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Austria fights ruling that it can be sued for Nazi-looted art
The Austrian Gallery tries to keep disputed Klimt painting

LOS ANGELES -- Austria is asking the US Supreme Court to review a decision of a federal appeals court which allowed a lawsuit to proceed against it to recover six allegedly Nazi-looted paintings now in the Austrian Gallery (AG). On 28 April, the Ninth Circuit US Court of Appeals rejected Austria’s request for a rehearing of its earlier decision, which permitted the lawsuit seeking to recover the paintings by Gustav Klimt, valued at $150 million. The claim is brought by a US citizen, Maria V. Altmann, the niece and an heir of Ferdinand Bloch-Bauer, a wealthy Jewish Viennese sugar magnate who died penniless in Switzerland in 1945, his vast collection of porcelains and paintings stolen by Nazis and dispersed among Hitler's closest aides and others.
In January, the US Government supported Austria’s request to the Ninth Circuit for a rehearing on its December 2002 decision upholding the lawsuit. (The Art Newspaper, March 2003).

The Government filed a friend-of-the-court brief, arguing that Austria could not be sued in US courts over Nazi-era atrocities. It is now supporting Austria’s appeal to the Supreme Court.
In seeking Supreme Court review, Austria will argue that it was immune from suit in US courts when the events involving the Klimts occurred and that it remains immune, despite the erroneous assumption by the Ninth Circuit that “the United States would not have accorded absolute sovereign immunity to Austria” after World War II. Rather, actions by sovereign nations which took place before 1952 are immune from review by US courts, Austria and the US will say, and an exception which applies under the Foreign Sovereign Immunities Act cannot be applied retroactively to the Altmann case.

In a separate request to the Supreme Court, Austria is arguing that the California lawsuit should not go forward until the Supreme Court decides whether to take the case. Austria’s “entitlement to immunity from suit is effectively lost if this case is erroneously permitted to proceed in the trial court,” it has told the Court, adding that Austrian officials should not be compelled to submit to US court jurisdiction by “appearing at depositions, producing official government documents and attending other possible pre-trial proceedings” before the issue of sovereign immunity is completely adjudicated.

In April, the Ninth Circuit amended its December 2002 decision to include an excerpt from the London Declaration of 1943, in which the US and its allies reserved the right to invalidate transfers of property in territories that had come under Axis control. The US had argued that Austria was never at war with the United States and therefore enjoys the immunity that the court decision said could be denied to enemy states. The court’s new inclusion of the London Declaration, referring to US invalidation of takings of property in Nazi-occupied territory, may make Austria’s status during the war less relevant to the decision.

The three Ninth Circuit judges who rejected Austria’s immunity claim unanimously denied the request for rehearing. All other active judges of the court were given the opportunity to request a vote to hear Austria’s claim “en banc,” or as a full court, but none requested a vote. The US urged the “en banc” request because the case was seen as so important that it wanted the entire court to consider Austria’s arguments.

In its January friend-of-the-court brief, the US argued that the court should not interject itself in matters of foreign policy, which the doctrine of sovereign immunity is intended to prevent. The government called the case “of significant interest” to the United States, saying that the December 2002 decision, if followed in other cases, could have “a significant adverse impact on the Executive Branch’s conduct of foreign relations” with important US allies. In two other lawsuits now pending in federal courts in New York and Washington, D.C., the US is similarly arguing that Austria and Japan are immune from World War II compensation claims in US courts, a position which Austria is highlighting to the Supreme Court.

Austria maintains that Ferdinand’s wife Adele gave the paintings to the AG. But Mrs. Altmann says that Ferdinand, not Adele, owned the paintings, and that Adele’s request in her will that the paintings be given to the AG was non-binding. Mrs. Altmann is also seeking to invalidate transfers of the paintings to the AG which she says were required by Austria after the war in order to allow the export of other family artworks from the country. But Austria denies that it acquired the six Klimt paintings this way.

Mrs. Altmann, who is now 87, filed the case in federal district court in Los Angeles in August 2000. In May 2001, the district court rejected Austria’s claim of immunity, and Austria has yet to hear a different interpretation from a federal court. "The case is now several years old and we are eager to try the case on the merits," says Mrs. Altmann's attorney, E. Randol Schoenberg, of Los Angeles.

But Austria says that Mrs. Altmann’s advanced age makes no difference and its request for a stay should be granted. Altmann’s testimony has been recorded by deposition with Austria’s agreement, and she is not a key witness, Austria told the Supreme Court, adding that other family members would be equally entitled to pursue her claim.


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