Klimt Art Suit May Proceed, Court Says

A federal appeals court ruled Thursday that an elderly West Los Angeles woman is entitled to go forward with a lawsuit against Austria in which she seeks to recover six paintings worth $150 million seized by the Nazis in 1939.

The 3-0 decision marked the first time in Holocaust reparations litigation that a federal appeals court has ruled that a foreign government can be held accountable in a U.S. court.

“This is a milestone in Holocaust restitution litigation,” said Whittier Law School professor Michael Bazyler, an expert on such litigation.

The U.S. 9th Circuit Court of Appeals in San Francisco rejected Austria’s contention that it was protected by a federal law that normally shields foreign countries from lawsuits in U.S. courts.

The 9th Circuit also spurned Austria’s argument that if plaintiff Maria V. Altmann is entitled to a trial, it should be held in Austria because the case involves events that occurred there, and the contested paintings by Austrian artist Gustav Klimt are now displayed in the government-run Austrian Gallery in Vienna.

Altmann, who fled to California after the Nazi takeover of Austria in 1938, should get a chance to prove that the paintings were taken in violation of international law, the court ruled.

“I’m totally thrilled,” Altmann said Thursday. “I’m so absolutely grateful to this country and the judges.” Altmann said that she had tried to reach a compromise with the Austrian government four years ago without success and that her stance on the issue has intensified since.

“I want those paintings to be in American and Canadian museums,” she said. In particular, Altmann said she hoped that some day one of the paintings would hang in the Getty. “That’s my dream.”

The Austrian government maintains that the paintings at issue “are national treasures and part of the cultural heritage of the Republic [of Austria].”

“This is an unprecedented victory and we are very happy with it,” said Altmann’s attorney E. Randol Schoenberg. Schoenberg said his pleasure was tempered by the fact that the case is now 2 years old, his client is nearly 87 and there is no imminent prospect of a trial because he expects Austria to appeal to the U.S. Supreme Court.

Los Angeles attorney Scott Cooper, who represents Austria, said that because he had not had a chance to speak with his client, he could not comment.

Other Holocaust suits involving art, bank accounts, insurance and slave labor, have been settled out of court.

In a detailed ruling, Judge Kim M. Wardlaw said that the illegal seizure of the paintings from Altmann’s uncle, Ferdinand Bloch-Bauer -- fell within the “expropriation exception” of the Foreign Sovereign Immunities Act -- the law under which Austria had claimed protection.

Wardlaw emphasized that compelling Altmann to sue in Austria would present major practical problems. Under Austrian legal rules, Altmann, who has been trying to recover the paintings for years, would have to pay at least a $135,000 fee to file her suit there, compared to $150 in the U.S. Secondly, Altmann’s claims probably would be barred in Austria because of a 30-year statute of limitations.

The lawsuit contends that the Nazis took the paintings to “Aryanize” them in violation of international law, and that the Austrian government of that era was complicit in the seizure. Altmann alleges that the current Austrian government deceived her and her uncle’s other heirs about how it had obtained the paintings. And Altmann contends that the Austrian government and the Austrian Gallery wrongfully claim ownership of the paintings.

“Altmann has alleged sufficient facts, which if proven, would demonstrate that the Klimt paintings were taken in violation of international law,” Wardlaw wrote. “The Nazis did not even pretend to take the Klimt paintings for a public purpose,” the judge added.

Altmann’s uncle was a Jewish sugar magnate who had supported anti-Nazi activities and fled Austria after Hitler annexed the country.

Thursday’s decision upholds a decision by U.S. District Judge Florence-Marie Cooper who ruled last year that a U.S. court had jurisdiction to hear the case.

While acknowledging the general rule that foreign nations are immune from suit in the U.S., Cooper said there was an exception when property is taken in violation of international law, when it is owned or operated by an agency of the foreign country, and when the agency is engaged in commercial activity in the U.S. The appeals court agreed.

Wardlaw noted that in 2000, the Austrian Gallery, in affiliation with Yale University Press, published a book in the U.S. titled “Klimt’s Women.” The book includes some of the paintings that are the subject of Altmann’s lawsuit.

In addition, the Austrian Gallery publishes a guidebook in English that can be purchased in the U.S. Featured on the cover is Klimt’s “Adele Bloch-Bauer I,” a full-length gold painting of Altmann’s aunt, a prominent art collector. Considered one of Klimt’s two best-known paintings, it is valued at $50 million to $60 million and is one of the paintings at issue in Altmann’s lawsuit.

Austria’s attorneys asserted that Adele Bloch-Bauer, who died in 1925, had requested in her will that her husband, Ferdinand, give the Klimt paintings to the Austria Gallery after her death. Altmann countered that Ferdinand, who died in Zurich in 1945, specified in his will that his substantial estate would be divided among two nieces and a nephew. Altmann is the only one of the three still living.

Ferdinand received no compensation for the paintings, his home, a valuable porcelain collection or the sugar factory he left behind when he fled Austria. Some of his 19th century paintings were sent to Adolf Hitler and Hermann Goering, one of Hitler’s chief aides.

After World War II ended, Austria declared that all transactions motivated by discriminatory ideology were null and void, but government officials said the decree did not apply to the Klimt paintings. Austrian law prohibited the export of artworks deemed important to the country’s cultural heritage.

In December 1998, Austria enacted a law providing for the restitution of art objects seized during the Nazi era. The Altmann family recovered some pieces, including valuable porcelains. But the state-run Austrian Gallery continues to maintain that it is entitled to keep the Klimt paintings because of the desires expressed by Adele Bloch-Bauer in her will.

Altmann’s suit contends that Adele was merely voicing a desire that has no binding effect, and that her uncle “never would have donated anything to Austria after the way he had been treated.”

After hearing oral arguments last March on Austria’s appeal of Cooper’s ruling, the 9th Circuit, in an unusual move, ordered the two sides to participate in court-ordered mediation. But that initiative failed after one session, setting the stage for Thursday’s ruling.

Judges William Fletcher and Ronald Whyte joined Wardlaw’s opinion.