Federal courts continue to grapple with claims involving a diptych—two painted panels titled Adam and Eve, painted by the famed German Renaissance painter Lucas Cranach the Elder.  The works are currently in the collection of the Norton Simon Museum in Pasadena, California, but plaintiff Marei Von Saher claims she is their rightful owner.  The case’s history is nearly as convoluted as the history of the artworks—the matter has already made two trips to the Ninth Circuit Court of Appeals, plus two unsuccessful appeals to the Supreme Court—and the courts must grapple with complex threshold considerations before they can even reach the merits of Von Saher’s claims.

The History of the Cranachs

Von Saher alleges that, prior to World War II, Adam and Eve were owned by her husband’s father, Jacques Goudstikker, a Dutch art dealer; Jacques acquired them at a 1931 auction in Berlin of Soviet state-owned works.  In May 1940, the Nazis invaded the Netherlands, forcing the Jewish Goudstikker family to flee to South America, leaving behind their art gallery and a significant art collection, including the Cranach diptych.  Jacques’ mother, Emilie, also remained in the Netherlands.  Sadly, Jacques died during the voyage.  Back in the Netherlands, top Nazi official Herman Goring informed Emilie that the family’s art collection would be confiscated, but that she would be spared from harm if she cooperated; she therefore agreed to vote her minority ownership share in the gallery in favor of a sale of the gallery’s assets for a fraction of their value.  Gallery employees also contacted Jacques’ widow, at that point the gallery’s majority owner, to seek her consent to the sale.  She refused, but the gallery employees went ahead with the sale, in the form of two separate contracts.  In the first transaction, Goring himself purchased 800 of the most valuable Goudstikker works and took them to his country home in Germany.  In the second, a Nazi named Alois Miedl took over the Goudstikker art dealership business and remaining property.

A few years later, as the Allies gained ground during World War II, they began to discover and confiscate caches of art stolen by the Nazis, and began to formulate policies for how this loot should be handled.  President Truman ultimately outlined procedures for “external restitution” (by which countries formerly occupied by Nazi Germany would present to the United States lists of looted property and information about the theft, and the American authorities would identify and return the property to the home country) and “internal restitution” (whereby a nation, having received the externally restituted works, would then undertake the process of restoring the works to their rightful owners).

By the end of the war, the Allies had identified the Cranachs and many other pieces from the Goudstikker collection and returned them to the Dutch government, to be held in trust for the owners.  Jacques’ widow, Desi, returned to the Netherlands in 1946 to claim them, but the Dutch government took the position that the two sales facilitated by the gallery employees were voluntary, not coerced, and therefore the family was not entitled to relief; if Desi wanted the property back, she would have to pay for it, and she would receive no compensation for missing property, the loss of goodwill from the gallery, or Miedl’s profits from the business.  Desi ultimately, and under protest, reached a settlement with the Dutch government in which she paid to buy back the property she lost in the Miedl transaction, including her home.  However, she did not file a restitution claim for property lost in the Goring transaction, because she believed it would be futile given the Dutch government’s intransigence regarding the Miedl transaction and its insistence that the Goudstikker sales had been voluntary.

Many of the family’s artworks, therefore, remained in the Dutch National Collection.  By 1996, Jacques’ widow, mother, and son had all passed away, leaving all of their interests in the Goudstikker property to the son’s wife— the plaintiff in this case, Marei Von Saher.

In 1997, the Dutch government announced that, in light of investigations into externally restituted artworks after World War II, it would be accepting new restitution claims for artwork in its custody.  Around this time, Von Saher learned for the first time of facts surrounding the wartime “sale” of the Goudstikker gallery.  In 1998, she requested the return of all Goudstikker property still in the custody of the Dutch government, but her request and subsequent appeals were rejected; the Dutch government told her that the postwar proceedings had been carefully conducted, that Desi had made a “conscious and well considered decision” to not seek restitution of the works covered by the Goring “sale,” and her claim was untimely.

However, Dutch authorities eventually reconsidered in light of a recommendation by the Ekkart Committee, which was appointed to investigate the provenance of various works in state custody and which had been critical of flaws in the original internal restitution procedures immediately after the war.  In 2004, Von Saher made a new restitution claim for the Goudstikker property in possession of the Dutch government; this time, the Ekkart Committee recommended that, notwithstanding legal issues with her claim, her application should be granted in light of the coercive circumstances surrounding the Goring “sale.”  The Netherlands ultimately agreed to return a significant group of works taken by Goring.

In the intervening years, however, and unbeknownst to Von Saher, the Cranachs had changed hands yet again.  In 1961, a Russian man named Stroganoff had also challenged the Dutch government’s possession of the diptych, but on very different grounds; in his view, the original 1931 auction (at which Jacques had bought the Cranachs from the Soviet Union) had been invalid, because the Soviet Union had unlawfully seized and sold works (including the Cranachs) that rightfully belonged to the Stroganoff family.  In 1966, in return for an unknown amount of compensation by Stroganoff and without notice to the Goudstikker family, the Dutch government transferred the Cranachs to Stroganoff.  A few years later, in 1971, Stroganoff sold the paintings; they passed through the hands of a New York dealer and landed in the Norton Museum, where they have been ever since.

Von Saher’s Federal Case

In 2007, following lengthy but unfruitful negotiations with the museum, Von Saher sued for the return of the Cranachs, asserting California state-law claims and relying on California Code of Civil Procedure § 354.3, which was tailored to permit claims by plaintiffs seeking recovery of Holocaust-era art.  The District Court dismissed the case, holding that Section 354.3 was invalid because it was preempted by the Supremacy Clause of the United States Constitution.  Von Saher appealed, and in 2010, the Ninth Circuit affirmed the preemption decision on the basis of the “field preemption” doctrine, which invalidates any state attempts at “intrusion into a field occupied exclusively by the federal government.”  Here, the court held, California’s statute intruded into the federal government’s exercise of foreign affairs powers, and in particular the field of war-related disputes.  The Ninth Circuit also remanded, however, for the trial court to determine whether the claim might be timely under a more generally applicable statute of limitations.  See Von Saher v. Norton Simon Museum of Art at Pasadena, 578 F.3d 1016 (9th Cir. Aug. 19, 2009), as amended by 592 F.3d 954 (9th Cir. Jan. 14, 2010).  Shortly thereafter, the California legislature passed an amendment extending the statute of limitations for all art claims, not just those involving Holocaust-era art, and specifying that the statute of limitations for such claims began to run only upon actual discovery of a claim.

With these more favorable statute-of-limitations principles in place, Von Saher filed an amended complaint, alleging state-law claims including replevin and conversion.  This time, however, the district court dismissed the claims on the basis of “conflict preemption,” which applies where “state law conflicts with a federal foreign policy,” and “stands as an obstacle to the accomplishment and execution of the full purposes and objectives” of that federal policy.  In a 2012 decision, see 862 F. Supp. 2d 1044, the lower court explained that Von Saher’s claims conflicted with the federal government’s policy of external restitution, whereby “the U.S. restituted looted art to countries, not individuals,” and left it to the country of origin to return the art to individual owners.  The district court relied in part on an amicus curiae brief submitted by the U.S. Solicitor General (SG) at an earlier phase in the litigation explaining that the federal government had a policy of respecting the finality and outcome of other countries’ internal restitution proceedings, and that “[w]hen a foreign nation, like the Netherlands, has conducted bona fide postwar internal restitution proceedings following the return of Nazi-confiscated art to that nation under the external restitution policy, the United States has a substantial interest in respecting the outcome of that nation’s proceedings.” The district court ruled that, because Von Saher’s claims necessarily sought a different remedy and would require U.S. courts to delve into the propriety of restitution decisions made by the Dutch government and courts, her claims were preempted.

The Ninth Circuit’s 2014 Decision

Last summer, however, the Ninth Circuit reversed the lower court’s conflict preemption holding, keeping Von Saher’s claims alive for another day.  See Von Saher v. Norton Simon Museum of Art at Pasadena, 754 F.3d 712 (9th Cir. June 6, 2014).  Two of the three appellate judges ruled that Von Saher’s claims did not conflict with a federal policy of respecting other nations’ internal restitution proceedings, because the Cranachs had never actually been subject to such proceedings.  The opinion recognized that a state law is preempted where state law stands as an obstacle to the full execution of a federal policy, and that individual claims or entire lawsuits may be preempted, even where a plaintiff relies on a statute of general applicability.  However, the majority held this was not such a case.

The majority reviewed the SG’s explanation of the federal government’s interest in respecting the finality of foreign governments’ internal restitution decisions.  But the majority also took specific note of other federal policies relating to Holocaust-era art, including the 1998 Washington Conference Principles on Nazi Confiscated Art and the 2009 Terezin Declaration on Holocaust Era Assets and Related Issues, both non-binding international resolutions signed by the U.S. and the Netherlands.  The majority outlined the following “tenets” of the federal government’s policy on the restitution of Nazi-looted art:

a commitment to respect the finality of “appropriate actions” taken by foreign nations to facilitate the internal restitution of plundered art; (2) a pledge to identify Nazi-looted art that has not been restituted and to publicize those artworks in order to facilitate the identification of prewar owners and their heirs; (3) the encouragement of prewar owners and their heirs to come forward and claim art that has not been restituted; (4) concerted efforts to achieve expeditious, just and fair outcomes when heirs claim ownership to looted art; (5) the encouragement of everyone, including public and private institutions, to follow the Washington Principles; and (6) a recommendation that every effort be made to remedy the consequences of forced sales.

The court went on to explain why Von Saher’s claims do not conflict with these tenets.  Specifically, the court emphasized that the works at issue in this case were never subject to any postwar internal restitution proceedings in the Netherlands.  The court reasoned that it need not evaluate the appropriateness of the various decisions made by the Netherlands; the facts, as alleged in the complaint, support a conclusion that the Cranachs were never subject to any postwar internal restitution process at all.  Therefore, allowing Von Saher’s claims to proceed did not threaten the finality of any foreign government proceeding.  In fact, the court opined that Von Saher’s claims were actually fully consistent with federal policy, because she was “just the sort of heir that the Washington Principles and Terezin Declaration encouraged to come forward,” and her suit would encourage a just and fair outcome.

Kim McLane Wardlaw, one of the three judges on the panel, dissented.  She would have affirmed the district court’s decision that Von Saher’s claims must fail due to conflict preemption.  In her view, federal policy on Holocaust-era property is that such claims may not be litigated in U.S. courts if the property was subject or potentially subject to an adequate internal restitution process in its country of origin. Judge Wardlaw held that it was not the court’s position to opine on the adequacy of the postwar Dutch restitution process.

The Next Chapter Begins

Following the Ninth Circuit’s decision, the Norton Simon Museum sought a review by the Supreme Court; earlier this month, however, the Supreme Court denied certiorari, meaning that case will now return to the district court, which will likely need to consider more threshold issues, such as whether the Dutch government’s 1961 transfer of the works to Stroganoff constituted an “act of state,” which a United States federal court may not invalidate.  The Ninth Circuit acknowledged that the district court will be in the “delicate position” of developing the facts surrounding the 1961 Stroganoff transfer while refraining from impugning the Dutch government’s motives or questioning the merits of its decision.

Thus, nearly eight years after her original complaint was filed, Von Saher’s claims have cleared the preemption hurdle, but will soon face more complex legal issues that may stop the lawsuit in its tracks.  However, the Supreme Court’s refusal to hear the case leaves intact the Ninth Circuit’s June decision, which is noteworthy for the weight it gives to the non-binding international Washington Principles and Terezin Declaration.  Other courts grappling with cases involving Holocaust-era art may now be more inclined to follow the Ninth Circuit’s lead in treating those principles as an important tool in evaluating legal claims.

Moreover, as this blog has reported previously, the art world is paying increased attention to options for voluntary, negotiated restitution of possibly looted artworks, not only to avoid costly and time-consuming court proceedings but for ethical and publicity reasons.  Some experts predict that there will be increased pressure on the museum to voluntarily return the diptych to Von Saher instead of entrenching itself in further litigation.  As with many Holocaust-era art cases, these artworks come not only with a tangle of factual issues, but a complicated procedural history (both in the United States and abroad).  The Norton Simon has said that it will “continue to pursue, consistent with its fiduciary duties, all appropriate legal options”—so this case may continue to play out, slowly and with difficulty, in the courtroom, but perhaps the parties will explore other alternatives as well.