The opinion of the court was delivered by: JOYCE HENS GREEN
Plaintiff has sued the Federal Republic of Germany for compensation for property taken in 1941 from plaintiff 's uncle, who assigned his interest in the claim to plaintiff. The Court entered default judgment for plaintiff on October 1, 1992, when defendant failed to appear after proper service. Defendant subsequently moved to dismiss the complaint for want of jurisdiction and to set aside the default judgment. The motion has been fully briefed and is ready for disposition.
The facts set forth in the Complaint, which defendant does not dispute for purposes of the initial jurisdictional question, are as follows. On May 1, 1941, plaintiff's uncle, Mihailo Stefanovitch, withdrew several thousand gold coins from a safe deposit box he held at Mesarka Banka in Belgrade. He gave the coins to Commandant Bege of the German Garrison Command, who drew up in return a certificate documenting his receipt of 2,800 French Napolean coins; 3,200 Kaiser Franz-Josef ducats; and 540 Turkish liras. The certificate is marked No. 327-A-B, signed by Bege, dated, and stamped by the German command post in Belgrade.
In November 1971, Stefanovitch filed a claim with the Federal Republic of Germany, demanding restitution of these coins. Apparently he received no response to the demand. On June 14, 1978, Stefanovitch assigned his rights to the claim documented by the certificate to plaintiff by a written document signed in Paris. Plaintiff renewed Stefanovitch' s claim in July of 1978 by writing to the German Embassy in Washington. With the aid of U.S. Representative John Burton, plaintiff finally received a response on July 7, 1980.
The response stated that the Agreement on German External Debts, signed by the Federal Republic of Germany and the United States, among other parties, postponed resolution of all such claims against the German Reich until "the definitive settlement of the reparation question." Decision of the German Bundestag, Pet. No. 600-8-680-32833, 228th Sess. (July 2, 1980) (trans. Cong. Research Serv.) (Ex. 1 to Motion for Entry of Judgment in Support of Plaintiff's Request for Relief). The treaty relied upon postponed settlement of the following group of claims, among others:
Consideration of claims arising out of the second World War by countries which were at war with or were occupied by Germany during that war, and by nationals of such countries, against the Reich and agencies of the Reich, including costs of German occupation, credits acquired during occupation on clearing accounts and claims against the Reichskreditkassen shall be deferred until the final settlement of the problem of reparation.
Agreement on German External Debts, June 15, 1989, art. 5(2), 33 U.N.T.S. 3 (Ex. 1 to Germany's Reply to Plaintiff's Response Raising the Issue of Waiver of Sovereign Immunity).
Plaintiff now asserts that the Treaty on the Final Settlement with Respect to Germany, signed on September 12, 1990, should reopen his claim because it terminated all quadripartite agreements, including, he argues, the treaty quoted above. Treaty on the Final Settlement with Respect to Germany, art. 7(1), S. Treaty Doc. No. 101-20, 101st Cong., 2d Sess. 7 (1990) (Ex. 3 to Germany's Reply to Plaintiff's Response Raising the Issue of Waiver of Sovereign Immunity). After passage of the Final Settlement, plaintiff resubmitted his claim to the German government, which again rejected the claim on the same grounds previously stated. Plaintiff then filed the complaint in this case on March 12, 1991. He has submitted documents supporting the above facts and an appraisal estimating the present-day total value of the coins at $ 2,170,000, for which he seeks judgment.
Plaintiff's renewed pursuit of his claim is sensible in light of German unification and its accompanying treaty developments. The newly formed German government has begun to act on previously unsuccessful claims. See Note, Resolving Rival Claims on East German Property Upon German Unification, 101 Yale L.J. 527, 536-37 (1991). This Court is precluded from considering the merits of plaintiff's claim, however, because plaintiff has failed to establish adequate grounds for jurisdiction over defendant.
The parties agree that jurisdiction in this case can only be asserted, if at all, under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1602-1607 ("FSIA"). They dispute whether the FSIA should be applied retroactively to this 1941 transaction and, if the FSIA does apply, whether the transaction falls within the "commercial activity" exception to the FSIA's general provision of sovereign immunity. 28 U.S.C. § 1605(a)(2).
The FSIA was passed in 1976. It has been held to apply retroactively to 1952, see Carl Marks & Co. v. Union of Soviet Socialist Republics, 841 F.2d 26, 27 (2d Cir. 1988), when the United States adopted as a matter of foreign policy the "restrictive immunity" approach to sovereign immunity. Letter from Jack B. Tate, Acting Legal Adviser, Dep't of State, to Acting Attorney General Philip B. Perlman (May 19, 1952) (reprinted in Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 48 L. Ed. 2d 301, 96 S. Ct. 1854 (1976) (Appendix 2 to opinion of the Court)). Restrictive immunity, like the FSIA, permitted jurisdiction over foreign sovereigns in suits concerning their commercial or nongovernmental acts. Prior to 1952, the ...