Burris & Schoenberg, LLP

LITIGATING LOSS

USC alumni work to draw attention to - and right the wrongs of - Holocaust-era theft

Randy Schoenberg '91 remembers seeing the stunning golden painting during a trip to the Austrian Gallery as a small boy: Gustav Klimt's portrait of Adele Bloch-Bauer, today one of the artist's most revered paintings. "That's Maria's aunt," Schoenberg's mother told him.

She was referring to Maria Altmann, a close Schoenberg family friend whose uncle fled Vienna in 1938, just as the Nazis invaded Austria. The family's personal belongings, including six Klimt paintings, were seized by Nazis.

The story of the escape from Nazi horrors was familiar to Schoenberg. He didn't know, however, that it would one day consume his professional life.

In February 2004, Schoenberg appeared before the U.S. Supreme Court to argue that Altmann has the right to sue the Austrian government in U.S. courts to recover her family's artwork. The issue before the justices: Whether the Foreign Sovereign Immunities Act's (FSIA) expropriation exception affords U.S. courts jurisdiction over claims against foreign states based on conduct that occurred prior to the enactment of the Act in 1976 and before the United States adopted the restrictive theory of sovereign immunity in 1952, which limited immunity in cases involving commercial activity.

On June 7, against all odds, the court ruled 6-3 in Altmann's favor. Whether she will be able to recover the paintings is yet to be seen. But the ruling does allow her to continue fighting the case on U.S. soil.

For many, the landmark decision not only breaks new ground in U.S. and international law but also sets the stage for other Holocaust-era victims to pursue similar claims. For Altmann, it is an opportunity to win back the artwork, valued at $150 million, and to fulfill her dream of seeing them hang in museums in North America.

"I'm thrilled that there's justice in the world," Altmann told reporters after her Supreme Court victory.

So far, the law has been on her side, but at 88 years old, time is not.

OVERDUE COMPENSATION

Michael Bazyler calls it the greatest murder and the greatest theft in history. When the Nazis murdered six million Jewish men, women and children, they also stole assets worth an estimated $230 billion - $320 billion in today's dollars - from Europe's Jewish population. Priceless family heirlooms. Records, documents and certificates. Historical artifacts and masterful works of art. Family homes. Unthinkable loss compounded by more unthinkable loss.

"The greatest evil of the Holocaust was mass murder," says Bazyler, a 1978 graduate of USC Law School and author of Holocaust Justice: The Battle for Restitution in America's Courts (New York University Press, 2003). "No one can forget that. And restitution for property stolen during the Holocaust can never make up for the heinousness of the genocide that the Nazis perpetrated. But the survivors deserve some measure of com-pensation for their financial losses."And they are getting some compensation, finally, through the American courts.

Bazyler, himself the child of Holocaust survivors, has been researching and writing about Holocaust restitution litigation for the past five years. A professor of international law at Whittier Law School, he always has been interested in issues of international human rights law. For many years, he avoided studying the Holocaust because of his own personal connection to it. But in the mid-1990s, as the media began reporting allegations that Swiss banks were withholding money deposited by Jewish families before the Holocaust, Bazyler began studying the legal and moral aspects of Holocaust restitution in the context of his research work in human rights. His new book examines Holocaust litigation and the impact such cases have had on U.S. courts.

"The real hero of this story is the American justice system," he writes in the preface to Holocaust Justice. "It is a tribute to the U.S. system of justice that American courts were able to handle claims that originated more than 50 years ago in another part of the world. The unique features of the American system of justice - including the right of foreign citizens to file suit in the United States over human rights abuses in foreign lands; the recognition of jurisdiction over foreign defendants who do business in the United States; class action lawsuits; fixed and affordable court filing fees for civil cases; a judiciary that is independent from political branches of government - are precisely the factors that make the United States the only forum in the world where Holocaust claims could be heard today."

Whether that system will work in Maria Altmann's favor has yet to be determined.

DAVID V. GOLIATH

Adele Bloch-Bauer died in 1925. Her husband, Maria Altmann's uncle Ferdinand Bloch-Bauer, died in exile in 1945, leaving all of his possessions to his nieces and nephews. Altmann, who arrived in the United States as a refugee in 1942, is the remaining survivor. Under post-war restitution laws, some Austrian families whose possessions were stolen by Nazis were able to retrieve their property or receive compensation from the gov-ernment. In order to recover the bulk of their property in a timely fashion, the Bloch-Bauer family surrendered its claim on the Klimt paintings. The Austrian government then turned the paintings over to the state museum.

In the late 1990s, a new law in Austria recognized the rights of Holocaust victims to recover stolen property - including items that may have been "improperly" negotiated away during initial property settlements. Altmann tried to sue in Austrian courts to recover the paintings but ultimately could not afford the court's $135,000 filing fee. Another concern was the strain of potentially lengthy proceedings on the octogenarian.

Schoenberg decided to try another strategy, and in 2000 Altmann filed suit in U.S. District Court, alleging that the Austrian government was withholding stolen property in violation of international law. The Austrian government argued that the U.S. courts have no jurisdiction over a sovereign foreign state in such a case, but the judge found that the case fit into the Foreign Sovereign Immunities Act's expropriation exception, which limits sovereign state immunity in cases where possession of stolen property violates international law.

In December 2003, the 9th U.S. Circuit Court of Appeals upheld the District Court's ruling, noting that the Austrian government profits from the paintings "by authoring, promoting, and distributing books and other publications exploiting these very paintings" in the United States. The Austrian government appealed the ruling, and the U.S. Supreme Court heard oral arguments in the case in February.

Altmann's Supreme Court victory has been likened to a David-over-Goliath decision. Not only did Thomas Hungar, deputy to U.S. Solicitor General Theodore Olson, argue on behalf of the Austrian government before the Court, but foreign governments ranging from Mexico to Japan also filed amicus briefs in support of Austria. A win for Altmann, opponents argued, would open the floodgates to any number of similar cases from the past against foreign governments, adversely affecting U.S. foreign relations.

Schoenberg says Austria's arguments are exaggerated because most such suits would be denied by the courts for other reasons.

Bazyler, who helped another family win a landmark settlement against a foreign government in 1996, agrees. In Bazyler's case, Siderman v. Republic of Argentina, the 9th Circuit held that Argentina implicitly waived its immunity under FSIA by continuing to operate businesses expropriated by the military from the Sidermans - and actively advertising and soliciting clients in the United States. The case marked the first time a lawsuit brought before a U.S. court led to a foreign government being held accountable for damages from human rights abuses that occurred abroad.

"These cases against Austria and Argentina are very fact-specific," Bazyler said. "There are a few exceptions to sovereign immunity, and these exceptions don't come up very often. In the Altmann case, Austria is using the painting for commercial activities in the U.S., and that's the hook.

"When we won the Siderman v. Argentina case, people called me from all over the world to see if their claim against other foreign governments could be pursued, but I couldn't help them because their specific facts did not fit within any of the sovereignty exceptions."

Still, Bazyler says there are thousands of other Nazi-looted artwork in circulation. According to Holocaust Justice, the Nazis between 1933 and 1945 stole approximately 600,000 pieces of art worth more than $20 billion today. Prior to the Altmann case, many other individuals have filed lawsuits over property plundered during the Holocaust, but most of them are against museums or private collections. Altmann v. Austria is the first of its kind against a government.

"This case so far has been an enormous success, and it's so important," Bazyler says. "As an older graduate of USC Law School, I'm looking at a younger graduate, and I'm cheering for him. This is great, this is inspirational! It shows that when you persevere, you just don't know how far you'll succeed."

PERSONAL MISSION

On Sept. 10, Altmann overcame another legal challenge when U.S. District Judge Florence-Marie Cooper denied the Austrian government's motion to dismiss the case. A trial date has been set for Nov. 1, 2005.

For Schoenberg - whose grandmother grew up in pre-war Vienna and often told stories of Viennese artists and thinkers of her time, such as Klimt, Freud and Mahler - this case is as much a personal mission as it is a professional challenge.

"It's very personal for me to be able to work on these cases, and not just because Maria is a close family friend," says Schoenberg, who also is representing a law student in another high-stakes, high-profile Nazi art theft case, Bennigson v. Alsdorf, involving a Pablo Picasso oil painting worth an estimated $10 million. Next year, the California Supreme Court will determine whether California courts have jurisdiction to adjudicate ownership of personal property brought into the state for sale.

"This is my family's history as well," Schoenberg says. "This was an incredible generation of people - so educated, so cultured. The world lost so much during the Holocaust. It's meant a lot to me to tell this story to a new generation."

For more information on Altmann v. Austria, visit http://www.adele.at/.