## Facts

- Holocaust survivors and heirs sued Hungary’s national railway (MÁV) and national bank (Magyar Nemzeti Bank), alleging participation in 1944 deportations and related takings of Jewish property.
- Plaintiffs also sued Erste Group Bank AG and other banks, alleging they received or benefited from looted Hungarian Jewish assets (cash, gold, jewelry, and valuables).
- The claims sought U.S. court compensation for property takings and related misconduct occurring in Hungary during World War II.
- Earlier Seventh Circuit proceedings required plaintiffs, for claims against Hungarian state entities, to exhaust available Hungarian remedies or show a compelling reason for not doing so.
- On remand, the district court dismissed the claims against the Hungarian state entities for lack of subject-matter jurisdiction under the FSIA due to failure to exhaust Hungarian remedies.
- The district court dismissed the claims against Erste (a private foreign bank) on forum non conveniens grounds in favor of Hungary; Erste consented to Hungarian jurisdiction.
- Plaintiffs appealed both the FSIA exhaustion dismissal and the forum non conveniens dismissal; the United States filed a statement of interest supporting dismissal of the claims against Erste.

## Issues

1. Whether the FSIA expropriation exception permitted jurisdiction over Hungarian state entities when plaintiffs had not exhausted potentially available remedies in Hungary and had not shown a compelling reason to excuse exhaustion.
2. Whether Hungary was an adequate alternative forum and whether dismissal of claims against a private foreign bank (Erste) on forum non conveniens grounds was within the district court’s discretion.

## Decision

- The Seventh Circuit affirmed dismissal of the claims against the Hungarian railway and national bank for lack of subject-matter jurisdiction because plaintiffs did not satisfy the exhaustion requirement.
- The court rejected plaintiffs’ arguments that Hungary’s fee-shifting (“loser pays”) rules and plaintiffs’ age and hardship justified excusing exhaustion.
- The Seventh Circuit affirmed dismissal of the claims against Erste on forum non conveniens grounds.
- The court held Hungary was an adequate alternative forum, emphasizing Erste’s consent to Hungarian jurisdiction.
- The court found no abuse of discretion in weighing private and public interest factors, including the location of evidence and foreign-relations concerns highlighted by the U.S. statement of interest.

## Legal Principles

- In Holocaust-era expropriation suits against foreign sovereign instrumentalities, jurisdiction under the FSIA expropriation exception may be conditioned on exhaustion of remedies available in the foreign state, absent a compelling reason to excuse exhaustion.
- A foreign forum is not rendered inadequate for exhaustion or forum non conveniens purposes merely because it applies fee-shifting rules common in civil-law systems.
- Forum non conveniens dismissal is appropriate when an adequate alternative forum exists (including by defendant’s consent to jurisdiction) and the balance of private and public interest factors favors litigation abroad.
- In cases implicating sensitive foreign-relations concerns, courts may give significant weight to the Executive Branch’s views when evaluating public interest factors in forum non conveniens.

## Conclusion

The Seventh Circuit left the plaintiffs without a U.S. forum for these claims by affirming (1) FSIA dismissal of the Hungarian state-entity defendants for failure to exhaust Hungarian remedies and (2) forum non conveniens dismissal of the claims against Erste in favor of litigation in Hungary.


Fischer v. Magyar Államvasutak Zrt., 777 F.3d 847 (7th Cir. 2015)