Volume 43 | Number 1 Fall 2007
Adding Tools to the Arsenal: Options for Restitution from the Intermediary Seller and Recovery for Good-Faith Possessors of Nazi-Looted Art
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II. Background
Widespread and systematic looting of valuable works of art by the Nazis was a sad by-product of World War II. The calculated discovery and removal of “degenerate” artwork6 from the Nazi occupied territories was conducted on a supremely grand scale. Some commentators have calculated that throughout the Nazis’ terrifying reign, they pillaged nearly one-third of the art held in private hands at the time.7 Other evidence indicates that the value of the looted artwork during World War II was greater than the total value of all artwork present in the United States in 1945.8
Many of these valuable pieces of looted art remain “lost” and have been scattered across the globe. Fortunately, as a result of several factors, provenance research9 is increasingly a less cumbersome process. In the 1990s, certain relevant documents maintained by the German government were declassified. Because the Nazis kept meticulous records of much of their plundering, these documents have greatly assisted those searching for their treasured paintings and antiquities.10 However, these records have mainly been useful for locating higher quality works. Those pieces not of museum caliber were not recorded with such precision and detail and are more difficult to track down.11
In addition, the development of comprehensive searchable databases of stolen and missing works of art has begun to play an increasing role in provenance research. The Art Loss Register, in particular, has become prominent for such purposes.12 Italy and France have also developed their own databases to assemble reports of stolen art.13 Notably, selected museums have begun to post descriptions of individual works of art and articulate gaps in provenance.14 Finally, and perhaps most importantly, two authors and experts in the history of World War II art theft, Lynn Nicholas15 and Hector Feliciano,16 have each provided detailed compilations of their research regarding Nazi art theft. Both books provide in-depth accounts of the history behind the looting, as well as insight into the paths of specific works of art. Additional support for original owners has developed with the advent of “bounty hunters”—lawyers who have come to specialize in the recovery of war loot.17 Generally, these lawyers provide their services on a contingency fee basis, even financing provenance research and court costs for a percentage of the proceeds of a winning judgment.18 All of these factors have contributed to an increase in the claims of original owners and their heirs.
This increase in claims, combined with their rising success, is a source of concern for art possessors.19 Museums, in particular, have been criticized for their lack of diligence in provenance research, with some commentators calling on American museums “to become allies in the investigation of art thefts and to do the right thing.”20 Beginning with the guidelines for dealing with Holocaust-era art adopted by the Association of Art Museum Directors in 1998 and reaffirmed in 1999,21 museums have attempted to balance “doing the right thing” against appropriately guarding their public trust.22 While returning stolen works to their rightful owners is morally desirable, museums are also obliged to the public to ensure that any deacquisition of artwork is done lawfully and only with proper provenance research.23 Moreover, all types of good-faith possessors, including museums, have struggled with the financial loss that accompanies the sacrifice of artwork. Nevertheless, since 1998 about 2,000 Nazi-looted works of art around the world have been returned; many have come from museums and public galleries.24
In addition to financial losses that can be incurred by returning artwork, the increasing efforts of art galleries and museums to research provenance are not without a price; piecing together provenance can be challenging, time-consuming, and expensive.25 Parties with pertinent information may be unwilling to open their records or may have gone out of business.26 Despite these obstacles, the Cleveland Museum of Art, through its own provenance research, was able to identify approximately 373 paintings and eighty-six sculptures with gaps in provenance during the Holocaust period.27 Notably, this particular museum is relatively small.28 Such a comprehensive undertaking by a larger museum would be a much more complicated (and expensive) endeavor if undertaken without any significant public funding.29
Despite the large number of artwork homecomings worldwide, the actual number of claims made against U.S. art museums has been relatively small, and the majority of those have proven to be without merit.30 It is not surprising, therefore, that to date only twenty-two Nazi-looted works of art have been restituted by U.S. museums.31
Yet given the significance of their potential financial losses due to such claims, museums and other good-faith possessors have sought various remedies to diminish their risk. As one option for recourse, the good-faith possessor can attempt to seek damages from the intermediary seller. One major roadblock to this approach is that some of these purchases were completed decades ago, and the seller’s art gallery or business is no longer in operation. This was just the case in a chain of sales that followed a Matisse painting in the Rosenberg case, as described by Michael Bazyler:
Fortunately, for the [Seattle Art Museum], Knoedler & Co., the New York dealer, was still in existence and eventually settled by offering the museum any painting in its collection as damages. Knoedler, however, could not in turn sue the Gallerie Drouant-David, the French gallery from which it bought the painting. Not only would Knoedler have to pursue the gallery in French courts (itself a dubious proposition, since the French gallery could successfully assert the good-faith purchaser and/or statute of limitations defenses under French law), but the gallery long ago went out of business.32
The present article reviews some of the notable claims by good-faith possessors that have managed to overcome this obstacle, specifically focusing on legal developments that have occurred in the United States. Legal developments in the United States are particularly relevant because many of the claims by original owners against the good-faith possessors are filed there. Original owners have certain advantages in the United States that would not be available to them elsewhere. For example, current possessors who have purchased or received artwork in good faith have no legal claim to the pieces under U.S. law as against the true owners.33 This is not true of some civil law countries, such as Switzerland, where a good-faith purchaser may acquire good title under certain circumstances. 34 Also, many European fora subscribe to much stricter statutes of limitation rules. 35 This is particularly true in comparison to the application of the claimant-friendly “demand and refusal rule” to the statute of limitations for good-faith possessors in the state of New York. 36