The Art Law Report

Providing timely updates and commentary on legal issues in the museum and visual arts communities

Immunity from Seizure in Focus—Loans from Cuba for Exhibitions on Hold

Posted in Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, Foreign Sovereign Immunities, Immunity from Seizure Act, Legislation, Museums

A recent story in The Art Newspaper spotlights a number of lingering issues related to stolen art, the power of U.S. courts to seize property to satisfy liability, and the role of the Immunity from Seizure Act, 22 U.S.C. § 2459 (IFSA). As we discussed recently, the prospect of a material change in U.S.-Cuba relations, which as a commercial matter haven’t existed for more than 50 years, has broad implications for the art market. Just as importantly, there are many, many unanswered questions about the fate of property in Cuba that changed hands or was nationalized as part of the Cuban Revolution in the late 1950s and onward. Simply put, there are thousands of claims worth billions of dollars for all sorts of property that exiles left behind or had taken from them. While it is still a long way off, one impact of potentially normalized relations is the prospect of sorting through those claims.

In this context art is no different than other property with regard to its ownership, but it differs in a critical way with regard to potential cultural exchange. Any object, no matter how clear the case for recovery, cannot be seized by a U.S. court if it has been brought into the country with a grant of immunity from seizure under IFSA. That does not mean that the owner cannot be sued, or even that the fact of the import may subject the owner to suit (something that has been the subject of proposed, but never enacted, legislation). But it does mean that the object itself will be allowed to come into the U.S. and then be removed, regardless of an ongoing dispute. For counter-examples, consider the Portrait of Wally affair, in which there was no immunity from seizure and the painting was held in the U.S. for more than ten years, and the Malevich case, in which the painting was immune from seizure but created the possibility for the plaintiffs to sue the City of Amsterdam under the Foreign Sovereign Immunities Act.

So what of all this now and Cuba? According to The Art Newspaper:

Another outstanding issue between Cuba and the US involves the claims made by US citizens for industrial, commercial and private property seized in Cuba after Castro came to power. According to some estimates, this property could be worth around $7bn. These claims now serve to block museum loans between the US and Cuba. The exhibition “Wifredo Lam: Imagining New Worlds” (14 February-24 May) at the High Museum, Atlanta, will show paintings and works on paper by the late Afro-Chinese-Cuban artist. The director and curator of the McMullen Museum at Boston College, the show’s initial venue, travelled to Havana to secure loans of works by Lam from the Museum of Fine Arts. The Havana museum agreed to send a group of pictures, but the loans were never made. The US State Department discouraged the Boston museum from applying for immunity from seizure for the pictures, citing Cuba’s status as a country that “supports international terrorism”. Even with immunity from seizure from the State Department, that stigma put the pictures at risk of being held to satisfy outstanding legal claims against US property seized by Cuba.

There is a lot going on here. Full disclosure, I graduated from Boston College Law School, but I have no other connection to the case. The involvement of the State Department is important, because it is that agency that decides whether to grant immunity. So it is certainly interesting that the State Department—which could simply say “no” to immunity from seizure if it chose—asked the museum not even to request immunity from seizure. The second major point relates to the ongoing (and going, and going…) exhibition loan boycott by Russia related to the judgment in the Chabad case. Even though any painting loaned from Cuba, if immune from seizure, would never be seized, the practical fact is that many countries simply do not believe it. The principle of judicial independence in the U.S., which is absolute, is simply hard for many people to believe.

In the meantime, no one is happy. The claimants for this painting are looking for a forum for their grievance, and an exhibition and museum goers don’t have the painting that would provide cultural enrichment. Clearly there is still work to be done.

Development May be Coming Soon In Klimt Beethoven Frieze Case

Posted in Restitution, World War II

Der Standard in Austria reported this week that a recommendation is expected on Friday in the claim by the heirs of Erich Lederer to the famous Klimt Beethoven Frieze in the Secession Museum in Vienna.  The issue in this case is not a Nazi-era theft per se, but the effect of Austria’s post-war restitution law, which returned ownership to the Lederer family (it was looted from Erich Lederer under the Nazi) but forbade export, leading to a sale.  The Lederer family has argued that that amounts to a second taking.  As I made no secret last week with regard to Germany’s intended National Cultural Property Designation for the Welfenschatz that my clients have sued to recover, this kind of export prohibition is now recognized for what it is: an effort to hinder restitution.  The same kind of claim was made against the Leopold Museum in Vienna for Portrait of Wally, namely, the allegation that the post-war sale was not valid under the circumstances because of the export prohibition.  That case settled in 2010, the painting remains in Vienna.

It is, to be clear, not at all the current position of Austria.  That country’s 1998 law eliminated the last vestiges of this outdated approach.  The current dispute focuses on transactions under the old law.

As we have discussed previously, Austria’s Advisory Committee (Der Beirat gemäß § 3 des Bundesgesetzes über die Rückgabe von Kunstgegenständen aus den Österreichischen Bundesmuseen und Sammlungen, BGBl. I Nr. 181/1998 i.d.F. BGBl. I Nr. 117/2009, (Kunstrückgabegesetz)) has performed reasonably well on balance since its formation in 1998 (unlike some others in neighboring countries).  The Austrian Committee has handled questions of flight goods and sales under duress admirably.  On the other hand, this is a work of art greatly treasured in Vienna, and bound up in the fin-de-siècle image that is so beloved there.  How the Committee handles it will bear close watching.

Civil Action Filed Against Germany for Restitution of Guelph Treasure

Posted in Guelph Treasure, Restitution, World War II

I filed yesterday a new civil action against the Federal Republic of Germany and the Stiftung Preussischer Kulturbesitz (the SPK, which is responsible the administration of the Berlin museums, among other things) in the United States District Court in Washington, DC. You can read the Complaint here.  The lawsuit seeks the immediate restitution to my clients of the collection held by the SPK known as the Welfenschatz, or as it is referred to in English, the Guelph Treasure. My clients Gerald Stiebel and Alan Phillip are the blood relatives and successors to the consortium of Jewish art dealers who were threatened and forced by the National Socialist government into selling the Welfenschatz in 1935.

A little quick background that the court documents we have submitted will verify: The Welfenschatz was sold to the Consortium by its previous owners in 1929. After selling about half the collection of their own free will before 1933, the situation for the Consortium changed quickly and drastically after the Nazi seizure of power. The Consortium was suddenly targeted by a concerted campaign of the National Socialists to acquire property they believed was of German heritage and not fit to be owned by Jews, though of course those Jews were until then German citizens too. There were many, many recorded instances in which the Jews of Germany were stripped of their property. And in this case, it was an organized effort that ran from the mayor of Frankfurt (where they lived) all the way up to Goering and Hitler personally. Eventually, the Consortium relented under intense pressure and sold the collection under duress for a fraction of its actual value. The proceeds were paid into accounts that were in actuality blocked, and the Consortium’s members were subjected to further intimidation and the infamous flight taxes, which are described in a Gestapo document included in yesterday’s court filing. After the acquisition, Goering made a great public gesture of presenting the Welfenschatz to Hitler as a personal gift, and was even featured in news reports at the time. It has remained in Berlin ever since, now held by the SPK.

Quite simply, the Welfenschatz belongs to my clients. The transaction forced upon the Consortium was illegitimate as a matter of German and international law, and it had and has no validity whatsoever. My clients attempted in good faith to obtain the return of the collection by participating in mediation with the Advisory Commission, but despite presenting conclusive and unopposed evidence of the oppression that they faced and the inadequate sum they received, the Advisory Commission refused last year to recommend restitution, and the SPK likewise refused to return it.

As a result of a failure of justice here in Germany, my clients have asked me to vindicate their rights in the federal courts of the United States of America. The availability of the U.S. courts to address our claims is clear and longstanding. Pursuant to the Foreign Sovereign Immunities Act (FSIA), our courts have jurisdiction over this case and will confront the SPK precisely because these claims concern rights in property taken in violation of international law, and since these defendants, Germany and the SPK, engage in commercial activity within the United States. Since 2004, when the United States Supreme Court allowed Maria Altmann’s lawsuit for the return of her paintings to proceed against Austria pursuant to the FSIA, it has been well established that our courts are the proper place to seek restitution. Our courts—including the Supreme Court—have consistently held that sales under duress constitute property taken in violation of international law, and that jurisdiction will follow from it. This is nowhere more true than in cases where property ended up in the hands of the Nazi government of the Third Reich.

The SPK can only contest our claims by arguing that the 1935 sale was legitimate, a tactic that it regrettably has employed in the past. Since the Allied victory in 1945 the law has been clear, however: any sale by a Jewish owner after 1933 was presumptively under duress. That is to say, unless Germany proves otherwise, my clients win. But Germany cannot prove, and it should not try to prove, that a conspiracy to take the Consortium’s property—a conspiracy spearheaded by Hermann Goering—was in any way a non-coerced, normal marketplace transaction. It was not.

Lastly, two things about the announcement made over the weekend that the Welfenschatz has received a national cultural heritage designation. The first thing is that the mere fact of the designation shows that the SPK knows full well that the collection belongs to my clients. If the SPK were so sure that title to the collection had been resolved, then the designation would serve no purpose. Instead, it confirms that the SPK knows full well that the 1935 transaction was void, and it’s nothing less than an effort to thwart restitution that neither changes the ownership, and frankly is an insult to the Washington Principles and the Collective Declaration of 1999. It is a desperate tactic, and it will not work. Any suggestion that the designation settles the question of my clients’ rights is incorrect.

Second, that designation, even on its face, has no effect whatsoever on my clients’ ownership rights. At most, and if the designation is even valid, it could affect the physical movement of the collection once my clients ownership of it is confirmed. They will cross that bridge when they have to.

The Welfenschatz is my clients’ property and has been for decades and we now intend to use the full weight of the American justice system to prove that. We look forward to the day when it is back in their rightful possession.

 

Sullivan & Worcester LLP Press Release Concerning Claims For Guelph Treasure

Posted in Foreign Sovereign Immunities, Guelph Treasure, Restitution, World War II

FOR IMMEDIATE RELEASE

 

U.S. COURT ASKED TO ACT AGAINST GERMANY IN NAZI ART ACQUISITION NOW VALUED AT $250 MILLION

Collection Once Presented to Hitler as “Surprise Gift”

Current Owners Insist 1935 Jewish Owners Freely Sold To Nazis

Diminishing of Germany’s Restitution Policy Seen

Washington, D.C.–February 24, 2015–American and British descendants of Jews who escaped from Nazi Germany, and whose joint art collection included precious medieval works worth an estimated $250-300 million today, have asked the United States District Court for the District of Columbia to restitute that collection from Germany and from the current possessor of the collection, Germany’s Prussian Cultural Heritage Foundation (SPK).

This is the first time U.S. Courts have been asked to intervene in Germany’s refusal to recognize the claimants’ ownership of these works, known as The Guelph Treasure, which were stolen in what the claimants say was a “sham transaction” forced upon their predecessors in 1935.

The Prussian Cultural Heritage Foundation’s refusal to recognize these restitution claims followed a March 20, 2014 opinion by a German government advisory commission that had no binding authority. The decisions of that advisory board have shown, according to today’s complaint, a disturbing tendency in recent years to ignore longstanding principles of international law that such transactions in Nazi Germany were by definition coercive, voidable and should not be considered valid.

“Germany advances the pretense that it has enacted procedures to address Nazi-looted art, but the reality is quite different,” said Nicholas M. O’Donnell of Sullivan & Worcester LLP, an attorney for the descendants of the art owners, who filed the Complaint.  “The German government’s refusal to recognize the losses incurred by these victims, who survived with their lives but lost their livelihoods and property, does not square with Germany’s historical approach and responsibility.”

The U.S. law that the descendants are turning to is the Foreign Sovereign Immunities Act (FSIA), which confers jurisdiction because the claims concern rights in property taken in violation of international law, and Germany and the SPK do business within the United States through exhibitions and other activities. The case also points to the 1998 Washington Conference Principles, which established standards of restitution for Nazi-confiscated art, and to which Germany previously agreed in a 1999 German resolution.

Today’s filing is filled with accounts of how the owners escaped from Germany in the 1930’s, what was happening around them to other Jews in Germany, and how their art collection landed in the possession of top figures in the Nazi government. The collection, housed in the Kunstgewerbemuseum in Berlin, is widely regarded to be worth more than $250,000,000, according to expert testimony in court documents.

BACKGROUND:

The Guelph Treasure, also known in Germany as the Welfenschatz, includes dozens of gilded and jeweled reliquary art from the 11th to 15th centuries that long belonged to Prussian aristocrats from the House of Brunswick-Luneberg. In 1929, the Duke of Brunswick sold off the collection, with part of it going to a consortium of art dealers owned by the plaintiffs’ ancestors and predecessors: J.&S. Goldschmidt, I. Rosenbaum, and Z.M. Hackenbroch.

In the 1930’s the Jewish ethnicity of those dealers brought them to the attention of Hermann Goering, whose titles as one of Adolf Hitler’s top Nazi deputies included not only Commander of the Luftwaffe and President of the Reichstag, but also Prime Minister of Prussia.

The works were obtained by Goering’s emissaries through a pressured transaction at a fraction of their worth, paid into blocked accounts to the members of the art owners’ consortium.  Some of the owners had already begun preparations to flee Germany, others followed soon after. Fees demanded by Nazi authorities as the escapees fled were then stripped from the accounts through harsh “flight taxes,” as described in a Gestapo document included in today’s filing

Coerced selling of property was a common tactic of the Third Reich during the period historians are now calling Early Nazi Terror. Germany’s SPK has claimed that the transaction was done at the owners “free disposal.” But so pleased with the Guelph acquisition was Goering that, according to a 1935 report in the Baltimore Sun, he personally presented the collection as a “Surprise Gift” to Hitler.

Other documents show the then-Mayor of Frankfurt, shortly after the Nazi takeover, boasting in a letter to his “most revered” leader, “Reichskanzler (Chancellor Hitler),” about the potential to take advantage of the Welfenschatz’s owners and seeking Hitler’s personal assistance in setting the stage for the forced transaction. Another letter, concerning how to obtain the Welfenschatz from the Jews, is addressed to Paul Körner, a Nazi leader who later participated in the infamous Wannsee Conference in which Hitler’s “Final Solution” was formalized to oversee the extermination of all remaining Jews in Europe.

“The Jewish people who owned this art had their property squeezed out of them while their lives and the lives of their families were at risk,” O’Donnell said. “The value of that collection was four to six times as much as these victims were paid. But no matter what the price was, it’s an absolute outrage for the Prussian Cultural Heritage Foundation to state, as it did in reply to the finding of the advisory commission, that any sale under these circumstances in 1935 was done at ‘free disposal’ by Jews being persecuted.”

The plaintiffs’ longtime German attorney, Markus Stötzel, added, “The historical record is clear. After being publicly denounced as ‘traitors’ and targeted for their Jewish heritage, the members of the consortium had no real choice when they came up against Goering’s henchmen.”

In an apparent attempt to further its position, the Prussian Cultural Heritage Foundation is in the process of having the Welfenschatz collection designated as German national cultural heritage, which would restrict its physical movement. The plaintiffs dismissed the designation as a semantic ploy that has no effect on their ownership rights. “The unilateral nationalization of the collection by Germany doesn’t change the facts we have provided that show it was obtained, like so many other confiscations of Jewish property, through forced manipulation by the Third Reich,” said Mel Urbach, another attorney representing the descendants of the owners. “It is a shameful move that in actuality advances the illicit work of the Nazis. This is a clear violation of international accords on looted property that call for a fair and just resolution,” added Urbach.

The descendants of the art owners include Gerald Stiebel of Santa Fe, New Mexico, whose ancestor was to Isaak Rosenbaum, mentioned in today’s filing. “My great-uncle Isaak was fortunate to make it to Amsterdam, but my father always talked about how the family had to leave so much behind.” said Stiebel. “We’ve been looking for justice for years from today’s German government. They claim the Nazis bought it in a fair marketplace. How is that possible? We hope we can find justice now in the United States Court system.”

###

The U.S. District Court filing against the Federal Republic of Germany and the Prussian Cultural Property Foundation can be found here: (LINK)

The “Washington Conference Principles” on Nazi-Confiscated Art can be found here: http://m.state.gov/md122038.htm

For further information please contact:

Jeff Roberts 646-761-2795 jroberts@sloweymcmanus.com

Tara Goodwin 617-338-2465 tara@goodwinpr.com

Dominic Slowey 781-710-0014 dslowey@sloweymcmanus.com

Detroit Bankruptcy Debrief—Judge Rhodes Speaks on the Grand Bargain and the Detroit Institute of Arts

Posted in Bankruptcy, Detroit Bankruptcy, Museums

Last year’s biggest art law story was, in our view the Detroit bankruptcy. Nathan Bomey, who along with Mark Stryker formed the essential reporter team on up-to-the-minute updates on the proceedings, interviewed Bankruptcy Judge Steven Rhodes in the Detroit Free Press. The interview speaks for itself, but the highlights to me were:

Rhodes accepted the Michigan Attorney General’s opinion that the art at the Detroit Institute of Arts could not be sold, regardless of what the city wanted (and he underscored that the creditors certainly could never have forced the city to do so).

Over and above the city’s power to sell the art, Rhodes clearly was not persuaded that it was remotely a good idea. Even framed in terms of the tradeoff in very real city services, Rhodes said this:

Bankruptcy requires shared sacrifice. And the deeper truth than that immediate one that they were trying to express is simply this: Without a revitalized city, any pension promises that the city might make would be impaired.

A revitalized city was essential to any long-term promises that the city might make to any creditor, including the pensioners.

Lastly, he revealed that but for their apology, creditor Syncora Capital would have been sanctioned harshly for its impugning of the ethics of Grand Bargain mediator U.S. District Court Chief Judge Rosen. As we observed at the time, this is a lesson in advocacy. Don’t overplay the hand you have. Syncora was never going to get Rhodes to force Detroit to sell the art, but it was trying to persuade him to choose among some other options, and ended up offending him.

Kunstmuseum Bern and Germany Now Blaming Claimants for Delay in Gurlitt Restitution

Posted in Gurlitt Collection, Restitution, World War II

In a story that never fails to provide new twists and turns, the Kunstmseum Bern, apparently with the collaboration of the German government, is now contesting the idea that the only thing holding up restitution of the works identified as Nazi-looted by the Gurlitt Task Force is the will contest by Cornelius Gurlitt’s cousin Uta Werner.  Instead, they are now blaming the claimants themselves for the delay in restituting Seated Woman by Henri Matisse, The Cardplayers, by Carl Spitzweg, and Two Riders on the Beach, by Max Liebermann, to the Rosenberg, Henrichnsen, and Friedmann/Toren families, respectively.

The Kunstmuseum Bern released a statement today jointly with the German government that reads:

By signing the agreement, the Kunstmuseum Bern relinquished any entitlement to pictures suspected of being looted art as early as November 24, 2014. This is also true for the picture Seated Woman by Henri Matisse. Since then, the BKM (the German Federal Government Commissioner for Culture and the Media), in agreement with the KMB, is endeavoring to obtain the necessary evidence of the claimant’s entitlement to restitutions from the attorneys representing the Rosenberg family. What has been submitted to date falls short of the requirements—just as in the cases of the two other restitutions that have been assented to. The necessary documents for proving entitlement to inherit of individual members of the respective community of heirs have been requested several times, accompanied by necessary explanations both in writing and orally. Mr. Marinello, the legal representative of the Rosenberg heirs, sent documents proving entitlement to inherit to the BKM with a letter dated January 23, 2015, and on February 14, 2015, agreed to send the missing documents and evidence at a later date.

By all accounts the Rosenbergs had an agreement with Gurlitt himself before he died.  Further evidence of their relationship is essentially irrelevant (and insulting); that agreement to return the Matisse is almost certainly binding on Gurlitt’s heir, whether it is the museum or Werner (who in turn has disclaimed any right to it).  To suggest that the Rosenberg family’s lawyer, a prominent and respected advocate for the return of stolen art, is the cause of any of this is bold indeed, to put it politely.

Anyone wondering whether the Gurlitt affair had turned a corner for the better doesn’t really need to wonder any more.

Gurlitt and the State of Restitution: Triumphalist Moment Looking More Like Premature “Mission Accomplished”

Posted in Gurlitt Collection

Ongoing events have weakened irrevocably the triumphalist message that Germany had hoped to send with its November agreement concerning the Gurlitt bequest to the Kunstmuseum Bern, and the January opening of the Deutsches Zentrum für Kulturgutverluste (the German Center for Lost Cultural Property). Instead, the self-congratulatory air that surrounded those events is starting to look like a premature “Mission Accomplished” moment.

To recap: the ongoing will contest by Uta Werner, Cornelius Gurlitt’s cousin, has brought into focus the tension between the Kunstmuseum Bern’s acceptance of the bequest, its agreement with Germany, and the possibility that it may not in fact be the heir (if Gurlitt lacked the competence to make the will that named the museum as beneficiary).  After the news yesterday from the Rosenberg family (heirs to the Matisse Seated Woman), Werner herself has now apparently submitted an affidavit in court in Heidelberg, and has affirmed through her attorneys and representatives the agreement concerning the Matisse. So, again, there is no impediment to its immediate return. Werner’s lawyer has said that he has been in touch with representatives of the claimants for the other paintings already identified as looted.  Bavaria’s odd response was only to question whether her affidavit was properly notarized.

This is not what the museum and Germany had in mind when congratulating themselves back in November. And it’s not hard to understand how it’s come to this. Despite the fanfare of the research supposedly to take place into the collection, and the opening of the Cultural Property Center, it’s been mostly window dressing since then. Consider the “developments” since the Center opened on January 1, 2015. Three weeks later, it announced that it had constituted its board of directors. Is that really news? Its website is now up and running as well. To paraphrase David Spade on Saturday Night Live: 1995 called, and it wants its website back. It consists mostly of links to other sites like the Washington Principles and the webpage of the German Cultural Minister, Monika Grütters. And more than a year after the Gurlitt Task Force was constituted, its conclusions can be counted on one hand.

As a result, what has changed? German museums who wish to examine their collections (but are not required to do so) may have marginally more resources at their disposal.

Contrast, incidentally, a recent conference in Berlin on the looted antiquities trade in the Middle East (to which Germany itself has no historical connection or special responsibility) and the admirable directive that came out of it to take a hard look at their collections. This is apparently still too much to ask for Nazi-looted art. Instead, hard choices are still optional.

This perspective is gaining traction. Der Spiegel published a feature piece last week called “The Procrastination of the Bureaucrats,” questioning why no pictures have yet been returned. Over at the Holocaust Art Restitution Project, Marc Masurovsky has written a devastating point-by-point indictment of how the Gurlitt affair fails the requirements of the Washington Principles.

Lastly, if there were any remaining doubt about how important this all is, the sorry state of available processes that the Washington Principles oblige lay them to rest. The only current recourse for claimants in Germany is the Advisory or “Limbach” Commission, a non-binding mediation whose recommendations can be ignored. Sadly, its recommendations have increasingly become cover for doing nothing. We’ve discussed here before the dismaying trend at the Advisory Commission not to see coercive sales for what they are, and this month the commission has released another disappointing decision.

In brief, the claim concerned the heirs of George Eduard Behrens, a Hamburg banker and owner of Pariser Wochentag (Paris Weekday) by Adolph von Menzel. As his heirs pointed out, they had suffered almost immediate persecution in 1933 after the Nazi ascension to power. According to the Advisory Commission opinion, Behrens sold the painting at some point in 1935. The exact date was not known, but it was after September 15, 1935, when the Nuremberg Laws that enacted racial and racist classification were enacted. According to the City of Düsseldorf (where the painting now is), it was sold first to a dealer, and then to the city. Behrens was arrested by the Hamburg police after Kristallnacht in 1938, and then deported to the Sachsenhausen concentration camp in 1939. The bank L. Behrens & Söhne ceased operations on May 31, 1928 and was liquidated as of December 31, 1938. After paying the confiscatory “flight taxes,” Behrens managed to escape through Belgium and France to Cuba.

Despite all this, the Advisory Commission concluded that the 1935 sale was not the result of persecution. This is where it really gets astonishing. First, citing the Düsseldorf position (effectively endorsed by the result), it states (my translation):

Jewish private banks were hardly affected in the early years of the Nazi regime in their business.

It gets worse. Now speaking not for Düsseldorf, but for itself and its reasoning, the Advisory Commission concludes (again my translation):

The Commission of course does not fail to recognize that George E. Behrens belonged to those persons collectively persecuted for racist reasons as “Non-Aryan” after the adoption of the “Reich Citizenship” Law of September 15, 1935, that he was in concentration camp custody from November 1938 until March 1939, that he had to liquidate his bank, and to emigrate accompanied by great property losses. The Commission considers the situation at the time of the sale of the Menzel painting, however, for the bank and for the family, to be quite another.

Translation: it wasn’t that bad for Jewish bankers in Germany before 1935. If that were somehow unclear, it goes on to say:

Undoubtedly there had been a massive anti-Semitic agitation in Germany since the beginning of 1933, as well as any-Jewish excesses and a changing legal situation with the introduction of the “Aryan clause” for employment in the civil service. It is, however, undisputed in the historical record that Jewish private banks in the early years of the Third Reich were not directly affected.

I think a good number of rational observers would dispute that.

The Ministry of Economic Affairs, until the end of the “Schacht” era was interested in trouble-free operation of the Jewish banks and fought successfully against anti-Semitic advances in this area for several years. with the decline of the economic crisis, the Jewish banks experienced an economic boom, which passed on to the banking house of L. Behrens & Söhne as well.

So, apparently, not only were Jewish bankers not persecuted until late 1935, things were going really well for them..because Germany needed their banks! The “Schacht era,” referring to Minister of Economics Hjalmar Schacht, was hardly the salad days of German Jews either. Schacht did himself speak out on occasion, it’s true, and later broke with the regime, but it hardly follows that Jewish bankers were free from interference in 1933. And, don’t forget, the Advisory Commission and Germany have defended sale prices before on the theory that the prices were attributable to the Great Depression. So apparently the Great Depression was over in 1935 for some (when it suits), but not for others (when it doesn’t).

From here, it’s clear that the train has gone off the rails.

Kunstmuseum Bern Blames Gurlitt Restitution Delay on Will Contest, Claimants Are Having None of it

Posted in Gurlitt Collection

We recently discussed how the will contest concerning the will in which Cornelius Gurlitt left his estate to the Kunstmuseum Bern was complicating efforts to restitute any Nazi-looted works within the collection. Since the will contest, in and it itself, certainly seemed plausible, the resulting effect it could have on returning questionable works was not hard to see.

Two developments today bring that back into focus. First the museum itself went so far as to issue a press release taking that very position. The press release reads, in part:

At its last meeting, the Board of Trustees of the Kunstmuseum Bern categorically resolved that it will establish a “Gurlitt” research body and defined its tasks and structure. However, this decision can only first be implemented when the pending application of Cornelius Gurlitt’s cousin for a certificate of inheritance has been probated in Munich. The Board of Trustees regrets this delay, in particular because it will impede the settlement of restitution cases that have already been clarified and endorsed by the Kunstmuseum Bern, but the circumstances are beyond its control.

Read a little closer, however. The statement does not say that works cannot be restituted until the will contest is over. It basically says that the formation and tasks of the research group itself cannot even begin until the will contest is over. If that is indeed the approach, the will contest certainly provides no justification for it.

Not surprisingly, at least one set of claimants responded swiftly. Recall that to date only three works have been identified definitively as Nazi loot to be restituted: Seated Woman by Matisse, once owned by Paul Rosenberg, Two Riders on the Beach by Max Liebermann, once owned by David Friedmann in Breslau and claimed by his nephew David Toren, and a drawing by Carl Spitweg once owned by Henri Henrichsen. Christopher Marinello of Art Recovery International, who represents the Rosenberg family, told ArtNet by e-mail:

An agreement has been signed between the family of Uta Werner and the Rosenberg heirs which represents an unconditional renunciation of any interest in the Rosenberg Matisse.   This agreement now removes any impediment to immediate restitution of this looted work and places the burden squarely on the Kunstmuseum Bern and the Bundesregierung to back up their words with action.

The purpose of this Agreement is to counter the recent claim by the Kunstmuseum Bern that Uta Werner’s challenge to the Gurlitt Will is causing procedural delays. The Kunstmuseum Bern, the German Probate Court, and the German Ministry of Culture and Media have all publicly stated that Nazi-looted works of art contained in the Gurlitt hoard will be returned. To these assertions, we can now add Uta Werner and her family who consent to the restitution of the Rosenberg Matisse. We have had enough of the finger pointing in this case and with this universal consensus of heirs and potential heirs to the Gurlitt pictures, we expect an expeditious restitution over the next few weeks.

This could scarcely be clearer. The will contest is no justification to delay restitution, and it is certainly no justification to delay even beginning the process.

Who Owns Left Shark? Super Bowl Halftime Show Spills Over into IP Debate and General Absurdity

Posted in Copyright, Fair Use

The Super Bowl is America’s biggest civic holiday, in many ways.  The country’s most popular sport combines with the country’s desire just to sit and watch television in a once-a-year event.  This year did not disappoint, in one of the most exciting contests in the game’s history, the New England Patriots prevailed over the Seattle Seahawks 28-24, sealed by a game-winning drive by Tom Brady and a last-minute interception by Malcom Butler.  My partner Jay Darby recaps his thoughts on the game here

In addition and more relevant to present purposes, the traditional halftime extravaganza (“Hooray for Everything,” anyone?) featured a current pop star, this year Katy Perry.  In the midst of a tense game (the Art Law Report is a huge Patriots fan), I will confess my own reaction to the halftime show ranged from escapism to curiosity to confusion, to just being mesmerized.  By the time the dancing sharks came on the stage, I found myself in a similar state to the Beijing Olympics opening ceremony in 2008: I didn’t know what it meant, but I absolutely could not look away. 

As the Internet is wont to do, a meme was born instantly after people observed that the shark to the left of Perry (on her right) was dancing with less gusto than its counterpart to the right.  And so, Left Shark was born.  As a medium to project Internet silliness onto, it could scarcely have been more perfect.  Left Shark flip books, a Left Shark Tumblr page, Left Shark existential reflections, and, inevitably, Left Shark merchandise and costumes followed within hours, followed by a hilarious new Sportscenter ad

The latter point was apparently more than Perry’s branding team was willing to accept.  A demand letter soon surfaced in which Perry’s attorneys demanded that Fernando Sosa, the maker of a 3-D printed sculpture of Left Shark cease marketing it.  Perry’s lawyers asserted that 1) Left Shark was a creation; 2) by Perry; and 3) protected by copyright.  Conceding that while a costume alone is not copyrightable, they insisted that the creative elements leading to that costume (drawings, designs) were, and protected the Left Shark from copying. On that basis, they argued, unauthorized reproductions were infringing.

As with any good Internet argument, there was a response.  Sosa’s lawyer Chris Sprigman of NYU Law School dished out a healthy dose of sarcasm in his response, which included:

First, you claim that the Left Shark costume is copyrightable because it is based on the “multiple shark drawings” you say were produced by Katy Perry’s team. The drawings are irrelevant. Sketches of Left Shark may be copyrightable, but that doesn’t make the Left Shark costume copyrightable.

This is correct.  Laying it on a bit thicker, he stated:

When I look at the Left Shark costume, I don’t see “conceptually separable elements.” I see a shark costume. I am obliged to admit that, unlike any shark I’ve seen, the Left Shark costume has legs (and a quick Google search reveals that many other shark costumes have legs). But that doesn’t make the Left Shark costume copyrightable. The Left Shark costume has legs because the person inside of it has legs. The legs are not “conceptually separable” from the Left Shark costume. They are integral to its function as a costume.

Lastly, Sprigman points out that “Left Shark” as a concept did not exist until the halftime show took place and the name caught fire on the Web, that nowhere in the show itself (or presumably the drawings) was an apathetic shark on the left of the screen a conceptual part of the show.  It was, in a sense, just bad dancing.  Based on all this, Sprigman argues “As I explained in my previous letter, the Left Shark costume is an uncopyrightable useful article, and my client is free to copy it.”

I find the Sosa/Sprigman argument persuasive, but I also wonder if there is another layer entirely.  Namely, the NFL itself.  Perry presumably had an agreement with the NFL for her performance, and I have no doubt it would have carved out substantial IP rights for herself.  But the fixing in a tangible medium was the Super Bowl broadcast itself.  If Left Shark exists as a concept, does the NFL own it?  Or does no one.  It is a shrewd point that “Left Shark” was not something anyone set out to create.  But then it happened, and accidental meaning can be copyrightable.  

Lastly, of course, is the dangling possibility of fair use.  Assume that the sharks were intended to crate a boisterous atmosphere as Perry sang “California Gurls,”there’s a pretty good argument that adopting that image—even if fully copyrighted—transformed that substantially.  If Richard Prince can add guitars and pornography to serene images by Patrick Cariou of Rastafarians, then why not the nonsensical Rorschach Test that Left Shark has inspired?

Here’s an even more down-the-rabbit hole possibility: Does Left Shark own “Left Shark”?  Independently copyrightable performances are very much in play in the Ninth Circuit right now as we await a decision in Garcia v. Google et al.  Again, there are likely work for hire contracts, but sometimes that falls through.  Lest we scoff at the idea (which, to be clear, would be a logistical nightmare, but the case is still undecided and the people wearing the robes make the decision, not us), Glendale, Arizona is located within the jurisdiction of—you guessed it—the Ninth Circuit.

Left Shark may be dancing with a little more pep if things fall that way.

Dismissal of Claims is Affirmed in Admissions Policy Lawsuit Against The Metropolitan Museum of Art

Posted in Litigation, Museums

The Appellate Division, First Department, has affirmed the 2013 dismissal of claims in a lawsuit challenging the admissions policy of the Metropolitan Museum in New York.

The Met gained its present location as part of an agreement with the City of New York and 19th-century statutes that together provide that the museum may stay rent-free only so long as it is open to the public free of charge on multiple days each week.  At some point, the Met began soliciting voluntary donations from visitors even on those free days.  Theodore Grunewald and Patricia Nicholson, the plaintiffs in the first of the two lawsuits claimed that the signs in the museum and the links on the website are misleading in that they suggest a mandatory admission fee, and that the Met has intentionally misled the public to that effect.  A second suit made substantially the same allegations on behalf of a different group of plaintiffs (Filip Saska, TomášNadrchal, and Stephen Michelman). 

The plaintiffs claimed to be beneficiaries of the Met’s lease contract with the city of New York.  A third party beneficiary is someone whom a contract contemplates will be benefitted in some way, and that person ordinarily has standing to bring a claim to enforce the contract (like the beneficiary of an insurance contract, for example).  Since the city was not a party, and the court considered whether the plaintiffs even had standing to bring the claims as third-party beneficiaries.  The Supreme (trial) Court found that they are not.  Although the Met’s arrangement was clearly designed to benefit the public, that does not convert every member of the public into a third-party beneficiary.

The second question was whether the statute authorizing this arrangement allowed citizens to bring suit, in what is called a “private right of action.”  Caselaw has become extremely strict in recent years to hold that unless a statute unambiguously indicates its intention to allow for private suits, they are not permitted. 

The appeal focused on the narrow question of standing under the statute.  The Appellate Division had little difficulty with that question: “Clearly there is no express private right of action.  Nor is there an implied right of action consistent with the legislative scheme.”  Consistent with other questions of government action and policy, the court noted further:

Government contracts often confer benefits to the public at large. That is not, however, a sufficient basis in itself to infer the government’s intention to make any particular member of the public a third party beneficiary, entitled to sue on such contract (see Fourth Ocean Putnam Corp. v Interstate Wrecking Co., 66 NY2d 38 [1985]; Moch Co. V Rensselaer Water Co, 247 NY 160 [1928]; Restatement (Second) of Contracts §313). In order for the benefit to be direct, it must be primary and immediate in such a sense and to such a degree as to demonstrate the assumption of a duty to provide a direct remedy to the individual members of the public if the benefit is lost

There are misrepresentation-based claims still pending, but our view has always been that those claims face even taller hurdles to survive than the statutory third benefit claims that have now failed (a plaintiff must prove that the defendant made a statement of fact that the defendant knew to be false when he made it, for the purpose of inducing the plaintiff into doing something that that plaintiff reasonably did under the circumstances, to the plaintiff’s detriment.  In other words, if the statement was true, if the reliance by the plaintiff was not reasonable, or if the plaintiff was not harmed, there can be no claim).

The plaintiffs have the option to petition the Court of Appeals, New York’s highest court, for further review, but for the high court even to take the case is the rare exception.  We shall see. 

UPDATE:

After my initial post, I received two Tweets from Theodore Grunewald, who is presumably the same Theodore Grunewald as the plaintiff. 

Both are true, but also consistent with our analysis since the first dismissal.  There is no question on the pleadings that the plaintiffs’ allegations give them standing as a matter of law to claim a violation of the consumer protection law, but the matter of proving its elements as a matter of fact is the challenge now before them (and, judging by these messages, one they intend to embrace).  The second point is, at least in my reading, subsdiary to the recent result and the remaining claims.