Woman Can Sue Austria Over Art Seized by Nazis

An elderly Los Angeles woman who has fought for years to recover six paintings worth an estimated $150 million that were seized by the Nazis from her family in Vienna in 1939 is entitled to proceed in court against the government of Austria, the U.S. Supreme Court ruled Monday.

Austria, supported by the U.S. Justice Department, had argued that it was immune under a federal law designed to block most suits against foreign governments in U.S. courts.

But the justices, ruling 6 to 3, disagreed, siding instead with 88-year-old Maria V. Altmann, a former dress shop owner in Los Angeles who arrived here as a refugee in 1942.

The contested paintings, by Austrian artist Gustav Klimt, have been on display in the Austrian Gallery, a national museum that is a government entity. The most famous one depicts Adele Bloch-Bauer, a prominent patron of the arts in prewar Vienna, who died in 1925 and was Altmann’s aunt.

“It is totally wonderful that justice seems to prevail,” a jubilant Altmann said. “This is not totally a Jewish case. It is a case of justice,” she emphasized in a telephone interview.

“I never expected this decision,” Altmann said Monday. “I was hoping for it, but I was not counting on it.”

Altmann’s victory may open courtrooms for other Holocaust survivors and heirs of people who perished. Already, for example, survivors and their families have filed suit in New York federal courts against the French and Polish governments stemming from actions that occurred during the Nazi era, said Michael Bazyler, a professor at Whittier Law School and the author of “Holocaust Justice: The Battle for Restitution in America’s Courts.”

The ruling also might allow a trial of claims by women who have sued Japan over allegations that they were used as sex slaves by the Japanese armed forces during World War II.

However, in each of those cases, as in Altmann’s case, the governments involved still have other substantial legal defenses.

Altmann said she hoped the Austrian government would now be willing to negotiate a settlement that would allow the paintings eventually to hang in galleries in the United States and Canada, where some of her relatives live.

Scott Cooper, of Proskauer Rose in Century City, who represents Austria, said the government had made “no decisions on the next steps.” He emphasized, however, that the high court’s ruling left several important legal issues unresolved. The Austrian government has maintained that the paintings “are national treasures and part of the cultural heritage of the Republic.”

The paintings belonged to Altmann’s uncle, Ferdinand Bloch-Bauer, a wealthy Jewish sugar magnate, arts patron and foe of the Nazis. He fled Vienna in 1938 as Hitler was on the verge of annexing Austria and died in poverty in Zurich in 1945.

Bloch-Bauer received no compensation for the paintings, his home, a valuable porcelain collection or the sugar factory he left behind. Some of his 19th century paintings were sent to Hitler and Hermann Goering, one of Hitler’s top aides.

The shimmering gold “Portrait of Adele Bloch-Bauer I,” painted by Klimt at the request of Ferdinand Bloch-Bauer and now estimated to be worth $50 million to $60 million, is one of the central holdings of the Austrian Gallery. It appears on promotional materials for the museum and has been made even more widely known by its use as a marketing tool for other items -- including a line of women’s clogs.

Altmann grew up viewing the painting. “I saw it every Sunday when I went to my aunt’s house for lunch in Vienna,” she said. After the Nazi takeover of Austria, Altmann, then 22, escaped. By 1942, she had made her way to California and three years later became a U.S. citizen.

In 1998, Altmann began trying to get the paintings back. After two years of unsuccessful negotiations, she went to court. Her suit, filed by E. Randall Schoenberg of Los Angeles’ Burris & Schoenberg, contends that the Nazis, in violation of international law, took the paintings to “Aryanize” them and that the Austrian government of that era was complicit in the seizure from Altmann’s uncle.

The suit also contends that the current Austrian government deceived Altmann and other heirs of her uncle about how it had obtained the paintings.

Austria’s attorneys contend that Adele Bloch-Bauer in her will had asked Ferdinand to give the Klimt paintings to the Austrian Gallery after her death. Altmann counters that Adele was simply airing a desire that had no binding effect and that her uncle “never would have donated anything to Austria after the way he had been treated.” Ferdinand specified in his will that his large estate be shared by two nieces and a nephew, of whom Altmann is the only one still living.

Both a U.S. district judge and the U.S. 9th Circuit Court of Appeals had ruled that Altmann had a right to take her claims to trial. But Austria and the Justice Department asked the Supreme Court to review the case.

In the high court’s ruling, Justice John Paul Stevens said that while the federal Foreign Sovereign Immunities Act of 1976 normally bars cases against foreign governments in the U.S., the law has exceptions. Altmann’s case fits one of those, known as the “expropriation exception,” Stevens wrote.

Still, Stevens emphasized that the holding was narrow and that the Austrian government might yet be able to use other defenses that have not yet been considered in court.

Three justices, led by Anthony Kennedy, dissented, saying the ruling could hurt U.S. relations with foreign governments.

Indeed, both the governments of Japan and Mexico had filed briefs with the justices asking them to rule in Austria’s favor. Mexico faces a suit by former participants in the cross-border bracero program who claim they were defrauded of money they were owed.

Stuart E. Eizenstat, former U.S. deputy treasury secretary who served as the U.S. special envoy on Holocaust reparations during the Clinton administration, said the ruling had given him “a severe case of schizophrenia.”

On the one hand, Eizenstat said, “it does advance human rights, it does help Mrs. Altmann.” But the ruling “complicates our foreign policy” with Austria and other countries, such as France and Poland, that are defendants in Holocaust-related litigation in U.S. courts, he said.

Moreover, Eizenstat said, the ruling might prompt other countries “to pass mirror-image laws” that allow their citizens to sue the U.S. government for alleged wrongdoing.

So far, he said, the Austrian government has made $300 million in payments in cases involving slave and forced labor and $150 million in compensation for seized goods, including jewelry and furniture.

An additional $200 million in payments for seized property is the subject of a pending case in a New York federal court. The resolution of that case might be delayed by Monday’s ruling, Eizenstat said.

New York attorney Howard Spiegler, co-chairman of the international art department of Herrick, Feinstein, LLP, a law firm that has handled many high-profile art recovery cases, called the ruling “very significant.”

“I think it will affect anyone or any family who seeks restitution of any property that it alleges has been expropriated by a foreign government and is currently in the hands of a foreign government,” Spiegler said. “And the real significance is that the time when that expropriation occurred is essentially irrelevant -- that was really the main aspect of the court’s decision.”

Sharon Flescher, executive director of the International Foundation for Art Research in New York, an organization that deals with questions about the authentication and ownership of art, noted that the ruling deals only with artworks housed in foreign museums.

Because of that, the decision would not affect most current legal disputes over ownership of paintings and other artworks that were seized by the Nazis and unwittingly acquired by museums in the United States, she said.

Most major museums, including the Getty Museum, the Los Angeles County Museum of Art and the Norton Simon Museum in Pasadena, have been making a concerted effort to identify Nazi-looted artworks and make restitution to the owners since 1998, when the American Assn. of Museum Directors issued guidelines on the matter after a handful of well-publicized claims by Jewish heirs.

Both the Getty and LACMA provide information on their websites that identifies artworks in their collections that have gaps in their Nazi-era “provenance,” or ownership records.

Cooper, the lawyer for Austria, said he was disappointed in Monday’s ruling. He had argued that the case should be dismissed and that if it was going to be heard anywhere, it should be in Austria.

Schoenberg said he hoped to get the case to trial by the end of this year, noting that his client already had been the subject of an extensive deposition.

Times staff writers Diane Haithman and Suzanne Muchnic contributed to this report.