## Facts

- After World War II, U.S. forces in occupied Germany seized (1) four Adolf Hitler watercolors and (2) photographic archives compiled by Heinrich Hoffmann and his son, including a large “Washington archive” and a smaller “Carlisle archive.”
- The photographs in the Washington archive were shipped to Washington, D.C., used in the Nuremberg trials, and in 1951 the Attorney General issued a Trading with the Enemy Act vesting order purporting to vest title to the photographs in the United States.
- The United States returned certain non-Hitler artworks to Hoffmann’s son but retained the Hitler watercolors and the seized photographic materials.
- In the early 1980s, Billy F. Price purchased rights in the paintings and archives from Hoffmann’s heirs and demanded that the United States return the property.
- The United States refused to surrender the items.
- In 1983, Price and related claimants sued the United States in the Southern District of Texas under the Federal Tort Claims Act (FTCA), alleging conversion based on the government’s refusal to return the property.
- The district court found the United States liable for conversion and, after a damages trial, awarded approximately $7.95 million, including loss-of-use damages beginning in 1983.
- The United States appealed; Price cross-appealed seeking additional damages.

## Issues

1. Whether the FTCA waived sovereign immunity and supplied subject-matter jurisdiction for a conversion claim based on the United States’ retention of property seized in occupied Germany.
2. Whether the FTCA’s requirement that liability be determined by “the law of the place where the act or omission occurred” was satisfied when key conduct occurred abroad during a military occupation.
3. Whether a TWEA vesting order foreclosed an FTCA tort action that would function as a collateral challenge to the government’s claimed title to the Washington archive.
4. Whether claimants satisfied the FTCA’s administrative exhaustion requirement as to portions of the Washington archive not covered by the vesting order.

## Decision

- The Fifth Circuit reversed the district court’s judgment and remanded with instructions to dismiss for lack of subject-matter jurisdiction.
- The court held that sovereign immunity was not waived because the claims did not meet FTCA jurisdictional requirements, including the “law of the place” requirement for the conduct at issue.
- As to the Washington archive covered by the TWEA vesting order, the court concluded the FTCA could not be used to obtain tort damages premised on disputing the United States’ vested title.
- On rehearing, the court clarified that the vesting order covered only part of the Washington archive; for the non-vested portion, the district court still lacked jurisdiction because claimants failed to exhaust administrative remedies under 28 U.S.C. § 2675(a).
- The dismissal as to the non-vested portion of the Washington archive was without prejudice to a separate lawsuit, while dismissal as to the vested portion remained jurisdictionally barred.

## Legal Principles

- The United States is immune from suit absent an express waiver; FTCA waivers are strictly limited by their statutory terms and jurisdictional prerequisites.
- FTCA jurisdiction under 28 U.S.C. § 1346(b) requires that the alleged tort be actionable “in accordance with the law of the place where the act or omission occurred”; conduct arising from seizure and disposition during a foreign military occupation may fail that requirement.
- A claimant must present an administrative claim to the appropriate federal agency and satisfy 28 U.S.C. § 2675(a) before filing an FTCA action; failure to exhaust deprives federal courts of subject-matter jurisdiction.
- Where the government asserts title through a Trading with the Enemy Act vesting order, an FTCA conversion claim seeking damages based on wrongful retention cannot proceed if it would operate as a collateral attack on the vesting action.

## Conclusion

The Fifth Circuit held that federal courts lacked subject-matter jurisdiction over Price’s FTCA conversion action seeking damages for the United States’ refusal to return art and photographic archives seized in occupied Germany, reversing the damages award and ordering dismissal because the FTCA’s waiver conditions were not met and portions of the claim were barred by a TWEA vesting order and by failure to exhaust administrative remedies.


Price v. United States, 69 F.3d 46 (5th Cir. 1995)