AUSTRIA v. ALTMANN

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Argument of Scott P. Cooper

Chief Justice Rehnquist: We'll hear argument next in 03-13, the Republic of Austria v. Maria Altmann.

Mr. Cooper.

Mr. Cooper: Mr. Chief Justice, and may it please the Court:

Landgraf and its progeny provide the basis for a decision in this case.

In enacting the FSIA, Congress did not direct that it apply retrospectively to events that occurred prior to its enactment.

Moreover, application of the 1976 expropriation exception to alleged conduct that occurred in and before 1948 would change the legal consequences of that conduct, and therefore be impermissibly retroactive.

Justice Scalia: What... why would it change the legal consequences?

It... wouldn't it just change where you can, where you can sue?

Mr. Cooper: No, in fundamental terms it would change the legal consequences.

Prior to 1976, there was complete immunity in this country for claims of expropriation.

Foreign sovereigns had an expectation that they would not be hailed into our courts to answer for the internal exercise of their sovereign activities, and that is the fundamental aspect of--

Justice O'Connor: Did the Tate letter have any coverage prior to '76, the so-called Tate letter from the State Department?

Mr. Cooper: --The so-called Tate letter changed the State Department's position with respect to commercial activities as of 1952.

This conduct all preceded 1952 and concerned what has always been recognized as essentially public acts, that is, acts of expropriation.

But to finish the answer to Justice Scalia, the... the issue that underlies the whole concept of foreign sovereign immunity at its very basis is the question of whether our courts, in the case of United States' jurisdiction, will exercise jurisdiction to question past judgment on the sovereign conduct of foreign states acting in their own... within their own borders with respect to property within their own country in this case.

And that's something that as a matter of comity and as a matter of international concepts of orderly relationships between sovereigns that we don't tolerate.

Justice Ginsburg: But I thought that... well, first, I think you recognize that this suit could be brought inside Austria, and then one of the countries that don't follow the... the absolute rule.

Then it seems to me that Justice Scalia is right, it's a question of where you can sue.

You... your argument is the United States has been self-denying, but countries like Austria itself that don't follow that absolute rule could be a proper forum.

Mr. Cooper: With respect, Justice Ginsburg, the... this issue of the adoption of the restrictive theory by any country is really a red herring here.

The expropriation exception concerns itself with what has always been recognized as a public act, and that is that the act of expropriation, something that can only be done by a governmental entity through the exercise of its governmental authority.

Justice Ginsburg: But I... as I understand this claim, it's not the original ex parte... expropriation is when Austria isn't even a country, because this happened in the Nazi period, right?

Mr. Cooper: No, Your Honor.

The United States' position throughout World War II and thereafter has been that Austria retained its sovereignty, that it was an occupied state by the Nazi regime.

The United States immediately recognized--

Justice Ginsburg: Then why was there a second republic?

Mr. Cooper: --The second republic was the reconstituted government of the state of Austria, but the United States' position, and it is the executive's position that has binding authority with respect to the sovereign status, the executive's position was that Austria was always a state.

More importantly, Your Honor--

Justice Ginsburg: But may I continue, because I thought that this claim, whatever you say about Austria's status in the, at the time of the Anschluss, that it's not necessarily about the stealing of the goods, it's about the retention of the goods.

Mr. Cooper: --We don't believe that that's a correct reading of section 1603... 1605(a)(3).

1605(a)(3) concerns itself with the expropriation of property.

The Congress... I articulated the power for the enactment of the expropriation exception as the power to define and punish violations of the laws of nations, and it is not even arguably the case that a possession of expropriated property, especially as it's been argued by the respondent, not necessarily even having been expropriated by the defendant country, is a violation of international law.

Justice Ginsburg: So if you know that you've taken from an expropriator, that's all right under international law?

Mr. Cooper: It's not a question of whether it's all right.

It's a question of whether Congress decided that it was a basis for an exception to the long-standing and general rule of law in this country, that is, sovereign immunity.

So in other words, has... has Congress determined that one of the narrow and specified exceptions to foreign sovereign immunity is the mere possession of property?

Justice Scalia: Is it sovereign immunity or is it the act of state doctrine?

Mr. Cooper: It's sovereign immunity, Your Honor.

Justice Scalia: Well, but, I mean, even... there... there are two things that happen here.

The sovereign can be brought into court, but more than that, the sovereign can be held to account for the act of the sovereign on its own territory.

The latter, it seems to me, can be described as substantive law, the former, just allowing the sovereign to come into your... or allowing your court to entertain a suit against the sovereign is... is just... just where suit goes.

It has nothing to do with the outcome of the suit.

Mr. Cooper: This Court determined--

Justice Scalia: So I... I wish you could tell me that it did have to do with the act of state doctrine, because that would be... that would be a substantive change and that should not be retroactive.

Mr. Cooper: --The... the active state doctrine is an independent doctrine that is not before the Court today.

The sovereign immunity doctrine is before the Court today.

Sovereign immunity, this Court decided in Verlinden, is a matter of substantive Federal law.

This Court made that decision after careful consideration and with specific reference to the FSIA and Congress' power to enact it, and concluded that it was more than a jurisdictional statute.

Moreover, in the Hughes case, this Court determined that merely articulating a statute's terms in terms of jurisdiction does not remove it from the retroactivity analysis we urge is the rule of law that... that determines the outcome of this case.

Quite the contrary.

Hughes made it clear that in circumstances very much like these, where a cause of action was not previously allowed, and here the immunity kept a... an action for expropriation from being adjudicated in American courts under those circumstances.

As of 1976, there was a fundamental change in the law with respect to foreign sovereigns.

Justice Scalia: Well, in Hughes... in Hughes there were... there were other changes besides the... besides the jurisdictional one.

There... there were defenses that were eliminated.

I don't think Hughes is a very good... good case for you, but Verlinden, it seems to me, is... is... is closer, but we were determining there whether it was a substantive law or not for a very different purpose, for the existence of... of power on the part of the Federal Government to... to enact the statute.

That's a... that's a bit different from the purpose for which we're determining whether it's a substantive law here.

Mr. Cooper: The interest of the United States, Your Honor, in the... the administration of cases against foreign sovereigns has long been recognized by this Court as being a... a matter of great national interest.

The question of when we decide to exercise jurisdiction over foreign sovereigns is an essential component of the way this country interacts with other countries.

It's an area in which the Constitution conferred responsibility on the political branches.

The executive exercised that responsibility for the vast portion of this country's history and then submitted to Congress an act, the Foreign Sovereign Immunity Act, which Congress then enacted, and created--

Justice Scalia: But none of that's in question.

Mr. Cooper: --very narrow exceptions to the doctrine.

Justice Scalia: None of that's in question.

The only thing that's in question is when Congress enacted this, did they intend it to have the effect of... of... what should I say... de-immunizing, if you want to put it that way, prior acts or not.

Mr. Cooper: And it--

Justice Scalia: We're... we're not questioning the authority of the executive or the authority of the legislature or the importance of this matter.

Essentially, the issue is, what did Congress mean by this statute?

Mr. Cooper: --And Congress in this Court has clearly articulated in... in Landgraf and in the... the several cases that followed it, exactly how we determined what it was that Congress did as it relates to the retroactive aspects of those changes in law.

Justice Kennedy: And in... in our domestic jurisprudence, we are cautious about retroactivity because it destroys subtle expectations.

Is that same rationale applicable when we're talking about foreign sovereign immunity, or are there other considerations such as the dignity or... of the foreign state?

Mr. Cooper: We think when the issue of a concept of basic fairness so close to the root of our understanding of what constitutes fair treatment of any individual, that no less standard--

Justice Kennedy: Well, that's why--

Mr. Cooper: --no less rigorous standard than Landgraf should apply.

Justice Kennedy: --That leads to my... my next question.

If we're talking about expectations, my understanding... correct me if I'm wrong... is that in 1948 Austria was... and all countries... were on notice that immunity would be judged later on by acts of the executive, or in this case, by an act of Congress.

Wasn't the expectation here that there would be a later determination of whether there was immunity?

Mr. Cooper: The expectation was that, based on the general concepts of international law and general concepts of comity, which are not just a question of whim or courtesy, but rather a question of fair treatment of one sovereign by another with the expectation that the sovereign who is declining jurisdiction would be fairly treated in the courts of other countries.

Justice Kennedy: But still whether or not there would be immunity, Austria and all other countries knew, would be a later determination, so that the expectation they had was to that extent necessarily, it seems to me, diminished--

Mr. Cooper: The expect--

Justice Kennedy: --or qualified.

Mr. Cooper: --Expectations are only one of a number of factors that the Court has referred to in Landgraf.

Justice Kennedy: So it's... so there are additional factors other than expect.

What are the additional factors?

Mr. Cooper: Well, certainly.

Landgraf quoted Justice Story in his 1814 articulation of what was relevant, but the factors are expectations, changed circumstances, and changed considerations for the parties.

Any case that increases liability, for instance, for a particular act is considered to be--

Justice Scalia: Let's just stick... stick with expectations--

Mr. Cooper: --part of common sense--

Justice Scalia: --for the moment.

Let's... before you get off of expectations, I don't know that we protect expectations of the sort that... that you're talking about.

Let's assume that a state which has not... not previously allowed a tort action by... by two out-of-state people, between two out-of-state people, to be brought within that state.

Let's assume they change their law and they say, you know, in the future, you... you can bring a tort action.

Do you think that... that we would say, you're... you're disrupting people's expectations if you allow those persons who are... who are the parties to a tort in another state before this statute was passed to sue in the new state?

Mr. Cooper: --Our concepts of--

Justice Scalia: What expectation, you know?

I expected not to be able to be sued in Virginia.

As it turns out, I can... I can be sued in Virginia.

Did that really affect my action in... in this case?

I can't believe that Austria when it took this action had in mind, oh, I... I know that I... that I can't be sued for this in the United States, I may be sueable a lot of other places.

Mr. Cooper: --Reliance--

Justice Scalia: I'm sueable here, but I'm not sueable in the United States.

Who cares?

Mr. Cooper: --That kind of particularized reliance analysis has never been a part of this Court's retroactivity analysis.

It... the Court doesn't look for purposes of civil or criminal cases, can we find evidence that the individual, when that individual acted, or the party, when that party acted, had in mind the current state of law.

The question has been as a matter of common sense understanding, is the new law a change in the consequences for past conduct?

And--

Justice Souter: So you're... you're distinguishing reliance and expectation?

An expectation is relevant even though there may be no reliance.

Is... do I understand you correctly?

Mr. Cooper: --We are focused on the changed legal consequences, not the subjective intention of the party in any respect.

Justice Souter: But is... do... do you articulate that in terms of the country's expectation, even though the country may not have relied upon that expectation when it acted?

Mr. Cooper: Not--

Justice Souter: Are you drawing that distinction?

Mr. Cooper: --Not solely.

We are not focused on the expectation component of the test.

We are focused primarily, although I think expectations could be a factor, we think that the more important aspect of the analysis is the changed legal circumstances.

That's... that's the core of what the--

Justice Souter: And the changed legal circumstance that I understand you're emphasizing here is that, at least prior to 1976, this particular possession of expropriated property, as well as the expropriation itself, would not have been cognizable in the court of any country unless possibly the country itself, which as an act of grace later, decided to... to make its own reparations.

But subject to that section... that exception... it would not be... would not have been cognizable anywhere?

Mr. Cooper: --That's absolutely correct.

Justice Souter: Okay.

Mr. Cooper: If there are no further questions at this point, I'd like to reserve time.

Argument of Thomas G. Hungar

Chief Justice Rehnquist: Very well, Mr. McCoy... rather, Mr. Cooper.

Mr. Hungar, we'll hear from you.

Mr. Hungar: Mr. Chief Justice, and may it please the Court:

The position of the United States has always been that sovereign immunity bars U.S. courts from adjudicating pre-1976 expropriation claims against foreign sovereigns.

As this Court recognized in Dames & Moore, claims by nationals of one country against the government of another are frequently sources of friction between the two sovereigns.

Since 19... prior to 1976, therefore, and absent a waiver of sovereign immunity, expropriation claims against foreign sovereigns have always been addressed through diplomatic negotiations and foreign claims processes, and not in U.S. courts.

And the United States has entered into numerous agreements with foreign countries regarding such claims, always against and with a background understanding prior to 1976 that such claims could not be adjudicated in U.S. courts.

Justice Kennedy: Is... is the friction that's feared in part based on changed expectations, or is that just irrelevant to the analysis?

Mr. Hungar: Changed expectations are relevant in, in the general sense, not the particular... particularized expectations of a particular state, but that it is a general rule and understanding of international laws set forth in the Vienna Convention on Treaties and elsewhere that changes in international law, including changes in sovereign immunity law, are not retroactively applied.

And there are numerous examples of the latter point cited in our brief at footnote 14, and... and it was an absolute rule in 1948 and before.

Justice Stevens: Is the absolute rule based on the act of state doctrine or on sovereign immunity?

The distinction--

Mr. Hungar: Sovereign immunity.

Sovereign... it was an absolute rule of sovereign immunity--

Justice Stevens: --But as you stated the proposition, you're limited to appropriation claims.

Mr. Hungar: --Well, that's what we're addressing here.

This... the absolute doctrine, the doctrine of absolute immunity was applicable to all claims.

There is no... there is not a single instance of any case or State Department determination prior to 1952 in which a suit was permitted to proceed against a foreign sovereign--

Justice O'Connor: And then that was the Tate letter, the--

Mr. Hungar: --The Tate letter changed--

Justice O'Connor: --In '52.

Mr. Hungar: --With respect to commercial activity, but, of course, this is not a commercial... it's not even alleged the... within the commercial activity exception.

We're not talking about commercial activity.

Justice Kennedy: Why is it that retroactivity... retroactivity causes more friction?

Because--

Mr. Hungar: Because it would be inconsistent with the understandings with which the United States and these foreign governments operated under with claims resolution agreements with numerous countries, not merely arising out of World War II, but out of communist government expropriations and numerous agreements regarding these types of--

Justice Kennedy: --But I thought part of the baseline of immunity law was that other... foreign countries such as Austria knew that from time to time we would confer immunity or not confer immunity depending on the decision of the executive.

So I don't see how wealth... how settled this expectation or this other reliance is.

Mr. Hungar: --The... the case that... the doctrine of absolute sovereign immunity, there were no... there are no exceptions.

There could not possibly have been expectation or reason to believe that the executive of this country would deny immunity in an expropriation case because that had never happened in the history of the absolute doctrine, immunity doctrine, for 150 years.

No suit, again, no suit in the United States has been permitted, was permitted to proceed on any theory against a foreign sovereign in personam.

It was... it would be absolutely unprecedented for such a suit to have been permitted prior to 1976, in fact, in the expropriation context.

And so--

Justice Ginsburg: Would that be true of... would that be true of Austria itself if the tables were turned?

Mr. Hungar: --It's unclear whether a... a court action could have been brought, at least we're not familiar with anything in the record that indicates whether a court action could have been brought in 1948, under, for example, the restitution law that Austria passed in 1947.

Justice Ginsburg: I think there was--

Mr. Hungar: But that's irrelevant because it can't be... the retroactivity analysis has to be a term... determined on a section-by-section, or... or provision-by-provision basis.

It can't be a case-by-case, country-by-country rule.

Justice Ginsburg: --Well, it was relevant to something that Mr. Cooper said.

He said this was a matter of fairness and we want others to be treated... treat others... treat others well so that they will treat us well.

That sounded to me like he was speaking in reciprocity terms.

Mr. Hungar: Reciprocity is also an important consideration, Your Honor.

If this law were to be applied retroactively, it could open the United States to reciprocal claims brought in foreign courts, which would further complicate our foreign relations.

Justice Breyer: Well, how... how does it work if in fact you treat the statute as purely jurisdictional?

You have to, one, establish jurisdiction, they have it under 1330.

You have to have venue, they established that.

And then you look to see if it's wiped out by sovereign immunity, and (a)(3) says this is a case in which rights and property taken in violation of international law are an issue.

Right.

So suppose you said, yes, that is such a case, even though the expropriation took place in '48 or earlier perhaps.

Then the State Department could come in and say, well, you don't win if you wanted to.

You'd say, after all, there first is the act of state doctrine, and this was not clearly in violation of international law in 1948, or you could file, what is it called, it's a... an information, or what is it, it's a suggestion of something or other... it's a--

Mr. Hungar: Well, prior to--

Justice Breyer: --statement of interest.

And you say it's the... there's a... there's a foreign policy interest here, and so that way the State Department's in control, and if it feels that it would hurt foreign affairs to have the suit go ahead, it says either act of state if it's not clear or a statement of interest, and a... which is a kind of political question, I guess.

And so, what... how does that, in other words, where am I wrong in thinking there's no real foreign policy concern here in respect to the application of this statute as a purely jurisdictional matter?

Mr. Hungar: --We believe that the... as we said in our briefs, and part of the reason we're here today is that there are foreign policy concerns implicated--

Justice Breyer: I know, and what I want to know is, what was wrong with what I just said?

You see, as I was saying it... did you follow it?

One--

Mr. Hungar: --Well, I'm not... understand.

We are here today saying the United States has an interest in not having this expropriation exception applied retroactively because it would undermine the background assumption--

Justice Breyer: --I understand that and I'm trying to get to the reasoning.

And my thought was, I don't see why it affects foreign affairs.

You can explain why.

I understand you believe it does and I'm sure you're right, but I just want to know why, and the reason I find it difficult to see why is because it seems to me you still, even assuming jurisdiction, can come in and say this was an act of state, this seizure in 1948, or you can file a statement of interest, which I take it is saying there's a big foreign policy matter here and we're working it out in other forums and you courts stay out of it.

Now... now am I wrong about that?

I'm sure you're going to say I am wrong and I want to know why.

Mr. Hungar: --Well, we don't perceive a meaningful difference between an amicus brief expressing foreign policy concerns, which is what we have filed, and a statement of interest expressing foreign policy concerns.

Justice Breyer: Ah. Well, then the correct result in this case is to say yes, this statute applies, it applies to 1948 seizures, because they were in violation of international law.

Now, the State Department files a statement of interest saying to the court, there is a valid foreign policy reason for not going ahead in the case.

Mr. Hungar: But the--

Justice Breyer: I take it, by the way, you promised you wouldn't in this case, but nonetheless, all right.

So... so if... that would be just up to you, so if you do it, then the court will not go ahead and adjudicate this case even though there is jurisdiction under the FSIA.

Mr. Hungar: --Justice Breyer--

Justice Breyer: I'm missing something, so you explain it to me.

Mr. Hungar: --Well, several things.

First of all, it's not true that we promised not to express a view--

Justice Breyer: I'm sorry I brought that up.

Take that out.

Mr. Hungar: --That has to do with a particular agreement entered into in 2001 and it is certainly our position that that agreement does not cover this case and that was the position we took.

But again, with respect to the... we are expressing the foreign policy concerns that I've identified, which are generalizing, go through the retroactive application of this statute generally.

We're not talking just about Austria here.

There are claims and potential claims against countless foreign countries, many of whom... many of which would involve claims that were previously addressed--

Justice Scalia: Some of them do not involve the act of state doctrine and you want us to hold that... that... that this would be a retroactive application of this jurisdictional statute no matter... no matter what claim is made, whether it's an act of state claim or not.

If... if you were limiting them to act of state, I could understand it, because that's a substantive... a substantive matter, but you want us to say no... no suits can be brought that... out of actions that... that arose before this.

Mr. Hungar: --In principles of retroactivity, the presumption against retroactivity require--

Justice Scalia: It's not--

Mr. Hungar: --This is not a sub--

Justice Scalia: --It begs... it begs the question whether it is retroactive or not.

Mr. Hungar: --This is not purely... no, Your Honor, this is not purely jurisdictional.

The fact that a... if it's true that a similar type claim could have been brought in Austria at the time, that cannot change the retroactivity analysis, because otherwise retroactivity would be determined country by country, and that fact that... that a state by... by an exercise of grace has chosen to allow claims that somehow deprive it would change the rules, which can't be--

Justice Breyer: Give me an example.

I only have one question in this case and I've just said it and I want to be sure I get the best answer I can.

So give me an example of an instance where it would hurt the foreign affairs interests of the United States if the law said you proceed as I outlined.

Mr. Hungar: --We have--

Justice Breyer: There is jurisdiction but you are free to file act of state or--

Chief Justice Rehnquist: --Wind it up.

Justice Breyer: --statement of interest.

Mr. Hungar: --May I answer, Your Honor?

Chief Justice Rehnquist: Yes.

Mr. Hungar: The... we... there are currently cases pending against countries such as Japan and Poland, with which... which this country previously entered into agreements which both sides thought had resolved the issue entirely, and to now retroactively apply a substantive provision that this Court recognized in Ex parte Peru is a substantive, not merely jurisdictional, but a substantive legal defense, to apply that retroactively would be to change settled expectations, change the rules, and it should not be done.

Argument of E. Randol Schoenberg

Chief Justice Rehnquist: Thank you, Mr. Hungar.

Mr. Schoenberg, we'll hear from you.

Mr. Schoenberg: Mr. Chief Justice, and may it please the Court:

We believe there are four independent grounds for affirming the lower court in this case.

First, as the Court has just discussed, the Foreign Sovereign Immunities Act regulates the exercise of jurisdiction, not the underlying primary conduct of the parties.

Therefore, the Act does not operate retrospectively.

Justice Souter: Well, why doesn't it retro... why... why isn't it just as easy to say that it does operate retrospectively, because the question is, when should it exercise jurisdiction for a particular purpose?

And on the one hand there's no point in exercising jurisdiction now if it's not going to adjudicate later, so so far as the court is concerned, presumably it's going to adjudicate on a substantive issue.

That being the purpose, why can you... why really does it make sense to draw that neat line?

Mr. Schoenberg: Well, I'm... I'm not sure that I understand the question.

Justice Souter: Why... why... why isolate jurisdiction when we all know that the purpose of exercising the jurisdiction is to exercise it for the purpose of adjudicating a particular kind of case and to apply a particular substantive law to it?

Mr. Schoenberg: Because the... the operative event, the event that's being regulated by a jurisdictional statute, as the Court has said, is that exercise of the Court's power, regardless of when the underlying acts took place, the Court has differentiated between the primary conduct of the parties and the secondary conduct, which is the exercise of the Court's power.

For example, just last term in the Dole Food case, the Court found that the Foreign Sovereign Immunities Act is not intended to chill the conduct of the foreign state.

Rather, it's there to decide whether now presently it would embarrass the conduct of foreign relations, and the... 25 years ago, over 25 years ago, Congress decided that cases such as these should be allowed to go forward.

Justice Souter: Well, the Government of the United States has just said you're going to embarrass foreign relations whether the United States' position with respect to a consideration in interpreting this act is raised now or whether it's raised after jurisdiction is assumed and you get to the next stage.

Why not... why not get into it now and consider it in interpreting the... the scope of the act, in particular its retroactivity.

Mr. Schoenberg: This would be a much different case if the foreign government had ever said that the prosecution of this case would interfere with foreign relations, as it has in all of these other cases.

But it hasn't in this case, it hasn't filed a suggestion of immunity, it hasn't filed a statement of interest.

A matter of fact, it required Austria to withdraw the act of state doctrine defense when it was asserted below.

This case itself--

Justice Kennedy: But I thought it just told us that it would be an interference three minutes ago.

Mr. Schoenberg: --The concern, as I understand the Government's concern, is that in other cases that are pending against Japan and Mexico, et cetera, there might be foreign relation issues.

Chief Justice Rehnquist: Well, why... why should we look further?

If the Government says that, I mean, isn't that conclusive in a case like this?

Mr. Schoenberg: I don't... I don't think so.

I think there are two responses.

First, the amount of deference that is given to the Government's litigation position under Bowen v. Georgetown and also INS v. St. Cyr.

Chief Justice Rehnquist: Well, those are not cases involving foreign relations.

Mr. Schoenberg: That... that's correct, and that's why the second issue is very important.

I believe it was Justice Powell who said in the first National City Bank case that... that jurisdiction is not the same as justiciability.

And what the Government is talking about is a justiciability question.

Does the act of state doctrine, for example, prevent this case from going forward?

I'll give you another example, Your Honor.

In... the same district court judge who handled our case and granted jurisdiction in our case, Judge Cooper, also was given a class action case asserting World War II era claims against Austria, this is the Anderman case.

And just last April, she threw out that entire class action, because the Government had come in and filed a statement of interest and asserted its interest in the... in the case, and she found very similar to the Court's holding in Garamendi last term that the political question doctrine was implicated when the Government comes in and says that the prosecution of this particular case will interfere with foreign relations.

But I've never heard any... in any other case the Government say that a case that does not implicate foreign relations, as this one does, should be dismissed on jurisdiction grounds merely because we have justiciability concerns with other cases.

Justice Breyer: What... what is it if... what do you reply to their, what I take is their argument, that if we say there is jurisdiction here, so that this covers pre-1952 expropriations, think of all the eastern European bloc, what used to be, millions of pieces of real estate, et cetera, and Japan, Peru, all over the world, South America, there have been expropriations, and suddenly our Court becomes... become places where you litigate who owns property all over the world, at least if you trace an interest to an American citizen, for expropriations that may have taken under Maximilian of Mexico.

I mean, see... you see that kind of problem I think is what they're trying to raise.

Mr. Schoenberg: Right.

We're very--

Justice Breyer: What's the answer to that?

Mr. Schoenberg: --We're very sensitive to the Government's concern, the can of worms argument here.

And I think the answer to it is that all of those cases present much more difficult problems than this one does in terms of, for example, the statute of limitations.

Your Honor, the statute of limitations is designed to get rid of old claims.

In our case, because of Austria's post-war conduct of concealment--

Justice Breyer: All right, statute of limitations.

Let's go on, let's list a few other things, because--

Mr. Schoenberg: --There--

Justice Breyer: --there might be instances where the statute hasn't run for all kinds--

Mr. Schoenberg: --Right.

Justice Breyer: --of local reasons.

Mr. Schoenberg: There's--

Justice Breyer: I don't know what the statute of limitations rule is in Peru and et cetera.

Mr. Schoenberg: --I can think of at least five problems that cases, old cases, would have.

One would be statute of limitations.

Form non-convenience may be a problem.

It wasn't in this case.

The act of state doctrine we've mentioned is also a serious problem in many of these cases.

You have interference with treaties, which is also not this case.

And you have interference with executive agreements, which is also not this case.

Justice Breyer: Can they come in and file a letter, in your opinion, assume you have jurisdiction to say, look, Judge, we don't want you to litigate this case, it interferes with our foreign affairs, period?

Mr. Schoenberg: Yes.

Justice Breyer: They can?

Mr. Schoenberg: They can file that.

I think it would have to be considered by the--

Justice Breyer: And they give a good reason, they give a good reason.

Mr. Schoenberg: --If there were a good reason why Austria's ownership of paintings would interfere with foreign policy--

Chief Justice Rehnquist: But that's for a court to judge rather than the executive?

Mr. Schoenberg: --Well, there's a certain amount of deference that would have to be given to--

Chief Justice Rehnquist: But no, but you're saying that the executive could say and have... give a good reason, and the court could say, no, we don't... we don't approve of that?

Mr. Schoenberg: --I think under... under this Court's doctrine in foreign affair and policy... foreign affairs policy... there is an automatic deference given to the Government's suggestion that a particular case will interfere with foreign policy, but in most cases I think it would be quite clear.

This case--

Chief Justice Rehnquist: Well, what... what case is it that says that the court should decide rather than the executive in case like this?

Mr. Schoenberg: --Well, I believe, for example, in... in Sabbatino, the Court did not immediately accept the Government's position as to whether a case should or should not go forward and said that it was... now, I don't know whether that, whether Sabbatino, in that part of Sabbatino, it would still be good law today.

I don't think that's been considered.

Chief Justice Rehnquist: It... we... it wasn't the Court opinion, was it?

Mr. Schoenberg: Right.

It was a plurality opinion.

But there is a suggestion, it may not be an answered question, Your Honor.

I'm not sure I can point to a case that would... would talk about the deference, but again, we're talking about not our situation, because the Government has not filed any suggestion of immunity or... or statement of interest suggesting that this case would interfere with foreign policy.

Justice Scalia: Could... could I ask about the act of state doctrine?

I mean, even... why isn't that in play here?

I mean, even if giving... holding Austria here would not be acting retroactively insofar as the exercise of jurisdiction is concerned, why wouldn't holding Austria liable for an act of state which previously would not be a basis for... for challenge in this country, why wouldn't that be acting retroactively?

Mr. Schoenberg: Well, we haven't addressed the act of state because it hasn't been raised and it was an argument that was dropped.

I... I can answer the question though.

The act of state doctrine, as I understand it, is designed to prevent courts from entering into situations where there is no settled basis for deciding the case.

In other words, in the Cuban cases where there's a regime that has a completely different property system than ours, it would be unwise for the courts to venture into this political dispute over whether communism or capitalism is the appropriate way to adjudicate these cases.

In our case, we have a treaty, article 26 of the Austrian State Treaty says Austria must return property taken from Jewish families during the Nazi era.

So there's no dispute between the two countries as to whether or what type of law would apply in this case.

And under Sabbatino, it's very much qualified by the absence of a treaty governing the rule of decision.

So I... I don't think this case could ever pose an act of state problem.

Other cases do though.

That... and that's... that's really the point.

These cases against Mexico, against Japan, against Poland could potentially pose serious act of state problems.

This particular case doesn't.

We'd be happy to litigate it.

Justice Scalia: Whether it poses a problem or not, the suit is... is resting upon... is challenging an act of the state of... of Austria that... that occurred in Austria.

Mr. Schoenberg: That... that's correct.

Every suit against a foreign sovereign that's authorized under the Foreign Sovereign Immunities Act has the potential of interfering with foreign relations to the extent that it concerns the actual foreign country.

Justice Scalia: Right.

So the issue would be, should that be given retroactive application?

Mr. Schoenberg: In the act of state context.

Justice Scalia: Yeah.

Mr. Schoenberg: Well, I... I don't think--

Justice Scalia: This is the act of state context.

I mean, that's what's going on here.

Mr. Schoenberg: --The act of state doctrine is a choice of law doctrine, as I understand it, and... and so it, again, is not something that really operates retroactively, I think.

I don't think to... to echo what was said before that any country could have an expectation in how the act of state doctrine will apply in the particular case.

Justice Kennedy: How about the public acts?

Mr. Schoenberg: I'm sorry?

Justice Kennedy: This is a public act.

Mr. Schoenberg: Well, whether it's a public or private act to collect paintings, I'm not sure is so clear.

Justice Kennedy: Let's assume it's a public act.

Does it have an expectation that... that that will be adjudicated under the then-prevailing norms?

Mr. Schoenberg: I... well, yes and no.

Yes in the sense that we do have to establish that... that this property was taken in violation of international law, and I think that part of the statute clearly expects that the taking be adjudicated according to the state of international law at the time.

So to that degree I think yes.

But whether... whether it's a public or private act I think doesn't determine the... the retroactivity question.

Justice Kennedy: But we're told that at least in this country such acts were never adjudicated in foreign courts.

Mr. Schoenberg: I... I understood that to be the Government's position.

I don't know how the Government explains the Santissima Trinidad case, which is a case concerning private property on a ship where not one, but several, sovereigns claimed an ownership interest, and Justice Story said that our courts, of course, have to adjudicate the ownership of that private property, regardless of whether it was taken as part of a public act.

In the Santissima Trinidad, it's a confusing case, and I'm not sure, even having read it many times, how the ship came to be in its final location, but as I understand it, it went through many different, many different hands.

And the question at the end was, because the sovereigns were claiming the ship, which was potentially a ship of war, does that mean that the Court could not adjudicate the ownership of cargo on the ship?

And Justice Story said no.

Justice Souter: No, but he... isn't the... the concern about the applicability of that case to this one is precisely the reason you said.

It was... it was a suit between sovereigns and we're talking here about the sovereign immunity defense in a suit by an individual, and it's rather a stretch to take that as... as the basis for your law in this case.

Mr. Schoenberg: Well, I would... I would think that the act of state doctrine, which is what we were talking about, would... would be implicated even more strongly in a... in a suit involving multiple sovereigns than it would with regard to just an individual against a sovereign.

And I... I... the Government makes the position I think for the first time today that the expropriation clause sort of appeared from nowhere, but I don't think that's the case.

The first section of 1605(a)(3) very clearly is the Santissima Trinidad case.

That's the property is inside the United States in connection with the commercial activity.

The second clause I believe arises out of the Cuban expropriation cases and the Government's experience in those cases, and it was the intention of the Government in 1976 when the executive branch proposed this law and when the Congress enacted it to allow our courts to adjudicate these types of claims.

Justice Breyer: Well, what... what I'm looking for, I'm beginning to understand his answer better... I think there should be a way, not in your case necessarily, but in general, for the Government to say, court, stay out of this case, because of the international implications.

And what I was thinking is if we... if this is jurisdictional, follow Justice Powell's distinction, that won't be a problem because there'll be other ways for them to do it.

You're gradually closing those doors.

One way I had thought of was act of state, but you correctly point out that the act of state doctrine does not bar anything when the claim rests upon a treaty or other unambiguous agreement, and your quoting the '55 treaty might not help you because it's post-'48, but a... but 1907 might help you, so you're there with a treaty.

And so they say, well, we can't use that one, and there'll be a lot of cases when we can't.

So then I had mentioned this thing called a statement of interest, which I was looking for an explanation because I don't know what it is.

And there's a third thing that you mentioned, which is called a letter about immunity.

Well, that won't help them because that's what this statute is.

See, so that now we're back to the statement of interest.

Now, can... what is this thing, a statement of interest?

Can... in other words, is the statement of interest sufficient to achieve the objective that I was thinking was important, that not necessarily your case, but in many other cases there has to be a way for the executive to stop the judge from deciding the matter where it really does interfere with foreign relations.

Now, what's... do you see where I'm--

Mr. Schoenberg: I--

Justice Breyer: --Do you see that that is the thing that has been floating in my mind--

Mr. Schoenberg: --I understand--

Justice Breyer: --and I'm trying to settle on.

Mr. Schoenberg: --I understand.

It's, of course, difficult for us to talk about it because there is no statement of interest in this case, but--

Justice Breyer: But you can explain to me what a statement of interest is.

Mr. Schoenberg: --Right.

Justice Breyer: And whether a statement of interest is a sufficient legal route to achieve the end that I think is necessary and that they're arguing for.

Mr. Schoenberg: I believe if... if the Government were to file a statement of interest saying that the prosecution of this particular lawsuit would interfere with the foreign relations of the Government, I think a court would be proper in abstaining from adjudicating the case under the political question doctrine, very similar to this Court's holding last term in Garamendi, I think.

Chief Justice Rehnquist: But it wouldn't have to, in your view?

Mr. Schoenberg: I would say it would... it would be very... it would almost always have to.

I think... I think the Court should still be allowed to determine whether... whether there is really a basis for the Government's position.

I... I wouldn't say that our courts necessarily have to bend always to the Government's position with regard to a statement of interest.

I think that's the... the import of the first National City Bank case and... and... and the... the Sabbatino case and Alfred Dunhill also.

Justice Souter: But I... I take it that in no case, in no instance would you concede the appropriateness of... of the statement of interest being considered at the jurisdictional as opposed to the justiciability of--

Mr. Schoenberg: That's... that's absolutely correct.

We're talking today only about the jurisdiction question.

There hasn't been a statement of interest filed and there couldn't be a suggestion of immunity.

I'm sorry, Your Honor.

Unknown Speaker: --No, I'm sorry.

Justice Scalia: What do you do about Verlinden?

Mr. Schoenberg: Verlinden actually is a great case for us as I realized in reviewing it.

Verlinden is... is a retroactive application of the Foreign Sovereign Immunities Act.

In that case it was a foreign company against a foreign state, something for which there was no jurisdiction in the United States prior to the enactment of the Foreign Sovereign Immunities Act.

That action arose in 1975 and yet when it was brought under the Foreign Sovereign Immunities Act several years later, this Court directed the lower court to adjudicate jurisdiction under the Foreign Sovereign Immunities Act.

So that case is exactly a... if... if anything is retroactive, that's a retroactive application of the Foreign Sovereign Immunities Act.

But again, it goes back to this Court's statements in Landgraf that jurisdictional statute which confers or ousts jurisdiction is not impermissibly retroactive and that--

Justice Kennedy: Did... Verlinden didn't expressly discuss the right to retroactivity?

Mr. Schoenberg: --It absolutely did not discuss retroactivity.

It maybe never occurred to any of the Justices or the parties at that time that a jurisdictional statute like the Foreign Sovereign Immunities Act could be in any way--

Justice Scalia: No, but they... but we did say that it wasn't just a jurisdictional statute.

That's what we said.

Mr. Schoenberg: --The... the Court said that it was substantive in Republic of Mexico v. Hoffman in 1945.

The Court refers to sovereign immunity as substantive law.

But I think as this Court has said, whether you label the... the law substantive or procedural really isn't the question.

The question is, on what activity is... is the statute operating?

And here it's operating on the claim to immunity and how that is adjudicated by our courts in deciding whether the court has the jurisdiction--

Chief Justice Rehnquist: But that... that has a bearing on the Landgraf exception too.

If a statute is more than jurisdictional, you know, it isn't so easily disposed of under Landgraf.

Mr. Schoenberg: --It's correct, but I think this case presents a much better case than the two cases cited in Landgraf, the Andrus case and U.S. v. Alabama, although U.S. v. Alabama you could distinguish as something seeking only injunctive relief and therefore prospective.

In Andrus, this is a case brought against the U.S. Government after the U.S. Government... or while the case was pending, I think, the statute is changed to take away the amount in controversy requirement.

So, in other words, very clearly before the suit could not proceed, now the statute's been changed without any suggestion of retroactivity in the enactment.

And the Court says... this is 1978, I think... it's of no moment that this jurisdictional statute has been changed now to allow a suit against in... in a sovereign entity, the United States.

So I think this case presents actually a much better... much better case, because here, and these are other points that I wanted to raise, I believe the text of the Foreign Sovereign Immunities Act demonstrates that it was intended to apply to all claims to immunity, regardless of when the acts took place, the underlying acts took place.

Our... our third point--

Justice Souter: May I just ask you on that, I mean, isn't the objection to that that the... that the subject matter we're concerned with here is a subject matter which is defined in terms of property and the history of that property, and the history of that property as expropriated necessarily raises the time question?

And if the time is prior to the... the enactment of the statute, we necessarily, by the definition of present subject matter, get into an issue of retroactivity.

What... what's the answer to that?

Mr. Schoenberg: --Well, the answer is, again, in Landgraf that not every statute which affects prior events is impermissibly retroactive, and my point was--

Justice Souter: But it's not impermissibly retroactive, but it raises the question about the permissibility of a retroactive application.

Mr. Schoenberg: --Well, I... my view is that the Foreign Sovereign Immunities Act is... is a statute that is designed to take away the immunity decision from the State Department and place it in the hands of judges, and the purpose of the statute was that henceforth all claims to immunity should be adjudicated under this procedure, not the old procedure.

In other words, the U.S. Government's position should--

Justice Souter: Yeah, but even... even that, with respect, it seems to me that that begs the question.

The court is going to adjudicate.

The question is whether in adjudicating them it is going to draw a line based on... on... on this temporal consideration.

That still leaves it in the hands of the court.

But the question is whether in the hands of the court retroactivity ought to be a basis for making the jurisdictional decision.

Mr. Schoenberg: --I... I don't... I don't see... I don't think that it is with regard to the text of this statute.

I... even though the statute does refer to events that could take place prior to the enactment, the purpose of the statute, which is what I think the analysis requires that we consider, is to change the forum of the adjudication from the old State Department procedure to the... to the court procedure under these specific rules.

Justice Ginsburg: How does your... the discussion about the statement of interest then fit in?

It seems to me what you just said is, they meant to take it away from the State Department and put it in the hands of the court.

Mr. Schoenberg: The... the immunity consideration, yes, but I think the statute, the Foreign Sovereign Immunities Act, was not intended to change the rules, for example, with the act of state doctrine or with the statute of the limitations or with any of the other doctrines that might bar an older claim from... from entering court.

Our third point, this I don't want to spend too much time on, but it's our view that the Foreign Sovereign Immunities Act merely codified the common law of sovereign immunity, and therefore, it did not substantially change the law.

And this is not only my opinion.

If one looks at the State Department circular that was sent out in 1976 to foreign states, it says, this enactment will not substantially alter the rules for deciding sovereign immunity questions in U.S. courts.

So it was the position of the State Department at the time that they proposed this legislation that it merely codified what the State Department then considered to be the rules of sovereign immunity.

And we have an interesting situation, I think an unprecedented situation, because the common law itself depended on the views of the State Department, so we have a little bit of a reflexive situation.

The way I look at it, let us suppose, for example, that the... that instead of enacting the Foreign Sovereign Immunities Act they issued another Tate letter, another letter that merely said, henceforth we want the courts to adjudicate under this... under this regime.

So it's not a new statute, it's just a suggestion to the courts on how to decide cases.

Under this Court's ruling with regard to common law, non-statutory law, of course that... that approach would have to be applied retroactively, and I don't think it's any less retroactive just because the executive branch sent it over to Congress and said, we want you to pass the statute also.

Our last--

Justice Scalia: Any... any more retroactive?

Mr. Schoenberg: --Any more retroactive.

Our last... our last point is really the basis for the Ninth Circuit's decision, and that is, as to these parties in this case, there is no impermissibly retroactive effect, because Austria could never have had any expectation of immunity with regard to Mrs. Altmann's claims.

Justice Breyer: That would be a pretty good nightmare, wouldn't it, if we had to have judges trying to work out on a case-by-case basis, country by country, whether Turkey in 1921 when it was an enemy, had a... didn't have an expectation of being treated as a sovereign, but Hungary in 1962 had a different expectation, et cetera.

I mean, that... that... I think their point on that's a pretty good one, isn't it?

Mr. Schoenberg: Well, it... it's... but it's not a point about retroactivity, Your Honor.

The--

Justice Breyer: Well, it is because they're saying that unless you treat these things as a whole, you won't understand the problem.

And even if in your case the country had no expectation, there are so many countries that did that... and going into it case by case is so difficult that it would better to have an absolute rule.

That's their arguments.

Mr. Schoenberg: --It would be better, but that's not really how the Court's retroactivity analysis has gone over the last 10 years, and that's... that's why I certainly favor some of the earlier arguments.

I think it's easier to decide the case on those, rather than the way the Ninth Circuit did in evaluating the expectations, but if one doesn't decide in our favor on all of those other arguments, that the statute itself is jurisdictional, that Congress intended it to apply, that there's really no change in the law because it's the same as the common law of sovereign immunity, then really under Hughes one has to look at whether, as to the parties of this case, there is any retroactive effect, and that... that's... that's what the Hughes holding is.

It's a statute phrased jurisdictionally, but let's look at what happened here.

You have a new plaintiff with new incentives and a defense, substantive defense taken away.

That's the Hughes case.

And so it requires you to look outside the four corners of the statute to look at what was... what are you comparing the statute to, when... when in Hughes the Court said if it determines whether a cause of action can proceed and not where, the where question, of course, implies that you have to look and see if there are other jurisdictions where the case could be brought.

And in this case, as we've made very clear, Austria could always have been sued, at least since it was re-established after World War II for these acts, and as a matter of fact, Austria was required by the United States to enact restitution laws that were designed to afford people like Mrs. Altmann relief.

They have never asserted sovereign immunity in these claims in their own courts and they would not have been allowed to by the U.S. Government, and that sentiment, of course, is echoed in the subsequent treaty in 1955 and it's echoed in the Bernstein letter in 1948 that as to expropriations, as to property taken from Jewish families in violation of international law, this country does not recognize sovereign immunity anywhere, not in the states where... where... that were involved, and not in the United States, and that... that's... that's our last point and that's the Ninth Circuit's position.

If the Court has no further questions--

Justice Scalia: Is it... is it correct that... that we would be out of step with all other countries if we... if we allowed this suit to proceed?

Mr. Schoenberg: --Well, certainly not as a matter of... of the statute.

Our... our... in terms of--

Justice Scalia: No, no.

I mean... I mean, have... have all other countries, when they've changed to the new modern notion of limited sovereign immunity, have they all declined to... to apply it in a manner that the Government here would call retroactive?

Mr. Schoenberg: --Right.

I... I don't know how all states have done it.

I know that, for example, in Austria we cited the Dralle case, which concerned a post-war communist expropriation of a... of a subsidiary company in Czechoslovakia, and a German company was allowed to sue Czechoslovakia in Austria concerning the trademarks and... and the expropriation, and have an Austrian court rule whether that expropriation violated international law.

So I would say as to Austria, the argument is, and I think we cited also in our brief a statement by an Austrian professor, Seidl-Hohenveldern, who said that the courts... there's nothing in international law that prevents courts from adjudicating the rights and property taken in violation of international law.

Thank you very much.

Rebuttal of Scott P. Cooper

Chief Justice Rehnquist: Thank you, Mr. Schoenberg.

Mr. Cooper, you have five minutes remaining.

Mr. Cooper: Thank you, Mr. Chief Justice.

Just on that last point, the Dralle case, which is one that we address in our reply brief, does not stand for the proposition that Czechoslovakia's expropriation could be second-guessed in Austria.

Quite the contrary.

Austria determined that the legality of Czechoslovakia's activities in their own... in its own country were not subject to reconsideration in Austria.

Austria concerned itself only with whether, given its own neutrality as between Czechoslovakia and Germany, whether Austria could give effect to an expropriation as an act of war.

And it determined that it could not with respect to property located in Austria.

That issue has nothing to do with what's before the Court today.

Sovereign immunity isn't merely a form selection rule.

It confers on the foreign state the right to choose whether and where to be sued.

That's a substantive right.

It's a right this country has always understood as a right in a sovereign.

Austria's choice, if it did so choose, the circumstances under which it would provide remedies in its own country, either by statute or in its own courts, doesn't constitute a waiver of the sovereignty to which it had been accorded in this country throughout the current period up to 1976.

So this country has always recognized the difference between a sovereign's right to create a remedy, and this country has done so in its own instances with respect to events that were claimed to be the subject of reparations, and by doing so it has never suggested that it thought it was subjecting itself to the jurisdiction of a foreign court for individual claims to be able to look for more than the statute of the United States provided for.

In addition, with respect to the law immediately prior to the enactment of the FSIA, I think the suggestion was that somehow the United States had... had eroded the expropriation rule or that Congress thought that it was adopting the... codifying the law of the land with respect to expropriation in the FSIA, and that plainly is not true.

The legislative history, and more importantly the statements of the State Department, in particular the... the digest by John Boyd with respect to State Department decisions from 1952 to 1976 cited in our brief make it clear that the State Department considered this to be a fundamental change in the law.

The conduct being regulated here is expropriation or at the very least possession that goes back to events in 1948 alleged in the complaint.

It is not the mere question of the exercise of jurisdiction here or, worse yet, this mere substitution of another tribunal.

This is something that Congress focused on in each of the expropriation exceptions.

It identified the conduct that it thought the foreign sovereign had engaged in that justified one of our narrow exceptions to the general concept of foreign sovereign immunity.

Whether that was an express waiver under (a)(1), whether that was the exercise of commercial conduct that any private party could engage in under (a)(2) or the... or the expropriation of property in violation of international law in (a)(3), Congress identified the conduct that it thought justified the lifting of the generally applicable foreign sovereign immunity and decided that's the conduct we want to regulate.

And that's what we think justifies the variance from our general rule with respect to sovereigns, and that is a change in the law that requires application of the retroactivity analysis to treat those sovereigns fairly.

If there are no further questions, I have nothing.

Chief Justice Rehnquist: Thank you, Mr. Cooper.

The case is submitted.

Unknown Speaker: The honorable court is now adjourned until Monday next at ten o'clock.

Print this transcript Transcript: 

Argument of Speaker

Mr. Speaker: The opinion of the Court in No. 03-13, The Republic of Austria versus Altmann will be announced by Justice Stevens.

Argument of Justice Stevens

Mr. Stevens: This case comes to us from the Court of Appeals for the Ninth Circuit.

It is a case that maybe of more interest to historians and art connoisseurs than to lawyers.

At issue is the ownership of six valuable paintings by Gustav Klimt, a famous Austrian artist who died in 1918.

The paintings now hang in the Austrian gallery in Vienna.

The plaintiff Maria Altmann was born in Austria in 1916.

She is a Jew who fled the country after it was annexed by Nazi Germany in 1938.

She ultimately settled in California where she now resides.

Her aunt Adel is the subject of two of the paintings at issue.

All six of them hung in her uncle’s palatial home in Vienna before 1938.

Adel died in 1925 leaving a will in which she asked her husband to bequeath the paintings to the Austrian gallery.

Until a few years ago, the plaintiff believed that her uncle had carried out Adel’s request.

In 1998 however, an Austrian journalist who had been granted access to the gallery’s archives discovered evidence that the paintings had not been donated to the gallery by their rightful owner but instead had been seized by Nazis during World War II, and thereafter acquired by the gallery.

Plaintiff claims ownership of the paintings pursuant to the terms of a will that her uncle executed after he fled from Austria in 1938.

She filed this action in Federal District Court in California asserting jurisdiction over petitioners, Austria and the gallery, under the Foreign Sovereign Immunities Act or FSIA.

Enacted in 1976, the FSIA clarified foreign sovereign immunity law replacing the often opaque, inconsistent, and politically charged standards courts had been applying with a comprehensive set of legal rules covering all claims of immunity and civil actions against foreign states or their instrumentalities.

The rule plaintiff invoked known as the expropriation exception precludes foreign states from asserting sovereign immunity in most cases involving property allegedly taken in violation of international law.

Petitioner's moves to dismiss claiming that when their alleged wrongdoing theft placed, they would have enjoyed absolute immunity from suit in the United States.

Because the FSIA was not enacted until almost 30 years later, they argued that its expropriation exception should not be applied retroactively to deprive them of their preexisting immunity.

The District Court and the Ninth Circuit both rejected this argument as well as certain other defenses raised by the gallery.

We granted certiorari and limited our review to the sovereign immunity issue.

Because the case has not yet been tried, our review of that issue does not determine the final outcome of the case.

We presume that most statutes have only prospective effect but several provisions in the FSIA persuade us that Congress intended it to apply in all civil actions brought against foreign sovereigns even though they arise out of pre-enactment conduct.

The FSIA’s preempt states that the Act will apply “henceforth” to all “claims” of foreign sovereign immunity.

The provisions relating the procedural matters such as venue, removal, execution, and attachment clearly applied a claims based on pre-1976 conduct, and there is no reason to believe that Congress intended an isolated provision like the expropriation exception to have purely prospective application.

Applying the FSIA to all pending cases it is consistent with the Act’s two principal purposes: clarifying the rules judges are to apply in resolving claims of sovereign immunity and eliminating political participation in the resolution of those claims.

Those purposes would be frustrated if in postenactment cases but concerning preenactment conduct.

Courts were to continue to follow the ambiguous non-uniformed and politically charged standards that the FSIA replaced.

Accordingly, we affirm the judgment of the Court of Appeals.

Justice Scalia has filed a concurring opinion; Justice Breyer has also filed a concurring opinion in which Justice Souter has joined; Justice Kennedy has filed a dissenting opinion in which the Chief Justice and Justice Thomas have joined.