Full opinion text
MEMORANDUM & ORDER KORMAN, Chief Judge. The complaint in this case arises out of the near total annihilation of the Jews of Poland by the Nazis during World War II and the subsequent horrendous treatment of the small number who survived. Prior to the War, Poland had the largest Jewish population in all of Europe — more than three million Jews. The overwhelming majority of these Jews died during the War or were murdered by the Nazis and their Polish collaborators. A small number of Polish Jews fled to Palestine. The majority of those who were fortunate to escape the horrors of the Holocaust moved eastward and sought refuge in the Soviet Union. After the War, on July 6, 1945, the Soviet Union and Poland entered -into a repatriation agreement whereby 230,000 of these Polish Jews returned to Poland. Many of the surviving. Jews were in “horrible condition[;] .... they [were] exhausted, starved and half-naked, or in rags ... [and] sick.” (Stein Aff. ¶ 9.) They arrived to find Poland “in a state of chaos and ruin.” (Id ¶ 5.) Much of their “property had been adversely possessed for as long as five years by the time of liberation and repatriation.” (Pls.’ Mem. at 5.) Tensions over that property sparked a renewal of violence- against the Jews. During the first two years after the war, more than 1,000 Jews were murdered. (Stein Aff. ¶ 10.) Post-War violence against the Jews culminated in a riot which occurred on July 4, 1946 in Kielce, Poland. (Am.Compl.¶ 93.) A local boy’s accusation of kidnaping by a mentally disabled Jew ignited simmering tensions between Jewish and non-Jewish residents of the town. (Stein Aff. ¶¶ 15-16.) A crowd gathered around a building that housed nearly 200 Jews. According to plaintiffs’ affidavit, Polish army officers disarmed the Jewish residents of the building and forced them into the hands of the mob, whereupon 41 Jews were killed. (Id. ¶ 17.) Some historians believe that the riot was planned and implemented by Polish security officials and communist party higher-ups. (Id. ¶¶ 22-34.) Although nine individuals alleged to have participated in the Kielce riot were tried and executed, the army officers and security officials allegedly responsible for the riot were arrested, but never tried. (Id. ¶¶ 20, 22.) Violence against Jews did not end after Kielce. Thirty-three other Jews were murdered that month. (Am.Compl.¶ 93.) Jewish property was looted. (Id.) The result of this post-war violence was that the vast majority of the few remaining Jews in Poland chose to emigrate by 1946, leaving behind their property and possessions. (Id. ¶ 95.) Anti-Semitic violence continued in Poland even after this mass immediate post-war emigration. In 1956, there were more than 40 incidents where Jews were beaten or abused. (Stein Aff. ¶ 39.) Plaintiffs allege that the local authorities did not react appropriately to these incidents and cite statements concerning the anti-Semitism of Communist party officials. (Id.) Plaintiffs also allege that in 1967 some 9,000 Jews were purged from the Communist party, the Foreign Ministry, the armed forces and the defense establishment in response to concerns over the development of a “Fifth Column” antiCommunist movement. (Id. ¶ 47; Am. Compl. ¶ 96.) It is undisputed that, after the post-Kielce emigration, Poland nationalized land in 1946-47. Defendants maintain, however, that these nationalization laws affected all Poles and did not target or discriminate against Polish Jews specifically. (Defs.’ Reply Mem. at 2; see Korzycka-Iwanow Aff. ¶¶ 9-10 (outlining six nationalization statutes enacted by the then-governing communist regime as a “means of production and central planning and management of the national economy”)). According to defendants, laws were enacted relating to the following categories of property: (1) “deserted properties;” (2) “post-German” properties; and (3) “abandoned properties.” (Korzycka-Iwanow Aff. ¶¶ 4-5.) The laws provided that “deserted property” — real property that was confiscated by the Nazis or that was the subject of forced sales — was to be returned to its owners, or their legal successors, if a claim application was received by December 31, 1948. (Id. ¶ 5.) Conversely, property characterized as “abandoned”— once belonging to the Third Reich or German citizens — became the property of the Treasury. (Id.) Plaintiffs allege that the true owners of much of this “abandoned property” were Jews and that this category was established to legitimize the taking of that property by defendants. (Am. Compl.¶ 102.) On July 16, 1960, an Agreement was signed by Poland whereby it agreed to pay $40 million over a period’ of twenty years in full settlement of claims by United States nationals arising from the nationalization of property, the appropriation or loss of the use of property by the Polish government, and debts owed by nationalized enterprises or upon property which has been nationalized. See generally Agreement with the Government of the Polish People’s Republic Regarding the Claims of Nationals of the United States, July 16, 1960, 11 U.S.T. & O.I.A., T.I.A.S. No. 4545 (1960) (“1960 Treaty”). Claims for war damage and property taken by governments other than Poland were not covered under the. agreement. (Id.) The Agreement was also restricted to persons who were United States citizens on the date the property was taken by the Polish government. (Id.) Plaintiffs allege that officials of the Polish army and security services incited, participated in, and purposely failed to prevent the Kielce riot and the subsequent anti-Jewish violence — actions “motivated not simply by abstract anti-Semitism, but by a specific desire to prevent Polish Jews from reclaiming their property” after World War II. (Pls.’ Mem. at 7.) Plaintiffs also cite a book alleging that the American government had some “official and semiofficial indications provided by the Warsaw government that it is encouraging the migration of the Jews of [a major] part of its Jewish population.” (Stein Aff. ¶ 12, citing George Lenezowski, The Middle East in World Affairs 330 (1980)). According to plaintiffs, “[a]t all times relevant to the events described herein, ministers, officers, and directors of Poland and [the Ministry of the Treasury] knew, or were in the possession of such information that they should have known, that they were part of an unlawful scheme that (i) resulted in depriving the Jewish Holocaust victims and their heirs of their Properties, and (ii) provided Poland and [the Ministry] with enormous profits from the use and enjoyment of such Properties.” (Am. Compl.¶ 108.) Plaintiffs and class members are “Jewish persons and entities (and their heirs and successors) who owned real property and improvements thereon in Poland during the period September 1, 1939 to May 30, 1945.” (Am.Compl.¶¶ 2, 68.) Plaintiffs allege five claims. First, plaintiffs contend that defendants violated customary international law by creating, participating in, and/or failing to prevent the permanent dispossession of Polish Jews’ property in the aftermath of the Holocaust and that defendants then profited commercially from their management of the properties. (Am.Compl.¶¶ 111-15.) Second, plaintiffs also accuse defendants of wrongfully converting plaintiffs’ and other class members’ properties for their own use and benefit. (Am.Compl.¶¶ 116-18.) Third, plaintiffs seek an order declaring defendants to be constructive trustees of the property seized and requiring them to turn over the income and profits of that property to plaintiffs and other class members. (Id. ¶¶ 119-21.) Fourth, plaintiffs demand an accounting of the amount and disposition of the , property seized and of the profits derived therefrom. (Id. ¶¶ 122-24.) Fifth, the sub-class of plaintiffs whose property is currently held by a defendant, or any other Polish governmental body, seeks restitution. (Id. ¶¶ 125-28.) DISCUSSION A. Introduction The Republic of Poland and its Ministry of the Treasury move pursuant to Federal Rule of Civil Procedure 12(b) to dismiss this action on the ground, inter alia, of lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1330, 1602-1611 (2001), which “provides the sole basis for obtaining jurisdiction over a foreign state in federal court.” Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 439, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989). The Act is composed of both jurisdictional provisions, 28 U.S.C. § 1330, and immunity provisions, 28 U.S.C. §§ 1602-1611. Section 1380(a) grants the district courts “original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state ... as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement.” § 1330(a). Conversely,- § 1604 entitles foreign states to immunity from the jurisdiction of federal and state courts “except as provided in sections 1605 to 1607 of this chapter” and “[s]ubject to existing international agreements to which the United States is a party at the time of enactment of this Act.” § 1604. “Under the [FSIA], a foreign state is presumptively immune from the jurisdiction of the United States courts; unless a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state.” Saudi Arabia v. Nelson, 507 U.S. 349, 355, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993): Once the plaintiff has produced evidence showing that one of the Act’s specified exceptions applies, the burden shifts to the foreign state to establish that it is immune from the jurisdiction of the United States courts. Cargill Int’l S.A. v. M/T Pavel Dybenko, 991 F.2d 1012, 1016 (2d Cir.1993). In the instant case, plaintiffs rely on two of the exceptions to immunity specified in the FSIA: the commercial activity exception, § 1605(a)(2), and the takings exception, § 1605(a)(3). The commercial activity exception, & 1605(a)(2), provides, in pertinent part, for the exercise of jurisdiction over a cause of action against a foreign state based “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.” § 1605(a)(2). The commercial activity exception codifies the law with respect to claims against a foreign state that was in effect since 1952. The premise underlying this exception has been, articulated by the Supreme Court as follows: Participation by foreign sovereigns in the international commercial market has increased substantially in recent years. The potential injury to private businessmen — and ultimately to international trade itself — from a system in which some of the participants in the international market are not subject to the rule of law has therefore increased correspondingly. As noted above, courts of other countries have also recently adopted the restrictive theory of sovereign immunity. Of equal importance is the fact that subjecting foreign governments to the rule of law in their commercial dealings presents a smaller risk of affronting their sovereignty than would an attempt to pass on the legality of their governmental acts. In their commercial capacities, foreign governments do not exercise powers peculiar to sovereigns. Instead, they exercise only those powers that can also be exercised by private citizens. Subjecting them in connection with such acts to the same rules of law that apply to private citizens is unlikely to touch very sharply on “national nerves.” . . Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 703-04, 96 S.Ct. 1854, 48 L.Ed.2d 301 (1976) (internal citation and footnote omitted). The takings exception, § 1605(a)(3), provides, in pertinent part, for the exercise of jurisdiction "over causes of action if “rights in property taken in violation of international law are in issue” and “that 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.” § 1605(a)(3). Prior to the enactment of the FSIA in 1976, foreign states enjoyed absolute immunity from suit in the United States for causes of action based on the taking of property. See Victory Transp. Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F.2d 354, 360 (2d Cir.1964). Section 1605(a)(3) maintains the rule of absolute immunity for the foreign state itself (except where the expropriated property is present in the United States), but effects a change in the law by subjecting “an agency or instrumentality” of a foreign state (which includes an organ of the foreign state) to suit in the United States for causes of action that otherwise meet the statutory criteria. The takings exception requires not only that the property be owned or operated by an agency or instrumentality of the foreign state, but also that the agency or instrumentality be engaged in commercial activity in the United States. The takings exception thus attempts to strike a balance between two seemingly contradictory policies — maintaining immunity for foreign states which expropriate property in violation of international law, while denying immunity to certain constituent parts of the foreign states. The foregoing discussion requires the consideration of a threshold question presented by this case, namely, the retroactivity of the exceptions to the FSIA upon which plaintiffs rely. The operative events leading to the expropriation of plaintiffs’ property occurred prior to 1952, when the defendants enjoyed immunity from suit for their commercial activities and for the expropriation of property, the latter exception continuing until the enactment of the FSIA in 1976. Because the Court of Appeals for the Second Circuit has held that the exceptions to the FSIA that changed prior law cannot be applied retroactively, Carl Marks & Co. v. Union of Soviet Socialist Republics, 841 F.2d 26, 27 (2d Cir.1988), it is necessary to discuss the law prior to the enactment of the FSIA and the law regarding the retroactivity of the exceptions upon which plaintiffs rely. I then discuss those exceptions in addressing plaintiffs’ claims that the operative act of expropriation occurred in 1957 and that, consequently, the commercial activity exception provides a basis for their cause of action. B. The Law Prior to the FSIA Prior to 1952, foreign states enjoyed virtually absolute immunity from the jurisdiction of United States courts. See Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983). The doctrine of absolute immunity originated in an era of personal sovereignty, when the assertion of jurisdiction by one sovereign over another was thought to constitute an affront to the latter’s dignity and independence. As stated by Chief Justice Marshall: One sovereign being in no respect amenable to another; and being bound by obligations of the highest character not to degrade the dignity of his nation, by placing himself or its sovereign rights within the jurisdiction of another, can be supposed to enter a foreign territory only under an express license, or in the confidence that the immunities belonging to his independent sovereign station, .though not expressly stipulated, are reserved by implication, and will be extended to him. The Schooner Exchange v. McFaddon, 11 U.S. (7 Crunch) 116, 137, 3 L.Ed. 287 (1812). The issue in The Schooner Exchange was whether the district court had jurisdiction over an armed vessel in the service of Napoleon, the emperor . of France, the vessel being physically present within the territory of the United States. Id. at 116-17, 7 Cranch 116. The Attorney General argued in favor of immunity on the ground that “[t]he right to demand redress belongs to the executive department, which alone represents the sovereignty of the nation in its iritercourse with other nations.” Id. at 132, 7 Cranch 116. Chief Justice Marshall expressly declined to reach the Attorney General’s argument, relying instead on the “implied license” theory of immunity set forth in the quotation above in concluding that the district court lacked jurisdiction over the vessel. Id. at 146-47, 7 Cranch 116. The “implied license” theory of immunity subsequently came to be regarded as supporting the extension of immunity to foreign sovereigns even in connection with their commercial activities in the United States. See Berizzi Bros. Co. v. The Pesaro, 271 U.S. 562, 574, 46 S.Ct. 611, 70 L.Ed. 1088 (1926). The Pesaro was an in rem proceeding against a merchant vessel owned and operated by the Italian government “in the service and interest of the whole Italian nation.” Id. at 570, 46 S.Ct. 611. In response to an inquiry from the district court, the State Department took the position that “ ‘government-owned merchant vessels ... should" not be regarded as entitled to the immunities accorded public vessels of war.’ ” The Pesaro, 277 F. 473, 479 n. 3 (S.D.N.Y.1921) (quoting statement of Solicitor of the State Department), vacated by consent of parties. The Supreme Court failed even to acknowledge the State Department’s position, however, basing its decision instead on the “implied license” theory of immunity developed by Chief Justice Marshall in The Schooner Exchange. The Pesaro, 271 U.S. at 571-73, 46 S.Ct. 611. The Court concluded that jurisdiction was lacking over a vessel “held and used by a government ... for the purpose of advancing the trade of its people or providing revenue for its treasury.” Id. at 574, 46 S.Ct. 611. After The Pesaro, and with the passing of the era of personal sovereignty, the Supreme Court began to view the doctrine of immunity as a matter of judicial deference to the executive branch of government. See Victory Transp. Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F.2d 354, 357 (2d Cir.1964). This shift in the basis of the doctrine first became apparent in The Navemar, 303 U.S. 68, 58 S.Ct. 432, 82 L.Ed. 667 (1938), an in rem proceeding against a merchant vessel owned by the Spanish government. Id. at 70, 58 S.Ct. 432. The issue in the case was whether the district court was bound to accept as. conclusive the “suggestion” of the Spanish ambassador that the vessel was in the. Spanish government’s possession and control, and therefore entitled to immunity under The Pesaro. Id. Noting that the State Department had declined to recognize the Spanish government’s claim of possession and control of the vessel, id. at 71, 58 S.Ct. 432, the Court stated, in dictum that, “[i]f the claim is recognized and allowed by the Executive Branch of the government, it is then the duty of the courts to release the vessel upon the appropriate suggestion by the Attorney General of the United States.” Id. at 74, 58 S.Ct. 432. Absent recognition of the claim by the State Department, the district court was not bound to accept as conclusive the Spanish ambassador’s suggestion, and the issue of the Spanish government’s possession and control of the vessel was an “appropriate subject[ ] for judicial inquiry upon proof of the matters alleged.” Id. at 75, 58 S.Ct. 432. Subsequent decisions in Ex Parte Republic of Peru, 318 U.S. 578, 63 S.Ct. 793, 87 L.Ed. 1014 (1943), and Republic of Mexico v. Hoffman, 324 U.S. 30, 65 S.Ct. 530, 89 L.Ed. 729 (1945), firmly established judicial deference to the executive branch as the basis for the doctrine of foreign sovereign immunity. In Ex Parte Republic of Peru, the State Department formally recognized the Peruvian government’s claim that a merchant vessel owned by it was immune from jurisdiction. 318 U.S. at 581, 63 S.Ct. 793. The Supreme Court held: Upon recognition and allowance of the claim by the State Department and certification of its action presented to the court by the Attorney General, it is the court’s duty to surrender the vessel and remit the libelant to the relief obtainable through diplomatic negotiations. [Citing The Navemar and The Schooner Exchange.] This practice is founded upon the policy, recognized both by the Department of State and the courts, that our national interest will be better served in such cases if the wrongs to suitors, involving our relations with a friendly foreign power, are righted through diplomatic negotiations rather than by the compulsions of judicial proceedings. Id. at 588-89, 63 S.Ct. 793. In Hoffman, by contrast, the State Department took no position with respect to the asserted immunity of a merchant vessel owned by the Mexican government but not in its possession or control. 324 U.S. at 31-32, 65 S.Ct. 530. The Court held that, even “[i]n the absence of recognition of the claimed immunity by the political branch of the government,” the district court was bound to decide whether immunity existed “in conformity to the principles accepted by the department of the government charged with the conduct of our foreign relations.” Id. at 34-35, 65 S.Ct. 530. Stated otherwise, “[i]t is ... not for the courts to deny an immunity which our government has seen fit to allow, or to allow an immunity on new grounds which the government has. not seen fit to recognize.” Id. at 35, 65 S.Ct. 530. As the State Department had declined to recognize the immunity claim both in the case at bar and in The Nave-mar, which was factually similar, the Court concluded that the Mexican vessel was subject to the jurisdiction of the district court. Id. at 37-38, 65 S.Ct. 530. Despite this shift in the basis of the doctrine of sovereign immunity, foreign states continued to enjoy virtually absolute immunity from suit in the United States prior to 1952, even in connection with their commercial activities. See Verlinden, 461 U.S. at 486, 103 S.Ct. 1962 (“Until 1952, the State Department ordinarily requested immunity in all actions against friendly foreign sovereigns.”). Indeed, where a foreign state was named as a defendant in an in personam action, it was invariably held to be immune from the jurisdiction of the district court, whether or not the State Department had made a suggestion of immunity. See Puente v. Spanish Nat'l State, 116 F.2d 43, 45 (2d Cir.1940) (Spanish government held immune upon suggestion of Spanish ambassador); Sullivan v. State of Sao Paulo, 122 F.2d 355, 358-59 (2d Cir.1941) (citing Puente and holding that constituent states of Brazil were immune upon suggestion of Brazilian ambassador); Piascik v. British Ministry of War Transport, 54 F.Supp. 487, 487-88 (S.D.N.Y.1943) (citing Ex Parte Republic of Peru and holding that British Ministry of War Transport was immune upon suggestion of Secretary of State). In 1952, the State Department announced, in the so-called Tate Letter, its adoption of the “restrictive” theory of sovereign immunity. Letter of Jack B. Tate, Acting Legal Adviser, Department of State, to Acting Attorney General Philip B. Perlman, May 19, 1952, reprinted in 26 Dep’t of State Bull. 984-85 (1952) and Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 711-15, 96 S.Ct. 1854, 48 L.Ed.2d 301 (1976). Under this theory, “the immunity of the sovereign is recognized with regard to sovereign or public acts (jure imperii) of a state, but not with respect to private acts (jure gestionis ).” Alfred Dunhill, 425 U.S. at. 711, 96 S.Ct. 1854 (quotation from text of Tate Letter). Legal Adviser Tate cited the following reasons for the State Department’s adoption of the theory: (i) most civil law countries had already adopted it; (ii) the Government of the United States did not claim immunity when sued in foreign courts in contract or tort; and (iii) “the widespread and increasing practice on the part of governments of engaging in commercial activities makes necessary a practice which will enable persons doing business with them to have their rights determined in the courts.” Id. at 714, 96 S.Ct. 1854. Under Ex Parte Republic of Peru and Hoffman, the courts were bound to apply the restrictive theory of immunity adopted by the State Department in the Tate Letter. Victory Transp. Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F.2d 354, 358-59 (2d Cir.1964). The commercial activity, of a foreign state fell into the category of “private” acts for which immunity was denied under the restrictive theory, while expropriation fell into the category of “public” acts for which immunity was recognized. Victory Transp., 336 F.2d at 360. In Victory Transport, the Comisaria General, a branch of the Spanish Ministry of Commerce, argued, inter alia, that its purchase of wheat pursuant to the Surplus Agricultural Commodities Agreement to help feed the people of Spain constituted a public act for which it was entitled to immunity. Id. at 361. The Comisaria General had made a request to the State Department for a suggestion of immunity, to which the State Department had failed to reply. Id. at 358-59. The Second Circuit denied the Comisaria General’s immunity claim, observing that only certain categories of acts, including “legislative acts, such as nationalization,” qualified as the “strictly political or public acts” for which immunity was always recognized under the restrictive theory, even if, in any particular instance, the State Department failed to make a suggestion of immunity to the court. See also Am. Hawaiian Ventures, Inc. v. M.V.J. Latuharhary, 257 F.Supp. 622, 626-27 (D.N.J.1966) (Indonesian government immune from suit for alleged expropriation of plaintiffs property). The immunity recognized by the courts prior to the enactment of the FSIA extended to the political subdivisions of a foreign state, including its departments and ministries, and, often, to other entities that performed governmental functions. See, e.g., Oliver Am. Trading Co. v. Gov’t of the United States of Mexico, 5 F.2d 659, 661 (2d Cir.1924) (Mexican National Railways held immune). As explained by the Second Circuit in Oliver: While the action is nominally against both the government of Mexico and the National Railways in Mexico, it is in reality a suit only against the Mexican government. For it appears that the National Railways of Mexico is “merely a name” for a system of railroads in the possession of the Mexican government, and has been controlled and operated by Mexico since 1914 for national purposes, just as it operates the Post Office, the Customs Service, or any other branch of the national government. Id. See also, e.g., United States v. Deutsches Kalisyndikat Gesellschaft, 31 F.2d 199, 202-03 (S.D.N.Y.1929) (distinguishing between “departments of government,” entitled to immunity, and state-owned corporations, not entitled to immunity); Sullivan v. State of Sao Paulo, 122 F.2d 355, 359-60 (2d Cir.1941) (constituent states of Brazil entitled to immunity as political subdivisions of foreign state); Piascik v. British Ministry of War Transport, 54 F.Supp. 487, 487-88 (S.D.N.Y.1943) (British Ministry of War Transport entitled to immunity as “duly constituted department of the British Government”); In re Investigation of World Arrangements with Relation to Prod., Transp., Ref. & Distrib. of Petroleum, 13 F.R.D. 280, 290-91 (D.D.C.1952) (Anglo-Iranian Oil Company entitled to immunity on ground that it performed “fundamental government function serving a public purpose”); Victory Transp. Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F.2d 354, 356-57 (2d Cir.1964) (branch of Spanish Ministry of Commerce assumed, without discussion to be foreign state for immunity purposes). C. The FSIA and Its Retroactive Effect In 1976, Congress enacted the FSIA in order to clarify the standards governing foreign sovereign immunity in United States courts and to free the executive branch from the case-by-case diplomatic pressures exerted upon it by foreign states. H.R.Rep. No. 94-1487, at 7 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6605-06; see also Verlinden, 461 U.S. at 488, 103 S.Ct. 1962. “For the most part, the Act codifies, as a matter of federal law, the restrictive theory of sovereign immunity.” Verlinden, 461 U.S. at 488, 103 S.Ct. 1962. Section 1605(a)(2), for example, denies immunity to foreign states in actions based upon their commercial activities carried on in the United States or causing a direct effect in the United States. Section 1605(a)(3) is also consistent with pre-FSIA law to the extent that it maintains the immunity of foreign states in actions based upon the taking of property (except where the property is located in the United States). In other respects, however, the enactment of the FSIA effected a change in the law of foreign sovereign immunity. Of particular significance in the context of the present discussion, § 1605(a)(3) subjects any “agency or instrumentality” of a foreign state to suit in the United States where “rights in property taken in violation of international law are at issue,” provided that the agency or instrumentality owns or operates the property and is engaged in commercial activity in this country. The definition of “agency or instrumentality” under the FSIA could under some circumstances encompass certain departments or ministries of a foreign state. See H.R. No. 94-1487, at 15-16, reprinted in 1976 U.S.C.C.A.N., at 6614 (“As a general matter, entities which meet the definition of an ‘agency or instrumentality of a, foreign state’ could assume a variety of forms, including ... a department or ministry which acts and is suable in its own name.”). The denial of immunity to the Ministry of the Treasury of Poland under the circumstances here would clearly conflict with pre-FSIA law, which did not distinguish between a foreign state and its departments or ministries, and which recognized the absolute immunity of foreign states in all actions based on their public acts, including expropriation. In Carl Marks & Co. v. Union of Soviet Socialist Republics, 841 F.2d 26 (2d Cir.1988), the Second Circuit held that the FSIA could not be applied retroactively to a claim that arose in 1918. The plaintiffs in Carl Marks were holders of debt instruments issued by the Russian Imperial Government in 1916. Id. at 27. In 1918, after the fall of the Imperial Government, the Bolshevik regime repudiated all foreign loans, including the debt instruments held by plaintiffs. Id. The Second Circuit held that, while the issuance of public debt fell within the commercial activity exception of the FSIA, § 1605(a)(2), the district court lacked jurisdiction over the suit, because: Such a retroactive application of the FSIA would affect adversely the USSR’s settled expectation, rising to the level of an antecedent right, of immunity from suit in American courts. We believe, as did the district court, that only after 1952 was it reasonable for a foreign sovereign to anticipate being sued in the United States courts on .commercial transactions. Carl Marks, 841 F.2d at 27 (citations and internal quotation marks omitted). Because the plaintiffs’ claim arose before the State Department’s issuance of the Tate Letter in 1952, the Second Circuit observed that it “need not decide the effect of the FSIA on causes of action arising between 1952 and the enactment of the Act.” Id.; see also Jackson v. People’s Republic of China, 794 F.2d 1490, 1497-98 (11th Cir.1986) (holding that Chinese government was immune from suit for its default on bonds that matured in 1951, because “to give the [FSIA] retrospective application to pre-1952 events would interfere with antecedent rights of other sovereigns”). Plaintiffs here argue that the Second Circuit’s decision in Carl Marks does not preclude retroactive application of the FSIA to their claims, because Poland could not have had a “settled expectation” of immunity for the discriminatory taking of Jewish property after World War II. (Pls.’ Mem. at 15-20.) This argument is difficult to reconcile with the premise that a clear consensus did not exist with respect to the issue whether expropriation by a foreign sovereign of property belonging to its own citizens violates the law of nations — even where the expropriation was part of a scheme of religious persecution of Jews in Nazi Germany. See Filartiga v. Pena-Irala, 630 F.2d 876, 888 n. 23 (2d Cir.1980) (distinguishing such conduct, which formed the basis for the cause of action in Dreyfus v. Von Finch, 534 F.2d 24 (2d. Cir.1976), from torture, which was at issue in Filartiga ). Nor can it be reconciled with the act of state doctrine, which holds that: [T]he judicial branch will not examine the validity of a taking of property within its own territory by a foreign sovereign government, extant and recognized by this country at the time of suit, in the absence of a treaty or other unambiguous agreement regarding controlling legal principles, even if the complaint alleges that the taking violates customary international law. Banco National de Cuba v. Sabbatino, 376 U.S. 398, 428, 84 S.Ct. 923, 11 L.Ed.2d 804 (1964). Cf. Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 706, 96 S.Ct. 1854, 48 L.Ed.2d 301 (1976) (“We decline to extend the act of state doctrine to acts committed by foreign sovereigns in the course of their purely commercial operations.”). Indeed, the extent to which the act of state doctrine posed an obstacle to an action of- the kind brought here is demonstrated by the sad case of a Jewish victim of Nazi persecution who was imprisoned in 1937 and compelled by force, threats of physical violence and duress to transfer his property, which was eventually converted by a Dutch corporation to its own use in 1939. Bernstein v. N.V. Nederlandsche-Amerikaansche Stoomvaart-Maatschappij, 173 F.2d 71, 72-73 (2d Cir.1949). After initially dismissing a civil suit due to the act of state doctrine, id. at 75-76, the Second Circuit reversed itself, deferring to a State Department recommendation for jurisdiction over “suits for [the return of] identifiable property involved in Nazi forced transfers.” Bernstein v. N.V. Nederlandsche-Amerikaansche Stoomvaart-Maatschappij, 210 F.2d 375, 375-76 (2d Cir.1954). Only this “supervening expression of Executive Policy” permitted an action to proceed against a private party. Id. at 376. The doctrine of sovereign immunity differs from the act of state doctrine because it goes to the issue whether a foreign state can be forced to defend a cause of action in the United States, while the act of state doctrine supplies the rule of decision if jurisdiction is exercised over the claim. Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 705 n. 18, 96 S.Ct. 1854, 48 L.Ed.2d 301 (1976). Indeed, the House Judiciary Committee report describing the exception to the doctrine of sovereign immunity for cases involving the expropriation of property in violation of international law emphasizes that it “deals solely with, issues of immunity, [and] it in no way affects existing law on the extent to which, if at all, the ‘act of state’ doctrine may be applicable.” H.R. No. 94-1487, at 20, reprinted in 1976 U.S.C.C.A.N., at 6618. I merely cite this choice of law rule, which often overlaps the doctrine of sovereign immunity, Alfred Dunhill, 425 U.S. at 705 n. 18, 96 S.Ct. 1854, to show that, even without reference to the doctrine of sovereign immunity, there is reason to question the premise that Poland would have had any expectation of being held to account here for its conduct at the time it occurred. The real issue, however, is whether, prior to the adoption of the FSIA in 1976, Poland enjoyed immunity from suit in the United States for the discriminatory taking of Jewish property even • if other legal principles did not stand in the way of the successful prosecution of such an action. The answer is that a foreign state did enjoy such immunity prior to the enactment of the FSIA. To the extent that the FSIA overruled prior law, the holding in Carl Marks makes clear that it cannot be applied retroactively. Also unsustainable is plaintiffs’ argument that defendants’ conduct has been, and is, ongoing. Plaintiffs cite Asociacion De Reclamantes v. United Mexican States, 561 F.Supp. 1190 (D.D.C.1983), aff'd, 735 F.2d 1517 (D.C.Cir.1984), and Von Dardel v. Union of Soviet Socialist Republics, 623 F.Supp. 246 (D.D.C.1985), vacated on other grounds, 736 F.Supp. 1 (D.D.C.1990), hr support for this argument. In Reclamantes, however, the Mexican Government had consistently acknowledged its obligation to pay the plaintiffs’ claims, even after the suit was brought, Reclamantes, 561 F.Supp. at 1195, while in Von Dardel, the Soviet Union’s alleged detention of Raoul Wallenberg was considered an “ongoing tort” because there was some evidence that Wallenberg might still be alive, notwithstanding the Soviet Union’s representation that he had died in 1947, Von Dardel, 623 F.Supp. at 249-50, 260. See also Carl Marks & Co. v. Union of Soviet Socialist Republics, 665 F.Supp. 323, 348-49 (S.D.N.Y.1987), aff'd, 841 F.2d 26 (2d Cir.1988). Here, because defendants have not acknowledged the validity of plaintiffs’ claims, and because those claims are not based on the ongoing tortious detention of a person, neither Reclamantes nor Von Dardel is apposite. Although plaintiffs do not expressly so argue, some courts have held that the Supreme Court’s decision in Landgraf v. USI Film Products, 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994), establishes the full retroactivity of the FSIA and thus effectively overrules the Second Circuit’s decision in Carl Marks. See, e.g., Haven v. Rzeczpospolita Polska (Republic of Poland), 68 F.Supp.2d 943, 946 (N.D.Ill.1999) (FSIA applicable to claims virtually identical to those asserted here); Altmann v. Republic of Austria, 142 F.Supp.2d 1187, 1201 (C.D.Cal.2001) (FSIA applicable to claim for taking of artwork by Nazis in 1938); see also Princz v. Federal Republic of Germany, 26 F.3d 1166, 1170 (D.C.Cir.1994) (suggesting, but not deciding, that “all questions of foreign sovereign immunity, including those that involve an act of a foreign government taken before 1976, are to be decided under the FSIA”). In Landgraf, the Supreme Court provided an analytical framework for determining the retroactivity of a statute. See Landgraf, 511 U.S. at 263-80, 114 S.Ct. 1483. The issue in the case was whether certain provisions of the Civil Rights Act of 1991 — creating a right to recover compensatory and punitive damages for specified violations of Title VII and providing for trial by jury if such damages were claimed — applied to a case pending on appeal when the provisions were enacted. Id. at 247-49, 114 S.Ct. 1483. In deciding that issue, the Court outlined a two-step process for determining the retroactivity of a statute. Id. at 280, 114 S.Ct. 1483. First, it must be determined “whether Congress has expressly prescribed the statute’s proper reach.” Id. “If Congress has done so, of course, there is no need to resort to judicial default rules.” Id. Second, if the statute contains no such express command, it must be determined “whether the new statute would have retroactive effect, i.e., whether it would impair rights a party possessed when he acted, increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed.” Id. If the statute would have such an effect, the “traditional presumption against retroactivity teaches that it does not govern absent clear congressional intent favoring such a result.” Id. The first step in the Landgraf analysis is easily resolved in this case. The text of the FSIA does not express a clear congressional intent that the statute be applied retroactively. Carl Marks & Co. v. Union of Soviet Socialist Republics, 665 F.Supp. 323, 336-37 (S.D.N.Y.1987), aff'd, 841 F.2d 26 (2d Cir.1988). The second step in the Landgraf analysis is to determine whether application of the FSIA to plaintiffs’ claims would have “.a genuinely ‘retroactive’ effect.” Landgraf 511 U.S. at 277, 114 S.Ct. 1483. Elaborating on this step in the analysis, the Court stated: We have regularly applied intervening statutes conferring or ousting jurisdiction, whether or not jurisdiction lay when the underlying conduct occurred or when the suit was filed. Application of a new jurisdictional rale usually “takes away no substantive right but simply changes the tribunal that is to hear the case.” Hallowell [v. Commons, 239 U.S. 506, 508, 36 S.Ct. 202, 60 L.Ed. 409 (1916)]. Present law normally governs in such situations because jurisdictional statutes “speak to the power of the court rather than to the rights or obligations of the parties,” Republic Nat. Bank of Miami [v. United States, 506 U.S. 80, 100, 113 S.Ct. 554, 121 L.Ed.2d 474 (1992)] (Thomas, J., concurring). Landgraf, 511 U.S. at 274, 114 S.Ct. 1483. See, e.g., Andrus v. Charlestone Stone Prods. Co., 436 U.S. 604, 607 n. 6, 98 S.Ct. 2002, 56 L.Ed.2d 570 (1978) (statute eliminating amount-in-controversy requirement in federal question cases applied retroactively); Bruner v. United States, 343 U.S. 112, 116-17, 72 S.Ct. 581, 96 L.Ed. 786 (1952) (statute repealing district court’s jurisdiction over wage actions brought by employees of United States applied retroactively); The Assessors v. Osbornes, 76 U.S. 567, 575, 9 Wall. 567, 19 L.Ed. 748 (1869) (statute repealing Circuit Court’s jurisdiction over cases arising under internal revenue laws applied retroactively); see also United States v. Alabama, 362 U.S. 602, 604, 80 S.Ct. 924, 4 L.Ed.2d 982 (1960) (statute conferring jurisdiction on district courts over actions against states applied retroactively to case in which plaintiff sought only prospective injunctive relief). Nothing in the Court’s decision in Landgraf overruled the Second Circuit’s ruling in Carl Marks that a foreign state’s settled expectation of immunity from the jurisdiction of the United States courts “ris[es] to the level of an antecedent right,” Carl Marks, 841 F.2d at 27 (internal quotation marks omitted). Indeed, as the quotation set forth in the preceding paragraph shows, the Court simply reaffirmed in Landgraf the principles of retroactivity that it had been applying since at least as early as its decision in Hallowell v. Commons, 239 U.S. 506, 36 S.Ct. 202, 60 L.Ed. 409 (1916). Moreover, the Court’s conclusion in Landgraf — that the relevant provisions of the Civil Rights Act of 1991 did not apply retroactively, Landgraf, 511 U.S. at 293, 114 S.Ct. 1483 — provides no support for the argument that the FSIA applies retroactively. Particularly apposite here is Hughes Aircraft Co. v. United States, 520 U.S. 939, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997). The issue in Hughes was the retroactivity of an amendment to the qui tam provision of the False Claims Act, 31 U.S.C. § 3730(b), which permits, in certain circumstances, a suit by a private party on behalf of the United States against anyone submitting a false claim to the Government. Id. at 941, 117 S.Ct. 1871. Prior to 1986, such a suit was barred if the Government already had possession of the information on which the suit was based. Id. A 1986 amendment to the False Claims Act partially removed that bar. Id. The plaintiff in Hughes brought suit under the False Claims Act based on conduct predating the effective date of the amendment and argued that the amendment, which he needed to maintain his suit, should apply to his claim. Id. at 946, 117 S.Ct. 1871. In support of his claim, the plaintiff contended that the amendment did not increase the defendant’s liability for past conduct; it merely affected whether a private party could bring suit on behalf of the United States. Id. at 948, 117 S.Ct. 1871. More generally, the plaintiff argued that the 1986 amendment was merely jurisdictional and, therefore, an exception to the general Landgraf presumption against retroactivity. Id. at 950, 117 S.Ct. 1871. The Court rejected the plaintiffs argument, holding: The 1986 amendment ... does not merely allocate jurisdiction among forums. Rather, it creates jurisdiction where none previously existed; it thus speaks not just to the power of a particular court but to the substantive rights of the parties as well. Such a statute, even though phrased in “jurisdictional” terms, is as much subject to our presumption against retroactivity as any other. Id. at 951, 117 S.Ct. 1871 (emphasis in original). To the extent that the FSIA created jurisdiction over certain types of suits against foreign sovereigns, it is similar to the qui tam provision of the False Claims Act. The Court’s decision in Verlinden also supports the Second Circuit’s ruling in Carl Marks that the FSIA should not be applied retroactively to the extent that it adversely affects a foreign state’s settled expectation of immunity from suit in the United States courts. The issue in Verlinden was whether Congress, in enacting the FSIA, had exceeded the scope of Article III by granting the district courts subject-matter jurisdiction over certain civil actions by foreign plaintiffs against foreign sovereigns where the rule of decision was provided by state law. Verlinden, 461 U.S. at 491, 103 S.Ct. 1962. The Court held that the enactment of the FSIA was a proper exercise of Congress’s power to regulate foreign commerce, observing that: As the House Report [on the FSIA] clearly indicates, the' primary purpose of the Act was to “se[t] forth comprehensive rules governing sovereign immunity,” H.R.Rep. No. 94-1487, at p. 12; the jurisdictional provisions of the Act are simply one part of this comprehensive scheme. The Act thus does not merely concern access to the federal courts. Rather, it governs the type of actions for which foreign sovereigns may be held liable in a court in the United States, federal or state. The Act codifies the standards governing foreign sovereign immunity as an aspect of substantive federal law [citing Ex Parte Republic of Peru and Hoffman]; and applying those standards will generally require interpretation of numerous points of federal law. Id. at 496-97, 103 S.Ct. 1962. The Court’s opinion thus made clear that sovereign immunity is an issue of substantive, not merely jurisdictional, law. The preceding analysis suggests that the takings exception of the FSIA should not apply retroactively insofar as it allows jurisdiction over a claim brought against a department or ministry of a foreign state, since immunity would have been recognized with regard to such a claim prior to the enactment of the FSIA. By contrast, the commercial activity exception of the FSIA should apply retroactively to claims arising since the State Department’s adoption of the Tate Letter in 1952. Plaintiffs argue that their claims arose in 1957, when, under Polish law, the property that they had abandoned during the War es-cheated to the Polish state. (See Korzycka Aff. Ex. C (decree, dated March 8,1946, at art. 37)). Under these circumstances, if plaintiffs could satisfy the conditions of the commercial activity exception of the FSIA, the defendants would not enjoy sovereign immunity. I need not determine whether plaintiffs’ claims arose in 1947, as defendants maintain, or in 1957, as plaintiffs maintain, because, as the following, discussion will show, even if plaintiffs’ claims arose in 1957, they dp not fall within the commercial activity exception. Likewise, although I do not finally resolve the issue, plaintiffs, would very likely fail to satisfy the conditions of the takings exception. D. The Exceptions to FSIA Immunity 1. The Commercial Activity Exception The commercial activity exception provides that a foreign state is not immune from the jurisdiction of the United States courts if: the action is based [1] upon a commercial activity carried on in the United States by the foreign state; or [2] upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or [3] 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. 28 U.S.C. § 1605(a)(2). Plaintiffs allege that defendants’ actions fall within the third clause of this exception. Under that clause, defendants are not immune if the expropriation: (1) took place outside of United States territory; (2) occurred “in connection with” a commercial activity; and (3) caused “a direct effect” in the United States. Id. Since the expropriation of plaintiffs’ land occurred in Poland, only the latter two requirements are in dispute. The commercial activity exception of the FSIA is intended to cover a foreign state’s activities as a private player in the marketplace, not to expose a foreign state to liability for its sovereign activities. See Hanil Bank v. Pt. Bank Negara Indonesia, (Persero), 148 F.3d 127, 131 (2d Cir.1998) (citing Saudi Arabia v. Nelson, 507 U.S. 349, 360, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993)); see also Alfred Dunhill, 425 U.S. at 699, 96 S.Ct. 1854 (“[T]he policy supporting the restrictive view of immunity ... is to assure those engaging in commercial transactions with foreign sovereignties that their rights will be determined in the courts whenever possible”). Consequently, the Second Circuit requires “a ‘substantive connection’ or a ‘causal link’ between [the operative acts in the suit] and the commercial activity.” Filetech S.A. v. France Telecom S.A., 157 F.3d 922, 930-31 (2d Cir.1998) (quoting Hanil Bank, 148 F.3d at 130); see also Hanil Bank, 148 F.3d at 130 (issuance of letter of credit, and subsequent failure to honor it, satisfied “in connection” requirement). Otherwise, the “in connection” language of § 1605(a)(2) could be read “to include tangential commercial activities to which the ‘acts’ forming the basis of the claim have only an attenuated connection, [and] the ‘commercial activity exception would effectively be rewritten to authorize the exercise of jurisdiction over acts that are essentially sovereign in nature.” Drexel Burnham Lambert Group Inc. v. Committee of Receivers for Galadari, 12 F.3d 317, 330 (2d Cir.1993) (citing Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 450 (D.C.Cir.1990)). Plaintiffs argue their property was taken outside the United States “in connection” with its subsequent ownership and commercial operation. There are undoubtedly commercial consequences to that expropriation. Plaintiffs have attached a brochure produced by the Ministry that offers for sale real estate in the Polish city of Bialystok — some of which it is alleged was formerly plaintiffs’ property. (See Garland Decl. at Ex. C.) Plaintiffs also allege, without citing to any evidence, that defendants have used United States financial institutions to maintain the properties and the profits therefrom. (Am. Compl.¶¶ 11-14.) Defendants do not contest that advertising and banking are commercial activities. Instead, they maintain that these activities are too attenuated from the operative acts in this suit to satisfy the “in connection” requirement. “[T]he phrase [‘based upon’ in § 1605(a)(2)] is read most naturally to mean those elements of a claim that, if proven, would entitle a plaintiff to relief under his theory of the case.” Nelson, 507 U.S. at 357, 113 S.Ct. 1471 (citations-omitted). Plaintiffs’ claims — alleging a violation of customary international law, conversion, constructive trust, and seeking equitable accounting as well as restitution — are “based upon” the manner in which the property was obtained, not its subsequent management. “Expropriation is a quintessentially sovereign act and is never viewed as having commercial character.” Pena-Perez v. Procuraduria General De Justicia of Nicaragua, No. 96 Civ. 0168, 1997 WL 122823, at *2 (S.D.N.Y. Mar.17, 1997) (citing Carey v. National Oil Corp., 453 F.Supp. 1097, 1102 (S.D.N.Y.1978), aff'd, 592 F.2d 673 (2d Cir.1979)); see Baglab Ltd. v. Johnson Matthey Bankers Ltd., 665 F.Supp. 289, 294 (S.D.N.Y.1987) (“The nationalization of a bank is a quintessentially sovereign activity and may not serve as the basis for a suit against the Bank.”). On facts virtually identical to those alleged in this action, Judge Shadur ruled that “[i]t is obvious that governmental expropriation of private property under governmental authority— whether legitimate or illegitimate — is the classic [sovereign] activity.... Whatever else may be- said of the Governmental Defendants’ alleged conduct, it is not ‘commercial activity.’ ” Haven, 68 F.Supp.2d at 954. Plaintiffs cannot “escape the requirements of § 1605(a)(3) through artful re-characterization of their takings claim.” Chuidian v. Philippine Nat’l Bank, 912 F.2d 1095, 1106 (9th Cir.1990) (ruling that a claim that was “in substance a taking of property, not a tortious injury to property[,]” must be pled under § 1605(a)(3)); see de Sanchez v. Banco de Nicaragua, 770 F.2d 1385, 1398 (5th Cir.1985) (noting that “Congress [could not have] intended plaintiffs to be able to rephrase their takings claims in terms of conversion and thereby bring the claims even where the takings are permitted by international law”); Alberti v. Empresa Nicaraguense De La Carne, 705 F.2d 250, 254 (7th Cir.1983) (ruling that § 1605(a)(2) does not apply where there was “no controversy” concerning the' commercial activities subsequent to the nationalization); but see Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 710 (9th Cir.1992) (ruling that defendants’ expropriation of plaintiffs’ property was performed “in connection with” defendants’ subsequent commercial management and operation of the property). On this point, Siderman is unsupported by the legislative history of the FSIA and principles of statutory construction. The House Report on the Act provides examples of activities which should be considered “commercial” for the purposes of § 1605(a)(2) and others which should be considered governmental. The former include commercial transactions undertaken to achieve a governmental end. See H.R.Rep. No. 94-1487, at 16, reprinted in 1976 U.S.C.C.A.N., at 6615 (citing contracts to buy military provisions or construct a governmental building). Conversely, governmental activities with potential commercial implications do not qualify as commercial activities under the FSIA. See id. (citing foreign state’s participation in foreign assistance program administered by United States government). Also, as a matter of statutory construction, the commercial activity exception requires the basis for the suit to be commercial. Otherwise, the commercial activities exception would subsume the FSIA’s expropriation exception in § 1605(a)(3); every expropriation of property has some commercial implications. Even if the “in connection” require-’ ment of the third clause of § 1605(a)(2) has been satisfied, plaintiffs have failed to allege a “direct effect” of the alleged expropriation in the United States. The “direct effect” test focuses on whether the effect of defendants’ activity is “sufficiently ‘direct’ and sufficiently ‘in the United States’ that Congress would have wanted an American court to'hear the case[.]” Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300, 313 (2d Cir.1981). An effect is direct if “it follows ‘as an immediate consequence of defendant’s ... activity.’ ” Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 618, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992) (quoting Weltover, Inc. v. Republic of Argentina, 941 F.2d 145, 152 (2d Cir.1991)). In addition, the Second Circuit has held that the specific conduct causing the direct effect in the United States must be legally significant to the cause of action. See Filetech, 157 F.3d at 931 (citing Hanil Bank, 148 F.3d at 133, and Antares Aircraft, L.P. v. Federal Republic of Nigeria, 999 F.2d 33, 34-35 (2d Cir.1993)). Plaintiffs cite two “direct effects” of defendants’ actions — neither of which satisfies the requirements of the “direct effect” test. First, plaintiffs point to the adversely affected class members who reside in the United States as directly affected by defendants’ actions. This effect, however, is insufficient as a matter of well-settled law. “[T]he fact that an American individual or firm suffers some financial loss from a foreign tort cannot, standing alone, suffice to trigger the [commercial activity] exception ... If a loss to an American individual and firm resulting from a foreign tort were sufficient standing alone to satisfy the direct effect requirement, the commercial activity exception would in large part eviscerate the FSIA’s provision of immunity for foreign states.” Antares Aircraft, 999 F.2d at 36. Second, plaintiffs contend that defendants advertised the expropriated property for sale in the United States and that defendants have used financial institutions in the United States to maintain the property. Even assuming that these activities were an element of the “act” upon which plaintiffs’ action is based, they are insufficient to satisfy the “legally significant acts” test. This is because the activities allegedly causing a “direct effect” in the United States — the advertising of the property in the United States and the use of United States financial institutions to maintain the property — have no legal significance to this action. Thus, plaintiffs cannot avail themselves of the commercial activity exception to the FSIA. 2. The “Takings in Violation of International Law” Exception Because I have concluded that the takings exception of the FSIA does not apply to confer jurisdiction for a claim arising prior to its enactment, it is unnecessary for me to address the merits of plaintiffs’ argument. Nevertheless, I discuss the takings exception in some detail in order to frame the issue should the Court of Appeals conclude that my retroactivity analysis is flawed. The takings exception provides that a foreign state shall not be immune from the jurisdiction of the United States courts if: rights in property taken in violation of international law are in issue and [i] 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 [ii] 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[J 28 U.S.C. § 1605(a)(3). Since the property at issue here is in Poland, only the second clause of this exception can apply. Under this clause, plaintiffs must show that: (i) the property was taken in violation of international law; (ii) that property, or any property exchanged for that property, is owned or operated by an “agency or instrumentality” of the foreign state; and (iii) that agency or instrumentality was engaged in a commercial activity in the United States. Id. Citing to the fact that many of the plaintiffs appear to have been Polish citizens at the time of expropriation, defendants argue that, as a matter of well-settled law, a foreign state’s expropriation of the property of its own nationals is not a violation of the “law of nations.” See Dreyfus v. Von Finck, 534 F.2d 24, 31 (2d. Cir.1976) (finding that “violations of international law do not occur when the aggrieved parties are nationals of the acting state”). Most courts that have considered such expropriation have ruled that it does not violate international law. See, e.g., Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 711 (9th Cir.1992) (holding that takings exception did not apply to claims of plaintiffs who were citizens of defendant country); Chuidian v. Philippine Nat’l Bank, 912 F.2d 1095, 1105 (9th Cir.1990) (“Expropriation by a