Supreme Court weighs whether commingled wartime proceeds can subject Hungary to U.S. courts

The U.S. Supreme Court heard oral argument in Hungary v. Simon, a dispute over whether the Foreign Sovereign Immunities Act’s expropriation exception allows U.S. courts to hear claims tied to property seized during the Holocaust that later was liquidated and mixed into a nation’s general funds.

Respondents argue the exception applies because Hungary and its national railway, MAV, liquidated victims’ property and commingled the proceeds with other state funds, and later used those commingled funds in the United States. "When Hungary used commingled funds to pay interest and buy equipment in The United States, it put into The United States property that had been exchanged for the expropriated property," respondents’ counsel told the Court.

Petitioners countered that the statute’s key phrase—"exchanged for"—requires a traceable connection between the original expropriated item and the asset now said to be present in the United States. Counsel for Hungary argued that ordinary meaning and the FSIA’s history support a narrow interpretation and that "simply showing…