such immunity, and noted that, after the enactment of the FSIA, ‘“the Act—and not the preexisting common law—indisputably governs the determination of whether a foreign state is entitled to sovereign immunity.”’

The Court of Appeals noted that in Fischer v. Magyar Allamvasutak Zrt., 777 F.3d 847 (7th Cir. 2015), the Seventh Circuit had required survivors of the Hungarian Holocaust and heirs of other Holocaust victims to exhaust any available Hungarian remedies or show a legally compelling reason for their failure to do so, and had distinguished that case from NML Capital by reasoning that the defendants did not need to rely on the FSIA and could invoke the “well-established rule,” drawn from Restatement Third, Foreign Relations Law § 713, that exhaustion of domestic remedies was preferred in international law as a matter of comity. The D.C. Circuit stated, however, that it had previously explained that “that ‘[Restatement Third] provision addresses claims of one state against another,’” and noted that Restatement Fourth, Foreign Relations Law – Sovereign Immunity § 455 (Tentative Draft No. 2, 2016) confirmed its interpretation, given the explanation in Reporters’ Note 9 that “the rule cited by the [Seventh Circuit] applies by its terms to ‘international . . . proceedings.’”

In R (on the Application of The Freedom and Justice Party) v. Secretary of State for Foreign and Commonwealth Affairs, [2018] EWCA Civ 1719 (Eng. & Wales), the Court of Appeal cited the Restatement of the Law Fourth, The Foreign Relations Law of the United States, in deciding whether, under customary international law, the receiving state had to grant, for the duration of a special mission’s visit, the privileges of personal inviolability and immunity from criminal proceedings in the same way that members of permanent missions were entitled to such immunities under the Vienna Convention on Diplomatic Relations, 1961, and whether such immunities were recognized by the common law.

In that case, the appellants alleged that an individual was responsible for torture in the course of events that led to the downfall of the Egyptian government, of which they were former members. The Foreign and Commonwealth Office (FCO) accepted the visit of the individual and other members of his delegation as a special mission, and, while the appellants requested that the individual be arrested, the FCO and Crown Prosecution Service guidance stated that special-mission members were immune from arrest, and no action was taken against the individual. The Divisional Court found that “customary international law obliges a receiving State to secure, during the currency of the mission, the inviolability and immunity from criminal jurisdiction of a member of a special mission whom it has accepted as such.”

Dismissing the appeal, the Court of Appeal noted that the Divisional Court had examined the decision of the U.S. District Court for the Southern District of Florida in United States v. Sissoko, 995 F. Supp. 1469 (S.D. Fla. 1997), in which the court cited Restatement Third, Foreign Relations Law § 464 in rejecting a claim for immunity by a member of a special mission that had not been accredited as such, and observing that the United Nations Convention on Special Missions, 1969—which provides that special missions should automatically have not only the core immunities but also other immunities extending beyond the immunities that the particular special mission might need for its visit—was not customary international law.

In determining whether there was a rule of customary international law, the Court of Appeal held that there was sufficient evidence “to conclude that the state practice of the United States recognises special missions and that members of them are entitled to the core immunities.” Specifically, it concluded that “the Divisional Court was correct to hold that a rule of customary international law has been identified which now obliges a state to grant to the members of a special mission, which the state accepts and recognises as such, immunity from arrest or detention (i.e. personal inviolability) and immunity from criminal proceedings for the duration of the special mission’s visit.” The Court of Appeal also concluded that such immunities are recognized by the common law. It made note that “the ALI is currently working in this field and the Restatement of the Law Fourth, Foreign Relations Law of the United States, approved by the ALI in 2017 awaits publication,” thereby giving “a signal to future readers of this judgment that there may be more up to date and valuable material from the ALI in [the] future.”