Fred Westfield , in his capacity as administrator de bonis non administratis of the… v. Federal Republic of Germany

*The Honorable Robert Holmes Bell, United States District Judge for the Western District of
Michigan, sitting by designation.
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 11a0026p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
FRED WESTFIELD , in his capacity as
administrator de bonis non administratis of
the Estate of an Alien, Walter Westfeld; FRED
WESTFIELD ; ERICH WESTFIELD ; HANNAH
KAHN ; LINDA PLAUT ; J EANNE REES; and
ROSIE SEGAL , as executor of the Estate of
Martin Segal,
Plaintiffs-Appellants,
v.
FEDERAL REPUBLIC OF GERMANY ,
Defendant-Appellee.
X---->
,----------
N
No. 09-6010
Appeal from the United States District Court
for the Middle District of Tennessee at Nashville.
No. 09-00204—Todd J. Campbell, Chief District Judge.
Argued: December 10, 2010
Decided and Filed: February 2, 2011
Before: MARTIN and SILER, Circuit Judges; BELL, District Judge.*
_________________
COUNSEL
ARGUED: Overton Thompson III, BASS, BERRY & SIMS PLC, Nashville,
Tennessee, for Appellants. William S. Walton, MILLER & MARTIN PLLC, Nashville,
Tennessee, for Appellee. ON BRIEF: Overton Thompson III, Kathryn Hannen Walker,
BASS, BERRY & SIMS PLC, Nashville, Tennessee, Jeffrey Schoenblum,
VANDERBILT LEGAL CLINIC, Nashville, Tennessee, for Appellants. William S.
Walton, James A. Beakes III, MILLER & MARTIN PLLC, Nashville, Tennessee, Max
Riederer von Paar, RUBIN, WINSTON, DIERCKS, HARRIS & COOKE, LLP,
Washington, D.C., for Appellee.
1

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No. 09-6010 Westfield, et al. v. Federal Republic of Germany Page 2
1The members of the Westfeld family who emigrated to the United States and are parties to this
action now use the spelling “Westfield.”
_________________
OPINION
_________________
BOYCE F. MARTIN, JR., Circuit Judge. The Heirs of Walter Westfeld, a
prominent German art dealer during the 1930s, seek to recover the value of Westfeld’s
art collection from the Federal Republic of Germany. Westfeld had attempted to remove
his art collection to Tennessee but, before he could do so, Nazi officials seized and sold
off the collection. The district court granted Germany’s motion to dismiss, holding that
the Heirs’ claims were barred by the Foreign Sovereign Immunities Act, and do not fall
within the exception for acts in connection with commercial activity. On appeal, the
Heirs make a compelling argument that while other plaintiffs raising similar claims have
not fallen within the commercial activity exception, their claims do fall within a literal
reading of the text of the exception and should be allowed to proceed. However, while
the Heirs present a very persuasive explanation of why Germany’s actions were in
connection with commercial activity, they fail to establish that Germany’s actions had
a sufficiently direct effect in the United States to support applying this exception.
Therefore, we AFFIRM the district court’s decision granting Germany’s motion to
dismiss.
I.
Fred Westfield,1 in his capacity as the second administrator of the estate of
Walter Westfeld, and the individual heirs of Walter Westfeld, brought this action to
recover damages from the Federal Republic of Germany for the seizure and conversion
of Westfeld’s art and tapestry collection. The Heirs contend that, while under Nazi
control, German officials seized and sold the collection, which Westfeld had attempted
to protect and bring to the United States.

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No. 09-6010 Westfield, et al. v. Federal Republic of Germany Page 3
Westfeld was a renowned art dealer in Germany in the 1930s. Nazi officials
began persecuting and torturing Westfeld in 1933 because he was Jewish. Westfeld
attempted to flee Germany with his art collection but his passport had expired and he
was unable to get a visa from the United States. In 1938, German officials arrested
Westfeld for what the Heirs refer to as a “trumped up” currency charge. Westfeld was
sentenced to prison for three and a half years and fined Reichmarks 300,000 for the
alleged currency violation. Before the sentence and fine were finalized, the District
Attorney’s Office in Düsseldorf ordered that Westfeld’s art and tapestry collection be
sold to satisfy the fine. The Heirs explain this was a common practice in Nazi Germany
that allowed the government to raise funds. Lempertz, the German auction house,
auctioned off Westfeld’s collection under orders from the German government on
December 12 and 13, 1939. The Heirs eventually obtained a copy of the auction
catalogue, which describes more than five hundred tapestries and pieces of artwork from
Westfeld’s collection that Lempertz sold.
In prison, officials interrogated Westfeld and discovered that he had more
artwork. From 1943 to 1944, after Westfeld had been killed, Nazi officials seized and
sold the rest of his collection. After the war, the Regional Court Düsseldorf declared
Westfeld’s sentence and fine to be null and void.
In 2004, Fred Westfield discovered that the Boston Museum of Fine Arts was
seeking information about his uncle, Walter Westfeld, in relation to a painting in its
collection of Dutch Masters. Through the Museum, Fred learned that Germany had
seized his uncle’s art collection and discovered that much of it had been sold at auction
by Lempertz.
The Heirs seek to recover the value of this property, arguing that Germany
improperly seized it from Westfeld. Important to establishing jurisdiction, the Heirs
contend that Westfeld had intended to send these items to Nashville, Tennessee where
his brother lived. The complaint alleges that Germany’s actions had a direct effect in the
United States because they prevented valuable assets from reaching the United States,
deprived Westfeld’s family members in the United States the benefit of the property

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No. 09-6010 Westfield, et al. v. Federal Republic of Germany Page 4
2There appears to be some dispute as to whether the parties to this lawsuit are actually Westfeld’s
only heirs. However, as it does not affect the outcome in this case, we need not address this issue.
intended for them, deprived Westfeld’s family members of property that would have
passed to them by intestacy, and deprived the United States art market of access to the
collection.
Fred Westfield initiated an action in a Tennessee probate court, which appointed
him administrator de bonis non administratis, the second administrator, of Walter
Westfeld’s estate. The probate court also designated the individual plaintiffs in this suit
the sole heirs of Walter Westfeld after litigation with German citizens who also claimed
to be heirs.2
The Heirs then filed this lawsuit in Tennessee state court. Germany removed to
federal court and filed a motion to dismiss for lack of subject matter jurisdiction based
on the Foreign Sovereign Immunities Act. The district court granted Germany’s motion
to dismiss and the Heirs appealed.
II.
A. Standard of Review.
This Court reviews decisions regarding subject matter jurisdiction under the
Foreign Sovereign Immunities Act de novo. O’Bryan v. Holy See, 556 F.3d 361, 372
(6th Cir. 2009). We may affirm the district court’s judgment on any ground supported
by the record, including on a basis not mentioned in the district court’s opinion.
Louisiana Sch. Employees’ Ret. Sys. v. Ernst & Young, LLP, 622 F.3d 471, 477 (6th Cir.
2010); In re Comshare Inc. Sec. Litig., 183 F.3d 542, 547-48 (6th Cir. 1999). For
purposes of this motion to dismiss, we must accept all of the factual allegations in the
complaint as true. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).

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No. 09-6010 Westfield, et al. v. Federal Republic of Germany Page 5
B. The Commercial Activity Exception to Sovereign Immunity.
The Foreign Sovereign Immunities Act, 28 U.S.C. § 1602 et seq. (2006),
provides the sole basis for a court in this country to obtain jurisdiction over a foreign
sovereign. Republic of Arg. v. Weltover, Inc., 504 U.S. 607, 611 (1992). The Act
provides that a “foreign state shall be immune from the jurisdiction of the courts of the
United States and of the States except as provided in sections 1605 to 1607 of this
chapter.” 28 U.S.C. § 1604. The plaintiff has the burden of proving that one of the
statutorily defined exceptions applies and the court has jurisdiction. See Am. Telecom
Co., L.L.C. v. Republic of Leb., 501 F.3d 534, 537 (6th Cir. 2007); see also Verlinden
B.V. v. Cent. Bank of Nig., 461 U.S. 480, 494 n.20 (1983) (requiring courts to determine
that immunity is unavailable under the Act even if the foreign state does not enter an
appearance).
At issue on this appeal is the “commercial activities” exception, 28 U.S.C.
§ 1605(a)(2), which provides that foreign sovereigns are not immune from suit in any
case:
[1] in which the action is based upon a commercial activity carried on in
the United States by the foreign state; [2] or upon an act performed in the
United States in connection with a commercial activity of the foreign
state elsewhere; [3] or upon an act outside the territory of the United
States in connection with a commercial activity of the foreign state
elsewhere and that act causes a direct effect in the United States.
The Heirs rely on the exception contained in the third clause of this section and assert
that Germany’s act of seizing Westfeld’s valuable art collection was “in connection
with” the “commercial activity” of selling it on the private market. Although the district
court rejected this argument, on appeal the Heirs quite persuasively navigate the morass
of reported decisions and make a convincing argument that, based on Germany’s sale
of the collection at auction to raise capital, the seizure of Westfeld’s artwork was
sufficiently in connection with commercial activity to fall within this exception.
However, we need not, and do not, decide whether the actions as alleged are sufficiently
in connection with commercial activity to fall within this exception. Even if Germany’s

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No. 09-6010 Westfield, et al. v. Federal Republic of Germany Page 6
3While the district court did not reach this issue, Germany addressed the direct effect requirement
in its brief, and the Heirs responded to Germany’s argument in their reply.
4This opinion refers to decisions from some of the circuits that require a “legally significant act”
take place in the United States to find a direct effect. However, we do not adopt this requirement or refer
to discussion relating to this requirement in the opinions that are cited.
actions were sufficiently in connection with commercial activity, Germany is
nonetheless entitled to immunity because the Heirs have not established that those
actions caused a direct effect in the United States.
III.
The district court did not reach the issue of whether Germany’s actions caused
a direct effect in the United States in light of its holding that the seizure of Westfeld’s
art collection was insufficiently connected to commercial activity.3 “An effect is direct
if it follows as an immediate consequence of the defendant’s . . . activity.” Weltover,
504 U.S. at 618 (internal quotations omitted). The effect need not be foreseeable or
substantial but “jurisdiction may not be predicated on purely trivial effects in the United
States.” Id.; see also Virtual Countries, Inc. v. Republic of S. Afr., 300 F.3d 230, 236 (2d
Cir. 2002) (“Congress did not intend to provide jurisdiction whenever the ripples caused
by an overseas transaction manage eventually to reach the shores of the United States.”
(internal quotations omitted)). Unlike some of our sister circuits, we have expressly
rejected the requirement that a “legally significant act” take place in the United States
in order to establish a direct effect.4 Keller v. Cent. Bank of Nig., 277 F.3d 811, 817-18
(6th Cir. 2002); see Am. Telecom, 501 F.3d at 539-40. When considering whether an
action caused a direct effect in the United States we are cognizant of the Act’s
presumption that foreign sovereigns are immune, and wary of applying this requirement
too loosely such that our courts become a haven for airing the world’s disputes.
Courts have struggled to announce objective standards and clear rules for
determining what does and does not qualify as a direct effect in the United States.
Without objective standards to guide us, much of our analysis is drawn from comparison
to other decisions addressing the scope of the direct effect requirement, many of which
involve bonds issued by foreign governments. For example, Weltover involved bonds

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No. 09-6010 Westfield, et al. v. Federal Republic of Germany Page 7
issued by Argentina that allowed the creditor to elect to receive payment in either the
London, Frankfurt, Zurich or New York markets. Weltover, 504 U.S. at 609-10.
Argentina attempted to reschedule payment on the bonds and the bondholders demanded
immediate payment in New York. Id. at 610. The Supreme Court held that Argentina’s
refusal to pay caused a direct effect in the United States. Id. at 618-19. “Because New
York was thus the place of performance for Argentina’s ultimate contractual obligations,
the rescheduling of those obligations necessarily had a ‘direct effect’ in the United
States: Money that was supposed to have been delivered to a New York bank for deposit
was not forthcoming.” Id. at 619.
Similarly, when considering claims arising out of a scam perpetrated by an
individual purporting to be an official in the Nigerian government, we concluded that the
direct effect requirement was satisfied when the foreign government failed to comply
with its alleged obligation to make payment in the United States. Keller, 277 F.3d at
814, 818. The plaintiff in Keller alleged that the Central Bank of Nigeria, an entity
controlled by Nigeria and entitled to sovereign immunity, had agreed to pay funds to an
account at a bank in Cleveland, Ohio but failed to do so. Id. at 818. Because of the
preexisting duty to pay funds in the United States, we concluded that, as in Weltover, the
failure to do so caused a direct effect in this country. Id.; accord Hanil Bank v. PT. Bank
Negara Indon., 148 F.3d 127, 132 (2d Cir. 1998) (failing to remit funds to a designated
bank account in the United States caused a direct effect in the United States); Voest-
Alpine Trading USA Corp. v. Bank of China, 142 F.3d 887, 896 (5th Cir. 1998).
However, here, the Heirs have not alleged that Germany ever promised to deliver
Westfeld’s art collection to the United States. Because Germany had not obligated itself
to do anything in the United States, we cannot say that its actions caused a direct effect
in the United States based on the Weltover line of cases.
The Heirs also cannot establish that Germany’s actions had direct effects in the
United States based on allegations that its expropriation of the artwork prohibited
Westfeld from sending his collection to Nashville. Even this Court’s recent decision in
DRFP L.L.C. v. Republica Bolivariana de Venezuela, 622 F.3d 513 (6th Cir. 2010),

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No. 09-6010 Westfield, et al. v. Federal Republic of Germany Page 8
which liberally interpreted “direct effect,” focused its analysis on whether the bonds
allowed the holder to demand payment in the United States and not on where the creditor
intended to move the funds on receipt. Over dissent, the majority concluded that the
terms of the notes placed no restrictions on where the holder could demand payment.
Id. at 517 (noting that the “parties implicitly agreed to leave it to the bearer to demand
payment of the notes anywhere, including, perforce, Columbus, Ohio”). Because the
majority believed that the holder could demand payment anywhere, when the holder
demanded payment in Ohio, the failure to pay caused a direct effect in the United States.
Id. at 518. Although the panel disagreed over the result, the dispositive issue was
whether the terms of the bonds called for Venezuela to make payment in the United
States. Id. If they did not, and the creditor merely intended to move funds it received
in Venezuela to the United States, Venezuela’s failure to make payment would not have
caused a direct effect in the United States. See id. at 517; id. at 521 (Martin, J.,
dissenting). Here, the Heirs’ allegations are, in a sense, that Germany interfered with
Westfeld’s plan to transfer property in Germany to the United States by unlawfully
seizing it. However, although Germany’s actions caused effects in the United States, our
holding in DRFP does not establish that they were direct effects. Consistent with the
Weltover line of cases, because Germany was under no obligation to send the collection
to the United States, we cannot conclude that seizing the artwork in Germany caused a
direct effect in the United States based on our decision in DRFP.
In contrast to situations where foreign sovereigns promised to pay funds to
accounts in the United States, if the funds are only payable in a foreign country, failure
to receive those funds does not cause direct effects in the United States. This is true
even where the entity that was not paid alleges that it intended to transfer the funds to
the United States on receipt. When funds are due abroad and not paid, the direct effects
occur abroad. Although the entity might ultimately feel the financial injury at home in
the United States, we have held that those reverberations are too attenuated to qualify
as direct effects. Am. Telecom, 501 F.3d at 541; see Guirlando v. T.C. Ziraat Bankasi
A.S., 602 F.3d 69, 78 (2d Cir. 2010) (noting that “the mere fact that a foreign state’s
commercial activity outside of the United States caused physical or financial injury to

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No. 09-6010 Westfield, et al. v. Federal Republic of Germany Page 9
a United States citizen is not itself sufficient to constitute a direct effect in the United
States”); Big Sky Network Can., Ltd. v. Sichuan Provincial Gov’t, 533 F.3d 1183, 1191
(10th Cir. 2008) (holding that “failure to receive promised funds abroad will not qualify
as a ‘direct effect in the United States’”); Antares Aircraft, L.P. v. Fed. Republic of Nig.,
999 F.2d 33, 36-37 (2d Cir. 1993) (“If a loss to an American individual and firm
resulting from a foreign tort were sufficient standing alone to satisfy the direct effect
requirement, the commercial activity exception would in large part eviscerate the [Act’s]
provision of immunity for foreign states.”); Zedan v. Kingdom of Saudi Arabia, 849 F.2d
1511, 1515 (D.C. Cir. 1988). The Heirs claim that Germany unlawfully seized
Westfeld’s art collection. Because Westfeld intended to send the art collection to the
United States, this seizure interrupted those plans and ultimately affected his family in
Nashville. However, this loss, suffered in the United States, is not a direct effect of
Germany’s actions. Seizing Westfeld’s art collection caused a direct effect in Germany.
Allegations that Westfeld intended to send his art collection to the United States do not
broaden the scope of the direct effects. Although the action that prevented the transfer
was in this case an illegal seizure and not a failure to pay, that does not distinguish the
cases cited above, which recognize that a foreign country’s actions do not cause direct
effects in the United States merely because the entity to which it owed money planned
to move the funds to the United States. While we do not question that Westfeld
genuinely wished to transfer his artwork to Nashville, finding a direct effect based on
plans to send property to the United States would largely eliminate the protections of
sovereign immunity.
Unlike sovereigns that obligated themselves to make payment in the United
States, the only reason effects were felt in the United States is because Westfeld had
intended to send his art collection to Nashville. In American Telecom, we noted that the
only immediate consequences, and hence direct effects, of disqualifying an American
corporation from bidding on a contract to perform services in Lebanon were felt in
Lebanon. 501 F.3d at 541 (noting that “everything else is entirely derivative of that
action, and therefore not an ‘immediate consequence’ and not a direct effect”). Although
we do not hold that the only actions that may cause a direct effect in the United States

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are those where the sovereign is obligated to perform in the United States, similar to
American Telecom, here, Germany’s actions did not extend beyond its borders. The only
connection to the United States is through Westfeld and derivative of Germany’s action.
As appalling as the Nazis’ actions were, the reverberations felt from them in Nashville
were derivative of Germany’s seizure and not direct effects.
Consistent with this, we have also noted that the foreign sovereign’s actions, and
not the plaintiff’s, must have caused the effects in the United States. In American
Telecom, we held that the foreign sovereign’s actions in disqualifying a United States
corporation from submitting a bid on a project did not cause a direct effect in the United
States where the performance was to occur entirely in a foreign locale. 501 F.3d at 541.
One result of the sovereign’s actions was that American Telecom lost $30,000 that it had
paid from its United States bank account. However, that effect was not caused by the
foreign sovereign. Id. (noting that the corporation “was not required to submit payment
from an American bank; it chose to do so”). This approach is the only sensible way to
apply the direct effect requirement. Otherwise, any payment to a foreign sovereign from
a United States account would be sufficient to establish a direct effect and dissolve a
foreign sovereign’s immunity. Similarly, focusing on the plaintiff’s actions and ties to
the United States would be inconsistent with our prior decisions recognizing that an
American entity’s mere financial loss is insufficient to establish a direct effect in the
United States. Therefore, this too counsels against concluding that Germany’s actions
caused a direct effect in the United States because Germany did not itself do anything
here. The only ties to the United States are Westfeld’s.
We recognize that “direct effect” is amorphous and hard to define. However, in
light of the Supreme Court’s pronouncement in Weltover, and our decisions interpreting
this requirement, we hold that the Heirs have not alleged that Germany’s actions caused
a direct effect in the United States. The seizure undoubtedly prevented Westfeld from
disposing of his collection, but any effects felt in the United States did not follow as an
immediate consequence of Germany’s actions. Germany acted entirely within its
borders and the only connection to the United States is because Westfeld planned to send

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the artwork to Nashville. The complaint does not state that Germany ever promised to
send the artwork to the United States. Additionally, none of the Heirs or Westfeld’s
relatives in the United States had any actual ownership interest in the property at the
time of the seizure. While Westfeld’s plans to send the artwork to the United States
meant that Germany’s actions had effects here, they were not direct. Concluding
otherwise would effectively read the “direct” requirement out of the statute and greatly
expand the jurisdiction of our courts in contrast to Congress’s goals in enacting the
Foreign Sovereign Immunities Act.
Although we are very sympathetic to the Heirs’ claims, we cannot conclude that
Walter Westfeld’s intention to transfer the proceeds to the United States caused a direct
effect here. Our longstanding tradition of foreign sovereign immunity, and prior
decisions recognizing that an American entity’s failure to receive funds due abroad does
not cause direct effects in the United States, compel the conclusion that Germany’s
actions did not cause direct effects in this case. Accordingly, we hold that the district
court did not err by granting the motion to dismiss for lack of subject matter jurisdiction.
Germany’s actions in seizing Westfeld’s art and tapestry collection, as abhorrent as they
were, do not fall within the commercial activity exception to sovereign immunity.
IV.
We find the Heirs’ argument that this case does not involve a sovereign act
because a German court declared Westfeld’s sentence and fine “null and void”
unpersuasive. Sovereigns were historically entitled to absolute immunity and the Act
was intended to codify the “restrictive theory” of sovereign immunity, waiving immunity
only in certain limited situations. Verlinden B.V., 461 U.S. at 488; see also Alfred
Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 703 (1976). Although the
Heirs are correct in arguing that it would be “nonsense” to require a domestic court to
respect the acts of a foreign state that the foreign state itself declared null and void, that
is not what this Court is being asked to do here. Rather, this Court is being asked to not
consider the actions—the initial fine and imprisonment or the subsequent declaration
that the acts were null and void. These actions, even though they have been declared

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null and void, and even though they constituted an abuse of police and prosecutorial
powers by the German government at the time, were nonetheless the acts of a sovereign.
Congress did not create an exception for lawless activities in the Act. Therefore, even
though we agree that this Court should not recognize Westfeld’s fine and imprisonment,
it should still respect that they were acts of a sovereign.
V.
We are deeply sympathetic to the loss the Heirs suffered as a result of Germany’s
unspeakable acts. However, our jurisdiction is limited by both Article III of the
Constitution and the statutes Congress enacts. We must operate within those restrictions,
and because the Heirs failed to establish that Germany’s actions caused a direct effect
in the United States, their claims do not fall within the commercial activity exception to
sovereign immunity. Therefore, the district court’s decision dismissing this action is
AFFIRMED.

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