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Tuesday, July 20, 2010

Historical Context of Holocaust-era Assets Claims

What judges think of their function and task undoubtedly informs their understanding of their power or jurisdiction.  In the most recent Nazi-looted art appeal of Grosz v. MoMA, No. 09 Civ. 3706 , 2010 Westlaw 88003, at *22 (S.D.N.Y. Mar. 3, 2010), the district court viewed itself as confronted “with a legal, not a historical, question.”  This view is a false dichotomizing of the judicial function.  Judges cannot be expected to know intimately the historical context of all cases that come before them, but should not ignore widely accepted historical facts when deciding whether a claim arguing that a seemingly voluntary transaction was, in fact, made under duress is “plausible” under Iqbal, Twombly and their progeny. 

From the very beginning of the Nazi era, law and jurisprudence became a strong component of justification of regulations that deprived “enemies of the State” of their liberty and property, and these deprivations led in turn to mass murder.  Indeed, as documented in Martin Dean's book, Robbing the Jews, the “legalized” grand larceny became a form of financing the mass murder. 

The Führerprinzip demanded unquestioning loyalty to the concentrated power of a “unitary executive.”  Both legislators and judges in Nazi Germany participated in the normalization of practices of State grand theft that were engineered to make involuntary transactions appear “ordinary and legal” from the very first weeks of the Nazi regime early in 1933, even before the infamous racist Nuremberg laws of “blood and honor” in 1935, and the final push to a “Final Solution.”   The U.S. Consul General in Vienna immediately after the Anschluss of Austria in March 1938 poignantly observed: “There is a curious respect for legal formalities.  The signature of the person despoiled is always obtained, even if the person in question has to be sent to Dachau in order to break down his resistance.” 

Jews were systematically excluded from professions and forced to compile inventories to streamline the despoliation of their property from 1933 to 1942 when Jews had little or no property left to rob, and when the focus turned to “cost-efficient” mass murder in the death camps of occupied Poland.  It is a gross distortion of reality to suggest that the financial despair of Jews in 1933 during widespread, sporadic boycotts until the passage of the first Nuremberg law in 1935 resulted from a series of isolated private set-backs brought about by generalized, severe financial conditions akin to the Great Depression.  The National Socialist platform, adopted as official German state policy as of 1933, was committed to driving Jews and other “enemies of the State” out of economic life. 

This is the historical context in which modern claims to Nazi-looted art should be viewed.  Too frequently, some of our judges seem to have forgotten history.  In knee-jerk fashion, some seem to assume that claims 70 years old simply can not be viable.  This reaction is contrary to history and U.S. executive policy, which I outlined in a previous post.  I should add here that the Department of State Bulletin stated in 1951:  "For the first time in history, restitution may be expected to continue for as long as works of art known to have been plundered during a war continue to be rediscovered."  Ardelia R. Hall, The Recovery of Cultural Objects Dispersed during World War II, 337, 337 (Aug. 27, 1951).  The executive branch has not deviated from this position to date. 

Posted by Jen Kreder on July 20, 2010 at 09:04 AM | Permalink


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I think my position is reasonably clear and did not feel "pressed," which seems to imply I am being less than honest. I will try to summarize in one final sentence: The court's view of its function allowed MoMA to dupe it into accepting a non-sensical argument on limitations grounds (Lowry's letter stating he lacked authority to respond triggered N.Y.'s "clear refusal" requirement) and keeps the history of painting in the dark, thereby preventing full, honest historical research into trafficking through Switzerland into the United States during and after the war.

Posted by: Jen Kreder | Jul 26, 2010 12:10:26 PM

Now you've confused me (and my hunch is other readers) even further. Your original post suggested that the issue before the district court was whether plaintiffs had plausibly pleaded a claim that a purported voluntary transaction was actually made under duress. When pressed, you now concede that wasn't so: the issue before the district court, you say, was actually when MoMA had refused the plaintiff's demand. You disagree with the district court's conclusion, which of course you're entitled to do, but, again, what does that have to do with a "false dichotomizing of the judicial function" escapes me.

Then, doubling back, you say the "real game" isn't the statute of limitations but . . . something else. I'm not sure what you're trying to say. Do you think the district court's statute of limitations analysis was incorrect or do you think the district court ought to have simply ignored MoMA's "technical" statute of limitations defense so that the parties could focus on the merits?

Posted by: peters | Jul 26, 2010 11:39:05 AM

The real game is not the limitations period - it is the dismissing of the factual allegations as "rank hearsay" (the court's own words) at the motion to dismiss stage without even allowing discovery of MoMA's records, which MoMA's own web site says are open to all serious researchers. MoMA duped the court and the effect was to trample on our ability to conduct serious historical research into the history of the paintings.

The Washington Principles, Vilnius Declaration, Terezin Declaration, Association of American Museum Directors guidelines and American Association of Museum guidelines all call for transparent provenance research and for cases to be resolved on the merits, not on technical defenses like statute of limitations and laches. Nonetheless, MoMA sought and obtained dismissal on limitations grounds to shut down inquiry into historical truth. The fact that MoMA conducted research does not change that - MoMA is not objective. New York follows the demand and refusal rule (although there is not too much difference between it and the discovery rule in effect), whereby the statute of limitations does not start to run until a claimant's demand is clearly refused. If you read the MoMA's letter by Director Glenn Lowry that the judge is now construing as a clear demand, the court's conclusion is complete bunk. Moreover, in the court's own words, Lowry's "temporizing language was almost certainly designed to entice plaintiffs to continue negotiating and to prevent the dispute from becoming public or escalating into litigation." Even if you buy the court's completely wrong limitations analysis, every lawyer would recognize the applicability of the tolling doctrine where a defendant entices a plaintiff into missing the limitations window.

The net effect of focusing on technical defenses is shutting down inquiry into historical truth. In the next few days (as I balance teaching my third night class of the summer), I'll post some new information about the history of art being trafficked from the Reich to the United States.

Posted by: Jen Kreder | Jul 23, 2010 11:24:20 AM

Despite your response to the comment, I'm still confused. The District Court's March 3, 2010 decision denied a motion for reconsideration of its earlier, January 6, 2010, decision dismissing the complaint. But the dismissal, as I understand it, was based on the statute of limitations. The District Court concluded that plaintiffs had demanded that MoMA return the three paintings in November 2003 but didn't sue until April 2009, well after the three-year statute of limitations for their conversion claim had run. Whether that decision was right or wrong may be debatable, but I don't see what it has to do with the Iqbal-Twombly plausiblity pleading standard, or how it "ignored widely accepted historical facts."

Posted by: peters | Jul 22, 2010 4:27:07 PM

Thanks for the question. In court, the procedural rules apply regardless of history - I know and fully accept that. The Grosz complaint was very well-pled even by Iqbal-Twombly standards. It included much history and detail about the specific transactions and how the Nazis masked forced and duress sales as voluntary ones. Many people react to these claims in a way that rejects them without much thought because they seem sensational or are so old, but many of them are legally viable. The first modern-era Nazi-looted art case (a civil forfeiture action filed by the U.S. government) settled last night for $19 million, for example. The district judge in Grosz characterized some of the facts in the complaint about MoMA as "rank hearsay," although all facts in the complaint on a motion to dismiss are supposed to be accepted as true. To rule that the complaint was not even "plausible" simply was not true when one accepts the history surrounding the claims. I hope that helps clarify.

Posted by: Jen Kreder | Jul 21, 2010 11:32:30 AM

I'm not sure I follow. Is your concern that the district judge did not take judicial notice of facts that should have been pleaded in the complaint, but were not? Or is your view that judges should apply the law to such claims in a special way -- letting cases go forward when otherwise they would not -- because the history is so compelling?

Posted by: Orin Kerr | Jul 21, 2010 10:38:38 AM

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