The most famous pieces of the Herzog Collection are on display in two museums operated by the Republic of Hungary. The Herzog family -- the heirs of the generation displaced or murdered in the Holocaust -- want the Collection back. In a recent court decision, the government of Hungary and the museums failed in their effort to have the case dismissed.

The defendants plan to appeal. We won't go into that decision in as much detail as we have in the memorandum dismissing their motion. But we still maintain that the case is a fascinating example of how the law works. The Holocaust generation had inherited the artworks from their parents; the Hungarian government, aided by the Nazis, seized the collection during World War II. They have been attempting ever since to recover their patrimony.

The defendants made one argument after another -- that the court lacked the authority to sue a sovereign state, that the plaintiffs had been compensated for their loss by a 1973 agreement between the U.S. and Hungary. The court sided with the plaintiffs each time.

The court also agreed with the plaintiff's response to another of defendants' claims: that the plaintiffs had been compensated by the Foreign Claims Settlement Commission. If compensated, a claimant's future claims were barred. But, the court pointed out, only if a claimant received full compensation could no further action be taken. The Herzog award did not amount to full compensation, so the heirs were entitled to act to recover the balance and the property itself.

Defendants mounted one last argument. Even if the court had jurisdiction, and even if the plaintiffs' claims weren't barred by earlier settlements, the defendants said, the plaintiffs had failed to state a claim upon which relief could be granted. Essentially, the defendants argued that the plaintiffs have no case; they can complain as much as they want to, but that doesn't mean they have a legal leg to stand on.

We'll discuss that in our next post.

Source: DAVID L. de CSEPEL, et al. v. REPUBLIC OF HUNGARY, et al., Memorandum, United States District Court for the District of Columbia, Civil Action No. 10-1261 (ESH), filed Sept. 1, 2011