Hungary can be sued for return of Nazi looted art

Last week, the United States District Court for the District of Columbia (DDC) rejected Hungary's motion to dismiss a claim brought against it by the heirs of Baron Mor Lipot Herzog, a well-known Jewish Hungarian art collector.

Herzog had amassed a large collection of more than 2000 paintings, sculptures and other artworks prior to his death in 1934. After his death, and the death of his wife in 1940, his collection was divided among his three children. However, the collection was then seized by Hungary and Nazi Germany, and while the Hungarian government purported to “return” a handful of items from the collection to the Herzog heirs in the years immediately following the war, those “returns” were largely on paper or short-lived, and the vast majority of the collection remained in the possession of a number of museums and other Hungarian state-owned bodies.

One of the pieces claimed in the action.

Having unsuccessfully tried to reclaim the collection through the Hungarian courts, the plaintiffs [claimants in the UK] filed the action in the DDC in July 2010 against the Republic of Hungary, the Hungarian National Gallery, the Hungarian Museum of Fine Arts, the Hungarian Museum of Applied Arts and the Budapest University of Technology and Economics.

On 15 February 2011, the defendants filed a motion to dismiss the claim on a number of grounds including:

the Court lacked jurisdiction under the Foreign Sovereign Immunities Act;

the Court was an improper forum for the claims based on the 1973 Agreement between Hungary and the United States; and

the claims were barred by the applicable statute of limitations; principles of international comity, claim preclusion, and issue preclusions; and the Act of State Doctrine.

Unfortunately for the defendants, the DDC rejected all these grounds and, for the most part, denied the defendants' motion. In respect of the ground listed above, the court inter alia held as follows.

Jurisdiction
In order to have jurisdiction, the Court had to find that: (1) “rights in property” are at issue; (2) the property was “taken in violation of international law”; and (3) “the property at issue (or any property exchanged for it) [is] . . .‘owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality’ engages in commercial activity in the United States”.

The Court found that (1) the defendants did not dispute that “rights in property" (2) the plaintiffs’ claim that the Herzog Collection was taken in violation of international law was substantial and non-frivolous, and therefore, adequately satisfied the second requirement; and (3) the defendants admitted that the museums and the university (both agencies or instrumentalities of Hungary) were in possession of the pieces of collection identified in the complaint which was sufficient to satisfy the ‘owned or operated’ requirement, ad these bodies were are engaged in “either a regular course of commercial conduct or a particular commercial transaction or act” in the US as of the commencement of the action.

Improper forum
The 1973 Agreement did not strip the court of jurisdiction.

Barred claims
The defendants’ claim to forum non conveniens ground was not established.

The Complaint stated facts which, if true, could support a finding that the action was timely, and so was not barred by the applicable statute of limitations.

The balance of factors weighs against applying the act of state doctrine (which precludes the courts of a country from inquiring into the validity of public acts of a recognised foreign sovereign power committed within its own territory).

There were no grounds for dismissing the case on the political question doctrine (which instructs that courts should decline to adjudicate matters which have in any measure been committed by the Constitution to another branch of government).

The claims were not barred by the doctrine of international comity (that the merits of the case should not, in an action brought in this country upon the judgment, be tried afresh, as on a new trial or on appeal, upon the mere assertion of the party that the judgment was erroneous in law or in fact).

It is assumed that the case will now proceed to trial and a decision on the merits. However, this preliminary decision is a very worthwhile read. Particularly, on the historical aspects of Hungary during and after the Second World War.

More fighting around Egyptian art

As reported here, it was not long ago that political battles were threatening artworks in Egypt. Now, there is a legal battle over a piece of Egyptian art in the US.

The artwork is an Egyptian mummy mask known as the Mask of Ka-Nefer-Nefer, said to be approximately 3,200 years old, which was discovered in about 1952.

Presently the mask is the possession of The Saint Louis Art Museum which has recently filed a complaint in the US District Court for the Eastern District of Missouri in Saint Louis. The Museum seeks declaratory relief that the US government (and in particular the US Department of Homeland Security) is not entitled to seize the mask from it.

The Complaint sets out the background as follows.

After the mask was discovered, in the early 1960s, it became part of a private collection which was purchased by a Croatian collector in Switzerland. In around 1995, the Croatian collector sold the mask to a Swiss company (Phoenix Ancient Art SA).

Subsequently, towards the end of 1997, the Museum initiated an investigation into the provenance of the mask as it intended to purchase the mask from Phoenix. At this time, the Museum made multiple enquiries into the mask's provenance to ensure that it was not stolen. These enquires were made of a number of individuals and entities, including: the director of the Museum of Egyptian Antiquities in Cairo, The Art Loss Register (as previously discussed here on this blog), INTERPOL, the International Federation of Art Research ad the Missouri Highway Panel (as an INTERPOL constituency). None of these, or other, background checks, established that the mask was stolen. Accordingly, in April 1998, the Museum purchased the mask from Phoenix.

However, from the end of 2005, a number of communications were sent to the US government alleging that the mask was stolen and asking the government to take action to return the mask to Egypt.

Eventually, at the end of 2010, the Museum was contacted by the US Attorney's Office for the Eastern District of Missouri in St Louis to attend a meeting regarding the mask. At that meeting, in January 2011, the Assistant US Attorneys informed the Museum of their intention to seize and forfeit the mask under the Tariff Act, 19 USC § 1595a – on the ground that it is reasonable to believe that the mask was “stolen, smuggled, or clandestinely imported or introduced” into the US.

The Museum claims in the alternative that

1. the US government is precluded from seizing and/or forfeiting the mask pursuant to the provisions of the Tariff Act because such recovery is time-barred by the applicable Statute of Limitations, 19 USC § 1621 – which provides that any action for forfeiture pursuant to the provisions of the Tariff Act must be commenced with 5 years after the time when the alleged offence is discovered – since at least as early as 2005, the government had constructive or actual knowledge that the mask was stolen

2. the US government cannot show probable cause that the mask was “stolen, smuggled, or clandestinely imported or introduced” into the US – on the basis that the museums investigations prior to purchasing the mask revealed no evidence that the mask was owned by Egypt under applicable Egyptian law, or that the mask was stolen from Egypt, or that the mask had unlawfully entered the US; and because Egyptian Law No. 215 on the Protection of Antiquities, which was applicable at the time the mask was discovered and excavated, allowed for the personal and private ownership of Egyptian antiquities, provided that antiquities could be sold or gifted, and thus did not establish ownership of the mask by Egypt.

As we have seen previously on this blog, Statute of Limitations arguments have proved very successful in the past in the US in relation to recovery of art works. We will have to wait and see whether it is once more in this case.

Grosz v MoMA

More bad news for those seeking to reclaim ownership of a number of artworks which were sold in dubious circumstances during the Second World War.

On 16 December 2010, the United States Court of Appeals, Second Circuit confirmed the decision of the South District Court of New York that the claim was time-barred.The case related to three works of German artist Georg Grosz, which were confiscated by the Nazis, and, by various routes, eventually ended up in the collection of the Museum of Modern Art in New York (MoMA).

>> Poet Max Hermann-Neisse with Cognac << >> Self-Portrait with Model <<

>> Republican Automatons <<

Grosz heirs brought the claim against MoMA following several years of unsuccessful negotiations between the parties. However, the claim was only filed more than three years after the Director of MoMA had sent a letter to Grosz's heir saying that the Museum had voted not to relinquish the art. Accordingly, as it was also decided in the case of Boston Museum of Fine Arts and the Kokoschka painting, the Court held that the action should be dismissed as it fell outside the Statute of Limitations.

See here for the decision of the Court of Appeals.

See here for the decision of the District Court.

Holocaust art claims

Over the last few days there has been some good and bad news for Holocaust survivors and their relatives.

Database of Art Objects at the Jeu de Paume

Firstly, some good news in the recent announcement that more than 20,000 unrestituted art objects which were looted by the Nazis during the Second World War have been listed in a new online database. Entitled the “Database of Art Objects at the Jeu de Paume”, the database lists the thousands of cultural valuables which were seized from French Jewish and Belgian Jewish collections by the Einsatzstab Reichsleiter Rosenberg (ERR) and taken to the Jeu de Paume building in the Tuileries Gardens in Paris.

The ERR was a special unit formed during the War with the purpose of plundering cultural artefacts from Nazi-occupied countries. Between 1940 to 1944, the ERR seized not only books, archives, and other research materials, but paintings, antique furniture, carpets, tapestries, objets d’art, and antiquities. The ERR then produced a detailed inventory of its growing collection, with many of the items being photographed and documented.

The database allows the remaining registration cards and photographs produced by the ERR covering more than 20,000 to be searched in illustrated form. The hope is that the database will enable the objects to be claimed and returned to their rightful owners.

UK heir to £100m Steiner art collection

In more good news, it has been reported that an English descendent of Jewish art collector, Jenny Steiner, is to receive a share of a £100m fortune following a Holocaust restitution claim. The collection of more than 18 masterpieces which was confiscated by the Nazis had remained unclaimed for more than six decades. However, the works are now gradually being recovered and sold, and following extensive research by the Jewish Federation, it appears that the English beneficiary is a second generation descendent of the original collector, and thus entitled to a substantial share of the proceeds of the paintings.

Boston Museum of Fine Arts retains ownership of Oskar Kokoschka's Two Nudes (Lovers)

The bad news is that the sole surviving heir of Austrian Jewish art collector Oskar Reichel has not had the same success. Claudia Seger-Thomschitz had sought to recover possession of Oskar Kokoschka's Two Nudes (Lovers), a valuable oil painting formerly owned by Reichel, but presently held by the Boston Museum of Fine Arts (MFA). However, on 14 October 2010, the United States Court of Appeals, First Circuit affirmed the District Court’s ruling that Seger-Thomschitz's claims were time-barred on statute of limitations grounds.







Two Nudes (Lovers)
1913 Oskar Kokoschka, Austrian, 1886–1980










By way of background, Seger-Thomschitz had claimed that she was the rightful owner of the painting as Reichel had only sold the under duress for insufficient consideration after Austria was annexed by the Third Reich in 1938. Accordingly, Seger-Thomschitz’s attorney had sent a letter to the MFA on 12 March 2007, demanding the return of the painting. The MFA was then said to have undertaken an exhaustive effort to research and document the provenance of the Painting in order to ascertain whether the claim appeared valid or not. The MFA concluded that the original transfer of the painting had been valid. Consequently, on 22 January 2008, the MFA filed an action in the District Court of Massachusetts seeking a declaratory judgment to confirm its rightful ownership of the painting. This was followed by a motion for summary judgment arguing that Seger-Thomschitz's counterclaims were time-barred as a matter of law.

The District Court entered judgment in favour of MFA. Applying the three-year Massachusetts statute of limitations applicable to tort and replevin actions, the District Court held that the causes of action against the MFA accrued when the Reichel family and/or Seger-Thomschitz had discovered or should reasonably have discovered the basis for their claims to the painting. It then addressed both the Reichel family's knowledge and Seger-Thomschitz's knowledge, concluding that all parties should have known about the basis for their claims more than three years before Seger-Thomschitz made her demand on the MFA through her attorney's letter.

Seger-Thomschitz appealed. However, the First Circuit Court was not asked to judge the merits of Seger-Thomschitz’s claims, but rather only whether her claims were time-barred as a matter of law. Thus, the Court concentrated on the applicable law of limitations that “actions of tort, actions of contract to recover for personal injuries, and actions of replevin, shall be commenced only within three years next after the cause of action accrues” (Mass. Gen. Laws ch. 260, § 2A). It noted that the District Court had analysed the accrual question by applying the so-called discovery rule, which provides that a cause of action accrues when “an event or events have occurred that were reasonably likely to put the plaintiff on notice that someone may have caused her injury” and agreed with the approach that the party seeking the benefit of the discovery rule has the burden of showing (1) that she lacked actual knowledge of the basis for her claim and (2) that her lack of knowledge was objectively reasonable.

With regards to Seger-Thomschitz’s knowledge, the Court said that the location of the painting had never been a secret – it had long been on public display at the MFA. Moreover, it was listed in a provenance database on a publicly accessible website, and several published books and at least one catalogue raisonné of Kokoschka's works had identified the MFA as the current holder of the painting. Finally, the Getty Provenance Index, a database of provenance information that has been searchable on the internet since 1999, also noted that the Painting was part of the MFA's collection. Thus, the Court said, there was no question that the MFA's possession of the painting had long been discoverable with minimal diligence.

Furthermore, by her own admission, Seger-Thomschitz had "learned that the Nazis had confiscated artworks from Oskar Reichel in the Fall of 2003 when the Museums of Vienna contacted her concerning their intent to return to her as the sole heir of Oskar Reichel four artworks in their collection by the artist Anton Romako." That information had put her on notice that she might have a claim to other artworks that were previously owned by Dr. Reichel and she retained a Viennese attorney that same year "for purposes of handling the restitution of any artworks that Oskar Reichel may have lost due to Nazi persecution." Yet she did not demand the return of the painting in issue from the MFA until 2007, well over three years after she was contacted about the Romako works.

The Court also looked at the Reichel family’s knowledge of the conditions under which the painting had been transferred and whether the family sold have known that the painting was sold under duress. In this respect, it noted that the District Court had held that the family "had ample notice of any possible claim to the painting decades before the filing of this lawsuit." Indeed, the District Court had noted that Oskar Reichel's son Raimund had written several letters to art historians during the 1980s in which he was indicated that he remembered the painting and knew the details of its transfer. Thus, the Court said that it was this knowledge, plus the fact that the Reichel family sought compensation for some other artworks, but not the painting, which led the District Court to conclude that the family's failure to lay claim to the painting was not due to ignorance about the availability of restitution.

Thus, the First Circuit Court concluded that:

“Any reasonable jury confronted with the summary judgment record would conclude that Seger-Thomschitz's causes of action accrued no later than the fall of 2003, when she learned that the Nazis had confiscated artworks from Dr. Reichel, and could then, with reasonable diligence, have discovered her claim to the painting. Because she did not make a demand on the MFA until March 12, 2007, more than three years after her causes of action accrued, summary judgment was properly granted on the MFA's limitations defense.”

Seger-Thomschitz also argued that the Massachusetts statute of limitations should be set aside because it conflicted with the federal government's foreign policy on Nazi-confiscated art. In this respect, Seger-Thomschitz listed a number of statutes which were claimed to constitute evidence of a federal policy disfavoring the application of rigid limitations periods to claims for Nazi-looted artwork. Seger-Thomschitz relied on Supreme Court jurisprudence in American Insurance Association v Garamendi that "state law must give way" when it is in "clear conflict" with an "express federal policy" in the foreign affairs context.

However, the First Circuit Court also dismissed this argument. It found that none of the language of the Acts cited by Seger-Thomschitz was sufficiently clear and definite to constitute evidence of an express federal policy against the applicability of state statutes of limitations to claims for the recovery of lost, stolen, or confiscated art. Furthermore, the Court held that even if there were an express federal policy disfavoring overly rigid timeliness requirements, the Massachusetts statute of limitations would not be in “clear conflict” with that policy. Rather, the Massachusetts statute of limitations struck a reasonable balance between restitution and repose, such that where a claimant in a missing or confiscated art case could demonstrate that she diligently pursued her property, she could defeat summary judgment.

Thus, unfortunately for Seger-Thomschitz, the District Court’s statute of limitations ruling. was affirmed.

However, that the Circuit Court did make an important point at the end of its decision:

“Precisely because they do not address the merits of a claim, statutes of limitations do not vindicate the conduct of parties who successfully invoke them. Although we make no judgment about the legality of the MFA's acquisition of the Painting in 1973, we note the MFA's own disclosure that, when confronted with Seger-Thomschitz's claim, it initiated a provenance investigation for the Painting that it had not done before. The timing of that investigation may have been legally inconsequential in this case. However, for works of art with unmistakable roots in the Holocaust era, museums would now be well-advised to follow the guidelines of the American Association of Museums: "[M]useums should take all reasonable steps to resolve the Nazi-era provenance status of objects before acquiring them for their collections — whether by purchase, gift, bequest, or exchange." American Association of Museums Guidelines Concerning the Unlawful Appropriation of Objects During the Nazi Era (Nov. 1999)"

It is hoped that this encourages art galleries and museums to heed the Guidelines before acquiring objects for their collections.