Dismissal of Heirs’ Claims for Guelph Treasure

Posted on: September 12, 2022 by

Cross from the Guelph Treasure (Bode Museum, Berlin) (via Wikimedia Commons – Public Domain)

Heirs of German Jewish dealers who seek restitution of a collection of Christian reliquaries known as the Welfenschatz (or Guelph Treasure) have received a stinging dismissal of their suit from a Washington D.C. district court. The case made headlines in 2021 after it was remanded by the U.S. Supreme Court to the D.C. Circuit for consideration of an alternative argument by the heirs that centers on the nationality of those dealers. This recent ruling in favor of Germany’s Stiftung Preussischer Kulturbesitz (SPK) (manager of the Welfenschatz) has been described as a victory that “affirms SPK’s long-held assessment that this lawsuit seeking the restitution of the Guelph Treasure should not be heard in a US court”.

In its opinion last year, the Supreme Court ruled that the ‘expropriation exception’ of the Foreign Sovereign Immunities Act that offers foreign states a “baseline presumption of immunity from suit” applied only in instances when property was taken “in violation of international law of expropriation”. This exception incorporates the US ‘domestic takings rule’, meaning that it does not apply to a foreign state’s taking of its own citizens’ property.[1] The mandate issued by the Supreme Court to the D.C. Circuit was therefore to consider whether the “sale of the Welfenschatz is not subject to the domestic takings rule  because the consortium members were not German nationals at the time of the transaction” and “whether [that argument] was adequately preserved below”.[2]

By mandate from the D. C. Circuit, District Judge Colleen Kollar-Kotelly resolved both these issues against the heirs: the consortium members (i.e. the dealers) were held to be German nationals, making the Welfenschatz sale fall within the domestic takings rule; and the heirs failed to preserve this argument below.[3] This is yet another adverse ruling for the heirs who have pursued return of the Welfenschatz since 2008 when they first requested and were denied return by Germany.

History of the Welfenschatz and this litigation

While a more complete background of the Welfenshatz and this seven-year suit can be found in earlier blog posts and in Art Antiquity and Law, a few key points are offered here.

Sale of the Welfenschatz took place in the summer of 1935 in Nazi Germany – a time when it might be difficult to imagine the German Jewish ‘sellers’ enjoying equal bargaining power with the Welfenschatz ‘buyer’ (the Nazi State of Prussia led by future war criminal Hermann Göring). After the acquisition, the Welfenschatz was gifted to Göring’s Führer (Hitler). Since the late 1950s, the Welfenschatz has been in the possession of SPK, which “was created for the purpose of succeeding all of Prussia’s rights in cultural property”.[4] In the 1960s, the Welfenschatz went on display in Berlin, and it is currently estimated at $200 million in value.

Initially, heirs to the Welfenschatz sought restitution by using recourses available in Germany. After receiving the German Advisory Commission’s denial of their request (based on a finding that this “was not a compulsory sale due to persecution”)[5], the consortium’s descendants thought they might be afforded a fair ruling in the American justice system and filed suit in 2015 against SPK (as well as Germany though the case was dismissed against the foreign state). The heirs alleged the 1935 sale “was made under duress for less than market value as part of the Nazi persecution of the Jewish sellers”[6]. Wishing to keep what is deemed a national treasure, SPK has maintained a staunch defense against the heirs. If the district court’s recent dismissal stands, that wish will be granted.

The heirs’ pleadings held to be lacking

Following remand, SPK moved to dismiss the heirs’ recently amended complaint. Throughout the analysis within its 32-page opinion, the district court parsed through the heirs’ pleadings with a disapproving eye and found the heirs did not meet their burden “of invoking the court’s subject matter jurisdiction”.[7]

Under a review of “whether and how” each party previously addressed the domestic takings rule, the heirs did not fare well. Their assertion that the “court expressly acknowledged the existence of the domestic takings rule, but explicitly declined to reach it because of the controlling law provided by Simon [I]” solicited the Court’s ire with its notation that such assertions “turn the burden of proof on its head.”[8] The Court found SPK clearly raised the domestic takings argument, but the Heirs “never responded to it, instead electing to rely on Simon I and a theory involving a claim of genocide”[9] (on which point, see the discussion in an earlier blog post here).

“[T]he major flaw in this case” highlighted by SPK was the heirs’ alleged failure to “argue in the alternative that even if the expropriation exception looked solely to the law of takings (as SPK contended), this was not a domestic taking.”[10] Despite the heirs having “disputed whether the Consortium was a German legal entity”[11], the heirs “neither challenged Defendants’ argument that the art dealership firms were German corporate entities nor did they assert that any of the individual owners were foreign nationals or stateless.”[12]

In setting out its dismissal, the court found “the majority of [the heirs’] assertions” to be “general in nature” and “tangential at best in providing information about the Consortium members’ alleged loss of German nationality by the time of the sale”.[13]

Germany’s litigious stance versus its moral commitment

What the district court opinion does not mention is the question of Germany’s commitment to the Washington Principles, which urge states to take “steps” to “expeditiously [] achieve a just and fair solution” in cases such as this.[14] While the Washington Principles also provide that such steps “may vary according to the facts and circumstances surrounding a specific case”, this caveat is sometimes distorted.

As covered recently on this blog and in Art Antiquity and Law[15], Spain’s commitment to the Washington Principles has been called out repeatedly in regards to its denial of the claim of certain heirs (the Cassirer family) who seek restitution of a Pissarro painting (Rue Saint-Honoré, après-midi, effet de pluie) sold during the Nazi era. The Ninth Circuit notably dubbed Spain’s approach as “moralistic preening.”[16] Perhaps Germany could be seen as moralistically preening as well when it comes to the Welfenschatz.

As of this writing, it is not known whether the heirs will appeal. In the event an appeal is not filed, this will be the end of a long journey for the Welfenschatz claimants. And, if this decision does stand, some might say that it is justice which has been turned on its head.

A more detailed discussion of this most recent development in the Welfenschatz case will be forthcoming in Art Antiquity and Law.

 

[1] Federal Republic of Germany, et al. v Philipp, et al., Index No. 19-351, 592 U.S. ___ (2021), Opinion of the Court at 1, 4, 15 (quoting 28 U.S.C. Section 1605(a)(3)). (SC 2021 Opinion).

[2] Opinion of the Court (SC 2021 Opinion) at 16.

[3] Philipp, et al., v. Stiftung Preussischer Kulturbesitz, Case 1:15-cv-00266-CKK, Memorandum Opinion, ECF No. 71 (hereafter in these footnotes, ‘Opinion’).

[4] Opinion at 5.

[5] 20 March 2014 Recommendation of the Advisory Commission for the return of Nazi-confiscated cultural artefacts at 3.

[6] Opinion at 5.

[7] Opinion at 11.

[8] Opinion at 13 (citing to Simon v. Republic of Hungary, 812 F.3d 127 (D.C. Cir. 2016)).

[9] Opinion at 14.

[10] Opinion at 14 (quoting Defendant SPK’s Memorandum Motion to Dismiss the Second Amended Complaint, ECF No. 63-1, at 28).

[11] Opinion at 14 (quoting Plaintiffs’ Opposition to Defendants’ Motion to Dismiss First Amended Complaint, ECF No. 19, at 66, n.8).

[12] Opinion at 14.

[13] Opinion at 26 (citing Pls’ Second Amended Complaint, ECF 62; and Pls’ Opposition to Defendant’s Motion to Dismiss the Second Amended Complaint, ECF No. 66, at 26).

[14] Washington Principles, No. 8: “If the pre-War owners of art that is found to have been confiscated by the Nazis and not subsequently restituted, or their heirs, can be identified, steps should be taken expeditiously to achieve a just and fair solution, recognizing this may vary according to the facts and circumstances surrounding a specific case”.

[15] Art Antiquity and Law, Volume 27, Issue 2 (August 2022), The Long Road to Justice for the Cassirer Family and Its Plundered Pissarro (Cassirer v. Thyssen-Bornemisza Collection Foundation).

[16] Cassirer v. Thyssen- Bornemisza Collection Found., Case no. 19-55616, Case no. 19-55616, Docket 62-1 at 9, FN3.