Victory For Heirs Of German Jewish Art Dealers Allegedly Fleeced By Nazis

The heirs of a consortium of four German Jewish art dealers seeking to recover a $250 million collection of medieval relics that were sold to Nazi Germany at one-third their value in 1935 won another court victory this week as the U.S. Court of Appeals for the D.C. Circuit ruled that they may proceed with their suit against the Prussian Cultural Heritage Foundation (known as the SPK), where the collection now resides.

The suit must now be heard in District Court to allow SPK to prove that the sale of the collection, known as the Welfenschatz or the Guelph Treasure, was an arms-length transaction and was not coerced.

Writing for the three-judge court, U.S. Circuit Judge David Tatel said: “[Nazi art dealers] routinely went through the bizarre pretense of ‘negotiations’ with and ‘purchase’ from powerless counterparties. It was within that context, the heirs allege, that the Nazis pressured the consortium to sell the Welfenschatz for well below market value.”

Tatel also dismissed the claim of Germany, which was also a defendant in the case, which contended that siding with the heirs would unfairly increase the jurisdiction of the U.S. court system.

“The United States has repeatedly made clear that it favors [domestic litigation of Nazi-era art-looting claims],” he wrote, citing the Holocaust Expropriated Art Recovery Act that extends the statute of limitations on the recovery of art obtained by Nazis during the Holocaust.

Germany had argued also that the case should not be heard out of respect for “international comity” or until the heirs had pursued all legal options in Germany. But the court said flatly: “The heirs have no obligation to exhaust their remedies in Germany.”

The court also rejected Germany’s argument that Nazi Germany’s persecution of Jews in the 1930s was not a crime against international law. It noted: “Congress has expressly found that the Holocaust began in 1933.”

In ordering the case to be presented to the District Court, Judge Tate wrote: “Our conclusion rests not on the simple proposition that this case involves a 1935 transaction between the German government and Jewish art dealers, but instead on the heirs’ specific — and unchallenged — allegations that the Nazis took the art in this case from these Jewish collectors as part of their effort to “drive [Jewish people] out of their ability to make a living.”

Nicholas M. O’Donnell, an attorney for the heirs, said the court “confirmed that Germany’s persecution of Jews is the quintessential crime against international law. Germany stands shamed today for its effort to revise the history of early Nazi repression and pretend that it takes this question seriously. The broken and self-serving restitution policies of Germany are worthy of no deference or respect, and our courts have seen that.”

He stressed that the Court of Appeals dealt purely with a jurisdictional question and that the District Court trial will focus on “what happened and who it happened to. … The court did not rule that we are entitled to the art, but [it said that] for the purpose of considering the transaction, forced sales in the ‘30s — including those not at the point of a gun — do violate international law because [the sale was] coerced. And because, as the court ruled, the Nazi persecution of Jews starting in January 1933, it was part and parcel of their deliberate intent to destroy Jews’ ability to exist in Germany and eventually at all. That was important because Germany had argued that unless the plaintiffs could prove this collection of art [had to be sold in order] to put food on the table, persecution is not equal to genocide. … Germany’s argument depended on the idea that persecution and genocide are different, [but] genocide was a word coined to describe Nazi persecution.”

The court did dismiss the claims against Germany, ruling that Germany would have had to use the Guelph Treasure in the United States to be sued.

In a statement, Professor Dr. Hermann Parzinger, president of SPK, said: “It is SPK’s long-held belief that this case should not be heard in U.S. court, and we remain committed to demonstrating that the case has no merit, as the Guelph Treasure’s sale more than 80 years ago was not a forced sale due to Nazi persecution. In fact, the merits of the Welfenschatz case have already been considered by the German Advisory Commission on the return of cultural property seized as a result of Nazi persecution, especially Jewish property, which concluded in 2014 that restitution was not appropriate.”