1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ROSALIE SIMON, et al. Plaintiffs, vs. THE REPUBLIC OF HUNGARY, MAGYAR ÁLLAMVASUTAK Zrt., and RAIL CARGO HUNGARIA Zrt., Defendants. Case No.: 1:10-cv-01770-BAH Hon. Beryl A. Howell THE REPUBLIC OF HUNGARY’S AND MAGYAR ÁLLAMVASUTAK ZRT.’S MOTION TO DISMISS THE FIRST AMENDED CLASS ACTION COMPLAINT The Republic of Hungary (“Hungary”) and Magyar Államvasutak Zrt. (MÁV), by and through their attorneys, hereby move to dismiss the above-captioned action against them. The grounds for this Motion are set forth in the accompanying Memorandum of Law. REQUEST FOR ORAL HEARING Pursuant to Rule 7(f) of the Rules of the United States District Court for the District of Columbia, Hungary and MÁV respectfully request an oral hearing on this motion. Case 1:10-cv-01770-BAH Document 22 Filed 04/08/11 Page 1 of 3
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ROSALIE SIMON, et al. Plaintiffs, vs. THE REPUBLIC OF HUNGARY, MAGYAR ÁLLAMVASUTAK Zrt., and RAIL CARGO HUNGARIA Zrt., Defendants.
Case No.: 1:10-cv-01770-BAH Hon. Beryl A. Howell
THE REPUBLIC OF HUNGARY’S AND MAGYAR ÁLLAMVASUTAK Z RT.’S MOTION TO DISMISS THE FIRST AMENDED CLASS ACTION CO MPLAINT
The Republic of Hungary (“Hungary”) and Magyar Államvasutak Zrt. (MÁV), by and
through their attorneys, hereby move to dismiss the above-captioned action against them. The
grounds for this Motion are set forth in the accompanying Memorandum of Law.
REQUEST FOR ORAL HEARING
Pursuant to Rule 7(f) of the Rules of the United States District Court for the District of
Columbia, Hungary and MÁV respectfully request an oral hearing on this motion.
Case 1:10-cv-01770-BAH Document 22 Filed 04/08/11 Page 1 of 3
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Dated: April 8, 2011.
/s/ Michael J. Lyle Michael J. Lyle (D.C. Bar No. 475078) Meghan A. McCaffrey (application pending) WEIL, GOTSHAL & MANGES LLP 1300 Eye Street, N.W. – Suite 900 Washington, D.C. 20005 Telephone: (202) 682-7000 Facsimile: (202) 857-0940 Konrad L. Cailteux (admitted pro hac vice) Brian Keith Gibson (admitted pro hac vice) Jeremy T. Grabill (admitted pro hac vice) WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Attorneys for The Republic of Hungary and Magyar Államvasutak Zrt.
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CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing was filed electronically with the
Clerk of the Court using CM/ECF on April 8, 2011. As such, the foregoing was served
electronically upon the following:
/s/ Michael J. Lyle Michael J. Lyle
Case 1:10-cv-01770-BAH Document 22 Filed 04/08/11 Page 3 of 3
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ROSALIE SIMON, et al. Plaintiffs, vs. THE REPUBLIC OF HUNGARY, MAGYAR ÁLLAMVASUTAK Zrt., and RAIL CARGO HUNGARIA Zrt., Defendants.
Case No.: 1:10-cv-01770-BAH Hon. Beryl A. Howell
THE REPUBLIC OF HUNGARY’S AND MAGYAR ÁLLAMVASUTAK ZRT.’S MEMORANDUM OF LAW IN SUPPORT OF THEIR MOTION TO DISMISS THE FIRST AMENDED CLASS ACTION COMPLAINT
Case 1:10-cv-01770-BAH Document 22-1 Filed 04/08/11 Page 1 of 46
TABLE OF CONTENTS
Page
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TABLE OF AUTHORITIES ......................................................................................................... ii
I. HUNGARY AND MÁV ARE ENTITLED TO SOVEREIGN IMMUNITY, REQUIRING DISMISSAL OF THIS SUIT................................... 6
A. The Expropriation Exception 28 U.S.C. §1605(a)(3) Does Not Apply.......................................................................................................... 7
B. The Commercial Activity Exception 28 U.S.C. §1605(a)(2) Does Not Apply................................................................................................... 9
II. THE PLAINTIFFS’ CLAIMS PRESENT NON-JUSTICIABLE POLITICAL QUESTIONS.................................................................................. 12
III. PLAINTIFFS’ CLAIMS SHOULD ALSO BE DISMISSED UNDER THE DOCTRINE OF FORUM NON CONVENIENS, AS HUNGARY IS THE PROPER FORUM TO RESOLVE THE INSTANT DISPUTE................. 24
A. Hungary Provides An Adequate Alternative Forum For Resolution Of Plaintiffs’ Claims ................................................................................ 25
B. Private And Public Factors Weigh Heavily In Favor Of Adjudicating Plaintiffs’ Claims In Hungary, Not The United States ...... 27
Alberti v. Empresa Nicaraguense de la Carne, 705 F.2d 250 (7th Cir. 1983) ...................................................................................................11
Alfadda v. Fenn, 159 F.3d 41 (2d Cir. 1998).......................................................................................................28
Alperin v. Vatican Bank, 242 F. Supp. 2d 686 (N.D. Cal. 2003) .....................................................................................23
Altmann v. Fed. Republic of Austria, 317 F.3d 954 (9th Cir. 2002) .....................................................................................................8
*Anderman v. Fed. Republic of Austria, 256 F. Supp. 2d 1098 .........................................................................................................22, 23
Antolok v. United States, 873 F.2d 369 (D.C. Cir. 1989) .................................................................................................24
Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (1989)...................................................................................................................6
Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009)............................................................................................................5, 9
Atherton v. Dist. of Columbia Office of Mayor, 567 F.3d 672 (D.C. Cir. 2009) ...................................................................................................5
*Baker v. Carr, 369 U.S. 186 (1962).....................................................................................................16, 17, 23
Beekmans v. J.P.Morgan & Co., 945 F. Supp. 90 (S.D.N.Y. 1996).............................................................................................28
Beg v. Islamic Republic of Pakistan, 353 F.3d 1323 (11th Cir. 2003) ...............................................................................................11
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Belk v. United States, 858 F.2d 706 (Fed. Cir. 1988)............................................................................................17, 18
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2004).........................................................................................................5, 9, 12
Blanco v. Banco Indus. De Venezuela, S.A., 997 F.2d 974 (2d Cir. 1993).....................................................................................................29
BPA Int’l, Inc. v. Kingdom of Sweden, 281 F. Supp. 2d 73 (D.D.C. 2003) ...........................................................................................27
*Burger-Fischer v. Degussa AG, 65 F. Supp. 2d 248 (D.N.J. 1999) .................................................................................... passim
Butcher v. Gerber Prods. Co., No. 98 Civ. 1819, 1998 WL 437150 (S.D.N.Y. Aug. 3, 1998) ...............................................27
Capital Currency Exch., N.V. v. Nat’l Westminister Bank PLC, 155 F.3d 603 (2d Cir. 1999).....................................................................................................28
Carey v. Nat’l Oil Corp., 453 F. Supp. 1097 (S.D.N.Y. 1978).........................................................................................11
Chuidian v. Philippine Nat’l Bank, 912 F.2d 1095 (9th Cir. 1990) ...................................................................................................8
Cicippio v. Islamic Republic of Iran, 30 F.3d 164 (D.D.C. 1994) ........................................................................................................7
Crist v. Republic of Turkey, 995 F. Supp. 5 (D.D.C. 1998) ....................................................................................................9
Cruz v. Maritime Co. of Philippines, 549 F. Supp. 285 (S.D.N.Y. 1982), aff’d, 702 F.2d 47 (2d Cir. 1983) ....................................34
Dahl v. United Tech. Corp., 632 F.2d 1027 (3d Cir. 1980).............................................................................................30, 32
Dames & Moore v. Regan, 453 U.S. 654 (1981)...........................................................................................................15, 17
Deutsch v. Turner Corp., No. CV 00-4405 SVW(AJWX), 2000 WL 33957691 (C.D. Cal. Aug. 25, 2000) ..................22
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F. Palicio y Compania, S.A. v. Brush, 256 F. Supp. 481 (S.D.N.Y. 1966).............................................................................................8
Faber-Plast v. Kleinert, 997 F. Supp. 846 (E.D. Mich. 1998)............................................................................28, 33, 34
Freiberg v. Muskie, 651 F.2d 608 (8th Cir. 1981) ...................................................................................................24
Freund v. Republic of France, 592 F. Supp. 2d 540 (S.D.N.Y. 2008)........................................................................................9
*Frumkin v. JA Jones, Inc., 129 F. Supp. 2d 370 (D.N.J. 2001) ..........................................................................................22
*Gould v. Nat’l Life Ins. Co., 990 F. Supp. 1354 (M.D. Ala. 1998) .................................................................................27, 28
Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9 (D.D.C. 2001) ...............................................................................................6
Gschwind v. Cessna Aircraft Co., 161 F.3d 602 (10th Cir. 1998), cert. denied, 526 U.S. 1112 (1999)........................................33
Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947).................................................................................................................25
In re Nazi Era Cases Against German Defendants Litig., 129 F. Supp. 2d 370 (D.N.J. 2001) ....................................................................................13, 23
In re Nazi Era Cases Against German Defendants Litig., 198 F.R.D. 429 (D.N.J. 2000)..................................................................................................22
In re Nematron Corp. Sec. Litig., 30 F. Supp. 2d 397 (S.D.N.Y. 1998)........................................................................................27
In re Papandreou, 139 F.3d 247 (D.C. Cir. 1998) .................................................................................................25
In re Union Carbide Corp. Gas Plant Disaster at Bhopal, 809 F.2d 195 (2d Cir. 1987).....................................................................................................28
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*Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424 (D.N.J. 1999) ................................................................................12, 21, 22
Jackson v. American Univ., in Cairo, 52 Fed. App’x 518 (D.C. Cir. 2002) ........................................................................................28
Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803)...................................................................................................16
Mars, Inc. v. Kabushiki-Kaisha Nippon Conlux, 24 F.3d 1368 (Fed. Cir. 1994)..................................................................................................29
Martin v. Vogler, No. 93 C 3870, 1993 WL 462853 (N.D. Ill. Nov. 9, 1993).....................................................30
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MBI Group, Inc. v. Credit Foncier Du Cameroun, 616 F.3d 568 (D.C. Cir. 2010) .................................................................................................25
McDonald’s Corp. v. Bukele, 960 F. Supp. 1311 (N.D. Ill. 1997) ..........................................................................................30
Mediterranean Golf, Inc. v. Hirsh, 783 F. Supp. 835 (D.N.J. 1991) .........................................................................................30, 33
Millicom Int’l Cellular v. Republic of Costa Rica, 995 F. Supp. 14 (D.D.C. 1998) ..................................................................................................8
Moscovits v. Magyar Cukor Rt., No. 00 Civ. 0031 (VM), 2001 WL 767004 (S.D.N.Y. July 9, 2001) ......................................... 26 Nemariam v. Fed. Democratic Republic of Ethiopia,
*Occidental of Umm al Qaywayn, Inc. v. A Certain Cargo of Petroleum Laden Aboard the Tanker Dauntless Colocotronis, 577 F.2d 1196 (5th Cir. 1978) ...........................................................................................18, 24
*Oetjen v. Central Leather, Co., 246 U.S. 297 (1918)...............................................................................................12, 16, 17, 18
*Oveissi v. Islamic Repub. of Iran, 573 F.3d 835 (D.D.C. 2009) ....................................................................................................31
Pain v. United Techs. Corp., 637 F.2d 775 (D.C. Cir. 1980) .................................................................................................34
Papasan v. Allain, 478 U.S. 265 (1986)...................................................................................................................5
Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36 (D.C. Cir. 2000) .....................................................................................................6
*Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981)......................................................................................................... passim
Postol v. El-Al Israel Airlines, Ltd., 690 F. Supp. 1361 (S.D.N.Y. 1988).........................................................................................34
*Princz v. Fed. Republic of Germany, 26 F.3d 1166 (D.C. Cir. 1994) .....................................................................................11, 19, 20
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Princz v. Fed. Republic of Germany, 871 F. Supp. 18 (D.D.C. 1994) ................................................................................................20
Proyectos Orchimex de Costa Rica, S.A. v. E.I. DuPont de Nemours & Co., 896 F. Supp. 1197 (M.D. Fla. 1995)........................................................................................34
*Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (1992).....................................................................................................10, 11, 12
Republic of Austria v. Altmann, 541 U.S. 677 (2004)...................................................................................................................6
*Rong v. Liaoning Provincial Gov’t, 362 F. Supp. 2d 83 (D.D.C. 2005) .............................................................................................8
Rosner v. United States, 231 F. Supp. 2d 1202 (S.D. Fla. 2002) ......................................................................................9
Saudi Arabia v. Nelson, 507 U.S. 349 (1993)...................................................................................................................6
Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208 (1974).................................................................................................................24
Scottish Air Int’l, Inc. v. British Caledonian Group, PLC, 81 F.3d 1224 (2d Cir. 1996).....................................................................................................32
Siderman de Blake v. Republic of Argentina, 965 F.2d 699 (9th Cir. 1992) .....................................................................................................8
Sinochem Int’l Co., Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422 (2007).................................................................................................................25
Smith v. Reagan, 844 F.2d 195 (4th Cir.1988) ....................................................................................................24
Sparrow v. United Air Lines, 216 F.3d 1111 (D.C. Cir. 2000) .................................................................................................5
Stromberg v. Marriot Int’l, Inc., 474 F. Supp. 2d 57 (D.D.C. 2007) ...........................................................................................28
U.S. Ecology, Inc. v. U.S. Dep’t of Interior, 231 F.3d 20 (D.C. Cir. 2000) .....................................................................................................6
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United States v. Martinez, 904 F.2d 601 (11th Cir. 1990) .................................................................................................17
United States v. Philip Morris USA, Inc., No. Civ.A.99-2-2496(GK), 2004 WL 5355971 (D.D.C. Aug. 2, 2004)....................................3
United States v. Pink, 315 U.S. 203 (1942).................................................................................................................17
United World Trade, Inc. v. Mangyshlakneft Oil Prod. Ass’n, 33 F.3d 1232 (10th Cir. 1994) ...........................................................................................11, 12
Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480 (1983).................................................................................................................24
Ware v. Hylton, 3 U.S. 199 (1796).....................................................................................................................16
Younis v. American Univ. in Cairo, 30 F. Supp.2d 390 (S.D.N.Y. 1998).........................................................................................32
Zinsler v. Marriott Corp., 605 F. Supp. 1499 (D. Md. 1985) ............................................................................................34
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OTHER AUTHORITIES
Fed. R. Evid. 201 .............................................................................................................................3
Fed. R. Civ. P. 12(b)(1)....................................................................................................................5
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145(2) (1971) ................................................31
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The Republic of Hungary (“Hungary”) and Magyar Államvasutak Zrt. (MÁV) submit
this Memorandum of Law in Support of Their Motion to Dismiss the First Amended Class
Action Complaint (the “Complaint”) filed by Hungarian Holocaust survivors (“Plaintiffs”).
PRELIMINARY STATEMENT
Few periods of civilization engender as much animosity, disbelief, and disgust as the
treatment of Jewish persons by the Nazi regime during World War II. The Nazi atrocities
committed against the Jewish people has been well documented and it is unquestioned that
Hungarian Jews were among the devastated populations. The question presented by this motion,
though, is not whether the wrongs inflicted upon Plaintiffs and millions of others were wrongful
– they clearly were.1 Rather, the question presented is whether private parties may bring civil
damage actions for events that took place in Europe during World War II against sovereign
entities that had been integrated into the German war machine by the Nazi Regime that
conceived and organized these crimes. For several fundamental reasons, the answer to that
question is no.
First, as Plaintiffs admit, both Hungary and MÁV are sovereign entities and, under the
Foreign Sovereign Immunities Act (“FSIA”), are presumptively immune from the jurisdiction of
this Court. Further, Plaintiffs cannot establish that an exception to the FSIA is applicable to this
case. Thus, the Plaintiffs’ claims against Hungary and MÁV should be dismissed because the
Court lacks subject matter jurisdiction over them.
Second, the Complaint should be dismissed because its claims present a non-justiciable
political question. War reparations have historically been resolved through state-to-state
negotiations rather than the courts. Throughout the years following World War II, the United
1 Nothing said in the defense of this lawsuit can, or should, diminish the world’s condemnation of Nazi wrongdoing during World War II.
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States, in connection with allied nations, entered into bi-lateral negotiations and agreements with
a number of European countries, including Hungary, regarding reparations for the various
victims of World War II. In no situation is this historical precedent more prevalent than with
respect to reparations for the various atrocities committed against Jewish people during the
Holocaust. Any attempt by the Court to review and pass judgment on those negotiations would
impinge on the foreign policy interests of the United States and, therefore, present non-
justiciable questions under the political question doctrine.
Finally, the Complaint should be dismissed under the doctrine of forum non conveniens.
This case has nothing to do with the District of Columbia or the United States. Rather, all of the
conduct at issue took place in Hungary over sixty years ago, the documents relevant to the
Plaintiffs’ claims are in Hungary and in the Hungarian language, and the Plaintiffs’ claims are
likely governed by Hungarian law. In short, Hungary has a far stronger interest in addressing
and resolving claims relating to the mistreatment of its citizens during the Holocaust. Thus,
Hungary, not the United States, is the proper forum for the resolution of any disputes relating to
the treatment of Hungarian Jews during the Holocaust.
FACTUAL BACKGROUND
A. The Complaint.
Plaintiffs filed this putative class action on October 20, 2010. They filed a First
Amended Class Action Complaint on March 11, 2011. See Rec. Docs. 1 & 21. Plaintiffs allege
that Hungary, MÁV, and Rail Cargo Hungaria Zrt. “orchestrated, collaborated and participated
in the confiscation of the personal possessions of their Hungarian Jewish victims and their
transportation by train to the killing fields and death camps of Nazi Germany-occupied Poland
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and the Ukraine.” Am. Compl. ¶ 3.2 Plaintiffs seek to represent a class of
(a) all surviving Jewish victims of the Holocaust, whether presently American citizens or aliens, who were stripped of personal property by any of the defendants, and/or transported by rail via Defendant MÁV or Defendant MÁV Cargo to locales where they were placed or maintained in the custody of the German, or other hostile, authorities and (b) the heirs (whether American citizens or aliens) and open estates (wherever located) of the deceased Jewish victims of the Holocaust who at any time between September 1, 1939, and May 8, 1945, were stripped of personal property by any of the defendants, and/or transported by rail via Defendant MÁV or Defendant MÁV Cargo to locales where they were placed or maintained in the custody of the German, or other hostile, authorities and died while in captivity or thereafter.
Am. Compl. ¶ 143. Plaintiffs assert nineteen separate causes of action and request a variety of
remedies, including an accounting, compensatory damages, punitive damages, a declaratory
judgment, a permanent injunction, costs, attorneys’ fees, and expenses. See Am. Compl. ¶¶ 164-
225. Plaintiffs concede that Hungary is a sovereign nation, and that MÁV is an agency or
instrumentality of Hungary. See Am. Compl. ¶¶ 82, 85.
B. Post-War Treaties, Agreements, and Compensation Schemes.
World War II ended in Europe in May 1945.3 In February 1947, Hungary signed the
Treaty of Paris with the Allies. See Treaty of Peace with Hungary, Feb. 10, 1947, 61 Stat. 2109
(the “1947 Peace Treaty”).4 Pursuant to Article 26(2) of the 1947 Peace Treaty, Hungary agreed
to “restore[] free of all encumbrances and charges” “all property, rights and interests” that had
come under Hungarian control as a result of the war. Id. at Art. 26(2). Moreover, in Article
2 This motion is only filed on behalf of Hungary and MÁV. Rail Cargo Hungaria Zrt. has not appeared in this action and the Court has entered a default against Rail Cargo. See Rec. Doc. 19. 3 It is well settled that this court may take judicial notice of historical facts such as those surrounding World War II, many of which have been well documented and are not in dispute. See United States v. Philip Morris USA, Inc., No. Civ.A.99-2-2496(GK), 2004 WL 5355971, at *1 (D.D.C. Aug. 2, 2004) (noting that “[j]udicial notice may be taken of historical, political, or statistical facts, or any other facts that are verifiable with certainty”); see also Fed. R. Evid. 201. 4 A copy of the 1947 Peace Treaty is attached as Ex. 1 to the April 8, 2011 Declaration of Meghan A. McCaffrey (“McCaffrey Decl.”).
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27(1), Hungary agreed that “in all cases where the property, legal rights or interests in Hungary
of persons under Hungarian jurisdiction have, since 1 September 1939, been the subject of
measures of sequestration, confiscation or control on account of the racial origin or religion of
such persons, the said property, legal rights or interests shall be restored together with their
accessories or, if restoration is impossible, that fair compensation shall be made therefore.” Id.
at Art. 27(1).
In 1973, the Executive branch of the U.S. Government and the Government of the
Hungarian People’s Republic entered into a broad agreement to resolve all “taken property”
claims suffered by U.S. nationals prior to 1973 and to extinguish any future claims against
Hungary. See Agreement Between the Government of the United States of America and the
Government of the Hungarian People’s Republic Regarding the Settlement of Claims, March 6,
2 of the 1973 Agreement, the claims “which are being settled and discharged by this Agreement,
are claims of nationals and the Government of the United States for: (1) property, rights and
interests affected by Hungarian measures of nationalization, compulsory liquidation,
expropriation, or other taking on or before the date of this Agreement.” Id. at Art. 2.
In the 1990s, after the fall of the Communist regime in Hungary, the Hungarian
government, pursuant to its obligations under the 1947 Peace Treaty, enacted various
compensation schemes designed to further compensate Hungarian citizens (current and former)
for losses they suffered after the beginning of World War II in 1939. See Declaration of László
Nagy (“Nagy Decl.) at ¶¶ 23-25. These various compensation schemes were intended to
compensate the Jewish population for the wrongful taking of their property during and after
5 A copy of the 1973 Agreement is attached as Ex. 2 to the McCaffrey Decl.
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World War II, as well as for personal injury during this time frame. Id. Additionally, the
Hungarian Government established a foundation to which it transferred real property that had
been wrongfully taken from Jewish persons, but could not be returned to the rightful owner. Id.
at ¶ 26. For a discussion of the compensation schemes enacted by Hungary during this time
period, see id. at ¶¶ 23-26, 28-29, 31. Additionally, in 1993, the Hungarian Constitutional Court
determined that Hungary had not fully complied with its obligations under the 1947 Peace
Treaty, causing Hungary to put in place mechanisms to ensure compliance. Id. at ¶¶ 27-29.6
ARGUMENT
Although a complaint’s factual allegations must be presumed true, and the plaintiff must
be given every favorable inference that may be drawn from the allegations of fact, Sparrow v.
United Air Lines, 216 F.3d 1111, 1113 (D.C. Cir. 2000), a court need not accept as true “a legal
conclusion couched as a factual allegation,” nor inferences that are unsupported by the facts set
out in the complaint. Trudeau v. Fed. Trade Comm’n, 456 F.3d 178, 193 (D.C. Cir. 2006)
(quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). Moreover, the allegations in a complaint
must “raise a right to relief above the speculative level,” and must be, at a minimum, “plausible.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2004); see also Ashcroft v. Iqbal, 129 S.Ct. 1937,
1949 (2009) (noting that “[w]here a complaint pleads facts that are merely consistent with a
defendants’ liability, it stops short of the line between possibility and plausibility of entitlement
to relief”) (internal quotations and citations omitted); Atherton v. Dist. of Columbia Office of
Mayor, 567 F.3d 672, 688 (D.C. Cir. 2009).
Federal Rule of Civil Procedure 12(b)(1) requires the party seeking to invoke the 6 The Hungarian Constitutional Court is the supreme organ for the protection of the Constitution of the Republic of Hungary, and it is charged with reviewing the constitutionality of laws and protecting the constitutional order and fundamental rights established in the Constitution. The Constitutional Court does not decide traditional legal disputes. For further information about the Constitutional Court, see http://mkab.hu/index.php?id=introduction (last visited Apr. 7, 2011).
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jurisdiction of a federal court to bear the burden of establishing that the court has jurisdiction
over the case. See, e.g., U.S. Ecology, Inc. v. U.S. Dep’t of Interior, 231 F.3d 20, 24 (D.C. Cir.
2000); Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C.
2001). Moreover, a court is free to consider materials outside the allegations contained in the
complaint in determining whether it has jurisdiction to hear a case. See Jerome Stevens Pharms.,
Inc. v. FDA, 402 F.3d 1249, 1253-54 (D.C. Cir. 2005).
I. HUNGARY AND MÁV ARE ENTITLED TO SOVEREIGN IMMUNITY, REQUIRING DISMISSAL OF THIS SUIT.
Under the FSIA, a “foreign state is presumptively immune from the jurisdiction of United
States courts.” Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993).7 As Plaintiffs concede,
“Hungary is a sovereign nation,” Am. Compl. ¶ 82, and MÁV “is an agency or instrumentality of
the Republic of Hungary for purposes of the Foreign Sovereign Immunities Act,” Am. Compl. ¶
85.8 Accordingly, unless Plaintiffs can satisfy an exception to the FSIA, Hungary and MÁV are
“immune from the jurisdiction of the courts of the United States.” 28 U.S.C. § 1604; see
Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 39 (D.C. Cir. 2000) (“If no
exception applies, a foreign sovereign’s immunity is complete: The district court lacks subject
matter jurisdiction over the plaintiff’s case.”); see also Argentine Republic v. Amerada Hess
Shipping Corp., 488 U.S. 428, 439 (1989) (holding that “the FSIA provides the sole basis for
obtaining jurisdiction over a foreign state in federal court”).
Plaintiffs do not identify which FSIA exceptions they seek to invoke. The allegations in
the Amended Complaint, though, appear to suggest that Plaintiffs are relying on the
7 The FSIA applies retroactively to conduct occurring before its enactment. See Republic of Austria v. Altmann, 541 U.S. 677, 697 (2004). 8 The FSIA defines the term “foreign state” to include a state’s political subdivisions, agencies, and instrumentalities. 28 U.S.C. § 1603(a). MÁV is a company owned 100% by Hungary. See Nagy Decl. at ¶ 10 n.12.
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expropriation and commercial activity exceptions at 28 U.S.C. § 1605(a)(2)-(3):
Defendant Hungary engages in an ongoing course of commercial activity throughout, and maintains property in, the United States, that has been exchanged for the property it stole from the plaintiffs herein. That property is owned and operated by MÁV and/or other agencies and instrumentalities of Hungary that are engaged in commercial activity in the United States. Alternatively, that property is present in the United States in connection with commercial activity carried on by Hungary within the United States. Am. Compl. ¶ 83. . . . MÁV engages in an ongoing course of commercial activity in the United States. More specifically, and without limitation, MÁV engages in commercial operations within the United States, including maintenance of an agency for selling tickets, booking reservations, and conducting similar business in the United States. MÁV owns and/or operates property and property exchanged for property that it stole from Hungarian Jewish deportees. Am. Compl. ¶ 85.
These allegations, though, do not support the application of either § 1605(a)(2) or (a)(3) in this
case.9
A. The Expropriation Exception 28 U.S.C. §1605(a)(3) Does Not Apply.
Under the expropriation exception, a foreign state and its instrumentalities are not
immune where:
rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state; or that property or any property exchanged for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States.
28 U.S.C. § 1605(a)(3). For several reasons, this exception is not applicable here.
First, for this exception to apply, Plaintiffs must have had rights in property that were
taken “in violation of international law.” Nemariam v. Fed. Democratic Republic of Ethiopia, 9 The FSIA tort exception for personal injury or death, 28 U.S.C. § 1605(a)(5), would not apply to this case. Plaintiffs have not alleged that any personal injury or death occurred in the United States as required by that exception. See 28 U.S.C. § 1605(a)(5); Cicippio v. Islamic Republic of Iran, 30 F.3d 164, 168 (D.D.C. 1994) (holding that “noncommercial tort” exception to FSIA did not apply where injuries complained of took place entirely in Lebanon). Rather, any personal injury or wrongful death is alleged to have occurred in Europe during World War II. See, e.g., Am. Compl. ¶¶ 90-92.
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491 F.3d 470, 475 (D.C. Cir. 2007) reh’g denied. However, the “[e]xpropriation by a sovereign
state of the property of its own nationals does not implicate settled principles of international
law.” Rong v. Liaoning Provincial Gov’t, 362 F. Supp. 2d 83, 101 (D.D.C. 2005) (quoting
Chuidian v. Philippine Nat’l Bank, 912 F.2d 1095, 1105 (9th Cir. 1990)). “[C]onfiscations by a
state of the property of its own nationals, no matter how flagrant and regardless of whether
compensation has been provided, do not constitute violations of international law.” Id. at 102
(quoting F. Palicio y Compania, S.A. v. Brush, 256 F. Supp. 481, 487 (S.D.N.Y. 1966)); see also
Altmann v. Fed. Republic of Austria, 317 F.3d 954, 968 (9th Cir. 2002) (holding that under the
expropriation exception to the FSIA, “the plaintiff cannot be a citizen of the defendant county at
the time of the expropriation, because ‘[e]xpropriation by a sovereign state of the property of its
own nationals does not implicate settled principles of international law’”) (quoting Siderman de
Blake v. Republic of Argentina, 965 F.2d 699, 711 (9th Cir. 1992)). Although Plaintiffs allege
that they are now citizens of the United States, Canada, Israel, and Australia, they bring suit
against defendants for the alleged expropriation and/or nationalization of property owned by
“Hungarian Jewish victims.” Am. Compl. ¶ 3. All of the Plaintiffs were Hungarian nationals at
the time of the events in question. Am. Compl. ¶¶ 10, 14, 21, 27, 38, 40, 48, 64, 72, 80. Thus,
because the alleged expropriation and/or nationalization by Hungary of its own nationals’
property does not violate international law, the expropriation exception does not apply.10
Second, Plaintiffs have failed to adequately allege that any taken property (or any
property exchanged for such taken property) is either “present in the United States in connection
with a commercial activity carried on in the United States by the foreign state” or “owned or
10 Moreover, the alleged expropriation and/or nationalization cannot be considered a violation of international law because Plaintiffs have not shown that they have “pursued and exhausted domestic remedies in the foreign state that is alleged to have caused the injury.” Millicom Int’l Cellular v. Republic of Costa Rica, 995 F. Supp. 14, 23 (D.D.C. 1998).
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operated by an agency or instrumentality of” Hungary. 28 U.S.C. § 1605(a)(3). As an initial
matter, Plaintiffs allege that the allegedly taken property was “transferred” to the “Nazi
Government during World War II.” Am. Compl. ¶ 136. Thus, it would appear that Plaintiffs
concede that Hungary and MÁV do not have the property allegedly taken from Plaintiffs.11
Regardless, Plaintiffs’ conclusory allegations run afoul of the U.S. Supreme Court’s holdings in
Twombly and Iqbal. See Am. Compl. ¶ 83 (making bare bone allegation that Hungary
“maintains property” in the United States “that has been exchanged for the property it stole from
the plaintiffs herein”); Am. Compl. ¶ 85 (making bare bone allegation that MÁV “owns and/or
operates property and property exchanged from property that it stole from Hungarian Jewish
deportees”). These are nothing more than “bald assertions” and Plaintiffs have “failed to set
forth any facts” in support of such assertions. Crist v. Republic of Turkey, 995 F. Supp. 5, 11
(D.D.C. 1998); see Freund v. Republic of France, 592 F. Supp. 2d 540, 559-60 (S.D.N.Y. 2008)
(finding that plaintiffs’ conclusory allegations that defendant took property sixty years ago did
not justify inference that defendant still owned or operated such property today). Therefore, the
expropriation exception does not apply to this case.
B. The Commercial Activity Exception 28 U.S.C. §1605(a)(2) Does Not Apply.
Under the commercial activity exception, a foreign state and its instrumentalities are not
immune where:
the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the
11 This apparent concession is supported by the fact that “[i]n the fall and winter of 1944-45, as the prospect of Germany’s defeat loomed larger, the Hungarian government, at the direction of the Nazis, loaded . . . Jewish property onto a train bound for Germany.” Rosner v. United States, 231 F. Supp. 2d 1202, 1204-05 (S.D. Fla. 2002). “The lengthy train,” known as the “Gold Train,” “made its way from Hungary into Austria, but never made it to German territory” because it was intercepted by the U.S. Army. Id.
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foreign state elsewhere and that act causes a direct effect in the United States.
28 U.S.C. § 1605(a)(2). Although it is not clear which clause of this exception Plaintiffs attempt
to invoke, the only conceivable clause that might apply is the third clause because there is no
allegation that this lawsuit is based on any actions occurring in the United States. To the
contrary, this lawsuit is based on alleged actions by Hungary and MÁV in Europe during World
War II. See Am. Compl. ¶ 3 (alleging that the defendants “orchestrated, collaborated and
participated in the confiscation of the personal possessions of their Hungarian Jewish victims and
their transportation by train to the killing fields and death camps of Nazi Germany-occupied
Poland and the Ukraine”). Accordingly, the Court’s analysis of this exception is limited to
considering whether the Plaintiffs’ claims (1) involve “commercial activity” outside the United
States that (2) “cause[d] a direct effect in the United States.” 28 U.S.C. § 1605(a)(2). The
Plaintiffs cannot satisfy either requirement.
First, a “commercial activity” under the FSIA is “either a regular course of commercial
conduct or a particular commercial transaction or act.” 28 U.S.C. § 1603(d); see Republic of
Argentina v. Weltover, Inc., 504 U.S. 607, 614 (1992) (“[T]he issue is whether the particular
actions that the foreign state performs (whatever the motive behind them) are the type of actions
by which a private party engages in ‘trade and traffic or commerce.’”) (citation omitted)
(emphasis in original). Here, the alleged actions of Hungary and MÁV asserted by the Plaintiffs
cannot be considered “commercial activity” as a matter of law. Plaintiffs allege that “Hungarian
officials stripped Jews, including named plaintiffs herein, of their valuable possessions when
they were transferred into the Jewish ghettoes and as they boarded the defendants’ trains taking
them to slave labor camps, concentration camps and extermination camps.” Am. Compl. ¶ 82.
Plaintiffs also allege that “[a]t the points of embarkation, MÁV confiscated and kept personal
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property of the Jews who were about to be deported,” and that “MÁV mistreated the Jewish
deportees who were on its trains during their deportation, causing grievous injury and death to
many of them en route.” Am. Compl. ¶ 84. In short, Hungary and MÁV are alleged to have
expropriated and/or nationalized Plaintiffs’ property. But as multiple courts have held,
“nationalization is the quintessentially sovereign act” and is “never viewed as having a
commercial character.” Carey v. Nat’l Oil Corp., 453 F. Supp. 1097, 1102 (S.D.N.Y. 1978); see
also Beg v. Islamic Republic of Pakistan, 353 F.3d 1323, 1327-28 (11th Cir. 2003)
(“Expropriation is neither the type of activity in which private actors engage nor is it a market
transaction.”); Alberti v. Empresa Nicaraguense de la Carne, 705 F.2d 250, 254 (7th Cir. 1983)
(holding that commercial activity exception did not apply because “nationalization . . . is a
quintessential Government act”).
Second, the alleged expropriation and/or nationalization of Plaintiffs’ property lacks the
requisite nexus with the United States, as required by the third clause of the commercial activity
exception. 28 U.S.C. § 1605(a)(2) (commercial activity must cause a “direct effect in the United
States”). As the D.C. Circuit has held, the effect in the United States cannot be “purely trivial,”
but must instead “follow[] as an immediate consequence of the defendant’s . . . activity.” Princz
v. Fed. Republic of Germany, 26 F.3d 1166, 1172 (D.C. Cir. 1994) (quoting Weltover, 504 U.S.
at 618). This is because Congress “did not intend to provide jurisdiction whenever the ripples
caused by an overseas transaction manage eventually to reach the shores of the United States.”
United World Trade, Inc. v. Mangyshlakneft Oil Prod. Ass’n, 33 F.3d 1232, 1238 (10th Cir.
1994). At most, Plaintiffs allege that Hungary and MÁV now own and/or operate property in the
United States that was exchanged for property that they allegedly stole from Plaintiffs. See Am.
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12
Compl. ¶¶ 83, 85.12 Of course, Plaintiffs fail to allege any details about any such “exchanges” of
property (e.g., what property was involved? when did these exchanges occur?). Regardless,
courts “look to the place where the legally significant acts giving rise to the claim occurred in
determining the place where a direct effect may be said to be located.” United World Trade, 33
F.3d at 1239 (internal quotation omitted). Here, the “legally significant acts” allegedly occurred
in Hungary and any exchanges of property in the United States were not “immediate
consequence[s]” of the defendants’ alleged expropriation and/or nationalization. Weltover, 504
U.S. at 618.
In short, there is no dispute that Hungary and MÁV are sovereign entities. See Am.
Compl. ¶¶ 82, 85. Therefore, under the FSIA, Hungary and MÁV are presumptively immune
from the jurisdiction of this Court. Plaintiffs also cannot establish that any FSIA exception
applies to the facts of this case. Accordingly, the Court does not have subject matter jurisdiction
over Hungary and MÁV, and Plaintiffs’ Complaint against them should be dismissed.
II. THE PLAINTIFFS’ CLAIMS PRESENT NON-JUSTICIABLE POLITICAL QUESTIONS.
Historically, reparations13 following a war have been resolved through state-to-state
negotiations. See Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424, 485 (D.N.J. 1999) (“As an
issue affecting U.S. relations with the international community, war reparations fall within the
domain of the political branches and are not subject to judicial review.”) (citing Oetjen v. Central
Leather, Co., 246 U.S. 297, 302 (1918)). No post-war reparations have been discussed and
12 Plaintiffs do not provide any support for these allegations in the Complaint. Rather, they merely make conclusory statements parroting the words of the statute, which is insufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. 13 War reparations have been defined to include “all the loss and damage to which . . . Governments and their nationals have been subjected as a consequence of the war imposed upon them.” Burger-Fischer v. Degussa AG, 65 F. Supp. 2d 248, 275 (D.N.J. 1999) (quoting Treaty of Peace Between the Allied and Associated Powers and Germany, June 28, 1919, Art. 231, 1 Bevans 43, 137-38).
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negotiated by governments as much as those relating to the mistreatment of Jews by the Nazi
regime during the Holocaust. Numerous U.S. federal courts have refused to pass judgment on
claims against various sovereign entities and companies that were under the direction and control
of the Nazi regime, holding that the resolution of these claims and compensation of the victims is
more properly left to inter-Governmental negotiations. See, e.g., Kelberine v. Societe
Internationale, Etc., 363 F.2d 989, 995 (D.C. Cir. 1966); In re Nazi Era Cases Against German
Defendants Litig., 129 F. Supp. 2d 370 (D.N.J. 2001). The claims giving rise to Plaintiffs’
claims in this case are no different. Since the end of World War II, the United States and
Hungary have addressed such claims through state-to-state negotiations.14
In February 1947, the United States signed and ratified the 1947 Peace Treaty which
expressly addressed and resolved the issue of compensation of Hungarian Jews for Holocaust-
related confiscation or property. See 1947 Peace Treaty at Art. 27.15 In 1991, following the end
of the Communist regime, Hungary took steps to comply with Article 27 through the enactment
of legislation designed specifically to compensate those who suffered losses after 1939. See Am.
Compl. ¶ 132; Nagy Decl. at ¶¶ 23-25. In 1993, the Hungarian Constitutional Court determined
that Hungary had not fully discharged its duties under Article 27 of the 1947 Peace Treaty, id. at
¶ 27, and Hungary took additional steps to comply with its obligations under the 1947 Peace 14 Plaintiffs seek to distinguish this case from previous attempts to have U.S. courts pass judgment on the actions of other sovereign entities involved in the Holocaust by claiming that Hungary and MÁV have “never been brought before the bar of justice,” and casting their claims as an effort to “to remedy these injustices.” Am. Compl. ¶ 4. As discussed, those issues are more appropriately addressed between governments, not U.S. courts. 15 In addition to being signed by the Hungary and United States, the 1947 Peace Treaty was also signed by the Union of Soviet Socialist Republics, the United Kingdom of Great Britain and Northern Ireland, Australia, the Byelorussian Soviet Socialist Republic, Canada, Czechoslovakia, India, New Zealand, the Ukranian Soviet Socialist Republic, the Union of South Africa, and the People’s Federal Republic of Yugoslavia. See Proclamation to 1947 Peace Treaty (McCaffrey Decl. Ex.1). As a result, adjudication of the claims in this case would not only require this Court to pass judgment on the sufficiency of an agreement entered into by the United States Government, but one entered into by a number of other foreign nations.
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Treaty. Id. at ¶¶ 28-29.
Plaintiffs do not dispute that the Article 27 of the 1947 Peace Treaty provided the
mechanism for Hungarian Jews, like the Plaintiffs, to seek restitution of their property from
Hungary or, in the alternative, compensation. Rather, they complain that Article 27 was merely
declaratory and did not provide sufficient means for enforcement of sanctions for non-
compliance. See Am. Compl. ¶ 127. However, Plaintiffs ignore Article 40 of the 1947 Peace
Treaty, which provides the mechanism for resolving any disputes relating to claims under the
treaty. Article 40 states that any disputes that are not settled by direct diplomatic negotiations
are to be referred to the Heads of the Diplomatic Missions from the Soviet Union, the United
Kingdom, and the United States. If a dispute remains unresolved by the Heads of the Diplomatic
Missions, then the dispute will be resolved by a Commission consisting of a representative from
each party to the dispute, who will then either select a third member or request that the Secretary
General of the United Nations designate a third member. Neither Article 40 nor any other
provision of the 1947 Peace Treaty contemplates a resolution of any dispute arising under the
treaty through private civil litigation.
Further supporting the fact that the resolution of the Plaintiffs’ World War II-related
claims was intended to be the sole province of the Executive Branch, in 1973, the United States
and Hungary entered into an executive agreement, the 1973 Agreement, that was designed to
settle the claims of U.S. citizens against Hungary. See 1973 Agreement (McCaffrey Decl. at
Ex. 2). Article 1 of the 1973 Agreement provided for the payment of $18.9 million by Hungary
to the United States “in full and final settlement and in discharge of all claims” of the United
States and U.S. nationals. The claims covered by the 1973 Agreement included “property, rights
and interests affected by Hungarian measures of nationalization, compulsory liquidation,
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15
expropriation, or other taking on or before the date of this Agreement.” Id. at Art. 2. In return
for the payment from Hungary, the United States Government agreed to discharge Hungary from
all claims referenced in Article 2, stating that “[u]pon their discharge, the Government of the
United States will consider as finally settled all claims for which compensation is provided under
Article 1, whether or not they have been brought to the attention of [Hungary].” Id. at Art. 6.
Therefore, the 1973 Agreement prohibits any claims by United States citizens, and therefore, the
claims of Plaintiffs who are U.S. citizens must be dismissed as they conflict with the 1973
Agreement. See Dames & Moore v. Regan, 453 U.S. 654, 686 (1981) (upholding the authority
of the Executive Branch to enter into an executive agreement relating to the release of hostages
by the Republic of Iran which suspended the claims of American nationals against Iran and
terminated those claims through binding arbitration in an Iran-United States Claims Tribunal).
The Plaintiffs acknowledge in their Complaint that in the years since the end of World
War II, Hungary has enacted several laws designed to compensate its Jewish citizens for the
wrongs committed against them during the Holocaust. See Am. Compl. at ¶¶ 127, 132.16 They
complain, however, that the restitution and compensation available to them under those various
legislative enactments and statutes are insufficient. See id. These various compensation
schemes resulted from policy decisions made by Hungary internally, and through multi-national
negotiations with other nations – including the United States – in the wake of the Holocaust. An
attempt to examine and evaluate the sufficiency of those compensation schemes by this Court
would present precisely the kind of multi-layered “political question” that depends entirely upon
policy choices and value determinations constitutionally committed to the President and
16 The Complaint acknowledges that at least one plaintiff, Ella Feuerstein Schlanger received compensation from Hungary in relation to the loss of family members. See Am. Compl. at ¶ 79.
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16
Congress. See Baker v. Carr, 369 U.S. 186, 211 (1962).17
In Baker, the Supreme Court identified six factors to be considered in determining
whether an action presents a non-justiciable political question: (1) a textually demonstrable
constitutional commitment of the issue to a coordinate political department; (2) a lack of
judicially discoverable and manageable standards for resolving it; (3) the impossibility of
deciding without an initial policy determination of a kind clearly for nonjudicial discretion; (4)
the impossibility of a court’s undertaking independent resolution without expressing lack of the
respect due coordinate branches of government; (5) an unusual need for unquestioning adherence
to a political decision already made; or (6) the potentiality of embarrassment from multifarious
pronouncements by various departments on one question. Baker, 369 U.S. at 217. These six
factors are evaluated individually, and where any one of the Baker factors is inextricable from
the case, the court should dismiss a case as presenting a non-justiciable political question. Id.
Several of the Baker factors counsel for dismissal of this case, particularly the first, fourth, and
fifth factors.
It is beyond dispute that United States foreign relations and foreign policy are
“demonstrably committed by our Constitution not to the courts but to the political branches.”
Joo v. Japan, 413 F.3d 45, 52 (D.C. Cir. 2005) (dismissing war-related claims against Japan
based on peace treaties entered into by various foreign states with Japan following World War
17 From its earliest days, the federal judiciary has held “political questions” to be committed by the Constitution to another branch of government, and therefore not justiciable by any court. See Ware v. Hylton, 3 U.S. 199, 259-61 (1796); Marbury v. Madison, 5 U.S. (1 Cranch) 137, 165-66 (1803); Oetjen v. Central Leather Co., 246 U.S. 297, 302 (1918); Baker v. Carr, 369 U.S. 186, 210-11 (1962); Kelberine v. Societe Internationale, Etc., 363 F.2d 989, 995 (D.C. Cir. 1966). This doctrine is firmly rooted in separation of powers principles and obliges a court to decline to adjudicate claims that call on the court to infringe on or disregard the constitutionally-granted discretion of the political branches. Baker, 369 U.S. at 210 (“The nonjusticiability of a political question is primarily a function of the separation of powers.”).
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II). Further, it is beyond dispute that the United States has actively engaged in foreign policy
directives aimed at resolving compensation and restitution claims relating to the Holocaust
through political negotiations and international agreement, not through the federal court system.
See Whiteman v. Dorotheum GmbH & Co. KG, 431 F.3d 57, 59 (2d Cir. 2005) (“The past two
presidential administrations, notwithstanding their differences in political affiliation, have
committed the United States to a policy of resolving Holocaust-era restitution claims through
international agreements rather than litigation.”). As discussed above, the historical record is
clear that the United States has made the decision to specifically address claims against Hungary
arising out of the Holocaust through international negotiation.18 Moreover, adjudicating
Plaintiffs’ claims would require this Court to pass judgment not only on the sufficiency of
Hungary’s compliance with its Article 27 responsibilities, but also on the sufficiency of the
Hungarian Constitutional Court’s decision regarding Hungary’s compliance, and to inject itself
impermissibly into foreign policy choices made by the political branches of the United States
Government starting over half a century ago.
Additionally, the fourth and fifth Baker factors would be impacted if this Court were to
review and comment upon the Executive Branch’s decision to enter into the 1947 Peace Treaty
and 1973 Agreement. As a result, this Court should dismiss the Plaintiffs’ claims on the grounds
that they present non-justiciable political questions.
Indeed, not only would adjudication of these claims reflect a “lack of respect due 18 Constitutional separation of powers principles and the political question doctrine dictate that a core foreign policy issue such as post-war reparations is the province of the political branches of government. See Baker, 369 U.S. at 211-13; Oetjen, 246 U.S. at 302 (conduct of foreign affairs “is committed by the Constitution to the Executive and Legislative – ‘the political’ – Departments of the Government”); United States v. Martinez, 904 F.2d 601, 602 (11th Cir. 1990) (in areas of foreign affairs, “the political question doctrine routinely precludes judicial scrutiny”) (citation omitted). Indeed, one area of foreign affairs that is particularly within the realm of presidential authority is the settlement and compromise of foreign claims. See Dames & Moore v. Regan, 453 U.S. 654, 680-83 (1981); United States v. Pink, 315 U.S. 203, 229-30 (1942); Belk v. United States, 858 F.2d 706, 710 (Fed. Cir. 1988).
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coordinate branches of government,” it would risk reopening decades-old issues that are by their
nature reserved exclusively to the international political process, and implicate principles of
international comity. “One need only consider the damage which would be created if foreign
nations negotiating with the United States were confronted with a situation in which a solemn
pact reached with the Executive Department and ratified by the Senate could be undone by a
court.” Burger-Fischer v. Degussa AG, 65 F. Supp. 2d 248, 285 (D.N.J. 1999); see also Oetjen,
246 U.S. at 302-04; Belk, 858 F.2d at 710; Occidental of Umm al Qaywayn, Inc. v. A Certain
Cargo of Petroleum Laden Aboard the Tanker Dauntless Colocotronis, 577 F.2d 1196, 1204 (5th
Cir. 1978).19
In 1966, the D.C. Circuit dismissed claims arising out of World War II on the grounds
that such claims were untimely and because in the absence of guidance from the Executive or
Legislative Branch, the Court was not equipped to provide relief. Kelberine v. Societe
Internationale, 363 F.2d 989, 995 (D.C. Cir. 1966). Plaintiffs in Kelberine were two individuals
who had, among other things, suffered as slave laborers at the German company I.G.
Farbenindustrie (“I.G. Farben”) during World War II. Plaintiffs brought suit in 1964 on behalf
of themselves and over two hundred thousand persons who were forced into slave labor and
suffered in other ways by a number of corporations who “participated in” and “profited from”
the “Nazi conspiracy.” Id. at 992. Affirming the district court’s dismissal of plaintiffs’ claims,
19 In Oetjen, plaintiff sought to recover possession of two hides that were confiscated during a civil war. While both the plaintiff and defendant were private parties, the Court held that resolution of the dispute involved the question of who the sovereign of Mexico was at the time of confiscation. 246 U.S. at 302-03. Noting that this was a non-justiciable political question, the Court held that the plaintiff's recourse must be found either in the courts of Mexico, or “through the diplomatic agencies of the political department of our Government.” Id. at 304. Likewise, Occidental involved a suit between private parties over possession of a shipment of oil. Resolution of the issue would have required the court to resolve an international territorial dispute over an island in the Persian Gulf, where the oil originated. Because ownership of lands disputed by foreign sovereigns is a political question, resolution of the dispute by the court would “not only usurp the executive power, but also intrude the judicial power beyond its philosophical limits.” 577 F.2d at 1205. The court dismissed the claim as non-justiciable. See id.
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19
the Kelberine court held that “the problem is not within the established scope of judicial
authority,” and that such claims would “pose an insoluble problem if undertaken by the courts
without legislative or executive guidance.” Id. at 995. The analysis which compelled these
findings, quoted below, fits this case perfectly:
It may be that the Congress might enact a program and a procedure by which the objectives prayed for could be achieved. But we think the courts alone cannot do it. As presently framed, the problem is not within the established scope of judicial authority. It did not arise under the Constitution or laws of the United States, or within the territorial jurisdiction of the courts of the United States. The premises for these conclusions are many and easily seen. The span between the doing of the damage and the application of the claimed assuagement is too vague. The time is too long. The identity of the alleged tort feasors is too indefinite. The procedure sought -- adjudication of some two hundred thousand claims for multifarious damages inflicted twenty to thirty years ago in a European area by a government then in power -- is too complicated, too costly, to justify undertaking by a court without legislative provision of the means wherewith to proceed.
. . . . The events, the witnesses, the guilty tortfeasors, their membership in the conspiracy are all so potentially vague at this point as to pose an insoluble problem if undertaken by the courts without legislative or executive guidance, authorization or support. The whole concept is too uncertain of legal validity to sustain the self-establishment of the proceedings by a court in the absence of specific legislative or executive formulation.
Id.
In Princz v. Federal Republic of Germany, the D.C. Circuit reaffirmed the rationale of
Kelberine that claims arising out of World War II are within the exclusive province of the
political branches. 26 F.3d 1166 (D.C. Cir. 1994). Princz involved the claims of Hugo Princz, a
U.S. citizen who had been living in what is now Slovakia when the U.S. declared war against
Germany in 1942, and was arrested as an enemy alien and sent to a concentration camp. He was
forced to work in a chemical plant owned by I.G. Farben, the same German company at issue in
Kelberine. Following the War, he applied for compensation from the German Government, but
was denied on the grounds that he failed to meet the residency and deadline requirements of the
applicable program.
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The U.S. State Department and members of Congress unsuccessfully attempted to
intervene on Mr. Princz’s behalf. He then filed a lawsuit against the German Government in
federal district court. The district court denied the German Government’s motion to dismiss. On
appeal, however, the D.C. Circuit granted the German Government’s motion, dismissing the
action as barred by the Foreign Sovereign Immunities Act. Id. at 1168-69. Judge Ginsburg’s
opinion reverberates with “political question” concerns:
We think that something more nearly express is wanted before we impute to the Congress an intention that the federal courts assume jurisdiction over the countless human rights cases that might well be brought by the victims of all the ruthless military juntas, presidents-for-life, and murderous dictators of the world, from Idi Amin to Mao Zedong. Such an expansive reading of § 1605(a)(1) would likely place an enormous strain not only upon our courts but, more to the immediate point, upon our country’s diplomatic relations with any number of foreign nations. In many if not most cases the outlaw regime would no longer even be in power and our Government could have normal relations with the government of the day -- unless disrupted by the courts, that is.
Id. at 1174 n.1.
Following dismissal of his case against the German Government, Mr. Princz sued several
corporations. Again the Administration and Congress intervened, this time successfully
negotiating an agreement with Germany providing compensation to Mr. Princz and other
American citizens placed in concentration camps. As a result of the Princz Agreement, the
lawsuit against the German companies was dismissed. The Stipulation of Dismissal signed by
Judge Sporkin identified as one of the grounds of settlement defendants’ argument that such
claims “are to be resolved through government-to-government negotiations.” Stipulation of
Dismissal with Prejudice at 7, Princz v. Fed. Republic of Germany, 871 F. Supp. 18 (D.D.C.
Sept. 18, 1995) (Civ. A. No. 92-644).
Additionally, numerous courts outside this Circuit have routinely rejected claims arising
out of World War II. In Burger-Fischer v. Degussa AG, 65 F. Supp. 2d 248 (D.N.J. 1999) and
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Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424 (D.N.J. 1999), two judges in the District of New
Jersey rejected attempts to litigate forced labor claims arising out of World War II in the federal
courts, holding that Article III courts cannot adjudicate individual claims for war-related injuries.
In Burger-Fischer, the actions arose out of charges that the defendants refined gold
seized from concentration camps as well as charges that they used slave labor. Burger-Fischer,
65 F. Supp. 2d at 250. Plaintiffs’ theories of recovery included many of those asserted here, such
as violations of international law, unjust enrichment, and conversion. See id. at 252, 254. After
an extensive and thoughtful analysis of the post-war treaties and agreements concerning
reparations, Judge Debevoise concluded that the political question doctrine barred him from
deciding the case:
In effect, plaintiffs are inviting this court to try its hand at refashioning the reparations agreements which the United States and other World War II combatants (whose blood and treasure brought the war of conquest and the program of extermination to an end) forged in the crucible of a devastated post-war Europe and in the crucible of the Cold War. . . . [T]his is a task which the court does not have the judicial power to perform.
To state the ultimate conclusion, the questions whether the reparation agreements made adequate provision for the victims of Nazi oppression and whether Germany has adequately implemented the reparation agreements are political questions which a court must decline to determine.
Id. at 282 (emphasis added).
In Iwanowa, a plaintiff seeking recovery for unjust enrichment and violations of the law
of nations filed suit on her behalf and on behalf of a class of thousands of persons compelled to
perform forced labor for Ford Werke between 1941 and 1945. See Iwanowa, 67 F. Supp. 2d at
434. Plaintiffs sought compensation for services rendered, restitution of unjust enrichment and
damages for pain and suffering. Id. Judge Greenaway dismissed the case, finding, in part, that
international comity counseled abstention, and that the political question doctrine required
dismissal. Focusing on the justiciability issue, Judge Greenaway stated that “it is evident that the
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executive branch, the department responsible for negotiating international agreements, considers
claims arising out of World War II as falling within the ambit of government-to-government
negotiations.” Id. at 486. Judge Greenaway further explained that “adjudication of Nazi era
forced labor claims when the executive branch has rejected the notion that such claims are
justiciable, would embarrass the executive branch in the eyes of the international community.”
Id. at 488.20
In Frumkin v. JA Jones, Inc., 129 F. Supp. 2d 370 (D.N.J. 2001), District of New Jersey
again dismissed claims against German corporations asserting claims of forced labor during the
Nazi era and World War II. Judge Bassler’s carefully reasoned dismissal was based on the
political question doctrine and noted that “[r]egardless of how compelling Plaintiff’s claim is, if
it is inexorably linked to the conduct of foreign affairs it presents a political question, and this
court must decline to reach the merits.” Id. at 375. See also In re Nazi Era Cases Against
German Defs Litig., 198 F.R.D. 429 (D.N.J. 2000).
In Anderman v. Fed. Republic of Austria, 256 F. Supp. 2d 1098 (C.D. Cal. 2003), the
Central District of California dismissed claims brought by Austrian Jewish citizens or residents
seeking to recover damages for the deprivation of property and failure to pay insurance claims
arising during the period of Nazi control of Austira. The Anderman court found that Holocaust-
related reparations claims were the types of claims that had been constitutionally committed to
the political branches of the Government, noting that “since 1945 the U.S. has been a party to
20 In Deutsch v. Turner Corp., No. CV 00-4405 SVW(AJWX), 2000 WL 33957691 (C.D. Cal. Aug. 25, 2000), the District Court for the Central District of California relied on Burger-Fischer and Iwanowa in dismissing claims brought by an individual seeking reparations for his forced labor during World War II and damages for the wrongful death of his brother. The Court held that “numerous treaties…as well as an agreement between the United States and Germany [], provided the exclusive remedy for individuals seeking reparations from German corporations for wrongdoing during the war.” Id. at *3. To allow the plaintiff’s claims to be adjudicated would “infringe upon the exclusive right of the political branches,” and therefore, the case presented a non-justiciable political question. Id.
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numerous treaties and agreements [] addressing World War II reparations,” and holding that the
“diplomatic history reflect[ed] a ‘firmly-established policy’ that war reparations claims arising
out of World War II fall within the domain of the political branches and are not subject to
judicial review.” Id. at 1113-14. The Court then dismissed the plaintiffs’ claims as presenting a
non-justiciable political question and stated that “[t]o find that the claims at issue have not been
committed to the political branches for resolution ‘would be to conclude that [the] claims are
somehow distinct from every other type of claim arising out of World War II and that they have
somehow been left open for judicial resolution.” Id. at 1113 (quoting Alperin v. Vatican Bank,
242 F. Supp. 2d 686, 690 (N.D. Cal. 2003)); see also In re Nazi Era Cases Against German Defs.
Litig., 129 F. Supp. 2d 370, 378 (D.N.J. 2001).21
There can be no question that the United States Government made the decision to address
the compensation of victims of Holocaust-related confiscation of property in Hungary through
state-to-state negotiations with Hungary and a number of other nations, which resulted in the
1947 Peace Treaty. In Article 27 of the 1947 Peace Treaty, those nations concluded that
Hungary, not U.S. courts, would oversee the restoration of “legal rights and interests” in all
property that was sequestered, confiscated, or controlled after September 1, 1939 by virtue of a
person’s “racial origin or religion.” Moreover, the United States and the other nations concluded
that where restoration was impossible, Article 27 required Hungary, not U.S. courts, to provide
“fair compensation.” Given the “‘firmly-established policy’ that war reparations claims arising
out of World War II fall within the domain of the political branches and are not subject to 21 In addition to finding that the first Baker factor required dismissal, the Anderman Court also held that the plaintiffs’ claims should be dismissed on the grounds that they “presented issues the resolution of which this Court lacks judicially discoverable and manageable standards” (the second Baker factor), “would clearly express a lack of respect for the political branches and their attempted resolution of such claims” through executive agreements (the fourth Baker factor), and “resolution of Plaintiffs’ claims ha[d] the potential to embarrass and undermine the Executive’s authority in foreign affairs” (the sixth Baker factor). Anderman, 256 F. Supp. 2d at 1115.
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judicial review,” the Plaintiffs’ claims regarding the adequacy of Hungary’s actions under its
treaty responsibilities present non-justiciable political questions that are not proper for judicial
resolution, and should, therefore, be dismissed.22
III. PLAINTIFFS’ CLAIMS SHOULD ALSO BE DISMISSED UNDER THE DOCTRINE OF FORUM NON CONVENIENS, AS HUNGARY IS THE PROPER FORUM TO RESOLVE THE INSTANT DISPUTE.
The Court should also decline to exercise jurisdiction on the grounds of forum non
conveniens, as the public and private interests weigh heavily in favor of this case being resolved
in Hungary rather than the United States. This case has nothing to do with the United States and
everything to do with Hungary. In fact, aside from the fact that several of the named plaintiffs
currently reside in the United States,23 the Complaint does not allege any facts establishing any
meaningful connection between this case and the United States. Moreover, as discussed above,
see p. 4, supra, the claims of those plaintiffs that are United States citizens should be dismissed,
as they were extinguished by the 1973 Agreement between the United States and Hungary. With
the dismissal of the claims of United States citizens, there is no connection between this case and
the United States. Hungary, on the other hand, has both significant connections to the facts of
this case and a compelling interest in the resolution of this case.
22 Where, as here, a case presents a political question, a federal court will dismiss for lack of subject matter jurisdiction. See, e.g., Antolok v. United States, 873 F.2d 369, 385 (D.C. Cir. 1989); Smith v. Reagan, 844 F.2d 195, 197, 202 (4th Cir. 1988); Freiberg v. Muskie, 651 F.2d 608 (8th Cir. 1981). As explained by the Fifth Circuit, “the inextricable presence of one or more [factors identifying a political question] will render the case nonjusticiable under the Article III ‘case or controversy’ requirement, and therefore, the Court would be without jurisdiction.” Occidental of Ummal Qaywayn v. A Certain Cargo of Petroleum Laden Aboard the Tanker Dauntless Colocotronis, 577 F.2d 1196, 1203 (5th Cir. 1978); cf. Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 215 (1974) (“the concepts of justiciability, which expresses the jurisdictional limitations imposed upon federal courts by the ‘case or controversy’ requirement of Art. III, embodies both the standing and political question doctrines”). The conclusion follows from the fundamental rule that “Congress may not expand the jurisdiction of the federal courts beyond the bounds established by the Constitution.” Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 491 (1983). 23 According to the Complaint, none of the plaintiffs reside in the District of Columbia.
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The Supreme Court has established the process a district court must follow in addressing
a forum non conveniens motion: the court must first consider the availability of an adequate
alternative forum and the amount of deference to be accorded to the plaintiff’s choice of forum;
after deciding these factors, the court must then balance various private and public factors to
determine the propriety of a forum non conveniens dismissal. See Gulf Oil Corp. v. Gilbert, 330
U.S. 501, 507-10 (1947); see also MBI Group, Inc. v. Credit Foncier Du Cameroun, 616 F.3d
(D.C. Cir. 2008)).24 Since Hungary provides a more than adequate alternative legal forum in
which to hear the Plaintiffs’ claims, and because Plaintiffs’ claims have nothing to do with the
District of Columbia (or the United States) – located thousands of miles away from many
potential witnesses (including some of the named plaintiffs), documents, and other sources of
evidence – and everything to do with Hungary, the factors here all point to dismissal.
A. Hungary Provides An Adequate Alternative Forum For Resolution Of Plaintiffs’ Claims.
Courts find an alternative forum adequate if: (1) the defendant is subject to service of
process there; and (2) the forum permits litigation of the subject matter of the dispute. See Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 254-55 n.22 (1981); Gulf Oil, 330 U.S. at 506-07. There is
no question that both Hungary and MÁV are subject to service and suit in Hungary. See Nagy
Decl. at ¶ 10. Moreover, as discussed above, although the Hungarian Constitutional Court
determined in 1993 that Hungary had complied with Article 27(1) of the 1947 Peace Treaty, it
24 Ordinarily, courts must determine whether they have jurisdiction before engaging in any evaluation of the merits of a claim in order to prevent a court from prematurely dismissing a case over which it does not have subject matter jurisdiction. See Sinochem Int’l Co., Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 431 (2007). Courts, however, have discretion to decide motions on forum non conveniens grounds before determining whether subject matter jurisdiction exists. Id.; see also In re Papandreou, 139 F.3d 247, 255 (D.C. Cir. 1998) (holding that courts may dismiss cases on certain non-merits grounds, such as forum non conveniens, prior to determining subject matter jurisdiction).
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also determined that Hungary had not yet fully complied with its obligations under Article 27(2)
of the 1947 Peace Treaty, which lead Hungary to take additional steps towards compliance. In
1997, the Hungarian Government established the Hungarian Jewish Heritage Public Foundation
and provided it with assets of substantial value. Id. at ¶ 28. Moreover, for the sake of
continuous operation, the foundation receives annual subsidies from the Hungarian State budget.
Id. at ¶ 29. These steps ultimately resulted in a 2007 Government Decision by Hungary that it
has fully complied with its obligations under the 1947 Peace Treaty. Id. at ¶ 30.25
Additionally, the Hungarian legal system provides for substantive fairness to Hungarian
citizens, as well as foreign litigants. See Nagy Decl. at ¶¶ 6-9. Part of this substantive fairness
includes access to the courts and an appeals process for all litigants, and the enforcement of
judicial determinations. Id. at ¶ 13. Hungary also recognizes and enforces international law. Id.
at ¶ 6. Finally, Hungarian law recognizes and provides damages for claims such as those
included in the Complaint (loss of property, wrongful death, etc.). Id. at ¶ 12. To the extent the
Complaint can be read to suggest that, although available, the Hungarian forum is inadequate
because the substantive law is less favorable than in the United States, the United States Supreme
Court has rejected this as a basis for denying a dismissal sought on grounds of forum non
conveniens. See Piper Aircraft, 454 U.S. at 247. As a result, Hungary presents an adequate
alternative forum for the resolution of the claims raised by the Complaint.26
25 Point 2 of Government Decision number 1091/2007 stated, “The Government establishes that enforcement of Article 27(2) of the [1947 Peace Treaty] shall also be considered closed, due to the establishing of the Hungarian Jewish Heritage Public Foundation based on the provisions of Act X of 1997 on the enforcement of Section 27(2) of Act XVIII of 1947 on the Paris Peace Treaty, and the Minutes drawn up on July 2, 1996 regarding the same, as well as the provision of assets – real estate, art, compensation vouchers – to the Hungarian Jewish Heritage Public Foundation – in accordance with Constitutional Court decision number 16/1993.” 26 In fact, at least one other federal court has found that Hungary is an adequate alternative forum in the context of a forum non conveniens analysis. See Moscovits v. Magyar Cukor Rt., No. 00 Civ. 0031 (VM), 2001 WL 767004, at *5 (S.D.N.Y. July 9, 2001).
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Additionally, the Court need not afford substantial deference to the Plaintiffs’ choice of
forum in this case for several reasons. First, the named plaintiffs purport to bring this suit on
behalf of a class of “all Hungarian Holocaust survivors and the immediate families of Hungarian
Holocaust victims.” Am. Compl. at ¶¶ 1, 141-155. A plaintiff’s choice of forum is entitled to
less deference when the action is brought on behalf of a class. See, e.g., Gould v. Nat’l Life Ins.
Co., 990 F. Supp. 1354, 1358 (M.D. Ala. 1998); In re Nematron Corp. Sec. Litig., 30 F. Supp. 2d
437150, at *10 (S.D.N.Y. Aug. 3, 1998). As the Supreme Court observed in Koster v.
(American) Lumbermens Mut. Cas. Co.:
[W]here there are hundreds of potential plaintiffs, all equally entitled voluntarily to invest themselves with the [class’] cause of action and all of whom could with equal show of right go into their many home courts, the claim of any one plaintiff that a forum is appropriate merely because it is his home forum is considerably weakened.
330 U.S. 518, 524 (1947).
Second, all of the facts underlying the allegations in the Complaint took place in Hungary
and the surrounding European countries, not in the District of Columbia or anywhere else in the
United States. When the “operative facts underlying the cause of action did not occur within the
forum chosen by the Plaintiff, the choice of forum is entitled to less consideration.” Gould, 990
F. Supp. at 1358 (internal quotation and citation omitted). Further, none of the named plaintiffs
reside in the District of Columbia, and in fact, the majority of the named plaintiffs reside outside
the United States. This Court has held that the deference given to a plaintiff’s choice of forum
“carries much less weight when the plaintiff is also a stranger to the forum.” BPA Int’l, Inc. v.
Kingdom of Sweden, 281 F. Supp. 2d 73, 84-85 (D.D.C. 2003); see also Piper Aircraft, 454 U.S.
at 256. For these reasons, the Court should afford little, if any, deference to the Plaintiffs’ choice
of forum in this case.
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B. Private And Public Factors Weigh Heavily In Favor Of Adjudicating Plaintiffs’ Claims In Hungary, Not The United States.
The second factor to be considered in evaluating dismissal on forum non conveniens
grounds is a balancing of the private and public factors. A court can dismiss a case on forum non
conveniens grounds if either the private factors or the public factors warrant dismissal. See
Piper Aircraft, 454 U.S. at 242-44; see also Jackson v. American Univ., in Cairo, 52 Fed. App’x
518, 518 (D.C. Cir. 2002). In this case, both the private factors and public factors weigh in favor
of adjudication in Hungary, not the United States.
The private factors to be considered as part of a forum non conveniens analysis are “the
ease of access to proof, the availability of compulsory process to obtain the attendance of hostile
witnesses, cost of transporting witnesses, and other expenses or inefficiencies.” Stromberg v.
Marriot Int’l, Inc., 474 F. Supp. 2d 57, 62 (D.D.C. 2007) (citing to Piper Aircraft, 454 U.S. at
241 n.6). Here, all of the private factors weigh strongly in favor of adjudication in Hungary. As
the Plaintiffs concede, the documentation that Plaintiffs claim is required to allow them to “fully
and fairly resolve[]” this dispute is located in Hungary. Am. Compl. at ¶¶ 137, 139. And, most
of the witnesses – including a number of the named plaintiffs – are located outside the United
States, including in Hungary.27 Moreover, given that the events at issue in the Complaint
27 Courts routinely dismiss cases on forum non conveniens grounds in these circumstances. See e.g., Alfadda v. Fenn, 159 F.3d 41, 47 (2d Cir. 1998) (dismissing on grounds of forum non conveniens where “all the defendants and nearly all the documentary evidence are located in France”); Capital Currency Exch., N.V. v. Nat’l Westminister Bank PLC, 155 F.3d 603, 611 (2d Cir. 1998) (dismissing case on forum non conveniens grounds where most evidence and witnesses were located in England); In re Union Carbide Corp. Gas Plant Disaster at Bhopal, 809 F.2d 195, 201 (2d Cir. 1987) (affirming forum non conveniens dismissal where “[t]he vast majority of material witnesses and documentary proof . . . is located in India, not the United States, and would be more accessible to an Indian court than to a United States court”); Mackley v. Gruner & Jahr A.G. & Co., No. 93 Civ. 6521, 1995 WL 417069, at *2 (S.D.N.Y. July 13, 1995) (granting forum non conveniens motion because “Germany is surely a vastly more convenient place” where the relevant liability witnesses are all located in Germany); Faber-Plast v. Kleinert, 997 F. Supp. 846, 848 (E.D. Mich. 1998) (granting forum non conveniens motion in part because a majority of the witnesses were located in Germany); Beekmans v. J.P.Morgan & Co., 945 F. Supp. 90, 93-94 (S.D.N.Y. 1996) (“Here, virtually all the witnesses and other sources of proof are located
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happened over sixty years ago, any witnesses with personal knowledge are likely to be elderly,
and even in the unlikely event they were willing to travel to the United States, it would be
manifestly unjust to require them to do so when there exists a much more convenient and
accessible forum in Hungary. See Lockman Found. v. Evangelical Alliance Mission, 930 F.2d
764, 770 (9th Cir. 1991) (dismissing on forum non conveniens grounds in part because “several
of [the witnesses] are apparently elderly and infirm and … would have difficult time traveling to
the United States [from Japan]); Jauss v. Lehman Bros., Inc., No. 94 Civ. 2921, 1995 WL 4023,
at *3 (S.D.N.Y. Jan. 5, 1995) (same).
Putting aside the location of the documents, the vast majority of relevant documents and
other proof necessary to support the Plaintiffs’ claims are overwhelmingly in the Hungarian
language, and therefore, would require the expense and inconvenience of translation into English
if this case were to be tried in the United States. Not only would documentary evidence need to
be translated, but much of the witness testimony would likely require translation as well. The
difficulties and burdens imposed by the necessity of translating documents and testimony could
be largely avoided by litigating this action in Hungary. See Blanco v. Banco Indus. De
Venezuela, S.A., 997 F.2d 974, 982 (2d Cir. 1993) (“[T]he documentary evidence is in the
Spanish language, as would be trial or deposition testimony, requiring translation to English that
would result in significant cost to the parties and delay to the court. This factor militates strongly
in favor of Venezuela as a more appropriate forum for this litigation.”); Mars, Inc. v. Kabushiki-
Kaisha Nippon Conlux, 24 F.3d 1368, 1376 (Fed. Cir. 1994) (affirming forum non conveniens
dismissal based in part on the complexity of “having to agree on the proper translation of
Japanese laws, documents and other communications”) (citation and internal quotations
in the Netherlands or the United Kingdom. […] The inability to obtain the testimony of these witnesses is a compelling factor favoring dismissal.”).
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omitted); Dahl v. United Tech. Corp., 632 F.2d 1027, 1031 (3d Cir. 1980) (the practical problem
of the need to translate documents and testimony of witnesses is a relevant concern);
McDonald’s Corp. v. Bukele, 960 F. Supp. 1311, 1318-19 (N.D. Ill. 1997) (granting dismissal on
forum non conveniens grounds in part because of the prohibitive cost of translating witnesses’
testimony).
Additionally, the public factors also weigh heavily in favor of dismissal. In addressing
the public factors to be considered, one of the most important factors is determining what law
will apply to the controversy. See Kamel v. Hill-Rom, 108 F.3d 799, 805 (7th Cir. 1997)
(dismissing action in part because, under state choice of law rules, Saudi Arabian law would
apply to the dispute). As the Supreme Court observed in Piper Aircraft, and as the lower courts
have consistently reiterated, “the need to apply foreign law points[s] towards dismissal.” 454
U.S. at 260 (footnote omitted); see also Kultur Int’l Films Ltd. v. Covent Garden Pioneer, FSP.,
Ltd., 860 F. Supp. 1055, 1069 (D.N.J. 1994) (dismissing case on forum non conveniens grounds
in large part due to “the potential applicability of English law to most, if not all of [plaintiff’s]
claims”); Mediterranean Golf, Inc. v. Hirsh, 783 F. Supp. 835, 852 (D.N.J. 1991) (dismissing
French law-based claims on forum non conveniens grounds because “France would be more
familiar with applying the law of France”); Martin v. Vogler, No. 93 C 3870, 1993 WL 462853,
at *4 (N.D. Ill. Nov. 9, 1993) (“While the application of foreign law alone does not suffice to
justify dismissal for forum non conveniens, it imposes a heavy burden on American courts and
renders litigation substantially more inconvenient”; dismissing case on forum non conveniens
grounds even though both parties were American citizens because “this was a German accident, .
. . virtually all relevant evidence lies in Germany, and . . . German law will likely apply.”)
1989). In determining which jurisdiction has the “most significant relationship,” courts look to
the following factors: “(1) the place where the injury occurred”; (2) “the place where conduct
causing the injury occurred”; (3) “the domicil[e], residence, nationality, place of incorporation
and place of business of the parties”; and (4) “the place where the relationship, if any, between
the parties is centered.” Oveissi, 573 F.3d at 842 (quoting RESTATEMENT (SECOND) OF CONFLICT
OF LAWS § 145(2) (1971).
It is clear that both the “governmental interest analysis” and the “most significant
relationship” test dictate that Hungarian law apply to this case. Hungary is where the alleged
injuries took place, where all of the conduct underlying the alleged injuries took place, and
where any relationship between the parties is centered. In contrast, there is no nexus between the
allegations in the Complaint and the United States. Moreover, it cannot be questioned that
Hungary has a far greater interest than the United States in resolving any conflict related to
actions taken in Hungary and against Hungarian nationals during World War II. Under these
circumstances, the District of Columbia’s choice-of-law analysis dictates that Hungarian law
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would apply to this conflict. And, the Hungarian courts are far better positioned to interpret and
apply Hungarian law than a U.S. court would be.
The fact that none of the claims at issue here is likely to be governed by United States
substantive law is a powerful reason to dismiss this case. “[C]ourts should prefer to have cases
adjudicated in the forum familiar with the law to be applied, instead of taking it upon themselves
to become educated about foreign law.” Bhatnagar v. Surrendra Overseas Ltd., 52 F.3d 1220,
1226 n.5 (3d Cir. 1995) (citation omitted); see also Piper Aircraft, 454 U.S. at 260 & n.29
(“[T]he need to apply foreign law point[s] towards dismissal.”); Scottish Air Int’l, Inc. v. British
Caledonian Group, PLC, 81 F.3d 1224, 1234 (2d Cir. 1996) (“When deciding a forum non
conveniens motion, a court may properly rely on the difficulties attending the resolution of
questions of foreign law.”) (citation omitted). It is neither necessary nor proper for a U.S. court
to engage in the application of Hungarian law to cases of this complexity and importance to
Hungary and its law. That is the role of the appropriate Hungarian court. See Younis v.
American Univ. in Cairo, 30 F. Supp. 2d 390, 396 (S.D.N.Y. 1998) (“Even if [English language
copies of Egyptian law] were available, it would be far more desirable for the courts of Egypt to
decide the Egyptian law issues presented.”).
In addition to considering whether foreign law applies, a court must consider the interest
in having controversies decided by the forum with the greatest interest in the resolution of the
dispute. Here, Hungary and the surrounding European countries is where all of the events
underlying Plaintiffs’ claims took place, where the defendants are located, and where most of the
documentary evidence and potential witnesses are most likely located, and where all the
plaintiffs resided at the time the events complained of occurred. Because of these factors,
Hungary has an overwhelming interest in this litigation. See Dahl, 632 F.2d at 1032 (dismissed
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on forum non conveniens grounds in part because the “factor of local public interest in the forum
state clearly militates in favor of trial in Norway,” given that all the plaintiffs were Norwegian
citizens and that the forum state had no contact with the facts alleged); Mediterranean Golf, 783
F. Supp. at 850, 852 (dismissing on forum non conveniens grounds in part because France was
the locus of the dispute, given that “the conduct occurring in France is more important to and
gives rise to this litigation”); Baumgart v. Fairchild Aircraft Corp., 981 F.2d 824, 837 (5th Cir.
1993) (dismissed on forum non conveniens grounds where “[t]he airline crash itself and other
principal events surrounding the accident took place in Germany, the vast majority of the
expected evidence and anticipated witnesses are located in Germany, and Germany is the
residence of all plaintiffs and of three potential third-party defendants”); Faber-Plast v. Kleinert,
997 F. Supp. 846, 850 (E.D. Mich. 1998) (“[I]t is advisable to allow a German court to decide
the issues presented here, especially considering the fact that most of the events giving rise to the
claim occurred in Germany.”).
Finally, a court must consider the general administrative burdens posed by a case. See,
e.g., Piper Aircraft, 454 U.S. at 241 & n.6; Gschwind v. Cessna Aircraft Co., 161 F.3d 602, 609
(10th Cir. 1998), cert. denied, 526 U.S. 1112 (1999). Plaintiffs’ case is not a typical, garden
variety lawsuit – it raises significant substantive and procedural issues and challenges that could
prove to be a substantial drain on this Court’s resources. See Gonzalez v. Naviera Neptuno A.A.,
832 F.2d 876, 879 (5th Cir. 1987) (“The administrative difficulties associated with trying a case
in a forum located thousands of miles away from the majority of the witnesses and evidence are
obvious.”). The difficulties posed by this case are even more burdensome in light of the
complete absence of contacts between this District and the facts underlying this action. Indeed,
“[t]he ability of federal courts in the United States to give speedy justice in matters properly
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34
before them would be substantially impaired to the prejudice of all ‘if they took it upon
themselves also to resolve the disputes of the rest of the world.’” Zinsler v. Marriott Corp., 605
F. Supp. 1499, 1506 (D. Md. 1985) (quoting Cruz v. Maritime Co. of Philippines, 549 F. Supp.
285, 290 (S.D.N.Y. 1982), aff’d, 702 F.2d 47 (2d Cir. 1983) (dismissing case on forum non
conveniens grounds where the suit involved foreign parties and events that occurred abroad)).
In Piper Aircraft, the Supreme Court was wary of the problems that would be posed if
United States courts reached to adjudicate what is essentially foreign litigation:
The American courts, which are already extremely attractive to foreign plaintiffs, would become even more attractive. The flow of litigation into the United States would increase and further congest already crowded courts.
454 U.S. at 252 (footnote omitted); see also Pain v. United Techs. Corp., 637 F.2d 775, 792
(D.C. Cir. 1980) (local dockets should not be clogged by cases having little relation to the
jurisdiction); Faber-Plast, 997 F. Supp. at 850 (“[T]here is no reason to burden the docket of this
court, or this court’s jurors, with a case with such minimal local connection. This case involves
events in Germany and questions of German law. As a result, it should be decided by a German
court.”) (citation omitted); Postol v. El-Al Israel Airlines, Ltd., 690 F. Supp. 1361, 1364
(S.D.N.Y. 1988) (“Courts may validly protect their dockets from cases which arise within their
jurisdiction but which lack significant connection to it.”) (citation omitted); Proyectos Orchimex
de Costa Rica, S.A. v. E.I. DuPont de Nemours & Co., 896 F. Supp. 1197, 1203 (M.D. Fla. 1995)
(dismissing in part because the “court’s docket would be thrown into chaos” if it retained
jurisdiction of such “complex” cases requiring “lengthy trials . . . last[ing] as long as six
months”).
In the present case, except for the residence of some of the named plaintiffs, the United
States has no connection with the operative facts of this litigation. None of the proof is likely to
be located in the District of Columbia, and none of the events underlying this action took place in
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35
the District of Columbia, let alone the United States. Accordingly, District of Columbia jurors
should not be burdened with adjudicating a matter concerning conduct by Europeans occurring
in Europe over sixty years ago. Moreover, because the suit challenges not only Hungary’s
actions during World War II, but also the sufficiency of its efforts to compensate those aggrieved
during the Holocaust, Hungary’s interests in this suit are paramount and are certainly greater
than the United States’ interests.
All of the private and public factors weigh strongly in favor of dismissing this case on
forum non conveniens grounds and requiring that the disputes raised by the Complaint be
addressed in Hungary.
CONCLUSION
For the above reasons, defendants Hungary and MÁV respectfully request that the Court
grant the instant motion, dismiss the Complaint, and grant Hungary and MÁV such other and
further relief as this Court deems just and necessary.
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36
Dated: April 8, 2011.
/s/ Michael J. Lyle Michael J. Lyle (D.C. Bar No. 475078) Meghan A. McCaffrey (application pending) WEIL, GOTSHAL & MANGES LLP 1300 Eye Street, N.W. – Suite 900 Washington, D.C. 20005 Telephone: (202) 682-7000 Facsimile: (202) 857-0940 E-mail: [email protected] Konrad L. Cailteux (admitted pro hac vice) Brian Keith Gibson (admitted pro hac vice) Jeremy T. Grabill (admitted pro hac vice) WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Attorneys for The Republic of Hungary and Magyar Államvasutak Zrt.
Case 1:10-cv-01770-BAH Document 22-1 Filed 04/08/11 Page 46 of 46
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ROSALIE SIMON, et a1.
Plaintiffs,
VS.
THE REPUBLIC OF HUNGARY, MAGYAR ÂLLAMVASUTAK Zit. and RAIL CARGO HUNGARIA
Defendants.
Case No.: I:10-cv-0 l 770-BAH
Hon. Beryl A. Howell
llT,CLARATION OF LASZLÔ NAGY
1. My name is Lâszlô Nagy. I am licensed to practice law in Hungary. I have never been held in contempt or disciplined by any court of law anywhere in the world. I have never been convicted of a crime.
2. I received my state diploma at EEitvos Lorând University. I speak, read and write fluently in both the English and Hungarian languages.
3. I am a partner in the Budapest office of Weil, Gotshal & Manges LLP, I specialize in litigation and arbitration, and have experience in, among other things, international legal disputes.
4. 1 have reviewed the first amended complaint filed by Rosalie Simon et al and make the following declarations regarding the Hungarian judicial system in support of the motion to dismiss the first amended class action complaint.
5. Unlike the United State's common-law legal system, Hungary has a codified, civil-law system»
6. Hungary respects the generally accepted principles of international law and has undertaken to harmonize its laws in accordance with its international obligations.' ' Hungary is a Member State of the European Union' and the Council of Europe. 4
lastp:üWWW.uncsco.ors/shSlethics /wcoiu cr-?action — Geo4COUntFV&dbz'Gf:;( ')4&id' 5&lno:cn 2 Section 7 of Act XX of 1949 on the Constitution
As a precondition to becoming a Member State of the European Union Hungary was obligated to harmonize its legal system withEuropean Union law. E.g., according to Article 6, point 1. of the Treaty on European Union: "The European Union is founded on the principles of liberty, democracy, respect for human rights and fundamental ,freedoms, and the rule of law, principles which are common to the Member States." ' According to Article 13 of the Convention for the Protection of Human Rights and Fundamental Freedoms: "Everyone whose rights and freedoms as set forth in this Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity." Also, Article 6 of the Convention guarantees the right to a fair trial by and independent and impartial tribunal established by law.
1
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7. The Hungarian Constitution' provides that all persons, including foreign nationals, are equal before the Hungarian courts and are entitled to have their legal disputes settled by an independent and unbiased court established by law in a fair trial. t The financial independence of Hungarian courts is guaranteed by the Act on the State Budget as well as the Act on Court Structure which ensure a separate budget within the state budget for the operating costs of the courts.' Administration of Hungarian courts is supervised by the National Judicial Counsel (in Hungarian: Orszeigos Igazscigszolgeltalcrsi Tancres), which is an independent body. s This supervision does not extend to the decision-making process of the courts.
8. The Hungarian Constitution sets out that judges are independent, bound only by the provisions of law and may not be members of political parties, nor conduct any political activities. Also, no judge may be influenced or given orders with respect to his or her judicial activities, and no judge may perform money-making activities, except for scientific, art, literature, teaching or composing activities, provided that such activities do not jeopardize his or her independence or give the impression of the same and do not prevent the judge from fulfilling his or her official duties. 1°
9. Under Hungarian law, any person having legal capacity, including foreign nationals, may initiate a lawsuit before the Hungarian courts. Although the language of the procedure is Hungarian, the court must provide an interpreter and a translator if any of the parties does not speak Hungarian or if the native language of a party is not Hungarian. The costs of the interpreter and translator are advanced and borne by the Hungarian State. 11
10. Under Hungarian law, any person having legal capacity, including both the Hungarian State and any state-owned company - such as Magyar .A.11amvasutak Zrt. l ' - may be sued before the Hungarian courts under the same conditions as any other person.
11. Hungarian law does not provide for a class action as provided in the United States. €s Nevertheless, cumulative litigation is possible under Hungarian law in the form of a joinder» It is also possible for other plaintiffs, the claims of whom arise from the same legal relationship, to join the lawsuit after it has been initiated, which they may do at any time prior to the adjourning of the last hearing before the decision of first instance»
12. Hungarian law does not provide for punitive damages. Under Hungarian law, damage claims can be filed for material or non-pecuniary damages. A person must pay damages if he or she causes damage to another person in breach of the law.' ° Damages mean the depreciation of
The Hungarian Government is currently working on a new Constitution which has not been adopted by the Parliament and has not entered into force as of the date of this declaration. r Section 57 (5) of Act XX of 1949 on the Constitution ' Section 2/A i) and j) of Act XXXVIII of 1992 on the State Budget and Section 6 of Act LXVI of 1997 on Court Structure s Members of the National Judicial Council include 9 judges, the Minister of Justice, the Minister of Finance, the Public Prosecutor, the President of the Hungarian Bar Association, a Member of Parliament delegated by the parliamentary committee of justice and a Member of Parliament delegated by the parliamentary committee of financial affairs. The president of the National Judicial Council is the President of the Supreme Court.
Section 3 of Act LXVI of 1997 on Court Structure 10 Section 23 (1) of Act LXVII of 1997 on the Status and Compensation of Judges II Section 6 (3) and Section 78 (4) of Act III of 1952 on Civil Procedure 12 According to the Hungarian Company Register, Magyar Allamvasutak Zrt. is a company 100% owned by the Hungarian State, established in 1993 as the legal successor of the state company (in Hungarian: ddllami vcillalat) Magyar Al]amvastriak. 13 The Hungarian Parliament passed a law on February 22. 2010 that was to amend the Hungarian Civil Procedure Act to contain the possibility of a class action similar to the one in the United States. However, before signing the law, the President of the Republic of Hungary sent the law back to Parliament for reconsideration, as it was not sufficiently elaborated. The relevant law has not come into effect at the date of this declaration. 14 Under Hungarian law, a joinder may be established if - among other things - the claims set out in the lawsuit arise from the same legal relationship or the claims are based on similar legal and factual grounds and the competence of the court can he established with respect to all plaintiffs. t` Section 64 (3) of Act III of 1952 on Civil Procedure 16 Section 339 (1) of Act 1V of 1959 on the Civil Code
2
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value in the property of the damaged person, loss of financial advantage, as well as any compensation and costs necessary to eliminate or decrease the material or non-pecuniary losses incurred by the damaged person.' ` Claiming the return of property or money based on unjust enrichment is also possible under Hungarian law.''
13. The Hungarian Constitution ensures that every person, including a foreign national, is entitled to appeal a court decision that is in breach of his or her rights or contrary to his or her legal interests.' Additionally, extraordinary appeal, i.e., appeal against a final and binding court decision, is also possible before the Supreme Court if the procedure preceding the final and binding decision was passed with certain deficiencies as set out in the Civil Procedure Act 2° or the decision itself breaches material legal provisions.''
14, Under Hungarian law, Hungarian courts have exclusive jurisdiction over any procedure initiated against the Hungarian State." Accordingly, no foreign judgment passed in a procedure initiated against the Hungarian State may be accepted and enforced in Hungary unless the Hungarian State explicitly waived its sovereign immunity,'' or if an international treaty or custom of reciprocity exists in relation to this with the given foreign state. 2 ' To the best of my knowledge, no such international treaty or custom of reciprocity exists between Hungary and the United States.
15. If a Hungarian court orders the Hungarian State to pay damages, then under Hungarian law the Hungarian State must pay such damages even if the amount of such payment exceeds the state budget planned for this purpose or the state budget for the given year in general -'
16. As a general rule in Hungary, the litigation costs of the prevailing party must be borne by the losing party.' Litigation costs are borne by the losing party in propo rtion to losing the lawsuit. Litigation costs include, e.g., stamp duty, attorney's costs and expenses, the costs of all witnesses and expe rts, costs of gathering preliminary information, correspondence, etc.
17. Upon initiating a lawsuit, the plaintiff must pay stamp duty of 6% of the value of the litigated amount, but no more than HUF 900,000 (approx. USD 4,775 27 ). 2s In the event of more than one plaintiff, the stamp duty shall be paid by the plaintiffs in propo rtion to their interest in the lawsuit, or, if this cannot be established, then the plaintiffs shall be jointly and severally liable for paying the stamp duty." In the event of claims for damages due to loss of life, bodily injury or damage to health, or in the event of claims for material damages, the occurrence of which endangered the life, body or health of a person, the plaintiffs are exempt by law from the advance payment of stamp duty. 30 In this case, stamp duty is paid by the person ordered to do so by the court' based on who actually prevailed in the case.
18. With respect to attorney's costs, such costs are based on the mandate agreement entered into between the party and the attorney. If no fee arrangement exists between the party and the
' Section 355 (4) of Act IV of 1959 on the Civil Code 18 Section 361 of Act IV of 1959 on the Civil Code 19 Section 57 (5) of Act XX of 1949 on the Constitution 20 Section 260 of Act Ill of 1952 on Civil Procedure 21 Section 270 (2) of Act 111 of 1952 on Civil Procedure 22 Section 62/A c) of Decree Number 13 of 1979 on Private International Law 23 Section 70 of Decree Number 13 of 1979 on Private International Law 24 Section 205 of Act LIII of 1994 on Enforcement 25 Section 28 (2) of Act IV of 1959 on the Civil Code 26 Section 78 (1) of Act 111 of 1952 on Civil Procedure 27 All USD amounts set out in this declaration are calculated based on the official exchange rate published by the Hungarian National Bank on March 25, 2011 (1 USD = HUF 188.45) 28 Section 42 (1) of Act XCIII of 1990 on Stamp Duty 29 Section 38 (2) of Act XCIII of 1990 on Stamp Duty
Section 62 ( 1) b) of Act Ill of 1952 on Civil Procedure 31 Section 59 (1) of Act Ill of 1952 on Civil Procedure
3
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attorney, or upon the party's request, the court will establish the attorney's fees based on Minister of Justice Decree Number 32 of 2003 on Attorney's Costs in Court Procedures. Attorney's costs may be decreased by the court if the court deems that the attorney's costs are disproportionate to the litigated amount or the actual work performed by the attorney,''
19. Under Hungarian law, the court may order a foreign national plaintiff to deposit so-called litigation-costs security (in Hungarian: perkoliségbiztositék) with the court upon the request of the defendant, unless an international treaty or custom of reciprocity in relation to this exists between Hungary and the given foreign state.
20. The Hungarian State entered into bilateral agreements regarding this subject with Australia," Canada,'' and Israel." To the best of my knowledge, no such international treaty or custom of reciprocity exists between Hungary and the United States.
21. Litigation-costs security will serve as payment of the litigation costs if the plaintiff loses the lawsuit. If the plaintiff fails to deposit the requested security, then the court will dismiss the lawsuit. 36 The amount to be paid (in cash, except if the parties agree otherwise) is determined by the court and may be amended during the procedure. If the security becomes unnecessary during the procedure, then the court will return the security to the plaintiff upon request. The order of the court ordering the payment or return of the litigation-costs security may he appealed; however, the amount of the litigation-costs security set out in the court order may not be appealed.
22. Under Hungarian law, the court may rule that a plaintiff be entirely or partially exempt from the payment of litigation-costs (in Hungarian: k6ltségmente,sség) if he or she is not capable of baring litigation-costs due to his or her financial situation.' A foreign national plaintiff may be exempt from the payment of litigation-costs if an international treaty or custom of reciprocity exists between Hungary and the given foreign state.' g The Hungarian State entered into bilateral agreements regarding this subject with Australia,'` Canada, 40 and Israel.`' To the best of my knowledge, no such international treaty or custom of reciprocity exists between Hungary and the United States.
23. Since the end of WWII, Hungary has taken. and continues to take steps in order to resolve issues related to the compensation of damages suffered by Jewish people during WWII due to deportations and other measures taken against them.
24, In the 1990's, Hungary enacted three laws regarding the compensation of Jewish people for the taking of property and personal injury, The laws set out the scope of persons entitled to compensation, the maximum amount and the calculation method of compensation, as well as the procedural rules.
25. Specifically, Hungary enacted the following laws to address issues of compensating Jewish people in relation to losses suffered during and after WWII:
(a) Act XXV of 1991 provided for pa rt ial compensation for damages caused unjustly to the property of Hungarian citizens by the state, in order to regulate proprietary relations;
' z Section 2 (2) of Minister of Justice Decree Number 32 of 2003 on Attorney's Costs in Court Procedures 33 Act XIII of 1936 on the implementation of the 1-Iungarian-British Treaty on Civil Legal Aid dated September 25, 1935 30. Act XIII of 1936 on the implementation of the Hungarian-British Treaty on Civil Legal Aid dated September 25, 1935 35 Decree Number S of 1966 on the announcement of the Hague Convention on Civil Procedure dated March 1, 1954 3' Section 157 c) of Act I II of 1952 on Civil Procedure 37 Section 84 of Act III of 1952 on Civil Procedure i8 Section 85 (4) of Act Ill of 1952 on Civil Procedure 39 Act XIII of 1936 on the implementation of the 1-Iungarian-British Treaty on Civil Legal Aid dated September 25, 1935 40 Act XIII of 1936 on the implementation of the Hungarian-British Treaty on Civil Legal Aid dated September 25, 1935 41 Decree Number 8 of 1966 on the announcement of the Hague Convention on Civil Procedure dated March 1, 1954
4
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(b) Act XXIV of 1992 provided for partial compensation for damages caused unjustly to the property of Hungarian citizens by the state due to the application of laws passed between May 1, 1939 and June 8, 1949, in order to regulate proprietary relations; and
(e) Act XXXII of 1992 provided for the compensation of persons deprived of their lives and freedom due to political reasons.
26, In 1946, the Hungarian State undertook to transfer to a foundation all Jewish heritage that became the property of the Hungarian State due to the absence of heirs, if the deceased person had died between June 28, 1941 and December 31, 1946 due to an injury or illness caused in the course of his or her persecution because of his or her Jewish religion or origins.'
27. In 1993, the Constitutional Court passed a decision, 43 in which it established that Hungary complied with its obligations set out in Article 27 (1) of the Paris Peace Treaty by enacting Act XXIV of 1992. Nevertheless, according to the Constitutional Court, Hungary failed to comply with its obligation set out in Article 27 (2) of the Paris Peace Treaty, because it failed to pass a law or a government decree based on which Act XXV of 1946 would be enforced and thus, Jewish heritage that became property of the Hungarian State due to the absence of heirs would be transferred to a Jewish foundation.
28. In order to comply with Constitutional Court Decision Number 16/19993 (111.12.), in 1997, the Hungarian Government established the Hungarian Jewish Heritage Public Foundation,' €a and provided it with real property (to the value of HUF 1,271,800,000 — approx. USD 6,748,000) and art (to the value of HUF 12,400,000 — approx. USD 65,800) listed in the articles of association of the foundation, as well as compensation vouchers exchangeable for annuities to the value of HUF 4,000,000,000 (approx. USD 21,000,000) and HUF 30,000,000 (approx. USD 159,000) as operating costs for the year 1997.
29. For the sake of continuous operation, the foundation receives subsidies from the state budget every year (the amount of the subsidy for 2011 is HUF 888,600,000 (approx. USD 4,715,000), according to Act CLXIX of 2010 on the State Budget). According to its deed of foundation, the goal of the Hungarian Jewish Heritage Public Foundation is to assist persons suffering harassment due to their Jewish origins in the Nazi era as well as their heirs, and to assist groups of such people to reorganize their religious, cultural and educational systems, strengthen their Jewish identity and enhance their social situation. Tasks include, among other things, social activities, assisting families, taking care of the elderly, education, cultural activities, enhancing the equal opportunities of disadvantaged groups, etc,
30. In its Government Decision of 2007, Hungary declared that it complied with all of its obligations set out in Section 27 (1) and (2) of the Paris Peace Treaty and closed the deadline to submit claims for compensation for personal injury as of December 31, 2006. The Hungarian Government also established an inter-ministerial committee for the coordination of the settlement of the claims of the Jewish community. Although the inter-ministerial committee was dissolved on February 12, 2011, but the Hungarian Government has given its commitment towards a broader dialogue with Jewish organizations . '
31. Also in 2007, the Hungarian Government and the Hungarian Jewish Heritage Public Foundation entered into a support agreement for five years, according to which the Hungarian Jewish Heritage Public Foundation is to receive a HUF amount equal to USD 21 million, of
42 Act XXV of 1946 on the contempt of the prosecution of Hungarian Jewry and the mitigation of its consequences '" Constitutional Court Decision Number 16/19993 (111.12.) `''' Government Decision number 1035 of 1997 on the establishment of the Hungarian Jewish Heritage Public Foundation 45 Also, as of July 23, 2010, publicly denying, questioning or mitigating the crimes of nationalist and communist regimes, i.e.. the denial of the Holocaust, is a crime in Hungary punishable by up to 3 years imprisonment; Section 269/C of Act IV of 1978 on the Criminal Code
5
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which a HUF amount equal to USD 12.6 million was paid for the years 2008-2010. According to the agreement, the Hungarian Jewish Heritage Public Foundation will receive the HUF equivalent of USD 4.2 million for 2011 and 2012, respectively. The amounts paid to the Hungarian Jewish Heritage Public Foundation are distributed among Jewish Holocaust survivors, taking into account their individual situation.
On the basis of the above, I conclude that Hungary is an adequate and available alternate forum for deciding the claims presented in the First Amended Complaint.
I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct.
Executed on the 8th day of April, 2011.
6
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1
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ROSALIE SIMON, et al. Plaintiffs, vs. THE REPUBLIC OF HUNGARY, MAGYAR ÁLLAMVASUTAK Zrt., and RAIL CARGO HUNGARIA Zrt., Defendants.
Case No.: 1:10-cv-01770-BAH Hon. Beryl A. Howell
DECLARATION OF MEGHAN A. MCCAFFREY IN SUPPORT OF THE REPUBLIC OF HUNGARY’S AND MAGYAR ALLAMVASUTAK ZRT.’S MOTION TO DISMISS THE FIRST AMENDED CLASS ACTION COMPLAINT
Pursuant to 28 U.S.C. § 1746, Meghan A. McCaffrey declares as follows:
1. I am an associate at the law firm of Weil, Gotshal & Manges LLP, counsel
for Defendants the Republic of Hungary (“Hungary”) and Magyar Államvasutak Zrt.
(“MÁV”) in this action. My admission to the bar of the United States District Court for
the District of Columbia is currently pending. I submit this declaration in support of
Hungary and MÁV’s Motion to Dismiss the First Amended Class Action Complaint and
to place before the Court certain documents.
2. Attached hereto as Exhibit 1 is a true and correct copy of the Treaty of
Peace with Hungary, dated at Paris, February 10, 1947.
3. Attached hereto as Exhibit 2 is a true and correct copy of the U.S. –
Hungary Agreement Regarding the Settlement of Claims, entered into force March 6,
1973, with accompanying Annexes.
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EXHIBIT 1
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Ratification advised by the Senate of the United States of America June 5, 1947;
Ratified by the President of the United States of America June 14, 1947;
Ratification of the United States of America deposited with the Union of Soviet Socialist Republics at Moscow September
15, 1947;
Proclaimed by the President of the United States of America September 15, 1947;
Entered into force September 15, 1947. BY THE PRESIDENT OF THE UNITED STATES OF AMERICA A PROCLAMATION TREATY OF PEACE WITH HUNGARY 1947 PART I FRONTIERS OF HUNGARY Article 1 PART II POLITICAL CLAUSES SECTION I Article 2 Article 3
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PART IV WITHDRAWAL OF ALLIED FORCES Article 22 PART V REPARATION AND RESTITUTION Article 23 Article 24 Article 25 PART VI ECONOMIC CLAUSES Article 26 Article 27 Article 28 Article 29 Article 30 Article 31 Article 32 Article 33 Article 34 Article 35 Article 36 Article 37 PART VII CLAUSE RELATING TO THE DANUBE
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Article 38 PART VIII FINAL CLAUSES Article 39 Article 40 Article 41 Article 42 LIST OF ANNEXES ANNEX I (See Article 1) Maps ANNEX II (See Article 14) Definition of Military and Military Air Training ANNEX III (See Article 17) Definition and List of War Material Category I. Category II. Category III. Category IV. Category V. Category VI.
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Category VII. Category VIII. ANNEX IV Special Provisions Relating to Certain Kinds of Property A. INDUSTRIAL, LITERARY AND ARTISTIC PROPERTY B. INSURANCE ANNEX V Contracts, Prescription and Negotiable Instruments A. CONTRACTS B. PERIODS OF PRESCRIPTION C. NEGOTIABLE INSTRUMENTS D. SPECIAL PROVISIONS ANNEX VI Judgments Note by the Department of State
BY THE PRESIDENT OF THE UNITED STATES OF AMERICA
A PROCLAMATION *1 WHEREAS the Treaty of Peace with Hungary, dated at Paris February 10, 1947, was signed by the respective Plenipoten-tiaries of the United States of America, the Union of Soviet Socialist Republics, the United Kingdom of Great Britain and Northern Ireland, Australia, the Byelorussian Soviet Socialist Republic, Canada, Czechoslovakia, India, New Zealand, the Ukrainian Soviet Socialist Republic, the Union of South Africa, the People's Federal Republic of Yugoslavia, and Hungary; WHEREAS the text of the said Treaty, in the Russian, English, French, and Hungarian languages, as certified by the Foreign Office of the Government of the Union of Soviet Socialist Republics, is word for word as follows:
TREATY OF PEACE WITH HUNGARY
1947 The Union of Soviet Socialist Republics, the United Kingdom of Great Britain and Northern Ireland, the United States of America, Australia, the Byelorussian Soviet Socialist Republic, Canada, Czechoslovakia, India, New Zealand, the Ukrainian
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Soviet Socialist Republic, the Union of South Africa, and the People's Federal Republic of Yugoslavia, as the States which are at war with Hungary and actively waged war against the European enemy States with substantial military forces, hereinaf-ter referred to as “the Allied and Associated Powers”, of the one part, and Hungary, of the other part; Whereas Hungary, having become an ally of Hitlerite Germany and having participated on her side in the war against the Union of Soviet Socialist Republics, the United Kingdom, the United States of America and other United Nations, bears her share of responsibility for this war; Whereas, however, Hungary on December 28, 1944, broke off relations with Germany, declared war on Germany and on January 20, 1945, concluded an Armistice with the Governments of the Union of Soviet Socialist Republics, the United Kingdom and the United States of America, acting on behalf of all the United Nations which were at war with Hungary; and Whereas the Allied and Associated Powers and Hungary are desirous of concluding a treaty of peace, which, conforming to the principles of justice, will settle questions still outstanding as a result of the events hereinbefore recited and form the basis of friendly relations between them, thereby enabling the Allied and Associated Powers to support Hungary's application to become a member of the United Nations and also to adhere to any Convention concluded under the auspices of the United Nations; Have therefore agreed to declare the cessation of the state of war and for this purpose to conclude the present Treaty of Peace, and have accordingly appointed the undersigned Plenipotentiaries who, after presentation of their full powers, found in good and due form, have agreed on the following provisions:
PART I
FRONTIERS OF HUNGARY
Article 1 1. The frontiers of Hungary with Austria and with Yugoslavia shall remain those which existed on January 1, 1938. *2 2. The decisions of the Vienna Award of August 30, 1940, are declared null and void. The frontier between Hungary and Roumania as it existed on January 1, 1938, is hereby restored. 3. The frontier between Hungary and the Union of Soviet Socialist Republics, from the point common to the frontier of those two States and Roumania to the point common to the frontier of those two States and Czechoslovakia, is fixed along the for-mer frontier between Hungary and Czechoslovakia as it existed on January 1, 1938. 4. (a) The decisions of the Vienna Award of November 2, 1938, are declared null and void. (b) The frontier between Hungary and Czechoslovakia from the point common to the frontier of those two States and Austria to the point common to those two States and the Union of Soviet Socialist Republics is hereby restored as it existed on Janu-ary 1, 1938, with the exception of the change resulting from the stipulations of the following sub-paragraph. (c) Hungary shall cede to Czechoslovakia the villages of Horvathjarfalu, Oroszvar and Dunacsun, together with their cadas-tral territory as indicated on Map No. IA[FN1] annexed to the present Treaty. Accordingly, the Czechoslovak frontier on this sector shall be fixed as follows: from the point common to the frontiers of Austria, Hungary and Czechoslovakia, as they ex-isted on January 1, 1938, the present Hungarian-Austrian frontier shall become the frontier between Austria and Czechoslo-vakia as far as a point roughly 500 meters south of hill 134 (3.5 kilometers northwest of the church of Rajka), this point now becoming common to the frontiers of the three named States; thence the new frontier between Czechoslovakia and Hungary
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shall go eastwards along the northern cadastral boundary of the village of Rajka to the right bank of the Danube at a point approximately 2 kilometers north of hill 128 (3.5 kilometers east of the church of Rajka), where the new frontier will, in the principal channel of navigation of the Danube, join the Czechoslovak-Hungarian frontier as it existed on January 1, 1938; the dam and spillway within the village limits of Rajka will remain on Hungarian territory. FN1. [This is one of two large-scale maps which comprise Annex I as indicated in note (1) on the following page.] End of Footnote(s).(d) The exact line of the new frontier between Hungary and Czechoslovakia laid down in the preceding sub-paragraph shall be determined on the spot by a boundary Commission composed of the representatives of the two Gov-ernments concerned. The Commission shall complete its work within two months from the coming into force of the present Treaty. (e) In the event of a bilateral agreement not being concluded between Hungary and Czechoslovakia concerning the transfer to Hungary of the population of the ceded area, Czechoslovakia guarantees them full human and civic rights. All the guarantees and prerogatives stipulated in the Czechoslovak-Hungarian Agreement of February 27, 1946, on the exchange of populations will be applicable to those who voluntarily leave the area ceded to Czechoslovakia. *3 5. The frontiers described above are shown on Maps I and IA in Annex I[FN2] of the present Treaty. FN2. [This Annex comprises two separate large-scale maps. The copies of the maps as received with the certified copy of the Treaty, from the Government of the Union of Soviet Socialist Republics, are deposited with the Treaty in the archives of the Department of State where they are available for reference.]
End of Footnote(s).PART II
POLITICAL CLAUSES
SECTION I
Article 2 1. Hungary shall take all measures necessary to secure to all persons under Hungarian jurisdiction, without distinction as to race, sex, language or religion, the enjoyment of human rights and of the fundamental freedoms, including freedom of ex-pression, of press and publication, of religious worship, of political opinion and of public meeting. 2. Hungary further undertakes that the laws in force in Hungary shall not, either in their content or in their application, dis-criminate or entail any discrimination between persons of Hungarian nationality on the ground of their race, sex, language or religion, whether in reference to their persons, property, business, professional or financial interests, status, political or civil rights or any other matter.
Article 3 Hungary, which in accordance with the Armistice Agreement has taken measures to set free, irrespective of citizenship and nationality, all persons held in confinement on account of their activities in favour of, or because of their sympathies with, the United Nations or because of their racial origin, and to repeal discriminatory legislation and restrictions imposed thereunder, shall complete these measures and shall in future not take any measures or enact any laws which would be incompatible with the purposes set forth in this Article.
Article 4
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Hungary, which in accordance with the Armistice Agreement has taken measures for dissolving all organisations of a Fascist type on Hungarian territory, whether political, military or para-military, as well as other organisations conducting propa-ganda, including revisionist propaganda, hostile to the United Nations, shall not permit in future the existence and activities of organisations of that nature which have as their aim denial to the people of their democratic rights.
Article 5 1. Hungary shall enter into negotiations with Czechoslovakia in order to solve the problem of those inhabitants of Magyar ethnic origin, residing in Czechoslovakia, who will not be settled in Hungary in accordance with the provisions of the Agreement of February 27, 1946, on exchange of populations. 2. Should no agreement be reached within a period of six months from the coming into force of the present Treaty, Czecho-slovakia shall have the right to bring this question before the Council of Foreign Ministers and to request the assistance of the Council in effecting a final solution.
Article 6 *4 1. Hungary shall take all necessary steps to ensure the apprehension and surrender for trial of: (a) Persons accused of having committed, ordered or abetted war crimes and crimes against peace or humanity; (b) Nationals of any Allied or Associated Power accused of having violated their national law by treason or collaboration with the enemy during the war. 2. At the request of the United Nations Government concerned, Hungary shall likewise make available as witnesses persons within its jurisdiction, whose evidence is required for the trial of the persons referred to in paragraph 1 of this Article. 3. Any disagreement concerning the application of the provisions of paragraphs 1 and 2 of this Article shall be referred by any of the Governments concerned to the Heads of the Diplomatic Missions in Budapest of the Soviet Union, the United Kingdom and the United States of America, who will reach agreement with regard to the difficulty.
SECTION II
Article 7 Hungary undertakes to recognise the full force of the Treaties of Peace with Italy, Roumania, Bulgaria and Finland and other agreements or arrangements which have been or will be reached by the Allied and Associated Powers in respect of Austria, Germany and Japan for the restoration of peace.
Article 8 The state of war between Hungary and Roumania shall terminate upon the coming into force both of the present Treaty of Peace and the Treaty of Peace between the Union of Soviet Socialist Republics, the United Kingdom of Great Britain and Northern Ireland, the United States of America, Australia, the Byelorussian Soviet Socialist Republic, Canada, Czechoslova-kia, India, New Zealand, the Ukrainian Soviet Socialist Republic and the Union of South Africa, of the one part, and Rouma-nia of the other part.
Article 9
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Hungary undertakes to accept any arrangements which have been or may be agreed for the liquidation of the League of Na-tions and the Permanent Court of International Justice.
Article 10 1. Each Allied or Associated Power will notify Hungary, within a period of six months from the coming into force of the pre-sent Treaty, which of its pre-war bilateral treaties with Hungary it desires to keep in force or revive. Any provisions not in conformity with the present Treaty shall, however, be deleted from the above-mentioned treaties. 2. All such treaties so notified shall be registered with the Secretariat of the United Nations in accordance with Article 102 of the Charter of the United Nations. 3. All such treaties not so notified shall be regarded as abrogated.
Article 11 1. Hungary shall hand over to Yugoslavia and to Czechoslovakia, within a period of not more than eighteen months from the coming into force of the present Treaty, objects of the following categories constituting the cultural heritage of Yugoslavia and Czechoslovakia which originated in those territories and which, after 1848, came into the possession of the Hungarian State or of Hungarian public institutions as a consequence of Hungarian domination over those territories prior to 1919: *5 (a) Historical archives which came into being as integral wholes in Yugoslav or Czechoslovak territories; (b) Libraries, historical documents, antiquities and other cultural objects which belonged to the institutions on Yugoslav or Czechoslovak territories or to historical personalities of the Yugoslav and Czechoslovak peoples; (c) Original artistic, literary and scientific objects which are the work of Yugoslav or Czechoslovak artists, writers and scien-tists. 2. Objects acquired by purchase, gift or legacy and original works of Hungarians are excluded from the provisions of para-graph 1. 3. Hungary shall also hand over to Yugoslavia the archives of the Illyrian Deputation, the Illyrian Commission and Illyrian Chancellery, which relate to the 18th century. 4. The Hungarian Government shall, on the coming into force of the present Treaty, give the authorised representatives of Yugoslavia and Czechoslovakia all necessary assistance in finding these objects and making them available for examination. Thereafter, but no later than one year from the coming into force of the present Treaty, the Yugoslav and Czechoslovak Gov-ernments shall hand the Hungarian Government a list of the objects claimed under this Article. Should the Hungarian Gov-ernment, within three months of the receipt of the list, raise objection to the inclusion therein of any objects, and should no agreement be reached between the Governments concerned within a further month, the dispute shall be settled in accordance with the provisions of Article 40 of the present Treaty.
PART III
MILITARY AND AIR CLAUSES
SECTION I
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The maintenance of land and air armaments and fortifications shall be closely restricted to meeting tasks of an internal char-acter and local defence of frontiers. In accordance with the foregoing, Hungary is authorized to have armed forces consisting of not more than: (a) A land army, including frontier troops, anti-aircraft and river flotilla personnel, with a total strength of 65,000 personnel; (b) An air force of 90 aircraft, including reserves, of which not more than 70 may be combat types of aircraft, with a total personnel strength of 5,000. Hungary shall not possess or acquire any aircraft designed primarily as bombers with internal bomb-carrying facilities. These strengths shall in each case include combat, service and overhead personnel.
Article 13 The personnel of the Hungarian Army and Air Force in excess of the respective strengths permitted under Article 12 shall be disbanded within six months from the coming into force of the present Treaty.
Article 14 Personnel not included in the Hungarian Army or Air Force shall not receive any form of military training or military air training as defined in Annex II.
Article 15 Hungary shall not possess, construct or experiment with any atomic weapon, any self-propelled or guided missiles or appara-tus connected with their discharge (other than torpedoes and torpedo launching gear comprising the normal armament of na-val vessels permitted by the present Treaty), sea mines or torpedoes of non-contact types actuated by influence mechanisms, torpedoes capable of being manned, submarines or other submersible craft, motor torpedo boats, or specialised types of as-sault craft.
Article 16 *6 Hungary shall not retain, produce or otherwise acquire, or maintain facilities for the manufacture of, war material in ex-cess of that required for the maintenance of the armed forces permitted under Article 12 of the present Treaty.
Article 17 1. Excess war material of Allied origin shall be placed at the disposal of the Allied or Associated Power concerned according to the instructions given by that Power. Excess Hungarian war material shall be placed at the disposal of the Governments of the Soviet Union, the United Kingdom and the United States of America. Hungary shall renounce all rights to this material. 2. War material of German origin or design in excess of that required for the armed forces permitted under the present Treaty shall be placed at the disposal of the Three Governments. Hungary shall not acquire or manufacture any war material of German origin or design, or employ or train any technicians, including military and civil aviation personnel, who are or have been nationals of Germany.
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3. Excess war material mentioned in paragraphs 1 and 2 of this Article shall be handed over or destroyed within one year from the coming into force of the present Treaty. 4. A definition and list of war material for the purposes of the present Treaty are contained in Annex III.
Article 18 Hungary shall co-operate fully with the Allied and Associated Powers with a view to ensuring that Germany may not be able to take steps outside German territory towards rearmament.
Article 19 Hungary shall not acquire or manufacture civil aircraft which are of German or Japanese design or which embody major as-semblies of German or Japanese manufacture or design.
Article 20 Each of the military and air clauses of the present Treaty shall remain in force until modified in whole or in part by agreement between the Allied and Associated Powers and Hungary or, after Hungary becomes a member of the United Nations, by agreement between the Security Council and Hungary.
SECTION II
Article 21 1. Hungarian prisoners of war shall be repatriated as soon as possible, in accordance with arrangements agreed upon by the individual Powers detaining them and Hungary. 2. All costs, including maintenance costs, incurred in moving Hungarian prisoners of war from their respective assembly points, as chosen by the Government of the Allied or Associated Power concerned, to the point of their entry into Hungarian territory, shall be borne by the Hungarian Government.
PART IV
WITHDRAWAL OF ALLIED FORCES
Article 22 1. Upon the coming into force of the present Treaty, all Allied forces shall, within a period of 90 days, be withdrawn from Hungary, subject to the right of the Soviet Union to keep on Hungarian territory such armed forces as it may need for the maintenance of the lines of communication of the Soviet Army with the Soviet zone of occupation in Austria. *7 2. All unused Hungarian currency and all Hungarian goods in possession of the Allied forces in Hungary, acquired pursu-ant to Article 11 of the Armistice Agreement, shall be returned to the Hungarian Government within the same period of 90 days. 3. Hungary shall, however, make available such maintenance and facilities as may specifically be required for the mainte-
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nance of the lines of communication with the Soviet zone of occupation in Austria, for which due compensation will be made to the Hungarian Government.
PART V
REPARATION AND RESTITUTION
Article 23 1. Losses caused to the Soviet Union, Czechoslovakia and Yugoslavia by military operations and by the occupation by Hun-gary of the territories of these States shall be made good by Hungary to the Soviet Union, Czechoslovakia and Yugoslavia, but, taking into consideration that Hungary has not only withdrawn from the war against the United Nations, but has also declared war on Germany, the Parties agree that compensation for the above losses will be made by Hungary not in full but only in part, namely in the amount of $300,000,000 payable over eight years from January 20, 1945, in commodities (ma-chine equipment, river craft, grain and other commodities), the sum to be paid to the Soviet Union to amount to $200,000,000, and the sum to be paid to Czechoslovakia and Yugoslavia to amount to $100,000,000. 2. The basis of calculation for the settlement provided in this Article will be the United States dollar at its gold parity on the day of the signing of the Armistice Agreement, i.e. $35 for one ounce of gold.
Article 24 1. Hungary accepts the principles of the United Nations Declaration of January 5, 1943, and shall return, in the shortest pos-sible time, property removed from the territory of any of the United Nations. 2. The obligation to make restitution applies to all identifiable property at present in Hungary which was removed by force or duress by any of the Axis Powers from the territory of any of the United Nations, irrespective of any subsequent transactions by which the present holder of any such property has secured possession. 3. If, in particular cases, it is impossible for Hungary to make restitution of objects of artistic, historic or archaeological value, belonging to the cultural heritage of the United Nation from whose territory such objects were removed by force or duress by Hungarian forces, authorities or nationals, Hungary shall transfer to the United Nation concerned objects of the same kind as, and of approximately equivalent value to, the objects removed, in so far as such objects are obtainable in Hun-gary. 4. The Hungarian Government shall return the property referred to in this Article in good order and, in this connection, shall bear all costs in Hungary relating to labour, materials and transport. 5. The Hungarian Government shall co-operate with the United Nations in, and shall provide at its own expense all necessary facilities for, the search for and restitution of property liable to restitution under this Article. *8 6. The Hungarian Government shall take the necessary measures to effect the return of property covered by this Article held in any third country by persons subject to Hungarian jurisdiction. 7. Claims for the restitution of property shall be presented to the Hungarian Government by the Government of the country from whose territory the property was removed, it being understood that rolling stock shall be regarded as having been re-moved from the territory to which it originally belonged. The period during which such claims may be presented shall be six months from the coming into force of the present Treaty.
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8. The burden of identifying the property and of proving ownership shall rest on the claimant Government, and the burden of proving that the property was not removed by force or duress shall rest on the Hungarian Government.
Article 25 The annulment of the Vienna Award of November 2, 1938, as provided in Article 1, paragraph 4, of the present Treaty, shall entail the annulment of the agreements, as well as the legal consequences ensuing therefrom, relating to matters of finance and public and private insurance, concluded between or on behalf of the two States concerned or between Czechoslovak and Hungarian juridical persons on the basis of the Vienna Award and in respect of the material handed over in accordance with the Protocol of May 22, 1940. This annulment shall not apply in any way to relations between physical persons. The details of the above-mentioned settlement shall be arranged by bilateral agreements between the Governments concerned, within a period of six months from the coming into force of the present Treaty.
PART VI
ECONOMIC CLAUSES
Article 26 1. In so far as Hungary has not already done so, Hungary shall restore all legal rights and interests in Hungary of the United Nations and their nationals as they existed on September 1, 1939, and shall return all property in Hungary of the United Na-tions and their nationals as it now exists. 2. The Hungarian Government undertakes that all property, rights and interests passing under this Article shall be restored free of all encumbrances and charges of any kind to which they may have become subject as a result of the war and without the imposition of any charges by the Hungarian Government in connection with their return. The Hungarian Government shall nullify all measures, including seizures, sequestration or control, taken by it against United Nations property between September 1, 1939, and the coming into force of the present Treaty. In cases where the property has not been returned within six months from the coming into force of the present Treaty, application shall be made to the Hungarian authorities not later than twelve months from the coming into force of the Treaty, except in cases in which the claimant is able to show that he could not file his application within this period. *9 3. The Hungarian Government shall invalidate transfers involving property, rights and interests of any description belong-ing to United Nations nationals, where such transfers resulted from force or duress exerted by Axis Governments or their agencies during the war. In the case of Czechoslovak nationals, this paragraph shall also include transfers after November 2, 1938, which resulted from force or duress or from measures taken under discriminatory internal legislation by the Hungarian Government or its agencies in Czechoslovak territory annexed by Hungary. 4. (a) The Hungarian Government shall be responsible for the restoration to complete good order of the property returned to United Nations nationals under paragraph 1 of this Article. In cases where property cannot be returned or where, as a result of the war, a United Nations national has suffered a loss by reason of injury or damage to property in Hungary, he shall receive from the Hungarian Government compensation in Hungarian currency to the extent of two-thirds of the sum necessary, at the date of payment, to purchase similar property or to make good the loss suffered. In no event shall United Nations nationals receive less favourable treatment with respect to compensation than that accorded to Hungarian nationals. (b) United Nations nationals who hold, directly or indirectly, ownership interests in corporations or associations which are not United Nations nationals within the meaning of paragraph 9 (a) of this Article, but which have suffered a loss by reason of injury or damage to property in Hungary, shall receive compensation in accordance with sub-paragraph (a) above. This
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compensation shall be calculated on the basis of the total loss or damage suffered by the corporation or association and shall bear the same proportion to such loss or damage as the beneficial interests of such nationals in the corporation or association bear to the total capital thereof. (c) Compensation shall be paid free of any levies, taxes or other charges. It shall be freely usable in Hungary but shall be sub-ject to the foreign exchange control regulations which may be in force in Hungary from time to time. (d) The Hungarian Government shall accord to United Nations nationals the same treatment in the allocation of materials for the repair or rehabilitation of their property in Hungary and in the allocation of foreign exchange for the importation of such materials as applies to Hungarian nationals. (e) The Hungarian Government shall grant United Nations nationals an indemnity in Hungarian currency at the same rate as provided in subparagraph (a) above to compensate them for the loss or damage due to special measures applied to their prop-erty during the war, and which were not applicable to Hungarian property. This sub-paragraph does not apply to a loss of profit. 5. The provisions of paragraph 4 of this Article shall apply to Hungary in so far as the action which may give rise to a claim for damage to property in Northern Transylvania belonging to the United Nations or their nationals took place during the period when this territory was subject to Hungarian authority. *10 6. All reasonable expenses incurred in Hungary in establishing claims, including the assessment of loss or damage, shall be borne by the Hungarian Government. 7. United Nations nationals and their property shall be exempted from any exceptional taxes, levies or imposts imposed on their capital assets in Hungary by the Hungarian Government or any Hungarian authority between the date of the Armistice and the coming into force of the present Treaty for the specific purpose of meeting charges arising out of the war or of meet-ing the costs of occupying forces or of reparation payable to any of the United Nations. Any sums which have been so paid shall be refunded. 8. The owner of the property concerned and the Hungarian Government may agree upon arrangements in lieu of the provi-sions of this Article. 9. As used in this Article: (a) “United Nations nationals” means individuals who are nationals of any of the United Nations, or corporations or associa-tions organised under the laws of any of the United Nations, at the coming into force of the present Treaty, provided that the said individuals, corporations or associations also had this status at the date of the Armistice with Hungary. The term “United Nations nationals” also includes all individuals, corporations or associations which, under the laws in force in Hungary during the war, have been treated as enemy; (b) “Owner” means the United Nation, or the United Nations national as defined in sub-paragraph (a) above, entitled to the property in question, and includes a successor of the owner, provided that the successor is also a United Nation, or a United Nations national as defined in sub-paragraph (a). If the successor has purchased the property in its damaged state, the trans-feror shall retain his rights to compensation under this Article, without prejudice to obligations between the transferor and the purchaser under domestic law; (c) “Property” means all movable or immovable property, whether tangible or intangible, including industrial, literary and artistic property, as well as all rights or interests of any kind in property.
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10. The Hungarian Government recognizes that the Brioni Agreement of August 10, 1942, is null and void. It undertakes to participate with the other signatories of the Rome Agreement of May 29, 1923,[FN3] in any negotiations having the purpose of introducing into its provisions the modifications necessary to ensure the equitable settlement of the annuities which it pro-vides. FN3. [The correct date of the Rome Agreement is Mar. 29, 1923.]
End of Footnote(s).Article 27 1. Hungary undertakes that in all cases where the property, legal rights or interests in Hungary of persons under Hungarian jurisdiction have, since September 1, 1939, been the subject of measures of sequestration, confiscation or control on account of the racial origin or religion of such persons, the said property, legal rights and interests shall be restored together with their accessories or, if restoration is impossible, that fair compensation shall be made therefor. *11 2. All property, rights and interests in Hungary of persons, organisations or communities which, individually or as mem-bers of groups, were the object of racial, religious or other Fascist measures of persecution, and remaining heirless or un-claimed for six months after the coming into force of the present Treaty, shall be transferred by the Hungarian Government to organisations in Hungary representative of such persons, organisations or communities. The property transferred shall be used by such organisations for purposes of relief and rehabilitation of surviving members of such groups, organisations and communities in Hungary. Such transfer shall be effected within twelve months from the coming into force of the Treaty, and shall include property, rights and interests required to be restored under paragraph 1 of this Article.
Article 28 Hungary recognizes that the Soviet Union is entitled to all German assets in Hungary transferred to the Soviet Union by the Control Council for Germany and undertakes to take all necessary measures to facilitate such transfers.
Article 29 1. Each of the Allied and Associated Powers shall have the right to seize, retain, liquidate or take any other action with re-spect to all property, rights and interests which at the coming into force of the present Treaty are within its territory and be-long to Hungary or to Hungarian nationals, and to apply such property or the proceeds thereof to such purposes as it may desire, within the limits of its claims and those of its nationals against Hungary or Hungarian nationals, including debts, other than claims fully satisfied under other Articles of the present Treaty. All Hungarian property, or the proceeds thereof, in ex-cess of the amount of such claims, shall be returned. 2. The liquidation and disposition of Hungarian property shall be carried out in accordance with the law of the Allied or As-sociated Power concerned. The Hungarian owner shall have no rights with respect to such property except those which may be given him by that law. 3. The Hungarian Government undertakes to compensate Hungarian nationals whose property is taken under this Article and not returned to them. 4. No obligation is created by this Article on any Allied or Associated Power to return industrial property to the Hungarian Government or Hungarian nationals, or to include such property in determining the amounts which may be retained under paragraph 1 of this Article. The Government of each of the Allied and Associated Powers shall have the right to impose such limitations, conditions and restrictions on rights or interests with respect to industrial property in the territory of that Allied or Associated Power, acquired prior to the coming into force of the present Treaty by the Government or nationals of Hungary,
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as may be deemed by the Government of the Allied or Associated Power to be necessary in the national interest. 5. The property covered by paragraph 1 of this Article shall be deemed to include Hungarian property which has been subject to control by reason of a state of war existing between Hungary and the Allied or Associated Power having jurisdiction over the property, but shall not include: *12 (a) Property of the Hungarian Government used for consular or diplomatic purposes; (b) Property belonging to religious bodies or private charitable institutions and used for religious or charitable purposes; (c) Property of natural persons who are Hungarian nationals permitted to reside within the territory of the country in which the property is located or to reside elsewhere in United Nations territory, other than Hungarian property which at any time during the war was subjected to measures not generally applicable to the property of Hungarian nationals resident in the same territory; (d) Property rights arising since the resumption of trade and financial relations between the Allied and Associated Powers and Hungary, or arising out of transactions between the Government of any Allied or Associated Power and Hungary since Janu-ary 20, 1945; (e) Literary and artistic property rights.
Article 30 1. From the coming into force of the present Treaty, property in Germany of Hungary and of Hungarian nationals shall no longer be treated as enemy property and all restrictions based on such treatment shall be removed. 2. Identifiable property of Hungary and of Hungarian nationals removed by force or duress from Hungarian territory to Ger-many by German forces or authorities after January 20, 1945, shall be eligible for restitution. 3. The restoration and restitution of Hungarian property in Germany shall be effected in accordance with measures which will be determined by the Powers in occupation of Germany. 4. Without prejudice to these and to any other dispositions in favour of Hungary and Hungarian nationals by the Powers oc-cupying Germany, Hungary waives on its own behalf and on behalf of Hungarian nationals all claims against Germany and German nationals outstanding on May 8, 1945, except those arising out of contracts and other obligations entered into, and rights acquired, before September 1, 1939. This waiver shall be deemed to include debts, all inter-governmental claims in respect of arrangements entered into in the course of the war and all claims for loss or damage arising during the war.
Article 31 1. The existence of the state of war shall not, in itself, be regarded as affecting the obligation to pay pecuniary debts arising out of obligations and contracts which existed, and rights which were acquired, before the existence of the state of war, which became payable prior to the coming into force of the present Treaty, and which are due by the Government or nationals of Hungary to the Government or nationals of one of the Allied and Associated Powers or are due by the Government or nation-als of one of the Allied and Associated Powers to the Government or nationals of Hungary. 2. Except as otherwise expressly provided in the present Treaty, nothing therein shall be construed as impairing debtor-creditor relationships arising out of pre-war contracts concluded either by the Government or nationals of Hungary.
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Article 32 *13 1. Hungary waives all claims of any description against the Allied and Associated Powers on behalf of the Hungarian Government or Hungarian nationals arising directly out of the war or out of actions taken because of the existence of a state of war in Europe after September 1, 1939, whether or not the Allied or Associated Power was at war with Hungary at the time, including the following: (a) Claims for losses or damages sustained as a consequence of acts of forces or authorities of Allied or Associated Powers; (b) Claims arising from the presence, operations or actions of forces or authorities of Allied or Associated Powers in Hungar-ian territory; (c) Claims with respect to the decrees or orders of Prize Courts of Allied or Associated Powers, Hungary agreeing to accept as valid and binding all decrees and orders of such Prize Courts on or after September 1, 1939, concerning Hungarian ships or Hungarian goods or the payment of costs; (d) Claims arising out of the exercise or purported exercise of belligerent rights. 2. The provisions of this Article shall bar, completely and finally, all claims of the nature referred to herein, which will be henceforward extinguished, whoever may be the parties in interest. The Hungarian Government agrees to make equitable compensation in Hungarian currency to persons who furnished supplies or services on requisition to the forces of Allied or Associated Powers in Hungarian territory and in satisfaction of non-combat damage claims against the forces of Allied or Associated Powers arising in Hungarian territory. 3. Hungary likewise waives all claims of the nature covered by paragraph 1 of this Article on behalf of the Hungarian Gov-ernment or Hungarian nationals against any of the United Nations whose diplomatic relations with Hungary were broken off during the war and which took action in co-operation with the Allied and Associated Powers. 4. The Hungarian Government shall assume full responsibility for all Allied military currency issued in Hungary by the Al-lied military authorities, including all such currency in circulation at the coming into force of the present Treaty. 5. The waiver of claims by Hungary under paragraph 1 of this Article includes any claims arising out of actions taken by any of the Allied and Associated Powers with respect to Hungarian ships between September 1, 1939, and the coming into force of the present Treaty, as well as any claims and debts arising out of the Conventions on prisoners of war now in force.
Article 33 1. Pending the conclusion of commercial treaties or agreements between individual United Nations and Hungary, the Hungar-ian Government shall, during a period of eighteen months from the coming into force of the present Treaty, grant the follow-ing treatment to each of the United Nations which, in fact, reciprocally grants similar treatment in like matters to Hungary: (a) In all that concerns duties and charges on importation or exportation, the internal taxation of imported goods and all regu-lations pertaining thereto, the United Nations shall be granted unconditional most-favoured-nation treatment; *14 (b) In all other respects, Hungary shall make no arbitrary discrimination against goods originating in or destined for any territory of any of the United Nations as compared with like goods originating in or destined for territory of any other of the United Nations or of any other foreign country; (c) United Nations nationals, including juridical persons, shall be granted national and most-favoured-nation treatment in all
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matters pertaining to commerce, industry, shipping and other forms of business activity within Hungary. These provisions shall not apply to commercial aviation; (d) Hungary shall grant no exclusive or discriminatory right to any country with regard to the operation of commercial air-craft in international traffic, shall afford all the United Nations equality of opportunity in obtaining international commercial aviation rights in Hungarian territory, including the right to land for refueling and repair, and, with regard to the operation of commercial aircraft in international traffic, shall grant on a reciprocal and non-discriminatory basis to all United Nations the right to fly over Hungarian territory without landing. These provisions shall not affect the interests of the national defence of Hungary. 2. The foregoing undertakings by Hungary shall be understood to be subject to the exceptions customarily included in com-mercial treaties concluded by Hungary before the war, and the provisions with respect to reciprocity granted by each of the United Nations shall be understood to be subject to the exceptions customarily included in the commercial treaties concluded by that State.
Article 34 Hungary shall facilitate as far as possible railway traffic in transit through its territory at reasonable rates and shall negotiate with neighbouring States all reciprocal agreements necessary for this purpose.
Article 35 1. Any disputes which may arise in connection with Articles 24, 25 and 26 and Annexes IV, V and VI of the present Treaty shall be referred to a Conciliation Commission composed of an equal number of representatives of the United Nations Gov-ernment concerned and of the Hungarian Government. If agreement has not been reached within three months of the dispute having been referred to the Conciliation Commission, either Government may require the addition of a third member to the Commission, and failing agreement between the two Governments on the selection of this member, the Secretary-General of the United Nations may be requested by either party to make the appointment. 2. The decision of the majority of the members of the Commission shall be the decision of the Commission and shall be ac-cepted by the parties as definitive and binding.
Article 36 Articles 24, 26, 33 and Annex VI of the present Treaty shall apply to the Allied and Associated Powers and France and to those of the United Nations whose diplomatic relations with Hungary have been broken off during the war.
Article 37 *15 The provisions of Annexes IV, V and VI shall, as in the case of the other Annexes, have force and effect as integral parts of the present Treaty.
PART VII
CLAUSE RELATING TO THE DANUBE
Article 38 Navigation on the Danube shall be free and open for the nationals, vessels of commerce, and goods of all States, on a footing
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of equality in regard to port and navigation charges and conditions for merchant shipping. The foregoing shall not apply to traffic between ports of the same State.
PART VIII
FINAL CLAUSES
Article 39 1. For a period not to exceed eighteen months from the coming into force of the present Treaty, the Heads of the Diplomatic Missions in Budapest of the Soviet Union, the United Kingdom and the United States of America, acting in concert, will rep-resent the Allied and Associated Powers in dealing with the Hungarian Government in all matters concerning the execution and interpretation of the present Treaty. 2. The Three Heads of Mission will give the Hungarian Government such guidance, technical advice and clarification as may be necessary to ensure the rapid and efficient execution of the present Treaty both in letter and in spirit. 3. The Hungarian Government shall afford the said Three Heads of Mission all necessary information and any assistance which they may require in the fulfilment of the tasks devolving on them under the present Treaty.
Article 40 1. Except where another procedure is specifically provided under any Article of the present Treaty, any dispute concerning the interpretation or execution of the Treaty, which is not settled by direct diplomatic negotiations, shall be referred to the Three Heads of Mission acting under Article 39, except that in this case the Heads of Mission will not be restricted by the time limit provided in that Article. Any such dispute not resolved by them within a period of two months shall, unless the parties to the dispute mutually agree upon another means of settlement, be referred at the request of either party to the dispute to a Commission composed of one representative of each party and a third member selected by mutual agreement of the two parties from nationals of a third country. Should the two parties fail to agree within a period of one month upon the appoint-ment of the third member, the Secretary-General of the United Nations may be requested by either party to make the ap-pointment. 2. The decision of the majority of the members of the Commission shall be the decision of the Commission, and shall be ac-cepted by the parties as definitive and binding.
Article 41 1. Any member of the United Nations, not a signatory to the present Treaty, which is at war with Hungary, may accede to the Treaty and upon accession shall be deemed to be an Associated Power for the purposes of the Treaty. 2. Instruments of accession shall be deposited with the Government of the Union of Soviet Socialist Republics and shall take effect upon deposit.
Article 42 *16 The present Treaty, of which the Russian and English texts are authentic, shall be ratified by the Allied and Associated Powers. It shall also be ratified by Hungary. It shall come into force immediately upon the deposit of ratifications by the Un-ion of Soviet Socialist Republics, the United Kingdom of Great Britain and Northern Ireland, and the United States of Amer-ica. The instruments of ratification shall, in the shortest time possible, be deposited with the Government of the Union of So-
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viet Socialist Republics. With respect to each Allied or Associated Power whose instrument of ratification is thereafter deposited, the Treaty shall come into force upon the date of deposit. The present Treaty shall be deposited in the archives of the Government of the Un-ion of Soviet Socialist Republics, which shall furnish certified copies to each of the signatory States.
LIST OF ANNEXES
I. Maps of Hungarian Frontiers II. Definition of Military and Military Air Training
III. Definition and list of war material IV. Special provisions relating to certain kinds of property:
A. Industrial, Literary and Artistic Property
B. Insurance
V. Contracts, Prescription and Negotiable Instruments VI. Judgments
ANNEX I
(See Article 1)
Maps I. Hungarian Frontiers IA. Rectification of the Hungarian-Czechoslovak Frontier
ANNEX II
(See Article 14)
Definition of Military and Military Air Training 1. Military training is defined as: the study of and practice in the use of war material specially designed or adapted for army purposes, and training devices relative thereto; the study and carrying out of all drill or movements which teach or practice evolutions performed by fighting forces in battle; and the organised study of tactics, strategy and staff work. 2. Military air training is defined as: the study of and practice in the use of war material specially designed or adapted for air force purposes, and training devices relative thereto; the study and practice of all specialised evolutions, including formation flying, performed by aircraft in the accomplishment of an air force mission; and the organised study of air tactics, strategy and staff work.
ANNEX III
(See Article 17)
Definition and List of War Material
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*17 The term “war material” as used in the present Treaty shall include all arms, ammunition and implements specially de-signed or adapted for use in war as listed below. The Allied and Associated Powers reserve the right to amend the list periodically by modification or addition in the light of subsequent scientific development.
Category I. 1. Military rifles, carbines, revolvers and pistols; barrels for these weapons and other spare parts not readily adaptable for civilian use. 2. Machine guns, military automatic or autoloading rifles, and machine pistols; barrels for these weapons and other spare parts not readily adaptable for civilian use; machine gun mounts. 3. Guns, howitzers, mortars, cannon special to aircraft; breechless or recoil-less guns and flamethrowers; barrels and other spare parts not readily adaptable for civilian use; carriages and mountings for the foregoing. 4. Rocket projectors; launching and control mechanisms for self-propelling and guided missiles; mountings for same. 5. Self-propelling and guided missiles, projectiles, rockets, fixed ammunition and cartridges, filled or unfilled, for the arms listed in subparagraphs 1-4 above and fuses, tubes or contrivances to explode or operate them. Fuses required for civilian use are not included. 6. Grenades, bombs, torpedoes, mines, depth charges and incendiary materials or charges, filled or unfilled; all means for exploding or operating them. Fuses required for civilian use are not included. 7. Bayonets.
Category II. 1. Armoured fighting vehicles; armoured trains, not technically convertible to civilian use. 2. Mechanical and self-propelled carriages for any of the weapons listed in Category I; special type military chassis or bodies other than those enumerated in sub-paragraph 1 above. 3. Armour plate, greater than three inches in thickness, used for protective purposes in warfare.
Category III. 1. Aiming and computing devices, including predictors and plotting apparatus, for fire control; direction of fire instruments; gun sights; bomb sights; fuse setters; equipment for the calibration of guns and fire control instruments. 2. Assault bridging, assault boats and storm boats. 3. Deceptive warfare, dazzle and decoy devices. 4. Personal war equipment of a specialised nature not readily adaptable to civilian use.
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1. Warships of all kinds, including converted vessels and craft designed or intended for their attendance or support, which cannot be technically reconverted to civilian use, as well as weapons, armour, ammunition, aircraft and all other equipment, material, machines and installations not used in peace time on ships other than warships. 2. Landing craft and amphibious vehicles or equipment of any kind; assault boats or devices of any type as well as catapults or other apparatus for launching or throwing aircraft, rockets, propelled weapons or any other missile, instrument or device whether manned or unmanned, guided or uncontrolled. *18 3. Submersible or semi-submersible ships, craft, weapons, devices or apparatus of any kind, including specially designed harbour defence booms, except as required by salvage, rescue or other civilian uses, as well as all equipment, accessories, spare parts, experimental or training aids, instruments or installations as may be specially designed for the construction, test-ing, maintenance or housing of the same.
Category V. 1. Aircraft, assembled or unassembled, both heavier and lighter than air, which are designed or adapted for aerial combat by the use of machine guns, rocket projectors or artillery or for the carrying and dropping of bombs, or which are equipped with, or which by reason of their design or construction are prepared for, any of the appliances referred to in sub-paragraph 2 be-low. 2. Aerial gun mounts and frames, bomb racks, torpedo carriers and bomb release or torpedo release mechanisms; gun turrets and blisters. 3. Equipment specially designed for and used solely by airborne troops. 4. Catapults or launching apparatus for ship-borne, land- or sea-based aircraft; apparatus for launching aircraft weapons. 5. Barrage balloons.
Category VI. Asphyxiating, lethal, toxic or incapacitating substances intended for war purposes, or manufactured in excess of civilian re-quirements.
Category VII. Propellants, explosives, pyrotechnics or liquefied gases destined for the propulsion, explosion, charging or filling of, or for use in connection with, the war material in the present categories, not capable of civilian use or manufactured in excess of civilian requirements.
Category VIII. Factory and tool equipment specially designed for the production and maintenance of the material enumerated above and not technically convertible to civilian use.
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Special Provisions Relating to Certain Kinds of Property
A. INDUSTRIAL, LITERARY AND ARTISTIC PROPERTY 1. (a) A period of one year from the coming into force of the present Treaty shall be accorded to the Allied and Associated Powers and their nationals without extension fees or other penalty of any sort in order to enable them to accomplish all nec-essary acts for the obtaining or preserving in Hungary of rights in industrial, literary and artistic property which were not ca-pable of accomplishment owing to the existence of a state of war. (b) Allied and Associated Powers or their nationals who had duly applied in the territory of any Allied or Associated Power for a patent or registration of a utility model not earlier than twelve months before the outbreak of the war with Hungary or during the war, or for the registration of an industrial design or model or trade mark not earlier than six months before the outbreak of the war with Hungary or during the war, shall be entitled within twelve months after the coming into force of the present Treaty to apply for corresponding rights in Hungary, with a right of priority based upon the previous filing of the ap-plication in the territory of that Allied or Associated Power. *19 (c) Each of the Allied and Associated Powers and its nationals shall be accorded a period of one year from the coming into force of the present Treaty during which they may institute proceedings in Hungary against those natural or juridical persons who are alleged illegally to have infringed their rights in industrial, literary or artistic property between the date of the outbreak of the war and the coming into force of the Treaty. 2. A period from the outbreak of the war until a date eighteen months after the coming into force of the present Treaty shall be excluded in determining the time within which a patent must be worked or a design or trade mark used. 3. The period from the outbreak of the war until the coming into force of the present Treaty shall be excluded from the nor-mal term of rights in industrial, literary and artistic property which were in force in Hungary at the outbreak of the war or which are recognized or established under part A of this Annex and belong to any of the Allied and Associated Powers or their nationals. Consequently, the normal duration of such rights shall be deemed to be automatically extended in Hungary for a further term corresponding to the period so excluded. 4. The foregoing provisions concerning the rights in Hungary of the Allied and Associated Powers and their nationals shall apply equally to the rights in the territories of the Allied and Associated Powers of Hungary and its nationals. Nothing, how-ever, in these provisions shall entitle Hungary or its nationals to more favourable treatment in the territory of any of the Al-lied and Associated Powers than is accorded by such Power in like cases to other United Nations or their nationals, nor shall Hungary be thereby required to accord to any of the Allied and Associated Powers or its nationals more favourable treatment than Hungary or its nationals receive in the territory of such Power in regard to the matters dealt with in the foregoing provi-sions. 5. Third parties in the territories of any of the Allied and Associated Powers or Hungary who, before the coming into force of the present Treaty, had bona fide acquired industrial, literary or artistic property rights conflicting with rights restored under part A of this Annex or with rights obtained with the priority provided thereunder, or had bona fide manufactured, published, reproduced, used or sold the subject matter of such rights, shall be permitted, without any liability for infringement, to con-tinue to exercise such rights and to continue or to resume such manufacture, publication, reproduction, use or sale which had been bona fide acquired or commenced. In Hungary, such permission shall take the form of a non-exclusive license granted on terms and conditions to be mutually agreed by the parties thereto or, in default of agreement, to be fixed by the Concilia-tion Commission established under Article 35 of the present Treaty. In the territories of each of the Allied and Associated Powers, however, bona fide third parties shall receive such protection as is accorded under similar circumstances to bona fide third parties whose rights are in conflict with those of the nationals of other Allied and Associated Powers.
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*20 6. Nothing in part A of this Annex shall be construed to entitle Hungary or its nationals to any patent or utility model rights in the territory of any of the Allied and Associated Powers with respect to inventions, relating to any article listed by name in Annex III of the present Treaty, made, or upon which applications were filed, by Hungary, or any of its nationals, in Hungary or in the territory of any other of the Axis Powers, or in any territory occupied by the Axis forces, during the time when such territory was under the control of the forces or authorities of the Axis Powers. 7. Hungary shall likewise extend the benefits of the foregoing provisions of this Annex to France, and to other United Na-tions which are not Allied or Associated Powers, whose diplomatic relations with Hungary have been broken off during the war and which undertake to extend to Hungary the benefits accorded to Hungary under the said provisions. 8. Nothing in part A of this Annex shall be understood to conflict with Articles 26, 29 and 31 of the present Treaty.
B. INSURANCE 1. No obstacles, other than any applicable to insurers generally, shall be placed in the way of the resumption by insurers who are United Nations nationals of their former portfolios of business. 2. Should an insurer, who is a national of any of the United Nations, wish to resume his professional activities in Hungary, and should the value of the guarantee deposits or reserves required to be held as a condition of carrying on business in Hun-gary be found to have decreased as a result of the loss or depreciation of the securities which constituted such deposits or reserves, the Hungarian Government undertakes to accept, for a period of eighteen months, such securities as still remain as fulfilling any legal requirements in respect of deposits and reserves.
ANNEX V
Contracts, Prescription and Negotiable Instruments
A. CONTRACTS 1. Any contract which required for its execution intercourse between any of the parties thereto having become enemies as defined in part D of this Annex, shall, subject to the exceptions set out in paragraphs 2 and 3 below, be deemed to have been dissolved as from the time when any of the parties thereto became enemies. Such dissolution, however, is without prejudice to the provisions of Article 31 of the present Treaty, nor shall it relieve any party to the contract from the obligation to repay amounts received as advances or as payments on account and in respect of which such party has not rendered performance in return. 2. Notwithstanding the provisions of paragraph 1 above, there shall be excepted from dissolution and, without prejudice to the rights contained in Article 29 of the present Treaty, there shall remain in force such parts of any contract as are severable and did not require for their execution intercourse between any of the parties thereto, having become enemies as defined in part D of this Annex. Where the provisions of any contract are not so severable, the contract shall be deemed to have been dissolved in its entirety. The foregoing shall be subject to the application of domestic laws, orders or regulations made by any of the Allied and Associated Powers having jurisdiction over the contract or over any of the parties thereto and shall be sub-ject to the terms of the contract. *21 3. Nothing in part A of this Annex shall be deemed to invalidate transactions lawfully carried out in accordance with a contract between enemies if they have been carried out with the authorization of the Government of one of the Allied and Associated Powers.
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4. Notwithstanding the foregoing provisions, contracts of insurance and re-insurance shall be subject to separate agreements between the Government of the Allied or Associated Power concerned and the Government of Hungary.
B. PERIODS OF PRESCRIPTION 1. All periods of prescription or limitation of right of action or of the right to take conservatory measures in respect of rela-tions affecting persons or property, involving United Nations nationals and Hungarian nationals who, by reason of the state of war, were unable to take judicial action or to comply with the formalities necessary to safeguard their rights, irrespective of whether these periods commenced before or after the out-break of war, shall be regarded as having been suspended, for the duration of the war, in Hungarian territory on the one hand, and on the other hand in the territory of those United Nations which grant to Hungary, on a reciprocal basis, the benefit of the provisions of this paragraph. These periods shall begin to run again on the coming into force of the present Treaty. The provisions of this paragraph shall be applicable in regard to the pe-riods fixed for the presentation of interest or dividend coupons or for the presentation for payment of securities drawn for repayment or repayable on any other ground. 2. Where, on account of failure to perform any act or to comply with any formality during the war, measures of execution have been taken in Hungarian territory to the prejudice of a national of one of the United Nations, the Hungarian Government shall restore the rights which have been detrimentally affected. If such restoration is impossible or would be inequitable, the Hungarian Government shall provide that the United Nations national shall be afforded such relief as may be just and equita-ble in the circumstances.
C. NEGOTIABLE INSTRUMENTS 1. As between enemies, no negotiable instrument made before the war shall be deemed to have become invalid by reason only of failure within the required time to present the instrument for acceptance or payment, or to give notice of non-acceptance or non-payment to drawers or endorsers, or to protest the instrument, nor by reason of failure to complete any formality during the war. 2. Where the period within which a negotiable instrument should have been presented for acceptance or for payment, or within which notice of non-acceptance or non-payment should have been given to the drawer or endorser, or within which the instrument should have been protested, has elapsed during the war, and the party who should have presented or protested the instrument or have given notice of non-acceptance or non-payment has failed to do so during the war, a period of not less than three months from the coming into force of the present Treaty shall be allowed within which presentation, notice of non-acceptance or non-payment, or protest may be made. *22 3. If a person has, either before or during the war, incurred obligations under a negotiable instrument in consequence of an undertaking given to him by a person who has subsequently become an enemy, the latter shall remain liable to indemnify the former in respect of these obligations, notwithstanding the outbreak of war.
D. SPECIAL PROVISIONS 1. For the purposes of this Annex, natural or juridical persons shall be regarded as enemies from the date when trading be-tween them shall have become unlawful under laws, orders or regulations to which such persons or the contracts were sub-ject. 2. Having regard to the legal system of the United States of America, the provisions of this Annex shall not apply as between the United States of America and Hungary.
ANNEX VI
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The Hungarian Government shall take the necessary measures to enable nationals of any of the United Nations at any time within one year from the coming into force of the present Treaty to submit to the appropriate Hungarian authorities for re-view any judgment given by a Hungarian court between April 10, 1941, and the coming into force of the present Treaty in any proceeding in which the United Nations national was unable to make adequate presentation of his case either as plaintiff or defendant. The Hungarian Government shall provide that, where the United Nations national has suffered injury by reason of any such judgment, he shall be restored in the position in which he was before the judgment was given or shall be afforded such relief as may be just and equitable in the circumstances. The term “United Nations nationals” includes corporations or associations organised or constituted under the laws of any of the United Nations. In faith whereof the undersigned Plenipotentiaries have signed the present Treaty and have affixed thereto their seals.[FN4] FN4. [For romanization of the facsimile signatures, see p. 2228.] End of Footnote(s).Done in the city of Paris in the Russian, English, French and Hungarian languages this tenth day of Feb-ruary, One Thousand Nine Hundred Forty-Seven. FOR THE UNION OF SOVIET SOCIALIST REPUBLICS: (Signature) [SEAL] (Signature) [SEAL] FOR THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND: (Signature) (Signature) [SEAL] FOR THE UNITED STATES OF AMERICA: (Signature) [SEAL] (Signature) [SEAL] FOR AUSTRALIA: (Signature) [SEAL] FOR THE BYELORUSSIAN SOVIET SOCIALIST REPUBLIC: (Signature) [SEAL] FOR CANADA: (Signature) [SEAL] FOR CZECHOSLOVAKIA:
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(Signature) [SEAL] (Signature) [SEAL] FOR INDIA: (Signature) [SEAL] FOR NEW ZEALAND: (Signature) [SEAL] FOR THE UKRAINIAN SOVIET SOCIALIST REPUBLIC: (Signature) [SEAL] FOR THE UNION OF SOUTH AFRICA: (Signature) [SEAL] FOR THE PEOPLE'S FEDERAL REPUBLIC OF YUGOSLAVIA: (Signature) [SEÁL] (Signature) [SEAL] (Signature) [SEAL] FOR HUNGARY: (Signature) [SEAL] WHEREAS the Senate of the United States of America by their resolution of June 5, 1947, two-thirds of the Senators present concurring therein, did advise and consent to the ratification of the said Treaty; WHEREAS the said Treaty was duly ratified by the President of the United States of America on June 14, 1947, in pursuance of the aforesaid advice and consent of the Senate; WHEREAS it is provided in Article 42 of the said Treaty that the Treaty shall come into force immediately upon the deposit with the Government of the Union of Soviet Socialist Republics of ratifications by the United States of America, by the Un-ion of Soviet Socialist Republics, and by the United Kingdom of Great Britain and Northern Ireland; WHEREAS instruments of ratification were deposited with the Government of the Union of Soviet Socialist Republics on September 15, 1947 by the United States of America, by the Union of Soviet Socialist Republics, and by the United Kingdom of Great Britain and Northern Ireland; AND WHEREAS an instrument of ratification was also deposited with the Government of the Union of Soviet Socialist Re-
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publics on September 15, 1947 by Hungary; NOW, THEREFORE, be it known that I, Harry S. Truman, President of the United States of America, do hereby proclaim and make public the said Treaty of Peace with Hungary to the end that the same and every article and clause thereof shall be observed and fulfilled with good faith, on and after September 15, 1947, by the United States of America and by the citizens of the United States of America and all other persons subject to the jurisdiction thereof, and do hereby further proclaim that the state of war between the United States of America and Hungary terminated on September 15, 1947. IN TESTIMONY WHEREOF, I have caused the Seal of the United States of America to be hereunto affixed. DONE at the city of Washington this fifteenth day of September in the year of our Lord one thousand nine hundred forty-seven and of the Independence of the United States of America the one hundred seventy-second. HARRY S TRUMAN [SEAL] By the President: ROBERT A LOVETT Acting Secretary of State
Note by the Department of State The following is a romanization of the facsimile signatures: FOR THE UNION OF SOVIET SOCIALIST REPUBLICS: V. MOLOTOV. A BOGOMOLOV. FOR THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND: ERNEST BEVIN DUFF COOPER FOR THE UNITED STATES OF AMERICA: JAMES F BYRNES JEFFERSON CAFFERY FOR AUSTRALIA: JOHN. A. BEASLEY FOR THE BYELORUSSIAN SOVIET SOCIALIST REPUBLIC:
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K KISSELEV FOR CANADA: GEORGE P. VANIER FOR CZECHOSLOVAKIA: JAN MASARYK V. CLEMENTIS FOR INDIA: S. E. RUNGANADHAN. FOR NEW ZEALAND: W. J JORDAN FOR THE UKRAINIAN SOVIET SOCIALIST REPUBLIC: I. SENIN FOR THE UNION OF SOUTH AFRICA: W. G. PARMINTER. FOR THE PEOPLE'S FEDERAL REPUBLIC OF YUGOSLAVIA: STANOJE S SIMI RODOLJUB C OLAKOVI DR PAVLE GREGORI FOR HUNGARY: JÁNOS GYONGYOSSI The certification on page 2226 reads, in translation, as follows: The Ministry of Foreign Affairs of the Union of Soviet Socialist Republics certifies by the seal affixed hereto that the present document is a true copy of the Treaty of Peace with Hungary signed at Paris on February 10, 1947, in the Russian, English, French and Hungarian languages in a single copy, the original of which is preserved in the archives of the Government of the Union of Soviet Socialist Republics.
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By order of the Minister, Member of the Collegium and Chief of the Treaty-Law Division of the Ministry of Foreign Affairs of the U.S.S.R. February 26, 1947. S. GOLUNSKI. [SEAL] T.I.A.S. No. 1651, 61 Stat 2065, 1947 WL 26320 (U.S. Treaty) END OF DOCUMENT
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EXHIBIT 2
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ROSALIE SIMON, et al. Plaintiffs, vs. THE REPUBLIC OF HUNGARY, MAGYAR ÁLLAMVASUTAK Zrt., and RAIL CARGO HUNGARIA Zrt., Defendants.
Case No.: 1:10-cv-01770-BAH Hon. Beryl A. Howell
(PROPOSED) ORDER GRANTING THE REPUBLIC OF HUNGARY’S AND MAGYAR
ÁLLAMVASUTAK ZRT.’S MOTION TO DISMISS THE FIRST AMENDED CLASS ACTION COMPLAINT
Upon consideration of The Republic of Hungary’s and Magyar Államvasutak Zrt.’s
Motion to Dismiss the First Amended Class Action Complaint and accompanying Memorandum
of Law in Support of the Motion to Dismiss, and good cause appearing therefore, IT IS
HEREBY ORDERED that the Motion to Dismiss is GRANTED.
IT IS SO ORDERED.
Dated: _______________, 2011
_____________________________________
THE HONORABLE BERYL A. HOWELL United States District Court Judge
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