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Germany can be sued for the return of Guelph Treasure, US court decides

A Washington, DC judge’s decision, and the new Hear Act, clear the path for further claims on alleged Nazi loot from the heirs of Holocaust victims

by Laura Gilbert  |  3 April 2017
Germany can be sued for the return of Guelph Treasure, US court decides
The Limbach commission concluded in 2014 that the sale of the 40-piece Guelph Treasure “was not a compulsory sale due to persecution” (Image: © EPA European Pressphoto Agency b.v. / Alamy Stock Photo)
Germany will have to defend itself in US court for the first time over art allegedly looted by the Nazis, following a 31 March ruling by a Washington, DC federal judge that denied the country’s motion to dismiss a lawsuit seeking to recover the Guelph Treasure. The case is one of the first affected by the recently enacted Holocaust Expropriated Art Recovery (Hear) Act, which makes it easier for the heirs of victims of the Nazi regime to file restitution claims in the US.

In 1935, a consortium of German-Jewish dealers sold a collection of medieval relics and devotional art once owned by the House of Guelph to the state of Prussia. Their heirs, Alan Philipp, Gerald Stiebel and Jed Leiber, say the dealers were coerced by the Nazis into selling the work for barely 35% of its market value, and that they were targeted not only because they were Jewish but because they were considered traitors for trying to sell off Germany’s national treasures.

The plaintiffs say the sale was spearheaded by Hermann Goering and Adolf Hitler, who wanted to “save” the Guelph Treasure for the German Reich, and cite a letter from the mayor of Frankfurt requesting Hitler “create the legal and financial preconditions for [its] return”. After the sale, Goering presented it as a “surprise gift” to Hitler, according to court documents.

Germany and the state-run Prussian Cultural Heritage Foundation (SPK), which administers Berlin's Museum of Decorative Arts where the Guelph Treasure is now on display, contend that the transaction was a legitimate arm’s length negotiation, its low price explained by the Great Depression and the collapse of the German art market. Before that, the consortium had managed to sell 40 objects—almost half of the objects—to institutions and private collectors for a total of 2.5m Reichsmark. The remaining works were sold to the state of Prussia for 4.25m Reichsmark. Since the dealers paid 7.5m Reichsmark for the collection in 1929, they suffered a 10% loss in the overall sale.

Judge Colleen Kollar-Kotelly rejected the defendants’ argument for dismissal based on the Foreign Sovereign Immunities Act, which prohibits lawsuits against other countries, but makes an exception where the government takes property in violation of international law. The Nazi’s systematic plunder of Jewish property “constitute[s] genocide and genocide… is a clear violation of international law”, Judge Kollar-Kotelly wrote.

In the original motion to dismiss, Germany and the SPK also argued that the statute of limitations for a claim on the Guelph Treasure had passed. With the passing of the Hear Act, the clock was reset to last December when President Obama signed the bill into law, and so the defendants withdrew that argument but retain the right to raise it again later. Asked whether the defendants will appeal, their lawyer Jonathan Freiman said: “We’re currently reviewing our options”.

The decision is significant, says the plaintiffs’ lawyer Nicholas O’Donnell, because the court ruled that Germany’s seizure of art from its own citizens before 1939, when government forces crossed borders and invaded other countries, is a violation of international law. The years between 1933, when the Nazis came to power, and 1939 is “a period with a large category of [such] crimes,” O’Donnell says, and he anticipates the decision “will be used for other claims”.

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