Earlier this week, the Court announced that it would be issuing some decisions on Wednesday, notwithstanding that the Nine are currently on their winter break. That led many observers to speculate that something big was in store—maybe a decision in the pending ACA case—because (in non-pandemic years) the Court would typically only release a decision mid-break if the case were time-sensitive and high-profile. Most of those observers were disappointed, though, as the Court instead issued three decisions that weren’t on most people’s lists for the biggest cases of the term: Federal Republic of Germany v. Philipp (No. 19-351); Simon v. Republic of Hungary (No. 18-1447); and Salinas v. United States Railroad Retirement Board (No. 19-199).

Most, but not all. Here at the Update, Germany v. Philipp was the most anticipated case of the term, because Wiggin and Dana happens to represent petitioners, who emerged with a 9-0 victory. But the case is interesting in its own right: Among other things, it’s a great example of the Court’s statutory-interpretation turn, in which cases involving attention-grabbing facts are decided based only on the driest and most technical rules of statutory interpretation. Salinas is no slouch either: It is the first 5-4 decision of the Justice Amy Coney Barrett era (in an argued case, anyway). And, surprisingly, the liberals won! Simon, though, that’s a dud, as we’ll soon explain.

Since this is our Update, we’ll start with Federal Republic of Germany v. Philipp (No. 19-351). The case centered on the Welfenschatz, a collection of medieval German relics, originally belonging to the royal House of Guelph. In the 1920s, the Guelphs fell on hard times, so they sold the collection to a group of prominent German-Jewish art dealers, who hoped to be able to use their connections in the art market to sell the collection for a profit. Unfortunately, the sale closed just weeks before the October 1929 stock market crash and ensuing global depression. While the art dealers succeeded in selling a few of the pieces over the next few years, by 1933, most of the collection remained, with few prospective buyers. That year also saw Hitler’s rise to power in Germany. And the Nazis took a great interest in the Welfenschatz, perhaps the preeminent example of German historical art. German officials (working through intermediaries) soon began negotiations with the art dealers about purchasing the collection, and after a few years, they reached a deal. Thus, in 1935, the German state of Prussia purchased the remaining items in the collection for a few million dollars. Since then, the Welfenschatz has been on display in several German public museums. It can currently be seen in Berlin in a museum operated by the Stiftung Preussischer Kulturbesitz (“SPK”), an institution akin to the Smithsonian.

In 2008, the heirs of some of the art dealers approached SPK, asserting that the 1935 sale was coerced and that the sale price was for just a fraction of the collection’s value. SPK investigated, but concluded it was a voluntary transaction for a fair price, approximately halfway between both sides’ starting points. The heirs then brought the dispute to the Advisory Commission for the Return of Cultural Property Seized as a Result of Nazi Persecution, Especially Jewish Property, a special body established by the German government to decide claims over property allegedly stolen by the Nazis. The Advisory Commission agreed with SPK as well, recommending that it retain possession of the Welfenschatz. The heirs promptly sued Germany and SPK, seeking the return of the collection or more than a quarter-billion dollars in damages. But they brought their suit not in Germany, but in D.C. federal court. That created some problems, chief among them that under the Foreign Sovereign Immunities Act (“FSIA”) foreign states and state-entities (like Germany and SPK) are immune from suit in U.S. court unless one of the FSIA’s statutory exceptions applies. The plaintiffs argued that the FSIA’s so-called expropriation exception covered their claims. It gives U.S. courts jurisdiction to hear disputes over “rights in property taken in violation of international law.” But Germany and SPK argued that this exception didn’t apply, because the international law of takings only covers states’ takings of foreign nationals’ property, so a state’s alleged taking of the property of its own nationals (such as Germany’s alleged taking of property owned by German nationals) is not a “taking in violation of international law.” The plaintiffs countered that the relevant international law violation was not the law of takings, but the law of genocide, since they alleged the transaction was a forced sale occurring in the context of (and as part of) the Holocaust. The D.C District Court and ultimately the en banc D.C. Circuit agreed with the plaintiffs. The Nine—every one of them—disagreed.

Writing for the unanimous Court, Chief Justice Roberts began by tracing the history of the international law of expropriation. Traditionally, international law was concerned only with states’ actions toward other states, not their actions toward individuals. But international law also recognized that states had certain obligations toward the nationals of foreign states, under the theory that a state’s wrongdoing toward a foreign national was, in a sense, a harm to that national’s home country. From this idea came the international law of takings: States’ uncompensated takings of foreign nationals’ property were violations of international law, but takings of their own nationals’ property were the concern only of the taking state’s domestic law. While in recent decades, international law has expanded to regulate states’ treatment of individuals, including their own nationals—such as through prohibitions on genocide and other serious human-rights violations—the law of takings never evolved beyond its focus on states’ takings of foreign-owned property. As a result, since the FSIA was first enacted in 1976, courts had generally understood that the expropriation exception was limited by this “domestic takings rule,” meaning that foreign states were immune from suit in U.S. court over claims they had taken their own nationals’ property.

The plaintiffs argued that the expropriation exception should be read not just to reach violations of the international law of takings (which all agreed included this domestic-takings rule), but also takings that violated any principle of international law. Thus, it applied to takings that allegedly violated the law of genocide, a body of law that (all agreed) is not limited to states’ treatment of foreigners. But for several reasons, the Chief found these arguments unpersuasive. First, the history and background of the FSIA suggested that Congress would’ve understood its words as referring to the international law of takings, not international law wholesale. Second, the exception focuses on property rights, which international law protects through the law of takings, not the sort of harms to persons and groups that are the focus of prohibitions on genocide. Third, the plaintiffs’ approach would be anomalous compared with the FSIA as a whole, which generally provides that foreign states can only be sued for commercial acts (like breaching a contract), while preserving their immunity for the exercise of their sovereign power (like taking property). Last, reading the exception as the plaintiffs proposed would arguably itself violate international law, because the International Court of Justice has held that states must give foreign states immunity from suit in their domestic courts over allegations of human-rights violations. And it would force the U.S. courts to decide disputes that have nothing really to do with the U.S. at all, something courts should generally avoid absent a clear legislative command.

The Chief thus concluded that the expropriation exception could only be satisfied by allegations that a foreign state violated the international law of takings. And those principles are limited to states’ takings of foreign nationals’ property. But the Court did not dismiss the case outright. Before the Supreme Court, the plaintiffs and some of their amici argued that the domestic-takings rule should not apply because the art dealers had been rendered stateless and therefore were not German nationals. The Chief instructed the lower courts to look into that question on remand, including whether it was properly raised below. The Court also declined to address Germany’s secondary argument that principles of international comity require dismissal, leaving that question for the lower courts to sort out.

Comity takes us to Simon v. Republic of Hungary (No. 18-1447). Like Philipp, it involves claims against a foreign state over property allegedly taken by the Nazis. But the allegations in Simon are more horrific: A group of plaintiffs sued Hungary in U.S. court, alleging that the Hungarian government stole all their earthly possessions in 1944, as the plaintiffs were being sent to Nazi-run deathcamps throughout Europe.

The district court dismissed these claims based on the doctrine of international comity, which allows U.S. courts to abstain from exercising jurisdiction over suits where a foreign state’s interest in allowing its own courts to hear a case outweighs the U.S. interest in providing a forum. But the D.C. Circuit reversed, finding that international comity could never be a basis for dismissing a suit brought under the FSIA. In doing so, it split with the Seventh Circuit, which had previously dismissed almost identical claims against Hungary based on comity principles. To resolve this split, the Court granted cert.

At oral argument, the Justices spent a great deal of time debating whether international comity allows U.S. courts to abstain from exercising jurisdiction, and if it does, just when they can do so. But the Justices also asked several questions about how the Court’s resolution of the FSIA issue in Germany v. Philipp would impact this case. After all, this case too involved allegations that Hungary had taken the property of Hungarian nationals, so if the expropriation exception was cabined by the domestic-takings rule, the courts might not even have jurisdiction, making the whole comity question moot.

Those questions pointed the way to resolving the case. In a one-sentence per curiam decision issued along with the Court’s opinion in Philipp, the Court vacated the lower courts’ decisions, directing them to consider how the Philipp holding affected the courts’ jurisdiction in Simon. The issue of whether international comity allows U.S. courts to abstain from hearing cases against foreign sovereigns thus remains unanswered, at least for now.

Moving on, in Salinas v. United States Railroad Retirement Board (No. 19-199), the Court resolved a circuit split concerning the availability of judicial review for the Railroad Retirement Board’s refusal to reopen a prior benefits determination. In a 5-4 opinion with the Chief and Justice Kavanaugh joining the liberal wing, the Court ruled in favor of judicial review.

Let’s begin with The Railroad Retirement Act of 1974 (RRA). It provides long-term benefits to railroad employees who have either become disabled or reached retirement age. These benefits are administered by the Railroad Retirement Board (Board), which has established a multi-step sequence for administrative review of benefits determinations with the Board itself serving as the administrative entity of last resort. If an applicant either exhausts the administrative review process or fails to seek review within 60 days, the benefits determination becomes “final.” Only once the determination becomes final can the applicant request that the Board reopen it for reconsideration. And while the decision to reopen the determination is wholly within the Board’s discretion, the Board is guided by substantive criteria—as relevant here, a decision may be reopened “[w]ithin four years of the date of the notice of such decision, if there is new and material evidence.”

Enter Manfredo Salinas. During his 15-year tenure with the railroad, he suffered serious injuries that led him to seek disability benefits under the RRA. Following three unsuccessful and unreviewed denials, Salinas submitted a fourth application for benefits. The fourth time was the charm (well, sort of). While the Board granted Salinas’ application, Salinas appealed the amount and start date. On appeal to the reconsideration section, Salinas argued that his third application should be reopened because the Board failed to consider certain medical records. Salinas’ reopening request was denied and Salinas appealed to the Fifth Circuit. The Fifth Circuit dismissed the petition for review, holding that federal courts lack jurisdiction to review the Board’s refusal to reopen a prior benefits determination. The Court granted certiorari to resolve the circuit split on this issue.

With Justice Sotomayor taking the pen for the majority, the Court reversed. Though Salinas sought benefits under the RRA, the Court’s decision ultimately turned on the text of the Railroad Unemployment Insurance Act (RUIA), a related provision that provides short-term unemployment benefits. This is because the RRA provides that judicial review under the RRA is available to the same extent that review is available under the RUIA.

Turning to the RUIA, a claimant may obtain judicial review of “any final decision of the Board.” Because the Board’s refusal to reopen Salina’s application was a “terminal event” that affected Salinas’ benefits and obligations under the RRA, it fell well-within the scope of the definition of  “final decision” borrowed from cases interpreting similar language in the APA (at least according to the majority).

The Board pressed the argument that “any final decision” within the meaning of the RUIA refers to “a final decision under § 355(c).” The provision the Board relied on authorizes claimants, railway labor organizations, claimant’s employers, and“any other party aggrieved by a final decision under subsection (c)” to seek judicial review of “any final decision.” Because reopening decisions are not governed by § 355(c), they are not final decisions, or so the argument goes. Justice Sotomayor was unconvinced, refusing to impose the limitation advanced by the Board because “Congress conspicuously chose the broad language ‘any final decision,’ without tying that phrase to the earlier reference to a ‘final decision under subsection (c).’” And to the extent there is any ambiguity in the meaning of “any final decision,” it was resolved by the strong presumption in favor of judicial review, which the Board failed to rebut.

Finally, Justice Sotomayor distinguished the Court’s earlier decisions in Califano v. Sanders (1977) and Your Home Visiting Nursing Services, Inc. v. Shalala (1999). In Califano, the Court held that judicial review is not available for decisions not to reopen Social Security benefits determinations because reopening decisions are not subject to a hearing. While the SSA designates an administrative hearing as a prerequisite to review, the RRA contains no such limitation, rendering Califano inapplicable. Justice Sotomayor deemed Your Home similarly inapposite. There, the Court held that an agency’s denial of reopening was merely a “refusal to make a new determination” of rights or liabilities, not a final decision. But the statute at issue in Your Home did not implicate the presumption in favor of judicial review and was narrower than the RRA. Thus, the plain meaning of “any final decision” won the day.

Writing for the dissent, Justice Thomas agreed that the majority “may well correctly interpret the judicial review provision located in the” RUIA, but emphasized that “this case concerns the judicial review provision located in the” RRA, not the RUIA. According to Justice Thomas, the RRA imposes an important prerequisite to judicial review, namely, that the decision of the Board must determine “rights and liabilities.” In his view, the Board’s decision implicated neither. There is no statutory right to reopening, nor did the Board’s decision to deny reopening actually determine Salinas’ statutory entitlement to benefits. To Justice Thomas, this case is no different than At Home—the reopening denial was merely a refusal to make new determinations and is therefore insulated from judicial review, not a final decision bearing on rights or liabilities. Worse, Justice Thomas concluded, the majority’s interpretation creates an elusive scheme under which judicial review is available, but the applicable standards of review remain entirely undefined.

That does it for the week’s opinions, but there was some (expected) news on the orders front. At the request of the Biden Administration, the Court removed two Trump-instigated cases from its February argument calendar. Biden v. Sierra Club (No. 20-138), concerned the propriety of the Defense Department’s transfer for approximately $2.5 billion to the Department of Homeland Security for the construction of President Trump’s border wall. And Pekoske v. Innovation Law Lab (No. 19-1212) was a challenge to the Trump Administration’s “remain in Mexico” policy. In each case, the named petitioner (President Biden and Acting Secretary of Homeland Security David Pekoske) no longer support the previous administration’s position and have rescinded the policies at issue. Accordingly, the Court has removed the cases from its calendar, at the request of Acting Solicitor General Elizabeth Prelogar.

While we won’t have those cases to discuss, the Court did add one more to its OT20 calendar. In PennEast Pipeline Co. v. New Jersey (No. 19-1039), the Court will decide whether the Natural Gas Act delegates to Federal Energy Regulatory Commission certificate-holders the authority to exercise the federal government’s eminent-domain power to condemn land in which a state claims an interest. The Court also directed the parties to address whether the Third Circuit properly exercised jurisdiction over the case to begin with.

Thanks, as always, for reading!

Dave and Tadhg