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Washington�An 87-year-old California woman’s long battle with Austria over ownership of six art masterpieces stolen by the Nazis will be heard by the U.S. Supreme Court this month in a case with implications for international relations and federal court authority. In recent years, an increasing number of U.S. citizens and aliens have turned to the federal courts seeking remedies for injuries that occurred in another nation or that were the fault of another nation. Like Maria V. Altmann’s claim against Austria, a number of them stem from the World War II era. The 800-pound gorilla guarding the federal courthouse against most of these claimants is the Foreign Sovereign Immunities Act (FSIA), said international law scholar David Bederman of Emory University School of Law. Bederman has filed an amicus brief on Altmann’s behalf in the high court case, Republic of Austria v. Altmann, No. 03-13. The 1976 act generally protects foreign nations from suits in U.S. courts unless they fall within one of the explicit exceptions in the act. Altmann, who will have turned 88 by the Feb. 25 date of the Supreme Court argument, brought her suit under one of those exceptions. The question for the justices is whether that exception can apply retroactively to conduct occurring many decades before Congress enacted the law. The court’s retroactivity jurisprudence is akin to its pre-emption jurisprudence-complex and vexing, according to litigators and scholars. There is a broad split among the circuits on the retroactivity question. “I think the application of the act to World War II events is a particularly difficult area thus far for the circuit courts,” said Austria’s high court counsel, Scott P. Cooper of the Los Angeles office of New York’s Proskauer Rose. “They are struggling to balance their desire to do right with the obligation to consistently apply the Supreme Court’s rulings and their understanding of the statute.” In Altmann’s case, the 9th U.S. Circuit Court of Appeals struck the right balance in holding that the suit could go forward in federal court, said her high court counsel, E. Randol Schoenberg of Los Angeles’ Burris & Schoenberg. “I’m absolutely convinced we’re right on the law,” said Schoenberg, whose family has long and close ties to the Altmanns. “These paintings were stolen. There’s no question they need to be returned. The only question is whether there is a court with the power and ability to enforce what the law said.” Claiming Klimt Altmann, an Austrian Jew, fled her homeland when the Nazis occupied it in 1938. Around the same time, her uncle, sugar magnate and art collector Ferdinand Bloch-Bauer, fled to Switzerland, where he later died in 1945, penniless and childless. The Nazis in 1938 seized the property of the Altmann and Bloch-Bauer families. Among Bloch-Bauer’s extensive art collection were six paintings by Gustav Klimt, famous as a co-founder of the Vienna Secessionists. After Bloch-Bauer’s death in Zurich, Switzerland, his will was probated and he left his estate to three of his brother’s children. Altmann, who moved to Los Angeles in the 1940s and became a U.S. citizen, is the only surviving heir. Altmann and the other heirs tried to recover Bloch-Bauer’s property under post-war restitution laws. Austria claimed, and still claims, that the Klimt paintings, even though stolen by the Nazis in 1938, had been bequeathed to Austria by Bloch-Bauer’s wife, who died in 1925. Altmann contends that her will merely includes a testamentary wish that her husband donate the paintings upon his death. Altmann notes that in 1948, Austria demanded that the heirs relinquish their claims to the six Klimt paintings in exchange for the return of the rest of the family’s art collection. After a major scandal over other allegedly stolen Austrian paintings erupted in 1998 in New York, the Austrian government, in response, opened its culture ministry’s archives to researchers. Altmann contends that she obtained documents from the Austrian Gallery’s archives that show that, even in 1948, museum officials knew that Adele Bloch-Bauer’s testamentary wish was not legally binding. Altmann and the heirs filed an administrative claim in Austria for the paintings but it was denied. The paintings are estimated to have a worth of more than $100 million. Altmann could have sought review of the administrative decision in Austrian courts, but she would have had to post a $1.6 million fee to prosecute the case. Instead, she filed suit in federal court in Los Angeles in 2000. “I had seen those paintings as a kid,” recalled Schoenberg, grandson of composer Arnold Schoenberg. “I’ve known them since I was 11. I’m 37 now. [When Altmann first contacted me,] I was at Fried Frank and they allowed me to assist her. We tried everything possible to deal with Austrian law. That didn’t work out and we were really left no choice but to file suit in the U.S.” Seeking immunity No trial has yet been held to test the merits of Altmann’s and Austria’s claims. The case thus far has been fought on the jurisdiction issue. Altmann filed suit under the FSIA’s expropriation exception, which allows suits against foreign sovereigns that have taken property in violation of international law. In the U.S. Supreme Court, Austria has drawn support for its view that the expropriation exception is not retroactive from the United States and from Japan and Mexico, both of which have faced litigation stemming from World War II actions, and others. Altmann is supported by a group of historians and art history scholars, the American Jewish Congress, the Austrian Jewish Committee and others. Until 1952, the United States says, it followed a policy that held foreign nations were absolutely immune from suit in U.S. courts. But in 1952, the State Department issued the so-called Tate Letter, which announced a change-adoption of the “restrictive” immunity policy that was growing in acceptance around the world. In fact, Austria had adopted restrictive sovereign immunity at the time of its alleged expropriation of the Klimt paintings. Under restrictive sovereign immunity, foreign states get immunity only for their sovereign or public acts and not for their commercial acts. The United States and a growing number of other nations adopted this policy because they saw the need for a judicial forum to resolve disputes stemming from the increasing commercial activities of governments. Congress codified this policy in the FSIA. “There are a number of FSIA cases brought every year,” said international law scholar Steven Ratner of the University of Texas School of Law. “Most of them are cases that concern commercial activities by foreign governments, like operating airlines or paying rents at embassies. Under those cases, FSIA is quite clear. If the commercial activity takes place in the U.S., U.S. courts have jurisdiction.” There’s no question that after 1976, the United States followed the restrictive immunity theory, he said, adding, “It’s probably clear that post-1952 acts would be covered by the restrictive theory, too. What makes this case interesting and the reason the U.S. Supreme Court took it is because it’s pre-1952. When you have a court saying it covers pre-1952 acts, then it gets dicier.” Austria’s position There is nothing “dicey” about the retroactivity question in the view of the Austrian or American governments. Austria’s counsel, Cooper, said the historical record is clear that all foreign states were given absolute immunity for expropriations before 1976 and for all conduct before 1952. The FSIA fails the high court’s retroactivity analysis because it lacks a clear statement by Congress that the expropriation exception is to be retroactive, Cooper argues, and it impermissibly imposes new legal consequences on foreign states for expropriations within their borders that did not exist before FSIA was enacted. The United States argues that before FSIA, it had entered into numerous treaties and agreements with Germany and its allies to settle post-World War II claims with the background assumption that they would not be sued in U.S. courts. “The retroactive application of the FSIA to pre-1952 conduct therefore would introduce significant new issues that the negotiators of those instruments could not have foreseen,” the solicitor general argues. But Schoenberg argues Altmann’s suit is consistent with the historical and present American policy of encouraging the return of looted property. Exercising jurisdiction in this suit, he contends, simply provides a jurisdictional basis for implementing American policy. There are no impermissibly retroactive effects on the rights or remedies of the parties, he adds. “There is nothing about this particular case that interferes with any foreign relations of the U.S.,” said Schoenberg. “Nothing about it is contrary to the U.S. position on Nazi stolen art.” Ratner noted that the 9th Circuit found retroactivity pre-1952 “because of what it regarded as very clear U.S. policy to help victims of the Holocaust recover their assets through U.S. courts if necessary. They quoted a State Department policy from 1949. They note Austria itself believed in the restrictive immunity theory.” Schoenberg pointed to a 2001 executive agreement reached by the United States and Austria over a general settlement fund for World War II claims expressly preserved individual claims for Nazi-looted art works. Emory’s Bederman, whose amicus brief supporting Altmann is on behalf of Bet Tzedek Legal Services and the American Jewish Committee, makes a different argument. “My view, based on Austria’s own case law, is Austria had accepted this restrictive view of sovereign immunity in expropriation cases,” he said. “What’s good for the goose is good for the gander.” Bederman, like Austria’s Cooper, believes a high court ruling could have a broad impact. Cooper notes that cases “are lined up” behind his case. Last year, the 2d Circuit reinstated a suit by Holocaust survivors and their heirs against the French national railroad that transported thousands of Jews and others to Nazi death camps. Also last year, the D.C. Circuit dismissed a suit against Japan brought on behalf of Asian women subjected to sexual slavery in World War II. Because of the 9th Circuit Altmann ruling, Mexico last year relitigated and won a suit brought against it by Mexican nationals who worked as migrant laborers in the U.S. during World War II. “We’ve said all along this has been a long shot,” said Schoenberg. “At the very least, we have in this case now an ability to set the record straight and have the story told by journalists and the court itself.” Coyle’s e-mail address is [email protected].

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