Scott M. Caravello

From 1933 to 1945, the Nazi regime looted art on a scale with few historical competitors. The Nazis used this state-sanctioned theft to dehumanize the Jewish population and carry out the “Aryanization” of German society.

To provide redress for the victims of Nazi looting, the United States and the international community adopted the Washington Principles in 1998—a set of guidelines intended to promote a “just and fair” solution for claims over Nazi-looted art. Unfortunately, despite this commitment, lawsuits to recover stolen artwork are often barred by time-based defenses.

In 2016, Congress passed the Holocaust Expropriated Art Recovery Act (“HEAR Act”) to promote resolution on the merits by effectively removing the statute of limitations as an affirmative defense. Surprisingly, however, Congress left the doctrine of laches available, thereby frustrating the effectiveness and stated purpose of the HEAR Act. The doctrine of laches bars a claim upon a showing that the claimant unreasonably delayed in bringing suit, and that the delay caused the artwork’s possessor to suffer prejudice. Yet because lawsuits for restitution of Nazi-looted artwork have only recently become viable, delay and the resulting prejudice—taking the form of lost evidence—are inherent in these claims. The doctrine of laches thereby undermines resolution on the merits, which is antithetical to the HEAR Act’s putative goals.

This Note argues that for the HEAR Act to provide the relief it ostensibly envisions, the doctrine of laches should be precluded as an available defense. Alternatively, the ability to assert the defense should be restricted to those parties who acquired contested artwork in true good faith. By revising the HEAR Act accordingly, a “just and fair” solution can be achieved.

Introduction

The destruction of Jewish cultural and economic identity was an integral component of the Nazi regime’s genocidal campaign.¹ 1.Ori Z. Soltes, Cultural Plunder and Restitution and Human Identity, 15 J. Marshall Rev. Intell. Prop. L. 460, 461–62 (2016).Show More The Nazis partly carried out this aim through the systematic looting of artwork, stripping the Jewish population of their possessions and casting them as outsiders.² 2.See Jonathan Petropoulos, Art as Politics in the Third Reich 14, 92–94 (1996); discussion infra Part I.Show More The scale of the theft highlights its importance to the Nazis—in 1948, the United States estimated that it had found approximately 10.7 million looted art and cultural objects.³ 3.Presidential Advisory Comm’n on Holocaust Assets in the U.S., Plunder and Restitution: The U.S. and Holocaust Victims’ Assets (2000), at SR–97 [hereinafter Commission Report].Show More The United States and European governments set up restitution programs,⁴ 4.Id. at SR–137 to SR–139.Show More though these efforts soon gave way to a focus on the Cold War.⁵ 5.See Nicholas M. O’Donnell, A Tragic Fate: Law and Ethics in the Battle Over Nazi-Looted Art, at xi (2017).Show More After the Soviet Union fell, however, interest re-emerged in the Holocaust, as Allied governments declassified archives and scholars devoted attention to the unresolved problem of Nazi-looted art.⁶ 6.See Commission Report, supra note 3, at 4–5; O’Donnell, supra note 5, at 29, 46; Phillipe de Montebello, Dir., Metro. Museum of Art, Panel at National Press Club Luncheon: Art Plundered During the Holocaust (July 14, 1998), transcript available at https://www.metmuseum.org/-/media/files/about-the-met/provenance-research/philippe-de-montebello-transcript.pdf [https://perma.cc/7V4W-57G9]) (commenting that “the fall of the Iron Curtain” led to “the declassification of a host of national archives”).Show More In 1998, at the Washington Conference on Holocaust-Era Assets, the representatives of forty-four countries, including the United States, agreed to a set of guidelines known as the Washington Principles.⁷ 7.See U.S. Dep’t of State & U.S. Holocaust Memorial Museum, Proceedings of the Washington Conference on Holocaust-Era Assets, app. G., at 791–92 (1998) [hereinafter Washington Principles]; Stuart E. Eizenstat, Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II, at 196–99 (2003).Show More This document set forth the parameters for countries to work within their own legal systems to promote the “just and fair” resolution of claims for Nazi-looted art.⁸ 8.Washington Principles, supra note 7, at 972 (Principles VIII & IX).Show More Since the adoption of the Washington Principles, United States courts have heard a growing number of cases seeking the restitution of artwork stolen by the Nazis.⁹ 9.See infra Part II.Show More

Despite the United States’ commitment to the Washington Principles, time-based defenses like the statute of limitations and its equitable counterpart, the doctrine of laches, have been used to bar many of these claims.¹⁰ 10.See id.Show More A laches defense is intended to prevent a claimant from delaying in asserting her rights in a way that—in the context of this Note—harms the party in possession of disputed artwork.¹¹ 11.The doctrine is an application of equity’s maxim that its jurisdiction is meant to “aid[] the vigilant.” See Bert Demarsin, Has the Time (of Laches) Come? Recent Nazi-Era Art Litigation in the New York Forum, 59 Buff. L. Rev. 621, 627 n.28 (2011) (citing Stone v. Williams, 873 F.2d 620, 623 (2d Cir. 1989)).Show More Recognizing the obstacles posed by time-based defenses, Congress acted in 2016 to reduce the difficulties descendants face in obtaining restitution.¹² 12.See Holocaust Expropriated Art Recovery Act of 2016, Pub. L. No. 114-308, § 3(2), 130 Stat. 1524, 1526.Show More The resulting legislation, the Holocaust Expropriated Art Recovery Act (“HEAR Act”), set a federal statute of limitations for actions seeking the recovery of Nazi-looted art.¹³ 13.Id. § 5(a). The most common claims are for replevin and conversion. See, e.g., Zuckerman v. Metro. Museum of Art, 307 F. Supp. 3d 304, 315 (S.D.N.Y. 2018), aff’d on other grounds, 928 F.3d 186 (2d Cir. 2019), cert. denied, 140 S. Ct. 1269 (2020) (mem.). For a summary of these causes of action, see Emily J. Henson, Comment, The Last Prisoners of War: Returning World War II Art to Its Rightful Owners—Can Moral Obligations Be Translated Into Legal Duties?, 51 DePaul L. Rev. 1103, 1137–41 (2002).Show More This six-year limitations period starts running when a claimant gains knowledge of the “identity and location of the artwork” and “a possessory interest” in the artwork.¹⁴ 14.Holocaust Expropriated Art Recovery Act § 5(a).Show More However, the HEAR Act’s final text did not address laches.¹⁵ 15.See id. Compared to the initial draft discussed infra Section I.C, there is no mention of equitable defenses or the doctrine of laches in the Act’s operative provision.Show More Legislative history suggests that Congress intended for the defense to remain available. The initial draft explicitly precluded the doctrine of laches,¹⁶ 16.S. 2763, 114th Cong. § 5(a) (2016).Show More but the enacted bill removed this language.¹⁷ 17.Holocaust Expropriated Art Recovery Act § 5(a).Show More Congress knew that the change would restrict the HEAR Act’s impact and allow laches to frustrate the efforts of the very families the Act purported to help.¹⁸ 18.S. 2763, the Holocaust Expropriated Art Recovery Act—Reuniting Victims with Their Lost Heritage: Hearing on S. 2763 Before the S. Subcomm. on the Const., Subcomm. on Oversight, Agency Action, Fed. Rts. & Fed. Cts., 114th Cong. 2–3 (2016) (statement of Agnes Peresztegi, President, Comm’n for Art Recovery), https://www.judiciary.senate.gov/­meetings/s-2763-the-holocaust-expropriated-art-recovery-act_reuniting-victims-with-their-lost-heritage [https://perma.cc/ETQ7-S8AQ] [hereinafter Peresztegi Testimony] (To access the hearing transcript, click on the first hyperlink and scroll down to the various witnesses. Under each witness is a link to the transcript of that individual’s hearing testimony. The second “permanent” hyperlink links directly to the cited hearing testimony transcript.).Show More

This Note focuses on Congress’s decision to leave laches intact—along with its consequences for claimants—and two possible revisions to the HEAR Act. By making the statute of limitations a non-issue in many disputes, Congress sought to ensure that these cases would be decided on the merits, thereby increasing the availability of restitution. Leaving laches intact, however, undermines that goal. A successful laches defense requires the party in possession¹⁹ 19.The labels for the party seeking restitution and the party currently in possession of the artwork will occasionally change throughout the text. For the party in possession, this Note will generally use “possessor” and, in certain contexts, “purchaser.” For the party seeking restitution, this Note will use “claimant,” “victim,” or “descendant.” “Plaintiff” and “defendant,” while simple, do not always reflect the claimant and possessor, as some current possessors will bring declaratory suits as the plaintiff. See, e.g., Bakalar v. Vavra, 819 F. Supp. 2d 293, 294 (S.D.N.Y. 2011), aff’d, 500 F. App’x 6 (2d Cir. 2012).Show More of the artwork to show: (1) that the claimant unreasonably delayed in bringing suit against the possessor, and (2) that the delay caused prejudice to the possessor.²⁰ 20.Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187, 192 (2d Cir. 1996) (citing Tri-Star Pictures, Inc. v. Leisure Time Prods., B.V., 17 F.3d 38, 44 (2d Cir. 1994); Saratoga Vichy Spring Co. v. Lehman, 625 F.2d 1037, 1040 (2d Cir. 1980)).Show More This defense is frequently easy for possessors of Nazi-looted art to demonstrate. These claims are inevitably delayed because the world largely treated art restitution as “a closed chapter” for half a century after World War II.²¹ 21.S. 2763, the Holocaust Expropriated Art Recovery Act—Reuniting Victims with Their Lost Heritage: Hearing on S. 2763 Before the S. Subcomm. on the Const., Subcomm. on Oversight, Agency Action, Fed. Rts. and Fed. Cts., 114th Cong. 1 (2016) (statement of Monica Dugot, Int’l Dir. of Restitution, Senior Vice President, Christie’s Inc.), https://www.judiciary.senate.gov/meetings/s-2763-the-holocaust-expropriated-art-recovery-act_reuniting-victims-with-their-lost-heritage [https://perma.cc/2TY6-KZY4] (To access the hearing transcript, click on the first hyperlink and scroll down to the various witnesses. Under each witness is a link to the transcript of that individual’s hearing testimony. The second “permanent” hyperlink links directly to the quoted hearing testimony transcript.).Show More Moreover, possessors can show prejudice based on lost evidence, as potential witnesses have passed away in the intervening decades. Even though such circumstances are inherent to these claims, courts have held that the doctrine of laches should prevent resolution on the merits.

Since passage of the HEAR Act, the tension between the legislation’s purpose to grant relief and the availability of laches has played out in two cases. The first, Zuckerman v. Metropolitan Museum of Art, in the Second Circuit, demonstrates how a laches defense can decide a dispute otherwise capable of resolution on the merits.²² 22.928 F.3d 186, 193–94 (2d Cir. 2019).Show More The second, Reif v. Nagy, in New York state courts, shows how an expansive, albeit incorrect, purposive reading of the HEAR Act can sidestep laches and facilitate relief on the merits.²³ 23.80 N.Y.S.3d 629, 634–35 (N.Y. Sup. Ct. 2018) (taking note of the guidance provided by the HEAR Act’s purpose and holding that laches is unavailable); see also Simon J. Frankel & Sari Sharoni, Navigating the Ambiguities and Uncertainties of the Holocaust Expropriated Art Recovery Act of 2016, 42 Colum. J.L. & Arts 157, 176–77 (2019) (concluding that Reif held laches unavailable under the HEAR Act).Show More Recently, the appellants in Zuckerman had their petition for certiorari to the Supreme Court denied,²⁴ 24.Zuckerman v. Metro. Museum of Art, 140 S. Ct. 1269 (2020) (mem.).Show More meaning that the availability of laches under the HEAR Act is now binding precedent in the Second Circuit. Reif, on the other hand, signals that the New York state courts may prove to be a more hospitable forum for claimants going forward.

It is not too late to aid survivors and their families in their quest for justice. Over a year after passing the HEAR Act, Congress enacted the Justice for Uncompensated Survivors Today (JUST) Act of 2017.²⁵ 25.Pub. L. No. 115-171, 132 Stat. 1288 (2018).Show More The JUST Act directs the State Department to report on the steps taken by countries that, like the United States, have themselves committed to promoting restitution for Holocaust survivors.²⁶ 26.Id. § 2(b).Show More And in early 2020, New York Governor Andrew Cuomo announced a conference “aimed at improving the State’s ability to help recover works of art and other property lost due to Nazi persecution.”²⁷ 27.Press Release, Governor Andrew M. Cuomo, On Holocaust Remembrance Day, Governor Cuomo Announces International Conference Aimed at Helping Victims of Nazi Crimes Recover Stolen Property (Jan. 27, 2020), https://www.governor.ny.gov/news/holocaust-remembrance-day-governor-cuomo-announces-international-conference-aimed-helping [https://perma.cc/ZR3S-TM86].Show More Congress should build on the political will in this area of bipartisan consensus²⁸ 28.Press Release, Senator Ted Cruz, Sens. Cruz, Cornyn Praise Unanimous Passage of the Bipartisan HEAR Act, (Dec. 10, 2016), https://www.cruz.senate.gov/?p=press_release&­id=2916 [https://perma.cc/3326-7EVS].Show More and modify the HEAR Act to ensure that claimants are able to resolve their claims on the merits.

Part I of this Note provides a brief history of Nazi looting as well as a history of the Washington Principles and other international and domestic initiatives prior to the HEAR Act. This background illustrates the moral and legal issues that Congress designed the Act to address. The remainder of Part I traces the HEAR Act’s legislative history and the explanations Congress did and did not offer for setting a statute of limitations while leaving laches untouched.

Part II then discusses a sample of the case law in the state and federal courts of New York, the international art capital of the world. Courts in New York have had frequent occasion to consider the application of laches to claims for artwork looted during World War II due to the state’s “demand and refusal” rule.²⁹ 29.See discussion infra Section II.A. Under this rule, the statute of limitations does not begin to run until the claimant demands that the possessor return the artwork, and the possessor refuses that demand. See Menzel v. List, 267 N.Y.S.2d 804, 809 (N.Y. Sup. Ct. 1966). As a result, laches has been invoked to reduce the potential unfairness that results from such a generous limitations period. Demarsin, supra note 11, at 621–22, 658.Show More

Part III presents the argument briefly described above—that application of the doctrine of laches to claims for restitution of Nazi-looted art is irreconcilable with the HEAR Act and the Washington Principles. Part III then proposes two solutions. The first, and preferable, solution is to preclude a laches defense entirely, faithful to the first draft of the HEAR Act. This would guarantee that the Act fulfills the Washington Principles’ call to promote “a just and fair” solution.³⁰ 30.Washington Principles, supra note 7, at 792 (Principles XIII & IX).Show More As a more moderate solution, courts should be directed to inquire into whether a possessor sufficiently investigated title to contested artwork. This will allow courts to determine whether current possessors acquired artwork in true good faith, or whether they have dealt in Nazi-looted art when problems with a piece’s provenance³¹ 31.“Provenance is a technical art world term meaning documentation of origin or history of ownership.” Kelly Diane Walton, Leave No Stone Unturned: The Search for Art Stolen by the Nazis and the Legal Rules Governing Restitution of Stolen Art, 9 Fordham Intell. Prop. Media & Ent. L.J. 549, 551–52 (1999). Provenance as used in this Note is therefore distinct from the actual ownership history of a work.Show More should have been apparent. Only when a possessor exercised appropriate diligence would a laches defense be available.

1. * J.D., University of Virginia School of Law, 2020. I am grateful to Professor Julia Mahoney for her guidance throughout the drafting of this Note. Thank you to Samantha Caravello, Read Mills, and Anna Rennich for their thoughtful comments on earlier versions. I also owe thanks to the members of the Virginia Law Review, especially Andrew Kintner, for diligent editing and insightful feedback. All errors are my own. ↑
2. Ori Z. Soltes, Cultural Plunder and Restitution and Human Identity, 15 J. Marshall Rev. Intell. Prop. L. 460, 461–62 (2016). ↑
3. See Jonathan Petropoulos, Art as Politics in the Third Reich 14, 92–94 (1996); discussion infra Part I. ↑
4. Presidential Advisory Comm’n on Holocaust Assets in the U.S., Plunder and Restitution: The U.S. and Holocaust Victims’ Assets (2000), at SR–97 [hereinafter Commission Report]. ↑
5. Id. at SR–137 to SR–139. ↑
6. See Nicholas M. O’Donnell, A Tragic Fate: Law and Ethics in the Battle Over Nazi-Looted Art, at xi (2017). ↑
7. See Commission Report, supra note 3, at 4–5; O’Donnell, supra note 5, at 29, 46; Phillipe de Montebello, Dir., Metro. Museum of Art, Panel at National Press Club Luncheon: Art Plundered During the Holocaust (July 14, 1998), transcript available at https://www.metmuseum.org/-/media/files/about-the-met/provenance-research/philippe-de-montebello-transcript.pdf [https://perma.cc/7V4W-57G9]) (commenting that “the fall of the Iron Curtain” led to “the declassification of a host of national archives”). ↑
8. See U.S. Dep’t of State & U.S. Holocaust Memorial Museum, Proceedings of the Washington Conference on Holocaust-Era Assets, app. G., at 791–92 (1998) [hereinafter Washington Principles]; Stuart E. Eizenstat, Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II, at 196–99 (2003). ↑
9. Washington Principles, supra note 7, at 972 (Principles VIII & IX). ↑
10. See infra Part II. ↑
11. See id. ↑
12. The doctrine is an application of equity’s maxim that its jurisdiction is meant to “aid[] the vigilant.” See Bert Demarsin, Has the Time (of Laches) Come? Recent Nazi-Era Art Litigation in the New York Forum, 59 Buff. L. Rev. 621, 627 n.28 (2011) (citing Stone v. Williams, 873 F.2d 620, 623 (2d Cir. 1989)). ↑
13. See Holocaust Expropriated Art Recovery Act of 2016, Pub. L. No. 114-308, § 3(2), 130 Stat. 1524, 1526. ↑
14. Id. § 5(a). The most common claims are for replevin and conversion. See, e.g., Zuckerman v. Metro. Museum of Art, 307 F. Supp. 3d 304, 315 (S.D.N.Y. 2018), aff’d on other grounds, 928 F.3d 186 (2d Cir. 2019), cert. denied, 140 S. Ct. 1269 (2020) (mem.). For a summary of these causes of action, see Emily J. Henson, Comment, The Last Prisoners of War: Returning World War II Art to Its Rightful Owners—Can Moral Obligations Be Translated Into Legal Duties?, 51 DePaul L. Rev. 1103, 1137–41 (2002). ↑
15. Holocaust Expropriated Art Recovery Act § 5(a). ↑
16. See id. Compared to the initial draft discussed infra Section I.C, there is no mention of equitable defenses or the doctrine of laches in the Act’s operative provision. ↑
17. S. 2763, 114th Cong. § 5(a) (2016). ↑
18. Holocaust Expropriated Art Recovery Act § 5(a). ↑
19. S. 2763, the Holocaust Expropriated Art Recovery Act—Reuniting Victims with Their Lost Heritage: Hearing on S. 2763 Before the S. Subcomm. on the Const., Subcomm. on Oversight, Agency Action, Fed. Rts. & Fed. Cts., 114th Cong. 2–3 (2016) (statement of Agnes Peresztegi, President, Comm’n for Art Recovery), https://www.judiciary.senate.gov/­meetings/s-2763-the-holocaust-expropriated-art-recovery-act_reuniting-victims-with-their-lost-heritage [https://perma.cc/ETQ7-S8AQ] [hereinafter Peresztegi Testimony] (To access the hearing transcript, click on the first hyperlink and scroll down to the various witnesses. Under each witness is a link to the transcript of that individual’s hearing testimony. The second “permanent” hyperlink links directly to the cited hearing testimony transcript.). ↑
20. The labels for the party seeking restitution and the party currently in possession of the artwork will occasionally change throughout the text. For the party in possession, this Note will generally use “possessor” and, in certain contexts, “purchaser.” For the party seeking restitution, this Note will use “claimant,” “victim,” or “descendant.” “Plaintiff” and “defendant,” while simple, do not always reflect the claimant and possessor, as some current possessors will bring declaratory suits as the plaintiff. See, e.g., Bakalar v. Vavra, 819 F. Supp. 2d 293, 294 (S.D.N.Y. 2011), aff’d, 500 F. App’x 6 (2d Cir. 2012). ↑
21. Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187, 192 (2d Cir. 1996) (citing Tri-Star Pictures, Inc. v. Leisure Time Prods., B.V., 17 F.3d 38, 44 (2d Cir. 1994); Saratoga Vichy Spring Co. v. Lehman, 625 F.2d 1037, 1040 (2d Cir. 1980)). ↑
22. S. 2763, the Holocaust Expropriated Art Recovery Act—Reuniting Victims with Their Lost Heritage: Hearing on S. 2763 Before the S. Subcomm. on the Const., Subcomm. on Oversight, Agency Action, Fed. Rts. and Fed. Cts., 114th Cong. 1 (2016) (statement of Monica Dugot, Int’l Dir. of Restitution, Senior Vice President, Christie’s Inc.), https://www.judiciary.senate.gov/meetings/s-2763-the-holocaust-expropriated-art-recovery-act_reuniting-victims-with-their-lost-heritage [https://perma.cc/2TY6-KZY4] (To access the hearing transcript, click on the first hyperlink and scroll down to the various witnesses. Under each witness is a link to the transcript of that individual’s hearing testimony. The second “permanent” hyperlink links directly to the quoted hearing testimony transcript.). ↑
23. 928 F.3d 186, 193–94 (2d Cir. 2019). ↑
24. 80 N.Y.S.3d 629, 634–35 (N.Y. Sup. Ct. 2018) (taking note of the guidance provided by the HEAR Act’s purpose and holding that laches is unavailable); see also Simon J. Frankel & Sari Sharoni, Navigating the Ambiguities and Uncertainties of the Holocaust Expropriated Art Recovery Act of 2016, 42 Colum. J.L. & Arts 157, 176–77 (2019) (concluding that Reif held laches unavailable under the HEAR Act). ↑
25. Zuckerman v. Metro. Museum of Art, 140 S. Ct. 1269 (2020) (mem.). ↑
26. Pub. L. No. 115-171, 132 Stat. 1288 (2018). ↑
27. Id. § 2(b). ↑
28. Press Release, Governor Andrew M. Cuomo, On Holocaust Remembrance Day, Governor Cuomo Announces International Conference Aimed at Helping Victims of Nazi Crimes Recover Stolen Property (Jan. 27, 2020), https://www.governor.ny.gov/news/holocaust-remembrance-day-governor-cuomo-announces-international-conference-aimed-helping [https://perma.cc/ZR3S-TM86]. ↑
29. Press Release, Senator Ted Cruz, Sens. Cruz, Cornyn Praise Unanimous Passage of the Bipartisan HEAR Act, (Dec. 10, 2016), https://www.cruz.senate.gov/?p=press_release&­id=2916 [https://perma.cc/3326-7EVS]. ↑
30. See discussion infra Section II.A. Under this rule, the statute of limitations does not begin to run until the claimant demands that the possessor return the artwork, and the possessor refuses that demand. See Menzel v. List, 267 N.Y.S.2d 804, 809 (N.Y. Sup. Ct. 1966). As a result, laches has been invoked to reduce the potential unfairness that results from such a generous limitations period. Demarsin, supra note 11, at 621–22, 658. ↑
31. Washington Principles, supra note 7, at 792 (Principles XIII & IX). ↑
32. “Provenance is a technical art world term meaning documentation of origin or history of ownership.” Kelly Diane Walton, Leave No Stone Unturned: The Search for Art Stolen by the Nazis and the Legal Rules Governing Restitution of Stolen Art, 9 Fordham Intell. Prop. Media & Ent. L.J. 549, 551–52 (1999). Provenance as used in this Note is therefore distinct from the actual ownership history of a work. ↑