New York Court Applies The HEAR Act, Orders Return Of Nazi-Looted Art

The decision in Reif v. Nagy, Sup. Ct. N.Y. City, April 5, 2018, has wide-ranging implications for litigation relating to art that was lost or stolen in the Holocaust. Justice Ramos of the Commercial Division of the Supreme Court granted summary judgment directing that two artworks looted by the Nazis during the Holocaust be returned to their true owners. This is a landmark decision and the first to truly rely on a new piece of legislation, the Holocaust Expropriated Art Recovery Act of 2016 (HEAR Act).

Background

There was no dispute between the parties that the artworks, two gouaches by Egon Schiele entitled Woman in a Black Pinafore and Woman Hiding Her Face (the Artworks), were once part of the collection of a Jewish-Viennese cabaret performer named Fritz Grunbaum. The Artworks were in the possession of a London art dealer named Richard Nagy and on display at the Park Avenue Armory in New York City when Grunbaum's heirs (the Heirs) discovered their location. A few years earlier, the Heirs had been unsuccessful in attempts to recover another artwork that was alleged to once have been the property of Grunbaum. See Bakalar v. Vavra, 819 F. Supp. 2d 293 (S.D.N.Y. 2011) aff'd, 500 F. App'x 6 (2d Cir. 2012). The judge in Bakalar held that the Heirs' claims were barred by the equitable defense of laches, under which a court can weigh the equities and refuse to return a chattel if the true owner had not been diligent in seeking its return and that delay prejudiced the current possessor.

The Decision

In delivering his decision ordering the return of the Artworks to the Heirs, Justice Ramos stated that "this case must be viewed in [the] context" of the recently passed HEAR Act, which codifies into law several prior statements of U.S. policy (such as the Washington Conference Principles on Nazi-Confiscated Art). The HEAR Act "expanded the timeliness for actions to recover Nazi-looted artwork to six years from the actual discovery by the claimant," and such actions are now deemed timely "notwithstanding any defense at law relating to the passage of time."

At its core, Justice Ramos explained, "the HEAR Act compels us to help return Nazi-looted art to its heirs." The decision continues:

In the HEAR Act, the [Washington Conference] Principles, and the Holocaust Victims Redress Act, we are...