Emil Alperin; v. Vatican Bank, aka Institute of Religious Works aka Instituto per le Opere Di…

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
EMIL ALPERIN; et al.,
Plaintiffs - Appellants,
v.
VATICAN BANK, aka Institute of
Religious Works aka Instituto per le Opere
Di Religione (IOR,
Defendant - Appellee.
No. 08-16060
D.C. No. 99-cv-04941-MMC
Northern District of California,
San Francisco
ORDER
Before: B. FLETCHER, THOMAS and N.R. SMITH, Circuit Judges.
The panel has elected to amend the memorandum disposition, filed on
December 29, 2009. With the amendment, the petition for panel rehearing and
rehearing en banc is DENIED. No further petitions for rehearing or rehearing en
banc may be filed.
Section II of the Memorandum Disposition, is deleted in its entirety, with the
following inserted in lieu thereof:
II
The district court did not err in holding that the international takings
exception does not apply to remove FSIA immunity. Where the defendant
sovereign succeeds in “establish[ing] a prima facie case of immunity, the burden of
FILED
FEB 10 2010
MOLLY C. DWYER, CLERK
U .S. C OU R T OF APPE ALS

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production shifts to the plaintiff to offer evidence that an exception applies.”
Phaneuf, 106 F.3d at 307.
FSIA's international taking exception provides that:
A foreign state shall not be immune from the jurisdiction of the courts
of the United States . . . in any case . . . (3) in which rights in property
taken in violation of international law are in issue and [1] that
property or any property exchanged for such property is present in the
United States in connection with a commercial activity carried on in
the United States by the foreign state; or [2] that property or any
property exchanged for such property is owned or operated by an
agency or instrumentality of the foreign state and that agency or
instrumentality is engaged in a commercial activity in the United
States.
28 U.S.C. § 1605(a).
The takings exception requires plaintiffs to plead that either the expropriated
property or property exchanged for the expropriated property has a jurisdictional
nexus to the United States. The Complaint must contain allegations as to the
current status of the expropriated property or property exchanged for such
property; either an allegation that such property is currently present in the United
States or an allegation that such property, although perhaps not located in the
United States, is currently owned or operated by an agency or instrumentality of
the foreign state.

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Cf. Garb v. Republic of Poland, 440 F.3d 579 (2d Cir. 2006) (suggesting1
that the first clause of the international takings exception applies to foreign states,
while the second applies to their agencies and instrumentalities). But see 28 U.S.C.
§ 1603(a) (“A ‘foreign state’ . . . includes . . . an agency or instrumentality of a
foreign state . . . .”).
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Alperin does not allege that the expropriated property or property exchanged
such property is currently in the United States. While we recognize that it could be
difficult to prove that fungible articles, such as the gold alleged to have been taken
in this case, are currently present in the United States, Alperin does not even make
such an allegation in the pleadings. Therefore, assuming without deciding that the
first clause of § 1605(a) applies to both foreign states and their instrumentalities,1
jurisdiction cannot be established under the first clause.
Nor has jurisdiction been established under the second prong of §
1605(a)(3). Alperin does not allege that the IOR currently owns or operates the
expropriated property or any property exchanged for the expropriated property.
The Complaint alleges that the defendants (in this multi-defendant case) laundered,
converted, and retained a “significant portion” of the property illegally
expropriated by the Ustasha regime; it does not allege that this portion included
property illegally taken from the Alperin plaintiffs. Assuming it did, the
Complaint alleges only that Alperin's property was in the past laundered,
converted, and retained by the IOR; it makes no allegation as to the current

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Indeed, the Complaint suggests that the expropriated property or property2
exchanged for such property is not currently owned or operated by the IOR, as
most of it was held by the IOR before being sent on to Swiss banks. See, e.g.,
Compl. ¶ 159.
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location of that property or property exchanged for that property. Because Alperin2
makes no allegation as to the current status of the expropriated property or property
exchanged therefore, jurisdiction has not been established under the second prong
of § 1605(a)(3).

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