U.S. Court Rules Holocaust Lawsuit Can Proceed

In a landmark ruling, a U.S. federal court has accepted a Holocaust restitution lawsuit in the long-running Guelph Treasure case whose outcome will likely affect a host of Nazi-looted art cases in various stages of litigation.

The case was brought by the heirs of a group of Jewish art dealers who in 1935 sold a world- famous collection of valuable religious artifacts –today worth a quarter of a billion dollars—to emissaries of top Hitler aide Hermann Goering. The property today is in the possession of the Prussian Cultural Heritage Foundation, and on permanent display in a German museum.

The heirs, Alan Philipp, Gerald Stiebel and Jed Leiber, claim the sale was a forced transaction spearheaded by Hermann Goering and Adolf Hitler who wanted to “save” the Guelph Treasure for the German Reich. The heirs cite a letter from the mayor of Frankfurt requesting Hitler “create the legal and financial preconditions for [the Guelph treasure’s] return.”

The plaintiffs say the dealers were coerced by the Nazis into selling the work for barely 35 per cent of its market value, and that even that amount never reached the owners as the transfer of the money was blocked by the Nazis, or bank officials working for them.

The brief cites the law on Germany’s books (imposed by the Allied Powers after Germany’s surrender) that all art transactions between Nazis and Jews in the Hitler era carry a legal presumption of coercion and are therefore invalid. The collection should be returned to the rightful owners, the plaintiffs say.

The German government and museum directors argue that Nazi persecution of Jews began in 1939 with the outbreak of WWII—four years after the sale of the Guelph treasure—and that the sale was therefore a legitimate and fair transaction. Attorneys for Berlin tried to minimize the persecution of Jews before 1939 as “an internal affair not subject to U.S. court jurisdiction.” The very low price Goering paid, they contend, was due to the depressed German market value at the time.

HOLOCAUST REVISIONISM AT PLAY

The move has grabbed headlines for a number of reasons. The District Court’s decision is unprecedented in that it employs the very law Germany has used to protect itself from Holocaust lawsuits on foreign soil – the Foreign Sovereign Immunities Act (FSIA) – to validate the plaintiffs’ bid to argue their case in a U.S. court.

In a 42-page tightly reasoned decision handed down on March 31, the District Court in Washington, D.C. ruled that Germany cannot claim immunity from the lawsuit suit for according to FSIA, there is no immunity in a case where the government acquires property in violation of international law.

Judge Colleen Kollar-Kotelly held that Nazi looting of Jewish property “constitute[s] genocide and genocide… is a clear violation of international law.” The judge accepted expert testimony that large-scale persecutions of German Jews were the norm at the time of the sale of the Guelph Treasure.

The case has global significance in that it highlights the broader issue behind the fight over ownership; the struggle to establish historical truth.

German officials claim the Jews enjoyed prosperity and civil rights until Kristallnacht, Nov. 1938. This is the rationale cited by museums and other parties in Germany for holding onto vast amounts of Jewish property until this day. It wasn’t stolen from Jews, they argue, it was bought. They proffer Nazi-era letters and documents to prove the legitimacy of the transaction.

Jewish families seeking restitution of their belongings dismiss Nazi paperwork as part of the thievery and fraud that perpetuates Nazis theft until today.

ARTICLES FROM 1930S REVEAL GROWING HORROR

In their brief to the court on behalf of the heirs, attorneys Mel Urbach of New York and Marcus Stoetzel of Germany reproduced newspaper articles from JTA archives and other news organs from the early 1930s. The articles erase all doubt about when Nazi terror and persecution against German Jewry began.

Frozen in time, the articles describe the once rich Jewish population of Frankfort and other cities reduced to pauperdom, starvation and terror by 1934, four years before Kristallnacht.

“Reich Plans To Slay 500, Paper Says,” cried out one headline. “Prominent Jews are included in a list of 500 Germans marked for execution in the Reich immediately after Hitler’s election as Reich President and Reich Chancellor, the London Daily Herald will announce tomorrow,” JTA forewarned. “In a front-page article, the Herald will allege the existence of a list of people, considered hostile to Hitler’s rule, who have been marked for slaughter, after Sunday’s plebiscite gives Hitler his expected vote of confidence.”

“Food Purchase Barred, Frankfurt Jews Starving” another shocking headline leaps out from the archives, replaying the agony of German Jewry. “An intense anti-Jewish campaign conducted by Nazi district leader Sprenger in this city is resulting of cases of actual starvation, it was learned today,” the JTA article disclosed. “Jews in this city of 500,000 have found it impossible to purchase food. Shop-owners are under strict orders not to deal with non-Aryans.”

Yet another chilling headline, hinting at the horror to come: “Nazis Starve 15,000 Professionals” The article by Boris Smolar, a European-based correspondent, describes how the “Aryan paragraphs” in the newly revised German Constitution, “robs Jewish doctors, lawyers, professors, journalists, and government workers of all hope.”

The article goes on to describe how “the community’s desperation is heightened by the difficulty of emigration.”

“The Jewish dealers [in the Guelph Treasure case] faced a crisis of a magnitude that we cannot comprehend,” Urbach said in an interview with Yated. “The thugs who wanted the Treasure were not just any Nazis. We are talking about the kingpins, Goering and Hitler. Jews in those days of terror were murdered or disappeared for a lot less than owning an art collection. Being owners of the Welfenschatz who were trying to sell off Germany’s national treasures put these Jews in mortal danger.”

SAGA OF THE GUELPH TREASURE

Known in Germany as the ‘Welfenschatz,” the Guelph Treasure was passed down over centuries from one royal and aristocratic family to another, finally coming to rest with the dukes of the House of Brunswick in Germany. This aristocratic family sold the prize collection after its fortunes were wiped out in the stock market crash of 1929, and the worldwide Great Depression that followed. To raise money to pay debts and support lavish lifestyles, they put the Guelph Treasure up for sale.

Five Jewish art dealers from Frankfurt, Saemy Rosenberg, Isaak Rosenbaum, Julius Falk, Arthur Goldschmidt and Zacharias Hackenbroch, borrowed money and pooled funds, raising enough to purchase the collection from the Duke of Brunswick in the early 1930s. They intended to sell the collection piecemeal on the international market. Items from the Treasure were thus exhibited in the United States in 1930–31, with 9 pieces purchased by the Cleveland Museum of Art, and some 30 others sold to other museums and private collectors.

A couple of years later, the remaining 40 gem-studded artifacts were in the hands of Hermann Goering, head of the Gestapo and Premier of Prussia. In a gala ceremony, Goering presented the collection to Hitler as a surprise gift. An October 1935 article in the Baltimore Sun, titled “Hitler To Receive $2,500,000 Treasure,” reports on the lavish Nazi ceremony at which this presentation took place.

“Long owned by the Dukes of Brunswick, the treasure was purchased by a consortium of art dealers and sold to the Prussian government…General Hermann Goering will preside at the ceremony at which the gift to Adolph Hitler will be made,” the article noted.

The facts surrounding Goering’s acquisition of the Treasure are now being scrutinized and heatedly disputed. The museum says the treasure wasn’t even in Germany at the time of the sale, it was in Amsterdam, so the claim that the Nazis extorted must be false. But Hachenbach’s heirs say the treasure being out of the country was no doubt the reason the three dealers were not shot dead on the spot, as were so many other Jews for lesser “crimes” than owning Nazi-coveted property.

The process of transferring ownership of the treasure, making the extortion appear as a legitimate sale, bought valuable time for the Jewish businessmen, keeping the Nazis at bay until they could flee Germany. Two of the dealers made it out of Nazi Germany. Zecharya Hachenbroch, a religious Jew, died in Germany, after an illness his family says was brought on by living in terror, never knowing if the game of cat and mouse he was forced to play with Goering’s henchmen would end with his death.

SEEING THROUGH THE SHAM

Rejecting Germany’s motion to dismiss the claim, the District Court ruled that restitution claims cannot be opposed on the basis of technicalities as to whether Jewish victims of Nazi theft were oppressed by their own government or by international agents acting for the Nazis (such as directors of the bank that froze the Nazi payment to the dealers).

The Court also dismissed recommendations issued by Germany’s Limbach Advisory Commission that the Guelph treasure should remain in Germany. The German government created the Commission to resolve Holocaust-related property and restitution disputes, but gave it only advisory powers, not binging legal authority. Its seven members, without discussing their reasons, ruled arbitrarily against the plaintiffs in 2014, declining a request from the plaintiffs for clarification.

U.S District Court Judge Kollar-Kotelly set aside the Limbach Commissions’ conclusions as basically irrelevant to the lawsuit, noting that the Commission had not barred the plaintiffs from seeking relief in U.S. court nor did it have the authority to do so.

A lawyer for the plaintiffs, Nicholas O’Donnell, welcomed the District Court’s ruling. “We are pleased that the Court agreed that a forced sale for an inadequate sum to agents of Hermann Goring enjoys no immunity from justice. The facts show beyond all doubt that the 1935 ‘sale’ was nothing more than a sham transaction,” O’Donnell said.

“The Nazi death camps did not spring fully formed into history,” the attorney noted drily in court papers. “The Holocaust did not begin in 1942 when the Nazis conspired at the Wannsee Conference to plan the industrialized murder of every Jew in Europe. It did not begin when German troops crossed into Poland on September 1, 1939…It did not even begin when Germans smashed the homes and businesses of Jews on November 9, 1938—the infamous Kristallnacht.”

“The Holocaust began on January 30, 1933, when Adolf Hitler became Chancellor of Germany, and the institutionalized persecution of German Jews commenced immediately,” O’Donnell asserted. Hitler immediately suspended the German Parliament, and the stripping of civil rights and property from Jews swiftly followed.

“Plaintiffs’ ancestors were swept up in that storm,” the brief noted. “From the moment the Nazis took power, the collection of art dealers that owned the Welfenschatz, or Guelph Treasure, were in the cross-sights of Nazi officials leading straight to Hitler. And when the levers of power began to pivot towards the Welfenschatz—in 1933—those Jewish art dealers had no chance.”

The outcome of this closely watched case will influence which narrative becomes official history about conditions for Jews in pre-1939 Germany. Will Germany embrace historical revisionism casting the years until 1939 as “benign?” Or will the government admit facts on record that a terrifying death trap began to encircle the Jews from the moment Hitler took power in 1933?

Berlin, which prides itself on taking the lead in Holocaust restitution in the late 1990s, “should finally show good faith in resolving a case that has dragged on for so many years,” Urbach said. “Instead of acknowledging the truth, the government filed an appeal this week, saying the case had no merit and the U.S. Court no jurisdiction. Berlin is signaling its intent to continue to stonewall and delay justice.