The U.S. Supreme Court seemed inclined to fold its arms and look out the proverbial window when it recently refused to review a case that time-barred a restitution claim over a Picasso sold in late 1930s Europe. By its refusal, America’s highest court has raised questions over the application of the Holocaust Expropriated Art Recovery (HEAR) Act of 2016, which was passed for the very purpose of eliminating time-bars to such claims. Among those questions are the following: Is the result in line with American policy on the issue, dating back to the Washington Conference Principles of 1998? Does it risk Holocaust victims and heirs potentially being dissuaded from filing claims for return of family heirlooms “sold” or taken during Nazi reign?
Zuckerman’s failed efforts to reclaim ‘The Actor’
As discussed in a prior blog post and case note in Art Antiquity and Law, Zuckerman v. The Metropolitan Museum of Art involves the 1938 sale of Picasso’s The Actor by German Jews Paul and Alice Leffmann to non-Nazi buyers. The monies received in that sale “constituted the majority of the Leffmanns’ available resources” at that time and were used to pay for their safe passage out of Europe into Brazil [See Special Appendix (SPA), US Court of Appeals for the 2nd Circuit at 14, 18]. After the war, the Leffmans did not demand return of The Actor, which by then was in America [SPA at 19; Zuckerman v. The Metropolitan Museum of Art, Docket No. 18-634 (2d Cir. 2019)].
The Leffmanns’ great-grandniece, Laurel Zuckerman, demanded return of The Actor in 2010 from the Met. Having been gifted the modernist masterpiece in the early 1950s, the Met was unwilling to give up the painting, which is valued at approximately $100 million. After expiration of a tolling agreement between the parties, Zuckerman filed suit in New York District Court in 2016, alleging that The Actor should be returned because it was sold under duress [SPA at 2].
The District Court granted the Met’s motion to dismiss Zuckerman’s claims, holding that Zuckerman failed to prove duress under New York law [SPA at 33; Zuckerman v. The Metropolitan Museum of Art, No. 1:16-cv-07665-LAP]. On appeal, the Second Circuit affirmed the lower court’s decision, but under an altogether different doctrine – the time-bar of laches [Zuckerman v. The Metropolitan Museum of Art, Docket No. 18-634 (2d Cir. 2019)]. In its conclusion, the appellate court found “that the HEAR Act does not preempt the Met’s laches defense and that Zuckerman’s claims are barred by laches” [ibid]. The Second Circuit found the application of laches appropriate due to the prejudice the Met would suffer if required to defend claims in the face of seventy years of lost evidence [Petition for a Writ of Certiorari to the US Court of Appeals for the 2nd Circuit (Petition) at 14].
Might Zuckerman precedent frustrate HEAR’s purpose?
The HEAR Act is federal legislation enacted to provide a six-year term for Holocaust victims and their heirs to bring a restitution suit. It was intended to give teeth to the pro-restitution policies set forth in the Washington Conference Principles on Nazi-Confiscated Art, the Holocaust Victims Redress Act and the Terezín Declaration [HEAR Act (2016), §2(7)].
In the context of the Zuckerman case, HEAR’s purpose, however, was altered by two words: “at law”. The Act states its limitation period allows claims regardless of “any defense at law relating to the passage of time” [HEAR Act (2016), §5(a) (emphasis added)]. The Second Circuit in Zuckerman found this to mean that defenses at equity – like laches – are allowed.
This position was soundly refuted in an amicus brief filed by members of Congress who sponsored and/or voted in favor of the HEAR Act:
“The Second Circuit’s approach is incompatible with the fundamental purpose of the HEAR Act: eliminating timeliness defenses to claims by Holocaust survivors and their heirs, so that those claims can be resolved on the merits. If left undisturbed, the Second Circuit’s decision would eviscerate the protections of the HEAR Act.” [See Brief of Current and Former Members of Congress as Amici Curiae in Support of Petitioner, US Court of Appeals for the 2nd Circuit at 3].
The urgency of this concern is heightened because, after HEAR’s expiration on January 1, 2027, all time bars will again be applicable to Holocaust restitution claims (except those pending). Ms. Zuckerman warns that claims could expire even sooner: “clarification on the scope of the HEAR Act is needed now: many, if not most, of these claims will expire in 2022.”[Petition at 15] The reason for this is that, if a claimant had the required knowledge of their claim before the enactment of the HEAR Act, the time limit (6 years) for bringing that claim is deemed to run from the date of the Act’s enactment [HEAR Act (2016), §5(c)]. Since the HEAR Act was enacted in December 2016, the expiry date for these claims will be December 2022.
Conflicting Federal and State decisions applying HEAR
Of the thousands of cases the Supreme Court receives requests to review each year, it grants certiorari to a hundred or so. One reason it grants certiorari is to harmonize conflicting federal decisions. Ms. Zuckerman suggested such a conflict related to HEAR existed, but then hedged that by adding “a firm circuit split has yet to develop”.[Petition at 16] The conflict she referred to involves a 2017 Ninth Circuit case that found Section 5 of HEAR “prevent[s] courts from applying defenses that would have the effect of shortening the six-year period in which a suit may be commenced” [Petition at 16, 22, 28 (citing Cassirer v. Thyssen-Bornemisza Collection Found., 862 F.3d 951, 965 (9th Cir. 2017))]. This comment by the Ninth Circuit locks horns with Zuckerman.
A conflict not relevant to whether certiorari should have been granted but important nonetheless is that between Zuckerman and the New York State Court decision in Reif v. Nagy [2018 WL 1638805 (N.Y. Sup. Ct. N.Y. Cty. Apr. 5, 2018)]. Similar to the Picasso sale, the sale of the Egon Schiele paintings at issue in Reif was to non-Nazi affiliates. Unlike the outcome in Zuckerman, the Reif court found the heirs held a superior right to the Schieles over a subsequent purchaser. The reason? The Reif Court applied the clear language of HEAR that required consideration of the problems associated with the “fragmentary historical record ravaged by persecution, war, and genocide” and facilitating return of property where heirs presented reasonable proofs of claim [HEAR Act (2016), §2(6)].
Twilight of the HEAR Act
The HEAR Act has been hailed to be “a major area of interest in art law” in coming years. One can only hope that courts in these next years will not risk creating uncertainty over the application of HEAR as might arguably be a result of the decision in Zuckerman. The door is closing on HEAR’s effective term, and the urgency to apply it in a way that yields just results is heightening with each day. It is imperative to remove hurdles that virtually every Nazi-era claim will face – seventy or so years of “fragmentary” evidence that may lead to what’s been labeled as “unreasonable delay”. If such hurdles are not removed, the question arises whether Congress’s intent in passing the HEAR Act risks being undermined during its final days.
A detailed case note on this dispute was written by Stephanie Drawdy for the October 2019 issue (Vol. XXIV, Issue 3) of our quarterly academic journal Art, Antiquity & Law. In order to subscribe and access this and many other articles please click here.
Image of Picasso’s The Actor, 1904, ©Coldcreation via Wikimedia Commons