The New York Times
June 8, 2004

 

Justices Allow Suit Against Austria to Regain Art

By LINDA GREENHOUSE
 

 

WASHINGTON, June 7 - The Supreme Court ruled Monday that the 88-year-old niece and heir of an Austrian Jewish art collector can pursue her lawsuit against the Austrian government and its national art gallery for the return of six paintings by Gustav Klimt that belonged to her family before the Nazi takeover.

The court did not rule on the merits of the lawsuit, filed in federal court in California by the woman, Maria V. Altmann, and Justice John Paul Stevens indicated in his majority opinion that important defenses remain available to Austria as the case proceeds to the next phase.

While Austria has returned $1 million worth of art to the family of the collector, Ferdinand Bloch-Bauer, including drawings by Klimt, it maintains that the Bloch-Bauers intended to bequeath the six disputed paintings, now worth over $100 million, to the state museum. Therefore, Austria argues, the paintings are its legitimate property today despite having been illegitimately expropriated by the Nazis after the family fled Vienna in 1938.

The issue for the Supreme Court was jurisdictional: whether the Foreign Sovereign Immunities Act, a law passed in 1976 to open the federal courts to specific categories of cases against foreign governments, applies to conduct that predated the law's enactment. By a vote of 6 to 3, the court's answer was yes. The decision affirmed a 2002 ruling by the federal appeals court in San Francisco, although in reaching that outcome, the Supreme Court applied a different legal analysis.

In affirming the retroactive applicability of the 1976 law, the decision may open the door to additional World War II-era lawsuits, but the category of cases the decision will actually assist is likely to be small. Claims against Germany and Japan, for example, were addressed by the treaties that ended the war and in the view of many legal experts cannot be pursued in private lawsuits.

The case the court decided Monday has attained high visibility as one of a handful concerning art looted by the Nazis that has made progress through the courts. Tens of thousands of important works stolen from Jews throughout Europe are still missing, and resolution of the claims has been slow for a variety of reasons.

The connection between the Bloch-Bauer family and the art at issue in this case is stunningly apparent: two of the paintings are portraits of Adele Bloch-Bauer, Ferdinand's wife and Ms. Altmann's aunt. Mrs. Bloch-Bauer died in 1925, leaving a will in which she asked her husband at his own death to leave the paintings to the Austrian Gallery.

However, the works belonged not to her but to her husband. By the time he fled Vienna in 1938, he had made no legal arrangements to donate the paintings to the government or its museum. When he died in Switzerland in 1945, the paintings remained in his estate although they were no longer in his hands. Ms. Altmann, who also escaped Austria and has lived in California since 1942, is his only surviving heir.

After the war, the family made several efforts to retrieve the paintings. The current effort began in 1998, after a newspaper report based on the museum's records indicated that the Austrian government was aware that the Bloch-Bauers had not donated the paintings. Ms. Altmann turned to the federal courts when she learned that under Austrian court rules, she would have to pay $350,000 in court costs in order to bring her lawsuit there.

Retroactivity has been a vexing issue for the Supreme Court, which has developed a set of criteria for deciding when it is reasonable to apply a new law to past conduct. In opposing the lawsuit, Austria argued that the Foreign Sovereign Immunities Act could not provide jurisdiction and, further, that if the law did apply in a general sense, the specific section that Ms. Altmann invoked did not apply to her case.

The lower federal courts found in Ms. Altmann's favor, both on the retroactivity question and on the specific issue of the applicability of a section that permits suits for expropriation of property in violation of international law. In accepting the appeal, Republic of Austria v. Altmann, No. 03-13, the Supreme Court agreed to decide only the retroactivity issue. It let stand the ruling on the specific section, meaning that the lawsuit can now go forward in Federal District Court in Los Angeles.

In his majority opinion, Justice Stevens cautioned that the ruling was narrow and that Austria could still defend itself on various diplomatic grounds. The United States government opposed the lawsuit, following a longstanding policy of preferring to keep such issues in the realm of diplomacy rather than federal court. Justice Stevens said that as the case proceeds, the government's views on the particular issues were entitled to deference.

The majority said that applying the law retroactively was "most consistent with two of the act's principal purposes," namely clarity, in handling claims of foreign immunity and "eliminating political participation in the resolution of such claims." Congress passed the law in part to relieve the executive branch of having to take a position in politically sensitive cases, Justice Stevens noted.

Justices Sandra Day O'Connor, Antonin Scalia, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer joined the opinion. Justice Anthony M. Kennedy dissented in an opinion that Chief Justice William H. Rehnquist and Justice Clarence Thomas also signed. He said the decision would "weaken the reasoning and diminish the force of the rule against the retroactivity of statutes, a rule of fairness based on respect for expectations."

In a separate development on Monday, the court removed a legal obstacle for the Bush administration to put into effect a long-delayed policy of letting Mexican long-haul trucks serve United States markets.

For more than 20 years, Mexican trucks have been limited to a 20-mile-wide zone along the border under a policy that in Mexico's view violated the North American Free Trade Agreement. An international arbitration panel agreed with Mexico in 2001, but the new policy has been dogged by environmental concerns. The United States Court of Appeals for the Ninth Circuit ruled last year that the Federal Motor Carrier Safety Administration, the agency within the Department of Transportation charged with issuing rules for the new policy, had not adequately assessed the impact on air quality of permitting Mexican long-haul trucks both to idle at the border while being inspected and to drive the interstate highway system while serving their new markets.

The Supreme Court unanimously overturned that decision on Monday in an opinion by Justice Thomas. He said that because the agency had no policy-making role, but only the limited task of proposing regulations, it was not legally obliged to conduct a full environmental review.

The administration said it would immediately begin to process applications from Mexican truck companies. The outcome may not be popular in the border states that are still trying to meet targets under the Clean Air Act. California and eight other states filed a brief opposing the new policy, which Attorney General Bill Lockyer of California described Monday as an "environmental blow."