Dreyfus v. von Finck Petition for a Writ of Certiorari to the US Court of Appeals for the Second Circuit

    I n the

(Emirt nf %  Xtritrik States
O ctober T e r m , 1975 

No.

W il l y  D reyfu s ,
Petitioner,

v.

A ugust  v o n  F in c k , et al.

PETITION FOR A WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 

FOR THE SECOND CIRCUIT

E ric S ch n apper  
Suite 2030 
10 Columbus Circle 
New York, New York 10019

J o h n  R . H oran

299 Park Avenue
New York, New York 10017

Counsel for Petitioner



TABLE OF CONTENTS

PAGE

Opinions Below ........... ....................... ...................... .....  1

Jurisdiction ..................................................................   2

Question Presented ........   2

Treaties and Statutory Provisions Involved .......   2

Statement of the Case .......................................... ...... . 4

Reasons for Granting the Writ .................... „ ............... 5

C onclusion  .....       11

A ppendices

Opinion of District Court dated May 20, 1974 .... la

Opinion of District Court dated January 2, 1975 .. 13a 

Opinion of Court of Appeals dated April 6, 1975 .. 30a



I n  the

ftuprme (to rt xti tiir M n x ttb  States
O ctober T e r m , 1975 

No.

W il l y  D reyfu s ,

y.
Petitioner,

A ugust  von  F in c k , et al.

PETITION FOR A WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 

FOR THE SECOND CIRCUIT

The petitioner, Willy Dreyfus, respectfully prays that 
a Writ of Certiorari issue to review the judgment and 
opinion of the United States Court of Appeals for the 
Second Circuit entered in this proceeding on April 6, 1976.

Opinions Below

The opinion of the court of appeals, which is not yet 
reported, is set out in the Appendix hereto, pp. 31a-41a. 
The opinion of the district court, dated May 20, 1974, 
which is not reported, is set out in the Appendix, pp. 
la-12a. The opinion of the district court, dated January 
3, 1975, which is not reported, is set out in the Appendix, 
pp. 13a-29a. The decision of the United States Court of 
Restitution Appeals, dated May 10, 1950, is reported at 
1 Court of Restitution Appeals, Opinion No. 24 (1951). 
The decision of the United States Court of Restitution



2

Appeals, dated March 7, 1951, is reported at 2 Court of
Restitution Appeals, Opinion No. 68 (1952).

Jurisdiction

The judgment of the Court of Appeals was entered on 
April 6, 1976. Jurisdiction of this Court is invoked under 
28 TT.S.C. §1254(1).

Question Presented

Does the complaint in this action state a claim upon 
which relief can be granted, (a) under 28 U.S.C. §§ 1331 
and 1350 with respect to the alleged treaties of the United 
States and the Law of Nations, or (b) under 28 U.S.C. 
§ 1331 with respect to Military Law 59 promulgated by 
the American Military Government for occupied Germany?

Treaties and Statutory Provisions Involved

Section 1350, 28 U.S.C., provides:

The district courts shall have original jurisdiction 
of any civil action by an alien for a tort only, com­
mitted in violation of the law of nations or a treaty 
of the United States.

Section 1331(a), 28 U.S.C., provides:

The district courts shall have original jurisdiction 
of all civil actions wherein the matter in controversy 
exceeds the sum or value of $10,000, exclusive of in­
terest and costs, and arises under the Constitution, 
laws, or treaties of the United States.



3

Article I of Military Law 59, promulgated by the United 
States Military Government for Germany on November 10, 
1947, provides:

1. It shall be the purpose of this Law to effect to 
the largest extent possible the speedy restitution of 
identifiable property (tangible and intangible property 
and aggregates of tangible and intangible property) 
to persons who where wrongfully deprived of such 
property within the period from 30 January 1933 to 
8 May 1945 for reasons of race, religion, nationality, 
ideology or political opposition to National Socialism. 
For the purpose of this Law deprivation of property 
for reasons of nationality shall not include measures 
which under recognized rules of international law are 
usually permissible against property of nationals of 
enemy countries.

2. Property shall be restored to its former owner 
or to his successor in interest in accordance with the 
provisions of this Law even though the interests of 
other persons who had no knowledge of the wrongful 
taking must be subordinated. Provisions of law for 
the protection of purchasers in good faith, which would 
defeat restitution, shall be disregarded except where 
this Law provides otherwfise.

Article 46 of the Hague Convention, 36 Stat. 2277, pro­
vides :

Family honour and rights, the lives of persons, and 
private property, as well as religious convictions and 
practice, must be respected. Private property cannot 
be confiscated.



4

Statement of the Case

Petitioner is a Jew and a citizen of Switzerland. Prior 
to 1937 petitioner, who was then a national of both Ger­
many and Switzerland, resided in Germany where he was 
the proprietor of a major bank in Berlin. In that year 
certain laws were promulgated making it illegal for Jews 
to own banks and various other business. Shortly there­
after petitioner sold his bank to a firm owned by the re­
spondent. The complaint alleges that the sale was made 
under duress and that the purchase price was as a con­
sequence more than one and one-half million dollars below 
the actual value of the firm. The complaint further alleges 
that such confiscation of Jewish property was part of the 
Nazi plans and preparations to wage aggressive war in 
violation of various treaties, and that the defendants were 
involved in those plans and preparations. After the loss 
of his bank petitioner fled to Switzerland.

Following World War II, petitioner sought additional 
compensation, and, in 1948, a settlement was agreed upon. 
This settlement, however, was never consummated, al­
legedly because of a wrongful repudiation by the defen­
dants. In November, 1947, the American Military Govern­
ment in Germany promulgated Military Law 59, which re­
quired restitution or compensation for property forcibly 
transferred from Jews under the Nazi regime. In 1948 
petitioner commenced a proceeding in the courts author­
ized by Military Law 59, seeking compensation or enforce­
ment of the 1948 settlement. In 1950 the Court of Resti­
tution Appeals, whose members were American nationals, 
directed that the 1948 settlement be enforced absent cer­
tain unlikely circumstances. On remand to the lower court 
(“Restitution Chamber” ) in Munich, however, that court 
refused to obey the appellate decision and a second appeal



5

was taken. At the 1951 oral argument in the Court of Resti­
tution Appeals which followed, however, counsel for peti­
tioner announced that he had agreed to a new settlement 
of case, and the case was dismissed on the basis of this 
representation. Petitioner maintains that this 1951 settle­
ment was entered into by counsel without his knowledge 
or approval, that it was fraudulent in nature, and that the 
amount of the 1951 settlement was only a fraction of the 
1948 settlement whose enforcement was virtually certain.

On December 12, 1973, petitioner commenced this action 
in the United States District Court for the Southern Dis­
trict of New York, and shortly thereafter obtained an order 
attaching certain assets owned by the defendants in New 
York City. Jurisdiction was alleged to exist under 28 
U.S.C. §§1331 and 1350. On May 20, 1974, the district 
court granted a motion to dismiss the complaint for fail­
ure to state a claim upon which relief could be granted. 
Pp. la-12a. Shortly thereafter the district court set the 
matter down for reargument and on January 3, 1975, issued 
a second opinion which also concluded that the action 
should be dismissed for failure to state a claim on which 
relief could be granted. On April 6, 1976, the court of 
appeals affirmed that dismissal.

Reasons for Granting the Writ

The Nazi policies of persecution and aggression, from 
which this action arises, were the most tragic and cata­
clysmic events of this century for the world at large and 
for the United States. In the World War that those poli­
cies precipitated, millions of American men fought, hun­
dreds of thousands of American men died, and tens of 
billions of American dollars were expended. For almost 
a decade following the conclusion of that wmr, the United



6

States occupied a substantial portion of Germany and 
administered a massive denazification program to elimi­
nate root and brancli the ideology which had threatened 
the very existence of this country. American officials 
undertook in a variety of ways to make whole the victims 
of the Third Reich, adopting Military Law 59 to force 
Germans who had 'expropriated the property of Jews to 
compensate those few victims who had survived the “Final 
Solution.”

This is one of the cases in which American military 
authorities undertook to fashion appropriate relief for 
conduct which had violated both Military Law 59 and the 
most universal of human moral standards. Petitioner al­
leges that, at a point in the history of that case when 
the American authorities were virtually certain to award 
him judgment, the attorneys for the litigants in Germany 
committed a fraud upon both petitioner and the all- 
American Court of Restitution Appeals by announcing to 
the court a “settlement” to which petitioner had never 
agreed and of which he had never been told.

The Second Circuit, however, concluded that these 
events were a purely internal German affair. Comparing 
the events of 1933-1945 to the negligent operation of a 
boat or a refusal to pay a life insurance policy, the court 
held that they involved no violations of the law of nations. 
Pp. 40a-41a. Although aware that the forums created 
by Military Law 59 no longer exist, the Second Circuit 
held that they were the exclusive and proper forum in 
which this action must be pursued. Pp. 34a-37a.

Underlying the opinion of the court below was its as­
sumption that where a defendant has been party to, or 
benefitted from, a violation of the Laws of Rations or of 
a United States treaty, an American court has no business 
enforcing such laws or treaties.



7

[E]ven where a treaty is self-executing, federal juris­
diction under §1331 will not lie where it is not pro­
vided for in the treaty. P. 38a.

Like a general treaty, the law of nations has been 
held not to be self-executing so as to vest a plaintiff 
with individual legal rights. P. 40a.

The Second Circuit apparently believed that, when viola­
tions of such international obligations occur and individ­
uals are injured, the relief in each case should be negoti­
ated by the Department of State and enforced by the 
Department of Defense.

This decision as to the enforceability of American inter­
national agreements comes at a time when such agree­
ments, touching directly upon a variety of basic human 
rights, are increasing in both number and scope. Expand­
ing on the provisions of the United Nations Declaration 
on Human Rights, the Helsinki Treaty of 1975 embodies 
a plethora of undertakings by the signatories to respect 
and protect individual civil and political liberties. As 
American public concern with violations of human rights 
continues to rise, legislation such as the Jackson Amend­
ment is certain to become increasingly common. These 
salutary trends represent an effort to subject international 
disputes regarding individual rights to the rule of law, 
rather than dangerous and uncertain ad hoc confronta­
tions between heavily armed superpowers. The decision 
below poses a clear threat to this new approach in inter­
national relations. The refusal of United States courts 
to enforce American treaty obligations or the accepted 
principles of international law, or to enforce regulations 
and orders promulgated by the executive branch and touch­
ing on the interests of foreigners, will inevitably lead to 
suspicions as to the sincerity of American commitments 
to those obligations, principles and rules.



8

It was to avoid precisely this problem that the Consti­
tutional Convention adopted clause 2 of Article VI, pro­
viding that “all treaties made, or which shall be made, 
under the Authority of the United States, shall be the 
Supreme Law of the Land; and the Judges in every State 
shall be bound thereby . . . . ” Hamilton explained in 
The Federalist:

The union will undoubtedly be answerable to foreign 
powers for the conduct of its members. And the re­
sponsibility for an injury ought ever to be accompanied 
with the faculty of preventing it. As the denial or 
perversion of justice by the sentences of courts is 
with reason classed among the just causes of war, 
it will follow that the federal judiciary ought to have 
cognizance of all causes in which the citizens of other 
countries are concerned. . . . arising upon treaties 
and the laws of nations, . . }

Uppermost in the minds of' the Convention was the re­
fusal of the states to comply with the provisions of the 
peace treaties with England which had forbidden confisca­
tion of Tory property.1 2 Invoking Article VI in 1816, this 
Court affirmed the enforceability of those treaties in Mar­
tin v. Hunter’s Lessee, 1 AVheat (14 U.S.) 303. The Sec­

1 The Federalist, No. 80.
2 Provisional Treaty of Peace, Article VI (1782) ; Definitive 

Treaty of Peace, Article VI (1783). These treaty obligations 
“were grossly disregarded by the States under the Confederation. 
They were deemed by the States not as laws, but like requisitions 
of mere moral obligations, and dependent upon the good-will of 
the States for their execution. Congress, indeed, remonstrated 
against this construction, as unfounded in principle and justice. 
But their voice was not heard.” Story,. Commentaries on the Con­
stitution, Book IV, Ch. XLII, p. 606. Nearly all the states en­
acted statutes which violated these treaties and appeals to 1 the 
state legislatures to repeal the statutes, were ineffectual. Hart and 
Wechsler, The Federal Courts & The Federal System, 21 (1953).



9

ond Circuit concluded, however, that no treaty could be 
enforced in the federal courts unless the treaty itself 
contained an express grant of jurisdiction to that effect. 
No such grant, or any other reference to court enforce­
ment, is to be found in the treaties in Martin, in any of 
the treaties signed in the early years of the Constitution,3 
or in virtually any other treaty adhered to by. the United 
States or previously enforced by this Court.4 5

The court below expressly acknowledged that expropria­
tion of the sort alleged would be a violation of the Law 
of Nations if the property had belonged to a foreign na­
tional. P. 41a. The court asserted that “plaintiff was a 
citizen and resident of Germany at the time of defen­
dants’ alleged wrongdoing.” P. 41a. In fact, at the time 
he lost his property, petitioner, who was also a Swiss 
national, was in the process of being stripped of his Ger­
man citizenship because he was a Jew.6 It is unreason­
able to suggest that the Nazi persecution of millions of 
German Jews, which entailed a systematic denial of the 
benefits of citizenship and ultimately of citizenship itself, 
was an entirely internal matter because the victims were 
all German citizens.

3 See e.g. Treaty of Amity and Commerce Between the United 
State's and France, Article III, IV, X , X X , X X III  (1776); 
Treaty of Amity and Commerce Between King of Prussia and 
the United States Article IV, XII, X X III  (1785) ; Treaty of 
Peace and Friendship Between the United States and Morocco, 
Article XVII, X X IV  (1787); Treaty of Peace and Amity Be­
tween Algiers and the United States, Articles II, XIV , X V II 
(1795) ; Treaty of Friendship Between United States and Spain, 
Articles X III, XV, X X II (1795).

4 Oneida Indian Nation v. County of Oneida, 414 U.S. 661 
(1974) ; Asakura v. Seattle, 265 U.S. 332 (1924); McClanahan 
v. State Tax Commission, 411 U.S. 164 (1973); Corbett v. Sergios, 
381 U.S. 187 (1961).

5 7 Encyclopedia Judaica, 489 (1971).



10

The Second Circuit did not deny that the expropriation 
alleged in the complaint constituted a violation of Military 
Law 59. It is difficult to see how the enforcement forum 
established by that law can be regarded as the appropriate 
and exclusive remedy when that forum no longer exists 
and the complaint alleges that a fraud was committed on 
the Military Law 59 courts. The decision below held that 
Military Law 59 was not a law of the United States be­
cause it was not promulgated pursuant to a statute. Pp. 
36a-37a. In fact the Law was only promulgated after, and 
pursuant to, repeated congressional authorizations of 
military administration of occupied Germany.6 Even in 
the absence of such statutory authorization, the President 
and his delegees have authority under Article II to issue 
regulations such as that in this case. The suggestion below 
that such regulations are not “ laws of the United States” , 
although they clearly have the force of law and often pro­
vide serious penalties for disobedience, is squarely incon­
sistent with the general view of section 1331 articulated 
by this Court in Illinois v. City of Milwaukee, 406 U.S. 91, 
98-101 (1972) and Romero v. International Terminal Co., 
358 U.S. 354, 393 (1959).

6 See, e.g., 59 Stat. 404 (1945) ; 61 Stat. 71, 569, 625, 943 (1947).



11

CONCLUSION

For the above reasons a Writ of Certiorari should issue 
to review the judgment and opinion of the Second Circuit.

Respectfully submitted,

E ri'c S ch n apper  
Suite 2030 
10 Columbus Circle 
New York, New York 10019

J o h n  R. H oran-
299 Park Avenue
New York, New York 10017

Counsel for Petitioner



APPENDICES



UNITED STATES DISTRICT COURT 
S ou th ern  D istrict  of N ew  Y ork 

73 Civ. 5271-CLB

Opinion of District Court dated May 20 , 1974

W il l y  D reyfu s ,

—against—
Plaintiff,

A ugust von  F in c k , Munich, Germany, and M erck , F in c k  
& Co., Munich, Germany,

Defendants.

M em orandum

B riean t , J .

By notice of motion dated March 11, 1974, heard on 
May 1, 1974, defendants moved for an order pursuant to 
Rule 12(b), F.R.Civ.P., vacating service and dismissing 
the complaint on four separate numbered grounds. Of 
these, No. 4 was waived at the hearing, and Nos. 2 and 3 
were withdrawn without prejudice to renew after the 
completion of discovery in the event that the Court fails 
to dismiss the complaint on the first numbered ground, 
i.e., lack of subject matter jurisdiction.

This is an action between aliens. Plaintiff is a Swiss 
citizen, born in Germany, and originally a national of that 
country. Defendants are a West German national, and a 
West German partnership or business entity. The com­
plaint was filed December 12, 1973. On January 15, 1974, 
after an ex parte hearing before me, plaintiff obtained an 
order of attachment in the amount of $150,000.00, which



2a

was levied upon bank accounts of defendants maintained 
in New York. The attachment was vacated by consent 
order dated February 5, 1974, after defendants posted a 
bond in that amount. Our jurisdiction over these defen­
dants is probably quasi in rein, and extending only to the 
amount of the attachment pursuant to New York CPLR 
§6201(1) as limited by Rule 320(e)(1) thereof, made ap­
plicable to this Court by Rule 4 (e)(2), F.R.Civ.P., al­
though plaintiff now contends that defendants are inter­
national bankers who participate in the State of New 
York in public offerings of securities with sufficient reg­
ularity, as underwriters or members of a selling syndicate, 
so as to constitute presence in this District and render 
them amenable to personal jurisdiction by service in West 
Germany, pursuant to §301 New York CPLR, also ap­
plicable here pursuant to Rule 4(f), F.R.Civ.P., a con­
tention defendants dispute.

The plaintiff seeks to recover damages for tortious con­
duct, and also to enforce an agreement or stipulation made 
in August, 1948, in settlement thereof. If subject matter 
jurisdiction is sustained as to the tort claim, we would 
have pendent jurisdiction over the claim to enforce the 
stipulation or agreement of settlement.

As required by Rule 8(a)(1), F.R.Civ.P., plaintiff pleads 
that jurisdiction is founded on 28 IT.S.C. §§1332 and 1350, 
and:

“ . . . is also founded on 28 IJ.S.C. §1331 and §1350 
in that part or the wrong complained of happened 
during, and as a result of, the occupation of Germany 
by the United States pursuant to the Four Power 
Occupation Agreement to which the United States was 
a signatory and also because they are acts which con­

Opinion of District Court dated May 20, 1974



3a

stituted violations of various treaties to which the 
United States and Germany were signatories, includ­
ing, inter alia, The Hague Convention, Versailles 
Treaty, and the Kellogg-Briand Pact, The amount in 
controversy exceeds, exclusive of interest and costs, 
the sum of ten thousand dollars.” (Complaint, ff4)

At the hearing on the motion, it was conceded that 28
U.S.C. §1332 could not he relied on. There is no diversity.
The pleading shows on its face that all parties are aliens.

Section 1350 of Title 28, also relied on, reads as follows: 

“Alien’s Action for Tort

The district courts shall have original jurisdiction 
of any civil action by an alien for a tort only, com­
mitted in violation of the law of nations or a treaty 
of the United States.”

Likewise applicable is §1331(a), which provides:

“ The district courts shall have original jurisdiction 
of all civil actions wherein the matter in controversy 
exceeds the sum or value of $10,000, . . . and arises 
under the Constitution, laws, or treaties of the United 
States.”

Opinion of District Court dated May 20, 1974

There is federal subject matter jurisdiction, within the 
rule of Bell v. Hood, 327 U.S. 678 (1946). That is an 
issue which must be resolved by looking to “the way the 
complaint is drawn, to see if it is drawn so as to claim 
a right to recover under” treaties of the United States. 
Bell v. Hood, supra at 681. “ [T]he party who brings a 
suit is master to decide what law he will rely upon.” Bell 
v. Hood, supra, at 681, quoted from The Fair v. Kohler



4a

Die Co.. 228 U.S. 22, 25. Bell v. Hood holds directly that 
where a complaint is so drawn, the federal court must 
entertain the suit, because “the Court must assume juris­
diction to decide whether the allegations state a [claim] 
on which the Court can grant relief” (ibid., p. 682). 
Whether the complaint states a claim must be decided 
after, not before, the Court has taken jurisdiction over the 
subject matter of the controversy. This District Court has 
subject matter jurisdiction, because the right of plaintiff 
to recover under his complaint will be sustained if the 
treaties of the United States are given one construction, 
and will be defeated if they are given another.

In the absence of a clear facial showing of subject mat­
ter jurisdiction, we would not have granted the order of 
attachment. What has occurred is that defendants have 
mistaken their remedy. The true thrust of their argument 
is directed towards whether the complaint pleads a tort 
claim arising under the treaties, upon which relief can be 
granted. As the issues have been briefed and argued fully, 
the Court will treat the motion as having ben brought 
under Rule 12(b)(6), F.R.Civ.P.

We turn now to the complaint. Plaintiff pleads that in 
1938, and prior thereto, he was a principal owner of J. 
Dreyfus & Co., a private banking firm, located in Berlin, 
Germany, and founded by his family in 1868. He tells us 
that (117) :

“ . . . plaintiff, as a result of collective Nazi perfidy, 
was [in January 1938] forced against his will, intent 
and desire to transfer at a completely unfair, illegal, 
inadequate and inequitable price the banking firm of 
J. Dreyfus & Co. and all of plaintiff’s interest therein 
to defendants.”

Opinion of District Court dated May 20, 1974



5a

This inequitable transaction was forced upon him (1J8)

“because plaintiff was Jewish and under the Niirnberg 
Laws and other decrees of Hitler could no longer own 
or operate a bank in Germany, . . . [nor] receive fair, 
adequate and appropriate compensation [for a sale 
thereof to defendants].”

Although defendants were apparently acting in a pri­
vate capacity, it is adequately pleaded that they tortiously 
and inequitably, unfairly, illegally and wrongfully acquired 
his banking assets. We are told (Till) that this conduct by 
defendants took place

“pursuant to said Niirnberg Laws and decrees of Hit­
ler which decrees and laws were illegal and contrary 
to the law of nations, treaties to which the United 
States and Germany were signatories, and humanity, 
and were part of the scheme to wage war against 
humanity and most of the nations of the civilized 
world.”

It is further pleaded that following World War II, the 
parties negotiated an agreement of settlement which de­
fendants refused to honor, and in fact, renounced.

That part of the complaint based on tort is analogous 
factually and legally to the claim pleaded in Bernstein v. 
Van Heyghen Freres, 8.A., 163 F.2d 246 (2d Cir. 1947), 
cert, denied, 332 U.S. 772, and also in Bernstein v. N.V. 
Nederlandsche-Amerikaansche, etc., 210 F.2d 375. As we 
are informed by Judge Learned Hand (Van Heyghen, 
supra, pp. 248-9) acts of the sort complained of on the 
part of defendants here were, at the time they are alleged 
to have taken place, and prior to December 1938 “unlawful 
under the laws of the Reich itself,” the place of the tort.

Opinion of District Court dated May 20, 1974



6a

They were unlawful here, whether for convenience referred 
to as fraud and deceit, intentional interference with or 
trespass to property, constructive duress, and overreach­
ing, or however may he most convenient for purposes of 
discussion.

It is not clear that this tort is actionable in an American 
court. The Bernstein litigation of course, did not reach 
the question of whether such a claim arises under a treaty, 
or because of acts committed in violation of the law of 
nations within the meaning of 28 U.S.C. §1350 relied on 
here. The latter issue did not arise in the Bernstein cases. 
There, diversity of citizenship was present. See 173 F.2d 
78.

In Van Heyghen, the complaint wTas dismissed for failure 
to state a claim. We refrain from quoting the reasoning; 
to do so would require us to incorporate the entire opinion. 
Later, this Circuit expressed the same viewpoint in Bern­
stein v. N.V. Nederlandsche-Amerikaansche, etc., 173 F.2d 
71 (1949), modified, 210 F.2d 375. Thereafter, a letter- 
dated April 13, 1949, of the sort since known to scholars 
as a “ Bernstein letter” was issued by the U. S. Department 
of State, quoted in relevant part in Bernstein v. N.V. 
Nederlandsche-AmeriTcaanishe, etc., 210 F.2d 375, 376 (2d 
Cir. 1954). Based on the letter, “claims asserted in the 
United States for the restitution of identifiable property 
(or compensation in lieu thereof) lost through force, co­
ercion or duress as a result of Nazi prosecution in Ger­
many” could be litigated.

The “Bernstein letter” was general as to its terms, and 
would be applicable in New York state court, or in this 
Court in a diversity case, but for subsequent expressions 
by the Supreme Court indicative of its present view that 
the last Bernstein case was decided incorrectly, and the 
“ letter” a nullity.

Opinion of District Court dated May 20, 1974



7a

The question was first considered in Banco Nacional de 
Cuba v. Sabbatino, 376 U.S. 398, 420 (1964) in which the 
Court said:

“ This Court has never had occasion to pass upon 
the so-called Bernstein exception, nor need it do so 
now.”

Recently in First National City Bank v. Banco Nacional 
de Cuba, 406 U.S. 759 (1972) several opinions were de­
livered, all referring to Bernstein. In that case, Mr. Justice 
Rehnquist, writing* only for himself, the Chief Justice and 
Justice "White (on this point) approved Bernstein, in re­
versing this Circuit (442 F.2d 530). But Mr. Justice Doug­
las, concurring, considered Bernstein inapplicable, and by 
implication, correct, while Mr. Justice Powell disagreed, 
(p. 773) and dissenters, Justices Brennan, Stewart, Mar­
shall and Blackmun wrote (p. 776) :

“The Court, nevertheless, affirms the Court of Appeals’ 
rejection of the ‘Bernstein’ exception. Pour of us in 
this opinion unequivocally take that step, as do Mr. 
Justice Douglas and Mr. Justice Powell in their sep­
arate opinions concurring in the result or judgment.”

Even if the dissenters in First National City Bank, supra, 
misinterpret the opinion of Mr. Justice Douglas, it is now 
clear that at least five of the Justices reject that case. 
Thus, the law in a like case is returned to the rule enun­
ciated by Judge Learned Hand in the first Bernstein case 
against Van Tleyghen, supra, and accordingly, plaintiff here 
fails to state a claim, as did plaintiff in Van Tleyghen.

We now turn to the secondary question, whether a claim 
is stated arising under treaties of the United States. Plain­
tiff has not called our attention to any particular provisions

Opinion of District Court dated May 20, 1974



8a

of any treaties to which the United States and Germany 
were signatories, which expressly create any private causes 
of action, for tort or otherwise. The United States is not 
a signatory to the Versailles Treaty referred to in the 
complaint, although it appropriated any benefits flowing 
to itself by its separate peace treaty with Germany of 
August 25, 1921 (iI5). The Hague Convention and the 
Kellogg-Briand Pact renouncing war as an instrument of 
international policy were the basis for imposing criminal 
sanctions on German war criminals, tried following World 
War II, but no case has been cited to our attention in which 
such treaties were relied upon as giving rise to a private 
cause of action pursuant to which this Court would have 
jurisdiction under §1350 of Title 28 U.S.C., or otherwise.

Plaintiff asks us to hold that this Court may imply a 
private cause of action in his favor under these treaties, 
as well as the Four Power Occupation Agreement, to which 
the United States was signatory (which was in effect at 
the time of the making of the 1948 contract of settlement, 
but not at the time of the tortious conduct in 1938). Only 
cases arising under the federal securities laws are cited in 
support of this invitation to exercise our judicial power 
in such grandiose fashion.

We find no authority, and none is cited to us in which a 
private cause of action arising out of extraterritorial acts, 
but justiciable in the federal courts, has been asserted suc­
cessfully as arising by implication out of any international 
treaty.

When the international lawyers and diplomats desire to 
create a private right arising out of a treaty, they know 
how to do so. The classic example, of course, is the Warsaw 
Convention, by which private causes of action were created 
by express language of the Convention itself, against inter­

Opinion of District Court dated May 20, 1974



9a

national air carriers for the benefit of passengers and 
shippers. See Chapter Three thereof, and particularly 
Article 28(1) which fixes the venue for the private action.

The learning with respect to international compacts 
differs from the interpretation of legislative intent fol­
lowed by our courts in implying private rights of action 
under remedial statutes such as the federal securities laws. 
An accepted principle of international law seems to be that 
to create a private right or obligation, the treaty, must, as 
in the case of the Warsaw Convention, express a clear 
intent so to do.

For example, in Pauling v. McElroy, 164 F.Supp. 390 
(D.C.D.C. 1958), aff’d 278 F.2d 252, cert, denied 364 U.S. 
835, the District Court considered it “doubtful” that the 
Court had jurisdiction, under 28 U.S.C. §1350, of a claim 
asserted by aliens, resident in the Marshall Islands, ag­
grieved by a proposed nuclear weapons test, and implied 
they failed to state a claim. The Court held (p. 393):

“ [5] 4. The provisions of the Chapter of the United 
Nations, the Trusteeship Agreement for the Trust 
Territory of the Pacific Islands, and the international 
law principle of freedom of the seas relied on by plain­
tiffs are not self-executing and do not vest any of the 
plaintiffs with individual legal rights which they may 
assert in this Court. The claimed violations of such 
international obligations and principles may be as­
serted only by diplomatic negotiations between the 
sovereignties concerned.”

See also Filhiol v. Maurice, 185 U.S. 108 (1902) in which 
the Court failed to imply a private cause of action arising 
out of the Fifth Amendment and the Treaty with France 
of October 21, 1803 (Louisiana Purchase). The Supreme 
Court there held (p. I l l ) :

Opinion of District Court dated May 20, 1974



10a

“Did it appear from plaintiffs’ own statement that 
the case arose under the Constitution or a treaty of 
the United States! We do not think it did.

The Fifth Amendment prohibits the exercise of 
Federal power to deprive any person of property with­
out due process of law, or to take private property 
for public use without just compensation; and the 
treaty of October 21, 1803, provided for the protec­
tion of the inhabitants of the territory ceded in the 
enjoyment of their property. Public Treaties, 200.

But no right, title, privilege or immunity was here 
asserted as derived from the Constitution or the treaty, 
as against these private individuals, who were im­
pleaded as defendants, either specifically, or through 
averments that plaintiffs were ousted in violation of 
the treaty and of the Fifth Amendment, the provisions 
of which it was the duty of the Federal Government 
to observe.

The gravamen of the complaint was that plaintiffs’ 
ancestor had a perfect title, to which they had suc­
ceeded, and the appropriate remedy for illegal inva­
sion of the right of possession was sought . . . and 
so far as defendants were concerned, it was not charged 
that the;/ took possession by direction of the Govern­
ment, and plaintiffs set up no more than a wrongful 
ouster by merely private persons, remediable in the 
ordinary course, and in the proper tribunals.”

In Z. & F. Assets Realisation Corp. v. Hull, 114 F.2d 
464 (D.C. Cir. 1940), aff’d. 311 U.S. 470 (1941) the Court 
of Appeals held as follows with respect to private dis­
putes arising out of German reparations for the “Black

Opinion of District Court dated May 20, 1974



11a

Tom” explosion of 1916, and related events, payable under 
the Treaty with Germany of August 25, 1921 (p. 470):

“A treaty is primarily a compact between inde­
pendent nations. It depends for the enforcement of its 
provisions on the interest and the honor of the gov­
ernments which are parties to it. If these fail, its 
infraction becomes the subject of international nego­
tiations and reclamations, so far as the injured party 
chooses to seek redress, which may in the end be 
enforced by actual war. It is obvious that with all 
this the judicial courts have nothing to do and can 
give no redress. But a treaty may also contain pro­
visions which confer certain rights upon the citizens 
or subjects of one of the nations residing in the ter­
ritorial limits of the other, which partake of the na­
ture of municipal law, and which are capable of en­
forcement as between private parties in the courts 
of the country.”

In Z. <& F. Assets, the complaint was dismissed because 
no such express provisions were found in the treaty. See 
authorities collected in fn.27,114 F.2d at 471. Cf. Khedivial 
Line 8.A.E. v. Seafarers’ Int’l Union, 278 F.2d 49 (2d 
Cir. 1960) [dictum, as no applicable treaty existed, and 
the acts complained of occurred in the United States] ; 
King Features Synd. v. Valley Broadcasting Co., 43 F.Supp. 
137, 138 (N,D. Tex. 1942).

There is no substantive right to recover for the claimed 
tort expressed in plaintiff’s favor in any treaty provision 
to which the United States is a party. We decline to im­
ply such a right. Accordingly, the complaint fails to state 
a tort claim [within 28 U.S.O. §1350 or otherwise] upon 
which relief can be granted. It follows that there is no

Opinion of District Court dated May 20, 1974



12a

pendent jurisdiction to entertain the contract claim, based 
on the stipulation or agreement or settlement made in 1948. 

The complaint is, for the foregoing reasons, dismissed. 
Settle a final Judgment on notice, which shall provide 

that the bond to secure our order of February 5, 1974 
vacating the attachment shall not be discharged or ex­
onerated pending appeal.

Dated: New York, New York 
May 20, 1974

/ s /  C hakles L. Brie a n t , Jb. 
Charles L. Brieant, Jr.

U.8.D.J.

Opinion of District Court dated May 20, 1974



13a

UNITED STATES DISTRICT COURT 
S ou th ern  D istrict  of N ew  Y ork 

73 Civ. 5271-CLB

Opinion of District Court dated January 2, 1975

W il l y  D reyfu s ,

—against
Plaintiff,

A ugust von  F in c k , Munich, Germany, and M erc k , F in c k  
& Co., Munich, Germany,

Defendants.

M em orandum

B riean t , J .

By memorandum opinion dated May 20, 1974, the com­
plaint in this action was dismissed, pursuant to Rule 12(h), 
F.R.Civ.P., for failure to state a claim upon which relief 
could be granted. Briefly, we held that although this Court 
had subject matter jurisdiction, and in rem jurisdiction 
over the funds of the defendant which had been attached, 
the complaint failed to state a claim, first because the 
Act of State doctrine precluded the Court from inquiring 
into the alleged forced transfer in Nazi Germany in 1938 
of plaintiff’s property to defendant, and second, because 
no private right of action exists under the treaties upon 
which plaintiff relied, nor could the Court imply such a 
right of action.

Plaintiff moved for reargument pursuant to Rule 9(m) 
of the General Rules of this Court, and by memorandum



14a

endorsement dated June 26, 1974, the motion was granted. 
The May 20, 1974 decision was modified on reargument 
to allow plaintiff to file an amended complaint alleging 
with particularity the provisions of the treaties upon which 
plaintiff relies. An amended complaint was filed on July 
24, 1974. By notice of motion filed September 11, 1974, 
defendants moved to dismiss the amended complaint, for 
failure to state claim, and upon additional grounds which, 
by agreement of counsel are to be deferred pending resol­
ution of the Rule 12(b)(6) motion.

I

Familiarity with our prior opinion is assumed. The orig­
inal complaint alleged, as does the amended pleading, 
that in 1938 plaintiff, then residing in Germany, was 
forced, because he was Jewish, to transfer his banking 
business to defendants for an inadequate consideration, 
and that this action was part of Hitler’s scheme to wage 
war in violation of the Hague Convention, the Versailles 
Treaty, the Kellogg-Briand Pact, and the law of nations.

In 1948, the parties negotiated an agreement under 
which compensation was to be paid to plaintiff. Plaintiff 
alleges (Amended Complaint, I fl6  and 17) that defen­
dants tortiously breached and renounced that agreement, 
and that the tortious and wrongful renunciation of the 
1948 settlement agreement violated the Four Power Oc­
cupation Agreement in some manner not specified.

The so-called Four Power Occupation Agreement 
(“Agreement on Central Machinery in Germany” ), 5 U.S.T. 
2062, however, is a mere allocation of “housekeeping” 
duties within military zones providing for the administra­
tion of sectors of Germany by the four victorious powers. 
There is no mention therein of injuries to private parties,

Opinion of District Court dated January 2, 1975



15a

nor of remedies for such injuries, nor does the Agree­
ment itself provide for reparations, restitutions or tribu­
nals to accomplish reparations. There is, therefore, no 
cause of action for the benefit of private parties expressed 
in that Agreement, nor is there any provision upon which 
to predicate an implied right of action in this Court.

The amended complaint charges that “ [beginning on 
or about January, 1932, and thereafter, Adolph Hitler 
and other political, governmental and business leaders of 
the German Third Reich conspired and determined to 
make aggressive war” (Amended Complaint, 1J8) in vio­
lation of the treaties set forth in both the original com­
plaint and the amended complaint, and in violation of in­
ternational law, and that as

“part and parcel of and crucial to the successful exe­
cution of such scheme, Hitler and the other said leaders 
adopted the policy of making it impossible for Jews 
to own economic assets including banking firms in 
Germany. Such scheme, in addition, included policies 
which would eliminate the Jewish people from Ger­
many.” (Amended Complaint, 8)

Plaintiff does not accuse the individual defendant, nor 
anyone associated with the corporate defendant of having 
been among those business leaders who conspired directly 
with Hitler or his cohorts. Upon the assertion that the 
“conduct complained of herein was held at Nurnberg to 
constitute criminal violations of the treaties relied on 
herein and the law of nations” (Plaintiff’s Memorandum 
Contra Defendants’ Motion to Dismiss Amended Com­
plaint, p. 33), plaintiff constructs the argument that these 
criminal violations give rise to an implied private right

Opinion of District Court dated January 2, 1975



16a

of action in this Court, citing cases arising under the fed­
eral securities laws and similar statutes.

The vicious crimes of Hitler, and the iniquitous treat­
ment by his regime of Jews are well-documented matters 
of history, properly condemned at Nurnberg, but unless 
the defendants in this case are responsible for the crimes 
of that infamous regime, plaintiff’s argument must fail. 
Although plaintiff relates the forced sale of his business 
to the entire Nazi war effort and its religious persecutions, 
the core of his injury is the forced sale itself, and the 
Nurnberg Tribunal held this particular kind of injury was 
not a war crime.

After the first and best known Nurnberg trial, by Exe­
cutive Order No. 9679, January 16, 1946, President Truman 
conferred on the Representative of the United States and 
its Chief of Counsel, “authority to proceed . . .  in proper 
cases, against other Axis adherents.” Whiteman, Vol. 11 
Digest of International Law (1968), p. 911. Twelve such 
trials were held during the years 1946 through 1948. Three 
and part of a fourth trial were concerned with the crim­
inal responsibility of leading German private businessmen. 
With regard to United States v. Friedrich Flick, Case No. 
5, op. cit. p. 912, it was reported that:

“The prosecution’s effort . . .  to convict three of the 
defendants of crimes against humanity committed be­
fore the war, was totally unsuccessful. The court 
refused to take jurisdiction, on the ground that crimes 
committed before and wholly unconnected with the 
war were not encompassed by Law No. 10. It added, 
furthermore, that crimes against humanity are ‘only 
such as affect the life and liberty of the oppressed 
peoples,’ and that ‘compulsory taking of industrial 
property, however reprehensible, is not in that cate­

Opinion of District Court dated January 2, 1975



17a

gory.’ Consequently, had it assumed jurisdiction of 
the charge, the Tribunal would have been unwilling to 
decide ‘that a person becomes guilty of a crime against 
humanity merely by asserting antisemitie pressure to 
procure by purchase or through state expropriation 
industrial property owned by Jews.’ ”

Even applying to treaties, for purposes of argument, the 
rule that violations of a criminal statute may give rise 
to a private cause of action in a proper case, no such cause 
exists here in view of the aforementioned determination 
of the Nurnberg Tribunal.

In accordance with this Court’s prior direction, plaintiff 
alleged in his amended complaint specific sections of treaties 
he claims defendants violated. These include the preamble 
to The Hague Treaty of October 18, 1907, and Articles 1, 
46 and 41 thereof; the entire Kellogg-Briand Pact; and 
Articles 124, 227-230, 231, and 300 of the Treaty of Ver­
sailles “made applicable to the United States by the 1921 
U. S.-Germany Treaty of Berlin;” and “the law of nations 
and universally generally accepted rules of international 
law.” (Amended Complaint, TI11).

The preamble to The Hague Convention of the Laws 
and Customs of War on Land (36 Stat. 2277) states that 
the Convention is “ intended to serve as a general rule of 
conduct for the belligerents . . .  in their relations with 
inhabitants” of countries with which they are at war. Ar­
ticles 1, 41 and 46 read as follows:

“Article 1. The Contracting Powers shall issue instruc­
tions to their armed land forces which shall be in con­
formity with the Regulations respecting the Laws and 
Customs of War on Land, annexed to the present 
Convention.”

Opinion of District Court dated January 2, 1975



18a

“Article 41. A violation of the terms of the armistice 
by private persons acting on their own initiative only 
entitles the injured party to demand the punishment of 
the offenders, or, if necessary, compensation for the 
losses sustained.”

“Article 46. Family honour and rights, the lives of 
persons, and private property, as well as religious 
convictions and practice, must be respected.
Private property cannot be confiscated.”

Article 40, not cited by the plaintiff, sheds some light on 
the use and meaning of the word “party” in Article 41, 
which is equivalent to the word “ state.” Article 40 provides 
that a violation of the Convention by one party “gives the 
other party the right of denouncing it, and even, in cases 
of urgency, of recommencing hostilities immediately.” 
Thus, it is states, not individuals, who may demand punish­
ment or compensation under Article 41. This is in accor­
dance with the general principle that only states have 
rights under international law. “ [Ujnder established inter­
national diplomatic and legal procedures persons have 
generally not had standing to initiate their own claims.” 
Restatement (Second) of Foreign Relations, p. 526 (1965). 
This statement is made with regard to the rights of aliens, 
with which, it is apparent the Hague Convention is con­
cerned. The Hague Convention does not presume to reg­
ulate the rights of nationals against their own governments, 
but is an attempt to protect the rights of foreign inhabitants 
of invaded countries.

The Kellogg-Briand Pact (46 Stat. 2343) has two sections 
which bear on the case. Article 1 declares that the con­
tracting parties “ condemn recourse to war for the solution 
of international controversies, and renounce it as an in-

Opinion of District Court dated January 2, 1975



19a

strument of national policy in their relations with one 
another,” and Article 2 states that settlement of disputes 
shall be by “pacific means.” Obviously, a treaty stated in 
such broad and precatory terms is at most a compact among 
nations, not purporting to confer any rights upon indi­
viduals.

The sections of the Treaty of Versailles cited by plaintiff 
(to which the United States was not a signatory) provide 
that Germany is to pay reparations to French nationals 
(Article 124), that the Allies may prosecute German cit­
izens for war crimes with the cooperation of the German 
government (Articles 227-230), that Germany accepts 
responsibility for damage to Allied countries and their 
nationals (Article 231), and that Allied nationals who were 
damaged by acts done in Germany may file complaints in 
an arbitral tribunal (Article 300). None of these articles 
purports to intervene on behalf of German nationals who 
have claims against their own government.

We, therefore, adhere to our original decision that

“ There is no substantive right to recover for the claimed 
tort expressed in plaintiff’s favor in any treaty pro­
vision to which the United States is a party.” (Memo­
randum Decision, May 20, 1974, p. 15)

The Court also adheres to its decision that it will not 
imply a private right of action by analogy to cases arising 
under the federal securities laws or similar internal regu­
latory statutes of the United States. As we pointed out in 
our May 20, 1974 decision, private rights of action must 
be created by express treaty language, as was done in the 
Warsaw Convention. See Restatement (Second) of Foreign 
Relations, §1, Comment f  and §115, Comment e (1965) 
Pauling v. McElroy, 164 F.Supp. 390 D.D.C. 1958, aff’d,

Opinion of District Court dated January 2, 1975



20a

278 F.2d 252, cert, denied, 364 TJ.S. 835; Filhiol v. Maurice, 
185 U.S. 108 (1902); Z. & F. Assets Realization Corp. v. 
Hull, 114 F.2d 464 (D.C. Cir. 1940), aff’d, 311 U.S. 479 
(1941). Accordingly, the amended complaint also fails to 
state a tort claim under 28 U.S.C. §1350, or otherwise, upon 
which relief can be granted, and there is no pendent juris­
diction over the contract claim.

II

The alternative ground on which the original complaint 
was dismissed was that the Act of State doctrine pre­
vents this Court from inquiring into official acts of the 
German government done within its own territory. Plain­
tiff’s counsel has made a scholarly argument in support 
of the position that the doctrine is not applicable here, 
either because the so-called “ Bernstein exception” applies, 
or because this case does not meet the criteria set by 
the Supreme Court in two recent cases in which it dis­
cussed the doctrine (Banco Nacional de Cuba v. Sabbatino, 
376 U.S. 398 (1964) and First National City Bank v. Banco 
Nacional de Cuba, 406 U.S. 759 [1972]), mentioned in this 
Court’s May 20, 1974 opinion. We previously noted that 
plaintiff’s tort claim

“is analogous factually and legally to the claim pleaded 
in Bernstein v. Van Heyghen Freres, 8.A., 163 F.2d 
246 (2d Cir. 1947), cert, denied 332 U.S. 772, and also 
in Bernstein v. N.V. Nederlandsche-Amerikaansche, 
etc., 210 F.2d 375. As we are informed by Judge 
Learned Hand (Van Heyghen, supra, p. 248-9) acts 
of the sort complained of on the part of defendants 
here were, at the time they are alleged to have taken 
place, and prior to December 1938 ‘unlawful under

Opinion of District Court dated January 2, 1975



21a

the laws of the Reich itself,’ the place of the tort.” 
(p. 7)

The Bernstein litigation did not seek to found subject 
matter jurisdiction upon 28 TJ.S.C. §1350, but rather relied 
upon diversity of citizenship under 28 TJ.S.C. §1332(a)(2). 
Bernstein v. N.V. Nederlandsch-Amerikaansche, etc., 6 F. 
R.D. 297, 301 (S.D.N.Y. 1946)

The Supreme Court held in Sabbatino that the Act of 
State doctrine was a principle of “federal-court-built law” 
(376 U.S. p. 426), a “principle of decision binding on fed­
eral and state courts alike but compelled neither by inter­
national law nor by the Constitution,” although it has 
“ Constitutional underpinnings.” (376 U.S. at p. 427).

In the view of the Supreme Court, the unjustified ex­
propriation of property of nationals of the expropriator, 
without compensation, is not universally regarded as a 
violation of international law, especially not by communist 
and third-world nations, and therefore is an issue too 
unsettled and sensitive to be passed upon by the federal- 
courts. The Court held that it was applying the Act of 
State doctrine to the case before it, based upon considera­
tions applicable to the particular case only, rather than 
fashioning a rule of general applicability precluding ex­
amination by the federal courts of every kind of act of 
state. The “relevant considerations” on which it based its 
holding were:

1. the property confiscated was located within the ter­
ritory of the foreign sovereign;

2. the foreign sovereign was extant and recognized by 
this country at the time of the Court’s decision;

Opinion of District Court dated January 2, 1975



22a

3. there was no treaty or other clear agreement as to 
controlling legal principles, even though it was alleged that 
the taking violated international law (376 U.S. at p. 428).

The Court indicated that it might not apply the Act of 
State doctrine where international law was clear, or where 
the implications of a decision on the merits were less im­
portant to United States foreign relations. The Court also 
stated (p. 428):

“ The balance of relevant considerations may also be 
shifted if the government which perpetrated the chal­
lenged act of state is no longer in existence, as in the 
Bernstein case, for the political interest of this coun­
try may, as a result, be measurably altered.”

The majority in Sabbatino carefully expressed no opinion 
on the “Bernstein exception” because the Department of 
State had not communicated to the Court its position on 
the applicability of the Act of State doctrine to the Cuban 
expropriations. The Court stated that it did not intend to 
set forth an inflexible rule requiring* application of the 
doctrine. Rather, because the Act of State doctrine is a 
principle of federal law subject to re-examination depend­
ing upon the circumstances of each case, the Court could 
and might now decide the Bernstein case differently from 
the Second Circuit decision Bernstein v. N.V. Neder- 
landsche-Amerikaansche, etc., 210 F.2d 375 (2d Cir. 1954). 
See also, Bernstein v. Van Heyghen Freres, S.A., 163 F.2d 
246 (2d Cir. 1947), cert, denied 332 U.S. 772.

In Sabbatino, the Supreme Court was concerned that a 
decision by the federal courts that a taking by a foreign 
country was invalid and contrary to international law 
would be an affront to the expropriating country and might 
prejudice efforts by the Executive Branch to achieve re­

Opinion of District Court dated January 2, 1975



23a

dress through diplomatic means. The reasons underlying 
the doctrine, as stated by Mr. Justice White in dissent in 
Sabbatino are

“ an effort to maintain a certain, stability and predict­
ability in transnational transactions, to avoid friction 
between nations, to encourage settlement of these dis­
putes through diplomatic means and to avoid inter­
ference with the executive control of foreign rela­
tions.” 376 U.S. at p. 447.

With these objectives Mr. Justice White had no dispute, 
although he disagreed with the method chosen by the ma­
jority to implement those objectives. Mr. Justice White 
pointed out that these considerations do not apply in a 
Nazi confiscation case. Confiscations by the Nazis such as 
those involved in Bernstein

“had been condemned in multinational agreements and 
declarations as crimes against humanity. The acts 
could thus be measured in local courts against widely 
held principle rather than judged by the parochial 
views of the forum.” 376 IT.S. p. 457, fn.18

One of the main reasons the Court gave for its hesitation 
to inquire into the Cuban confiscations was the lack of 
international agreement as to the legality of the taking 
without adequate compensation, which, as Mr. Justice White 
pointed out, does not exist in a “Bernstein” case.

In Banco Nacional de Cuba v. First National City Bank, 
431 F.2d 394 (2d Cir. 1970) the Court of Appeals applied 
the Act of State doctrine to bar a counterclaim for moneys 
First National held in excess of the proceeds realized from 
its sale of collateral securing a loan made to the Cuban 
bank. First National claimed the excess should be applied

Opinion of District Court dated January 2, 1975



24a

as a set-off in payment for First National branches ex­
propriated by the Castro government. The Second Circuit 
held the Act of State doctrine precluded assertion by First 
National of its counterclaim.

When the case reached the Supreme Court for the first 
time, the Department of State wrote a “Bernstein letter” 
to that Court, expressing its view that “the foreign policy 
interests of the United States do not require the applica­
tion of the Act of State doctrine to bar adjudication of 
the validity of defendant’s counterclaim or set-off against 
the Government of Cuba in these circumstances.” (Quoted 
at 442 F.2d p. 532).

The Supreme Court vacated the judgment of the Sec­
ond Circuit and remanded for reconsideration in view of 
the State Department’s letter. On remand, the Second 
Circuit adhered to its view, stating that:

“First National City’s arguments are based wholly on 
the assumption that the so-called Bernstein exception 
to the Act of State doctrine applies here since the 
State Department has written a letter. We feel that 
that assumption is erroneous. Bernstein arose out of 
a unique set of circumstances calling for special treat­
ment, and hence should be narrowly construed and, 
insofar as is possible, limited to its facts.” 442 F.2d 
p. 534.

Among the “unique circumstances” cited by the Second 
Circuit was the fact that the United States had gone to 
war with Nazi Germany, that government was no longer 
in existence, and the kind of acts of which Bernstein com­
plained had been comdemned throughout the world as 
crimes against humanity. The Second Circuit also quoted

Opinion of District Court dated January 2, 1975



25a

from the Solicitor General’s amicus curiae brief in the 
Sahbatino case:

“The circumstances leading to the State Department’s 
letter in the Bernstein case were, of course, most un­
usual. The governmental acts there were part of a 
monstrous program of crimes against humanity; the 
acts had been condemned by an international tribunal 
after a cataclysmic world war which was caused, at 
least in part, by acts such as those involved in the 
litigation, and the German State no longer existed at 
the time of the State Department’s letter. Moreover, 
the principle of payment of reparations by the suc­
cessor German government had already been imposed 
. . . so that there was no chance that a suspension 
of the act of state doctrine would affect the negotia­
tion of a reparations settlement.” 442 F.2d p. 534.

When First National City again was before the Supreme 
Court, the Second Circuit was reversed and the case re­
manded. Three justices framed the issue as follows (406 
IT.S. p. 764):

“ The question that we nrnst now decide is whether the 
so-called Bernstein exception to the act of state doc­
trine should be recognized in the context of the facts 
before the Court.”

It is apparent throughout the opinions in First National 
that the phrases “Bernstein exception”  and “Bernstein 
letter” are being used in a generic sense. The Court uses 
the term “Bernstein letter” to mean any letter written by 
the Department of State in any case, purporting to relieve 
the federal courts of the restraint upon the exercise of 
their jurisdiction which would result from application of

Opinion of District Court dated January 2, 1975



26a

tJae Act of State doctrine. The Court uses the term “Bern­
stein exception” to mean an exception to the general ap­
plicability of the doctrine in an expropriation case which 
results from the issuance in any such case of a “Bernstein 
letter.”

When Justices Rehnquist, White and the Chief Justice 
state that:

“we . . . adopt and approve the so-called Bernstein 
exception to the Act of State doctrine.” 406 U.S. p. 
768

they are merely stating their view of the law, that

“where the Executive Branch, charged as it is with 
primary responsibility for the conduct of foreign af­
fairs, expressly represents to the Court that appli­
cation of the Act of State doctrine would not advance 
the interests of American foreign policy, that doc­
trine should not be applied by the courts.” 406 U.S. 
p. 768

Likewise, when Justices Brennan, Stewart, Marshall and 
Blackmun, in dissent, state:

“ The Court today reverses the judgment of the Court 
of Appeals for the Second Circuit which declined to 
engraft the ‘Bernstein’ exception upon the act of state 
doctrine. . . . The Court, nevertheless, affirms the 
Court of Appeals’ rejection of the ‘Bernstein’ excep­
tion. Four of us in this opinion unequivocally take 
that step, as do Mr. Justice Douglas and Mr. Justice 
Powell in their separate opinions concurring in the 
result of the judgment.” 406 U.S. p. 776-777

Opinion of District Court dated January 2, 1975



27a

it is equally apparent that they are using the term “ Bern­
stein exception” in a generic sense. In essence, the four 
dissenters would re-affirm the Sabbatino case. In foot­
note 1 to the dissent (400 U.S. p. 776), the dissenters note 
that the Bernstein exception has been an exceedingly nar­
row one and was successfully applied only in the original 
Bernstein case. There is no indication in the dissenting 
opinion that the dissenters would refuse to apply the 
Bernstein exception if they were reviewing the Bernstein 
case or a case arising out of Nazi confiscations. The dis­
sent quotes extensively from Sabbatino, including that por­
tion of the opinion which states that if a government no 
longer exists, the Court might view the case differently.

Mr. Justice Brennan interprets Sabbatino as having held 
that in certain circumstances the validity of a foreign act 
of state is a “political question,” quoting (406 IT.S. p. 
788, fn. 11) from Baker v. Carr, 369 U.S. 186, 211-212 
(1962) the criteria by which the Court is to decide whether 
a case involves a political question the courts should ab­
stain from deciding. Applying those standards, Mr. Jus­
tice Brennan concludes that the Cuban expropriation is 
a political question, based on the following factors:

“ [T]he absence of consensus on the applicable inter­
national rules, the unavailability of standards from a 
treaty or other agreement, the existence and recogni­
tion of the Cuban government, the sensitivity of the 
issue to national concerns, and the power of the Exec­
utive alone to effect a fair remedy for all United States 
citizens. . . .” 406 U.S. p. 788

Mr. Justice Brennan believes a letter from the State De­
partment suggesting that the Act of State doctrine need

Opinion of District Court dated January 2, 1975



28a

not be applied is only one factor the Court must consider. 
He observes (406 U.S. p. 788, fn. 12) that a comparison 
of First National with Bernstein reinforces his conclusion, 
because, as the Government itself acknowledged, Bern­
stein was “a most unusual” case. Mr. Justice Brennan 
concludes, therefore, that

“the result, though not the rationale, in Bernstein may 
be defensible.” 406 U.S. p. 789, fn. 12 eont’d.

Mr. Justice Brennan stresses, as was held in Sabbatino, 
that a letter from the State Department may be considered 
by the federal courts as they shape the Act of State doc­
trine, but the courts cannot abdicate their responsibility 
to decide each case as it arises: “Representations from 
the Department of State are entitled to weight . . . but 
they cannot be determinative.” 406 U.S. p. 790. Other­
wise, as Mr. Justice Douglas points out:

“ The Court becomes a mere errand boy for the Execu­
tive Branch which may choose to pick some people’s 
chestnuts from the fire, but not other’s.” 406 U.S. p. 
773

It is clear, therefore, that only three members of the 
Court hold to the view that a “ Bernstein letter” from the 
State Department decides the issue of applicability of the 
Act of State doctrine. The four dissenters and Mr. Justice 
Douglas are of the opinion that each case should be de­
termined on its merits, applying the criteria set forth in 
Sabbatino and re-affirmed by a majority of the Court in 
First National City. It is possible, as plaintiff suggests, 
that the instant case is sufficiently different from the Cuban 
expropriation cases so that the Supreme Court would not

Opinion of District Court dated January 2, 1975



29a

apply the Act of State doctrine, since at least two of the 
major considerations in those cases do not exist here: The 
Nazi German government no longer exists, and confisca­
tions similar to those alleged in this case have been uni­
versally condemned (though not by the Nurnberg Tribunal 
as war crimes, as previously pointed out). This Court is 
of the opinion, nevertheless, as stated in its May 20. 1974 
decision, that the law at present is that stated in the first 
Bernstein case, Bernstein v. Van Heyghen Freres, S.A., 163 
F.2d 246 (2d Cir. 1947), cert, den., 332 U.S. 772. We need 
not, however, rest our decision on this ground, since for 
the reasons stated above, the complaint fails to state a 
claim cognizable in this Court.

The defendant’s motion is granted, and the amended 
complaint is dismissed.

Settle a final judgment on notice which shall provide 
that the bond to secure our order of February 5, 1974 
vacating the attachment shall not be discharged or ex­
onerated pending appeal.

Dated: New York, New York 
January 2, 1975

C harles L. B riean t , J r .
U. 8. D. J.

Opinion of District Court dated January 2, 1975



30a

UNITED STATES COURT OF APPEALS 

F or th e  S econd C ircu it

Opinion o f Court of Appeals dated April 6 , 1975

No. 194—September Term, 1975.
(Argued December 11, 1975 Decided April 6, 1976.)

Docket No. 75-7135

W il l y  D reyeu s ,
Plaintiff-Appellant, 

v.

A u gust  V on F in c h  and  M erc k , F in c k  & Co.,

Defendants-Appellees.

B e f o r e  :
O ak es , V a n  G raafeiland  and M e sk il l ,

Circuit Judges.

Appeal from an order of the United States District Court 
for the Southern District of New York, Charles L. Brieant, 
Judge, dismissing plaintiffs amended complaint for failure 
to state a claim upon which relief can be granted. 

Affirmed.

E ric S c h n a ppe r , New York, N. Y. (J o h n  R . 
Horan, New York, N. Y., of Counsel), for 
Appellant.

W il l ia m  S c h u r t m a n , New York, N. Y. (Walter, 
Conston, Schurtman & Gumpel, P.C., New



York, N. Y., Alan Kanzer, of Counsel), for 
Appellees.

31a

Opinion of Court of Appeals dated April 6, 1975

V an  Gbaaeeiland , Circuit Judge:

The judgment appealed from dismissed the complaint of 
a Swiss citizen and resident seeking recovery from West 
German citizens and residents for allegedly wrongful con­
fiscation of property in Nazi Germany in 1938. The action 
was commenced in the Southern District of New York in 
1973 by attaching certain of defendants’ assets in New 
York City.

Plaintiff, a Jew and former resident of Germany, was 
forced to emigrate from that country to Switzerland and 
sold defendants his interest in the banking firm of J. 
Dreyfus & Co., allegedly under duress and at a price which 
was one and one-half million dollars below its actual value. 
Following World War II, plaintiff sought additional com­
pensation from the defendants, and, in 1918, settlement 
was agreed upon. This settlement was never consummated, 
allegedly because of wrongful repudiation by defendants; 
and plaintiff then sought relief in a Restitution Court, or 
“ Chamber” , established under the aegis of the United States 
Military Command in Germany. In 1951, while the decision 
of this tribunal was on appeal in the Court of Restitution 
Appeals, a second settlement agreement was reached in 
open court; and plaintiff’s petition was thereupon dis­
missed. The consideration recited in this agreement, four 
hundred ninety thousand German marks, was paid.

Plaintiff predicated his cause of action below upon both 
the original taking of his property and defendants’ alleged 
repudiation of the 1948 settlement agreement. He alleged 
the existence of Federal jurisdiction under 28 U.S.C. j 1332 
upon an asserted diversity of citizenship, and under 28 
U.S.C. 1 .'531 and 1350 because defendants’ conduct al­



32a

Opinion of Court of Appeals dated April 6, 1975

legedly violated four treaties or pacts to which the United 
States was a party or adherent—the Hague Convention,1 
the Kellogg-Briand Pact,2 the Versailles Treaty3 and the 
Four Power Occupation Agreement.4

Defendants promptly moved pursuant to Fed. R. Civ. P. 
12(b) to dismiss the complaint, asserting, among other 
grounds, lack of subject matter jurisdiction.5 The parties 
conceded on oral argument that there was no diversity of 
citizenship under § 1332. However, the District Court held 
that, because a colorable claim was made under the above 
mentioned treaties, it had jurisdiction under 1331 and 
1350 to determine whether the complaint stated a cause of 
action on which it could grant relief. The District Court 
then ordered the complaint dismissed, because none of the 
treaties relied upon by plaintiff conferred upon him any 
personal right of recovery and because the “Act of State” 
doctrine precluded the court from inquiring into the alleged 
forceful transfer of plaintiff’s property to defendants.

Plaintiff moved for reargument and rehearing pursuant 
to Rule 9(m) of the General Rules of the Southern District, 
contending that he had not had an opportunity to brief

1 Hague Convention No. IV  o f  October 18, 1907, 36 Stat. 2277.

2 Kellogg-Briand Peace Pact, 46 Stat. 2343 (1928).

3 Although President W ilson submitted the Treaty o f Versailles to 
Congress for  approval, S. Doc. 49, 66th Cong., 1st Sess. (1919), it was 
not ratified and consequently when the Treaty became effective on Jan- 
uary 10, 1920 the United States was not a party thereto. It was not 
until August 25, 1921 that the United States finally established friendly 
relations with Germany. 42 Stat. 1939 (1921).

4 “Agreement on Central Machinery in Germany” , 5 U.S.T. 2062 (1945).

5 Other grounds relied upon were lack o f  personal jurisdiction and 
foru m  non conveniens. Disposition on these grounds was deferred with­
out prejudice. Defendants also state that, should they be required to 
answer the complaint, they will interpose affirmative defenses o f  pay­
ment, release, settlement, accord and satisfaction, statute o f  limitations 
and laches.



33a

Opinion of. Court of Appeals dated April 6, 1975

and argue the sufficiency of his complaint and that the Act 
of State doctrine, not having been raised as a defense, 
should not have been considered. This motion was granted, 
and the District Court’s original decision was modified on 
reargument to permit plaintiff to file an amended com­
plaint setting forth the specific provisions of the several 
treaties upon which plaintiff based his claim. An amended 
complaint was served on July 24, 1974, and defendants 
moved again to dismiss.

The District Judge, in a memorandum opinion dated 
January 2, 1975, reviewed the several treaties in greater 
detail and again concluded that no private right of recovery 
for defendants’ allegedly tortious conduct was provided 
for in any of them. He also reviewed the recent decisions of 
this Court and of the Supreme Court dealing with the Act 
of State doctrine6 and the so-called “Bernstein exception” 
and concluded that Judge Learned Hand’s opinion in Bern­
stein v. Van Heyghen Freres Societe Anonyme, 163 F.2d 
246 (2d Cir.), cert, denied, 332 U.S. 772 (1947),7 continued 
to state the correct application of that doctrine. The Dis­
trict Judge did not, however, rest his January 2 decision 
on that doctrine, because he felt that the complaint failed 
to state a claim on which relief could be granted.

6 B ern stein  v. Van N eyg h en  F reres  S ociete A nonym e, 163 F.2d 246 
(2d Cir.), cert, denied, 332 U.S. 772 (19 4 7 ); B ern stein  v. ASF. N eder- 
landsche-Am erikaansche, etc., 210 F.2d 375 (2d Cir. 1954) ; Banco  
N acional de Cuba v. Sabbatino, 376 U.S. 398 (1964); F irs t N ational 
C ity B ank  v. Banco N acional de Cuba, 406 U.S. 759 (1972).

7 Judge Hand said that “  a. court o f the forum will not undertake 
to pass upon the validity under the municipal law o f  another state of 
the acts o f officials o f that state, purporting to act as such.” 163 F.2d 
at 249. A t the time o f  the second B ernstein  decision, supra, 210 F.2d 
at 375, the Court was in receipt o f a letter from  the United States 
State Department relieving it from any restraint upon the exercise of 
its jurisdiction to pass upon the validity o f the acts o f  Nazi officials. 
This has become known as the "B ern stein  exception” to the A ct of State 
doctrine.



34a

Notice of appeal to this Court was served on February 18, 
1975. On May 15, 1975, plaintiff moved to have the case 
remanded to the District Court because his attorney, in 
preparing the brief on appeal, had concluded that Military 
Law 59, “Restitution of Identifiable Property” , 12 Fed. 
Reg. 7983 (1947), promulgated by the American Military 
Government in Germany, might furnish an additional basis 
for jurisdiction in the District Court. On the argument of 
the motion, defendants’ counsel stipulated that in the 
interest of having a prompt disposition of his appeal, 
defendants would not object if this Court also considered 
plaintiff’s supplemental contentions concerning Military 
Law 59.

Opinion of Court of Appeals dated April 6, 1975

The Question of Jurisdiction

The District Court held that it had subject matter juris­
diction to consider plaintiff’s treaty-based claims, because 
plaintiff’s right to recover “will be sustained if the treaties 
of the United States are given one construction and will be 
defeated if they are given another.” This analysis was 
proper. Section 1331 provides that the District Courts 
shall have jurisdiction in cases involving more than ten 
thousand dollars which arise “under the Constitution, laws 
or treaties of the United States.” Section 1350 provides for 
such jurisdiction in any civil action by an alien for a tort 
“in violation of the law of nations or a treaty of the United 
States.” While these provisions do not create a cause of 
action for a plaintiff seeking recovery under a treaty, they 
do give the District Court power to determine whether, in 
a well pleaded complaint, a cause of action exists. Montana- 
Dakota Utilities Co. v. Northwestern Public Service Co., 
341 U.S. 246, 249 (1951); Romero v. International Terminal 
Operating Co., 358 U.S. 354, 359 (1959); Bell v. Hoocl, 327



35a

U.S. 678, 682 (1946). Cf. Oneida Indian Nation v. County 
of Oneida, 414 U.S. 661, 666 (1974).

Where, however, a plaintiff’s allegation of jurisdiction 
is so attenuated and insubstantial as to he absolutely 
devoid of merit, a District Court may refuse jurisdiction. 
Bell v. Hood, supra, 327 U.S. at 682-83. Plaintiff’s claim 
under Military Law 59, as distinguished from his treaty 
claims, falls within this category. This “law” was promul­
gated by the American Military Government of occupied 
Germany on November 10, 1947, at a time when the United 
States was still officially at war with that country.8 Its 
stated purpose wras:

[T]o effect to the largest extent possible the speedy 
restitution of identifiable property . . .  to persons who 
were wrongfully deprived of such property within the 
period from 30 January 1933 to 8 May 1945 for reasons 
of race, religion, nationality, ideology, or political 
opposition to National Socialism. Military Law 59, 
Art. 1(1).

A claimant under this act would file a petition with a 
Central Piling Agency which would forward it to an ap­
propriate Restitution Agency for attempted adjustment. 
Id., Arts. 55, 62. If the matter could not be compromised, 
it vTas then referred to the Restitution Chamber, a three- 
judge court which held hearings and rendered written 
opinions. Id., Arts. 64, 66, 68. Appeals from the Chamber 
originally went to a Board of Review, Art. 69, but in 1950 
this was replaced by the Court of Restitution Appeals. 
15 Fed. Reg. 1547 (1950). Decisions of the Court of 
Restitution Appeals wTere final and not subject to further 
review. 15 Fed. Reg. 1548 (1950).

8 The war between the United States and Germany was not officially 
terminated until October 19, 1951. Joint Ees. Oet. 19, 1951, c. 519, 65 
Stat. 451.

Opinion of Court of Appeals dated April 6, 1975



36a

Traditionally, the “laws” of the United States within the 
meaning of § 1331 are statutory in origin. The Fair v. 
Kohler Die and Specialty Co., 228 U.S. 22, 25 (1913); 
Montana-Dakota Utilities Co. v. Northwestern Public 
Service Co., supra, 34-1 U.S. at 249, although the Supreme 
Court has in recent years broadened the definition of this 
term to include claims founded upon federal common law. 
Illinois v. City of Milwaukee, 406 U.S. 91, 100 (1972). 
United States Military Commissions and Occupation Courts 
generally have no statutory existence. Madsen v. Kinsella, 
343 U.S. 341, 347 (1952); In Re Yamashita, 327 U.S. 1, 19 
n. 7 (1946). The President has extensive power to set up 
special tribunals in occupied foreign lands, and they are 
considered arms of the Executive. Rose v. McNamara, 375 
F.2d 924, 927 (D.C. Cir. 1967). As stated in 1 Moore’s 
Federal Practice ft 0.5 [3.-1], at 141, “military commissions 
with their flexible jurisdiction are largely unfettered in­
struments of the executive branch of government and the 
President as Commander in Chief.” In times of war, 
executive decisions are generally political and military in 
nature, and neither judicially manageable nor reviewable. 
United States v. Shaughnessy, 177 F.2d 436 (2d Cir. 1949), 
cert, denied, 338 U.S. 948 (1950); DaCosta v. Laird, 448 
F.2d 1368, 1370 (2d Cir. 1971) (per curiam), cert, denied, 
405 U.S. 979 (1972); Atlee v. Laird, 347 F.Supp. 689 (E.D. 
Pa. 1972), aff’d by order, 411 U.S. 911 (1973). The fact 
that this executive authority is exercised by the President 
through others does not transmute it into judicially review- 
able action. Ludecke v. Watkins, 335 U.S. 160, 165 (1948).

Even in peace time, Executive Orders issued without 
statutory authority providing for presidential implementa­
tion are generally held not to be “laws” of the United 
States. Stevens v. Carey, 483 F.2d 188 (7th Cir. 1973); 
National Ass’n of Internal Revenue Employees v. Dillon,

Opinion of Court of Appeals dated April 6, 1975



37a

356 F.2d 811 (D.C. Cir. 1966); Manliattan-Bronx Postal 
Union v. Gronouski, 350 F.2d 451 (D.C. Cir. 1965), cert, 
denied, 382 U.S. 978 (1966); McDaniel v. Brown & Root, 
Inc., 172 F.2d 466 (lOtli Cir. 1949); Crabb v. Welden Bros., 
164 F.2d 797 (8th Cir. 1947); Sweet v. B. F. Goodrich Co., 
68 F.Supp. 782 (N.D. Ohio 1946), appeal dismissed on other 
grounds, 174 F.2d 1022 (6th Cir. 1949) (per curiam); 
Lodge 1647 and Lodge 1904 American Fed. of Gov’t Em­
ployees v. McNamara, 291 F.Supp. 286 (M.D. Pa. 1968); 
Canal Zone Central Trade Labor Union v. Fleming, 246 
F.Supp. 998 (D.C. Canal Zone 1965), rev’d on other 
grounds, 383 F.2d 110 (5th Cir. 1967).

Military Law 59 created its own regulations and its own 
tribunals to interpret and enforce them. It was completely 
self-contained. Nowhere did it provide for proceedings in 
a U.S. District Court, which has only such jurisdiction as 
is conferred upon it by statute. Goldlawr, Inc. v. Heiman, 
288 F.2d 579, 582 (2d Cir. 1961), rev’d on other grounds, 
369 U.S. 463 (1962). Its provisions had no general applica­
bility but were peculiarly concerned with the problems of 
occupied Germany and its people. Gf. Puerto Rico v. 
Rubert Hermanos Co., 309 U.S. 543, 550 (1940). It did not 
create a cause of action in favor of the plaintiff which can 
be enforced in a U.S. District Court. See American Well 
Works Co. v. Layne and Bowler Co., 241 U.S. 257, 260 
(1916). Neither is there any basic controversy concerning 
its provisions. See Gully v. First Nat’l Bank, 299 U.S. 109, 
118 (1936).

Plaintiff’s Treaty Rights

A  United States treaty is a contract with another nation 
which under art. VI, cl. 2 of the Constitution becomes a law 
of the United States. United States v. Reid, 73 F.2d 153, 
155 (9th Cir. 1934), cert, denied, 299 U.S. 544 (1936). It 
may also contain provisions which confer rights upon the

Opinion of Court of Appeals dated April 6, 1975



38a
Opinion of Court of Appeals dated April 6, 1975

citizens of one of the contracting parties which are capable 
of enforcement as are any other private rights under the 
law. Z. & F. Assets Realisation Corp. v. Hull, 114 F.2d 464, 
470 (D.C. Cir. 1940), aff’d, 311 U.S. 470 (1941). In general, 
however, this is not so. Brownlie, The Place of the 
Individual in International Law, 50 Ya. L. Rev. 435, 440 
(1964). Rarely is the relationship between a private claim 
and a general treaty sufficiently direct so that it may be 
said to “arise under” the treaty as required by art. I ll, 
§ 2, cl. 1 of the Constitution. 13 Wright, Miller & Cooper, 
Federal Practice and Procedure § 3563, at 424 (1975).

It is only when a treaty is self-executing, when it pre­
scribes rules by which private rights may be determined, 
that it may be relied upon for the enforcement of such 
rights. Foster v. Neilson, 27 U.S. 253 (1829); Edye v. 
Robertson (Head Money cases), 112 U.S. 580 (1884); Z. & 
F. Assets Realisation Corp. v. Hull, supra, 114 F.2d at 471; 
Camacho v. Rogers, 199 F.Supp. 155, 158 (S.D.N.Y. 1961); 
Pauling v. McElroy, 164 F.Supp. 390 (D.D.C. 1958), aff’d, 
278 F.2d 252 (D.C.Cir. 1960), cert, denied, 364 U.S. 835 
(1960); Saipan v. United States Dep’t of Interior, 356 
F.Supp. 645, 660 (D.Hawaii 1973). Cf. Hidalgo County 
Water Control and Improvement Dist. v. Hedrick, 226 F.2d 
1, 7 (5th Cir. 1955), cert, denied, 350 U.S. 983 (1956). In­
deed, even where a treaty is self-executing, Federal juris­
diction under § 1331 will not lie where it is not provided 
for in the treaty. Smith v. Canadian Pacific Airways, Ltd., 
452 F.2d 798, 802 (2d Cir. 1971).

We see no necessity for reviewing in detail the several 
treaties relied upon by plaintiff. Plaintiff was permitted to 
file an amended complaint specifying the particular treaty 
provisions upon which he based his claim. We find no error 
in the District Court’s findings that none of these dealt 
with the expropriation by Germans of the property of Ger­



39a

man citizens, and none conferred, any private rights with 
regard to such property which were enforceable in Amer­
ican courts. The Hague Convention attempted to impose 
standards of conduct for belligerent nations. The Kellogg- 
Briand Pact was a declaration renouncing war as an in­
strument of national policy. The Treaty of Versailles was 
a reparations and war crimes compact following World 
War I. The Pour Power Occupation Agreement provided 
for the joint occupation and control of Germany by the 
conquering nations during the period of surrender.

Treaty provisions similar to those involved herein have 
been relied upon by other plaintiffs with a singular lack 
of success. In Hamilton v. Regents of the University of 
California, 293 U.S. 245 (1934), plaintiffs challenged a 
California law which required university students to take 
a course in military science and tactics, relying in part upon 
the provisions of the Kellogg-Briand Pact. The Court 
stated that this contention required “ little consideration” 
and found no conflict between the statute and the provi­
sions of the treaty. Id. at 265. In Pauling v. McElroy, 
supra, the court held that the provisions of the Charter 
of the United Nations and the Trusteeship Agreement for 
the Trust Territory of the Pacific Islands were not self­
executing and did not vest plaintiffs with individual legal 
rights. Camacho v. Rogers, supra, and United States v. 
Vargas, 370 F.Supp. 908, 915 (D. Puerto Eico 1974), dealt 
with the United Nations Charter in the same manner.

We conclude that the District Court was correct in hold­
ing that no private right of action could be based on the 
four treaties referred to in plaintiff’s complaint.

The Law of Nations

As pointed out above, 28 TJ.S.C. § 1350 provides in part 
that District Courts shall have jurisdiction of an action by

Opinion of Court of Appeals dated April 6, 1975



an alien for a civil tort committed in violation of the law 
of nations. Plaintiff argues that the seizure of his prop­
erty and defendants’ allegedly wrongful repudiation of the 
1948 settlement agreement were torts which violated the 
law of nations. We disagree.

There has been little judicial interpretation of what 
constitutes the law of nations and no universally accepted 
definition of this phrase. Khedivial Line, S.A.E. v. Sea­
farers’ International Union, 278 F.2d 49, 52 (2d Cir. 1960) 
(per curiam); Valanga v. Metropolitan Life Ins. Co., 259 
F. Supp. 324, 327 (E.D.Pa. 1963). There is a general con­
sensus, however, that it deals primarily with the relation­
ship among nations rather than among individuals. “It is 
termed the Law of Nations—or International Law—be­
cause it is relative to States or Political Societies and not 
necessarily to individuals, although citizens or subjects of 
the earth are greatly affected by it.” von Redlich, The Law 
of Nations, 5 (2d ed. 1937).9 In Khedivial, supra, 278 F.2d 
at 52, we said: “Plaintiff has presented no precedents or 
arguments to show either that the law of nations accords 
an unrestricted right of access to harbors by vessels of all 
nations or that, if it does, this is a right of the foreign 
national rather than solely of the nation.”

Like a general treaty, the law of nations has been held 
not to be self-executing so as to vest a plaintiff with in­
dividual legal rights. Pauling v. McElroy, supra, 164 
F.Supp. at 393. It has been held inapplicable to torts such, 
as unseaworthiness of a vessel and failure to provide a 
seaman with a safe place to work, Damasldnos v. Societa 
Navigacion Interamericana, S.A., Panama, 255 F.Supp. 
919, 923 (S.D.N.Y. 1966), and to the right of a Russian

9 Kent defined the law o f  nations as “ that code o f public instruction 
which defines the rights and prescribes the duties o f  nations in their 
intercourse with each other.”  1 Kent Commentaries, 1 (1st ed. 1826). 
See also Brierly, The Law  o f  N ations, 1 (6th ed. 1963).

40a

Opinion of Court of Appeals dated April 6, 1975



citizen to recover the proceeds of a life insurance policy. 
Valanga v. Metropolitan Life Ins. Co., supra.

More importantly for purposes of this lawsuit, violations 
of international law do not occur when the aggrieved 
parties are nationals of the acting state. This was pointed 
out by Mr. Justice White in his dissenting opinion in Banco 
Nacional de Cuba v. Sabbatino, 378 U.S. 398, 441-442 (1964), 
and it is the clear holding in Salimoff & Co. v. Standard Oil 
Co., 262 N.Y. 220 (1933), cited by both the majority and 
dissenting opinions.10 oil

In the instant case, plaintiff was a citizen and resident 
of Germany at the time of defendants’ alleged wrongdoing. 
Moreover, his complaint did not allege that defendants 
played any role in the policymaking decision of the German 
government. Defendants’ conduct, tortious though it may 
have been, was not a violation of the law of nations, which 
governs civilized states in their dealings with each other.

Inasmuch as the District Court was correct in holding 
that plaintiff’s complaint failed to state a cognizable claim 
upon which relief could be granted, we need not consider the 
parties’ contentions concerning the “Act of State” doctrine 
which was not relied upon by the District Court.

The judgment appealed from is affirmed.

41a

Opinion of Court of Appeals dated April 6, 1975

O a k e s , Circuit Judge (concurring): 
I concur in the result.

10 In  Salim off, the New York Court o f Appeals said: “According to the 
law o f nations [Soviet Russia] did no wrong when it confiscated the
oil o f  its own nationals and sold it in Russia to the defendants.” 262 
N .Y. at 227.



M EilEN  PRESS INC, —  N. Y. C, 219