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Justices to Consider Suit to Recover Art Looted by Nazis (1)

July 2, 2020, 2:07 PMUpdated: July 2, 2020, 2:30 PM

The Supreme Court will consider protections for foreign countries from civil action in the U.S., agreeing to hear a German agency’s appeal of a ruling that it must face suit over the sale of art looted by the Nazis.

The justices agreed Thursday to take up the matter that turns on the interpretation of the Foreign Sovereign Immunities Act, which generally protects overseas governments and their agencies from lawsuits.

The U.S. Court of Appeals for the D.C. Circuit found that the “expropriation exception” allowed the suit in this case. That exception permits suits when property was taken “in violation of international law” and there is a sufficient commercial relationship between the U.S. and the foreign state.

Invoking that exception, the D.C. Circuit said the German art agency must face suit in the U.S. brought by heirs of Jewish art dealers who say they were coerced into selling a prominent collection of “medieval reliquary art” for a fraction of its value.

A 1935 Baltimore Sun article reported that the collection was eventually gifted to Adolf Hitler as a “surprise gift,” according to the heirs. The treasure is now on display in a Berlin museum.

The U.S. solicitor general’s office urged the justices to take the case and to ultimately side with Germany.

The U.S. “deplores” the atrocities committed by the Nazi regime, but allowing suits like these to go forward would have serious foreign relations consequences by “embroiling courts in sensitive foreign policy issues that are better left for the political branches,” the solicitor general told the justices.

The justices will also consider whether, even if such suits are allowed, courts can refuse to hear them given the foreign relations concerns.

That issue is also present in another case the justices agreed to hear Thursday, Republic of Hungary v. Simon. That case involves suits against the Hungarian government seeking to recover property taken by the Nazi-installed regime in that country.

Both cases will be heard next term, which starts in October.

The cases are Federal Republic of Germany v. Philipp, U.S., No. 19-351. and Republic of Hungary v. Simon, U.S., No. 18-1447.

(Adds snapshots detailing two cases to be heard by court.)

To contact the reporter on this story: Kimberly Strawbridge Robinson in Washington at krobinson@bloomberglaw.com

To contact the editors responsible for this story: Seth Stern at sstern@bloomberglaw.com; John Crawley at jcrawley@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com