HEAR Act: Senate Judiciary Committee Considers Nazi-Looted Art Statute of Limitations Bill

Art Law Report 9 June 2016
By Nicholas O'Donnell

The Senate Judiciary Committee held a hearing this week (video available here) on the Holocaust Art Recovery Act (the “HEAR Act”) that drew welcome attention to the ongoing challenges to the restitution of Nazi-looted art. We were skeptical about the bill’s chances for passage when it was proposed for largely structural reasons: it is the summer before a Presidential election, which is a time when things rarely get done in Washington. Yet it is undeniable that with its bipartisan sponsors Richard Blumenthal, Charles Schumer, Ted Cruz, and John Cornyn—strange political bedfellows under any circumstance—the hearing was an open and constructive discussion that showcased real momentum towards passage. Senator Chuck Grassley’s expediting of the hearing is also a sign that there may be a vote soon. This is important, because recent bills to amend the FSIA as to looted art claims, for example, have never even had a hearing in the Judiciary Committee, let alone gotten a vote (they did pass the House first). Yesterday’s hearing definitely moves the bill into a different category with regard to its prospects. The President has not made any comments on it—yet.

The sponsors submitted the bill in April to standardize at the federal level the statute of limitations for claims for allegedly Nazi-looted art, proposing a universal six-year limitations period for claims in U.S. state and federal courts. At the time it seemed more like a Presidential primary stunt by Sen. Ted Cruz on the eve of the New York primary, but a hearing held yesterday leaves the strong impression that the bill stands a real chance to progress. Given the current political climate, the hearing was almost shockingly bipartisan and collaborative. It is important to remember, however, that despite a healthy dose of self-congratulation by the Senators in attendance, the bill will not ensure any particular restitution, and will still leave available defenses that several of the participants decried as inconsistent with U.S. policy.

Most accounts of the hearing focused on the star power of the witnesses, which is understandable if not entirely relevant. Each submitted written comments as well. Actress Helen Mirren, who played Maria Altmann in the movie depiction of that restitution saga spoke eloquently about the tragedy of loss suffered by the victims and survivors of Nazi looting. More concretely, Simon Goodman, author of The Orpheus Clock and member of the Gutmann/Goodman family that brought one of the very first Nazi-looted art litigations in the United States—the claim for Edgar Degas’s Landscape with Smokestacks—spoke from personal experience about what Mirren had depicted onscreen. He also noted the challenges of postwar transactions that gave works “clear” legal title even when they had been looted. Likewise, Ronald Lauder decried the assertion of statutes of limitations as an avoidance of substance—which is true. Lauder said:

When the United States endorsed the Washington Principles in 1998 and the Terezin Declaration in 2009, the U.S. committed itself to the recovery of art that was confiscated by the Nazis1 during the Holocaust. Our adherence to this commitment requires that resolution of such cases be based on the merits of each case and not on procedural technicalities or the capacity of one party to outspend, or outwait, the other. There are museums here in the United States that have been waiting out the clock to pass the Statute of Limitations. This also forces claimants to spend enormous amounts of money on legal fees – another strategy to make them give up.

This is not justice. Stalling claims is an abuse of the system. Sadly, there are museums that feel no need to uphold the Washington Principles. Many other institutions do the very least that is required and not much more.

Quite right, but this bill would still allow possessors to wait out claims, they would just have to wait a little longer. The challenge is that the bill as proposed would not eliminate the statute of limitations, or bring a claim currently time barred back to life. So while a uniformity of the law would be a substantial improvement on the status quo, some of the testimony seemed to forget what the bill is really about.

Most on point were the comments of Monica Dugot of Christie’s, and Agnes Peresztegi, President of the Commission for Art Recovery. Dugot, an articulate advocate for many years for transparency and provenance research—responded to questions from Al Franken and others about the challenges that face claimants, the overwhelming and decentralized information that is available, and the need for expertise.

Peresztegi cited the problem with neutral statutes of limitations generally:

Statute of limitations and laches are intended to abort the adjudication of “stale” claims. These procedural doctrines were not designed to deal with the greatest art theft in history. One of the main justifications for statute of limitations and laches concerns the unfair burden of imposing on the current possessor the obligation to conserve evidence of legitimate ownership for many decades. In the case of Nazi era looted art, the burden is on the claimant to produce evidence of legitimate ownership that may be decades old, a task dramatically complicated by the fact that the original owner often disappeared along with the proof of ownership. Provenance research was almost impossible right after liberation, but today there is much more information available.

She also skillfully answered queries from Orrin Hatch about the power of Congress to override state law statutes of limitations, rightly pointing out the interstate nature of the art market, and the failure of California’s efforts to revise its statute of limitations, which was struck down as interference with federal law. Put another way, if states cannot regulate something because of preemption, then Congress certainly can.

Peresztegi also made important reference to the fact that it has been U.S. policy to support restitution since 1943—a reference to the so-called London Declaration of that year—undercutting frequent arguments seen in litigation that only national-level restitution, not individual claims, is the policy of the U.S. Lastly, she wisely made note of this year’s decision in the D.C. Circuit, Simon v. Republic of Hungary, that put paid to the notion that there should be some distinction between the kinds of property expropriations in determining who should have access to justice:

In Simon v. Republic of Hungary, the court went as far as to state that the illicit taking of art during the Holocaust, “did more than effectuate genocide or serve as a means of carrying out genocide. Rather, we see the expropriation as themselves genocide.”

The law’s proposed six-year statute of limitations and discovery rule is an improvement, as noted above. New York’s demand and refusal rule would be better. But it is critical to remember that even if the bill becomes law, none of the technicalities rightly decried by the witnesses would be unavailable to defendants who wanted, in Lauder’s words, to wait out claimants. Progress is always incremental, but readers should consider the soaring descriptions in the coverage of the hearing with a grain of salt, perhaps.
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