Case Review: Maestracci v. Helly Nahmad Gallery Inc. (2014)

By Madeleine Werker*

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Amedeo Modigliani, Seated Man with a Cane (1918)

At the core of Maestracci v. Helly Nahmad Gallery Inc., case filed in 2014 is the battle for ownership of an Amedeo Modigliani painting, Seated Man with a Cane (1918) (the “Painting”) valued at 25 million USD. The release of the Panama Papers in April 2016 revealed new information about the Painting, which could assist in settling the ownership conflict in court.

According to the complaint, Seated Man with a Cane was first exhibited at the 1930 Venice Biennale, where the so-called self-portrait was listed as number 35 in the catalogue. It belonged to Oscar Stettiner, a Jewish art dealer in Paris. Stettiner fled Paris in 1939 during the Nazi occupation of France, leaving his gallery and his artworks behind. After the war, in 1946, Stettiner attempted to retrieve the work by filing a French civil claim for “a Modigliani portrait of a man”, among other items, without success. Stettiner died in France in 1948 never having found the Painting.

In their filings, Plaintiff(s) allege that in 1941, Stettiner’s gallery was taken over by Nazi-appointed administrator, Marcel Philippon, who held four public auctions of the gallery’s inventory. In July 1944, the painting, listed as Selt Portrait of the Artist, was sold at the French auction house, Drouot, to John Van der Klip for 16,000 francs.[3] Although the painting was thought to have been resold in a series of unknown transactions, a May 2016 letter from Van de Klip’s descendants confirmed that the Modigliani stayed in the family and was passed down “by descent to the present owners” until the 1996 Christie’s London auction, where it was sold to the International Art Centre (“IAC”) for 3.2 million USD.[3]

At the time of the sale, the painting had not been flagged as a potential Nazi-looted artwork. The Christie’s catalogue entry noted that the painting had been sold in an anonymous sale in Paris between 1940 and 1945, and mistakenly attributed provenance to known French collector Roger Dutilleul. Christie’s cited the painting as number 16 from the 1930 Venice Biennale, not number 35.[4] This later complicated the painting’s identification.

In 2008, the Painting resurfaced and was relisted in the Sotheby’s New York catalogue (valued at 18-25 million USD). The 2008 catalogue listing cited the painting’s owner as the IAC and attributed provenance “possibly” to Roger Dutilleul and to Stettiner. The catalogue also re-listed the work as number 35, not 16, from the 1930 Venice Biennale. Two letters subpoenaed from Sotheby’s in April 2016, as part of the ongoing lawsuit, show an executive at Sotheby’s addressing Helly Nahmad Gallery as the painting’s consignor.

The Painting failed to sell at the 2008 auction and disappeared until the release of the Panama Papers led to its retrieval from the Geneva Freeport.

In 2009, Mondex Corporation, a Toronto firm that specializes in recovering Nazi-looted art, began putting together the painting’s history. Founder James Palmer then contacted Philippe Maestracci, an Italian citizen and Stettiner’s only heir, who agreed to have Mondex pursue the research on his behalf. Before this, Maestracci was not aware of his grandfather’s connection to the painting.

This pursuit led Maestracci to the US federal court where he sued the Helly Nahmad Gallery for the Painting in 2011. The Nahmads, a wealthy family of art dealers long believed to be in possession of the painting, denied ownership,[9] instead maintaining that the IAC owned the Painting independently after purchasing it in 1996. Maestracci later withdrew the amended federal court complaint over jurisdictional issues.

In February 2014 the Stettiner estate re-filed its suit against David Nahmad, Helly Nahmad (both the gallery and the individual), and the IAC with the New York Supreme Court.[11] In November 2015, when a New York State Supreme Court judge ruled that France-based Maestracci lacked standing to pursue the case in the United States, Maestracci amended his claim to make George Gowen, the New York administrator of Stettiner’s estate, the sole plaintiff in the case. The November filing alleged that the IAC was a “shell company” set up by the Nahmad family “to conceal and confuse their identities, and hide revenues…stemming from their art dealings.”[11]

Until recently Maestracci’s claim has not seen much success, but this all changed in April 2016 with the release of the Panama Papers, leaked documents from the Mossack Fonseca law firm, which linked various wealthy individuals to offshore companies. Originally published on April 3, 2016, the papers revealed the location and ownership of the painting that Maestracci sought to reclaim. The documents confirm the link between the Nahmads and the IAC.[12] Mossack Fonseca set up the IAC as a Panama-based company for the Nahmads in 1995. David Nahmad, has been the company’s sole owner since January 2014.

David Nahmad relies on two key points in denying Maestracci’s claim to the painting. First, according to Nahmad, the price fetched for the painting in 1944 was too low, even in an anonymous sale during wartime. Second, Nahmad cites Stettiner’s 1946 claim in which he referred to the painting as a self-portrait of the artist in a notation taken by a court bailiff.[14] Nahmad believes this proves that the work in question is, in fact, a different painting. Nahmad supported his position with the assertion that the family loaned the painting out a number of times, including to the Jewish Museum in 2004. Nahmad, who is Jewish, insists he would never accept Nazi-looted art. He has told Radio-Canada, “I could not sleep at night if I knew I owned a looted object”.[16] For now, the Nahmads are prepared to take their defense to the courts. However, Ezra Nahmad has said that if Maestracci “can provide concrete proof that this piece of art truly belongs to him, then [he] will gladly give it to him.”[15]

The New York State Supreme Court case, George Gowen v. Helly Nahmad Gallery Inc., 650646/2014, is ongoing. The last set of motions was filed in March 2017.

Select Sources:

  1. Maestracci Affidavit, Exhibit A: Nature of Action, ¶ 16 (NYSCEF DOC. NO. 9).
  2. Livengood Letter, Ex 72, 3 (NYSCEF DOC. NO. 941).
  3. Maestracci Affidavit, Exhibit G: Christie’s Listing (NYSCEF DOC. NO. 25).
  4. Maestracci Affidavit, Exhibit A: Nature of Action, ¶ 30 (NYSCEF DOC. NO. 9).
  5. Sotheby’s Letters 2-11-10 and 4-28-10 (NYSCEF DOC. NO. 768,769)
  6. Maestracci Affidavit, Exhibit B: Sotheby’s Catalogue, ¶ 32-33 (NYSCEF DOC. NO. 9).
  7. Golub Affidavit, ¶ 3 (NYSCEF DOC. NO. 918).
  8. Motion Sequence No. 7, 22 (NYSCEF DOC. NO. 378).
  9. Maestracci Notice With Summons, 2 (NYSCEF DOC. NO. 1)
  10. Verified Amended and Supplemental Complaint (NYSCEF DOC. NO. 489).
  11. Verified Amended and Supplemental Complaint, ¶ 2 (NYSCEF DOC. NO. 489).
  12. Maestracci Affidavit, Exhibit M: Panama Registry (NYSCEF DOC. NO. 69).
  13. Exhibit 1: Letter from Geneva Ministere public (NYSCEF DOC. NO. 917).
  14. Julian Sher, Modigliani masterpiece seized in wake of Panama Papers (CBC: Apr 11, 2016) available here; Schub Affirmation, ¶ 31 (NYSCEF DOC. NO. 929).
  15. Amah-Rose Abrams, David Nahmad Denies Modigliani Painting Is Nazi Loot (Art Net: June 13, 2016) available here; Fern Sidman, Ezzy Nahmad: “If the Gentleman Can Prove Rightful Ownership, I Will Gladly Give Him the Painting” (The Jewish Voice: May 4, 2016) available here.

About the Author: Madeleine Werker received her J.D. from the University of Ottawa, Canada in 2017. Before law school, she obtained her Bachelor of Art in Art History and Cultural Studies from McGill University in Montreal.

Spotlight: The Max Stern Art Restitution Project

By Ryan Igel*

screen-shot-2016-09-15-at-5-25-14-pmThe Max Stern Art Restitution Project (the “Project”),  established in 2002, is tasked with locating the paintings Jewish art dealer Max Stern (April 18, 1904 – May 30, 1987) was forced to sell during the Second World War, and return them to his heirs. The Project was established at the direction of the heirs of the Max Stern Estate. As Stern did not have children, his heirs consist of Concordia University in Montreal, McGill University also in Montreal, and Hebrew University in Jerusalem. The Project also serves an important educational and moral function, and seeks to educate both the general public and those in the art industry about art theft and the importance of provenance research in ensuring that artworks are returned to their rightful owners.  

The Project is housed at the Concordia University in Montreal, Quebec. The location of Montreal is significant, as this is where Max Stern settled once in Canada, and where he opened his Canadian gallery, the Dominion Gallery. Dr. Clarence Epstein, a Courtauld-trained art historian with experience in managing artists’ estates, was chosen by the heirs of Max Stern to be the Director of the project, and still holds this role. The project began with seed funding from the heirs of Max Stern, but is now largely self-funded through the sale of selected paintings.

The need for the Project stemmed from the cultural program aimed at confiscating and forcing the sale of art initiated by the Nazi Regime during the Second World War. The unprecedented art theft and destruction that occurred in Europe between 1933 and 1945 was a major part of the Nazi’s systematic efforts to establish a “new world order”. Works that were considered to be “degenerate” because they did not perpetuate Nazi ideals were confiscated from museums, galleries, and even from the homes of individuals. Moreover, because the Nazis believed that certain individuals, particularly those of the Jewish faith, should not participate in the creation and perpetuation of German culture, many Jewish art dealers were forced to sell or forfeit their artworks well below market prices. Many of these confiscated artworks were destroyed or purchased by German art dealers and private collectors while a number of them were sold internationally to finance the Nazi war effort.

Max Stern was one such person. Stern survived the war in Canada, but in the early years of World War Two, he lived in Düsseldorf, Germany, where he owned an art gallery and auction house that was established by his father, Julius Stern. On August 29, 1935, Max Stern received a letter from the Reich Chamber of Fine Arts – an organization tasked with ensuring that artistic endeavors within the Third Reich reflected Nazi ideals – informing him that he could no longer carry on the business of buying or selling art in Germany. Stern was given a deadline of December 15, 1937 by which to sell the 228 paintings that were in his possession. These paintings were later sold at auction at the Lempertz auction house. The extent of Stern’s involvement in the sale of his paintings is unclear as the Lempertz Auction houses records were destroyed when Cologne was bombed during the Second Word War. However, the fact that the catalogue used by the Lempertz auction house resembled those used by Galerie Stern, suggests that Stern was involved in the sale of his paintings.

After the war, individuals who were either forced to sell their art or whose art was confiscated, sought to have their property returned. Post-War restitution commissions were established by the governments of various countries to hear claims for these works, but the commissions were not always sympathetic to claims asserted by victims of the Nazis. This left a significant number of artworks in the possession of governments, state-owned museums, dealers and private collectors.

Like many, Stern began working on retrieving his paintings. On December 27, 1947, Stern filed a claim with the Central Office for Property Control to have 20 of the paintings he was forced to sell returned to him. Stern also placed advertisements in a German art magazine, Die Weltkunst, to publicize his efforts within the arts community. Through these efforts, Stern was able to recover a small number of his paintings. The Project was created to facilitate the return of the majority of paintings that were not recovered during his lifetime.

Restitution efforts call for different skills and much international cooperation between art historians, attorneys, researchers, political figures and scholars. The contentious nature of claims for restitution, and the lack of a consistent legal framework for dealing with these disputes makes relying solely on legal reasoning and other typical adversarial techniques less effective. Furthermore, the lack of proof of prior ownership makes international cooperation essential, as it is only with this cooperation that evidence of true ownership can be pieced together once again. Instances of international or trans-organizational cooperation are noteworthy.

While the Project employs both full time and part time staff, it also relies on assistance from other players in the restitution field, such as Holocaust Claims Processing Office (“HCPO”), which acts as an advocate for victims of the holocaust and seeks the return of their stolen assets. The HCPO plays a key role in the restitution process, and assists the Project by conducting provenance research, by acting as an advocate on its behalf, and by facilitating communication between the parties.

Dr. Epstein’s team also works with the National Archives in Ottawa, Canada, and lead investigator Willi Korte, a lawyer based in Washington, D.C., who is the co-founder of the Holocaust Art Restitution Project (link www.plunderedart.com). Both the team at Concordia University and the National Archives assist Dr. Epstein in the search for works that belonged to Max Stern. Lead Investigator, Willi Korte, who has worked on recovering each of the paintings recovered so far, assists with determining the provenance of paintings so that records of ownership can be established and later used in the restitution process. This task takes him all over the world.

The Project approaches the repatriation of Stern’s works through both legal and non-legal channels. However, Dr. Epstein emphasizes that the repatriation of most works is not actually achieved through legal avenues. This is because many countries do not consider forced sales to be theft and also because most countries do not have a specific legal mechanism to assist with these types of claims. Instead, moral arguments are used privately in what Dr. Epstein refers to as “a process of reconciliation” between the parties. The Project also presents more practical arguments such as pointing to the fact that a painting with tarnished provenance is not marketable. The success that has been achieved by using diplomacy and moral arguments demonstrate that shame on one hand and praise on the other are better suited to achieving the Project’s goals.

The reconciliation process utilized by the project is illustrated by the repatriation of Wilhelm Von Schadow’s Self Portrait of the Artist. This painting was discovered when a researcher from the National Archives in Ottawa, Canada found it in a catalogue for a 1967 Düsseldorf Museum Kunstplast exhibition. The catalogue for this exhibition listed the paintings location to be the Stadtmuseum. The Project contacted the museum directly, and the parties discussed the idea of returning the painting to the heirs of Max Stern. In the course of these discussions, both moral and legal arguments were presented and the museum ultimately agreed that the painting should be returned to Max Stern’s estate. However, instead of returning the painting physically, the parties agreed that the painting would remain in the Stadtmuseum Düsseldorf on the condition that the painting was acknowledged as being on loan from Stern’s estate. The parties also agreed that while on display, the painting would be used to remind those who visit the gallery of the painting’s history. As part of the educational component of the agreement, the parties agreed that the painting would be involved in two exhibitions: one on the life of Jewish people in Düsseldorf, and one specifically on Max Stern and his art collection. The museum also agreed to take on the role of providing education on provenance research.

Although reconciliation is preferred to the uncertainty and cost of litigation, the Project achieved a major legal breakthrough in the United States in the case of Vineberg v Bissonette. Vineberg v Bissonnette, 529 F.Supp.2d 300 (D.R.I 2007). Vineberg involved a claim by the Max Stern estate for the return of The Girl From Sabine Mountains by Franz-Xaver Winterhalter. At the time, the painting was owned by Maria-Louise Bissonette, the step-daughter of Dr. Karl Wilhelm, who had purchased the painting from the Lempertz Auction House in 1937. In this case, Chief District Judge Mary Lisi recognized that the forced sales of artworks under those circumstances were equivalent to theft, and ordered Bissonnette to return the painting to the Stern estate. Although the establishment of this legal principle is significant, Dr. Epstein cautions that the judgment is limited to the United States and does not assist with the repatriation of works that are in other countries such as Germany, where most looted paintings are still located.

To date, the Max Stern Art Restitution Project has recovered twelve of Max Stern’s paintings and continues to locate and negotiate the repatriation of his remaining collection . Stern’s works have been found in auction houses, a German casino, and in private collections. Some of these recovered works are now on loan to museums and foundations. Some examples being Aimee, a Young Egyptian by Emile Vernet-Lecomte which is on loan to the Montreal Museum of Fine Arts and  Portrait of Jan Van Everdyck by Nicolas Neufchatel which is on permanent loan to the Jakober Foundation. Other paintings, as previously mentioned, have been sold to finance the Project. Through the sponsorship of conferences and other educational events such as The Israel Museum Conference “Justice Matters: Restituting Holocaust-Era Art Artifacts” (2008), the Project has not only contributed significantly to ensuring that efforts to repatriate works of art stolen by the Nazis during the Second World War remain relevant, but has also become an important source of information and guidance for individuals and similar organizations that also seek the return of these precious works.

Sources:

*About the Author: Ryan Igel is a second year student at the University of Ottawa Faculty of Law, with an interest in the intersection of art and law. Ryan is particular interested in the restitution of artworks looted during the Second World War. He can be reached at rigel064@uottawa.ca.

The author would like to thank Dr. Clarence Epstein, Director of the Max Stern Art Restitution Project, for his time during telephone interviews.

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Readers should not construe or rely on any comment or statement in this article as legal advice. Instead, readers should seek an attorney with any legal questions.

HEAR and the Guelph Treasure Recovery Efforts: Restitution in Review

By Nina Mesfin*

On June 7, 2016, the Senate Judiciary Committee heard a bipartisan-backed piece of legislation called the Holocaust Expropriated Art Recovery (HEAR) Act, S. 2763, 114th Cong. (2016). As recently reported by Center for Art Law and elsewhere, the HEAR Act aims to allow “civil claims or causes of action to recover artwork or other cultural property unlawfully lost because of the persecution during the Nazi era, or for damages for the taking or detaining of such artwork or cultural property.” In other words, the HEAR Act proposes a federal statute of limitations on restitution claims as opposed to statutes of limitation that vary by state in order to “lift unfair restrictions from heirs’ claims.” In addition to garnering support from both the Republican and Democratic parties, the HEAR Act also offers advocates outside of the political realm.

Screen Shot 2016-08-09 at 11.21.25 AMFollowing the bill’s introduction, on June 7th actress Helen Mirren testified before the Senate on behalf of the bill. Mirren’s support, in part, stems from her recent portrayal of Maria Altmann in the film Woman in Gold (released in 2015). Altmann was a Jewish woman who successfully reclaimed five Nazi-looted works by Gustav Klimt from the Austrian government in the landmark case Republic of Austria v. Altmann (03-13) 541 U.S. 677 (2004) 327 F.3d 1246, affirmed. The Altmann case set a legal precedent in which the Foreign Sovereign Immunities Act (FSIA) was applied retroactively, allowing a sovereign body to be tried in a U.S. court.

The timing of Woman in Gold, which has drawn public attention to Altmann’s success, coupled with recent congressional efforts to facilitate the restitution of Nazi-looted works, may impact the outcome of other restitution claims. One of these cases involves the Welfenschatz or Guelph Treasure– a collection of medieval art currently in the Kunstgewerbe Museum in Berlin—with an estimated value of $250 million dollars. On February 23, 2015, the heirs of the art dealers who sold the Guelph Treasure to Germany filed a civil action in a U.S. district court against Germany and the Prussian Cultural Heritage Foundation. The case of the Guelph Treasure will test further the limits of both the U.S. government’s dedication to Holocaust-era restitution claims and ability to broker restitution deals.

What is the Guelph Treasure?

The Guelph Treasure, consisting of 82 gold, silver and gem encrusted liturgical objects from the Church of St. Blaine in Brunswick, Germany, and according to art historian Christina Nielsen, it is considered to be “the greatest group of medieval objects ever offered for sale.” The objects range in date from the 8th to the 15th century and the majority are works of German craftsmanship while other notable pieces are Italian and Byzantine in origin. One of the most extraordinary characteristics of this collection is its indisputable authenticity; records indicate that prior to its auction, the Treasure has been in continuous care of the same noble German family for more than 800 years.

Subsequent Sales of the Treasure

Duke Ernst August was the last of his German ancestors to possess the Guelph Treasure. Due to economic hardship in 1928, the Duke was forced to put a price on what was considered a collection of “incalculable intrinsic value” because of “its antiquity and art-historical importance”(Nielsen, 442). To the dismay of many German citizens and the State itself, the Duke sold the Treasure to a consortium of Jewish art dealers in 1930: Julius F. Goldschmidt of Frankfurt, Berlin, and New York and Z.M. Hackenbroch and J. Rosenbaum of Frankfurt. Although the Duke intended for the collection to stay together, the consortium of art dealers, having failed to resell the collection in its entirety, began to sell off pieces of the Treasure.

After meticulously cataloging the collection, the dealers began selling, or rather attempting to sell, portions of the Guelph Treasure in Germany. As Germany frowned upon the sale of what it considered to be cultural patrimony, the new owners, a consortium of Jewish art dealers, then tried to sell the collection in the United States. The Guelph Treasure was first exhibited in New York in 1929, and by 1934, the consortium sold 40 of the Treasure’s 82 pieces to several museums in the United States, including the Cleveland Museum of Art (Nielsen 443). In 1935, the remaining 42 pieces of the Treasure were sold to the State of Prussia for 4.25 million Reich marks, or $1.7 million. High-ranking Nazi official Hermann Göring oversaw the acquisition and later gifted it to Adolf Hitler. It is the legality of the second sale in 1935 that the heirs of the consortium are disputing.

Appearing before the German Advisory CommissionScreen Shot 2016-08-09 at 11.27.45 AM

Before their U.S.-based lawsuit, the heirs of art dealers J. and S. Goldschmidt, I. Rosenbaum and Z.M. Hackenbroch appeared before the German Government Advisory, also called the Limbach Commission. The Commission is a joint initiative of the Federal Commissioner for Cultural and Media Affairs and the Länder and the National Association of Local Authorities; it invites claims concerning Nazi-looted property that public institutions in Germany currently possess. The Commission serves as a mediator between these public institutions and former owners as well as their heirs, hearing cases and offering resolution recommendations. The New York Times reported that the heirs’ lawyers cited the “climate of fear and uncertainty for the [dealers’] futures in which Jews in Germany found themselves in 1935,” arguing that these dire circumstances suggest that any “purchase by the state from Jewish businessmen must be considered as having taken place under duress.” The lawyers representing the heirs attempted to prove that the sale was, in fact, forced by explaining that the dealers sold the pieces for $4.3 million less than they had paid for it five years earlier. The panel attributed the ten percent market price decease to the economic downtown wrought by the Great Depression.

After contemplating this argument, in March of 2014 the Commission’s panel recommended that the 42 “jewel-encrusted, intricately wrought silver and gold crucifixes, altars and other relics of the Guelph Treasure should remain in the possession of the state-run foundation.” Bloomberg News noted that the Commission went on to state that “[f]ar from selling under duress, the consortium had been attempting to unload the Guelph Treasure for years,” pointing to the correspondence among consortium members celebrating the sale.” The Commission also noted that the Guelph Treasure is an exception to the Washington Conference Principles on Nazi-Confiscated Art, which all German museums have agreed to uphold. The Principles are a set of guidelines that maintain that “any art object sold by Jews for less than its fair value during this period (Jan. 30, 1933, through 1945) is a candidate for restitution,” a period that includes the Guelph Treasure.”

This ruling, in favor of the Kunstgewerbe Museum is one of many made by the Commission that has been met with criticism. As art journalist Catherine Hickley reports, the Limbach Commission has recently “come under fire for a lack of transparency, the length of time it takes, failure to appoint a Jewish member and the low number of cases it has mediated.” The Commission has only mediated thirteen cases since its founding in 2003, whereas its Dutch counterpart has issued more than 140 since 2002.** In July of 2016, Germany’s culture minister, Monika Gütters, actually announced plans to reform the Limbach Commission.

The Civil Lawsuit over the Treasure

Screen Shot 2016-08-09 at 11.32.39 AMAlmost a year after the Commission made its non legally binding recommendation, the heirs to the Guelph Treasure, filed a civil lawsuit in U.S. District Court for the District of Columbia. Philipp et al. v. Federal Republic of Germany et al., 15-cv-00266 (D. D.C.). According to a Washington Jewish Week article, the seventy-one page complaint alleges that the consortium sold the 42 pieces to the State of Prussia “via a manipulated sham transaction spearheaded by Dresden Bank, which was acting on behalf and by order of the two most notorious Nazi leaders and war criminals,” Göring and Hitler. The complaint further notes that the heirs used the fact that the alleged forced sale was made for less than 35 percent of its actual value and that the payment “was then subjected to flight taxes that were demanded so the Jewish dealers could flee Germany,” as evidence backing their claim. One of the dealers, Hackenbrock,was able to leave Germany in 1935, although died shortly thereafter in London in 1937. Details concerning the other two dealers, Rosenbaum and Goldschmidt, are unknown.

In order to justify filing this suit in a U.S. court, attorneys for the claimants invoked the Foreign Sovereign Immunities Act, which “provides jurisdiction over foreign states that conduct business in the U.S. via exhibitions and other museum-related activity.” According to O’Donnell, one of the attorneys representing the claimants, FSIA’s applicability to this case is straightforward, as “Jewish victims of persecution like the Plaintiffs’ ancestors are victims of takings in property in violation of international law.” He further explains, “[a]s a result, and because the Defendants are engaged in commercial activity in the United States, this case presents precisely the category of claims over which § 1605(a)(3) of the FSIA, the expropriation exception, creates jurisdiction.”

In March 2016, Germany and the Prussian Heritage Cultural Foundation responded by filing an eighty-five page motion to dismiss the case, contesting the jurisdiction of the U.S. courts. Within the motion, the defendants contend “that the persecution and expropriation of property from its Jewish residents were a sufficiently internal affair so as not to be a violation of international law.” O’Donnell has described this motion as “revisionist” and “troubling.” Most recently, on May 11, 2016, claimants filed an opposition to the motion to dismiss. The latest filing in the case was in June a reply to opposition to motion re motion to Dismiss the Plaintiffs’ First Amended Complaint. Now we are waiting for the court to review the filings.

Conclusion

The pending case involving ownership of the Guelph Treasure has brought two interesting issues into focus. The first is whether the blanket application of forced sales to an entire time period, in this case the years immediately preceding and spanning WWII, is legitimate, not taking into account the market or the profession of the seller, i.e. an art dealer who is almost always in the process of making a deal. The Guelph Treasure also tests the authority of advisory commissions with no binding power, as rulings made by the Limbach Commission are unenforceable. On the other hand, there are several other European arbitrating bodies whose opinions are binding, such as the Austrian Restitution Binding Commission and the Dutch Advisory Committee on the Assessment of Restitution Applications for Items of Cultural Value and the Second World War. As Hickley points out in her article “German minister promises to reform Limbach Commission after mounting criticism,” unlike the Limbach Commission, the Austrian and Dutch advisory committees do not require both parties to agree in order to mediate disputes.

In challenging the Limbach Commission’s clout, the case of the Guelph Treasure may bring a foreign body into conflict with the crux of the U.S. court system. It will be interesting to see if and how the U.S. judicial system, in its dealings with the Guelph Treasure, will impact the authority enjoyed by European advisory board’s ruling on contested art. As Elazar Barkan explains in The Guilt of Nations: Restitution and Negotiating Historical Injustices, restitution as a means of acknowledging gross historical injustices is a relatively novel phenomenon. Nowadays, it “is a large part of the growing attention being paid to human rights.” The question becomes: in which instances is restitution warranted and in which does it potentially exploit society’s overeagerness to atone for past atrocities? Furthermore, at what point, if at all, is it appropriate for a third party state to hear these claims and issue rulings? While the United States at times offers a venue to bring restitution claims, the outcome and the cost of these claims is unpredictable.

Select Sources:

**There are currently five restitution commissions: United Kingdom, Austria, France, Germany, and the Netherlands. In 2007, the United States government considered establishing its own restitution advisory commission, to no avail.

About the Author: Nina Mesfin is a Summer 2016 legal intern at Center for Art Law. She is a rising junior at Yale University majoring in Ethnicity, Race and Migration and concentrating in Art, Literature and Narratives of Race and Ethnicity. Nina is also a scholar in the Yale Multidisciplinary Academic Program in Human Rights.

Disclaimer: This article is intended as general information, not legal advice, and is no substitute for seeking representation.

The Latest in Nazi-Era Restitution Efforts

By Bianca Acquaviva*

Over seventy years after the end of World War II and there is still much work to be done in the restitution of Holocaust-era looted art works. Even since 1998, the signing and adoption of the Washington Principles, many of the signatories are still doing very little in terms of finding “fair and just” solutions. See our Review of “Fair and Just?” The following is a summary of the recent flurry of activity both in the US and abroad in the realm of Nazi-era looted art disputes.

IN THE UNITED STATES…

California, USA

The long awaited trial in the case of Von Saher v. Norton Simon Museum of Art at Pasadena et al is now set for September 20, 2016. The case was filed by Marei Von Saher, a Connecticut resident, seeking the return of two paintings by Lucas Cranach the Elder that were seized from her family by the Nazis in 1940. Adam and Eve, which compose a diptych, were created in 1530 and were most recently appraised in 2006 for $24 million together. Norton Simon Museum of Art (“the museum”), represented by the firm Munger Tolles & Olsen, has vehemently opposed the claim brought by the legal team of Herrick, Feinstein. The efforts have continued for over a decade and have included countless appeals, motions, and filings.

Before the war, the paintings were owned by Jacques Goudstikker, a Dutch-Jewish art dealer. They were stolen by Nazi henchman Hermann Goering in a forced sale after Goudstikker fled the Netherlands and died on board a ship sailing for the US. Following World War II, the paintings passed through two sets of hands before the museum obtained the paintings. Confusion as to the rightful ownership of the diptych was created by George Stroganoff-Scherbatoff, who alleged in 1961 that the Soviet government had seized Adam and Eve from his family in the 1920s. Indeed, the paintings were auctioned with permission from the Soviet authorities, and Goudstikker was the highest bidder at the 1931 auction. After the war, the paintings were discovered by the Allied forces and transferred to the Dutch authorities to find the rightful owners, who transferred these paintings to Stroganoff-Scherbatoff. In 1971, Stroganoff-Scherbatoff sold the paintings to Norton Simon, founder of the Norton Simon Museum of Art. The museum argues that returning the artworks to private hands when there are legal grounds for it keeping them is contrary to its desire to keep works of art available for public view. However, supporters of restitution efforts argue that the Museum should not be allowed to keep works that were stolen from a family seeking to reclaim them.

It is unlikely that the case will settle before the opening statements, which will allow jurors to hear the astonishing details of the paintings’ journey after the war. When U.S. forces discovered Goering’s collection of stolen art, they sent the works back to the countries the works originated from, and those countries decided how to settle claims to the works. Thus, after the war, two paintings were returned to the Netherlands. Ms. Von Saher claims that when her mother-in-law, Jacques Goustikker’s wife Desi, went to claim the paintings, the Netherlands effectively slammed the legal door in her face, but she never gave up the right to bring a claim against authorities for the painting. In its defense, the museum counters that Desi Goudstikker had a chance to lay claim to the paintings with the Dutch government and failed to do so. Needless to say, the case has been further complicated by the Stroganoff’s claim and recently passed California legislation. The trial has been much-anticipated, akin to the litigation surrounding Egon Schiele’s Portrait of Wally against the Austrian Leopold Museum that was settled in 2010. Observers are eager to witness how the public and private interests are balanced and what the fair and just solutions are in this case.

In California, the statute of limitations for the recovery of stolen property is three years. However, aware of the unique circumstances surrounding many claims arising from looting during the Holocaust, the California legislature passed California Code of Civil Procedure §354.3 in August 2002. The law eliminated the statute of limitations for claims to recover Holocaust-era artwork as long as the action was commenced on or before December 31, 2010. The district court found the statute to be unconstitutional on the basis of field preemption, finding it in conflict with federal foreign affairs powers. The Ninth Circuit Court of Appeals affirmed this decision. Six weeks later, the California legislature amended California Code of Civil Procedure §338(c) to extend the statute of limitations from three to six years for claims concerning the recovery of fine art from a museum, gallery, auctioneer or dealer. The law was made explicitly retroactive and the statute of limitations did not commence until actual discovery of both the identity and location of the work.

 

Oklahoma, USA

 

On February 23rd, the University of Oklahoma agreed to return a painting by Camille Pissarro to French Holocaust survivor Léon Meyer, whose father owned the painting when it was stolen in 1941 during the Nazi occupation of Paris. The painting, La Bergère Rentrant des Moutons/Shepherdess Bringing in Sheep, was created in 1886 and was estimated to be worth $1.5 million in 2008. In 2000, the University received the painting as a donation from the Weitzenhoffer family, who purchased it from a New York gallery in 1956.

The case was originally filed in the Southern District of New York in 2013 and then transferred to Oklahoma in 2015. The grassroots and legislative efforts to convince the University to conduct a thorough investigation into the true ownership of the work, ultimately lead to the parties negotiating a settlement. “Léone Meyer has agreed that, rather than getting the painting back for her own living room, to continue the public display of the painting for the public,” Meyer’s attorney, Pierre Ciric, said.

Under the terms of the settlement, the painting will still be accessible in Oklahoma and available for education purposes until it is transferred to France. In a few months, the painting will be moved to France, where it will remain in a museum for five years. After that period ends, the Pissarro will rotate in three year intervals between the University’s art museum in Oklahoma and a yet-to-be-determined museum in France. A label stating the painting’s history, its seizure by the Nazis, and its restitution will accompany the work.

The university never denied that the painting was looted by the Nazis. Instead, it resisted its return based on procedural rules and the statute of limitations. They argued that the donor had purchased the work in good faith, and that Ms. Meyer brought her case in New York instead of Oklahoma to avoid a more stringent statute of limitations. This settlement ends a three-year dispute between the parties.

IN THE INTERNATIONAL SPHERE…

Germany: Gurlitt Saga (See our previous coverage)

In January, the Gurlitt task force appointed by Ms. Grütters released the results of their two-year, almost $2 million investigation. They found the rightful owners of just five of the 1500 works in the Gurlitt collection, a conclusion that disappointed many. Of the works in the collection, about 30 to 50 are “of superior quality.” While Ms. Grütters has admitted her own disappointment, she seems to be taking the slow and steady approach, so as to ensure that the provenance of the works is correct and avoid “a second seizure” of the art, which would result if the works are improperly awarded. The collection is to be exhibited in Germany later this year.

In late February, Germany announced that it will pay for at least another year of research and hire additional people to assist in establishing the provenance of works in the Gurlitt collection. The German culture minister, Monika Grütters, reaffirmed Germany’s pledge to return any looted art to its rightful owners or their descendants and set the provenance research budget at 6 million euros, which is approximately $6.5 million.

Additionally, Ms. Grütters stated that she was discussing a law that would encourage individuals to return looted art with the German justice minister. She has also been encouraged by the German Jewish community to appoint a Jewish individual to the Limbach Commission, but stated that she would not do so because that individual “would be the only voice who would be prejudiced.” After receiving backlash and criticism for this comment, Grutters announced that 90 year old Michael Blumenthal, former director of the Jewish Museum in Berlin and United States Secretary of the Treasury, would be nominated to the Limbach Commission. Currently, the Limbach Commission is the only board that mediates restitution cases, and something else must be done seeing as how the board has been rife with controversy.

 

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Juan Gris, Violon en encrier (1913). Source: AlfredFlechtheim.com

Mediation with the Limbach Commission:

 

The heirs of persecuted Jewish art dealer Alfred Flechtheim have officially withdrawn from the state-run non-binding mediation process concerning Violon en encrier (1913) by Juan Gris, currently housed in the Stiftung Kunstsammlung Nordrhein Westfalen (Art Collections Foundation of Northern Rhineland/Westphalia) in Düsseldorf. The painting was sold in 1934 in London, and Flechtheim’s heirs have argued that this sale was the result of his persecution, which began even before the Nazis took power. The museum bought the work on the international market in 1964.

Flechtheim’s great-nephew, Dr. Michael Hulton of San Francisco, requested that his attorneys suspend the Limbach Commission due to concerns about the fairness of the proceedings and requested that the Commission not make any recommendations about the painting until these concerns are addressed. Dr. Hulton and the Düsseldorf museum agreed in 2014 to submit the matter to the Advisory Commission. This is not the first time that the German Advisory Commission considered a work originating from Flechtheim. In 2013, the Advisory Commission considered Portrait of Tilla Durieux, a painting by Oskar Kokoschka which was housed in the Museum Ludwig in Köln. The Advisory Commission affirmed the Nazi-persecuted loss of the painting absent any evidence to dispute that Alfred Flechtheim abandoned the painting because of his persecution. This put the burden on the museum to provide evidence as to the legitimacy of the museum’s possession of the painting.

Three years later, this is apparently no longer the case. In the Gris matter, only half of the panel was in attendance at the first hearing. After the hearing, Dr. Hulton’s attorneys told the Advisory Commission that they would be submitting a letter to the entire panel on the evidentiary matters discussed at the hearing. The letter was submitted three days later, but when they followed up with the Advisory Commission, they were told that the letter was not circulated to the panel and the panel was already deliberating its recommendation. Upon officially withdrawing from the process, Dr. Hulton released a statement detailing the procedural irregularities. In addition to the panel not receiving Dr. Hulton’s letter, half of the commission’s members, including its chairperson, not being present, a member left mid-hearing. As a result, Dr. Hulton halted the mediation process.

This comes soon after the 2015 filing of a civil action, Philipp et al v. Federal Republic of Germany et al,  against Germany and the Stiftung Preussischer Kulturbesitz (the SPK, which is responsible the administration of the Berlin museums, among other things) in U.S. District Court in Washington, D.C. after the Limbach Commission refused to recommend restitution of the Guelph Treasure to Alan Philipp and Gerald Stiebel. Mr. Philipp and Mr. Stiebel are blood relatives and successors of a group of Jewish art dealers who were threatened and forced to sell the Guelph Treasure for a fraction of its value in 1935. The plaintiffs seek the immediate return of the Guelph Treasure to their possession.

The Advisory Commission has received immense criticism, which will only continue unless they reform their procedures. On March 9, 2016, a group of lawyers from the United States and Europe sent an open letter to members of the German government asking for a reform of the Limbach Commission and advocating an international binding arbitration, stating, “[i]n its current form, the ‘Limbach Commission’ … is not a suitable forum to meet the demands of the victims. The lack of fairness, transparency and justice is evident.”

Switzerland:

There has been an increase in pressure on Swiss museums to recognize that works of art sold by Jewish refugees to help them escape from the Nazis were forced sales and should be returned to their heirs. Ronald Lauder, the president of the World Jewish Congress, has released a plan for the Swiss government to deal with claims resulting from forced sales, which, he advocates, should be treated the same as claims for looted art. Lauder is also calling for the establishment of a Swiss commission that can review art claims, as no such body exists. The Swiss have been generally unwilling to recognize fluchtgut cases––those arising from forced sales.

Last year, Isabelle Chassot, the Swiss culture minister, recognized that Switzerland is the only country that draws a distinction between fluchtgut cases and art that was lost due to Nazi persecution, and called for the latter term to be applied. However, the Swiss art community has strongly opposed this proposition. They argue that sales of art by Jewish refugees are different from those in Germany and Austria because Switzerland was a free country and sellers had full access to the proceeds. Good faith, Lauder states, does not make art clean, and Switzerland is behind the rest of the world in terms of provenance research. Switzerland has announced that 2 million Swiss francs will be available for provenance research, but Lauder believes the Swiss must also develop “a decent database and an independent commission which supervises this thing.” Switzerland is just beginning to take steps in the right direction.

Incidentally, the aforementioned Gurlitt collection has been accepted by a museum in Switzerland, the Kunstmuseum Bern.

Latvia:

Looting and cultural losses that occurred before and during World War II on the eastern front have been increasingly difficult to ascertain and remedy the further east the claims extend. Therefore the recent decision by the Latvian parliament to address the legacy of the Holocaust is very important. On February 25, 2016, Saeima, the parliament of Latvia, passed legislation to restitute five formerly Jewish-owned properties to the Council of Jewish Communities of Latvia. The legislation, which was supported by the World Jewish Restitution Organization and the U.S. government through Special Envoy for Holocaust Issues Nicholas Dean, will now go to the Latvian president for his signature. The five properties, owned by the Jewish community until World War II, are: a former Jewish school in Riga, a former Jewish religious school also in Riga, a former Jewish nursing home in Riga, and two former synagogues in Jurmala and Kandava. Though the restitution of these five properties is certainly a fantastic accomplishment, there are about 270 former Jewish communal properties that have yet to be returned to the Latvian Jewish community.

Property owned by private interests and individuals are not addressed by the new legislation. Elie Valk, chairman of the Association of Latvian and Estonian Jews in Israel, stated that the restitution of additional properties would “help the Latvian Jewish community sustain and revitalize itself as well as provide urgently needed assistance to Holocaust survivors from Latvia.”

Poland: 

Please see Center for Art Law recently published summary of restitution efforts in Poland, which can be found here.

* * *

As with most government efforts, funding is the perennial problem. The research and recovery of art works is sometimes prohibitively expensive, as some of the items that may have been identified as looted are worth a fraction of the costs that would be necessary to facilitate their return. Individuals, museums, governments, and nongovernment agencies must take a more active role in solving these problems. As we have seen throughout the Gurlitt investigation, which took two years and nearly $2 million, millions upon millions of dollars can be spent without very many results. Recently, more emphasis has been put on provenance through initiatives such as the Smithsonian Provenance Research Institute and the creation of the German Lost Art Foundation (Deutshes Zentrum Kulturgutverluste). It is the collective responsibility of the public to ensure that pressure is put on museums and governments so that the stolen property of Holocaust victims may be rightfully restored to their families.

Select Sources:

* About the Author: Bianca Acquaviva is a legal intern with Center for Art Law and a second year law student at the Benjamin N. Cardozo School of Law, where she serves as a staff editor on Cardozo’s Arts and Entertainment Law Journal. She may be reached via e-mail at acquaviv@law.cardozo.yu.edu.

Disclaimer: This article is intended as general information, not legal advice, and is no substitute for seeking representation.

Book Review: “Fair and just solutions?” (2015)

By Adir Paner*

Screen Shot 2015-11-11 at 9.28.58 AMSeventy years since the end of World War II, earnest efforts to restitute property, cultural and otherwise seem to be on the rise. In addition to the millions of lives lost, displaced, peoples cobbling to make a living in new homes and new lands, many millions of pieces of property remain lost and out of the reach of their rightful private and public owners. Despite the best efforts of the allied forces when finding and administering collecting points, countless pre-war art owners, such as museums, and private families (Jewish and gentile) had property confiscated by the Nazis which was not subsequently restituted.

As objects resurface and as heirs discover their legacy, steps should be taken to expeditiously achieve an equitable solution, notwithstanding the time that lapsed. Recognizing this principle, in 1998, the U.S. Department of State and the U.S. Holocaust Memorial Museum co-hosted the Washington Conference on Holocaust-Era Assets. Delegations from forty-four nations and thirteen non-governmental organizations participated. The 1998 conference addressed various issues related to the confiscation of assets by the Nazis and others during the Holocaust, and was responsible for coining the the term “fair and just solutions,” which refers to the norm for the assessment of ownership claims to Nazi-looted art, as codified in the Washington Principles in 1998. While more than 40 nations became signatories to the Washington Principles, five nations (Austria, Germany, France, the Netherlands and the United Kingdom) went so far as to organize committees to review claims brought by claimants seeking recovery of cultural property, lost as a result of widespread and large-scale crimes committed by the Nazi regime.

Published in 2015, Fair and just solutions? is a compilation of essays presented during an eponymous international symposium at the Peace Palace in The Hague that took place in November 2012. The question mark in the title alludes to the lack of clarity surrounding this norm. What is ‘fair and just’? Many millions of people paid the ultimate sacrifice, losing more than just their valuables in the last century. Is it possible to find a fair and just solution to a problem that is much more expansive than mere loss of property? Additionally, how do we resolve competing interests of merit between victims of Nazi oppression, and the blameless institutions which acquired and cared for the art through no fault of their own?

The 2015 volume edited by Campfens, contains expert opinions aimed at evaluating the status quo in the field of non-governmental restitution claims to Nazi-looted art and at discussing the legal framework for ownership claims by heirs or dispossessed owners.

Fair and just solutions? delivers a detailed account and perspective on international claims for looted property. The editor responsible for organizing the 2012 conference in the Hague, Evelien Campfens, is a renowned attorney and historian as well as the Inaugural Director of the Dutch Restitutions Committee. For thirteen years, Campfens lead the research team and oversaw the coordination of cases and preparation of advisory opinions. Campfens’ extensive background put her in a strategic position to gather and assemble key pieces of restitution history and to offer her critique on them. 

Fair and just solutions? documents the information discussed in the conference, providing guidance for those who were unable to attend in 2012, as well as for newcomers to the field. Through the valuable contributions by attorneys and historians practicing in the U.K. and Continental Europe, a compilation of opinions by leading experts, and a discussion amongst stakeholders, Fair and just solutions? explores a way to move forward toward ultimate resolution of the Nazi-era art claims. As a result, it serves as an excellent resource for all those interested in the subject matter, including law students, educators, potential claimants, and attorneys involved in the restitution of art.

The books recurrent themes include: (1) the status quo with regard to the ‘fair and just solutions’ norm that was introduced in the 1998 Washington Principles, presented at the Washington Conference on Holocaust Era Assets; (2) the procedures available to claimants; and (3) how things stand in terms of international cooperation in expeditiously achieving a fair and just solution.

The book is divided into eleven chapters, each contributed by a different author, including inter alia the former U.S. Special Envoy for Holocaust Issues, Douglas Davidson, expert advisor to the U.K. Spoliation Advisory Panel Professor Norman Palmer, and former counsel to the Dutch Parliament Rob Polak. Opening with Campfens’ account of the “Old and New Rules for Looted Art” which analyzes instruments of soft and hard international law, the book progresses through important concepts highlighted by other experts.

The book also contains intriguing interviews with claimants. One such contribution entitled “Ultimately the Applicant Needs to Feel that Justice has Been Done,” recapitulates an interview with two great-grandchildren of Samuel van den Bergh, who describe their claims for a Persian medallion carpet in the Netherlands. It is a rare opportunity for restitution historians and pupils to learn of first hand experiences in the restitution process.  

In the introduction, Campfens points out that it is impossible to thoroughly explore all topics related to Holocaust restitution, such as the differences between the approach of different nations to restitution claims. Notwithstanding Campfens disclaimer and the relatively brief nature of the volume, the detailed appendices provide valuable sources for obtaining more information. Featured are several declarations, resolutions, and governmental acts pertinent to the restitution of confiscated property (e.g., Washington Principles on Nazi-confiscated Art, UNESCO Declaration of Principles Relating to Cultural Objects Displaced in Connection with the Second World War etc.) The general layout of the book spotlights the key documents in the development of international restitution law.

The lists of hard law (binding legal obligations in the international arena), procedure and legal instruments that appear within the chapters as well as in the addendum to the volume may be dull at times, but it is necessary to analyze the statutory impediments and distinguish legal procedures amongst other things for this book to accomplish its informative purpose. The issue is mostly alleviated by the book’s structure; Campfens is careful to include only material that she found essential to the understanding the restitution process.

Owing to the fact that Fair and just solutions? is a compilation of articles by multiple authors, the chapters may be pertinent to a diverse readership. Additionally, editors organized the book in short paragraphs with headers, making it simple for the reader to follow. Each chapter is supplemented with a brief conclusion, either commentary by the editor or key points summarized by the contributing authors, which makes for a useful dénouement—summarizing key points. Overall, Fair and just solutions? serves as a readable and informative reference on the evolution of the law on restitution, an analysis of international practice, and suggestions for future approaches to Holocaust-related claims.

*  *  *

From the Editors: On December 2, 2015, Evelien Campfens will discuss the book and the recent cases involving restitution efforts at the first international Art Law Mixer in London. The event will be held at Stephen Ongpin Fine Art Gallery. For additional details please visit our calendar of events or contact Center for Art Law.

*  *  *

*About the Author: Adir Paner is a Center for Art Law Legal Intern (Fall 2015) as a part of the Benjamin N. Cardozo School of Law Holocaust Restitution Claims Practicum.

WYWH: Review of “Murder to Museums: Recent Cases and Ethical Considerations in Nazi Looted Art”

By Debra S. Friedmann*

On June 17, 2015, the New York County Lawyer’s Association (the “NYCLA”) hosted an event entitled “Murder to Museums: Recent Cases and Ethical Considerations in Nazi Looted Art,” with remarks by Raymond Dowd from Dunnington Bartholow & Miller LLP, and introduced by the Honorable Barbara Jaffe, acting justice in the New York State Supreme Court. Dowd is one of the program chairs of the Art Litigation and Dispute Resolution Practice Institute, scheduled to hold its 8th annual conference in November 2015.

La-Bergere

“La Bergere rentrant des moutons/Shepherdess Bringing in Sheep” (1886) Camille Pissarro

Dowd, who has represented numerous claimants with title dispute cases in U.S. courts, introduced the topic for the evening with a few examples of ongoing restitution cases, including the recent effort to return Camille Pissarro’s painting, “La Bergère Rentrent des Moutons,” from the University of Oklahoma. The concept of art restitution, Dowd explained, began with the Lieber Code, also known as Executive Order 100, ordered by President Lincoln in 1863 and later included in the Hague conventions in 1899 and 1907. The code sought to protect classical works of art and libraries and banned the sale or donation of art removed from enemy nations.

Recent movies such as “The Monuments Men” (2014) and “Woman in Gold” (2015) brought Nazi art restitution to the forefront of art and legal discussions, begging the question, how did the Nazis take possession of art collections that belonged to Jews? Dowd explained that the Nazi regime demanded regular declarations of property from Jews and systematically transferred ownership of all Jewish assets by forcing Jews to relinquish power of attorney to an assigned “Aryan trustee.” This Nazi system that funded their war efforts appears to abide by the law. Dowd suggested that the legal appearance of these sham transactions with blocked bank accounts has confused historians and judges alike when trying to decide if a piece of art was sold fairly or forcibly.

With so many stolen works scattered in museums around the world, Dowd questioned whether museums are doing enough to investigate their holdings and return the looted work to their rightful owners. Though the U.S. State Department has regularly shown support for Nazi restitution, the U.S. federal court system has nevertheless rejected many of these claims, and in some circumstances, ruled in favor of museums that have sued the Jewish heirs for extortion.

Dowd introduced some of the hurdles, such as laches (the undue delay in obtaining relief), statute of limitations, and the claim that the sales were voluntary, that he has incurred in his own work representing heirs of Holocaust survivors. In Dowd’s case In re Flamenbaum, the rejection of the laches argument to bar the return of a third century golden tablet belonging to the Temple of Ishtar was instrumental as support for other cases that similarly would need to argue against laches. This subject was particularly timely in light of the recent Cassirer v. Spain appellate decision against Claude Cassirer, heir to Lilly Cassirer who was forced to give up Camille Pissarro’s “Rue Saint-Honoré, Après-midi, Effet de Pluie” while fleeing from Nazi Germany. Recognizing national sovereignty, the court ruled that Spanish law rather than California law applied to  the case because, though the plaintiffs had a significant connection to California, the painting did not. According to Spanish law, if one possesses property in an obvious way for a certain period of time, ownership transfers to that individual.  Therefore, since the doctrine of adverse possession applied in this case, it did not matter that the painting in question was looted by the Nazis.

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“Seated Woman With Bent Left Leg” (1917) Egon Schiele

Dowd warned the audience that it is important to look skeptically at provenance research associated with works of art. As an example, Dowd discussed the case Bakalar v. Vavra, where he established that Franz (Fritz) Grunbaum, who owned a sizable collection of Egon Schiele works, was murdered in Dachau. Sotheby’s claimed in the listed provenance for the drawing by Egon Schiele, “Seated Woman With Bent Left Leg” (1917), that it was passed down to the widow and heirs and then sold voluntarily, when in reality no such transactions took place.

Dowd concluded that museums are not doing enough to research their collections and return stolen works, noting that if there is a theft in a transaction, the transactions that follow are irrelevant. Museums such as the Museum of Modern Art, the Toledo Museum of Art, the Detroit Museum of Art, the Museum of Fine Arts in Boston, and the Guggenheim Museum, are still fighting and rejecting charges of looted Nazi art, refusing to return the works.

The CLE lecture, which drew an audience of approximately thirty people, ended with questions on what museums should do in response to claims of looted art and suggestions for what advocates can do to rectify the suppression of Nazi looted art claims.

Select Cases:

  • Bakalar v. Vavra, 619 F.3d 136, 2010 WL 3435375 (2d Cir. Sept 2, 2010)
  • Cassirer v. Kingdom of Spain, 616 F.3d 1019 (9th Cir. August 12, 2010)
  • De Csepel v. Republic of Hungary, 714 F.3d 591 (D.C. Cir. 2013)
  • Grosz v. Museum of Modern Art, 2010 WL 88003 (Jan. 6, 2010), aff’d (2d Cir. Dec. 16, 2010.)
  • Guggenheim v. Lubell, 153 A.D.2d 143, 153, 550 N.Y.S.2d 618, 624 (1st Dep’t 1990), aff’d 77 N.Y.2d 311, 321
  • Schoeps v. State of Bavaria, 2014 WL 2915894 (S.D.N.Y. June 27, 2014)
  • Menzel v. List, 267 N.Y.2d 804, 819 (Sup. Ct. N.Y. Co. 1966), modified 279 N.Y.S.2d 608 (1st Dep’t. 1967), modified and aff’d 24 N.Y.2d 91 (1969)
  • Museum of Fine Arts Boston v. Seger-Thomschitz, 623 F.3d 1 (1st Cir. Oct. 14, 2010)
  • Republic of Austria v. Altmann, 541 U.S. 677 (2004)
  • Toledo Museum of Art v. Ullin, 477 F. Supp.2d 802 (N.D. OH 2006)
  • Vineberg v. Bissonnette, 548 F.3d 50 (1st Cir. 2008)
  • Von Saher v. Norton Simon Museum of Art at Pasadena, 131 S.Ct. 379 (Oct. 4, 2010)

Additional Sources:

  • Dowd, Raymond J., Nazi Looted Art and Cocaine: When Museum Directors Take It, Call The Cops, 14 Rutgers Journal of Law and Religion 529 (2013)
  • Dean, Martin, Robbing The Jews: The Confiscation of Jewish Property in the Holocaust, 1933-1945 (Cambridge U. Press 2008)
  • Petropoulos, Jonathan, Art As Politics in The Third Reich (U. North Carolina Press 1999)
  • Petropoulos, Jonathan, The Faustian Bargain: The Art World In Nazi Germany (Oxford U. Press 2000)

*About the Author: Debra Friedmann is a rising second-year law student at the Georgetown University Law Center. She received a B.A. in History and Studio Art from Brandeis University. She may be reached at dsfriedmann@gmail.com.

Disclaimer:  This article is for educational purposes only and is not meant to provide legal advice. Readers are not meant to act or rely on the information in this article without attorney consultation.

WYWH: Review of “The New Cuba: What You Need to Know About the Cuban Art Market”

American and Cuban Presidents Obama and Castro shaking hands in Panama in early April 2015. (Source)

by Dennis C. Abrams

On the evening of April 12, less than a week after Presidents Barack Obama and Raúl Castro historically shook hands at the seventh Summit of the Americas, Herrick, Feinstein LLP and Akerman LLP co-sponsored a discussion entitled “The New Cuba: What You Need to Know About the Cuban Art Market” at Herrick’s offices in Midtown Manhattan. The seminar, featuring several distinguished speakers, explored the finer points and risks of buying, selling and collecting Cuban art in light of the President Obama’s recent decision to normalize diplomatic relations with Cuba.

The two panels explored the following discussion topics:

  • How recent U.S. regulatory changes will affect Americans’ ability to buy Cuban artwork;
  • Techniques for U.S. collectors to legally pay for new acquisitions and import their purchases into the United States;
  • The history of art nationalization in Cuba and how to avoid legal exposure by engaging in provenance- related due diligence.

Panel I

Introduced by Howard Spiegler, Partner at Herrick, the speakers on this first panel were Carlos Méndez-Peñate, a Partner and Co-Chair of the Latin America & the Caribbean Practice at Akerman LLP, Augusto E. Maxwell, a Partner and Chair of Akerman’s Cuba Practice and Alberto Magnan, the Cuban-born Gallery Principal at Magnan Metz Gallery.

Mr. Méndez-Peñate began by addressing the current state of the law regarding relations between the United States and Cuba, focusing on the Cuban Assets Control Regulations (CACR) which have been responsible for the American embargo on Cuba since being enacted by Congress in 1963. The CACR (which Lesley Sotolongo previously discussed for Center for Art Law) prohibit most forms of trade with Cuba but § 515.206(a) of the regulations explicitly exempts several different types of transactions from the ban including, most pertinently to this discussion, information and informational materials. The definition of “information and informational materials” specifically includes “artwork” and names several different types of media including films, posters and CD ROMs. However, as Méndez-Peñate pointed out, the item that is the subject of the transaction must be bought as is – meaning that, while Americans may buy completed artworks, they cannot commission a Cuban artist to create a new artwork nor hire a Cuban artist to alter or put the finishing touches on a preexisting project. Méndez-Peñate also mentioned that, because the embargo is embodied in statutory law, it will ultimately require an act of Congress to repeal and, until that time, any progress perceived to have been made by President Obama can easily be undone by the successive administration in 2017.

Mr. Maxwell then spoke about the specifics of traveling to and buying art in Cuba. He explained that the Office of Foreign Assets Control had recently relaxed its rules by issuing general licenses allowing travel to and transactions in Cuba for non-specific purposes and lifting the per diem limitation on expenses (which previously limited spending to $188 per day in Havana). Maxwell also discussed a roadblock for visitors to Cuba which may soon be resolved – because of Cuba’s status on the State Department’s list of State Sponsors of Terrorism, many banks refuse to do business in or with the island nation and, as a result, Americans’ credit and debit cards have long been nonoperational within its borders. Given President Obama’s recent endorsement of removing Cuba from that list, however, Americans may be able to buy art in Cuba using their credit cards before long. Finally, keeping in mind the sociopolitical sensitivity underscoring all interactions with Cuba, Maxwell outlined three things for buyers to beware of when shopping the Cuban art market: (1) artwork previously confiscated by the Cuban government, as rightful ownership and legal title may be subject to challenge, (2) purchasing works created by artists who have close ties to the Cuban government, as patronizing such artists may cause reputational damage to the buyer in anti-Castro circles, and (3) the danger of buying fakes in light of widespread forgeries in Cuba.

Lastly, Mr. Magnan discussed the history of art in Cuba since the 1980s and the current state of the nation’s art community. He lamented the fate of Cuba’s national art museum, the Museo Nacional de Bellas Artes de La Habana, which has suffered under the embargo as it would surely benefit from using American building materials for structural maintenance. At present, the museum relies largely on mid-20th century American air conditioners to control its climate and preserve its artworks. Magnan has contributed to the Cuban art community by exhibiting their work at his Manhattan gallery and curating shows in Cuba.

Shortly after the end of the Cuban Revolution, rebel Camilo Cienfuegos stands on a portrait of Marta Fernández de Batista which has been torn from its frame in the Presidential Palace. (Source)

Panel II          

The second panel addressed the subject of the nationalization of art by the Cuban government and the resulting legal risks in transacting in Cuban art. This discussion was covered by Mari-Claudi Jiménez, a partner in Herrick, Feinstein’s Art Law practice group, Monica Dugot, Senior Vice President and International Director of Restitution at Christie’s International and Lucian Simmons, a Senior Vice President at Sotheby’s New York and head of their Worldwide Restitution team.

The Cuban Revolution was fought from 1953 to 1959 and resulted in the establishment of Fidel Castro’s communist government which remains in power today. After Castro assumed office, art was among the many valuable resources confiscated from private citizens and redistributed. Most of that immeasurable hoard of art wound up in museums, in the homes of government officials or sold abroad at auctions. However, while the identification and restitution of art confiscated under similar circumstances in other countries has long been a major cause for concern in the art market, the status of art looted during the Cuban Revolution has become a topic of interest only recently according to Ms. Jiménez, who recently spoke on this topic at the annual American Society of International Law Annual Meeting in Washington, D.C. According to her, part of the reason that awareness for this issue has lagged so far behind is due to the insular nature of the nation and that Cuban families often lack the resources to identify, locate and secure the return of their missing heirlooms. While it would be reasonable to assume that a framework for restitution could be instituted similar to the one which has facilitated the return of so many Nazi-looted artworks, there is an operative difference between the two regimes, which makes such a proposition inapposite. The key difference is that the United Nations’ London Declaration of 1943 invalidated all transfers of property made by the Nazi regime, thereby giving rightful title of any artwork taken by the Nazis to the owner from whom it was taken. Conversely, the nationalization of previously privately owned artwork by the Cuban government is given full legal effect, leaving original owners without any clear legal recourse. Therefore, for most Cuban victims of art confiscation, restitution is not so much a goal as it is a hope.

According to Ms. Dugot and Mr. Simmons, neither Christie’s nor Sotheby’s has yet had occasion to return much, if any, artwork looted or nationalized during or after the Cuban Revolution. However, both institutions do have agreements with specific families who had significant collections confiscated to be on the lookout for and notify them of any works that may have previously belonged to their families. Dugot also mentioned that, in addition to returning Nazi-looted artwork, Christie’s has been able to return pieces nationalized by the Soviet, Cambodian and Egyptian governments. Given that due diligence can often only be as thorough as the resources consulted, Dugot implored victims to register their missing art in stolen art databases whenever possible.

“The New Cuba” left attendees with mixed feelings as to the future of the Cuban art market. While America’s relaxation of its sanctions against Cuba seems likely to facilitate relatively free trade between Cuban artists and American buyers, there is no guarantee that the market will not be replete with artwork taken from their original owners by the Castro regime. Although Cuban nationalization of property is given legal effect in the U.S. and Cuba and the original owner of such a work therefore may not have superior title to the work, the stigma of forceful takings runs counter to the values and standards of the present day art community. This creates a moral dilemma for subsequent purchasers of the work. And, as Lucian Simmons said, good “moral title” is often just as important as valid legal title.

About the Author: Dennis C. Abrams, Legal Intern with Center for Art Law, is a 3rd year student at Benjamin N. Cardozo School of Law, with an interest in intellectual property, media, art, entertainment, and sports law. He can be reached by e-mail.

Wish You Were Here: Sotheby’s Institute of Art (CA) Conference, January 2015

by Jessica Newman*

On January 30 and 31, the Sotheby’s Institute of Art gathered attorneys and art professionals together in Los Angeles, California for their Art Law Conference entitled “The Practice of Law in the International Art World.” The two-day expansive agenda featured twelve modules and nearly forty speakers, including artist Shepard Fairey giving an inspired keynote speech. The Conference addressed a number of issues at the confluence of art and law, including authenticity, looting, collecting, restitution, investment, public art, the future of art, and the art market. Following is a brief write up of the most memorable topics:

1. Liability v. Leadership: Advising Arts Organizations

Melody Kanschat, Executive Director of the Getty Leadership Institute at Claremont Graduate University, chaired a panel entitled “Liability v. Leadership: Advising Arts Organizations,” which featured Stephen Clark (J. Paul Getty Trust), Fred Goldstein (Los Angeles County Museum of Art), David Galligan (Walker Art Center), and Eva Schieveld (Van Gogh Museum). As multidimensional institutions, museums face a myriad of issues that extend far beyond the world of art. The panel emphasized that general counsel should be a part of all senior management conversations and budget discussions. One common concern was the avoidance of conflicts of interest (both real and apparent), particularly when dealing with a board of trustees.

One question posed to the panel was whether a museum can invest in a company which is run by a member of the museum’s board. As with many legal questions, the answer is, “Yes, but…” Although some museums have a strict zero tolerance policy when it comes to such investments, it is possible to structure transactions in a manner that avoids direct conflicts of interest. In part, the soundness of such a transaction turns on who is making the decision. It is important to ensure that the transaction is done at arm’s length and that no one who will directly benefit is personally involved in the decision whether or not to invest. In addition, transparency and continued management play important roles in preventing conflicts from arising.

2. Restitution Panel

Jonathan Petropoulos moderated the Restitution Panel, which explored the continuing evolution of restitution claims. Although issues of restitution have been around for some time, they remain a major concern for purchasers, heirs, and museums alike. Lucian Simmons of Sotheby’s observed that investigation into potential restitution issues remains a steady part of his work even today. Accordingly, as Simon J.Frankel (Covington) reiterated, research into proper provenance is as important as ever, and several conference speakers strongly advocated title insurance. As for the future of the field, Lawrence M. Kaye (Herrick), identified Russia as the next potential hotspot for restitution claims if access to Russian archives and collections becomes a possibility.

3. Secured Transactions

The second day of the conference began with a panel on Secured Transactions, moderated by Franklin Boyd and featuring John Arena (Bank of America), Stephen D. Brodie (Feinstein), and Karen McManus (Jacqueline Silberman & Assocs. Inc.). Art as an alternative asset has become increasingly popular for wealthy investors looking to diversify their portfolios. Art can also be used as a financial tool without having to sell the works by using the art as collateral. However, this option is only open to a select number of collectors.

The target collector is one with at least $10 million in well-established works (i.e., Old Masters, Modern, etc.) which can be quickly and easily sold were such a sale to become necessary for the lender. These works are appraised and, from a collector’s perspective, title insurance is recommended. Additionally, art must be the “second way out” of the deal. In other words, the borrower must have demonstrated equity in other assets. For those who can meet these criteria, using art to finance loans can be an attractive option. The fact that the United States is the only country where owners can maintain control of their collateralized works makes this option particularly appealing.

4. Art Collecting in the Current Legal Market

“Art Collecting in the Current Legal Market,” panel which was chaired by Mary Rozell (Sotheby’s) and featured Carol Bradford (California Community Foundation), Josh Roth (United Talent Agency, formerly Glaser Weil), and Katie Tolson (Gurr Johns). Although the increasingly global and technology-driven world of art collecting makes it easier than ever to access art, it also poses a number of challenges for the contemporary collector. For instance, documents can now be forged with the push of a button. However, one area in which technology has significantly enhanced the collecting experience is in inventory management. Ensuring proper documentation of one’s inventory is vital and a number of new software options have emerged that can assist a collector in doing just that. These software programs range in price, but at a minimum it should offer the collector a means of inputting photographs, descriptions of the works and details such as collection history, exhibition history, location, and inventory number. Ms. Tolson described her firm’s custom-designed Art Collection Management Software, which offers collectors a sophisticated means of managing their collections.

Roth discussed the increasing use of Section 1031 like-kind exchanges as a tool that can be utilized to expand one’s collection. Section 1031 of the Internal Revenue Code, entitled “Nonrecognition of gain or loss from exchanges solely in like kind,” provides a means for investors to defer taxes on capital gain from the sale of a work of art. In effect, 1031 Exchanges provide a collector with an interest-free loan from the government that can be used to subsidize future acquisitions so long as certain conditions are met. First, this section does not apply to personal property, as it applies only to property used for business or investment purposes. The exact parameters for this requirement are somewhat vague, however a work purchased solely for personal display in one’s home is not likely to qualify. Defining a like-kind property in this context can be equally difficult as there is no definitive guideline as to what type of art would be of like-kind to another. For instance, it is conceivable that the IRS may determine that a sculpture is not of like-kind to a painting.

Lastly, there are strict timing and designation requirements which are intended to distinguish a 1031 Exchange from a taxable transaction in which the purchaser merely uses the proceeds from a previous sale to purchase a new property. There are several ways to structure such an exchange, though the forward, or deferred exchange is most common. Broadly speaking a forward exchange works as follows: upon the sale of a work, the collector can use a 1031 exchange to defer the gain by investing the proceeds in a like-kind replacement property (i.e. another work of art) of equal or greater value. The replacement work must be identified within 45 days of the initial sale, and the collector has 135 days to close the sale upon identification. The appeal of such exchanges is evident, and Roth expects that they will only continue to grow in popularity.

Over the course of the two days, several takeaways emerged. First, many of the traditional issues within the field of art law – looting, restitution, importing/exporting, authenticity – remain at the heart of any art law practice. Secondly, the search for new uses and new means of valuing art has produced a number of creative options for investment and exchange of art. These options, however, are complex and require thorough due diligence by all parties. Lastly, the digital age has brought with it a host of new challenges for collectors, museums, artists, and attorneys alike. At the same time, technological advances also are opening up the art world in exciting ways.

Selected Sources:

About the Author: Jessica Newman is a third year dual-degree student pursuing a Juris Doctor and a Masters in Art History at Duke University. She can be reached at Jessica.newman@lawnet.duke.edu.

How do you solve a problem like Gurlitt?

By Irina Tarsis*

As Hollywood is celebrating the 50th Anniversary of “The Sound of Music,” set in Salzburg, Austria and the public release of “Woman in Gold,” a film based on successful legal actions to recover Nazi-looted art scheduled for release April 1, 2015, the Gurlitt saga continues to permeate the media and the legal scene. The News Wires are alive with the name of ‘Gurlitt,‘ and every related court decision and legal filing is music to our ears.

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Cornelius Gurlitt (1932-2014), was born into a family of artists, art historians and musicians. He was a son of one of the four infamous art dealers who had been involved in sales of “degenerate art” and purchases of works for the Führermuseum in Linz, among other transactions during the Third Reich. In 2013, the story broke that Cornelius, who was under a tax investigation, inherited a large art trove of paintings, drawings and prints, split between his apartment in Munich, Germany and a house in Salzburg, Austria. The insiders of the German-speaking art world, and probably beyond, must have known of the collection, particularly since the 2011 Lempertz auction of the Max Beckmann’s “Lion Tamer,” that was stolen from Alfred Flechtheim during World War II and was consigned by Cornelius Gurlitt.

Having vacillated between refusing to part with his collection and agreeing to allow researchers access to determine provenance of the works, Gurlitt passed away in 2014. Reportedly, he reached an agreement with the German government regarding access to the art; however, in his Will, Gurlitt bequeathed the contested art collection to the oldest fine art museum in Switzerland, Kunstmuseum Bern. Validity of the Will was challenged by Gurlitt’s relative, Uta Werner, who reportedly had promised to make Gurlitt’s documents public.

On March 25, 2015, it has been reported that the German court reviewed the challenge to Gurlitt’s will and ruled it valid.

Only days earlier, in two separate instances, Monika Grütters, Germany’s culture minister as of December 2013, announced that she approved and signed restitution agreements to release two of the paintings, a Matisse and a Liebermann, that have been affirmatively determined months ago as to have been looted from victims of the Nazi prosecution. Matisse’s “Seated Woman” is expected to be returned to the heirs of Paul Rosenberg and Liebermann’s “Two Riders on the Beach” should be sent to the heirs of David Friedman. The agreements are expected to be approved with the Munich court that is in charge of the Will and thus the Gurlitt estate.

After much dissonance and delay, let the next movement in the Gurlitt concerto be more of restitution agreements and release of documents – “these are a few of my favorite things.”

Select Sources:

About the Author: Irina Tarsis, Esq., specializes in art law, provenance research and cultural heritage law. She may be reached at itsartlaw@gmail.com.

Disclaimer: This article presents general information and is not intended as legal advice.

Restitution, Repatriation and Return: When Objects Go Back; (Part 2 of 5) Restitution of Cultural Objects Taken During World War II

By Kevin P. Ray, first posted on Greenberg Traurig’s art law blog Cultural Assets on March 20, 2015.

This article is thshutterstock_35931382e second in a five-part series discussing the restitution, repatriation, and return of cultural objects. Each part addresses a different category of return. The first article in the series available here, addressed the restitution of stolen cultural objects. This article is the continuation of Part 1 and discusses developments in the restitution of cultural objects taken during World War II. The remaining articles address: (1) the restitution of illicitly excavated and/or illicitly exported cultural objects, (2) repatriation of tribal and indigenous cultural objects, and (3) the return of cultural objects removed during colonial occupation.

Museums’ Use of Technical Defenses: Von Saher and Beyond

The question of museums waiving defenses, as the AAM Standards suggest, has emerged as an important point of conflict in Nazi-era restitution cases. In a few instances, museums have filed quiet title actions against restitution claimants, asking courts to issue declaratory judgments that the museums have good title to the objects and/or the claimants’ rights have been lost due to statutes of limitations or laches. [See, e.g., Toledo Museum of Art v. Ullin, 477 F. Supp. 2d 802 (N.D. Ohio 2006); Detroit Inst. of Arts v. Ullin, No. 06-10333, 2007 WL 1016996, at *1 (E.D. Mich. Mar. 31, 2007); Museum of Fine Arts, Boston v. Seger-Thomschitz, Case No. 08-10097-RWZ, 2009 WL 6506658 (D. Mass. June 12, 2009); Museum of Fine Art v. Schoeps, 549 F.Supp.2d 543 (S.D.N.Y. 2008).] Such cases remain rare, and are controversial. [See, e.g., Grosz v. Museum of Modern Art, 772 F.Supp.2d 473 (S.D.N.Y. 2010); Simon J. Frankel and Ethan Forrest, “Museums’ Initiation of Declaratory Judgment Actions and Assertion of Statutes of Limitations in Response to Nazi-Era Restitution Claims – A Defense,” 23 DePaul J. Art, Tech. & Intell. Prop. L. 279, 281 (2013).] However, museums asserting statutes of limitations and laches defenses – what have become known as “technical defenses” – rather than allowing cases to be decided solely on the merits is not less controversial. [1]

Statute of limitations and laches[2] defenses are commonplace in stolen art litigation. [For a discussion of statutes of limitations and related issues in stolen art cases, see my earlier discussion in “Restitution of Stolen Cultural Objects,” available here.] The propriety of museums’ use of such technical defenses is highlighted in Von Saher v. Norton Simon Museum of Art at Pasadena. [Von Saher v. Norton Simon Museum of Art at Pasadena, 754 F.3d 712 (9th Cir. 2014).] Before the Second World War, Jacques Goudstikker was a preeminent Amsterdam art dealer. [See “Reclaimed: Paintings from the Collection of Jacques Goudstikker,” exhibition March 15 – August 2, 2009, Jewish Museum website, available here.] When the Nazis invaded the Netherlands in 1940, the Goudstikkers, as Jews, were endangered. They fled the country, leaving behind their possessions, including the contents of Jacques’s art gallery, which included more than 1,400 objects, including two life-size 16th-century panels by Lucas Cranach the Elder, titled “Adam and Eve.”  Jacques Goudstikker had purchased the Cranach panels at auction in 1931. The auction was titled “The Stroganoff Collection,” and included objects that had been expropriated by the Soviet government from the Stroganoff family, as well as from other owners within the U.S.S.R. The Cranach panels had not been owned by the Stroganoff family, but had been in the collection of the Ukrainian Academy of Science in Kiev.

After the Nazis occupied Amsterdam, the Goudstikkers’ possessions were confiscated, with Hermann Goering selecting ca. 800 objects for his personal collection. Many of the Goudstikker objects were retrieved by Allied forces at the end of the war and were sent to the Central Collecting Point in Munich for cataloging and processing. Allied policy was to return Nazi-looted objects to the governments of the countries from which they had been taken, reasoning that those countries were in the best position to locate the original owners and return the objects to them or to their heirs. Along with other Goudstikker objects, the Allies restituted the Cranach panels to the government of the Netherlands. However, in 1961, an heir of the Stroganoff family filed a claim against the Cranachs, and Netherlands erroneously restituted the panels to him. The heir sold the Cranach panels to the Norton Simon Museum of Art at Pasadena in the early 1970s.

Von Saher I

With Von Saher the question of whether a statute of limitations defense is appropriate in the case of Nazi-looted objects has been extensively litigated. Concerned that California’s three-year statute of limitations was presenting an unfair burden on claimants with respect to Holocaust and in Nazi-era looting cases, the California legislature extended that statute of limitations, but only for such Holocaust and Nazi-era looting claims. Marei Von Saher, the heir of Jacques Goudstikker, filed a replevin action in California in May 2007 against the museum, and the museum filed a motion to dismiss, arguing that the California statute extending the limitations period unconstitutionally intruded upon the federal government’s “exclusive power to make and resolve war, including the procedure for resolving war claims.” [Von Saher v. Norton Simon Museum of Art at Pasadena, Case No. CV-07-2866-JFW, 2007 WL 4302726 (C.D. Cal. Oct. 18, 2007).] The district court agreed, and dismissed the case. Ms. Von Share appealed the decision to the 9th Circuit Court of Appeals, which issued a decision finding the California extension of its statute of limitations unconstitutional but allowing Ms. Von Saher leave to amend her complaint to allege that her claim was brought within the existing three-year statute of limitations measured by the discovery rule. [Von Saher v. Norton Simon Museum of Art at Pasadena, 578 F.3d 1016 (2009).] That decision was reheard en banc, with the full court again holding the extended limitations period to be unconstitutional, and remanding the case to the district court to allow the plaintiff to amend her complaint. [Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954 (2010).]

Von Saher II

Following the 9th Circuit’s decision, Ms Von Saher filed an amended complaint. The California legislature amended its statute of limitations, this time avoiding the foreign affairs conflict, and providing generally that claims for the recovery of artworks must be brought within six years after “actual discovery” by the plaintiff of the current location and current possessor of the object (provided that the object has been taken within the last 100 years). The constitutionality of this limitations period was challenged in a wholly separate Nazi-confiscated art case, and the statute was upheld. [Cassirer v. Thyssen-Bornemisza Collection Foundation, 737 F.3d 613 (9th Cir. 2013).] However, the district court granted the museum’s second motion to dismiss the case, holding that Ms Von Saher’s claims were preempted by the foreign affairs doctrine. [Von Saher v. Norton Simon Museum at Pasadena, 862 F.Supp.2d 1044 (2012).] Quoting the Solicitor General’s brief with approval, the district court found that “[w]hen a foreign nation, like the Netherlands here, has conducted bona fide post-war internal restitution proceedings following the return of Nazi-confiscated art to that nation under the external restitution policy, the United States has a substantial interest in respecting the outcome of that nation’s proceedings.” [Id. at 1051.]

On appeal, the 9th Circuit reversed that decision, finding that the Dutch post-war internal restitution proceedings that resulted in the Cranachs being given to the Stroganoff heir were not adequate, and were, in fact, criticized and disavowed by the Netherlands in a reassessment in the 1990s.  The court further found that the later Dutch restitution proceedings concerning objects from the Goudstikker collection (which resulted in the return to Ms. Von Saher of several hundred objects) were not internal restitution proceedings with respect to the Cranach panels, since those panels were no longer located within the Netherlands at that time and could not be returned. The 9th Circuit rejected the Solicitor General’s position that U.S. policy supported the finality of countries’ internal restitution decisions, without further considerations. Rather, the court stated:

 “U.S. policy on the restitution of Nazi-looted art includes the following tenets: (1) a commitment to respect the finality of ‘appropriate actions’ taken by foreign nations to facilitate the internal restitution of plundered art; (2) a pledge to identify Nazi-looted art that has not been restituted and to publicize those artworks in order to facilitate the identification of prewar owners and their heirs; (3) the encouragement of prewar owners and their heirs to come forward and claim art that has not been restituted; (4) concerted efforts to achieve expeditious, just and fair outcomes when heirs claim ownership to looted art; (5) the encouragement of everyone, including public and private institutions, to follow the Washington Principles; and (6) a recommendation that every effort be made to remedy the consequences of forced sales.” [Von Saher v. Norton Simon Museum of Art at Pasadena, 754 F.3d at 721.]

While museums and their trustees certainly have a duty to protect and preserve the objects in their collections, as well as an obligation to evaluate claims made against objects that they hold,[3]the Von Saher case has become a touchstone for critics of museums’ use of technical defenses to delay or foreclose resolution of bona fide claims on their merits. In Von Saher, the parties have been in court for seven years and have not yet reached the merits.

Objects Held by Foreign Museums: The Foreign Sovereign Immunities Act

Most U.S. museums are private charitable organizations, but that is not the norm in most other parts of the world, where museums are state-owned or state-affiliated. That means that parties asserting claims for the restitution of objects held in foreign museums frequently involve questions of foreign sovereign immunity.

Generally, a foreign state is immune from the jurisdiction of federal and state courts in the U.S. [See Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486 (1983).] However, the Foreign Sovereign Immunities Act (FSIA) [28 §§ U.S.C. 1602-1611.] allows U.S. courts to exercise jurisdiction over foreign sovereigns and their agencies and instrumentalities, but only within certain statutorily-defined exceptions. Although the FSIA was not enacted until 1976, it applies to all cases filed after its enactment, regardless of when the alleged wrongdoing occurred.[ See Republic of Austria v. Altmann, 541 U.S. 677, 700 (2004)(holding that the FSIA applies to conduct “that occurred prior to 1976 and, for that matter, prior to 1952 when the State Department adopted the restrictive theory of sovereign immunity.”).] Under the FSIA, state-owned or state-affiliated museums are considered agencies or instrumentalities of their foreign sovereigns.[4]

The most commonly applied FSIA exception in cultural property restitution cases is the “expropriation exception.” [See, e.g. Altmann v. Republic of Austria, 317 F.3d 954, (9th Cir. 2002),aff’d, 541 U.S. 677 (2004); Cassirer v. Kingdom of Spain, 580 F.3d 1048, (9th Cir. 2009); Agudas Chasidei Chabad of United States v. Russian Federation, 528 F.3d 934 (D.C. Cir. 2008); Malewicz v. City of Amsterdam, 362 F.Supp.2d 298 (D.D.C. 2005).] Under the expropriation exception, a foreign sovereign (or its agency or instrumentality) is amenable to suit in U.S. courts where property has been taken in violation of international law and either (1) “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 (2) 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.” [28 U.S.C. § 1605(a)(3).]

Foreign Sovereign-Owned Property in the U.S.

The first prong of the expropriation exception has typically been applied in cases where objects owned by foreign museums are temporarily located in the U.S. For example, in Malewicz v. City of Amsterdam, [Malewicz v. City of Amsterdam, 362 F.Supp.2d 298 (D.D.C. 2005); Malewicz v. City of Amsterdam, 517 F.Supp.2d 322 (D.D.C. 2007).] the heirs of artist Kazimir Malewicz sought the return of 14 Malewicz paintings from the City of Amsterdam, whose Stedelijk Museum had placed the paintings on temporary loan to the Solomon R. Guggenheim Museum and the Menil Collection. Amsterdam argued that because the paintings on loan were immune from seizure under the U.S. Department of State’s Mutual Educational and Cultural Exchange Program, the court should dismiss the case. The court, however, disagreed, holding that “[i]mmunity from seizure is not immunity from suit for a declaration of rights or for damages arising from an alleged conversion if the other terms for FSIA jurisdiction exist.” [Malewicz v. City of Amsterdam, 362 F.Supp.2d at 312.]

The court found that the requirements for FSIA jurisdiction were satisfied, because (1) the museum’s taking of the paintings violated international law, and (2) the paintings were present in the U.S. in connection with commercial activity. For purposes of determining whether jurisdiction exists under the FSIA, the court “need not decide whether the taking actually violated international law; as long as a claim is substantial and non-frivolous, it provides a sufficient basis for the exercise of [the court’s] jurisdiction.” For purposes of the FSIA, a taking violates international law if it is not for a public purpose, or is discriminatory, or does not provide for just compensation. The City of Amsterdam argued that FSIA takings jurisdiction cannot exist unless the plaintiffs have first exhausted local remedies. The court, however, agreed with the heirs that exhaustion of local remedies was not required because no local remedies were available to the heirs since, under Dutch law, no claim for the return of property (or damages for its taking) can be brought later than 30 years after the date of the taking. Therefore, the heirs had no remedy available to them in Dutch courts. The court found that the museum’s loan of the paintings to the U.S. museums satisfied the commercial activity requirement.

Foreign Sovereign-Owned Property Outside the U.S.

The expropriation exception’s second prong has proven to be an even more powerful tool in cultural property restitution cases, and has provided the basis for U.S. jurisdiction in many of the highest-profile cases of the last decade. They have included the restitution from the Austrian state museum of several Gustav Klimt paintings, the best-known of which is his portrait of “Adele Bloch-Bauer I” (which was then acquired by the Neue Galerie for $135 million), to the heir of the Bloch-Bauers. [Altmann v. Republic of Austria, 142 F.Supp.2d 1187 (C.D. Cal. 2001); Altmann v. Republic of Austria, 317 F.3d 954, (9th Cir. 2002), aff’d, 541 U.S. 677 (2004).] The Altmann case went to the U.S. Supreme Court and established the principle that jurisdiction under the FSIA applies to cases filed after enactment of the FSIA, regardless of when the actions that give rise to the case occurred. In fact, these cases have been instrumental in the development of FSIA jurisprudence. The case has been the subject of numerous articles and books, and is the basis for a forthcoming film, “Woman in Gold,” with Helen Mirren as Maria Altmann.

While the Altmann case was ultimately resolved by settlement, many cases seeking restitution of cultural objects held by foreign state museums or entities are on-going. These include actions by (i) heirs seeking return of a Nazi-confiscated painting currently owned by a Spanish state-affiliated museum [Cassirer v. Kingdom of Spain, 461 F.Supp.2d 1157, 1163-64 (C.D. Cal. 2006); Cassirer v. Kingdom of Spain, 616 F.3d 1019, 1032 (9th Cir. 2010); Cassirer v. Thyssen-Bornemisza Collection Foundation, No. CV 05–03459 GAF, 2014 WL 5510996, *5 (C.D. Cal. Oct. 31, 2014).] (which established the principle that the foreign state against whom suit is brought need not be the same foreign sovereign responsible for taking the property); (ii) heirs for the return of a collection of paintings, including works by Lucas Cranach the Elder, El Greco, Francisco de Zurbaran and Gustave Courbet, from the Hungarian National Gallery (which relies upon the breach of a post-war bailment agreement between the family and the museum); [de Csepel v. Republic of Hungary, 714 F.3d 591, (D.C. Cir. 2013).] (iii) a religious organization for return of a religious library and archive from the Russian State Library and Russian State Military Archive, which objects were first confiscated by the Nazis and later seized by Soviet troops and taken back to the Soviet Union (where the organization brought suit in the U.S. after Russia frustrated litigation there. The organization obtained a default judgment against Russia, and has imposed sanctions of $50,000 per day for Russia’s failure to comply with the court’s order directing it to return the objects); [Agudas Chasidei Chabad v. Russian Federation, 466 F.Supp.2d 6, 16 (D.D.C. 2006); Agudas Chasidei Chabad of U.S. v. Russian Fed’n, 528 F.3d 934, 948 (D.C. Cir. 2008).] and (iv) the Welfenschatz described earlier in this article.

The Washington Conference Principles, the museum ethics guidelines and standards, and the succession of court decisions (particularly those brought under the FSIA) have significantly transformed not only the law in the area of cultural property restitution, but perhaps more importantly, they have transformed awareness and behavior. These developments have the potential to affect a normative shift that extends beyond the historical specifics of World War II, and to change the way we think of rights and ownership of cultural property in a wide range of contexts. They are, and will continue to be, touchstones in a broader and continuing discussion.

[1] See, e.g., Jessica Schubert, “Prisoners of War: Nazi-Era Looted Art and the Need for Reform in the United States,” 30 Touro L. Rev. 675 (2014); Jessica Mullery, “Fulfilling the Washington Principles: A Proposal for Arbitration Panels to Resolve Holocaust-Era Art Claims,” 11 Cardozo J. Conflict Resol. 643 (2010); Benjamin E. Pollock, “Out of the Night and Fog: Permitting Litigation to Prompt an International Resolution to Nazi-Looted Art Claims,” 43 Hous. L. Rev. 193 (2006); Rachel Durbin, “Museums and Self-Regulation: Assessing the Impact of Newly Promulgated Guidelines on the Litigation of Cultural Property,” 18 U. Miami Bus. L. Rev. 101 (2010); Emily A. Graefe, “The Conflicting Obligations of Museums Possessing Nazi-Looted Art,” 51 B.C. L. Rev. 473 (2010); Jennifer Anglim Kreder, “Guarding the Historical Record from the Nazi-Era Art Litigation Tumbling Toward the Supreme Court,” 159 U. Pa. L. Rev. 253 (2011); Katherine N. Skinner, “Restituting Nazi-Looted Art: Domestic, Legislative, and Binding Intervention to Balance the Interests of Victims and Museums,” 15 Vand. J. Ent. & Tech. L. 673 (2013). up

[2] Laches is an equitable defense “designed to promote diligence and prevent enforcement of stale claims” by those who have “‘slumber[ed] on their rights.’” Gull Airborne Instruments, Inc. v. Weinberger, 694 F.2d 838, 843 (D.C.Cir.1982).  To invoke the defense of laches to bar a claim, a defendant must demonstrate that (1) “the plaintiff has unreasonably delayed” in asserting its claim, and (2) “there was ‘undue prejudice’ to the defendant as a result of the delay.” Jeanblanc v. Oliver Carr Co., No. 94–7118, 1995 WL 418667, at *4 (D.C. Cir. June 21, 1995). up

[3] See, e.g., Patty Gerstenblith, “Acquisition and Deacquisition of Museum Collections and the Fiduciary Obligations of Museums to the Public,” 11 Cardozo J. Int’l & Comp. L. 409 (2003)(noting that “Use of either the laches defense or the discovery rule will necessitate a lengthy trial that would consume museum resources.  It will lead to losses in terms of finances, efforts of staff, and, in many cases, negative publicity.  It is thus reasonable for a board of trustees to determine that its chances of retaining an art work through litigation and use of these affirmative defenses are not likely to succeed and thus to seek settlement, while saving the expense of litigation.”). up

[4] See Cassirer v. Kingdom of Spain, 461 F.Supp.2d 1157, 1163-64 (C.D. Cal. 2006) (holding that the Thyssen-Bornemisza Collection Foundation is an agency or instrumentality of the Kingdom of Spain, because it arranged and was a party to the original loan of the artworks, contributed toward the purchase price paid for the artworks, provided a facility to house the artworks, paid the cost of refurbishing that facility, and Spain’s governmental ministers were required to form part of the Collection’s directors); de Csepel v. Republic of Hungary, 714 F.3d 591, (D.C. Cir. 2013) (the Hungarian National Gallery); Agudas Chasidei Chabad of United States v. Russian Federation, 528 F.3d 934 (D.C. Cir. 2008) (Russian State Library and Russian State Military Archive); and Altmann v. Republic of Austria, 142 F.Supp.2d 1187 (C.D. Cal. 2001) (Austrian Gallery which was formerly an agency or instrumentality of Austria and was subsequently privatized). up