Supreme Court rules against heirs of Jewish art dealers in Nazi era

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FILE - In this Jan. 9, 2014, file photo, a medieval Cross, part of the Welfenschatz, is displayed at the Bode Museum in Berlin. The heirs of several Nazi-era Jewish art dealers have spent nearly a decade trying to persuade German officials to return the collection of medieval relics valued at more than $250 million. But they didn't make much headway until they filed a lawsuit in an American court. They won a round last week when a federal judge ruled that Germany can be sued in the United States over claims the so-called Guelph Treasure was sold under duress in 1935. ( AP Photo/Markus Schreiber, File)
A medieval cross that is part of the Welfenschatz, a collection of medieval Christian relics that were owned by Jewish art dealers, displayed at the Bode Museum in Berlin in 2014. (Markus Schreiber / Associated Press)

The Supreme Court ruled Wednesday against the heirs of Jewish art dealers who suffered a huge loss after selling an important collection of medieval artifacts to Nazi leaders in Germany in the 1930s.

In a unanimous decision, the justices held that Germany is shielded by the principle of "sovereign immunity" and said federal law bars U.S. courts from deciding most legal claims involving foreign governments, except those involving "property taken in violation of international law."

The high court agreed with Germany that this exception applies only to property taken from foreigners, not for "domestic takings."

"This 'domestic takings rule' assumes that what a country does to property belonging to its own citizens within its own borders is not the subject of international law," Chief Justice John G. Roberts Jr. said for the court in Federal Republic of Germany vs. Philipp.

The court stopped short of dismissing the lawsuit, however. Roberts said the heirs could renew their claim in a lower court by arguing that Jewish art dealers were no longer citizens of Germany at the time of the sale in 1935.

However, the justices rejected the heirs' main argument that the Holocaust and the genocidal campaign against Jews beginning in 1933 was such a grave and extraordinary violation of international law so as to waive Germany's protection from claims for stolen or confiscated property during the Nazi era.

The court also tossed out a similar claim brought by several Jewish survivors of the Holocaust in Hungary in a case called Republic of Hungary vs. Simon. The survivors had filed a suit against the state railroad in Hungary that confiscated the property of tens of thousands of Jews who were transported to Nazi death camps.

After Adolf Hitler's party took power in 1933, Nazi officials expressed interest in the state obtaining the Welfenschatz, or Guelph Treasure, a collection of medieval Christian relics owned by a consortium of Jewish art dealers based in Frankfurt.

In 1935, Saemy Rosenberg signed the sales documents in Berlin on behalf of his partners, receiving about one-third of what they had paid for the items in 1929. The buyer was the Prussian State Museum, which was under the control of Hermann Goering, Hitler's deputy.

Jed Leiber, a musician and record producer in Los Angeles, said he learned of his grandfather's role in the sale years after his death.

“This was a forced sale to one of the greatest art thieves of all time. And it was literally a present for Hitler,” Leiber said, referring to reports that Goering later presented the treasures to Hitler.

Leiber and other heirs filed a claim in Germany seeking compensation for the forced sale, but they were rebuffed. They then filed a suit in federal courts in Washington and won a pair of preliminary victories. The D.C. Circuit Court refused Germany's claim of sovereign immunity on the grounds that “genocide perpetrated by a state even against its own nationals is a violation of international law."

Nicholas O'Donnell, a Boston lawyer who represented the heirs, said his clients "were obviously disappointed in the court's ruling. We are considering our next steps for when the case returns to the District Court."

German officials have maintained that the 1935 deal for the sale of artifacts was not forced and reflected a fair-market price because the artifacts' values plummeted during the Great Depression.

Hermann Parzinger, a German historian who is president of the Prussian Cultural Heritage Foundation, or SPK, said in a statement it is the museum's "long-held belief that this case should not be heard in U.S. court. As such, we welcome the Supreme Court’s unanimous decision. We look forward to presenting robust legal arguments for the dismissal of this lawsuit.”

Last year, the Trump administration joined Germany and Hungary in urging the court to hear their appeals and to rule that those governments were shielded for "domestic takings" of property from their citizens. The lawyers argued that allowing such suits could permit European or other foreign courts to hand down major verdicts against the United States for confiscating the property of Native Americans or African Americans who were enslaved.

Roberts noted that point in his opinion. "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," he wrote.

This story originally appeared in Los Angeles Times.