Zschernig v. Miller/Opinion of the Court

Mr. Justice DOUGLAS delivered the opinion of the Court.

This case concerns the disposition of the estate of a resident of Oregon who died there intestate in 1962. Appellants are decedent's sole heirs and they are residents of East Germany. Appellees include members of the State Land Board that petitioned the Oregon probate court for the escheat of the net proceeds of the estate under the provisions of Ore.Rev.Stat. § 111.070 (1957), which provides for escheat in cases where a nonresident alien claims real or personal property unless three requirements are satisfied:

(1) the existence of a reciprocal right of a United States citizen to take property on the same terms as a citizen or inhabitant of the foreign country; (2) the right of United States citizens to receive payment here of funds from estates in the foreign country; and

(3) the right of the foreign heirs to receive the proceeds of Oregon estates 'without confiscation.'

The Oregon Supreme Court held that the appellants could take the Oregon realty involved in the present case by reason of Article IV of the 1923 Treaty of Friendship, Commerce and Consular Rights with Germany (44 Stat. 2135) but that by reason of the same Article, as construed in Clark v. Allen, 331 U.S. 503, 67 S.Ct. 1431, 91 L.Ed. 1633, they could not take the personalty. 243 Or. 567, 412 P.2d 781; 243 Or. 592, 415 P.2d 15. We noted probable jurisdiction. 386 U.S. 1030, 87 S.Ct. 1475, 18 L.Ed.2d 590.

The Department of Justice, appearing as amicus curiae submits that, although the 1923 Treaty is still in force, Clark v. Allen should be overruled insofar as it construed the personalty provision of Article IV. That portion of Article IV speaks of the rights of '(n)ationals of either High Contracting Party' to dispose of 'their personal property of every kind within the territories of the other.' That literal language and its long consistent construction, we held in Clark v. Allen, 'does not cover personalty located in this country and which an American citizen undertakes to leave to German nationals.' 331 U.S., at 516, 67 S.Ct., at 1438.

We do not accept the invitation to re-examine our ruling in Clark v. Allen. For we conclude that the history and operation of this Oregon statute make clear that § 111.070 is an intrusion by the State into the field of foreign affairs which the Constitution entrusts to the President and the Congress. See Hines v. Davidowitz, 312 U.S. 52, 63, 61 S.Ct. 399, 402, 85 L.Ed. 581.

As already noted one of the conditions of inheritance under the Oregon statute requires 'proof that such foreign heirs, distributees, devisees or legatees may receive the benefit, use or control of money or property from estates of persons dying in this state without confiscation, in whole or in part, by the governments of such foreign countries,' the burden being on the nonresident alien to establish that fact.

This provision came into Oregon's law in 1951. Prior to that time the rights of aliens under the Oregon statute were defined in general terms of reciprocity, similar to the California Act which we had before us in Clark v. Allen, 331 U.S., at 506, 67 S.Ct., at 1433 n. 1.

We held in Clark v. Allen that a general reciprocity clause did not on its face intrude on the federal domain. 331 U.S., at 516-517, 67 S.Ct., at 1438-1439. We noted that the California statute, then a recent enactment, would have only 'some incidental or indirect effect in foreign countries.' Id., at 517, 67 S.Ct., at 1439.

Had that case appeared in the posture of the present one, a different result would have obtained. We were there concerned with the words of a statute on its face, not the manner of its application. State courts, of course, must frequently read, construe, and apply laws of foreign nations. It has never been seriously suggested that state courts are precluded from performing that function, albeit there is a remote possibility that any holding may disturb a foreign nation-whether the matter involves commercial cases, tort cases, or some other type of controversy. At the time Clark v. Allen was decided, the case seemed to involve no more than a routine reading of foreign laws. It now appears that in this reciprocity area under inheritance statutes, the probate courts of various States have launched inquiries into the type of governments that obtain in particular foreign nations-whether aliens under their law have enforceable rights, whether the so-called 'rights' are merely dispensations turning upon the whim or caprice of government officials, whether the representation of consuls, ambassadors, and other representatives of foreign nations is credible or made in good faith, whether there is in the actual administration in the particular foreign system of law any element of confiscation.

In a California case, involving a reciprocity provision, the United States made the following representation:

'the operation and effect of the statute is inextricably     enmeshed in international affairs and matters of foreign      policy. The statute does not work disinheritance of, or     affect ownership of property in California by, any group or      class, but on the contrary operates in fields exclusively      for, and preempted by, the United States; namely, the control      of the international transmission of property, funds, and      credits, and the capture of enemy property. The statute is     not an inheritance statute, but a statute of confiscation and      retaliation.' In re Bevilacqua's Estate, 161 P.2d 589, 593      (Dist.Ct.App.Cal.) superseded by 31 Cal.2d 580, 191 P.2d 752.

In its brief amicus curiae, the Department of Justice states that: 'The government does not * *  * contend that the application of the Oregon escheat statute in the circumstances of this case unduly interferes with the United States' conduct of foreign relations.'

The Government's acquiescence in the ruling of Clark v. Allen certainly does not justify extending the principle of that case, as we would be required to do here to uphold the Oregon statute as applied; for it has more than 'some incidental or indirect effect in foreign countries,' and its great potential for disruption or embarrassment makes us hesitate to place it in the category of a diplomatic bagatelle.

As we read the decisions that followed in the wake of Clark v. Allen, we find that they radiate some of the attitudes of the 'cold war,' where the search is for the 'democracy quotient' of a foreign regime as opposed to the Marxist theory. The Oregon statute introduces the concept of 'confiscation,' which is of course opposed to the Just Compensation Clause of the Fifth Amendment. And this has led into minute inquiries concerning the actual administration of foreign law, into the credibility of foreign diplomatic statements, and into speculation whether the fact that some received delivery of funds should 'not preclude wonderment as to how many may have been denied 'the right to receive' * *  * .' See State Land Board v. Kolovrat, 220 Or. 448, 461-462, 349 P.2d 255, 262, rev'd sub nom. Kolovrat v. Oregon, 366 U.S. 187, 81 S.Ct. 922, 6 L.Ed.2d 218 on other grounds.

That kind of state involvement in foreign affairs and international relations-matters which the Constitution entrusts solely to the Federal Government-is not sanctioned by Clark v. Allen. Yet such forbidden state activity has infected each of the three provisions of § 111.070, as applied by Oregon.

In State Land Board v. Pekarek, 234 Or. 74, 378 P.2d 734, the Oregon Supreme Court in ruling against a Czech claimant because he had failed to prove the 'benefit' requirement of subsection (1)(c) of the statute said:

'Assuming, without deciding, that all of the evidence offered     by the legatees was admissible, it can be given relatively      little weight. The statements of Czechoslovakian officials     must be judged in light of the interest which they had in the      acquisition of funds for their government. Moreover, in     judging the credibility of these witnesses we are entitled to      take into consideration the fact that declarations of      government officials in communist-controlled countries as to      the state of affairs existing within their borders do not      always comport with the actual facts.' Id., at 83, 378 P.2d,      at 738.

Yet in State Land Board v. Schwabe, 240 Or. 82, 400 P.2d 10, where the certificate of the Polish Ambassador was tendered against the claim that the inheritance would be confiscated abroad, the Oregon court, appraising the current attitude of Washington, D.C., toward Warsaw, accepted the certificate as true. Id., at 84, 400 P.2d at 11.

In State By and Through State Land Board v. Rogers, 219 Or. 233, 347 P.2d 57, the court held Bulgarian heirs had failed to prove the requirement of what is now § (1)(b) of the reciprocity statute, the 'right' of American heirs of Bulgarian decedents to get funds out of Bulgaria into the United States. Such transmission of funds required a license from the Bulgarian National Bank, but the court held the fact that licenses were regularly given insufficient, because they were issued only at the discretion or 'whim' of the bank. Id., at 245, 347 P.2d, at 63.

As one reads the Oregon decisions, it seems that foreign policy attitudes, the freezing or thawing of the 'cold war,' and the like are the real desiderata. Yet they of course are matters for the Federal Government, not for local probate courts.

This is as true of (1)(a) of § 111.070 as it is of (1)(b) and (1)(c). In Clostermann v. Schmidt, 215 Or. 55, 332 P.2d 1036, the court-applying the predecessor of (1)(a)-held that not only must the foreign law give inheritance rights to Americans, but the political body making the law must have 'membership in the family of nations' (id., at 65, 332 P.2d, at 1041), because the purpose of the Oregon provision was to serve as 'an inducement to foreign nations to so frame the inheritance laws of their respective countries in a manner which would insure to Oregonians the same opportunities to inherit and take personal property abroad that they enjoy in the state of Oregon.' Id., at 68, 332 P.2d, at 1042.

In In re Estate of Krachler, 199 Or. 448, 263 P.2d 769, the court observed that the phrase 'reciprocal right' in what is now part (1)(a) meant a claim 'that is enforceable by law.' Id., at 455, 263 P.2d, at 773. Although certain provisions of the written law of Nazi Germany appeared to permit Americans to inherit, they created no 'right,' since Hitler had absolute dictatorial powers and could prescribe to German courts rules and procedures at variance with the general law. Bequests "grossly opposed to sound sentiment of the people" would not be given effect. Id., at 503, 263 P.2d, at 794.

In short, it would seem that Oregon judges in construing § 111.070 seek to ascertain whether 'rights' protected by foreign law are the same 'rights' that citizens of Oregon enjoy. If, as in the Rogers case, the alleged foreign 'right' may be vindicated only through Communist-controlled state agencies, then there is no 'right' of the type § 111.070 requires. The same seems to be true if enforcement may require approval of a Fascist dictator, as in Krachler. The statute as construed seems to make unavoidable judicial criticism of nations established on a more authoritarian basis than our own.

It seems inescapable that the type of probate law that Oregon enforces affects international relations in a persistent and subtle way. The practice of state courts in withholding remittances to legatees residing in Communist countries or in preventing them from assigning them is notorious. The several States, of course, have traditionally regulated the descent and distribution of estates. But those regulations must give way if they impair the effective exercise of the Nation's foreign policy. See Miller, The Corporation as a Private Government in the World Community, 46 Va.L.Rev. 1539, 1542-1549 (1960). Where those laws conflict with a treaty, they must bow to the superior federal policy. See Kolovrat v. Oregon, 366 U.S. 187, 81 S.Ct. 922. Yet, even in absence of a treaty, a State's policy may disturb foreign relations. As we stated in Hines v. Davidowitz, supra, 312 U.S., at 64, 61 S.Ct., at 402, 'Experience has shown that international controversies of the gravest moment, sometimes even leading to war, may arise from real or imagined wrongs to another's subjects inflicted, or permitted, by a government.' Certainly a State could not deny admission to a traveler from East Germany nor bar its citizens from going there. Passenger Cases, 7 How. 283, 12 L.Ed. 702; cf. Crandall v. State of Nevada, 6 Wall. 35, 18 L.Ed. 744; Kent v. Dulles, 357 U.S. 116, 78 S.Ct. 1113, 2 L.Ed.2d 1204. If there are to be such restraints, they must be provided by the Federal Government. The present Oregon law is not as gross an intrusion in the federal domain as those others might be. Yet, as we have said, it has a direct impact upon foreign relations and may well adversely affect the power of the central government to deal with those problems.

The Oregon law does, indeed, illustrate the dangers which are involved if each State, speaking through its probate courts, is permitted to establish its own foreign policy.

Reversed.

Mr. Justice MARSHALL took no part in the consideration or decision of this case.