Second Circuit Rules FSIA’s ‘Expropriation Exception’ Does Not Cover Routine Law Enforcement Seizures

On June 8, 2021, the U.S. Court of Appeals for the Second Circuit ruled in Beierwaltes v. Federal Office of Culture of the Swiss Confederation that a routine law enforcement seizure does not ordinarily fall within the scope of the “expropriation exception” of the Foreign Sovereign Immunities Act (the “FSIA”).

There are exceptions where the seizure is not rationally related to a public purpose, is related only to a “sham” public purpose, or continues for an unreasonably long and indefinite period. Accordingly, the Court held that there was no basis for jurisdiction for a suit in connection with a routine law enforcement seizure of art by Swiss authorities.

In reaching its ruling, the Court emphasized that U.S. courts should be highly deferential when assessing a sovereign’s policing activities and should only intervene in very rare circumstances, to avoid increasing international tensions. In combination with a recent Supreme Court ruling that interpreted the expropriation exception restrictively, the Beierwaltes decision constrains expropriation claims against foreign sovereigns.

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