The Act of State Doctrine: Underhill v. Hernandez (1897)
Introduction
Recent federal decisions such as Hungary v. Simon and Fuld v. PLO demonstrate the difficulty Holocaust survivors and victims of terror face in suing foreigners in U.S. courts. Much of the difficulty is based on how courts interpret the Foreign Sovereign Immunities Act (FSIA). While the FSIA was originally intended to help victims seek justice, recent cases suggest that federal courts are closing the courthouse doors and returning to a more restrictive rule known as the “Act of State Doctrine.”
The Act of State Doctrine
To better understand the doctrine, we turn to a Supreme Court case from 1897 — Underhill v. Hernandez — which involved the aftermath of the Venezuelan civil war of 1892.
In 1873, Guzman Blanco was elected president of Venezuela. In 1879, Blanco left for Europe, placing Gen. Joaquin Crespo in charge. President Blanco later returned, but in 1892 Gen. Crespo seized political power. Leading Crespo’s revolutionary army, General Hernandez captured the city of Bolivar on August 13, 1892, and the capital of Venezuela on Oct. 6, 1892. Recognizing the success of Crespo’s revolution, the U.S. formally recognized the Crespo government as the legitimate government of Venezuela on Oct. 23, 1892.
This created a problem for George F. Underhill, a U.S. citizen. Underhill had built a waterworks system for the city of Bolivar under a government contract. He also ran a machinery repair business and supervised the city’s water supply. After Gen. Hernandez took over Bolivar, Underhill asked for a passport to leave the city. Hernandez refused, even turning down requests made by others on Underhill’s behalf. Eventually, Hernandez granted a passport on Oct. 18, and Underhill left the country.
Upon returning to New York, Underhill sued Gen. Hernandez in federal court, seeking damages for having been assaulted by Hernandez’s soldiers, detained in Venezuela against his will, and confined to his home.
The Eastern District ruled that Underhill could not recover “because the acts of defendant were those of a military commander, representing a de facto government in the prosecution of a war, he was not civilly responsible therefore.” The court of appeals affirmed, reasoning “that the acts of the defendant were the acts of the government of Venezuela, and as such are not properly the subject of adjudication in the courts of another government.”
The United States Supreme Court upheld the decision. Writing for the Court, Chief Justice Melville Fuller explained: “Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory.”
This principle became known as the Act of State Doctrine. It means that when a government official acts in an official capacity, the state — and by extension, the individual acting on its behalf — is immune from suit. Taken to its logical conclusion, should the Act of State Doctrine have protected Adolph Eichmann?
The Eichmann Trial
In 1961, Israel put Adolph Eichmann on trial for his leading role in murdering millions of Jews in the Holocaust. Eichmann’s lawyers argued that the Act of State Doctrine granted him immunity, because he had acted under orders from a sovereign state, Nazi Germany. This Israeli Court rejected this argument:
“There is no basis for the doctrine when the matter involves acts that violate international law, especially ‘crimes against humanity.’ Such acts are completely outside the legitimate ‘sovereign’ jurisdiction of the State that ordered or ratified their commission, and those who participated in such acts must be personally accountable. They cannot hide behind the official nature of their duties or the laws of the state that ordered them.”
The Foreign Sovereign Immunities Act:
Jurisdiction and Limits
The judicially created Act of State Doctrine kept federal courts from reviewing the actions of foreign governments. To allow suits against foreign governments, Congress enacted the FSIA in 1976. The FSIA acknowledges that while a foreign sovereigns are normally immune from suit, a foreign sovereign may be hauled into a U.S. court if an exception applies. One prominent exception allows lawsuits involving the illegal seizure of property against international law (“expropriation”), especially if the property is connected to commercial activity within the U.S.
The state sponsor of terrorism is another exception. Since there is no lack of international bad actors, the FSIA opened the “floodgates of litigation” in U.S. courts against foreign states.
The Chabad Library: Historical Context
In 1915, Rabbi Shalom DovBer Schneerson, the fifth Lubavitcher Rebbe, fled Russia due to rising persecution, leaving behind a library of 12,000 books and 381 manuscripts. The Soviet authorities seized the library, collected by Lubavitcher leaders since 1772, and placed it in the Department of Scientific Libraries.
In 1939, his successor, Rabbi Yosef Yitzchak Schneerson, fled Nazi-occupied Poland, leaving an archive of 25,000 manuscripts. When the Soviet Union took over this region, this collection was transferred to the Russian State Military Archives.
Despite decades of diplomatic efforts, neither collection has been returned. In 2004, Chabad filed a lawsuit in U.S. federal court, claiming the Soviets “expropriated” the library and archive in violation of international law. The group initially won several important legal victories. In 2024, however, the D.C. Circuit dismissed the case, ruling that Russia, as a foreign sovereign, could only be sued in its own courts.
In Summary
Earlier landmark cases — such as Republic of Austria v. Altmann (2004)(supporting the return of art stolen by the Austrian Government during the Holocaust) and Flatow v. Iran (1998)(awarding a multimillion-dollar judgment to victims of terror) demonstrated the willingness of federal courts to protect American victims of foreign expropriation and terror.
However, the recent rulings of Agudas Anshei Chabad v. Russian Federation (2024) and Hungary v. Simon (2025)(in which the Supreme Court rejected the claims of Holocaust survivors against Hungary and the Hungarian state-owned railway for the seizure of their property during the Holocaust) highlight the difficulty in bringing suit against foreign actors in federal court. Are the courthouse doors slowly closing?
Eliyahu Asher Prero, Esq. is a practicing lawyer and certified mohel. He graduated magna cum laude from Seton Hall Law with a concentration in intellectual property law and served as a clerk for the Hon. Thomas A. Sarlo, Superior Court of New Jersey, Civil Division-Bergen County. Please address all correspondence to The Jewish Link.
