Court Rules for Germany in Nazi-Era Dispute Over the Guelph Treasure

A U.S. federal court has ruled against the heirs of Jewish art dealers who sought to sue Germany in America over a trove of valuable medieval relics that the heirs said were sold under duress and at a drastic discount in Nazi-era Frankfurt.

The ruling by the District Court for the District of Columbia dismissed a suit brought as part of an effort to recover the Guelph Treasure, a collection of medieval religious artifacts now estimated to be worth about $250 million.

A consortium of three firms owned by Jewish dealers bought the collection in the final days of the Weimar Republic in 1929. They sold about half of the collection to individual buyers and museums.

But as the Nazi government took power, the collection also drew the interest of Hermann Goering, a powerful Nazi figure and the prime minister of Prussia. According to the heirs, Goering coerced the art dealers into selling the remaining artifacts in 1935 for much less than they were worth.

The 42 pieces that were sold ended up in the Museum of Decorative Arts in Berlin.

In 2014, a German arbitration commission that specializes in Nazi-looted art ruled that the museum had acquired the collection legitimately, determining that the 1935 sale to Prussia had been voluntary, and did not need to return the artifacts.

As a result, the heirs sued in federal court in the United States. A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled against Germany, allowing the case to proceed.

Germany argued that the lawsuit was barred by the Foreign Sovereign Immunities Act, which generally forbids suits against foreign states. However, the law allows some exceptions, including one for the expropriation of property.

But last year, the Supreme Court unanimously ruled that the exception did not apply when a foreign government was accused of taking its own citizens’ property.

The Supreme Court returned the case to the lower courts to address an alternative argument put forward by the heirs that their relatives were not in fact German nationals at the time of the 1935 sale and so were free to sue because the exception to the Foreign Sovereign Immunities Act would apply.

The heirs argued that two of the dealers had fled Germany for the Netherlands and were not considered German nationals, while those who remained were subject to Nazi policies that stripped Jews of the legal and economic rights normally associated with being German citizens.

But in the ruling, Judge Colleen Kollar-Kotelly said that the heirs did not put forward enough information to support their argument that the dealers were not German nationals at the time of the sale.

The heirs’ allegations “regarding the individual art dealers and Nazi regime policies in effect during the applicable time period do not suffice to demonstrate that the Consortium members were not German nationals at the time of the sale,” she wrote.

Judge Kollar-Kotelly also found that lawyers for the heirs, earlier in the case, had erred by failing to put forward their argument that they should be exempted because they were not considered German nationals. The heirs’ lawyers had at that time focused on the argument that they were entitled to bring their case in an American court because the dealers were the victims of genocide and genocide was a violation of international law.

As a result, Judge Kollar-Kotelly said, the case did not qualify for an exception of the Foreign Sovereign Immunities Act.

In a statement, Hermann Parzinger, president of the Prussian Cultural Heritage Foundation, or SPK, which oversees Berlin museums, said: “We are pleased with the decision of the U.S. District Court, which confirms the SPK’s longstanding view that this lawsuit for the restitution of the Guelph Treasure does not belong in an American court. The SPK is also of the opinion that the sale of the Guelph Treasure in 1935 was not a forced sale as a result of Nazi persecution and that the lawsuit for restitution is therefore also unfounded in substance.”

Nicholas M. O’Donnell, a lawyer representing the heirs, said his clients were disappointed by the ruling and were weighing an appeal.

“This recent decision ignores that two of the victims had left Germany for Amsterdam by the time of the forced sale, as well as the detailed record of Nazi policy that in the eyes of that hateful regime, no Jew could ever be considered a German,” he said in an email.

“Further,” he said, “the idea that my clients never raised the facts that their ancestors were not German nationals under international law is simply perplexing; every pleading to date has noted the Nazi government’s odious perspective on this question and the relevant departure to Holland.”