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Expropriation Sovereign, not Commercial Activity
On July 28, 2009, the United States District Court for the Middle District of Tennessee dismissed the complaint in Fred Westfield v. Federal Republic of Germany, 2009 U.S. Dist. Lexis 65133, due to lack of subject matter jurisdiction, under Rule 12 (b)(1) of the Federal Rules of Civil Procedure. The court based its decision on 28 U.S.C. §1602 of the Federal Sovereign Immunities Act, which grants foreign sovereigns immunity from federal and state jurisdiction.
The plaintiff, as administrator de bonis non administratis of the estate of an alien, claimed a constructive trust and an equitable accounting with respect to the seized art collection of Walter Westfield. In 1938, a German court had falsely convicted Walter Westfield of an offense under a currency exchange statute and fined him 300,000 Reichsmark. The Nazi administration seized and auctioned his art collection, with the proceeds to cover the purported fine. The postwar German government had not provided compensated.
The court discussed the plaintiff's motion to apply §1605(a)(2), which enables United States courts to exercize their jurisdiction when the action against the foreign state is based upon commercial activity carried on outside of the United States which causes a direct effect in the United States.
For this exception to apply, the action of the German government would have to be commercial activity. The court could not find it because the Nazi government did not act as a private player within the market, engaging in trade and traffic of commerce like private persons. Further, the court noted, expropriations constitute sovereign rather than commercial activity. -- Lucyne Ghazarian, law student, international intern, Berliner, Corcoran & Rowe, LLP, Washington, DC.
Sun, / Embassy Law Link