Supreme Court Blocks Holocaust Survivors’ Long-Running Lawsuit Against Hungary, Where Nazis Seized Their Assets During WWII

The United States Supreme Court rejected a suit last Friday from Holocaust survivors who requested compensation from Hungary for the theft of their assets by Nazis during WWII.

The High Court voted unanimously to turn away the Holocaust survivors’ claim, which sought reparations for their looted property during WWII by Hitler’s Nazi regime. With this decision by the Supreme Court in Republic of Hungary v. Simon, the Holocaust survivors may not sue Hungary in American courts.

The Supreme Court arrived at this ruling because the assets stolen during World War II included funds “commingled” with other funds. The Justices said that US courts should not be involved in international disputes.

The suit was filed fifteen years ago in 2010 by over a dozen Holocaust survivors and their families when the group sued the Republic of Hungary and its national railway. The plaintiffs brought their claim to the Supreme Court, knowing that suits aimed at foreign governments are most often prohibited. However, they asked the Supreme Court to make an exception in their case.

The survivors' exception would mean that their lawsuit and other claims could be heard in US Courts, even though their assets are not present in the US. In this claim, the plaintiffs argued that their property, including art, jewelry, and more, was stolen from Hungarian Jews during World War II by Nazis and then sold, and that much of the proceeds ended up in the United States. The Holocaust victims and their families said they never received any compensation for the proceeds of the stolen goods.

Writing for the court, Justice Sonia Sotomayor explained that the Justices are aware of the morality involved in trying to get justice for survivors of the Holocaust. She said in a brief that the Justices know “the moral imperative has been and continues to be to provide some measure of justice to the victims of the Holocaust, and to do so in their remaining lifetimes.”

In a unanimous opinion, the Justice wrote that there are limits to what Americans can sue for in US courts when the ruling would apply to foreign governments. Justice Sotomayor added that the plaintiffs might be able to file a new lawsuit, in a different way, though she did not explain what strategy the Holocaust survivors would need to proceed.

Carter Spohn, a private investigator who has been involved in multiple cases involving Holocaust-era litigation, believes he understands what the Justice was alluding to.

“If you can find that connection between the foreign defendants that can tie them to financial interests in the U.S., show that any of the illicit funds came to or are in the U.S., then you might have a case where the U.S. courts could allow a case to move forward,” says Spohn of Millennium Intelligence Agency.

Spohn previously worked on behalf of the California Department of Insurance and a private law firm after California passed legislation extending the statute of limitations to file claims against foreign insurance companies arising from the Holocaust. A lawsuit was filed against some of the largest insurance companies world, including Allianz and Generali, on behalf of Jewish Holocaust survivors residing in California.

In their moving papers, Generali stated they were a foreign insurance company and did not conduct business in the United States. They also stated they had never availed themselves to any courts in Los Angeles or California. Spohn’s investigation, in contrast, showed that Generali did have substantial financial interests in California and insured racehorses in the state, where it had in fact made over 100 general appearances in California courts. In addition, Generali stated in a declaration they were unable to locate any Holocaust-era life insurance policies, but Spohn was able to unearth evidence showing Generali was housing 600,000 Holocaust-era life insurance policies in its warehouse in Trieste, Italy.

The evidence Spohn uncovered was key in proving the case against Generali, but equally important was the research establishing the nexus between the defendant and California, which allowed the case to proceed in the state court.

Another case Spohn worked on involved the use of slave labor by Nazi Germany during World War II. The case involved one of the world’s largest contractors, which served as Hitler’s personal contractor for a Messerschmidt factory near Berlin, according to facts revealed by Spohn’s investigation.

“This contractor argued that they do not do business in California and had no monetary assets in the U.S.,” Spohn recalls. “My investigation revealed that this contractor under a wholly-owned subsidiary had substantial holdings in the U.S. and had built one of the largest complexes on the upper west side of Manhattan.”

“Demonstrating this financial nexus between the foreign entity and the U.S. allowed the case to go forward,” Spohn explains of the litigation which was poised to be dismissed in California courts before this evidence was brought to light.

In the recent Simon decision, the Court stressed the fact of the commingled funds and the complications that arose from the mixed money.

“It is true that, because money is fungible, it will likely be difficult to trace cash from the sale of expropriated property after it is commingled,” Justice Sotomayor wrote. “When a foreign sovereign is responsible for the expropriation, a suit may proceed only if the property is ‘present in the United States.’”

During oral arguments, some Justices said they did not want to experience any international “fallout” from the case going forward, because other countries and foreign citizens could then sue the United States in their courts.

The Holocaust survivors' suit, filed in 2010, was heard by the Supreme Court in 2021 when it was sent back to lower courts. In 2024, an appeals court sided with the survivors' claim. The appeals court said that the Holocaust victims could sue Hungary, due to their being in line with the exception of the Foreign Sovereign Immunities Act which covers “property taken in violation of international law.”

But to qualify for this exception, the survivors needed to show the Supreme Court that their specific stolen assets have some kind of financial connection to America, and due to commingled funds, the High Court ruled this claim may not go forward.