JUSTICE ON THE MERITS: AN ANALYSIS OF THE HOLOCAUST EXPROPRIATED ART RECOVERY ACT OF 2016.

• Author: Cunningham, Emily J.

Contents INTRODUCTION I. HOLOCAUST EXPROPRIATED ART RECOVERY ACT HISTORY A. Nazi Thievery of Europe's Art B. Post-War Attempted Restoration of the Stolen Art C. HEAR Legislative History II. HOLOCAUST EXPROPRIATED ART RECOVERY ACT PROVISIONS A. Requirements for Claimant's Use of HEAR 1. HEAR Covers Claimant's Type of Claim a. HEAR Covers the Claimant's Type of Property b. A Judgment Concerning the Claim Has Not Been Finalized 2. Claimant Possesses the Requisite Knowledge 3. Claimant Timely Asserted HEAR B. Possible Defenses to a HEAR Claim 1. Congress Lacks the Authority to Enact HEAR 2. The Fifth Amendment Bars Use of HEAR When the Previous Statute of Limitations Expired a. Defendant Does Not Receive Good Title by Being a Bona Fide Purchaser of Chattel b. Defendant Received Settled Title After the Expiration of a Statute of Limitations c. HEAR Is Impermissibly Retroactive 3. The Claimant Falls Within HEAR's Statutory Exception III. POSSIBLE RESULTS A. HEAR's Use in Filed Cases B. Additional Issues Claimants Face 1. Choice of Law. 2. The Doctrine of Laches IV. PROPOSALS FOR THE FUTURE A. Special United States Commission B. Federal Legislation C. Funding CONCLUSION INTRODUCTION

As the price for her freedom, Martha Nathan relinquished six artworks to the Nazis before escaping to France. (1) In late 1938, Mrs. Nathan allegedly sold to art dealers a painting from her remaining pieces, which joined the Detroit Institute of Art collection in 1969. (2) The Detroit Institute of Art commenced action to quiet title, and Mrs. Nathan's heirs counter-claimed. (3) The United States District Court for the Eastern District of Michigan found that their counterclaims accrued when Mrs. Nathan sold the painting to the dealers on December 14, 1938. (4) In other words, Mrs. Nathan's claims in the state of Michigan expired on December 14, 1941, just three days after the United States officially went to war with Germany. (5)

The Nathan heirs' situation is not uncommon. Even in jurisdictions with more generous statutes of limitations, courts do not recognize the particular shroud of confusion surrounding Holocaust-era claims. (6) Courts strictly apply the statute of limitations and do not recognize that it is often unfeasible or impossible to bring claims when courts say claimants should have brought them. (7) In the immediate aftermath of World War II, affected families "simply lacked the information, resources, and sometimes wherewithal to locate and pursue litigation to obtain their property." (8) Art stolen by the Nazis floated across Europe after the war, its owners' locations unknown, with some of the art disappearing into the Soviet Union and some selling on the black market. (9) The sheer quantity of the art stolen by Nazis made restoration difficult, if not impossible, and thus "many works of art were never reunited with their owners." (10)

Recognizing the immense barrier keeping Holocaust victims and their heirs from pursuing legal claims, Congress passed the Holocaust Expropriated Art Recovery Act ("HEAR") in December 2016. (11) HEAR establishes a six-year statute of limitations for claims to "recover any artwork or other property that was lost during the covered period because of Nazi persecution." (12) The statute of limitations runs only when a claimant knows of an item's identity, location, and his or her "possessory interest" in the item. (13) Thus, HEAR allows claimants to bring a case when they actually know the relevant facts, provided they diligently search for art before HEAR's sunset provision of January 1, 2027, takes effect.

This Note discusses the Holocaust Expropriated Art Recovery Act. Part I summarizes HEAR's historical context in World War II and the subsequent years of confusion and case history. Part II discusses HEAR's provisions, analyzing constitutional concerns such as the justifications for federal action and retroactivity. Part III addresses possible results from HEAR's availability as a new statute of limitations and probable limits of its applicability. Part IV outlines future steps and a critique of other scholarly proposals. I argue that while HEAR will permit new cases into both state and federal courts that would otherwise be barred by state statutes of limitations, Congress would promote fairness and justice by creating a special doctrine of laches and funding additional art provenance research.

1. HOLOCAUST EXPROPRIATED ART RECOVERY ACT HISTORY

   1. Nazi Thievery of Europe's Art

      In February 1937, Adolf Hitler had been Chancellor of Germany for four years, (14) and he and his subordinates had spent those years refining the "Nazi art criteria" to reflect Hitler's tastes and the government's propaganda goals. (15) In the months following Hitler's ascension to power in January 1933, (16) government branches developed oversight over the arts, (17) and museum officials aligned museum policies with the government's emphasis on "German art" and set aside paintings disliked by the Nazi Party. (18) The Gestapo pressured museum directors, dealers, and artists associated with "degenerate" art into abandoning their support, even forcing some to leave Germany. (19)

      Hitler's artistic ambitions were personal. As a young man, Hitler envisioned himself as an artist but failed Vienna's art academy admissions test twice. (20) He absorbed Vienna's "rampant strains of anti-Semitism" and dreamed of Germany's expansion and power before becoming an early voice in the Nazi party. (21) Hitler despised artists of Jewish descent and modern art that insulted "classical ideals of human beauty," (22) but loved Old Master Germanic artists (23) and "cleanly abstracted and geometric styles." (24) On June 30, 1937, Hitler ordered the president of the Reich Chamber of Commerce to select "works of German degenerate art" from German Reich-owned collections for an exhibition in a Munich museum. (25) Curators rushed to hide, return, and sell works of art that the government could seize without compensation. (26) Curators displayed the remaining unlucky works in an exhibit of degenerate art, which accused the art and artists of everything from being "tool[s] of Marxist propaganda" to "promoting 'the systematic eradication of every last trace of racial consciousness.'" (27) The exhibit foreshadowed subsequent seizures beginning soon after in which almost 16,000 artworks disappeared from the nation's public collections. (28)

      Nazis influenced more than the purge of German state art collections. In 1935, the German Reichstag adopted discriminatory laws designed to identify, segregate, and harass Jewish citizens, expanding the field of victims initially identified and repressed in 1933. (29) Jews were discouraged from trading and owning art. Following a process called "Aryanization," many Jewish business owners, both voluntarily and involuntarily, transferred ownership of their assets to non-Jews. (30) Nazi legal devices, such as special taxes and confiscations, (31) forced desperate and anxious individuals to sell valuable, personal objects so they could have liquid assets to pay the government's exit fee if they wished to leave Germany. (32)

      After the German invasion of Austria in mid-March 1938, the Nazis did not give Austrian Jews even such limited options. Non-Jewish Austrians looted personal property, (33) jailed prominent Austrian Jews when they tried to leave, and subjected Jews to various forms of "Nazi sadism." (34) Nazis immediately seized items from the personal collections of wealthy Jewish families such as the Rothschilds (35) and the BlochBauers, (36) and the Nazis required less wealthy families to tell the Gestapo what they owned so that the Nazis would have useful records when they inevitably confiscated all Jewish-owned assets. (37) If Jews wished to leave Austria, the Nazis demanded that they surrender everything they owned through a complicated legal process. (38) Tellingly, the American Consul General in Vienna in 1939 reported that the Nazis had a "curious respect for legalistic formalities," requiring the "signature of the person despoiled ... even if the person in question ha[d] to be sent to Dachau in order to break down his resistance." (39)

      Following the Austrian seizures, the Nazis required German Jews to report their belongings. After Kristallnacht, the infamous night of violent destruction against Jews in Germany, (40) Nazis openly, and soon legally, confiscated private property, listing items in a "protocol" for each house. (41) The Nazis repeated this pattern in every country they invaded, seizing state and private property alike, and sending persons they deemed degenerate to concentration camps. (42) After the Nazis came to power, Nazi officials, notably Hermann Goering, gathered art for personal collections, originally through the Nazis' pretense of an art market and later through confiscations. (43)

      Hitler developed grandiose plans for the art he desired. Hitler planned to transform his birth city of Linz, Austria, into a "ceremonial cit[y]" like Florence, Italy, in which he would build an extensive art museum to house his burgeoning art collection. (44) Quickly, Hitler's vision expanded to a museum complex with different buildings for each artistic discipline. (45) Hitler's designated agent for the museum collection sorted through the available works and appropriated millions of dollars' worth of art for Hitler's collection. (46) To complete Hitler's collection, Hitler's agent perused the art market, purchased collections under the threat of potential harm should owners resist, and built Hitler's collection to over 8,000 works by 1945. (47)

      The forced confiscations and massive dispersal of art created a disastrous and complicated mess of the art market. Art not claimed by Nazi officials went to dealers or auctions. (48) As Allied countries shut down trade with Axis-controlled countries and people could not move money out of Axis-controlled countries, people with money purchased art from...