This case involves the de Csepel family's multi-decade effort to recover the Herzog Collection, a vast assemblage of art seized by the Hungarian government and its Nazi collaborators during World War II. The family, descendants of Baron Mór Lipót Herzog, sued the Republic of Hungary and state-owned museums, alleging the takings violated international law. The litigation has moved through the D.C. Circuit multiple times, with the Supreme Court's 2021 decision in *Philipp v. Germany* significantly narrowing the scope of the Foreign Sovereign Immunities Act's expropriation exception. The core dispute centers on whether the FSIA allows U.S. courts to hear claims regarding property taken during wartime occupation or from individuals rendered stateless by the Holocaust.
Circuit Judge Pillard, writing for the panel, analyzed whether the family could satisfy the FSIA's expropriation exception, which requires a violation of the international law of expropriation. The court first addressed the 'Santa Barbara' sculpture, which evidence suggested was taken by German officials during the wartime occupation. The court held that the Second Restatement of Foreign Relations Law, the primary source for international property law at the time of the FSIA's enactment, explicitly limits its scope to peacetime and excludes wartime takings. Consequently, the heirs could not establish that the wartime taking violated the international law of expropriation. The court also rejected the argument that Germany's occupation made Hungary legally responsible for the takings, noting that even if Germany were responsible, the wartime-takings defect would remain. Next, the court addressed the theory that the Herzogs were 'de facto stateless' at the time of the taking, which would theoretically bypass the domestic-takings rule. The court found that international law does not recognize a distinct category of protection for de facto stateless persons in the context of expropriation; the Third Restatement of Foreign Relations Law confirms that the law of expropriation protects only 'foreign nationals,' not those without nationality. Finally, regarding two paintings retaken by Hungary after the war, the court found that the 1973 U.S.-Hungary Agreement settled claims for pre-1973 takings, and the domestic-takings rule barred claims for takings of Hungarian nationals before they became foreign citizens.
The decision effectively ends the de Csepel family's legal battle in U.S. courts, dismissing all remaining claims for the return of the Herzog Collection. It reinforces the *Philipp* doctrine that the FSIA's expropriation exception is narrow and does not extend to wartime takings or takings of stateless persons under the international law of property. The ruling leaves the family without a judicial remedy in the United States, suggesting that redress for such historic wrongs must come through diplomatic channels or legislative action by Congress.