SCOTUS Decision on the FSIA's Expropriation Exception: Germany v Philipp

Yesterday the Supreme Court issued a unanimous decision in Federal Republic of Germany v. Philipp, which addresses the Foreign Sovereign Immunities Act’s expropriation exception. Chief Justice Roberts’ opinion begins:

The Foreign Sovereign Immunities Act provides that foreign nations are presumptively immune from the jurisdiction of United States courts. The statute, however, sets forth several specific exceptions. One such exception provides that a sovereign does not enjoy immunity in any case “in which rights in property taken in violation of international law are in issue.” 28 U. S. C. §1605(a)(3). The question presented is whether a country’s alleged taking of property from its own nationals falls within this exception.

The answer is no, because of the “domestic takings rule,” which “assumes that what a country does to property belonging to its own citizens within its own borders is not the subject of international law.” Roberts concludes: “We hold that the phrase ‘rights in property taken in violation of international law,’ as used in the FSIA’s expropriation exception, refers to violations of the international law of expropriation and thereby incorporates the domestic takings rule.”

The Court punted, however, on a couple of other interesting issues in the case. First, it did not consider Germany’s argument that federal courts were “obligated to abstain from deciding the case on international comity grounds.” Second, the Court did not address the plaintiffs’ argument that the individuals whose property was taken “were not German nationals at the time of the transaction,” directing the lower courts “to consider this argument, including whether it was adequately preserved below.”