Norton Simon Museum Wins Appeal Over Nazi-Looted Cranach Paintings

Art Law Report 31 July 2018
By Nicholas O'Donnell

The U.S. Court of Appeals for the Ninth Circuit has upheld the judgment against Marei von Saher on her claims against the Norton Simon Museum in Pasadena to recover Adam and Eve by Lucas Cranach the Elder.  The Cranachs belonged to Von Saher’s father-in-law Jacques Goudstikker, a renowned Dutch Jewish art dealer who fled the Netherlands.  Yesterday’s decision was the latest in a complicated case, holding that the claim could not proceed because it would conflict with a judgment made by the Dutch government—in a case about paintings that no one disputes were looted by the Nazis but which the Norton Simon refuses to return.  Notably, the Ninth Circuit upheld the dismissal entered two years ago by the District Court, but for different reasons.  Where the trial court had held in 2016 that Von Saher was not entitled to the paintings by applying substantive Dutch post-war law, the Ninth Circuit yesterday held that it could not entertain the question because it involved a so-called “Act of State,” a doctrine under which courts will decline to review certain kinds of cases that implicate sovereign acts.  It was not a complete surprise—the appeals court had hinted at the possibility of applying the doctrine back in 2014 when it remanded the case on one of its multiple trips to the appellate court—but was a curious application of it to a sale by the Dutch government, an act that is quintessentially commercial, not sovereign.  It remains to be seen what Von Saher will do next.  Von Saher is a complicated dispute that deserved its day in court, not the back of the hand out of “respect” for an “official” act that never actually happened, or an official act that this most recent decision actually contradicts. 

The case is one of the most protracted and complicated to be litigated in a U.S. court (indeed, it is the subject of the longest chapter of my book, A Tragic Fate—Law and Ethics in the Battle Over Nazi-Looted Art).  A brief refresher is necessary to make sense of the latest decision.  Goudstikker purchased the two paintings from the Soviet Union in 1931.  He fled the Netherlands in 1940 following the German occupation, tragically dying onboard the ship taking him away from Europe. His extensive collection was forcibly sold in two events; the first an auction by Alois Miedl who purchased Goudstikker’s art dealership and some his property; the second the expropriation by Hermann Göring of virtually the entire Goudstikker fine art collection, including the two Cranachs. The U.S. Army recovered the Cranachs and they were returned to the Dutch government in 1946.  The Netherlands sold them to George Stroganoff in 1966, who claimed to have had the paintings stolen from him by the Soviets before Goudstikker bought them.

When the District Court dismissed the case in 2016 (preceded by a bizarre ad hominem attack by the Norton Simon against Von Saher’s late father), it underwent a detailed analysis of the various Dutch laws that were passed after the war that related to property confiscated during the German occupation.  Dutch Royal Decree A6 from 1940 (in exile) voided automatically any transactions with Germans (such as Miedl or Göring).  That was modified by the Commisssie Rechtsverkeer in oorlogstijd (“CORVO”), which used its power in 1947 to “Sanction all acts and agreements, performed or entered into in violation of [Decree A6].”  The question was whether CORVO’s decision applied automatically to the Göring thefts, or whether the Goudstikker firm had to do some affirmative act to seek to have the transactions declared invalid.  A later Royal Decree 100 set up a procedure to challenge CORVO’s decision, with a deadline of July 1, 1951.  The District Court concluded that the Goudstikker firm had not made a timely Royal Decree 100 claim.  In the absence of a timely Royal Decree 100 restitution claim, the District Court found that a claimant was left to seek (financial) reparations under Royal Decree 133.  Critically, the court agreed with the Norton Simon’s arguments that Royal Decree 133 made such property recovered from the enemy and covered by CORVO’s 1947 opinion property of the Dutch state.  One of the questions was whether Göring’s and Miedl’s theft of Goudstikker’s property made it enemy property when the war ended.  Goudstikker’s widow filed timely claims to void the transactions involving Miedl, but not the Göring “contract” by which the Cranachs were stolen (as with most of his thefts, Göring went to the pretense of documenting his plunder as a “sale”).

Based on all this, the District Court found that when the Goudstikker firm failed to file a Decree 100 claim before 1951, the Cranachs became the property of the Dutch state.  At that point, the court held, the Netherlands had title to what it wanted (and thus the power to sell it to Stroganoff.

The Ninth Circuit took a step back to declare it would not even entertain the question of who had title under that convoluted sequence because it viewed the Dutch sale to Stroganoff in 1966 as a sovereign act.  Under the Act of State Doctrine, courts are leery of rendering judgment that would conflict with the official act of a foreign nation.  The outcome-determinative question, therefore, is whether the Stroganoff transaction was a commercial act or a sovereign, official act.

Incredibly, the Ninth Circuit held it to be the latter, despite consistent treatment throughout restitution cases to the contrary.  Indeed, defensively, the decision anticipates this (citing the Malewicz v. City of Amsterdam case that held the opposite in a jurisdictional analysis) in a footnote in which the court suggests that “The post-war governmental processes here contrast sharply with, for example, an employee of a city museum purchasing artworks on the open market like any dealer could do.”  That is incorrect for multiple reasons, however.  First, the Netherlands’ sale to Stroganoff is quintessentially commercial; it was an exchange of art for money.  It was no way shape or form “the product of the Dutch government’s internal restitution process.”  Yes, it also involved a release of claims asserted by Stroganoff, but he was getting the painting, that release had no value after the Netherlands sold him the paintings because it was a release of his claims to the paintings that at that point he had.  It also presupposes that the Netherlands had good title in the first place to make that decision, which in turn just begs the question of where that title arose.  And nothing in the CORVO/Decree 100 correspondence adjudicated a claim to the Cranachs.  If the District Court were correct, then the Netherlands had full title by virtue of the absence of a timely claim by Goudstikker’s heirs.  But characterizing the absence of a claim as a sovereign act that cannot be scrutinized makes no sense at all—even if it is a correct application of Dutch law.  Indeed, in Malewicz, the “purchasing artworks on the open market” followed the real taking at issue, which in Von Saher is the Nazi theft, not the post-war proceedings (that didn’t address these paintings).  Lastly, the Ninth Circuit opinion held that it could not revisit the question of title because of further Dutch proceedings in 1999, even though (as the opinion acknowledged) the Dutch government later reversed itself.  The Dutch government in 2006 recognized without reservation that she should receive all the remaining Goudstikker collection works still in the government’s possession.  So the opinion actually inconsistent with an official act of the Dutch government is yesterday’s ruling, not the still-hypothetical Von Saher victory. 

Equally curious was the concurrence filed by one of the judges that the case should never have proceeded at all as preempted by the foreign affairs power, a view that the Ninth Circuit itself has repudiated on more than one occasion, including in this case (as has the D.C. Circuit repeatedly, most recently in my clients’ claims for the Guelph Treasure), and has been obliterated by the HEAR Act (which goes unmentioned in the concurring opinion). There was one ironic point in the concurrence that resonates, however: if this threshold doctrine bars the case, why did the courts take more than a decade to get there?  It seems particularly cruel to end the litigation now in a fashion that was theoretically available at the start of it.

As always, a case like this poses the query of what it means for other cases.  It's hard to see it casting too long a shadow, actually.  The Act of State doctrine is not new, and has been argued in many restitution cases.  The application here, right or wrong, relates to a highly idiosyncratic fact pattern related to the Netherlands specifically.  

Von Saher has been litigating against the Norton Simon for more than a decade.  Her options now are to petition the full Ninth Circuit for rehearing, and/or seek the Supreme Court’s review (which she did unsuccessfully once before).  Both face long odds, but given her perseverance to date this may not be the final word.
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