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Abbas v. United States

United States Court of Appeals, Federal Circuit

December 6, 2016

HASSAN ALI ABBAS, Plaintiff-Appellant
v.
UNITED STATES, Defendant-Appellee

         Appeal from the United States Court of Federal Claims in No. l:15-cv-00229-LKG, Judge Lydia Kay Griggsby.

          Hassan Ali Abbas, Hanover Park, IL, argued pro se.

          Alexander Orlando Canizares, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by JAMES R. Sweet, BENJAMIN C. MlZER, Robert E. Kirschman, Jr., Martin F. Hockey, Jr.

          Before NEWMAN, LOURIE, and CLEVENGER, Circuit Judges.

          CLEVENGER, Circuit Judge.

         Hassan Ali Abbas appeals the final decision of the United States Court of Federal Claims dismissing his complaint for lack of subject matter jurisdiction and failure to state a claim for which relief can be granted pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the United States Court of Federal Claims. Because we agree with the Court of Federal Claims that Mr. Abbas's claims are time barred, we affirm.

         I

         This case arises from Mr. Abbas's complaint against the United States ("U.S." or "the Government") in the Court of Federal Claims for an alleged taking of his property rights in certain pre-World War II German bonds. Mr. Abbas alleges that a series of post-World War II treaties between the U.S. and Germany pertaining to the handling of these bonds effected a regulatory taking without compensation of his right to enforce the bonds against Germany in U.S. courts, in violation of the United States Constitutional requirement that "private property [shall not] be taken for public use, without just compensation." U.S. Const, amend. V. The Court of Federal Claims found that Mr. Abbas's claim was time barred by the applicable statute of limitations. We first provide a short recitation of the relevant historical background.

         After World War I, a number of German banks and companies sold bearer bonds that were underwritten and payable in the U.S. Abrey v. Reusch, 153 F.Supp. 337, 339 (S.D.N.Y. 1957).[1] Prior to the outbreak of World War II, many of the bonds were repurchased by the issuers for eventual retirement. Id. Those repurchased bonds no longer represented obligations. Id. Nevertheless, the outbreak of World War II prevented the issuing authorities from presenting the bonds to the American trustees or paying agents for cancelation, and thus a large number of the repurchased (but not cancelled) bonds were stored in Berlin during the war. Id. Following the occupation of Berlin by the Soviet Union, a large number of the stored bonds found their way into unauthorized hands. Id.[2] Still, a similarly large number of the bonds remained in the hands of legitimate bona fide purchasers. See id.

         After the war, Germany[3] was justifiably hesitant to pay off bonds that were possibly invalid, despite expressing a willingness to adopt liability for the pre-war debts of the Weimar Republic and the Third Reich.[4] The situation also posed a problem for holders of valid bonds, who would potentially be forced to share in the limited pool of available German assets with holders of invalid bonds. See id. Thus, Germany and the U.S. (as well as other Allied powers) executed a series of laws and treaties that sought to hold Germany responsible for its pre-war bonds (and other debts), while at the same time ensuring that only holders of valid bonds would be paid. See id.

         The first relevant statute was the Validation Law for German Foreign Currency Bonds of 1952. Gesetz zur Bereinigung von deutschen Schuldverschreibungen, die auf auslandische Wahrung lauten (Bereinigungsgesetz fur deutsche Auslandsbonds-AuslWBG) [Validation Law for German Foreign Currency Bonds], Aug. 25, 1952, BGB1. I at 553 ("Validation Law"). The Validation Law estab- lished procedures under which Germany would assume liability for foreign currency bonds where bondholders could prove that their bonds were held outside of Germany as of January 1, 1945 (i.e., prior to the Soviet invasion of Germany in late January 1945). See Mortimer Off Shore Servs., Ltd. v. Fed. Republic of Ger., 615 F.3d 97, 102 (2d Cir. 2010). The law required that the bonds and supporting evidence be submitted to an examining authority in Germany (or in the country of bond issue), which would conduct an administrative hearing to determine the bonds' validity. See id.

         The procedures of the Validation Law were incorporated into a subsequent 1953 agreement between the U.S. and Germany. Validation of German Dollar Bonds, Ger.-U.S., Feb. 25-Apr. 9, 1954, 5 U.S.T. 1 ("1953 Treaty"). The 1953 Treaty consisted of two agreements. The first, Validation of Dollar Bonds of German Issue, Ger.-U.S., Feb. 27, 1953, 4 U.S.T. 797 ("Validation Procedures Treaty"), incorporated the Validation Law (and thus incorporated the procedures for validating German prewar bonds). The agreement also created the Board for the Validation of German Bonds in the United States (the "Validation Board"), which served the same function as the examining authorities created by the Validation Law and was empowered to conduct the bond validation hearings.[5]

         In the second, Certain Matters Arising from the Validation of German Dollar Bonds, Ger.-U.S., Apr. 1, 1953, 4 U.S.T. 885 ("Certain Matters Treaty"), the U.S. agreed that the German bonds at issue would not be enforceable in U.S. courts until they had been validated (i.e., shown to have been outside of Germany on January 1, 1945) "either by the Board for the Validation of German Bonds in the United States established by the [Validation Procedures Treaty], or by the authorities competent for that purpose in the Federal Republic." Certain Matters Treaty art. II.

         Contemporaneously, the Allied powers and Germany also entered into a separate agreement, German External Debts, Feb. 27, 1953, 4 U.S.T. 443, 333 U.N.T.S. 3 ("London Debt Agreement"), which aimed "to remove obstacles to normal economic relations" between Germany and other nations and to "facilitat[e] a resumption of payments on [Germany's] external debts." Mortimer, 615 F.3d at 102 (quoting London Debt Agreement at Proclamation). The London Debt Agreement constituted a settlement offer by Germany for its pre-World War II debt obligations, but did not repeal the validation requirements put into place by the Validation Law, stating that "[o]nly such creditors shall be entitled to benefit under [the Agreement], as . . . accept the offer, or, in the case of other debts, assent to the establishment in accordance with such provisions of terms of payment and other conditions in respect of such debts." Id. (quoting London Debt Agreement art. 15(1)). In the wake of the London Debt Agreement, Germany adopted a policy of paying validated bondholders who agreed to settle before paying validated bondholders who refused the settlement offer. See World Holdings, LLC ...


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