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Friday, March 8, 2002

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Austria’s Lawyer Urges Court to Throw Out Suit Over Plundered Art

By KENNETH OFGANG, Staff Writer/Appellate Courts

The government of Austria should not be subjected to suit in U.S. courts by an American citizen who claims that paintings hanging in her homeland’s national gallery were stolen from her family by the Nazis and rightfully belong to her, an attorney told the Ninth U.S. Circuit Court of Appeals yesterday.
The collection and display of national art treasures is an "inherently governmental" activity covered by sovereign immunity, Scott P. Cooper of Proskauer Rose LLP told the three-judge panel. Alternatively, he said, Maria Altmann should be required to pursue a court action in Austria under the doctrine of forum non conveniens.
Altmann’s attorney, E. Randol Schoenberg, scoffed at those arguments, saying the operation of the national gallery, including the sale of tickets and the publication of a catalogue and another book containing images of the paintings by Gustav Klimt, is a commercial activity exempt from immunity under the Foreign Sovereign Immunities Act.
The paintings were owned by Ferdinand Bloch-Bauer, a prominent Jewish Viennese businessman, head of the Austrian sugar industry and a lifelong collector of art. Bloch-Bauer commissioned Klimt to do several portraits of his wife Adele and bought two of them in addition to four landscapes by the same artist.
Painting Donated
In 1936 he donated one of the landscapes to the Austrian Gallery. The five remaining paintings were apparently taken from Bloch-Bauer’s home, along with his other possessions, by the Nazis in 1938, when Bloch-Bauer fled to Switzerland, where he died in 1945.
The Austrian Gallery claims to own the paintings under terms of the will of Adele Bauer-Block, who died in 1925, or under a 1948 agreement with an attorney representing Altmann’s brother. Altmann claims them as Bloch-Bauer’s sole living heir.
Her attorney, Schoenberg, is the grandson of composer Arnold Schoenberg, who fled Austria for the United States around the time that Bloch-Bauer went to Switzerland, and the son of retired Los Angeles Superior Court Judge Ronald Schoenberg.
He argued yesterday that U.S. District Judge Florence-Marie Cooper of the Central District of California correctly denied immunity, based on the Ninth Circuit’s 1993 decision in Siderman de Blake v. Argentina, 965 F.2d 699.
Misappropriation Suit
The author of that opinion, now-Senior Judge Betty B. Fletcher, said that Jose Siderman could sue for the misappropriation of his properties, including a resort hotel, by the government of Argentina.
The FSIA permits a suit for misappropriation of property by an instrumentality of a foreign government if that entity engages in ‘’commercial activity in the United States." That requirement was met in Siderman’s case, the judge said, because the hotel had, under Argentinian government ownership, solicited guests in the United States and taken payment through U.S. credit cards.
Judge William Fletcher, son of the author of that opinion, was on the panel yesterday and questioned Cooper’s assertion that the operation of the Austrian Gallery, and in particular its use of the Klimt paintings, is non-commercial or is not "carried on in the United States."
Not only do Americans purchase tickets to the gallery while visiting Vienna, he noted, they are solicited to do so through advertisements distributed by the Austrian Embassy in Washington. The museum’s publication and sale in the United States of books in which the paintings are depicted also may supply the required nexus, he suggested.
Cooper disagreed.
Governments typically operate museums, he said, and often charge a fee for admission. That doesn’t change the fact that "this has always been a part of the government" whose sovereignty the FSIA is supposed to protect, he said.
Even if there is jurisdiction, Cooper went on to argue, the district judge erred in not applying the forum non conveniens doctrine. Given that the paintings, and the evidence of how the gallery obtained them, are in Austria, he said, that country is entitled to subject Altmann’s claims to the "fair and orderly application of its own judicial system."
Austria, he added, is a democratic state with an independent judiciary like that of the United States.
Judge Kim Wardlaw asked Schoenberg whether a ruling in his client’s favor would send the court "down a road where the Smithsonian [Institution] could be sued all over the world." He answered in the negative, saying the facts of the case fall squarely within the narrow expropriation exception enunciated in the FSIA and found applicable in Siderman.
There is no rational way, he expounded, that the Austrian Gallery’s activities could be viewed as non-commercial. He cited not only the books and ticket sales mentioned by Fletcher, but the operation of a museum store selling all manner of art-related items including "magnets with pictures of my client’s aunt."
Attacking the forum non conveniens argument, Schoenberg said there is no way Altmann can get a fair trial in Austria.
When she tried to bring an action there, he explained, a lower court ruled that she had to pay a fee of $200,000–basically her life savings–in order to sue the government.
The government appealed the ruling, arguing that the deposit should be 10 times as high, Schoenberg explained, the appeal being dismissed as moot when Altmann didn’t pay the lesser amount. Austria, he said, continues to maintain that Altmann must come up with $2 million in costs before she can sue to get the paintings.
Besides, he said, the Austrian government insists that the case be tried under Austrian law, which would require a dismissal under the statute of limitations, which would have run sometime in the 1950s. And Austria’s equivalent of the discovery rule wouldn’t help, he said, because it requires proof that the defendant was corruptly responsible for the plaintiff’s delay in discovering the facts giving rise to the claim.
If suit proceeds here, he explained, it would be held timely under California’s version of the discovery rule as set forth in Code of Civil Procedure Sec. 338.
Cooper countered that Altmann may have a claim under a 1998 law dealing with restoration of stolen art. But, pressed by Fletcher, he said he had no authority to waive any statute of limitations defense as a condition of having U.S. courts defer to those of Austria, and was uncertain that an Austrian court would allow the gallery to waive that defense without admitting that it perpetrated a fraud.
The case is Republic of Austria v. Altmann, 01-56003.

Copyright 2002, Metropolitan News Company