Treasure Sold During Holocaust Fought Over at High Court

WASHINGTON (CN) — A yearslong battle over a medieval collection sold to the Nazis in 1935, now estimated to be worth a quarter of a billion dollars, brought the heirs of Jewish art dealers to the U.S. Supreme Court on Monday.

The 42 silver religious artifacts are part of what is known as the Welfenschatz or the Guelph Treasure — said by some sources to have been gifted to Adolph Hitler himself by Hermann Goering, the Nazi leader of the state of Prussia. For decades, the treasure has been displayed at the Museum of Decorative Arts in Berlin. The Prussian Cultural Heritage Foundation, which owns the collection and runs the museum, denies modern assertions that the artifacts were sold during the Holocaust at below-market value. 

Today, with the heirs of two Holocaust victims seeking to have U.S. courts declare them as the rightful owners of the collection, the museum is joined by the German and Hungarian governments in seeking to have a pair of cases thrown out.

The double-header oral arguments before the high court on Monday saw the U.S. Department of Justice backing up Germany’s warning that a ruling for the heirs could open the floodgates and “expose the United States to similar litigation in foreign courts.” 

Such a decision by the justices would mark a “radical departure” from the understanding of sovereign immunity, said Deputy U.S. Solicitor General Edwin S. Kneedler.

With the justices considering some U.S. atrocities such as slavery and the internment of Japanese Americans during World War II, attorney Gregory Silbert for the Hungarian government argued that venue here is improper.

“We can all agree that the remedies for the worst injustices committed by the United States in the United States should not be decided by a Hungarian judge, applying Hungarian law, from a courtroom in Budapest,” Silbert said. 

Like the Hungarian government, Germany asserts that U.S. jurisdiction in the case poses an affront to “international comity,” the practice of deferring to the laws of other nations.

But attorneys for the descendants of the Jewish collectors said the U.S. has a moral imperative to provide relief to victims of the Holocaust.  

“Hungry wants courts to decide whether these are the types of claims that should be heard in U.S. courts. But Congress has already decided that they are,” attorney Sarah Harrington said. 

The Foreign Sovereign Immunities Act passed by Congress in 1976 explicitly sanctions the claims brought before the high court on Monday, Harrington argued.

She described the primary purpose of the law as doing away with “ad hoc determinations” by federal courts on whether they held jurisdiction over sovereign nations based on foreign policy concerns. 

For Germany, however, the law’s “expropriation exception” does not apply when a government is accused of taking its own citizens’ property. 

But Justice Neil Gorsuch pointed out that Jewish victims of the Holocaust were stripped of their citizenship in Germany.

“Why should they then have to go exhaust remedies elsewhere?” Gorsuch asked today. 

Jonathan M. Freiman, an attorney for Germany, argued that a ruling in favor of the collectors’ descendants would convert the U.S. judiciary into “new world courts” that hear alleged violations of international human rights. 

Justice Amy Coney Barrett expressed her own concern about such a landmark decision, saying the heirs were “struggling to identify limits” with their statutory claims. 

“You know that it’s problematic to interpret it so broadly that it would have 700 district judges in the country adjudicating all these kinds of claims,” Barrett said. 

Justice Elena Kagan raised that similar claims brought in the Seventh Circuit had borne potential damages adding up to around 40% of Hungary's gross domestic profits, a payout that could “essentially bankrupt a foreign nation.”

“Now that seems as though it's screaming severe international friction,” Kagan said. “Why shouldn't we be able to acknowledge something like that?” 

But Harrington, representing the heirs, said that any estimate as to the size of damages arising from a landmark ruling by the justices in the Guelph Treasure case would be “pure speculation at this point.”

The Justice Department is backing Germany on appeal, cautioning the judiciary that taking a stance in the case would entangle the courts in “sensitive foreign policy determinations.”

In a friend-of-the-court brief, meanwhile, a bipartisan group of lawmakers called it “greatly exaggerated” of the governments to assert that a ruling for the heirs would carry “international relations consequences.”

As for the risk of other human rights violations dropping down in U.S. courts, an attorney for the heirs urged the justices to remember that the atrocity here has no equal.

“It cannot be repeated enough,” Nicholas Michael O'Donnell said. “There is no paradigm like the Holocaust.”

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