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Csepel v. Republic of Hungary

United States District Court, D. Columbia.

December 12, 2014

DAVID L. de CSEPEL, et al., Plaintiffs,
v.
REPUBLIC OF HUNGARY, et al., Defendants

For DAVID L. DE CSEPEL, ANGELA MARIA HERZOG, JULIA ALICE HERZOG, Plaintiffs: Michael Dewayne Hays, LEAD ATTORNEY, Alyssa Tami Saunders, COOLEY, LLP, Washington, DC; Alycia Regan Benenati, Megan Kathleen Zwiebel, Sheron Korpus, PRO HAC VICE, KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, New York, NY; Dorit Ungar Black, Michael S. Shuster, PRO HAC VICE, HOLWELL SHUSTER & GOLDBERG LLP, New York, NY.

For REPUBLIC OF HUNGARY, a foreign state, HUNGARIAN NATIONAL GALLERY, MUSEUM OF FINE ARTS, MUSEUM OF APPLIED ARTS, BUDAPEST UNIVERSITY OF TECHNOLOGY AND ECONOMICS, Defendants: Emily C. Harlan, Grayson Yeargin, NIXON PEABODY LLP, Washington, DC; Michael Omar Azat, Sarah Erickson Andre, Thaddeus J. Stauber, PRO HAC VICE, NIXON PEABODY LLP, Los Angeles, CA.

Page 381

MEMORANDUM OPINION

ELLEN SEGAL HUVELLE, United States District Judge.

Defendants the Republic of Hungary, the Hungarian National Gallery, the Museum of Fine Arts, the Museum of Applied Arts, and the Budapest University of Technology and Economics have moved, pursuant to Federal Rule of Civil Procedure 12(b)(1), to dismiss this case for want of subject matter jurisdiction. (Mot. to Dismiss by the Republic of Hungary, the Hungarian National Gallery, the Museum of Fine Arts, the Museum of Applied Arts, and the Budapest University of Technology and Economics [ECF No. 86] (" Defs.' Mot." ).)

Plaintiffs David L. de Csepel, Angela Maria Herzog, and Julia Alice Herzog are descendants of Baron Mór Lipót Herzog, a Jewish Hungarian art collector who assembled a substantial art collection (the " Herzog Collection" ) prior to his death in 1934. Plaintiffs allege that Hungary and Nazi Germany seized the Herzog Collection during World War II, and that at least 40 of the pieces are still in defendants' possession. Plaintiffs brought this suit alleging that defendants breached bailment agreements entered into after World War II when they refused to return pieces from the Herzog Collection in 2008.

On February 15, 2011, defendants filed a motion to dismiss, which this Court granted in part and denied in part, holding that it had subject matter jurisdiction under the expropriation exception to the Foreign Sovereign Immunities Act (" FSIA" ), 28 U.S.C. § 1605(a)(3). See de Csepel v. Republic of Hungary, 808 F.Supp.2d 113, 132-33 (D.D.C. 2011). The D.C. Circuit affirmed in part and reversed in part.

Page 382

de Csepel v. Republic of Hungary, 714 F.3d 591, 404 U.S.App.D.C. 358 (D.C. Cir. 2013). Without addressing the expropriation exception, the Circuit held that plaintiffs' complaint alleged sufficient facts to confer subject matter jurisdiction pursuant to the commercial activity exception to the FSIA, 28 U.S.C. § 1605(a)(2). See id. at 601. On remand, this Court ordered discovery to proceed. de Csepel v. Republic of Hungary, No. 10-cv-1261 (D.D.C. Dec. 9, 2013). Discovery is ongoing and scheduled to end on July 28, 2015.

Defendants now assert that, in light of the documentary evidence produced to date, plaintiffs cannot carry their burden of proving that this Court has subject matter jurisdiction. In particular, defendants claim that the commercial activity exception to the FSIA does not apply. Plaintiffs respond that there exists sufficient evidence to satisfy the commercial activity exception and that, in any event, it would be premature for this Court to rule on the matter prior to the close of discovery. Alternatively, plaintiffs maintain that this Court has subject matter jurisdiction pursuant to the expropriation exception.

For the reasons stated below, this Court will deny defendants' motion without prejudice pending the close of fact discovery on February 27, 2015.

BACKGROUND

The background of this case has already been described by this Court and the Court of Appeals. de Csepel, 714 F.3d at 594-97; de Csepel, 808 F.Supp.2d at 120-26. The Court will therefore only recount the procedural history and facts relevant to this motion.

Baron Mór Lipót Herzog was a Jewish Hungarian art collector who amassed a collection of over 2,000 paintings, sculptures, and other pieces of artwork. (Compl. [ECF No. 1] (" Compl." ) ¶ 38.) After his death in 1934 and his wife's death in 1940, the Herzog Collection passed to his three children, Erzsé bet (Elizabeth) Weiss de Csepel, ...


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