Germany Prevails at Supreme Court in Dispute Over Jewish Art Extorted by Nazis

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February 3, 2021

The Supreme Court on Wednesday gave the German government a partial victory in a dispute over valuable art that the Nazis extorted from Jewish dealers.

At stake in Wednesday's case was whether the dealers' heirs can sue German authorities in American courts. Chief Justice John Roberts delivered Wednesday's opinion for a unanimous Court, which turned down the heirs' primary argument but kept their case alive on alternative grounds.

Top Nazi officer Hermann Göring acquired the collection, called the Welfenschatz, in 1935 for just a fraction of its value. Descendants of the dealers say their ancestors were strong-armed into the sale, fearing Nazi persecution. The Welfenschatz is today displayed at a museum in Berlin, and its value is pegged at around $250 million. A related case before the High Court involved a lawsuit against a Hungarian railroad company that transported Jewish people to concentration camps.

Foreign countries are immune from most lawsuits in American courts. But there's an exception for cases involving property "taken in violation of international law." The heirs said the Nazis seized the Welfenschatz as part of their genocidal campaign against German Jews—a violation of international law—and therefore the exception covers their case.

Germany countered that the exception only applies to instances in which one state takes property from citizens of a different state. The art dealers were German subjects at the time of the sale, Germany argued, so the exception doesn't apply and the case ought to be dismissed.

Writing for the Court, Roberts said Germany had the better argument about the meaning of the exception.

"A taking of property could be wrongful under international law only where a state deprived an alien of property," Roberts wrote, elsewhere noting that the exception "places repeated emphasis on property and property-related rights, while injuries and acts we might associate with genocide are notably lacking."

Roberts also said the High Court tries to avoid creating friction with other countries when resolving cases touching diplomatic relations. Reading the exception broadly, as the heirs proposed, would aggravate Germany and expose the United States to retaliation in foreign courts, Roberts warned.

"We would be surprised—and might even initiate reciprocal action—if a court in Germany adjudicated claims by Americans that they were entitled to hundreds of millions of dollars because of human rights violations committed by the United States Government years ago," the decision reads. "There is no reason to anticipate that Germany’s reaction would be any different were American courts to exercise the jurisdiction claimed in this case."

But the Court added that a special historical factor could salvage the heirs' case. Around the time of the Welfenschatz sale, the Nazi government stripped German Jews of citizenship. If the art dealers weren't German citizens at the time of the sale, then the sale can't be construed as a purely domestic issue beyond the scope of international law. Roberts directed a lower court to explore that issue as the case moves forward.

Wednesday's cases are No. 19-351 Germany v. Philipp and No. 18-1447 Hungary v. Simon. 

Published under: Germany , Supreme Court