United States Court of Appeals, District of Columbia Circuit
May 2, 2018
Appeals from the United States District Court for the
District of Columbia (No. 1:15-cv-00266)
Jonathan M. Freiman argued the cause for appellants. With him
on the briefs were Benjamin M. Daniels, David R. Roth, and
David L. Hall.
Nicholas M. O'Donnell argued the cause and filed the
brief for appellees.
A. Orseck, Ariel N. Lavinbuk, Daniel N. Lerman, and D. Hunter
Smith were on the brief for amicus curiae David Toren in
support of appellees.
Before: Tatel, Griffith, and Wilkins, Circuit Judges.
case, the heirs of several Jewish art dealers doing business
in Frankfurt, Germany in the 1930s seek to recover a valuable
art collection allegedly taken by the Nazis. Defendants, the
Federal Republic of Germany and the agency that administers
the museum where the art is now exhibited, moved to dismiss,
claiming immunity from suit under the Foreign Sovereign
Immunities Act. They also argued that the heirs failed to
exhaust their remedies in German courts and that their
state-law causes of action are preempted by United States
foreign policy. The district court rejected all three
arguments and denied the motion to dismiss. For the reasons
set forth below, we largely affirm.
this appeal comes to us from the district court's ruling
on a motion to dismiss, "we must accept as true all
material allegations of the complaint, drawing all reasonable
inferences from those allegations in plaintiffs'
favor." de Csepel v. Republic of Hungary, 714
F.3d 591, 597 (D.C. Cir. 2013) (internal quotation marks
omitted). Viewed through that lens, the complaint relates the
1929, three Frankfurt-based firms owned by Jewish art dealers
joined together into a "Consortium" and purchased
"a unique collection of medieval relics and devotional
art" called the Welfenschatz. First Amended Compl. (FAC)
¶ 1, Philipp v. Federal Republic of Germany,
248 F.Supp.3d 59 (D.D.C. 2017) (No. 1:15-cv-00266); see
id. ¶¶ 34-35. The treasure-or
"schatz"-acquired its name due to its association
with the House of Welf, an ancient European dynasty. See
id. ¶ 30. Dating primarily from the eleventh to
fifteenth centuries, the several dozen pieces that make up
the Welfenschatz were housed for generations in Germany's
Brunswick Cathedral. See id. After displaying the
Welfenschatz throughout Europe and the United States and
selling a few dozen pieces, the Consortium placed the
remainder of the collection, which at that time retained
about eighty percent of the full collection's value, into
storage in Amsterdam. Id. ¶¶ 41, 78.
heirs allege that "[a]fter the  Nazi-takeover of
power in Germany, . . . the members of the Consortium faced
catastrophic economic hardship," id. ¶ 10,
and in 1935, following "two years of direct
persecution" and "physical peril to themselves and
their family members," id. ¶ 145, the
Consortium sold the Welfenschatz to the Nazi-controlled State
of Prussia for 4.25 million Reichsmarks (the German currency
at the time), id. ¶¶ 145-160, "barely
35% of its actual value," id. ¶ 12.
"Standing behind all of this was [Hermann]
Goering," id. ¶ 73, "Prime Minister
of Prussia at that time," id., a
"notorious racist and anti-Semite," id.
¶ 74, and "legendary" art plunderer,
id. ¶ 75. Goering "seldom if ever"
seized outright the art he desired, preferring "the
bizarre pretense of 'negotiations' with and
'purchase' from counterparties with little or no
ability to push back without risking their property or their
lives." Id. The Welfenschatz was then shipped
from Amsterdam to Berlin, see id. ¶ 157, where
Goering presented it to Adolf Hitler as a "surprise
gift," id. ¶ 179 (quoting Hitler Will
Receive $2, 500, 000 Treasure, Balt. Sun, Oct. 31, 1935,
at 2). All but one of the Consortium members then fled the
country. See id. ¶¶ 163, 170-171. The
remaining member died shortly after, officially of
"cardiac insufficiency," id. ¶ 163,
but "rumors" circulated that he was "dragged
to his death through the streets of Frankfurt by a Nazi
mob," id. ¶ 166.
the war, [the Welfenschatz] was seized by U.S. troops,"
id. ¶ 181, and eventually turned over to
appellant Stiftung Preussischer Kulturbesitz (SPK), a German
agency formed "for the purpose . . . of succeeding to
all of Prussia's rights in cultural property,"
id. ¶ 184; see id. ¶¶
181-84. The Welfenschatz is now exhibited in an
SPK-administered museum in Berlin. Id. ¶
2014, appellees, Alan Philipp, Gerald Stiebel, and Jed
Leiber, heirs of Consortium members, sought to recover the
Welfenschatz, and they and the SPK agreed to submit the claim
to a commission that had been created pursuant to the
Washington Conference Principles on Nazi-Confiscated Art,
id. ¶ 220, an international declaration that
"encouraged" nations "to develop . . .
alternative dispute resolution mechanisms" for Nazi-era
art claims, id. ¶ 197 (quoting U.S. Dep't
of State, Washington Conference Principles on
Nazi-Confiscated Art ¶ 11 (1998) [hereinafter Washington
Principles]). Known as the German Advisory Commission for the
Return of Cultural Property Seized as a Result of Nazi
Persecution, Especially Jewish Property, id. ¶
205, the Advisory Commission concluded "that the sale of
the Welfenschatz was not a compulsory sale due to
persecution" and it therefore could "not recommend
the return of the Welfenschatz to the heirs," Advisory
Commission, Recommendation Concerning the Welfenschatz
(Guelph Treasure) (Mar. 20, 2014), Appellants' Supp.
Sources 7; see also FAC ¶ 221.
no further relief in Germany, the heirs filed suit in the
United States District Court for the District of Columbia
against the Federal Republic of Germany and the SPK
(collectively, "Germany"), asserting several
common-law causes of action, including replevin, conversion,
unjust enrichment, and bailment. See FAC
¶¶ 250-304. They sought the return of the
Welfenschatz "and/or" 250 million dollars,
id. Prayer for Relief, a "conservative
estimate" of its value, id. ¶ 33.
Germany moved to dismiss, arguing that it enjoyed immunity
from suit under the Foreign Sovereign Immunities Act (FSIA),
that international comity required the court to decline
jurisdiction until the heirs exhaust their remedies in German
courts, and that United States foreign policy preempted the