Academic journal article Texas International Law Journal

Adding Tools to the Arsenal: Options for Restitution from the Intermediary Seller and Recovery for Good-Faith Possessors of Nazi-Looted Art

Academic journal article Texas International Law Journal

Adding Tools to the Arsenal: Options for Restitution from the Intermediary Seller and Recovery for Good-Faith Possessors of Nazi-Looted Art

Article excerpt

I. INTRODUCTION

"The resolution of these problems is made the more difficult in view of the fact that one of two innocent parties must bear the loss."1

How is it that an innocent party can be punished? This is just the question presented in the adversarial system when courts are forced to choose between the victim of Nazi art theft and the current good-faith possessor of the artwork. The original owner of the disputed artwork in these situations was often either the victim of outright looting by the Nazis during World War II or an unwilling participant in a coerced sale. On the other hand, the current good-faith owner innocently purchased the artwork or received it through donation without knowledge of the work's sordid past. It is between these two parties that a court must choose.

When making the understandable decision to return the painting to the original owner, the court is assigning a huge financial loss to the good-faith possessor. However, because there are various options for recourse against the intermediary who sold the artwork to the innocent purchaser, all is not always lost. For example, there have been several notable courtroom victories for good-faith possessors.2 Yet progress has been slow in this area. In addition to utilizing litigation, good-faith possessors have attempted to avoid financial losses by fashioning unique settlement arrangements, as well as by employing title insurance. Although initial relief has been sporadic, the increasing number of claims by original owners will likely encourage the use and development of alternative solutions to alleviate financial punishment of good-faith possessors of Nazi-looted art.3

This article surveys the options available to good-faith possessors both in and out of the world of litigation. While some routes described do not provide for a complete recovery from the intermediary or other parties, all of the alternatives present some recourse for placing the possessor in a better position after the return of artwork to the original owner. The litigation strategies discussed are becoming more common, and will undoubtedly be further developed as claims by original owners and their heirs increase. However, the non-litigation alternatives-given the high cost and risks associated with litigation-will likely become popular options for current possessors as well. In addition, there is growing societal pressure for the current possessor to return the artwork with less resistance.4 Hence, the current possessor is more likely to seek compensation from the intermediary party, instead of battling the original owner.

Part II of this article offers a brief summary of the background behind Nazi-looted art and the developments in the art world that have occurred since that time. Part III discusses the progression of litigation methods over the past several decades, beginning with the seminal Nazi-looted art case, Menzel v. List.5 Part IV reviews various non-litigation tactics and remedies currently available to good-faith possessors. Some of these alternative strategies have already been tested by previous parties, while others have yet to be fully explored.

II. Background

Widespread and systematic looting of valuable works of art by the Nazis was a sad by-product of World War II. The calculated discovery and removal of "degenerate" artwork6 from the Nazi occupied territories was conducted on a supremely grand scale. Some commentators have calculated that throughout the Nazis' terrifying reign, they pillaged nearly one-third of the art held in private hands at the time.7 Other evidence indicates that the value of the looted artwork during World War II was greater than the total value of all artwork present in the United States in 1945.8

Many of these valuable pieces of looted art remain "lost" and have been scattered across the globe. Fortunately, as a result of several factors, provenance research9 is increasingly a less cumbersome process. …

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