Wednesday, March 20, 2019
Action Over Seized Romanian Film Company May Proceed
Panel Says Exception to Sovereign Immunity Might Apply Based on Violation of International Law
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday reinstated an action by two brothers, who are expatriates of Romania, based on the Communist regime’s expropriation in 1948 of the family’s film company.
A memorandum opinion reverses summary judgment by District Court Judge Fernando M. Olguin of the Central District of California in favor of RADEF RomâniaFilm, an arm of the Romanian government, on a cause of action for expropriation.
The action was brought by Jak and Edward Sukyas on March 16, 2015 based on the seizure of Cinegrafia Romana (“CIRO”), even before the Romanian People’s Republic nationalized all industries.
Allegations of Complaint
The complaint alleges:
“Plaintiffs’ uncle and father, brothers Melik Soukias and Vahram Sukyas respectively, were equal owners of CIRO when the Romanian Communist government illegally expropriated CIRO in 1948 in violation of international law, by way of a sham stock purchase made under duress from threats of imprisonment and threats to safety. Since that time, the company has been operated by state-owned successor-in-interest companies, which continue to do business in the United States.”
The value of CIRO was assessed in 2013 at $2 billion.
Exception to Immunity
Under 28 U.S.C. § 1605(a)(3), a foreign state enjoys no sovereign immunity where “rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state; or that property or any property exchanged for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States.”
Yesterday’s opinion declares:
“The district court incorrectly concluded that the expropriation exception is inapplicable because the Sukyas brothers could not show that RADEF Romania Film ‘is engaged in a commercial activity in the United States.’…In fact, by licensing U.S. films to screen in Romania, RADEF Romania Film receives ‘profits and benefits...derived from U.S. sources,’ thus bringing the Sukyas brothers claims within the…commercial-activity nexus clause of 28 U.S.C. §1605(a)(3).”
Another Exception Invoked
The plaintiffs also invoked an exception to sovereign immunity under §1605(a)(2), which applies where “the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; 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.”
Affirming summary judgment granted to RomâniaFilm under that section, the opinion says:
“The Sukyas brothers’ claims arise from the Romanian government’s alleged expropriation of their family’s film company, Cinegrafia Română (CIRO), disruption of CIRO’s business relationships with U.S. companies, and continued operation of CIRO’s film business in Romania. However, with no evidence that identifies any specific contractual relationships (and resulting contractual duties) between CIRO and U.S. film companies at the time CIRO was expropriated, the Sukyas brothers cannot show that Romania disrupted or assumed specific business relationships CIRO had with U.S. companies.”
The case was remanded for a determination as to whether CIRO was taken in violation of international law.
The case is Sukyas v. Romania, 17-56557.
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