We thought Armistice Day would be an appropriate time to wind up our story of the Herzog Collection. At some point, November 11 became Veterans Day, but for anyone who has traveled to the World War I battlefields that crisscross northern France and Belgium, it's hard not to call it Armistice Day. The Herzogs' story is from a different war, of course, and a different country.
All of it is far from Florida, but, if you close your eyes, you can see the monuments to soldiers of both wars -- all wars. For the Herzog heirs, the monument to their fallen is the thousands of artworks that the Baron amassed and that the family tried to protect in 1940. The heirs are fighting to get back what was left from their old lives, before the war and the Holocaust.
The defendants in this case, of course, include the government of the Republic of Hungary. As we've discussed, it's not easy to sue a government. The defendants, in their last argument, pointed to the Act of State doctrine. In its memorandum, the court again disagreed.
The doctrine "precludes the courts of this country from inquiring into the validity of public acts of a recogn9ized foreign sovereign power committed within its own territory." The theory is that individuals' complaints against a foreign power should be secondary to the relationship between the sovereigns. Don't let a family squabble interfere with foreign policy.
However, the doctrine only applies to cases where the dispute is based in a sovereign act. That is, the plaintiff is asking a U.S. court to rule that the official act of a foreign government is invalid. The act in question must be truly a sovereign act -- something a government does purely by right of sovereignty.
In contrast to an act of state stands a purely commercial act. The court returned to the bailment argument.
The plaintiffs argued, and the court agreed, that the government of Hungary had entered into a series of bailment agreements where the Herzog artworks were the chattel. A bailment is a commercial act, not a sovereign act.
Ahh, but you say, the root of this disagreement goes back to the Hungarian government and Nazi officials seizing the Collection during World War II. The court dispatched that issue with a simple, No. Courts have long held that "the act of state doctrine does not apply to the Nazi taking of Jewish property during the Holocaust." And, of course, the government that confiscated the Collection no longer exists.
One of the remarkable things about this is that the memo we've been discussing for 16 posts is just that -- a memorandum denying the defendants' motion to dismiss. The court's decision here merely allows the Herzog heirs to move forward with their case.
Art experts estimate the 40 artworks in question are worth about $100 million. While this case is moving forward, the Herzogs are pursuing claims against other countries. One of those suits involves Russia; it was filed in 1999.
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