February 17, 2023
By Nikki Vafai
David Friedmann (1857-1942) was a wealthy Jewish sugar industrialist and art collector in Breslau, Germany (now Wrocław, Poland), whose extensive art collection included works by renowned artists such as Pissarro, Rousseau, and Liebermann. In 1939, the Friedmann collection also caught the eye of Nazi bureaucrats, who were gathering information about private property of Jewish families and took inventory of all of the paintings in Friedmann’s collection, forbidding him from selling any of the works. One Nazi official wrote that the sale of Friedmann’s collection would generate revenue for the Reich. Due to his Jewish background, the Nazis then confined Friedmann and confiscated his vast art collection. Friedmann passed away in 1942 and his only daughter died in a death camp.
71 years later, Friedmann’s great-nephew, attorney David Toren, rediscovered one of the paintings his great-uncle had owned, “Two Riders on the Beach,” after seeing the painting on television following the discovery of German art dealer and collector, Cornelius Gurlitt’s art trove. Toren filed a successful claim for this one work, starting a long legal battle to recover all the works lost by his family to the Nazi regime.
In 2016, Toren filed a suit against Germany, seeking compensation for the regime’s taking of his family’s unrecovered art pieces and securities. The case was stayed while the United States Supreme Court decided Fed. Republic of Germany v. Philipp, 141 S. Ct. 703 (2021).
Federal Republic of Germany, et al. v. Alan Philipp
The precedent setting case, Federal Republic of Germany, et al. v. Alan Philipp (et al.), was commenced in 2017 and heard before the United States Supreme Court in 2020. It involved the heirs of a consortium of Jewish art dealers and collectors who alleged the Nazis unlawfully forced the consortium to sell its collection of medieval relics known as the Welfenschatz, or Guelph Treasure, for a fraction of its value to Prussia. Today, the Guelph Treasure, on display at a Berlin museum, is valued as high as $250 million dollars.
In 2015 the claimants brought several common law property actions against the Federal Republic of Germany and the Stiftung Preussischer Kulturbesitz (SPK), an instrumentality of the republic, which currently maintains the relics, as well as sought to lift immunity traditionally due to foreign sovereigns. The heirs sought $250 million in compensation.
Before the Supreme Court, the heirs (respondents) argued that their claims fell within the Foreign Sovereign Immunities Act’s (“FSIA”) expropriation exception. Under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1605(a)(3), a foreign government has sovereign immunity and cannot be sued in the U.S. There are, however, some exceptions in which the U.S. does have federal subject matter jurisdiction. One of these exceptions is the FSIA’s expropriation exception, which establishes that courts can exercise jurisdiction in cases where “rights in property taken in violation of international law are in issue” and where “that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state.” The heirs argued that because the forced sale of the Guelph Treasure was part of the Nazi’s genocidal plan against the Jewish people, it constituted an act of genocide. Therefore, the Guelph Treasure was taken in violation of international human rights law and Germany was not immune from suit in the U.S.
In response, Germany argued that the international law of expropriation applied in connection to the Guelph Treasure case, not the law of genocide. Under the international law of expropriation, a foreign sovereign’s taking of its own nationals’ property is a domestic affair. The invocation of the domestic takings rule would mean that the Nazi’s taking of art from Germany’s own citizens did not interfere with inter-state relations and therefore, international law should not apply.
While the heirs conceded that the domestic takings rule applied at the time of the FSIA’s enactment, they argued that “right in property taken in violation of international law” applied to all international norms, not just the international law of expropriation. Furthermore, the argument advanced by the respondents suggested that Germany revoked citizenship of its jewish population and thus the taking was not perpetuated against German nationals.
Additionally, the heirs also relied on the 2016 Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, an act which amended the FSIA to clarify that participation in “art exhibition activities” does not constitute “commercial activity” under the expropriation exception. The heirs claimed that this act suggested that Congress anticipated Nazi-looted art claims under the expropriation exception.
The Court sided with Germany, ruled that “rights in property taken in violation of international law” refers to violations of the international law of expropriation and that the FSIA expropriation exception does not extend to a sovereign’s taking of the property of its own nationals. Therefore, the Court held that the domestic takings rule should be invoked. The Court explained that the United Nations’ Universal Declaration of Human Rights and Convention on the Prevention of Genocide did not address property rights and international tribunals have therefore maintained that international law does not govern property taken by a state from its own nationals.
However, the Court vacated and remanded the case to the lower courts to decide the issue of whether the sale of the Guelph Treasure was not subject to the domestic takings rule because the consortium of dealers were not German nationals at the time of the taking. The District Court ultimately dismissed the claims against Stiftung Preussischer Kulturbesitz on the grounds of lack of subject matter jurisdiction due to foreign sovereign immunity. The District Court found that the heirs did not provide enough information to support the argument that the consortium dealers were not German nationals at the time of the taking. According to the District Court, the allegations of Nazi mistreatment of Jewish individuals during the Nazi era and the emigration of two of the consortium members was not enough evidence of relevant property being taken in a way that violated international law.
Toren v. Federal Republic of Germany
Unfortunately, during the stay for Philipp (as court waited for the decision, David Toren passed away. His son, Peter Toren, took over the efforts to reclaim the family’s art collection.
Following the 2021 decision of the Supreme Court in Philipp, Peter filed the Second Amended Complaint with the United States District Court for the District of Columbia. Toren argued that his claims were encompassed by the expropriation exception to the FSIA and that his family members were not German nationals at the time of the taking. He claimed that his family and other German Jews were stateless at the time of the taking due to the various Nazi-era decrees and the Nazi regime’s persecution against German Jews.
Germany filed a renewed motion to dismiss for lack of subject matter on the basis that the FSIA makes it, a foreign sovereign, immune from claims against it in American courts.
The District Court agreed with Germany that, following Philipp, Toren’s claims are not encompassed by the FSIA’s expropriation exception. The Court, in its opinion rendered by Judge Richard J. Leon, explained that Philipp established that the expropriation exception was limited to property taken in violation of the international law of expropriation rather than of human rights and does not apply to a country’s own nationals. The Court did not address whether Friedmann had been deprived of his German nationality but stated that the Supreme Court decision has rendered that the expropriation act does not apply to claims based on a foreign state taking property from a stateless person. The Court elaborated that not only would severing nationality based on genocidal actions create an exception that would “swallow” the Supreme Court’s rule, determining whether genocidal action was enough to make an individual stateless is subjective and difficult to measure. Furthermore, the judge claimed that Toren’s claim is identical to the claims made in Philipp.
Thus, the Court stated that it lacked subject matter jurisdiction and granted Germany’s motion to dismiss. Toren plans to appeal this ruling.
Distinguishing Toren from Philipp
While the District Court judge stated that Toren’s claim was indistinguishable from the claims made in Philipp, this is arguably not so, as the facts of the cases differ. In both cases, the Plaintiffs argued that their ancestors were not nationals of Germany due to Germany’s genocidal campaign against Jewish individuals. However, in the case of Philipp, the Plaintiffs argued that their ancestors were not nationals based on the general mistreatment of Jewish individuals during the Nazi era and the emigration of two of the consortium members, an argument that the Court did not accept. It is undeniable that the situation of the consortium members in Philipp was abhorrent and certainly duress-inducing. Nevertheless, in Philipp, the members of the consortium conducted business and sold, albeit at fraction of the value, the relics. In Toren, however, an art collection was confiscated from a Jewish family, without any remuneration or compensation, with rightful owners exterminated, as part of the Nazi-genocidal efforts. Furthermore, in Toren, the genocidal campaign profoundly impacted the family as they were placed in concentration camps following the taking of their art collection. Thus, there is a more direct link between the taking of their art collection in the process of their direct genocidal actions towards the family.
The District Court in Toren claimed that the Supreme Court’s decision in Philipp made clear that “the expropriation exception…[does not encompass] a claim based on a foreign sovereign’s rendering its own nationals stateless before taking their property.” However, the Supreme Court did not make this clear or even address statelessness. What the Supreme Court did clearly state was that the FSIA expropriation exception does not extend to a sovereign’s taking of the property of its own nationals and that it was not going to address whether the sale was “not subject to the domestic takings rule because the consortium members were not German nationals at the time of the transaction.” The Supreme Court did not expressly deny Phillip compensation because it left it to the lower courts to decide whether the members were German nationals or not. Thus, Toren may have presented a valid argument that David Friedmann was not a German national at the time his property was expropriated in 1942. Thus the FSIA expropriation exception applies and the court does have subject matter.
Additionally, following FSIA, the Second Hickenlooper Amendment to the Foreign Assistance Act of 1964 was passed, prohibiting U.S. courts from applying the act of state doctrine—a doctrine that discourages U.S. courts from deciding the validity of acts committed by foreign governments within their own territory—when a taking of property occurred in violation of the principles of international law. This amendment was understood to permit claims against foreign governments for the taking of property with the exclusion of the property of the foreign nation’s own nationals. While, the Second Hickenlooper Amendment does not apply to U.S. citizens who were not U.S. nationals at the time of taking, David Friedmann was arguably not a German national at the time his property was expropriated and so unlike in Philipp, the Second Hickenlooper Amendment could potentially apply in Toren’s case.
The Second Hickenlooper Amendment, the Department of State’s application of pressure on international institutions and governments that hold holocaust-related artwork to which American citizens have a claim, as well as the 1998 Washington Principles which promote provenance research and the restitution of Nazi-looted art all indicate some pushback on the policy side to the judicial interpretation of the FSIA.
While restitution of Nazi-looted art has proven to be extremely difficult, there have been some successful court cases and promising measures taken towards restitution. For example, just earlier in 2022, the United States Supreme Court decided Cassirer et al. v. Thyssen-Bornemisza Collection Foundation. The case was brought by the heirs of Lilly Cassirer (Germany 1876 – U.S. 1862) against the Thyssen-Bornemisza Museum in Madrid, in an effort to reclaim ownership of a Camille Pissarro painting sold to the Nazis under duress. While the lower court had sided with the Madrid museum, the U.S. Supreme Court remanded the case and its ruling narrowed the arguments available in the museum’s defense.
Outside of the courtroom, influences on the outcomes of the restitution claims, such as the increasing public pressure on museums, have proven to be extremely powerful in restituting Nazi-looted works and increasing awareness of provenance of such works. Also in 2022, a New York bill was passed that requires museums to label artworks that were looted or sold against the owner’s will under Nazi rule. Additionally, controversy and outrage following Kunsthaus Zürich’s exhibition of the Emil G. Bührle collection, a collection belonging to the deceased arms manufacturer and supplier to Nazi forces, played an influential role in creating an independent commission on Nazi looted art in Switzerland.
Over the last twenty some years, much progress has been made to seek fair and just solutions for disputes involving Nazi-era looted art. A handful of restitution committees have been created to handle Nazi-looted art claims and have been beneficial for the heirs of Nazi-looted art. For example, in a recent win in the Dutch Restitutions Commission, the heirs of a Jewish collector won back “View of Murnau with Church” by Wassily Kandinsky. Following new evidence that the real seller of the work was not Karl Legat, but Myrtil Frank, the commission held that it was “sufficiently plausible” that possession of the work was involuntarily lost “as a result of circumstances directly related to the Nazi regime.” It is worth noting that the Van Abbemuseum, which housed the painting, waived its right to invoke good faith as a legal grounds for having purchased the work.
Furthermore, many museums and individuals have begun to take the initiative of returning Nazi-era looted artworks on their own. In 2022, the Museum of Fine Arts (MFA), Boston, returned the “View of Beverwijk” to the heirs of Jewish art collector Ferenc Chorin, upon learning that the painting had been stolen by the Nazis. MFA had updated the provenance of the painting on its website, which allowed the Chorin family to locate the work, demonstrating that databases and provenance transparency measures such as those set forth in the aforementioned New York bill can assist Holocaust victims and their heirs to find their lost assets.
The reluctance of the U.S. court system to interfere with the actions of foreign nations has proven a challenge to the restitution of Nazi looted art. The Supreme Court in Philipp vocalized concerns that interfering with Germany’s past actions could result in not only an overwhelming flow of similar cases in U.S. courts, but also retribution from Germany against the U.S. in its courts. Naturally, the United States of America, itself a foreign sovereign outside its national borders, would vehemently argue its immunity from action in other courts. Still, the wrongs perpetuated by the Nazi officials against personal liberties and property rights, as hard as they are to document and uncover, must be addressed and remedied, lest same crimes are perpetrated again and again. These obstacles have made it difficult if not impossible for heirs of Holocaust victims and Jewish Germans to receive monetary compensation or to recover their lost works of art or compensation for forced labor, loss of life and health. Public pressure on owners of Nazi looted art has proven to be a very successful means of delivering justice to the heirs of victims.
About the Author:
Nikki Vafai is a law student at the University of Maryland Carey School of Law and holds a B.A. in International Affairs and Art History from the George Washington University. Nikki is a 2022 fall legal intern at the Center for Art Law who interviewed Peter Toren in connection with this article.