Heirs Get a New Shot to Claim Nazi-Looted Art

Entertainment Law Digest 12 September 2011
By Kim Calantropo

WASHINGTON (CN) - The heirs of a Jewish baron can sue Hungary and its state-run agencies in hopes of reclaiming their family's art collection, which they claim was seized by the Nazis in World War II, a federal judge ruled.

Before his death in 1934, Baron Mor Lipot Herzog, a Budapest banker, had amassed one of Europe's greatest and largest private collections of art in Hungary. At the start of the Hungarian Holocaust began in 1944 and 1945, Herzog's family left the country to escape certain death.

While Hungary had ordered Jews to register their art collection with the government, the Herzogs hid their paintings and sculptures in the cellar of a family-owned factory. Nevertheless, they government and Nazi collaborators discovered the hidden cache and seized it as trophies for Germany and the Museum of Fine Arts.

David de Csepel, a U.S. citizen, Angela and Alice Herzog, Italian citizens, sued to recover their estimated 40 pieces of art, including masterworks by El Greco, Francisco de Zurbaran and Lucas Cranach the Elder.

They are suing Hungary and its state-run agencies, Museum of Fine Arts, Hungarian National Gallery, Museum of Applied Arts and Budapest University of Technology and Economics. Though Hungary was supposed to return the art collection after the war ended, the Herzogs say Hungary instead bullied and harassed the heirs, denying them export permits and threatening them with jail time, until they surrendered their heirlooms to Hungary and its museums.

The Republic of Hungary argues that there are several reasons this case should not be tried in the United States, such as the statute of limitations and lack of jurisdiction under the Foreign Sovereign Immunities Act. It also claims that it cured any violations with an $18.9 million settlement struck with the U.S. in 1973 that paid Hungarian citizens for their damages during the war, and with its settlement one of the heirs in 1959.

U.S. District Judge Ellen Segal Hevelle dismissed the FSIA argument, saying the heir's complaints are "substantial and non-frivolous" and that the Herzog collection "was taken without just compensation and for discriminatory purposes."

She added that the alleged German Nazi conspiracy acts were proof enough alone of such a violation, even if Hungary's involvement did not violate international law.

 "There is a public interest in resolving issues, such as this one and that this court is familiar with the issues of law such as with this case and therefore finds the U.S. an appropriate forum for the case," the 46-page decision states, agreeing with the Herzogs that looting the Herzog art collection was a violation of international law.

Hungary's 1973 agreement with the U.S. did not apply to the Herzogs because the heirs were not considered to be American citizens when their collection was stolen in 1944, Hevelle said, noting the Herzogs' claim that Hungary seized their art after forcing them out of their country in 1944.

"It is clear, the government of Hungary thought otherwise and had de facto stripped her, Ms. Weiss de Csepel, and all Hungarian Jews of their citizenship rights," Hevelle said.

And the 1959 trial in Hungary does not apply to this case as this one involves more Herzog heirs, more Hungarian agencies and more art work, according to the court, which added the heir accepted only a partial payment of $169,827.

A final ruling on the statute of limitations is pending, but the complaint claimed facts that "if true, could support a finding that this action is timely." Hevelle said.

The plaintiffs are represented by Michael Shuster of Kasowitz
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