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Scalin v. Societe Nationale Des Chemins De Fer Francais

United States District Court, N.D. Illinois, Eastern Division

March 26, 2018



          Andrea R. Wood United States District Judge

         Plaintiffs Karen Scalin, Josiane Piquard, and Roland Cherrier claim that during World War II, Defendant Société Nationale des Chemins de Fer Français (“SNCF”), the national railway of France, transported their family members to Nazi concentration camps. Plaintiffs allege that in connection with the deportations, SNCF confiscated the Holocaust victims' personal property (such as cash, jewelry, and artwork), either converting the property to its own benefit or turning it over to the Nazis. On behalf of themselves and a purported class of similarly-situated individuals, Plaintiffs seek compensation for the alleged takings, which they claim violated international law. Before the Court is SNCF's motion to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), (2), (3), and (6). (Dkt. No. 18.) For the reasons explained below, the motion is granted.


         The following facts are taken from Plaintiffs' complaint, which “is stated upon information and belief, based on published research concerning SNCF's activities during and after the War.” (Compl. ¶ 5, Dkt. No. 1.) During World War II, the French government established and ran holding camps in France from which Jewish people and other “undesirables” were deported to Nazi concentration camps. (Id. ¶ 6.) SNCF assembled and ran the deportation trains, billing the Nazis per head, per kilometer at standard third-class rates (although the Holocaust victims were transported in rail cars normally used for cattle). (Id. ¶¶ 8-9.) The deportees were generally allowed to bring one suitcase or parcel with them as they boarded the SNCF trains. (Id. ¶ 10.) While in transit, SNCF confiscated the victims' belongings, thereafter converting the property to its own benefit or turning it over to the Nazis in exchange for cash and good will. (Id.) Plaintiffs allege that to this day, SNCF retains their relatives' property or the proceeds from it, and that no compensation has been made to the victims (Id. ¶¶ 13-14.)

         Plaintiffs assert three claims for relief here. Plaintiffs first allege that SNCF expropriated their family members' property in violation of international law, both customary and treaty, by taking the property on a discriminatory basis, for no public purpose, and without just compensation. They further allege that the takings were an integral part of the genocide against Jews during World War II. Plaintiffs' second and third claims for relief consist of state common law claims for conversion and unjust enrichment, respectively. The putative class includes all individuals transported by SNCF between holding camps in France or from France to Nazi concentration camps, and their heirs and beneficiaries.

         In its motion to dismiss Plaintiffs' complaint, SNCF argues that it is an instrumentality of the French government entitled to immunity under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq., and therefore this Court does not have subject-matter jurisdiction over Plaintiffs' claims. SNCF further argues that (1) the Court lacks personal jurisdiction over it; (2) Plaintiffs have not established standing; (3) Plaintiffs' claims are barred by the statute of limitations; (4) the complaint should be dismissed on the grounds of forum non conveniens; (5) principles of international comity similarly require dismissal; and (6) this lawsuit presents a non-justiciable political question.


         When a complaint is challenged for lack of subject-matter jurisdiction, the district court may look beyond the pleadings and view whatever evidence has been submitted on the issue to determine whether subject-matter jurisdiction in fact exists. See Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 444 (7th Cir. 2009) (internal citations omitted).[1] The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing that it exists. See Id. at 444-45. See also Ctr. for Dermatology & Skin Cancer, Ltd. v. Burwell, 770 F.3d 586, 588-89 (7th Cir. 2014) (“[A] plaintiff faced with a 12(b)(1) motion to dismiss bears the burden of establishing that the jurisdictional requirements have been met.”) (internal citation omitted).

         I. FSIA Immunity and the Expropriation Exception

          Because it is undisputed that SNCF is wholly owned by the French government, the Court's subject-matter jurisdiction over Plaintiff's claims depends upon application of the FSIA. See Autotech Techs. LP v. Integral Research & Dev. Corp., 499 F.3d 737, 743 (7th Cir. 2007). Under the FSIA, a foreign state and its instrumentalities are immune from suit in U.S. courts unless a specific statutory exception applies. Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661, 669 (7th Cir. 2012) (citing 28 U.S.C. § 1604). Here, Plaintiffs invoke the expropriation exception set forth in § 1605(a)(3) of the FSIA. That exception provides as follows:

A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case-in which 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). “To break that down, the expropriation exception defeats sovereign immunity where (1) rights in property are in issue; (2) the property was taken; (3) the taking was in violation of international law;[2] and (4) at least one of the two nexus requirements is satisfied.” Abelesz, 692 F.3d at 671. SNCF argues that Plaintiffs' complaint fails because it does not adequately allege a taking and because there is no nexus to the United States (as SNCF does not own or operate Plaintiffs' property and is not engaged in commercial activity in the United States).

         According to SNCF, even if the four elements of the FSIA's expropriation exception were met, the complaint must be dismissed because Plaintiffs have failed to exhaust domestic remedies in France. In Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661 (7th Cir. 2012), the Seventh Circuit held that although the FSIA itself does not impose a statutory exhaustion requirement, international law requires exhaustion of domestic remedies before a plaintiff can assert a claim for expropriation in violation of international law. See Id. at 678-82. See also Fischer v. Magyar Allamvasutak Zrt., 777 F.3d 847, 854 (7th Cir. 2015) (“Even though § 1605(a)(3) itself does not require exhaustion . . . the provision's reliance on international law norms ma[kes] clear that plaintiffs [] need to exhaust domestic remedies before they [can] assert a violation of customary international law in a United States court.”) Therefore, a plaintiff must either demonstrate that he or she has pursued and exhausted domestic remedies or “show convincingly that such remedies are clearly a sham or inadequate or that their application is unreasonably prolonged.” Abelesz, 692 F.3d at 681 (citing Restatement (Third) of Foreign Relations Law § 713 cmt. f). See also Fischer, 777 F.3d at 855 (“[I]nternational law favors giving a state accused of taking property in violation of international law an opportunity to ‘redress it by its own means, within the framework of its own legal system' before the same alleged taking may be aired in foreign courts.”) (quoting Abelesz, 692 F.3d at 680).

         II. Exhaustion of Domestic Remedies

         In their complaint, Plaintiffs assert that “[a]ll legal remedies of any nature in France permitting victims to seek redress against SNCF have been exhausted.” (Compl. ¶ 34, Dkt. No. 1). According to Plaintiffs, claims brought against SNCF in France were dismissed by the highest court and, following that precedent, all other cases against SNCF have been dismissed.[3] Plaintiffs also assert that the programs established by the French government for Holocaust victims are limited in scope and do not compensate deportees or their heirs for property taken on SNCF trains. In particular, Plaintiffs contend that the Commission for the Compensation of Victims of Spoliations Resulting from the Anti-Semitic Legislation in Force During the Occupation (“CIVS” or the “Commission”) does not compensate victims and their relatives for property taken by SNCF. SNCF, on the other hand, argues that Plaintiffs' claims are eligible for compensation by CIVS and that recourse to that remedial scheme is required under Seventh Circuit precedent.

         In support of its position, SNCF has submitted the declaration of CIVS's Chairman, Michel Jeannoutot. The declaration provides background on the history and purpose of the Commission as well as an organizational overview and a summary of the claims process. Jeannoutot explains that CIVS is an administrative commission of the French government under the Prime Minister. (Jeannoutot Aff. ¶ 4, Memo in Supp. of Def.'s Mot. to Dismiss, Attach. 3, Dkt. No. 19-3.) The Commission was established by decree in 1999 to compensate the victims of confiscations carried out by the Nazis and the Vichy authorities during World War II. (Id.) CIVS investigates claims, determines the nature and extent of material losses, and submits recommendations for compensation to the Prime Minister or any other institution involved (namely, banks). (Id.) At the end of 2014, nearly 29, 000 claims had been filed with CIVS, approximately 19, 000 of which were for “material spoliations” (as opposed to “bank-related spoliations”- seizures of assets in banks or the contents of safety deposit boxes). (Id.) And as of December 31, 2014, nearly 500 million euros in compensation had been recommended for material spoliations claims. (Id.) Jeannoutot notes that France has not set a ceiling for the amount of compensation or a deadline for filing claims. (Id.)

         CIVS accepts claims from direct victims of spoliations and their legal heirs or assigns- regardless of the claimant's nationality and country of residence. (Id. ¶¶ 17-18, 27.) To file a claim, the claimant simply sends a letter, fax, or email, or completes the claim form available on the Commission's website. (Id. ¶ 27.) There is no fee associated with the filing of a claim; the process is free of charge. (Id.) According to Jeannoutot, the claims process is collaborative; CIVS personnel frequently communicate with claimants and their representatives to assist them in managing each step of the process. (See, e.g., Id. ¶¶ 16, 28, 37-38, 41-42, 47-48.) For example, the Commission's administrative unit contacts claimants directly to collect information that is essential for processing their claim. (Id. ¶ 28.)

         Once a claim has been filed, the administrative unit conducts research in specialized archives. (Id. ¶¶ 9, 29-33.) Sitting or retired judges known as “rapporteurs” are responsible for conducting an investigation into the claim once the administrative unit's research is complete. (Id. ¶¶ 34-35.) At the conclusion of the investigation, the rapporteur prepares a compensation proposal based on the type and extent of the verified spoliations. (Id. ¶ 39.) Jeannoutot notes that because it is not always possible to gather evidence of losses sustained during deportations, interments, or other events, CIVS often relies on good-faith estimates. (Id. ¶ 14.) The rapporteur's report is sent, along with the claim file, to the Commission's hearings secretariat, which then schedules a hearing before the deliberative panel. (Id. ¶¶ 43, 45.) If a claimant is not satisfied with the rapporteur's investigation, he or she may request additional, or a new, investigation. (Id. ¶ 44.)

         During the hearing before the deliberative panel, the rapporteur presents his or her report, the claimant is invited to speak, a representative of the government provides an opinion on how to handle the claim, and the panel members ask any questions they may have. (Id. ¶ 49.) The claimant may be represented at the hearing by an attorney or any other person of his choosing. (Id. ¶ 47.) Jeannoutot notes that CIVS has organized missions to the United States and other countries so that residents who have submitted claims can participate in the hearings more easily and take part in the review of their claim just like claimants residing in France. (Id. ¶ 48.) After the hearing, the panel deliberates and issues a recommendation to the office of the Prime Minister. (Id. ΒΆ 49.) Once the panel's recommendation is approved by the ...

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