Republic of Austria, et al. v. Altmann, Maria (06/07/2004)

Questions presented: Does the Foreign Sovereign Immunities Act (FSIA) confer jurisdiction in the U.S. District Court for the Central District of California over the Republic of Austria and the state-owned Austrian Gallery in a suit alleging wrongful appropriation of six Gustav Klimt paintings from their rightful heirs?

BY ASHLEY YARCHIN, MEDILL NEWS SERVICE

Ferdinand Bloch, a wealthy Czech sugar magnate, commissioned a portrait of his wife in the early 1900s by Austrian painter Gustav Klimt. "Adele Bloch-Bauer I" and "Adele Bloch-Bauer II" were the results of years of sketches produced by the artist.

Before she died in 1925, Adele Bloch-Bauer owned six Klimt paintings: the two portraits of herself; a portrait of a friend, "Amalie Zuckerkandl;" and three landscapes, "Apple Tree I," "Beechwood" and "Houses in Unterach am Attersee."

In her will, Bloch-Bauer requested that her husband donate the paintings upon his death to the Austrian Gallery.

But when the Nazis invaded Austria on March 12, 1938, the Jewish widower fled the country, leaving all of his belongings behind, to settle in Zurich, Switzerland.

The Nazis confiscated the Klimt paintings, among other valuable possessions, and eventually displayed them in the Austrian Gallery in Vienna.

When Bloch died in 1945, he left a will revoking all prior wills, and leaving his entire estate to one nephew and two nieces, including Maria V. Altmann, who became a U.S. citizen in Hollywood, CA, that same year. However, the Austrian government decided to honor only the will of Bloch-Bauer and to keep the paintings in the Austrian Gallery.

After years of unsuccessful negotiations and attempted lawsuits with the Austria government to regain ownership of the paintings, Altmann filed suit on Aug. 22, 2000, in the Central District of California against the Republic of Austria and the Gallery.

Altmann alleged the wrongful appropriation of the six Klimt paintings from their rightful owner, in violation of international law. Austria moved to dismiss the suit on a number of grounds, including that a foreign state is normally immune from the jurisdiction of both federal and state courts in the United States. In denying the motion, the judge concluded that the suit falls within the Foreign Sovereign Immunities Act (FSIA), which was enacted to provide a limited means to obtain jurisdiction over foreign nations such as Austria, in cases such as these in which rights in property were taken in violation of international law. Austria appealed.

On Dec. 12, 2002, a 9th Circuit Court of Appeals panel unanimously affirmed, holding that Altmann had alleged sufficient facts to establish that the Klimt paintings were taken in violation of international law.

According to federal case law, "to constitute a valid taking under international law three predicates must existÉvalid expropriations must always serve a public purpose, aliens must not be discriminated against or singled out for regulation by the state and an otherwise valid taking is illegal without the payment of just compensation."

At issue were the provisions of the FSIA, one of which bars suits in U.S. courts based on events that took place before 1952.

Until 1952, the U.S. adhered to the doctrine that foreign sovereign nations were absolutely immune from suits in U.S. courts. That changed with the State Departments 1952 "Tate Letter," which lifted immunity in claims arising from a nations strictly commercial, as opposed to governmental, conduct. Austria claimed that because the last alleged taking took place in 1948, the FSIA provision could not be applied retroactively.

Though the 9th Circuit conceded that normally statutes are not to be applied retroactively, the judges concluded that because no new legal consequences resulted from the FSIA, in that no substantive right was changed, it was permissible to apply the act. The only thing the FSIA did, the panel concluded, was merely effect a change of jurisdiction.

The panel then inquired into whether prior to 1952, Austria could reasonably have expected to receive immunity for "its complicity in and perpetuation of the discriminatory expropriation of the Klimt paintings." In concluding no, the court noted that the takings violated Austria's obligations under the Hague Convention and that the Austrian government officially repudiated all Nazi transactions in 1946.

On Sept. 30, 2003, one week from the start of the 2003-04 term, the U.S. Supreme Court granted certiorari in the case, limited review to the first question raised in Austria's petition.

In urging the Court to take the case, Austria argued that there was a split among the federal circuits which the Supreme Court should resolve.

Altmanns attorney Randol E. Schoenberg said this case is "significant because it is the only Holocaust-claim case to ever go through the Supreme Court. It is the only Holocaust case against a foreign country, and it involves some of the most valuable paintings in the world."

Altmann, 87, told her attorney that she hopes to see a turn in her favor within her lifetime.

Attorneys: For Republic of Austria, et al.:Scott P.CooperProskauer Rose LLP2049 Century Park EastSuite 3200Los Angeles,CA90067(310) 557-2900For Maria V. Altmann:RandolSchoenbergBurris & Schoenberg12121 Wilshire Blvd., Suite 800Los Angeles,CA90025-1168(310) 442-5559Amici: For United Mexican States:Jonathan I.BlackmanCleary Gottlieb Steen & HamiltonOne Liberty PlazaNew York,NY10006(212) 225-2000

For Societe Nationale des Chemins de Fer Francais:Andreas F.Lowenfeld40 Washington Square SouthNew York,NY10012-1099(212) 998-6208For Japan:Craig A.HooverHogan & Hartson555 Thirteenth Street, NWWashington,DC20004(202) 637-5694

For U.S.:THEODORE B. OLSONSolicitor General, Counsel of RecordPETER D. KEISLERAssistant Attorney GeneralEDWIN S. KNEEDLERDeputy Solicitor GeneralJEFREY P. MINEARAssistant to the Solicitor GeneralMARK B. STERNDOUGLAS HALLWARD-DRIEMEIER