Nazi Confiscations Reach Well into the Future, Continue to Frustrate Heirs: Foreign Sovereign Immunities Act Defeats Heir’s Action to Recover Art Collection from Germany

Nazi Confiscations Reach Well into the Future, Continue to Frustrate Heirs: Foreign Sovereign Immunities Act Defeats Heir’s Action to Recover Art Collection from Germany

Following the Anschluss, Hermann Göring was asked about passports for the Viennese Jews. He responded, "All right, but not with any foreign currency. The Jews can go, but they will kindly leave behind their money, which they have stolen." In line with this thinking, the Reich financed itself by illegally confiscating and selling Jewish properties, including valuable art collections. Caught in this net was the art collection of Walter Westfeld, a prominent Jewish/German art dealer.

Before World War II, Westfeld attempted to move his art collection from Germany to Tennessee. However, Westfeld's passport had expired, and he was unable to get a visa from the United States. In 1938, German officials arrested and fined Westfeld. To satisfy the fine, Westfeld's art and tapestry collection was sold by Lempertz, the German auction house, under orders from the German government. Westfeld was later killed, but after the War, his sentence and fine were declared null and void.

In Westfield v. Fed. Republic of Germany, 2009 U.S. Dist. LEXIS 65133 (M.D. Tenn. July 28, 2009) [enhanced version available to lexis.com subscribers], Westfeld's heir sought to recover the art collection's value from the Federal Republic of Germany. The district court barred the claims under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C.S. § 1602, et seq. The First Circuit affirmed in Westfield v. Fed. Republic of Germany, 2011 U.S. App. LEXIS 2098 (6th Cir. Tenn. 2011) [enhanced version / unenhanced version available from lexisONE Free Case Law].

At issue on the appeal was 28 U.S.C. § 1605(a)(2)'s "commercial activities" exception, which provides that foreign sovereigns are not immune from suit:

upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.

Without deciding the exception's commercial activity requirement, the First Circuit held that Germany was entitled to immunity because the heir had not established that Germany's actions had caused a direct effect in the United States. The First Circuit underscored that:

  • Germany had never promised to deliver Westfeld's art collection to the United States; thus, Germany had not obligated itself to do anything in the United States; and
  • Germany's expropriation of the artwork did not cause a direct effect in the United States even though it had prevented Westfeld from sending his collection to Tennessee.  Consequently:
    • the reverberations felt in Tennessee were derivative of Germany's seizure and not direct effects; and
    • Germany had not itself done anything in the United States, and the only ties to the United States were Westfeld's (an American entity's mere financial loss was insufficient to establish a direct effect in the United States).

More Resources:

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1-2 Modern Estate Planning § 2.12 Exclusion for Loans of Qualified Works of Art 1-2 Modern Estate Planning § 2.12 (Purchase this treatise at the LexisNexis Store)

5-28 Nimmer on Copyright 28.syn Synopsis to Chapter 28: Fine Art 5-28 Nimmer on Copyright 28.syn (Purchase this treatise at the LexisNexis Store)

 

Legal Articles: (lexis.com customers can access the articles directly)

Bert Demarsin, The Third Time Is not Always a Charm: The Troublesome Legacy of a Dutch Art Dealer: The Limitation and Act of State Defenses in Looted Art Cases, 28 Cardozo Arts & Ent LJ 255 (2010)

Lina M. Monten, Soviet World War II Trophy Art in Present Day Russia: The Events, the Law, and the Current Controversies, 15 DePaul-LCA J. Art & Ent. L. 37 (2004)

Michael D. Murray, Stolen Art and Sovereign Immunity: The Case of Altmann v. Austria, 27 Colum. J.L. & Arts 301 (2004)

Alexandra Minkovich, The Successful Use of Laches in World War II-Era Art Theft Disputes: It's Only a Matter of Time, 27 Colum. J.L. & Arts 349 (2004)

 

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