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August 24, 1999


The opinion of the court was delivered by: Shadur, Senior District Judge.


Four name plaintiffs — Edward Haven as representative of the Estate of Maksymilian Rechtszafen, Evelyn Ruebner as representative of the Estate of Herbert Prerauer, Allen Welbel and Mark Krug — have brought this putative class action against Rzeczpospolita Polska ("Poland") and Skarb Panstwa, Rzeczpospolita Polska ("State Treasury of Poland") for wrongful seizure and expropriation of real property owned by plaintiffs (or their predecessors) and by other Jewish property owners during and shortly after World War II and for interfering with and preventing the performance of insurance contracts between plaintiffs and such other property owners on the one hand and Warta S.A. ("Warta") and Powszechny Zaklad Ubezpieczen S.A. ("PZU") on the other. Plaintiffs have also sued Warta and PZU for breach of those property and life insurance contracts. Everyone agrees that the four defendants are "foreign states" or "agencies or instrumentalities of foreign states" under the Foreign Sovereign Immunities Act ("Act," 28 U.S.C. § 1602-1611): Poland and its Treasury in tautological terms, Warta and PZU because they were owned and operated by the Polish government during all relevant times.

Understandably, defendants' first line of defense against such an effort to remedy wrongs that were initiated more than a half century ago is time-related. In this instance that takes the form of an argument that the statute to which plaintiffs look as their ticket of entry to the federal court, the Act, does not reach back to permit such aged claims. Although numerous other issues raised by defendants are still in the briefing stage, this opinion is limited to resolving that question alone because of the potentially dispositive character of the subject matter jurisdictional question.

Before 1952 foreign sovereigns were entitled to assert absolute immunity from suit in United States courts (see Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 486, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983)). Then the 1952 issuance of the Tate Letter*fn1 by the State Department restricted that immunity to suits involving the public acts of a foreign sovereign, while eliminating such immunity for commercial acts (see, e.g., Jackson v. People's Republic of China, 794 F.2d 1490, 1493 (11th Cir. 1986)). Nearly a quarter century later (in 1976) Congress entered the picture with the Act, which both (1) codified and clarified that restrictive theory of sovereign immunity and (2) also granted subject matter jurisdiction to United States courts over suits falling within certain exceptions to sovereign immunity. What must be addressed here is whether, in so doing, Congress conferred such jurisdiction over claims arising before 1952.*fn2

Three Courts of Appeals have weighed in on that issue: first Jackson, then Carl Marks & Co., Inc. v. USSR, 841 F.2d 26, 27 (2d Cir. 1988) (per curiam)*fn3 and, less than two months ago, Creighton Ltd. v. Government of the State of Qatar, 181 F.3d 118 (D.C.Cir. 1999). That has produced a 2 to 1 split in favor of a negative answer to the question, although only the most recent (and minority) decision has had the benefit of the Supreme Court's definitive teaching on the subject of retroactivity in Landgraf v. USI Film Prods., 511 U.S. 244, 274, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994).*fn4 To resolve the conflict, it is useful to rehearse the bases for all three decisions.

First among them, Jackson was an action against People's Republic of China for the payment of bearer bonds that had been issued by the Imperial Chinese Government in 1911. Attorneys for the United States weighed in on the Chinese government's side, and Jackson, 794 F.2d at 1497-98 held:

  We agree that to give the Act retrospective
  application to pre-1952 events would interfere with
  antecedent rights of other sovereigns (and also with
  antecedent principles of law that the United States
  followed until 1952). It would be manifestly unfair
  for the United States to modify the immunity afforded
  a foreign state in 1911 by the enactment of a statute
  nearly three quarters of a century later.

Next Carl Marks, 841 F.2d at 27 (citations omitted) similarly rejected an action against the Soviet Union to recover on debt instruments issued by the Russian Imperial Government in 1916:

  Such a retroactive application of the [Act] would
  affect adversely the USSR's settled expectation,
  rising "to the level of an antecedent right," of
  immunity from suit in American courts. We believe, as
  did the district court, that "[o]nly after 1952 was
  it reasonable for a foreign sovereign to anticipate
  being sued in the United States courts on commercial
  transactions." However, we need not decide the effect
  of the [Act] on causes of action arising between 1952
  and the enactment of the Act.

And so the matter stood for a bit more than a decade, when the District of Columbia Circuit was called upon in Creighton to decide a legally equivalent question: not one involving the date of passage of the Act itself, but rather deciding on the effect of a 1988 addition to the Act's immunity exceptions to embrace the enforcement of awards pursuant to arbitration agreements. There the question was whether that 1988 enactment was applicable in a situation where the arbitration agreement (indeed, the actual commencement of arbitration) had antedated that enactment. Creighton viewed the amendment (and by parity of reasoning the Act itself) as "speak[ing] not to the primary conduct of the parties" (181 F.3d at 124) but rather as specifying a forum for adjudication of that "primary conduct" — and it did so (id. at 124) by quoting this analysis from Landgraf, 511 U.S. at 274, 114 S.Ct. 1483 (citations and internal quotation marks omitted):

Creighton, id. continued with its own analysis and holding that could equally well have been written for this case:

  So it is in this case, for § 1605(a)(6) does not
  affect the contractual right of the parties to
  arbitration but only the tribunal that may hear a
  dispute concerning the enforcement of an arbitral
  award. See McGee v. International Life Ins. Co.,
  355 U.S. 220, 224, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957)
  (holding long-arm statute enacted after parties
  entered into contract "did nothing more than to
  provide petitioner with a California forum to enforce
  whatever substantive rights she might have against
  respondent"). Under established principles,
  therefore, application of § 1605(a)(6) is not
  retroactive, let alone impermissibly retroactive, and
  Qatar does not claim that a different result should
  obtain simply because a foreign state is affected by
  the change in a jurisdictional statute. See Princz
  [v. Federal Republic of Germany], 26 F.3d [1166,]
  1171 [(D.C.Cir. 1994)] (postulating, though not
  deciding, that application of 1976 version of FSIA to
  acts committed before 1952 would not be retroactive
  because it "would not alter Germany's liability under
  the applicable substantive law in force at the time,
  i.e. it would just remove the bar of sovereign
  immunity to the plaintiff's vindicating his rights
  under that law"). Accordingly, we hold that the
  district court has subject matter jurisdiction over
  this case pursuant to the arbitration exception in §

In fact, Jackson, 794 F.2d at 1497-98 had itself expressly treated the Act as applicable to conduct that antedated its 1976 enactment (Carl Marks, 841 F.2d at 27 ...

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