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SUPREME COURT TO DECIDE WHETHER AUSTRIA CAN BE SUED IN THE US
WASHINGTON, DC. The US Supreme Court has granted AustriaÇs request to appeal
a decision, taken by a lower federal appeals court in Los Angeles earlier
this year, that Austria can be sued in California in a looted art claim
stemming from the Nazi and post-war era. The case involves a claim seeking
the restitution of six allegedly Nazi-looted paintings by Gustav Klimt which
are now in the collection of the Nationalgalerie in Vienna.
http://www.theartnewspaper.com/news/article.asp?idart=11406
 

Supreme Court to decide whether Austria can be sued in the US
An American citizen is claiming six Klimts from the Nationalgalerie in
Vienna alleged to have been seized from her uncle by the Nazis and then
unlawfully retained by Austria after the war
 

By Martha Lufkin

WASHINGTON, DC. The US Supreme Court has granted Austriaís request to appeal
a decision, taken by a lower federal appeals court in Los Angeles earlier
this year, that Austria can be sued in California in a looted art claim
stemming from the Nazi and post-war era.

The case involves a claim seeking the restitution of six allegedly
Nazi-looted paintings by Gustav Klimt which are now in the collection of the
Nationalgalerie in Vienna.

The paintings are being claimed by an American citizen, Maria V. Altmann,
the 87-year old niece of the Jewish sugar magnate Ferdinand Bloch-Bauer,
whose vast art collection was seized by the Nazis in 1938 in Vienna.
Bloch-Bauer died impoverished in Switzerland in 1945.

The question at issue is whether a US statute, the Foreign Sovereign
Immunities Act (FSIA), allows a lawsuit in US courts against Austria, a
sovereign nation, based on events that took place before 1952.

Until 1952, the US adhered to a theory that foreign sovereign nations were
absolutely immune from lawsuits in US courts. That changed with the State
Departmentís 1952 ìTate Letter,î which lifted immunity in claims arising
from a nationís strictly commercial, as opposed to governmental, conduct. In
1976, the FSIA explicitly created an ìexpropriation exception,î allowing
lawsuits against foreign sovereigns when they have taken property in
violation of international law. In April 2003 Ms Altmann succeeded in
arguing that her case met that exception in the Ninth Circuit federal
appeals court in California.

Austria and the US Government, which filed a brief supporting Austria, had
argued that the exception cannot be retroactively applied to 1948 or earlier
events involving the paintings.

The disputed paintings include famous portraits of the plaintiffís aunt,
Ferdinandís wife Adele Bloch-Bauer. Ms Altmann has alleged not only that
these paintings were stolen by Nazis, but that a second wrongful
expropriation by Austria itself took place in 1948. According to Ms Altmann,
Austria demanded donations of works of art from the Bloch-Bauer family as a
precondition to allow the removal of the rest of the familyís art collection
from the country.

The Supreme Court will now determine whether a US court can hear a lawsuit
against a foreign nation for events that took place in World War II and
post-war yearsóbefore, Austria says, any exceptions were created in the
total immunity that had long been afforded sovereign nations in US courts.

In urging the US Supreme Court to take the case, Austria argued that there
was a split among the federal appeals courts which the Supreme Court should
resolve. Inconsistency on an issue among federal appeals courts is a
critical factor which the Supreme Court considers in selecting cases.

Indeed Austria argued that the Ninth Circuitís decision to allow the lawsuit
disregarded prior decisions by two other federal appeals circuits which
stated that the FSIA may not be applied to pre-1952 events, in cases
involving the USSR and China. That left the Altmann court ìalone among the
Circuits,î Austria argued.

In June, a third federal appeals court, the District of Columbia Circuit,
agreed that the FSIA would have an impermissible retroactive effect if used
to allow a lawsuit seeking damages for Japanís World War II era war crimes.

This same question is now being litigated in New York federal courts in a
separate lawsuit against Austria over World War II-related events. The
Supreme Court has also just been asked to review a similar question in a
case involving the French national railroad.

Advocating for Austria in the Ninth Circuit proceedings, the US argued that
foreign governments ìwere recognized to be absolutely immune from private
litigation in US courts on claims arising out of the Holocaust.î

The US and Austria also argued that US courts have traditionally deferred to
the executive branch in foreign affairs.

Randol E. Schoenberg, Ms Altmannís attorney, told The Art Newspaper he was
confident that his client would prevail in the Supreme Court. He added that,
ìThe issue Austria has appealed on is a purely procedural issue, going to
the question of which court will hear the case. On the merits, they have
absolutely no defense.î

But Scott P. Cooper, Austriaís lead lawyer at the law firm Proskauer Rose
LLP, Los Angeles, said that the question was one of substantive law. ìThe
concept of sovereign immunity is deeply embedded in US jurisprudence,î he
said. The issues pertaining to the merits of Altmannís claim are ìissues of
Austrian law and evidence,î he said, and should not be decided in the US.

Austria says the paintings were bequeathed to the Nationalgalerie in Vienna
under Adele Bloch-Bauerís will when she died in 1925. But Ms Altmann says
Adeleís will merely asked Ferdinand, her husband, to donate the paintings
upon his later death, which he did not do. She adds that a letter from
Nationalgalerie director Karl Garzarolli of 1948 stated that nothing in the
files of the museum would document a donation of the paintings to the
gallery, but this letter was kept hidden from Ferdinandís heirs.

In 1999, the Austrian Advisory Board Commission, a panel created by Austrian
law to consider the art restitution claims of Nazi victims, rejected
Altmannís claim for the paintings. But Altmann says the vote was
predetermined against her by the Austrian government.

Oral arguments before the Supreme Court are expected to be scheduled for
early 2004. A decision would follow by the end of June.