(CN) - The buyer of a painting once owned by Gestapo leader Hermann Goering must use the U.K. courts to press his claim that Sotheby's knew the art was Nazi loot, a federal judge ruled.
Steven Brooks sued Sotheby's earlier this year in California over "Allegorical Portrait of a Lady as Diana Wounded by Cupid," a painting by 18th century French artist Louis-Michel van Loo for which he paid roughly $96,000 at auction in 2004.
Brooks said he cannot resell the work because the art world now knows Goering may have acquired it illegally.
Sotheby's removed the action to federal court and then filed papers saying that England has jurisdiction. Because a U.S. court cannot transfer a case to a foreign court, the case must be dismissed, it said.
U.S. District Judge Richard Seeborg agreed Monday, noting that Brooks became subject to the conditions "set forth in Sotheby's auction catalogue, including a forum-selection clause granting exclusive jurisdiction to Courts of England to settle all disputes in connection with the auction," when he participated in the auction.
The forum-selection was written in fine print, but was boldly labeled, Seeborg found.
Brooks was also a regular at Sotheby's auctions, according to the ruling.
"While this was not a bargained for or negotiated contract, Brooks was an experienced participant and the terms contained in the auction catalogue were not inconspicuous," Seeborg wrote. "This was Brooks' 32nd purchase from a Sotheby's London auction, and he freely chose to bid in the auction subject to terms of which he had reasonable notice."
Brooks additionally did not dispute that he was a regular customer of Sotheby's auction in London, where purchases are invoiced in British pounds and funds are paid to a bank in London, the order says.
To limit the number of courts where it might have to fend off lawsuits, Seeborg also said Sotheby's has a legitimate reason to include a forum-selection clause in its terms.
"With operations in 40 countries and 250 annual auctions in ten global salesrooms, Sotheby's conducts a business that, by its nature, exposes it to potential litigation in different fora from plaintiffs from many locales," the ruling states.
Brooks had claimed that Sotheby's violated the California Legal Remedies Act, but Seeborg ruled that "Brooks is free to argue California law should govern this dispute under English conflict-of-law rules."
The collector also said he learned of the painting's possibly tarnished history when he asked fine arts auctioneer Christie's to sell the work for him in 2010.
He claimed that Christie's research raised enough questions that it declined the consignment.
Brooks then allegedly returned to Sotheby's, which took a year to conduct its own research and "concluded that they too were unable to clarify the painting's provenance sufficiently to offer it for sale. In declining to accept the painting for sale, Sotheby's wrote: '... we would want to establish that he [Goering] did not acquire it through the persecution of the prior owner.'"
Sotheby's alleged refusal of the consignment and refund demand led Brooks to sue.
"Sotheby's knew, or reasonably should have known, the following facts: (1) the Painting was at one time owned by Hermann Goering, founder of the Nazi Gestapo, commander-in-chief of the German Luftwaffe air force, Senior General and designated successor to Adolph Hitler; (2) Goering acquired the painting on August 23, 1939, through an intermediary art dealer; (3) in light of the circulation of confiscated and forcibly sold art work from Jewish collections that occurred after 1933 the conclusion that this is such a work cannot be ruled out as a possibility by reputable art dealers," his complaint said.
Brooks is represented by Thomas Losavio of Low, Ball & Lynch. Jeffrey Faucette of Skaggs Faucette represents Sotheby's.
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