The US Supreme Court on Wednesday delivered a setback to a bid by the heirs of Jewish art dealers to win restitution from Germany in American courts for what they called a coerced sale forced by the former Nazi government in 1935 of a collection of precious medieval religious art.
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The justices in a 9-0 ruling decided that the lawsuit cannot proceed under a US law called the Foreign Sovereign Immunities Act that limits the jurisdiction of American courts in claims against foreign governments. They threw out a lower court's decision that had let the lawsuit move forward in federal court in Washington.
But while the justices decided that this law barred the claims that the heirs brought against a German agency that administers state museums, they directed lower courts to re-examine other arguments made in the case, meaning the lawsuit potentially could still proceed.
The justices on Wednesday also threw out a separate lower court ruling that had allowed a similar lawsuit to proceed against Hungary that sought restitution for Jewish people whose property was forcibly taken as part of that nation's collaboration with its Nazi allies during World War II.
In a statement, Wednesday, the Holocaust Survivors Foundation USA said, "As Holocaust survivors, we are profoundly disappointed."
It said, "The Holocaust is not an abstraction – it was real and remains so for survivors and our families. In light of today's disappointing Supreme Court rulings, the survivor community calls on Congress to immediately enact, and the Biden Administration to support, legislation to establish a clear path in US courts for Holocaust survivors and victims' heirs to pursue remedies for genocidal thefts of assets such as artworks, insurance policies, and other property losses, when the victims, property, or culprits have a connection to the United States."
The American Jewish Committee said it regretted the Supreme Court ruling.
It noted Germany's Limbach Commission, which handles forced sales and seizures of art under the Nazi's, and attorneys for the German government "maintained before the Supreme Court that the 1935 sale of the artwork was free and uncoerced, despite the longstanding principle in Holocaust asset matters that any sale occurring after 1933, when the Nazis came to power, should be considered a forced sale. The attorneys for Germany further argued that the looting of Jewish property should not be considered as a part of the genocide of Jews, another principle that until now has governed Germany policy on Holocaust restitution matters."
The German case concerns a collection of ecclesiastical relics known as the Welfenschatz that was sold by the Jewish art dealers. The collection, dating primarily from the 11th to 15th centuries, includes gilded crosses and busts of saints. Pieces from the collection are on display at a museum in Berlin.
The heirs sued Germany and the Prussian Cultural Heritage Foundation, which oversees museums in Berlin, in 2015 in US federal court, seeking the collection's return or $250 million. The plaintiffs said the 1935 sale was a vastly undervalued "sham transaction" made under duress by Jewish victims of Nazi persecution in the years before World War II.
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Wednesday's ruling rejected the argument by the heirs that Germany was not immune from their lawsuit under the Foreign Sovereign Immunities Act because the coerced sale was an act of genocide, in violation of international law.
Writing for the court, Chief Justice John Roberts said that law does not cover what a foreign country does to property belonging to its own citizens within its own borders.
"As a nation, we would be surprised - and might even initiate reciprocal action – if a court in Germany adjudicated claims by Americans that they were entitled to hundreds of millions of dollars because of human rights violations committed by the United States government years ago," Roberts wrote.
"There is no reason to anticipate that Germany's reaction would be any different were American courts to exercise the jurisdiction claimed in this case," Roberts added.
The Prussian foundation's own investigation found that the sale was a "voluntary, fair-market transaction," and a German commission that looks into Nazi-looted art agreed that it was not made under duress and the price reflected the Great Depression's effect on the art market.
A federal judge in Washington ruled against Germany in 2017. The US Court of Appeals for the District of Columbia Circuit narrowed the case the following year, saying claims could proceed against the foundation but not against Germany's government itself.
