Family fights to revive Nazi-looted art case in New York

Courthouse News Service 18 November 2021
By Daniel Jackson

Heirs of a woman who owned an Edgar Degas painting auctioned off by Nazis in 1935 contend that the possibility of Swiss hostility to such cases is enough reason to render that forum inadequate.

Screenshot from video showing the 2009 auction of the Degas painting "Danseuses" at Christie's

Told relegation of the case to Switzerland could doom one family's chance at justice, a New York Court of Appeals judge questioned Wednesday whether unique circumstances would allow them to step outside “constipated jurisprudence.”

Judge Eugene Fahey made the remark this afternoon while hearing arguments by the bank UBS to affirm dismissal of a suit against it over the 2009 sale of the Edward Degas painting "Danseuses" for $10.7 million.

Eleven heirs of Margaret Kainer, the last rightful owner of the 1896 painting before its auction during the Holocaust, say their family was robbed twice: first by the Nazis and again through the creation of what the Kainers call a “sham Swiss foundation" under UBS control.

The Kainers sued in Manhattan for monetary damages and the return of the painting, but the case was dismissed on the basis of forum non conveniens. In a dispute where the parties are spread across the globe, the state trial court said it could not be regarded as a convenient venue.

Representing UBS at oral arguments in Albany on Wednesday, Gibson Dunn attorney Marshall King told the Court of Appeals that its job is only to determine whether an abuse of discretion occurred.

King said the lower courts made “clear, careful findings” regarding the decision to dismiss the case.

Fahey was somber with the bank's attorney, noting that the case being argued in the echoing, wood-paneled courtroom, where portraits of justices hung high on the wall, implicates “some of the consequences of what is arguably the greatest crime in human history."

“I think you make a fair argument,” he said. “I don’t know if I agree with you, but … it’s a reasonable argument.”

King said the case is further complicated by the inability of a New York court to compel testimony from witnesses outside the states. A judge would have to consider what actions people took in France, Germany and Switzerland over decades of time. Meanwhile, competing litigation in Switzerland could result in a ruling that conflicts with whatever is decided in New York.

“I understand the concept and the principle that the courts of the United States and New York want to give the ability to remedy what is a grave injustice of historical proportions, but that's not really the question that to be asked,” King said. “It's, is litigating this case just, convenient and efficient to be done here in the United States? And I think the answer to that is no.”

Robert Smith, representing the 11 heirs of Margaret Kainer, told the Court of Appeals that Switzerland’s courts were hostile to claims alleging Nazi-looted art.

Himself a onetime associate judge on the court now hearing his argument, Smith called it entirely possible that the Swiss courts conclude his clients waited too long to seek legal remedy.

In the time since the suit was first filed in 2013, the United States gave the heirs of Holocaust victims the ability to more easily bring suits for recovery of stolen heirlooms through the passage of the Holocaust Expropriated Art Recovery Act.

“Under the HEAR Act there is no time bar,” Smith said. “In Switzerland, there may very well be a time bar. Now I'm saying that's sufficient as a matter of law to render the Swiss forum inadequate.”

The Degas is one painting out of the more than 650,000 pieces of art stolen during the Holocaust, according to the World Jewish Restitution Organization. The search, documentation and restitution of those pieces of art has been an enduring aftermath of World War II.
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