[email protected] GARTENBERG GELFAND HAYTON LLP · vs. NORTON SIMON MUSEUM OF ART AT...

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07-2866 JFW(SSx) PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

Edward Gartenberg (Bar No. 102693) [email protected] GARTENBERG GELFAND HAYTON LLP 15260 Ventura Blvd., Suite 1920 Sherman Oaks, CA 91403 Telephone: (213) 542-2100 Facsimile: (213) 542-2101

Lawrence M. Kaye [email protected] Howard N. Spiegler [email protected] Darlene Fairman [email protected] Frank K. Lord, IV [email protected] HERRICK, FEINSTEIN LLP Two Park Ave. New York, NY 10016 Telephone: (212) 592-1400 Facsimile: (212) 592-1500 Attorneys for Plaintiff MAREI VON SAHER

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

MAREI VON SAHER,

Plaintiff,

vs. NORTON SIMON MUSEUM OF ART AT PASADENA, et al.,

Defendants.

Case No. 07-2866 JFW(SSx) PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Date: August 1, 2016 Time: 1:30 p.m. Courtroom: 16 Pre-Trial Conf.: September 2, 2016 Trial: September 20, 2016 Judge: Hon. John F. Walter

Case 2:07-cv-02866-JFW-SS Document 236 Filed 07/01/16 of 67 Page ID #:8982

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i 07-2866 JFW(SSx) PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...................................................................................... iii

PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ................................................................................................................ 1

I. INTRODUCTION ............................................................................................. 1

II. STATEMENT OF FACTS ................................................................................ 2

A. Historical Background ............................................................................ 2

III. ARGUMENT .................................................................................................... 7

A. The Dutch Government Did Not Acquire Ownership Or A Power To Transfer The Cranachs After World War II ...................................... 7

1. The Dutch State Did Not Acquire Ownership Under E133 And E100 ...................................................................................... 7

2. E100 Did Not Give The Dutch State The Power To Dispose ........................................................................................ 15

3. The Dutch State Did Not Have Title Or The Power To Dispose Of The Cranachs Under International Law .................. 19

4. The GON Has Issued Official Sovereign Determinations Comprising Acts Of State That Specifically Contradict Defendants’ Contentions That The Goudstikker Gallery Waived, Abandoned And Settled Its Claims .............................. 21

B. The Act of State Doctrine Is Inapplicable To The GON Conduct Alleged By Defendants ......................................................................... 28

Assertion of Ownership ........................................................................ 28

Transfer to Stroganoff ........................................................................... 29

1999 Court of Appeal Decision ............................................................ 37

Exceptions to the Act of State Doctrine ................................................ 38

C. The Ninth Circuit Has Ruled That Plaintiff’s Claims Are Not Preempted By Federal Restitution Policy ............................................. 40

D. Soviet Nationalizations Transferred Title To The Cranachs To The Soviet Union Prior To The Lepke Auction ................................... 44

E. Plaintiff’s Claim Are Timely ................................................................ 47

1. Plaintiff’s Claim Under Section 496 Is Timely .......................... 47


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ii 07-2866 JFW(SSx) PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

2. Defendants Have Failed To Establish Laches ............................ 50

F. Adverse Possession Of Personal Property Is Not Recognized In California Law ...................................................................................... 58

IV. CONCLUSION ............................................................................................... 60


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iii 07-2866 JFW(SSx) PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

TABLE OF AUTHORITIES

Page

Federal Cases

Alfred Dunhill of London, Inc. v. Rep. of Cuba,

425 U.S.682, 96 S. Ct. 1854, 48 L. Ed. 2d 301 (1976) .............. 25, 31, 32, 33, 38

Banco Nacional de Cuba v. Sabbatino,

376 U.S. 398, 84 S. Ct. 923, 11 L. Ed. 2d 804 (1964) ................................. 36, 37

Cassirer v. Thyssen-Bornemisza Collection Found.,

No. CV 05-3459-JFW (EX), 2015 WL 9464458 (C.D. Cal. June 4, 2015) ...........

...................................................................................................................... 58, 59

Chuidian v. Phillippine Nat’l Bank,

912 F.2d 1095 (9th Cir. 1990) ............................................................................ 39

Clayco Petroleum Corp. v. Occidental Petroleum Corp.,

712 F.2d 404 (9th Cir. 1983) ...................................................... 25, 26, 34, 36, 38

de Csepel v. Republic of Hungary,

808 F. Supp. 2d 113 (D.D. Cir. 2011), aff’d in part, rev’d in part, 714 F.3d

591 (D.D. Cir. 2013) ........................................................................................... 39

Hilsenrath v. Swiss Confederation,

No. C 07-02782 WHA, 2007 WL 3119833 (N.D. Cal. Oct. 23, 2007) ............. 40

Ingle v. Circuit City,

408 F.3d 592 (9th Cir. 2005) .............................................................................. 40

Konowaloff v. Metro. Museum of Art,

702 F.3d 140 (2d Cir. 2012) ............................................................................... 45

Malewicz v. City of Amsterdam,

362 F. Supp. 2d 298 (D.D. Cir. 2005) ................................................................ 40

Malewicz v. City of Amsterdam,

517 F. Supp. 2d 322 (D.D. Cir. 2007) .......................................................... 38, 39

Mannington Mills, Inc. v. Congoleum Corp.,

595 F.2d 1287 (3d Cir. 1979) ............................................................................. 36


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iv 07-2866 JFW(SSx) PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

McKesson Corp. v. Islamic Republic of Iran,

Civ. Action No. 82-0220 (RJL), 2009 WL 4250767 (D.D. Cir. Nov. 23,

2009), aff’d in part, rev’d in part, 672 F.3d 1066 (D.D. Cir. 2012) .................. 39

Nat’l Coal. Gov’t of Union of Burma v. Unocal, Inc.,

176 F.R.D. 329 (C.D. Cal. 1997)........................................................................ 36

Northrop Corp. v. McDonnell Douglas Corp.,

705 F.2d 1030 (9th Cir. 1983) ...................................................................... 29, 36

Occidental Petroleum Corp. v. Buttes Gas & Oil Co.,

331 F. Supp. 92 (C.D. Cal. 1971), aff’d, 461 F.2d 1261 (9th Cir. 1972) ..... 26, 27

Republic of Austria v. Altmann,

317 F.3d 954 (9th Cir. 2002) .............................................................................. 39

Ricaud v. Am. Metal Co.,

246 U.S. 304, 38 S. Ct. 312, 62 L. Ed. 733 (1918) ............................................ 25

Stroganoff-Scherbatoff v. Weldon,

420 F. Supp. 18 (S.D.N.Y. 1976) ....................................................................... 45

Timberlane Lumber Co. v. Bank of Am., N.T. & S.A.,

549 F.2d 597 (9th Cir. 1976) ........................................................................ 26, 38

Underhill v. Hernandez,

168 U.S. 250, 18 S. Ct. 83, 42 L. Ed. 456 (1897) ....................................... 29, 31

United States v. Lummi Indian Tribe,

235 F.3d 443 (9th Cir. 2000) .............................................................................. 40

United States v. Portrait of Wally,

663 F. Supp. 2d 232 (S.D.N.Y. 2009) .......................................................... 29, 31

Vineberg v. Bissonnette,

529 F. Supp. 2d 300 (D.R.I. 2007), aff’d, 548 F.3d 50 (1st Cir. 2008) ............. 48

Von Saher v. Norton Simon Museum of Art,

754 F.3d 712 (9th Cir. 2014) ....................................................................... passim

W.S. Kirkpatrick & Co. v. Env’t Tectonics Corp.,

493 U.S. 400, 110 S. Ct. 701, 107 L. Ed. 2d 816 (1990) ................. 25, 29, 31, 36

Yale Univ. v. Konowaloff,

5 F. Supp. 3d 237 (D. Conn. 2014), aff'd, 620 F. App'x 60 (2d Cir. 2015) ....... 45


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v 07-2866 JFW(SSx) PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

State Cases

Brown v. State Pers. Bd.,

43 Cal. App. 2d 70 (Dist. Ct. App. 1941) .......................................................... 52

Conti v. Bd. of Civil Serv. Comm’rs,

1 Cal. 3d 351, 82 Cal. Rptr. 337 (1969) ....................................................... 50, 52

Cortez v. Purolator Air Filtration Prods. Co.,

23 Cal. 4th 163, 96 Cal. Rptr. 2d 518 (2000) ..................................................... 57

Farahani v. San Diego Cmty. Coll. Dist.,

175 Cal. App. 4th 1486, 96 Cal. Rptr. 3d 900 (App. Ct. 2009) ................... 54, 56

In re Estate of Flamenbaum,

1 N.E.3d 782 (N.Y. 2013) .................................................................................. 51

Goldman v. Sup. Ct. of L.A. Cnty.,

124 Cal. App. 2d 165 (Dist. Ct. App. 1954)....................................................... 49

In re Estate of Kampen,

201 Cal. App 4th 971, 135 Cal. Rptr. 430 (App. Ct. 2011) ......................... 50, 52

Keeler v. Sup. Ct.,

2 Cal. 3d 619, 87 Cal. Rptr. 481 (1970) ............................................................. 59

Lickiss v. Fin. Indus. Regulatory Auth.,

208 Cal. App. 4th 1125, 146 Cal. Rptr. 3d 173 (App. Ct. 2012) ....................... 57

Miller v. Eisenhower Med. Ctr.,

27 Cal. 3d 614, 166 Cal. Rptr. 826 (1980) ................................................... 50, 52

Naftzger v. American Numismatic Society,

42 Cal. App. 4th 421, 49 Cal. Rptr. 2d 784 (Dist Ct. App. 1996) ................ 47, 48

People v. Allen,

21 Cal. 4th 846, 89 Cal. Rptr. 2d 279 (1999) ..................................................... 49

People v. Chatmajian,

No. B141742, 2002 WL 220603 (App. Ct. Feb. 13, 2002) ................................ 49

People v. Grant,

113 Cal. App. 4th 579, 6 Cal. Rptr. 3d 560 (App. Ct. 2003) ............................. 49


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vi 07-2866 JFW(SSx) PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

People v. Hartridge,


People v. Scaggs,


People v. Scott,


Quick v. Pearson,

186 Cal. App. 4th 371, 112 Cal. Rptr. 3d 62 (App. Ct. 2010) ........................... 57

San Francisco Credit Clearing House v. C.B. Wells,

196 Cal. 701 (1925) ...................................................................................... 58, 59

Soc’y of Cal. Pioneers v. Baker,

43 Cal. App. 4th 774, 50 Cal. Rptr. 865 (App. Ct. 1996) ............................ 58, 59

Williams v. Sup. Ct.,

81 Cal. App. 3d 330, 146 Cal. Rptr. 311 (App. Ct. 1978) ................................ 49

Federal Statutes

22 U.S.C. § 2370(e)(2) ............................................................................................ 39

State Statutes

California Code of Civil Procedure

§338 .............................................................................................................. 57, 59

§338(c) ................................................................................................................ 48

California Penal Code

§496 .................................................................................................. 47, 48, 49, 50

§496(a) ................................................................................................................ 48

§496(c) ................................................................................................................ 48

§518 .................................................................................................................... 48

Miscellaneous

2 Restatement (Third) of the Foreign Relations Law of the United States

§712, comment c (1987) .......................................................................................... 39

30 Cal. Jur. 3d Equity §53 ....................................................................................... 50

43 Cal. Jur. 3d Equity §32 ....................................................................................... 50

Princess Paley Olga v. Weisz, [1929] 1 K.B. 718 ................................................... 45


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-1- 07-2866 JFW(SSx) PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN

OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

I. INTRODUCTION

As this Court emphasized in its April 2, 2015 decision, Dkt. 119 (the “April 2

Order”), in which it decided that Plaintiff should have an opportunity to pursue the

merits of her claims, Plaintiff’s “family suffered terrible atrocities at the hands of the

Nazis.” The Court of Appeals for the Ninth Circuit in its June 6, 2014 decision

stated: “Perhaps most importantly, this litigation may provide Von Saher an

opportunity to achieve a just and fair outcome to rectify the consequences of the

forced transaction with Göring during the war.” Von Saher v. Norton Simon

Museum of Art, 754 F.3d 712, 723 (9th Cir. 2014). In complete disregard of what is

clearly at stake in this litigation, however, Defendants begin their brief in support of

their summary judgment motion by accusing Plaintiff of “advanc[ing] the same

inflammatory narrative about her claim to the Cranachs.” Defendants’

Memorandum of Points and Authorities in Support of Motion for Summary

Judgment (“Defs. Memo”) at 1 (emphasis added).

Defendants twist this case into an accusation that Plaintiff’s claims are

meritless -- and worse “inflammatory” -- by ignoring the official findings and

determinations of the government of the Netherlands (the “GON”) that plaintiff’s

mother-in-law, Désirée Goudstikker, was unfairly treated by the Dutch bureaucracy

when she tried to pursue her claims to recover the artworks looted by Nazi

Reichsmarschall Hermann Göring and that she never waived her claims to her

artworks. Plaintiff’s Statement of Genuine Disputes of Material Facts (“PSGD”) at

292-294. Defendants’ contrary conclusions regarding the “facts” presented in their

brief ignore and undermine these official GON findings and determinations, which,

as acts of state by the GON, cannot be challenged in this case.


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For this and other reasons, as Plaintiff details in the PSGD, Plaintiff’s

Memorandum of Evidentiary Objections in Opposition to Defendants’ Motion for

Summary Judgment and the Argument section below, a great number of the “facts”

set forth in Defendants’ Statement of Uncontroverted Facts and Conclusions of Law

(“DSUF”) and their brief are controverted by Plaintiff and/or are irrelevant or

otherwise inadmissible.

As shown in Plaintiff’s pending summary judgment motion, based on the

undisputed facts, Plaintiff has established all of the elements of her claims in this

case. As detailed both in Plaintiff’s motion and in the Argument section below,

each of Defendants’ defenses is without merit. Therefore, Plaintiff’s motion for

summary judgment should be granted, and Defendants’ motion for summary

judgment denied.

II. STATEMENT OF FACTS

In the Argument section below, Plaintiff will refer in detail to the undisputed

facts that support her claims and defeat all of the Defendants’ defenses and

arguments, all of which are set forth in the PSGD. We summarize here the

undisputed historical background of the case.

A. Historical Background

Plaintiff seeks to recover two oil paintings entitled “Adam” and “Eve” by the

sixteenth century German artist Lucas Cranach the Elder (the “Cranachs”) (PSGD at

253) that are in the possession of Defendants, the Norton Simon Museum of Art at

Pasadena and the Norton Simon Art Foundation (collectively, the “Museum”).

PSGD at 254. Plaintiff, Marei von Saher (“Marei”), is the widow of Edward G. von

Saher (formerly Edward J. Goudstikker, “Edo”), and the daughter-in-law of Jacques

Goudstikker (“Goudstikker” or “Jacques”) and his wife, Désirée (“Dési”). PSGD at

255. Before World War II, Jacques was the principal shareholder of the art gallery

Kunsthandel J. Goudstikker N.V. (the “Goudstikker Gallery”), and purchased the

Cranachs at a 1931 auction of artworks consigned by the Soviet Union at Lepke


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auction house in Berlin. PSGD at 256, 257. Upon Jacques’s, Dési’s and Edo’s

subsequent deaths, Marei became and remains the sole living heir of the

shareholders of the Goudstikker Gallery. PSGD at 258-260.

On May 10, 1940, Nazi troops invaded the Netherlands. Because they were

Jewish, Jacques, Dési, and their infant son Edo, were forced to flee for their lives.

PSGD at 261, 262. They left behind the Goudstikker Gallery and all of its assets --

including some 1,200 valuable artworks, including Rembrandts, Steens, Ruisdaels,

van Goghs, and the Cranachs -- as well as Oostermeer, the Goudstikkers’ residence;

Nijenrode, a twelfth-century castle; and Herengracht 458, a seventeenth-century

canal building in Amsterdam. PSGD at 262, 263.

Jacques died in a shipboard accident on May 16, 1940 while fleeing the

Netherlands. PSGD at 264. Dési continued on, eventually arriving in the U.S.

where she became a naturalized citizen on June 9, 1947. PSGD at 265. At the time

of his death, Jacques had in his possession a black notebook (the “Blackbook”). The

Blackbook contains entries describing artworks in the Goudstikker art collection.

PSGD at 266. The Blackbook lists the Cranachs and indicates that they were

purchased by Jacques at the Lepke Auction House and were from the Church of

Holy Trinity in Kiev. PSGD at 267.

After Jacques’s death, the assets of the Goudstikker Gallery, including the

Cranachs, were involuntarily transferred to Nazi Reichsmarschall Hermann Göring

and his cohort, Alois Miedl. PSGD at 268.

After World War II, the Allies recovered in Germany the Cranachs, along

with hundreds of other artworks taken by Göring from the Goudstikker Gallery.

PSGD at 269. In accordance with Allied policy, these artworks were sent to the

GON. PSGD at 270. In or about November 1944, the Dutch Government in Exile

in London advised Dési that after liberation one of its primary concerns would be to

restore looted works of art to their rightful owners. PSGD at 271. Beginning in

1946, Dési made several trips to the Netherlands in order to arrange the restitution


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of the Goudstikker property forcibly transferred to Göring and Miedl. PSGD at 272.

Although Dési eventually entered into a settlement agreement with the GON in 1952

and recovered some property that had been taken by Miedl, she refused to settle her

claims to the artworks taken by Göring. PSGD at 273. The GON therefore retained

custody of over 200 such artworks, including the Cranachs. PSGD at 274.

In 1961, George Stroganoff Scherbatoff (“Stroganoff”) asserted to the GON

that the Cranachs had belonged to his family and asked that the GON transfer them

to him, saying that the GON had no legal right, title or interest to, or in, them.

PSGD at 275. The GON took the position that Stroganoff had no right to the

Cranachs so he offered to purchase them instead. PSGD at 276, 277. The sale was

effectuated in 1966. PSGD at 278.

In or about 1971, the Norton Simon Art Foundation and the Norton Simon

Foundation acquired the Cranachs from Stroganoff through his agent, despite

knowing that the Cranachs had been transferred from the Goudstikker Gallery to

Reichmarschall Göring. PSGD at 279-281. The Cranachs have been in the

possession of the Museum since that time.1 PSGD at 282. On or about October 25,

2000, Marei discovered that the Cranachs were at the Museum and promptly

contacted the Museum. PSGD at 283.

After first learning in 1997 the facts concerning the artworks looted from the

Goudstikker Gallery (PSGD at 284), Marei began her attempts to recover her

family’s looted artworks in the custody of the GON through both administrative and

judicial proceedings in 1998. PSGD at 285. In 2001, the GON officially

determined that its post-War policies regarding the restoration of Nazi-looted

property should be re-examined: “Based on our examination of the documents

relating to a great number of post-war claims we must describe the way in which the

1 In 1991, the Norton Simon Foundation transferred any interest it had in one of the

Cranachs to the Norton Simon Art Foundation. PSGD at 280.


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Netherlands Art Property Foundation generally dealt with the problems of restitution

as legalistic, bureaucratic, cold and often even callous.” PSGD at 286. Thus, the

GON decided that going forward it would review claims for such property based

upon a more policy-oriented approach. PSGD at 287. Following this policy change,

Plaintiff, through the successor entity to the Goudstikker Gallery, submitted a claim

for artworks looted from the Goudstikker Gallery to the State Secretary of the

GON’s Ministry of Education, Culture and Science, which oversees the GON’s

restitution policy, and the State Secretary referred the claim to the Dutch Advisory

Committee on the Assessment of Restitution Applications for Items of Cultural

Value and the Second World War (the “Restitutions Committee”). PSGD at 288,

289.

After an intensive review of the historical evidence, the Restitutions

Committee advised the State Secretary to restitute to Plaintiff all of the artworks in

the custody of the GON that, like the Cranachs, had been taken from the

Goudstikker Gallery by Göring. PSGD at 290. The Restitutions Committee found

that the transactions through which Göring and Miedl purported to purchase all of

Jacques’s artworks were involuntary, forced sales. PSGD at 291. Referring to

Dési’s complaint about unfair treatment at the hands of the Dutch bureaucracy, the

Restitutions Committee found that “the authorities responsible for restorations of

rights or their agents wrongfully created the impression that Goudstikker’s loss of

possession of the trading stock did not occur involuntarily.” PSGD at 292. It

concluded that Dési did not waive her rights to the Göring looted works. PSGD at

293.

On February 6, 2006, the State Secretary adopted the Restitutions

Committee’s advice and decided to restitute to Marei the 200 artworks looted by

Göring from Goudstikker, and still in the GON’s custody. PSGD at 294.

In her report to the President of the House of Representatives of the States

General officially conveying her restitution decision, the State Secretary explained


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her decision further. She stated that the Restitutions Committee based its

recommendations on the “extended restitution policy,” which was adopted in

accordance with the Washington Principles.2 Following these Principles, the

Committee decided to “depart from a purely legal approach . . . to choose a more

moral policy approach.” PSGD at 295.

Even though the Restitutions Committee found that a Dutch Court of Appeal

decision in 1999 did not “settle” the restoration of rights issue (PSGD at 296), the

State Secretary disagreed with the Restitutions Committee on this point and

explained that this is the reason “why this case is not included in the current

restitution policy.” PSGD at 297, 432. She nevertheless concluded that this was a

“special” case that justifies a restitution “in keeping with the recommendations of

the Committee.” PSGD at 297. She explained the basis of her reasoning: “In this

regard I have in particular taken into account the facts and circumstances

surrounding the involuntary loss of property and the manner in which the matter was

dealt with in the early Fifties as this has been put forward by the Committee in its

extensive investigation.” PSGD at 298.

In a letter dated March 31, 2006, the GON’s Director of Cultural Heritage,

writing on behalf of the State Secretary, specifically refused to confirm that the

GON had lawfully conveyed title to the Cranachs to Stroganoff, in response to

Defendants’ counsel’s written request dated February 6, 2006. PSGD at 299, 300.

On December 20, 2006, the Director of Cultural Heritage, again writing on behalf of

the State Secretary, advised Plaintiff’s counsel (with a copy to Defendants’ counsel)

2 Washington Conference Principles on Nazi Confiscated Art, produced at the

Washington Conference on Holocaust-Era Art Assets in 1998, described by the most

recent decision of the Court of Appeals in this case as follows: “Though non-

binding, the Principles reflect a consensus reached by the representatives of 13

nongovernmental organizations and 44 governments, including both the United

States and the Netherlands to resolve issues related to Nazi-looted art.” Von Saher,

754 F.3d at 721.


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as follows regarding this case: “I confirm to you that the State of the Netherlands is

not involved in this dispute. The State is of the opinion that this concerns a dispute

between two private parties.” PSGD at 301.

III. ARGUMENT

A. The Dutch Government Did Not Acquire Ownership Or A Power To Transfer The Cranachs After World War II

1. The Dutch State Did Not Acquire Ownership Under E133 And E100

Defendants argue that, through decrees and an administrative decision, the

GON acquired title to the artworks looted from the Goudstikker Gallery by

Reichsmarschall Göring, including the Cranachs. Their position is that Nazi-looted

assets recovered by the Allies in Germany and returned to the Netherlands that were

eligible for restitution to their pre-War owners became “enemy property” owned by

the State.3 But there is no basis for this conclusion. While Defendants’ experts

propose various theories to support this position, all are meritless and internally

inconsistent. PSGD at 409. As shown below, this is because the GON realized that

the various theories under which it might claim title to the recuperated property

3 Assets returned from Germany to the Netherlands after WWII consisted of enemy

assets (assets previously owned by enemies or enemy states), traitor assets

(collaborators), and assets returned to the Netherlands for restitution to their

previous Dutch owners. PSGD at 335. Royal Decree E100, issued in 1944, set

forth procedures for restoration of property rights to its true owners. PSGD at 335.

Pursuant to Royal Decree E133, issued about a month later, enemy assets that were

returned to the Netherlands became the property of the State. PSGD at 337.

The transfer of property to Göring from Goudstikker was the result of a forced

sale and, therefore, was eligible for restitution. PSGD at 339. After the War,

however, the GON consistently took the position that the sale of artworks from a

Jewish owned gallery to Hermann Göring, against the instruction of Dési

Goudstikker and by employees who were given huge bonuses for their

collaboration, was a voluntary sale. See PSGD at 340. This unfair post-War

position taken by the GON was an important basis for the eventual restitution in

2006. PSGD at 292, 294, 295, 298.


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were unsound and subject to legal challenges. Moreover, Defendants’ suggestion

that the GON acquired title to the artworks stolen by Göring is at odds with the

Allied post-War restitution policy.

Under the Allies’ post-War restitution policy, property found in Germany was

returned to its country of origin on the express understanding that the country of

origin was responsible for locating the true owners of that property and restituting it

to them. PSGD at 328. See Plunder and Restitution: The U.S. and Holocaust

Victims Assets, Findings and Recommendations of the Presidential Advisory

Commission on Holocaust Assets in the United States and Staff Report 8 (2000)

(“the recipient government bore the responsibility to locate the rightful owner and to

restitute the property turned over to it by U.S. authorities”). This was reaffirmed by

Secretary of State Clinton in a Press Statement issued by the U.S. Department of

State dated January 16, 2013. PSGD at 329.

Indeed, when cultural property was returned by the Allies, it was required that

the country of origin acknowledge receipt. Many receipts expressly provided that

the receiving country accepted the objects “as custodians pending the determination

of the lawful owners thereof,” and the goods “will be returned to their lawful

owners.” PSGD at 330. Defendants argue that reliance on these receipts is

misplaced because the wording of the receipt signed for the Cranachs differed from

that used in earlier receipts, which expressly referred to the state as “custodian”. 4

Defs. Memo at 34. But this assertion is without merit. Defendants point to no

intervening change of Allied policy that altered the understanding with regard to

4 Beginning some time in 1946, receipts were altered to reflect the possibility of an

Allied restitution commission that would make determinations about claims. This

commission was never actually created. The receipts that mention it contain

language that reinstates the obligations under the prior receipts in the event the

commission did not get set up. PSGD at 331. The Cranachs were returned on a

receipt that referred to the envisioned restitution commission. PSGD at 332.


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recuperated property, and there is nothing in the later receipts, like the one for the

Cranachs, providing for a transfer of title to the receiving state.5 PSGD at 331, 332.

Nor was there any subsequent change in Allied policy on this point. Thus, under the

Allied policy, when the Göring works were returned, they were held in custody by

the GON for the pre-War owner, Goudstikker; and the GON was obligated to

construct a restitution process under which the artworks would be returned to

Goudstikker, who throughout remained the lawful owner. PSGD at 325-332, 437.

On May 13, 1940 -- three days after the Nazi invasion -- the GON in exile

promulgated Royal Decree A6, which prohibited the conclusion of agreements with

the enemy or enemy subjects without the prior permission of a special commission,

CORVO. PSGD at 333. Defendants acknowledge that pursuant to A6 the sale to

Göring was void ab initio (Defs. Memo at 10, 29); therefore, no ownership interest

could be transferred to Göring through the “sale” in July 1940. Defendants contend,

however, that as the result of a February 5, 1947 decision by CORVO (the “1947

Decision”) that purported to exempt from Decree A6 all assets that were returned

from Germany, title to looted assets eligible for restitution vested in the enemy

purchasers and became enemy property owned by the State through Royal Decree

E133 on Enemy Property. Defs. Memo at 29-30. There is no basis for this

conclusion in the 1947 Decision or otherwise. The 1947 Decision simply reflected

5 Other Goudstikker artworks looted by Göring were returned on receipts from the

American Collecting Point in Munich that specifically designated the country of

origin as custodian. PSGD at 332. For example, Jan Mostaert’s painting known as

“Conquest of America by the Spanish” or “Landscape with an Episode from the

Conquest of America”, which was among the works Göring took from the

Goudstikker Gallery that were subsequently restituted to Plaintiff in 2006, was

handed over to the GON on a receipt that explicitly stated the GON was acting as

custodian for the rightful owner. PSGD at 446. Under Defendants’ theory, the

GON was acting as custodian for the Mostaert because of that receipt’s language,

but not for others, like the Cranachs, that were taken in the same way, at the same

time, by the same person. This is obviously absurd.


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that when the recuperated property was returned to the Netherlands, the initial

interest in the invalidity of the legal transactions came to an end. PSGD at 334. But

this had no effect on whether or not the assets were eligible for restitution, and the

GON continued to act as a custodian of the recuperated assets for the true owner, as

various official reports and memoranda of the GON confirm. PSGD at 456.

Thus, GON committees on post-War restitution confirmed that looted assets

returned from Germany were not enemy property owned by the State pursuant to

Decree E133 but rather that the GON, in line with Allied policy, held such assets in

custody for the pre-War owners from whom they had been looted. PSGD at 341.

For example, the Dutch Committee for Recovered Property was set up on December

11, 1946 to study issues relating to recovered property. PSGD at 342. The

Committee was chaired by W.G. Belinfante, who was Secretary of CORVO when

the 1947 Decision was issued and would have been fully cognizant of its intended

effect. PSGD at 451. The committee acknowledged the 1947 Decision, but

nonetheless expressly rejected the possibility that the GON was the owner of

property returned to the Netherlands pursuant to Decree E133, because it did not

apply to goods that were outside the border or legal sphere of the Netherlands. As

the Committee stated, such property “cannot be enemy capital within the meaning of

Royal Decree No. E. 133.” PSGD at 452.

The Executive Committee of the Art Property Foundation (the “Stichting

Nederlands Kunstbezit” or “SNK”) subsequently reviewed the report and issued an

Opinion on Recovered Works of Art, dated January 5, 1948. It was even more

direct. The Executive Committee stated that “although a number of schemes have

been suggested as possibilities . . . a right of ownership of the State with regard to

recovered property does not exist in general.” 6 PSGD at 343.

6 Indeed the SNK repeatedly urged the Government to implement a statutory scheme

to transfer title, but its efforts were rejected. PSGD at 410.


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Moreover, in November 1948, the Dutch Minister of Finance, noting that the

State was acting as a custodian (“Zaakwaarnemer”) for the original owners or their

successors, conceded that it would be “unacceptable to the Netherlands” for the

GON to claim ownership of restituted goods under Decree E133. This would have

had adverse economic consequences for the Netherlands and could have been

“challenge[d] on legal grounds”.7 PSGD at 344. This was not merely an abstract

policy debate: the Minister made direct changes to the structure of Dutch restitution

agencies to reflect the change in his position on recuperated property. PSGD at 411.

Nor did the GON itself believe it was the owner of the property that had been

looted by Göring. In November 1952, almost four months after settlement of the

Goudstikker Gallery’s claims regarding the Miedl transaction, the GON considered

selling paintings that had been part of the Göring transaction. With respect to those

paintings, the head of the Dutch Restoration Payment and Recuperated Property

Bureau concluded that if Dési “had not made the reservation in the settlement

effected between her and Nederlandse Beheersinstitutut, then the Dutch State would

have the full title to these paintings and would be able to sell them.” Instead, it was

determined that Dési would have to agree to any sale of those paintings that the

GON proposed. PSGD at 347. If the GON believed that Dési waived her claim to

the Göring works or that it was the owner of those paintings, Dési’s permission

would not have been necessary.8 Plainly, the GON knew that Dési maintained all of

her rights with regard to those works.

7 The Minister suggested that it would be better to argue that the GON could obtain

title to restituted property whose owners were unknown through the operation of

international law (PSGD at 345), but as discussed below, Dési Goudstikker was not

“unknown” (see pp. 15-17, infra) and there is no basis under which title could be

obtained through operation of international law. See III.A.3, infra. 8 The GON wrongfully sold some Goudstikker works during 1950-51, but as shown

below, that was not indicative of ownership.


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Defendants discuss the case of Rebholz v. Het Nederlandse Beheersinstituut

(“NBI”) extensively, contending that the decision supports their argument that the

looted Göring works became the property of the GON pursuant to Decree E133.

The decisions in Rebholz do no such thing, and Defendants misrepresent their

holdings.

The Rebholz and Goudstikker claims are not analogous, because the Rebholzs

were enemies of the State,9 and the Goudstikker Gallery was most certainly not.

PSGD at 338. There is no legal analysis about or discussion of the Rebholzs’ enemy

status in the 1953 decision because it was not necessary. The Rebholzs conceded

for the purposes of the case that they were enemies of the State within the meaning

of Art. 2 of E133. PSGD at 413. Therefore, the ownership of their estate was

transferred to the GON by operation of law pursuant to that provision, and the NBI

was managing their property for that reason.10

PSGD at 338, 414.

The critical issue, as stated by the Rebholz court in 1953, was “that the parties

hold different opinions about the question under which title the State obtained

possession of the litigious painting, viz. as an owner, as the N.B.I. and the State

have argued, or as a holder for the owner of the painting,” even though Decree E133

may have applied. PSGD at 415. It concludes that the State “must keep [the

recuperated property] and arrange for its return to the person who will appear to be

entitled to such property, so that the Foundation [i.e., the SNK], which must be

identified with the State for this purpose, obtained the painting as holder for its

9 Otto Rebholz was a member of the National Socialist Movement in the

Netherlands and the Dutch SS as well as a notorious war profiteer. PSGD at 412. 10

Defendants make much of the 1951 decision in the Rebholz case, but as to Decree

E133 it said nothing more than this. Defs. Memo at 31-33. A new case was brought

in 1953 because the 1951 decision was infirm in that it mistakenly held that the

Rebholzs had not made an application for de-enemization and, consequently, had no

standing to bring a claim. PSGD at 417.


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owner[.]” PSGD at 416. Although the Court devotes nearly half of the decision to

the analysis of this one question, Defendants -- conveniently and misleadingly -- fail

to mention it.

Defendants similarly give short shrift to Rebholz’s other important ruling. In

Rebholz, as Defendants’ expert agrees, the GON did not argue that it had title under

E133, since the Rebholzs had conceded that for the purposes of the case, but rather

argued only that the painting became state property upon its return, through a state

to state transfer, by the Allies to the GON pursuant to US Military Laws 52 and 63.

The court rejected that proposition. PSGD at 418.

Defendants argue that there is nothing in E133 or E100 stating that the GON

“was a mere custodian” (Defs. Memo at 34), but as Rebholz shows, the GON was a

custodian not because of internal Dutch laws, but because that was the capacity in

which it accepted the property from the Allies. Rebholz found the basis for this in

Military Laws 52 and 63 (PSGD at 419), but as noted above, it was also reflected in

the receipts for cultural property signed by the GON and repeatedly confirmed by

Dutch officials and reports. See pp.7-11, supra.

Neither E133, which was inapplicable, E100, nor any other Dutch statute

vested title in Goudstikker’s recuperated property in the State, even though

Goudstikker elected not to bring an E100 proceeding. Indeed, as Plaintiff’s expert

Arthur Salomons explained, under Dutch law it is not possible to change a

custodian/detentor into an owner by the enactment of a statute. PSGD at 420.

In the 1960s, when Stroganoff brought his claim to the GON, there was doubt

as to whether the GON owned the Cranachs. Uncertainty over the question of

whether the GON had title to the Cranachs played a major role in the discussions

between Stroganoff and the GON. In the eyes of the GON, having Stroganoff

purchase the Cranachs would act as an admission that it was the owner, which was

desirable because GON officials at the time were uncertain of its ownership interest.

PSGD at 348, 349.


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Plaintiff’s efforts to recover the Göring-looted artworks in the custody of the

GON vindicated Dési’s decision not to bring a claim under E100 during the post-

War period. As noted above, among other things, the post-War restitution regime

took the absurd position that the Göring transaction was voluntary. A proceeding

under Decree E100 would have been futile: the NBI took the position as late as

March 1952 that the sales had been voluntary. See n.3, supra. The report of the

Restitutions Committee and the decision by the State Secretary of February 6, 2006

confirm that Dési’s decision not to bring a proceeding in the 1950s did not prejudice

her rights to the Göring works. See pp.21-25, infra. The Restitutions Committee

pointed to the wrongful behavior of the GON as one reason that Dési might have

decided against bringing a claim. See p.23, infra.

Indeed, as discussed in the Restitutions Committee report, early in the post-

War restitution process, Dési was given a clear message that her efforts to recover

her property under the post-War restitution scheme would not be successful. In the

midst of initial negotiations with the GON to recover her property, Goudstikker

sought recovery of the Blauw Dollhouse from a third party who had purchased it

from Miedl during the War. PSGD at 421. On April 21, 1949, the Judicial Division

refused to return the dollhouse, relying on a provisional agreement reached with the

GON, which included a release of her claims to the Miedl property, which was later

repudiated by the GON and was certainly not in effect in 1949.11

PSGD at 453.

There was no way to appeal the Judicial Division’s decision once it had been made.

PSGD at 422. This decision taught Dési that if she were to bring a claim before the

Judicial Division, whether for Miedl or Göring works, she would lose.

11

As for the Judicial Division’s reliance on a draft agreement to bar Goudstikker’s

claim, Defendants’ expert admitted, “[l]egally it would have been very strange to

rely on a draft contract which was not yet signed.” He also admitted that, unlike a

Dutch court, the Judicial Division was not obligated to follow the Dutch Civil Code

and had wide latitude to make essentially any decision it wanted to. PSGD at 423.


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The justifiable decision not to commence an E100 proceeding did not deprive

Dési of any of her rights to the looted Göring artworks, as the recommendations of

the Restitutions Committee show. PSGD at 290, 292-293, 373. Nothing in the

post-War restitution regime, including Decrees E100 and E133, bestowed title on

the GON because a proceeding was not commenced. The Committee made it clear

that the GON held looted assets returned by the Allies, including the Göring works,

in custody for the pre-War owners or their successors. PSGD at 350. And, finally,

when the GON recently restituted other looted Göring works to Plaintiff, it again

acknowledged that the works were being held by it “in the custody of the Dutch

Government,” and did not suggest that it was the owner of the artworks. PSGD at

351.

2. E100 Did Not Give The Dutch State The Power To Dispose

Having failed to demonstrate that title to recuperated artworks passed to the

GON pursuant to E100 and E133, Defendants propose as an alternative that,

pursuant to Chapter VII of E100 (Art. 110-113), the GON acquired a right to

dispose of the Cranachs. There is no support for this proposition in Chapter VII or

otherwise.

The main fault in Defendants’ argument is that Chapter VII of E100 did not

apply to all property recuperated from Germany. Rather, as is clear from the

Explanatory Memorandum of Decree E100, Chapter VII was to be limited to owners

who were “unknown” in the strictest sense. It states, “it is to be expected that such

assets will be found on a large scale after the liberation, especially in cases where

individuals have died abroad and their heirs are unknown or have disappeared or

died.” PSGD at 424. As is often the case in post-War restitution regimes, property

whose owner was truly unknown was treated in special ways, but the owner of the

Goudstikker property was not unknown.

In addition, the previously mentioned “Report of the Dutch Committee for

Recovered Property” concluded that Chapter VII was even more limited. The


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Committee stated that “the provisions of Section VII of Royal Decree No. E 100

were not written for [recuperated] property.” Instead, Section VII actually addresses

“assets found unattended in the Netherlands.” PSGD at 425.

Regardless, even if this chapter could have been read as Defendants urge, it

could not have applied to the recuperated property from the Goudstikker gallery.12

Art. 113 of Chapter VII only required the sale of property of an unknown owner

who had not come forward. PSGD at 424, 433. Thus, it would only apply if Dési

had not come forward. It cannot be disputed that she did.

Indeed, the GON sought out Dési to get information about the looted

collection from the Goudstikker Gallery. Even before the end of the War, the Dutch

government had identified Dési as a potential claimant, sought her out, and she had

come forward by providing detailed information about property to which she had a

claim. PSGD at 428. There was never a moment in the post-War period when Dési

or her claims were “unknown” to the GON. And this would have been true even if

Dési had not responded to the GON. As Plaintiff’s expert testified, an owner would

not have been “unknown” if the State “knew from other sources who the owner

was”.13

PSGD at 429. The GON obviously knew from other sources that Dési was

12

Defendants suggest that the GON “applied chapter VII broadly” and that it

included instances “where potential claimants were known but had chosen not to file

a claim.” Defs. Memo at 34. But the only authority Defendants’ expert cites for

this is a book about the Stichting Nederlands Kunstbezit (see Declaration of Lars

Van Vliet, Ex. 29, at 71), which lost responsibility for handling recuperated

artworks on July 1, 1950, before the deadline for making claims expired. PSGD at

426. In any event, to the extent that officials applied this broadly, they overreached

their authority under the express terms of Chapter VII. That is clear from the plain

text of the explanatory memorandum for Chapter VII (PSGD at 424) and is why

their post-War efforts to sell property were controversial and engendered great

criticism, including from other Allied countries. PSGD at 427. 13

Defendants falsely imply that Plaintiff’s expert agreed that the definition of

“unknown” should be read broadly. Defs. Memo at 34. He did not. PSGD at 429.


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the owner of the Goudstikker property as the Minister of Education, Arts and

Sciences was writing to her about the property before the War had ended. PSGD at

428.

Defendants state that, in the early 1950s, the GON sold Goudstikker artworks

recuperated from Germany at public auction “without any objection from the Firm.”

DSUF ¶148. But nothing cited by Defendants says anything of the kind. The only

statement in the record cited as support is testimony from Plaintiff’s expert, who

stated only that he did not know if an objection was made. DSUF ¶148. Defendants

have not demonstrated that Goudstikker was notified that the State intended to sell

some of the artworks, which would have been required to change the State’s status

as custodian/detentor (PSGD at 430), or that Goudstikker was even aware of the

auctions. Moreover, after a few auctions in the early 1950s, the GON stopped the

sales and, as shown above (see p.11, supra), determined that Dési would have to

agree to any sale of those paintings that the GON proposed. She refused.14

Defendants contend that Plaintiff’s experts agree that Articles 110-113 of

E100, relating to items whose owner is unknown, permitted the GON to sell the

Cranachs. But this is not so. In fact, Arthur Salomons specifically declined to agree

with this.15

PSGD at 431. Professor Salomons certainly never said that Dési was

an “unknown owner” under E100 pursuant to Chapter VII or otherwise.16

14

As evidenced by the return of 200 such works to Plaintiff in 2006, the GON never

sold the great majority of the Göring works, as it would have been required to do if

it fell under Chapter VII. PSGD at 447. 15

The portion of the deposition of Plaintiff’s expert Arthur Salomons that is cited as

support of this assertion is actually the sixth time that he expressly refused to say

this. See Kaye Decl., Ex. 343 (Deposition of Arthur Salomons taken by counsel for

Defendants on May 3, 2016 at 115:15-116:24). 16

Contrary to Defendants’ assertion, Professor Schrage never agreed with the notion

that the GON had the right to sell Goudstikker property pursuant to Chapter VII and

never agreed with Defendants’ proposition that Chapter VII applied to the Cranachs.


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Defendants’ argue that Art. 113 granted the GON “a power of disposal over

the goods governed by this chapter, including the Cranachs.” Defs. Memo at 35.

As explained above, the Cranachs were not covered by this provision, but this

argument also fails on other levels. The legal provisions used to argue that a

purported power of disposal applied to the Cranachs are inapplicable.17

As

Plaintiff’s expert has explained, under Dutch law, even a special statute cannot

change the legal status of a custodian/detentor; such a change requires notification

that the owner’s rights will no longer be recognized. PSGD at 420, 430.

Defendants confuse the issue by pointing to Dutch laws covering different legal

relationships, like those of a secured creditor, where the property held might be sold.

Defs. Memo at 35. But Plaintiff’s expert has explained that, under Dutch law, a

secured creditor’s relationship to the property may allow a power of disposal, but

only because the property is subject to a pledge by the owner, not because the

creditor is a detentor. PSGD at 432.

The preamble of E100 made clear that it was an emergency decree enacted

because of the “urgent circumstances” of the post-War period. PSGD at 434. Even

if it could be argued that Chapter VII applied to the Cranachs, it is inconceivable

that controversial emergency provisions could have been used by the GON in 1966,

20 years after the War ended, to justify the sale to Stroganoff. And most

importantly, the GON has never taken the position that it sold the Cranachs to

Stroganoff because of its power of disposal under Chapter VII. The only ones to

make that argument are Defendants; and it is totally unjustified.

He referred only to Art. 151 of E100, which referenced both property covered by

Chapter VII and other recuperated property eligible for restitution that was entrusted

to other departments of the Council. PSGD at 433. In any event, he never

suggested that the GON had the right to sell other Goudstikker property pursuant to

Chapter VII or otherwise. 17

Defendants’ citations to the California Code are irrelevant to the transfers under

Dutch law at issue here.


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3. The Dutch State Did Not Have Title Or The Power To Dispose Of The Cranachs Under International Law

Defendants’ assertion that international law provided the GON with title and

the power to dispose of the Cranachs is without merit. The only relevant tenet of

international law, which Defendants ignore, is that property wrongfully taken from

individuals during War should be returned to the pre-War owners. This follows

from the fact that taking property wrongfully during wartime violates basic

principles of international law. PSGD at 455.

The London Declaration, entered into by the U.S. and the Netherlands, among

other countries, underscored that Nazi transactions pursuant to which pre-War

owners were dispossessed of their property should be undone, and the signatory

nations specifically reserved the right to invalidate all wartime property transactions,

including “transactions apparently legal.” PSGD at 325, 326. This set the stage for

the Allies’ post-War restitution policy pursuant to which property found in Germany

was returned to its country of origin, on the express understanding that the country

of origin was responsible for locating the true owners of that property and restituting

it to them. PSGD at 327, 328. Defendants’ assertion that, under the Allied policy,

the receiving state could do whatever it wanted with the property is wrong.

Although each country was charged with setting up its own regime for post-War

restitution, the ultimate obligation was to effectuate restitution to the pre-War

owner. PSGD at 435. The only reason that the U.S. chose to return the property to

the countries of origin, rather than directly to the victims, was that, considering the

enormous number of claims, it would have presented an administrative nightmare.

PSGD at 436. While the U.S. did not monitor each country’s restitution procedures,

the receiving country was still obliged to return looted property to its pre-War

owners. See PSGD at 437.

Unfortunately, many countries of origin failed to fulfill this obligation, and

this is what led to the 1998 Washington Conference and in turn, the Washington


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Conference Principles.18

PSGD at 454. See Von Saher, 754 F.3d at 721. Although

the Principles are non-binding, the 44 signatory governments agreed “to resolve

issues related to Nazi-looted art, “including “’to develop national processes to

implement these principles.’” Id. Consequently, the GON adopted the restitution

policy that resulted in the return of 200 Göring looted artworks to Plaintiff in 2006.

See p.6, supra.

Although international law permitted the countries of origin to impose

reasonable restrictions on the restitution process after the War, it did not, as

Defendants assert (Defs. Memo at 36), “give” those nations the power to expropriate

title to the property where reasonable restrictions were not implemented. PSGD at

438. Plaintiff’s expert, Dr. Andre Nollkaemper, makes clear that international law is

neutral with respect to state title or ownership of property and leaves such matters to

the individual countries. PSGD at 439. As shown above, however, the GON never

took title to the Goudstikker Gallery property. See III.A.1., supra. Moreover,

pursuant to international law, any action by the receiving countries may not

prejudice the claims of owners who bring their claims after any imposed deadline.

PSGD at 440. Under international law, a treaty might effect a transfer of title, and

indeed, in 1948 Dutch Finance Minister Lieftinck suggested that, in order to use

international law as a predicate for claiming ownership of recuperated property, any

treaty the GON entered into should include a provision passing title to the

recuperated property passed to the State (PSGD at 441), but the GON did not do so.

And the 1953 decision in Rebholz rejected the argument that the GON could claim

title to property recuperated in a state to state transfer based on Military Law 52 or

63. PSGD at 418.

18

Opening Statement by Miles Lerman (Kaye Decl., Ex. 327): What really shocked the conscience of the world was the discovery that even after the war, some countries tried to gain materially from this cataclysm by refusing to return to the rightful owners what was justly theirs. The refusal to respond to these rightful claims was a great injustice, a moral wrong which cannot be ignored.


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Defendants also incorrectly suggest that an analogy can be made to Military

Law 59 and its transfer of unclaimed property to the Jewish Restitution Successor

Organization (the “JRSO”). Defs. Memo at 36-37. Military Law 59 was consistent

with Allied post-War restitution policy in that its purpose was to return looted

property to pre-War owners. PSGD at 442. Although, as Defendants note, title to

the unclaimed property could be conveyed by the JRSO, this is not in any way

comparable to a country of origin claiming title of such property for itself. The

JRSO was not a government entity, but a charitable organization designated by the

U.S. to receive the assets of heirless victims and help survivors. PSGD at 443. The

JRSO was a trustee of the Jewish survivor community and took ownership in that

capacity. It did its best to return works to the owners, and only after the deadline for

claims had expired, did it sell property in order to raise funds for the benefit of

survivors. PSGD at 444. This hardly compares to the GON’s officials’ conduct

after the War: JRSO officials did not “use the assets for their own gain, or to admire

it on their walls.” PSGD at 445. Defendants’ attempt to equate GON conduct with

that of the JRSO is preposterous.

Not only is Defendants’ analogy baseless, it misses the most important point.

There was a formal mechanism created after the War by which title could be

transferred to the JRSO. As shown above, the GON did not establish any statutory

regime pursuant to which it could or did take title to the looted Göring works,

including the Cranachs. See, III.A.1, supra.

4. The GON Has Issued Official Sovereign Determinations Comprising Acts Of State That Specifically Contradict Defendants’ Contentions That The Goudstikker Gallery Waived, Abandoned And Settled Its Claims

Defendants spend much of their brief sharing their labored analysis of the

events surrounding the efforts by Dési after World War II to recover the paintings

looted by Göring from the Goudstikker Gallery. Defs. Memo at 11-19, 38-43. The

GON’s Restitutions Committee conducted a much more intensive official


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investigation of such events and its findings and conclusions completely contradict

those of Defendants. The Restitutions Committee’s main conclusion, that the

Goudstikker Gallery did not waive its claim to the Göring looted artworks, was

adopted by the State Secretary of the GON’s Ministry of Education, Culture and

Science, which oversees the GON’s restitution policy. PSGD at 290, 293, 294, 373.

Defendants are therefore asking this Court to invalidate the GON’s determinations

and findings, based on their own theories. Since these GON decisions comprise

official sovereign acts of state, they may not be invalidated or undermined, based on

Defendants’ theories or otherwise. In the face of the GON’s official determinations

and actions, Defendants’ conclusions and analysis are irrelevant, and their attempt to

prejudice Plaintiff’s case in this fashion should not be considered by the Court.

In 2001, the GON officially determined that its post-War policies regarding

the restoration of Nazi-looted property should be re-examined: “Based on our

examination of the documents relating to a great number of post-war claims we

must describe the way in which the Netherlands Art Property Foundation generally

dealt with the problems of restitution as legalistic, bureaucratic, cold and often even

callous.” PSGD at 286. Thus, it was the GON’s own conclusion that its post-War

restitution proceedings were not conducted in good faith, and that going forward it

would review claims for such property based upon a more policy-oriented approach.

Following this policy change, Plaintiff, through the successor entity of the

Goudstikker Gallery, submitted a claim for artworks looted from the Goudstikker

Gallery to the State Secretary of the GON’s Ministry of Education, Culture and

Science, which oversees the GON’s restitution policy, and the State Secretary

referred the claim to the Restitutions Committee. PSGD at 287-289. These facts are

admitted by Defendants (compare First Amended Complaint, ¶ 63 with First

Amended Answer (“FAA”), ¶ 63) and are evidenced by official GON records.

PSGD at 287-289.

After an intensive review of the historical evidence, the Restitutions


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Committee advised the State Secretary to restitute to Plaintiff all of the artworks in

the custody of the GON that, like the Cranachs, had been taken from the

Goudstikker Gallery by Göring. PSGD at 290. The Restitutions Committee found

that the transactions through which Göring purported to purchase the Goudstikker

artworks comprised an involuntary forced sale (PSGD at 291), and that Dési did not

waive her rights to the Göring looted artworks by not “asking for the restoration of

rights:”

Goudstikker could have had various reasons at the time for

deciding against seeking restoration of rights that in no

way suggest the surrender of ownership rights to the

Göring collection. One example that can be cited is that

the authorities responsible for restoration of rights or their

agents wrongfully created the impression that

Goudstikker’s loss of possession of the trading stock did

not occur involuntarily. As another indication that

Goudstikker did not want to surrender the rights to the

Göring collection in 1952, the Committee would like to

point out the deliberate omission of this category of works

of art from the final version of Article 1.4 of the [1952]

settlement.

PSGD at 292 (emphasis added). Thus, the Restitutions Committee, after a

comprehensive and official fact-finding investigation, came to the exact opposite

conclusion from Defendants about Dési’s intentions and conduct, determining that

the Goudstikker Gallery did not “abandon its rights in the Göring works by its

conduct in 1949-51” (Defs. Memo at 38) and had not “waived its rights in the 1952

Settlement Agreement.” Defs. Memo at 40.

On February 6, 2006, the State Secretary adopted the Restitutions

Committee’s advice and decided to restitute to Marei 200 artworks looted by Göring

from Goudstikker and still in the GON’s custody. PSGD at 294. The State

Secretary specifically found that “grounds for restitution exist in this particular case

in accordance with the committee’s recommendation:”


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In so doing I am especially mindful of the facts and

circumstances relating to the involuntary loss of property

and the settlement of the case in the early 1950’s as

highlighted by the committee in its extensive

investigation.

. . .

With regard to the ‘Göring transaction’, the Restitutions

Committee concludes that Goudstikker had suffered

involuntary loss of possession, since the rights to those

works were never waived as they were not covered by the

1952 settlement. Accordingly, it recommends that the

application for restitution be granted. I hereby adopt this

recommendation.

PSGD at 373. It follows that had the Cranachs still been in the custody of the GON

in 2006, they, too, would have been returned to Plaintiff.

In her report to the President of the House of Representatives of the States

General officially conveying her restitution decision, the State Secretary explained

her decision further. She stated that the Restitutions Committee based its

recommendations on the “extended restitution policy”, which was adopted in

accordance with the Washington Principles. Following these Principles, the

Committee decided to “depart from a purely legal approach . . . to choose a more

moral policy approach.” PSGD at 295.

Even though the Restitutions Committee found that the Dutch Court of

Appeals decision in 1999 did not “settle” the restoration of rights issue (PSGD at

296), the State Secretary disagreed with the Restitutions Committee on this point

and explained that this is the reason “why this case is not included in the current

restitution policy.” PSGD at 297. She nevertheless concluded that this was a

“special” case that justifies a restitution because of “the facts and circumstances

surrounding the involuntary loss of property and the manner in which the matter was

dealt with in the early Fifties as this has been put forward by the Committee in its

extensive investigation.” PSGD at 298.


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There can be no question but that the State Secretary concluded that the

Goudstikker matter had not been dealt with appropriately by the GON in the early

Fifties and that Goudstikker never waived her rights to the Göring looted works,

either in the 1952 settlement agreement or otherwise. This determination, and the

findings of the State Secretary, as well as those of the Restitutions Committee, are

“official act[s] of a foreign sovereign performed within its own territory.” Von

Saher, 754 F.3d at 725 (citing W.S. Kirkpatrick & Co. v. Env’t Tectonics Corp., 493

U.S. 400, 405, 110 S. Ct. 701, 704, 107 L. Ed. 2d 816, 822 (1990). The decision of

the State Secretary, based on the Restitutions Committee findings, was an official

“decree, order or resolution showing that the government action was undertaken as a

‘sovereign matter.’” Id. at 726 (citing Alfred Dunhill of London, Inc. v. Rep. of

Cuba, 425 U.S.682, 695, 96 S. Ct. 1854, 1861, 48 L. Ed. 2d 301, 311 (1976)). As a

restitution decision, it fits easily into the Court of Appeals’s analysis of sovereign

activity like restitution constituting “a considered policy decision by a government

to give effect to its political and public interests” (Von Saher, 754 F.3d at 726, citing

Clayco Petroleum Corp. v. Occidental Petroleum Corp., 712 F.2d 404, 406-07 (9th

Cir. 1983) and Ricaud v. Am. Metal Co., 246 U.S. 304, 310, 38 S. Ct. 312, 317, 62

L. Ed. 733, 746 (1918)) as opposed to private interests like a sale (Von Saher, 754

F.3d at 726 (citing Clayco, 712 F.2d at 406-07)). Therefore, the act of state doctrine

applies since the “defense interposed would require[ ] a court in the United States to

declare invalid the official act of a foreign sovereign performed within its own

territory.” Kirkpatrick, 493 U.S. at 405, cited in Von Saher, 754 F.3d at 725.

The State Secretary’s actions and the Restitutions Committee’s findings

“cannot become the subject of re-examination and modification in the courts of

another.” Ricaud, 246 U.S. at 310. Indeed, “inquiries by this court into the

authenticity and motivation of the acts of foreign sovereigns would be the very

sources of diplomatic friction and complication that the act of state doctrine aims to

avert.” Occidental Petroleum Corp. v. Buttes Gas & Oil Co., 331 F. Supp. 92, 110


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(C.D. Cal. 1971), aff’d, 461 F.2d 1261 (9th Cir. 1972). As the Court in Occidental

Petroleum emphasized, “‘our courts should be even more sensitive to the

involvements of a sovereign’s action when the sovereign is not a party to the action,

and the adjudication as it affects its prestige and dignity partakes of the nature of an

ex parte proceeding.’” Id. at 111 (citation omitted).

The policy decision by the State Secretary to adopt the factual findings of the

Restitutions Committee regardless of the previous Dutch Court of Appeal decision

was motivated by her determination that this was a “special case” based on the facts

the Restitutions Committee found, including the manner in which the matter had

been dealt with by the post-War GON and the fact that Dési never waived her

claims. PSGD at 297, 298, 372. The motivation of the State Secretary in this regard

cannot be questioned or impugned by Defendants or this Court (see Clayco, 712

F.2d at 407 (“This circuit’s decisions have similarly limited inquiry which ‘would

impugn or question the nobility of a foreign nation’s motivation’”) (citing

Timberlane Lumber Co. v. Bank of Am., N.T. & S.A., 549 F.2d 597, 607 (9th Cir.

1976)), and the wisdom of her policy and the integrity of her actions cannot be

challenged. See Timberlane, 549 F.2d at 607.

But that is precisely what Defendants try to do. Although they generally give

incredibly short shrift to the determinations of both the Restitutions Committee and

the State Secretary, they do go as far as to accuse the Restitutions Committee of

ignoring Dutch contract law when it specifically concluded that Dési did not waive

her rights in the 1952 settlement agreement. Defs. Memo at 40, 43. Defendants

then urge this Court to ignore the Committee’s conclusions and come to its own

independent and contrary interpretation of the 1952 settlement agreement under

Dutch law. Defs. Memo at 43. They claim, without any basis, that somehow the

Restitutions Committee’s specific references to the provisions of the settlement

agreement and the factors underlying Dési’s conduct when interpreting that

agreement, as indicated above, were guided more by “policy” than legal contract


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interpretation and fact-finding. Id. This is particularly unwarranted in light of the

fact that the Chair of the Restitutions Committee, Judge B.J. Asscher, was the

President of the Amsterdam District Court for ten years and was obviously well-

versed on Dutch contract law. PSGD at 405.

But whatever the motivation of the Restitutions Committee in interpreting the

1952 settlement agreement and otherwise determining that Dési did not waive her

rights, it officially did so as part of its mandate to carry out the restitution policy

promulgated under Dutch law. To question its motives or its conclusions -- or to

ignore this broad mandate of Dutch restitution law in favor of Defendants’ myopic

focus on their own interpretation of Dutch contract law -- would effectively

invalidate and undermine the Committee’s determinations and its decision to

restitute the works to Marei. Any such “inquir[y] by this court into the authenticity

and motivation of the acts of foreign sovereigns would be the very source[] of

diplomatic friction and complication that the act of state doctrine aims to avert.”

Occidental Petroleum, 331 F. Supp. at 110.

Indeed, to do so would be directly contrary to U.S. government policy on

restitution, as described in detail by the Court of Appeals. Specifically, the Court

held that United States policy on the restitution of Nazi-looted art included “a

commitment to respect the finality of ‘appropriate actions’ taken by foreign nations

to facilitate the internal restitution of plundered art” and “a recommendation that

every effort be made to remedy the consequences of forced sales.” Von Saher, 754

F.3d at 721. Any questioning of the conclusions of the Restitutions Committee or

the State Secretary that undermined their decisions to restitute the looted artworks to

Marei would be directly contrary to the Executive Branch’s pronounced policies, in

violation of the act of state doctrine. See id. at 726 (citing Clayco, 712 F.2d at 406-

07).

For all these reasons, this attempt by Defendants to have this Court invalidate

and question the sovereign acts of the GON in this manner must be rejected.


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B. The Act of State Doctrine Is Inapplicable To The GON Conduct Alleged By Defendants

In its most recent opinion in the case, the Court of Appeals remanded for

further consideration the act of state defense asserted by Defendants, but made it

clear that the only “act” to be analyzed in this context is the transfer of the Cranachs

to Stroganoff by the GON in 1966. Von Saher, 754 F.3d at 727. Nevertheless,

Defendants contend that there are two additional “acts of state” that would also

“bar” Plaintiff’s claims. None of these three examples of GON conduct implicates

the act of state doctrine.

Assertion of Ownership. After spending some five pages of their brief

purportedly analyzing the facts and Dutch laws to argue that the GON “acquired

ownership” of the Cranachs (Defs. Memo at 29-34), a contention with which

Plaintiff strongly disagrees (see III.A.1., supra), Defendants now incorrectly assert

that this somehow comprises an act of state.

As shown by Defendants’ own analysis, the issue of whether the GON owned

the Cranachs or was merely a custodian has to be determined under Dutch and

international law as it is applied to the relevant facts. These facts include

Defendants’ assertion that Dési waived her rights to the Cranachs, which, as shown

above, was determined not to be the case by the Restitutions Committee and the

State Secretary, in findings and determinations that comprise acts of state that

cannot now be challenged in this case. (See III.A.4, supra). Indeed, the GON

concluded that the GON did not act in good faith during the post-War restitution

proceedings. PSGD at 286. Moreover, as shown above, contrary to what

Defendants contend, the GON itself did not consistently assert that it owned the

Cranachs. See III.A.1., supra.

In any event, Plaintiff is not seeking to invalidate any sovereign act of the

GON, which the Court of Appeals set forth as a basic tenet of the act of state

doctrine: “In every case in which . . . the act of state doctrine appli[es], the relief


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sought . . . would . . . require[ ] a court in the United States to declare invalid the

official act of a foreign sovereign performed within its own territory.” Von Saher,

754 F.3d at 725 (citing Kirkpatrick, 493 U.S. at 405). The only issue raised by

Defendants is whether the GON owned the Cranachs based on the various GON

decrees and other sources they cited. Plaintiff does not seek to invalidate any of

these Dutch law provisions; rather, she contends that Defendants’ interpretation of

their effect on the GON’s status as owner or custodian in light of the relevant facts is

fundamentally incorrect.

The court in United States v. Portrait of Wally, 663 F. Supp. 2d 232, 248

(S.D.N.Y. 2009), held that the act of state doctrine did not apply where, as here,

the Court is not being asked to invalidate any action by [a]

governmental authority, but only to determine the effect of

such action, if any, on [the painting’s] ownership. See

Kirkpatrick, 493 U.S. at 409-10 (“The act of state doctrine

does not establish an exception for cases and controversies

that may embarrass foreign governments, but merely

requires that, in the process of deciding, the acts of foreign

sovereigns taken within their own jurisdictions shall be

deemed valid.”)

As the Court of Appeals emphasized, the “justification for invoking the act of

state doctrine ‘depends greatly on the importance of the issue’s implications for our

foreign policy.’” Von Saher, 754 F.3d at 725 (citing Northrop Corp. v. McDonnell

Douglas Corp., 705 F.2d 1030, 1047 (9th Cir. 1983)). Since the determination of

whether the GON owned or merely had custody of the Cranachs under Dutch and

international law accords all due respect for “the independence” of the GON, the

basic reason for application of the act of state doctrine is not implicated. Id. (citing

Underhill v. Hernandez, 168 U.S. 250, 252, 18 S. Ct. 83, 84, 42 L. Ed. 456, 457

(1897)).

Transfer to Stroganoff. Although Defendants give lip service to the

reference by the Court of Appeals to the act of state doctrine, they ignore the


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specific guidelines that the Court provided for analyzing the factual and legal issues

that pertain to the GON’s transfer of the Cranachs to Stroganoff. Applying these

guidelines, in light of the uncontroverted facts uncovered during discovery,

demonstrates that there is no basis for the application of the act of state doctrine to

this transfer. Von Saher, 754 F.3d at 725-27.

As the Court of Appeals made clear, the key question is whether this transfer

was a sale or a restitution. Id. at 726. As explained in detail below, the documents

regarding the transfer found in the files of the Dutch Ministries of Culture and

Finance demonstrate that the GON sold the Cranachs to Stroganoff for what the

GON thought was fair value, as reflected by a contract of sale signed by both

parties. PSGD at 278. Moreover, the GON consistently maintained the position

throughout this period that Stroganoff had no right to the Cranachs and therefore

never considered, let alone effected, a restitution of the paintings to him. PSGD at

276. In the face of the GON’s opposition, Stroganoff changed his position and

offered to buy the Cranachs from the GON. PSGD at 277. The GON eventually

accepted the offer. No restitution decree or any other official statute, decree, order

or resolution issued from the GON in connection with the sale to Stroganoff. PSGD

at 359.

But prior to analyzing the nature of the transfer of the Cranachs to

Stroganoff, the first inquiry must again be whether this Court is being asked to

declare the transfer invalid. As discussed above, the Court of Appeals set this forth

as a basic tenet of the act of state doctrine. Von Saher, 754 F.3d at 725. Regardless

of whether the transfer to Stroganoff was a sovereign act for these purposes, the act

of state doctrine simply does not come into play because Plaintiff is not seeking to

have the transfer declared invalid.

The only issue that must be determined in this case with respect to the transfer

to Stroganoff is whether title passed to Stroganoff under Dutch law as a result of the

transfer, not whether the transfer itself is valid. Plaintiff is not seeking to invalidate


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the transfer, i.e., she does not contend that the Cranachs should return to the custody

of the GON. Rather, since the transfer to Stroganoff was incontestably in the form

of a sale (PSGD at 278), the issue is whether Stroganoff acquired title under Dutch

law as a result of the sale.

As explained above, the court in Portrait of Wally, 663 F. Supp. 2d at 248,

concluded that the act of state doctrine did not apply where “the Court is not being

asked to invalidate any action by [a] governmental authority, but only to determine

the effect of such action, if any, on [the painting’s] ownership.” In Wally, the “acts”

considered by the court for this purpose were three “express approvals” issued by

ministries of the Austrian government taking possession and then transferring the

paintings at issue in that case to an individual other than the claimant. Despite the

official nature of these transfers, the Court concluded that the act of state doctrine

was not implicated since whether ownership resulted from the transfers was the only

issue relating to these transfers, not their validity. A fortiori, in this case, where no

official decrees of any kind were issued, the act of state doctrine is not applicable.

Once again, since the determination of title transfer under Dutch civil law accords

all due respect for “the independence” of the GON, the basic reason for application

of the act of state doctrine is not implicated. Von Saher, 754 F.3d at 725 (citing

Underhill, 168 U.S. at 252).

Indeed, even if validity of the transfer were at issue here, the act of state

doctrine would not apply. As the Court of Appeals held, the key question that

would then have to be determined by this Court with respect to the act of state

doctrine, is “whether the conveyance to Stroganoff constituted an official act of a

sovereign . . . .” Von Saher, 754 F.3d at 725-26, citing Kirkpatrick, 493 U.S. at 409.

See also Alfred Dunhill, 425 U.S. at 695, also cited by the Court of Appeals (Von

Saher, 754 F.3d at 712), in which the Court had pointed to the fact that “the foreign

government had not offered a government ‘statute, decree, order, or resolution’


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showing that the government action was undertaken as a ‘sovereign matter.’”19

These kinds of actions that distinguish a sovereign act of state from private actions

like a sales contract are missing in this case.

Applying this analysis, the Court of Appeals determined that the specific

question to be resolved with respect to the act of state issue is whether the transfer to

Stroganoff constituted a “sale” by the GON or a “return[ ] [of] the Cranachs to

Stroganoff to satisfy some sort of restitution claim.” Von Saher, 754 F.3d at 726.

The Court of Appeals found that the “record casts doubt” on Defendants’ Museum’s

contention that the transfer satisfied a restitution claim that Stroganoff made, and

noted that the deadline for filing an internal restitution claim in the Netherlands

expired on July 1, 1951, well before Stroganoff requested the Cranachs from the

GON. Id. at 722. PSGD at 360. Furthermore, as the Court of Appeals explained,

the Restitution of Legal Rights Decree, which governed

the Dutch internal restitution process, was established to

create “special rules regarding restitution of legal rights

and restoration of rights in connection with the

liberalization of the [Netherlands]” following World War

II. The Decree included provisions addressing the

restitution of wrongful acts committed in enemy territory

during the war. To the extent that Stroganoff made a

claim of restitution, however, it was based on the allegedly

wrongful seizure of the paintings by the Soviet Union

before the Soviets sold the Cranachs to Jacques

Goudstikker in 1931 – events which predated the war and

any wartime seizure of property. Thus, it seems dubious

at best to cast Stroganoff’s claims as one of internal

restitution.

Von Saher, 754 F.3d at 722 (emphasis added); PSGD at 336.

The documents from the GON files reflecting the communications preceding

19

This is in the portion of Alfred Dunhill that was held by a majority of the justices,

not having to do with the commercial activity exception agreed to by only a

plurality.


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and at the time of the transfer to Stroganoff bear out the Court of Appeals’s

skepticism about the transfer being anything but a sale. Specifically, the Head of

Legislation and Legal Affairs Division reports to the State Secretary that only the

“Goudstikker Company” could possibly have a restitution claim to the artworks

under the post-War restitution decrees, “and in any case not Mr. Stroganoff.” PSGD

at 361. Perhaps even more telling is the actual document presented by Stroganoff’s

attorney comprising his so-called “notification” to the GON regarding his request

for the Cranachs. PSGD at 275. This document asks that the GON hand over the

requested artworks or explain its refusal to do so. No restitution or other provisions

of Dutch law are cited in the document and it expressly states that it was “issued so

that the party notified is informed in a legal manner of the facts and circumstances

as described in this notification, as well as interruption of the limitation period.”

PSGD at 362. At his deposition, Defendants’ own expert agreed. Dr. Lars Van

Vliet testified that the notification “is an attempt for an amicable solution to the

problem and it also stops any limitation period. So this is simply an informal

request of returning the object. So we don’t really have a formal word for it. It is

not a Dagvaarding which is the formal word for the document starting legal

proceedings.” PSGD at 363.

The key document is the contract of sale between the GON and George

Stroganoff, dated July 1966, which provides that the State sells to Stroganoff and

that Stroganoff buys from the State three paintings including the Cranachs at a

purchase price of 60,000 Dutch Guilders. PSGD at 278. There is no mention of

restitution in this document nor did any “statute, decree, order or resolution”

officially issue from the GON. See Alfred Dunhill, 425 U.S. at 695. It is a contract

of sale, plain and simple.

Indeed, GON officials repeatedly denied that Stroganoff had any valid claim.

PSGD at 276. In the face of this rejection, Stroganoff offered to buy the Cranachs

from the GON. PSGD at 277. The GON itself acknowledged that Stroganoff’s


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offer to purchase the Cranachs at a reasonable price “does not concur” with a claim

for restitution. PSGD at 364. As a result, there was no need for legislation to

authorize the transfer of the Cranachs to Stroganoff, which would have been

required if this were a “settlement” of his claim rather than a sale. PSGD at 359.20

The lack of legislation demonstrates without question that “private” rather than

“public” interests were involved in this sale transaction, the characterizations

utilized by the Court of Appeals to distinguish a sale from a restitution. Von Saher,

754 F.3d at 726 (citing Clayco, 712 F.2d at 406-07).

Meanwhile, as the negotiations between Stroganoff and the GON proceeded,

an American named W.F.C. Guest, acting on Stroganoff’s behalf, tried to get Prince

Bernhard, Queen Juliana’s husband, involved. But a memorandum prepared by

Guest indicates that Stroganoff did not have a valid legal claim to the artworks he

sought, stating instead that his claim was based on “simple justice” and not on the

law. PSGD at 365, 366. This was confirmed by the Head of Legislation and Legal

Affairs. PSGD at 366. Finally, after further discussions, the GON and Stroganoff

agreed that Stroganoff would purchase the Cranachs and another painting. PSGD at

367.

What happened thereafter is further evidence that this was a sale and not a

20

Contrary to Defendants’ assertion, there was no “settlement” involving the three

paintings (the Cranachs and one other) and the Rembrandt. Defs. Memo at 46.

Because Stroganoff dropped his claim to the three paintings and purchased them

instead, the GON concluded that there was no “settlement” involving these three

paintings. The only “settlement” concerned the Rembrandt, as to which Stroganoff

separately waived his claim. PSGD at 352. In light of the documents actually

reflecting the communications concerning the matter (id.), Defendants misread the

summary memorandum prepared two years later, from which they quote. Defs.

Memo at 21 (“Accordingly, a settlement was reached in 1966, in which Stroganoff

agreed to waive his claims on the Rembrandt, while purchasing the other three

paintings from the state of the Netherlands for a total sum of f. 60,000.”) (Emphasis

added).


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restitution. The GON learned after the sale that the price paid by Stroganoff was

substantially lower than the actual market value of the sold paintings and considered

nullifying the entire agreement on that basis. PSGD at 368. This demonstrates that

it was the Government’s intention to sell and realize the market value of the

Cranachs without regard to any claim that Stroganoff asserted. There was no

official action to restitute the Cranachs to Stroganoff.

The position of the GON regarding the current lawsuit further demonstrates

that no act of state is involved here. In a letter dated February 6, 2006, an attorney

representing the Defendants wrote to the Dutch ministers of finance and culture:

“the NSAF respectfully requests the Dutch government to confirm that it lawfully

conveyed title to the ‘Adam’ and ‘Eve’ paintings by Cranach to George Scherbatoff

in 1966.” PSGD at 299. In response, the Secretary of Education, Culture and

Science wrote: “I refrain from an opinion regarding the two pieces of art under the

restitution policy.” PSGD at 300. When counsel for Plaintiff subsequently inquired

as to whether Defendants had been in contact with the GON about this case, the

Ministry for Education, Culture and Science responded: “I confirm to you that the

State of the Netherlands is not involved in this dispute. The State is of the opinion

that this concerns a dispute between two private parties.” PSGD at 301. Thus, as

Defendants are well aware, the GON has itself answered the inquiry that a court

must make in its act of state analysis. When given the opportunity to take a position

or raise concerns about this case, the GON disavowed any interest, emphasizing the

dispute was a “private” matter. The GON made clear that it has no concerns that its

sovereign acts are implicated in any way.

In the face of all this evidence that the transfer to Stroganoff was a sale and

not a restitution or other sovereign act, the only thing that Defendants can point to is

the Dutch Minister of Culture’s recognition of the importance of the Cranachs to the

“Dutch cultural collection,” the sale of which should only take place “in exceptional

cases, actually only if the interest of the country requires such sale.” Defs. Memo at


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46. But of course that is true of every sale by any government of any artwork in its

collection. And a sale, as opposed to the “return[ ] [of] the Cranachs to Stroganoff

to satisfy some sort of restitution claim,” does not comprise an act of state. Von

Saher, 754 F.3d at 762

No public interests are involved here, regardless of the fact that it was the

GON that sold the Cranachs to Stroganoff. As the Court in Mannington Mills, Inc.

v. Congoleum Corp., 595 F.2d 1287, 1294 (3d Cir. 1979) held, the granting of

patents by a governmental entity did not constitute “a considered policy decision by

a government to give effect to its political and public interests.” Von Saher, 754

F.3d at 726 (citing Clayco, 712 F.2d at 406-07). “[T]he grant of patents . . . is not

the type of sovereign activity that would be of substantial concern to the executive

branch in its conduct of international affairs.” Mannington Mills, 595 F.2d at 1294.

As with the grant of patent rights, the sale to a private citizen of artworks in the

government’s custody reflect only private rather than political or public interests,

and are of no substantial concern to the executive branch. As in Clayco, sovereign

activity here “merely formed the background to the dispute.” Clayco, 712 F.2d at

406. The GON’s 2006 letters made that clear.

The GON’s position is also relevant when one considers the policies behind

the act of state doctrine as this Court is required to do. The Court of Appeals

emphasized that the act of state doctrine is not an “inflexible and all-encompassing

rule.” Von Saher, 754 F.3d at 725 (citing Banco Nacional de Cuba v. Sabbatino, 376

U.S. 398, 428, 84 S. Ct. 923, 940, 11 L. Ed. 2d 804, 823 (1964)). It is instead “‘a

sort of balancing approach’ [that] can be used to determine whether the policies

underlying the doctrine justify its application.” Nat’l Coal. Gov’t of Union of

Burma v. Unocal, Inc., 176 F.R.D. 329, 350 (C.D. Cal. 1997) (citing Kirkpatrick,

493 U.S. at 409). The key question is whether a court’s inquiry into the foreign

sovereign’s acts will interfere with the conduct of foreign policy relations. Northrop

Corp., 705 F.2d at 1047. When, as here, the GON has determined that it has no


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sovereign interest in this case, there can be no foreign policy concerns.

It is important to consider in this context that in 2006 the GON restituted to

Plaintiff all of the Goudstikker artworks still in its custody that had been looted by

Göring. PSGD at 294. This would have included the Cranachs if they were still in

its custody at that time.21

Thus, any decision by this Court that the Cranachs should

be returned to Plaintiff would be in accord with actions that the GON has already

taken. As stated in Sabbatino, “the less important the implications of an issue are

for our foreign relations, the weaker the justification for exclusivity in the political

branches.” Sabbatino, 376 U.S. at 428. Here, where the GON has disclaimed

interest in this litigation and the relief sought would conform with its own policy,

there is no reason for the Judiciary to defer to the “political branches.” Von Saher,

754 F.3d at 730-31. As the Court of Appeals determined, returning the Cranachs to

Plaintiff would also be consistent with United States restitution policy. Id. at 722-

23.

1999 Court of Appeal Decision. As Defendants’ acknowledge, the 2005

Restitutions Committee recommendation made a judgment regarding the 1999 Court

of Appeal decision. Defs. Memo at 48. Specifically, the Committee determined

that that decision did not “settle” the restoration of rights issue, and it decided to

restore Plaintiff’s rights to the Göring looted artworks, effectively overruling the

1999 decision. Although the State Secretary disagreed, concluding that the Court of

Appeal decision did “settle” the issue, she explained that this is the reason “why this

case is not included in the current restitution policy.” PSGD at 372. She concluded,

however, that this was a “special” case that justified restitution because of “the facts

and circumstances surrounding the involuntary loss of property and the manner in

21

Indeed, two paintings by Pietro Rotari that were formerly part of the Stroganoff

Collection and were purchased by Jacques at the 1931 Lepke auction were restituted

by the GON to Marei in 2006. PSGD at 319.


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which the matter was dealt with in the early Fifties as this has been put forward by

the Committee in its extensive investigation.” PSGD at 297. As explained above,

these findings and determinations by the GON comprise acts of state that cannot be

invalidated or undermined in this case. See III.A.4, supra. Since the 1999 Court of

Appeal decision has been superseded by the acts of state of the Restitutions

Committee and State Secretary, any attempt to resurrect the decision by calling it an

act of state must fail. Ironically, Defendants appear to make this very point: “the act

of state doctrine exists so that foreign governments, not U.S. courts, can judge their

own prior acts.” Defs. Memo at 48. The motivation of the State Secretary in this

regard cannot be questioned or impugned by Defendants or this Court (see Clayco,

712 F.2d at 407) and the wisdom of her policy and the integrity of her actions

cannot be challenged. See Timberlane, 549 F.2d at 607.

Exceptions to the Act of State Doctrine. The Court of Appeals referred to

two exceptions to the act of state doctrine that might come into play in this case.

Defendants only address one of these exceptions, i.e., the commercial exception, but

both would apply here.

First, with respect to the commercial exception, if such an exception is

recognized by the Ninth Circuit, it would clearly apply here to the GON’s transfer of

the Cranachs to Stroganoff. As shown above, the transfer of the Cranachs by the

GON to Stroganoff was a sale, and, as a result, did not comprise a sovereign act, let

alone the exercise of a power “peculiar to sovereigns.” See Von Saher, 754 F.3d at

726 (citing Alfred Dunhill, 425 U.S. at 704). As the District Court of the District of

Columbia explained in Malewicz v. City of Amsterdam, 517 F. Supp. 2d 322, 339

(D.D. Cir. 2007), the government’s purchase of paintings, although “official” in the

sense that it was effected by a government employee acting in his official capacity,

“was not an action taken by right of sovereignty” because “any private person or

entity could have purchased the paintings for display in a public or private

museum.” The same, of course, can be said for a sale of artworks. Courts have


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repeatedly held that the key to determining whether an act by the government is an

“act of state” is whether it could be effected by a private person; if so, it cannot be

considered a sovereign act under the act of state doctrine. See, e.g., McKesson

Corp. v. Islamic Republic of Iran, Civ. Action No. 82-0220 (RJL), 2009 WL

4250767, at *5 (D.D. Cir. Nov. 23, 2009), aff’d in part, rev’d in part, 672 F.3d 1066

(D.D. Cir. 2012); de Csepel v. Republic of Hungary, 808 F. Supp. 2d 113, 143 (D.D.

Cir. 2011), aff’d in part, rev’d in part, 714 F.3d 591 (D.D. Cir. 2013)) (the actions

challenged by the plaintiffs are commercial acts that “could be committed by any

private university or museum”; such “‘purely commercial’ acts do not require

deference under the act of state doctrine”).

Second, the other exception to the act of state doctrine to which the Court of

Appeals referred would apply here even if the GON’s sale was deemed to be a

sovereign act that would otherwise be subject to the act of state doctrine. As the

Court of Appeals explained, the Second Hickenlooper Amendment provides that the

act of state doctrine does not apply to a taking or confiscation (1) after January 1,

1959, (2) by an act of state (3) in violation of international law. 22 U.S.C.

§2370(e)(2). Von Saher, 754 F.3d at 727. If this Court should somehow determine

that the transfer of the Cranachs to Stroganoff was not a sale but was instead a

restitution, then that would constitute a confiscation of Dési’s property without

compensation22

in violation of international law, since Dési was not a Dutch national

at the time of the transfer23

(see generally, Chuidian v. Phillippine Nat’l Bank, 912

F.2d 1095 (9th Cir. 1990)) and the Cranachs were in the U.S. when this action was

22

2 Restatement (Third) of the Foreign Relations Law of the United States §712,

comment c (1987); see also, Republic of Austria v. Altmann, 317 F.3d 954, 968 (9th

Cir. 2002) (taking of paintings by foreign government could not be valid absent the

payment of just compensation). 23

PSGD at 265.


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commenced24

(see Hilsenrath v. Swiss Confederation, No. C 07-02782 WHA, 2007

WL 3119833, at *6 (N.D. Cal. Oct. 23, 2007)).

The Museum’s own research confirmed that there is no evidence that

Stroganoff’s family ever owned the Cranachs. See III.E.2., infra. The GON has

ruled officially that the paintings looted by Göring should be restituted to Plaintiff.

Under these circumstances, if the GON had “restituted” the Cranachs to Stroganoff,

it would have wrongfully expropriated them from Dési Goudstikker without

compensation in violation of international law, and the Second Hickenlooper

Amendment would bar any application of the act of state doctrine. Indeed, even if

the transfer was a sale by the GON to Stroganoff, it would still have been an

expropriation without compensation. Cf. Malewicz v. City of Amsterdam, 362 F.

Supp. 2d 298, 306 (D.D. Cir. 2005) (purchase of paintings by City of Amsterdam

without compensation to true owners considered a “tak[ing] without compensation”

and therefore “violate[d] international law”).

For all these reasons, there is no merit to Defendants’ act of state defense.

C. The Ninth Circuit Has Ruled That Plaintiff’s Claims Are Not Preempted By Federal Restitution Policy

The law of the case doctrine precludes a court from “reconsidering an issue

previously decided by the same court, or a higher court in the identical case.” Ingle

v. Circuit City, 408 F.3d 592, 594 (9th Cir. 2005); United States v. Lummi Indian

Tribe, 235 F.3d 443, 452 (9th Cir. 2000). The Court of Appeals has expressly held

that Plaintiff’s claims “do not conflict with any federal policy.” Von Saher, 754

F.3d at 721. Defendants may not relitigate this issue.

The Court of Appeals held that since the Cranachs were never subject to post-

War internal restitution proceedings in the Netherlands, “allowing von Saher’s claim

to go forward would not disturb the finality of any internal restitution proceedings --

24

PSGD at 282.


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appropriate or not -- in the Netherlands.” Id. at 723. Therefore, there could be no

conflict between the restitution policy of the United States and any such

proceedings. Id. The Court of Appeals based its decision on three facts, each of

which is undisputed or indisputable. Id.

“(1) Dési chose not to participate in the initial postwar restitution process.”

Defendants admit that this allegation is true. Id. See FAA, ¶ 32, PSGD at 371.

“(2) the Dutch Government transferred the Cranachs to Stroganoff before

Dési or her heirs could make another claim.” Von Saher, 754 F.3d at 723. It is

undisputed that the Cranachs were transferred to Stroganoff by the GON in 1966

(See, e.g., FAA, ¶ 40, PSGD at 278) and it is indisputable that the deadline for

bringing a restitution claim had expired on July 1, 1951. See, e.g., the decision of

the Dutch Court of Appeal. PSGD at 360, 372. See also Von Saher, 754 F.3d at

722.

“(3) Stroganoff’s claim likely was not one of internal restitution . . . .” Id. at

723. As was explained in detail at III.B., supra, this conclusion of the Court of

Appeals is not only proven by the facts that Stroganoff’s claim for the Cranachs was

not subject to the post-War restitution procedures and was not asserted before the

deadline for such procedures (PSGD at 360), but also by the nature of Stroganoff’s

claim, which did not purport to commence a restitution or any other proceeding (as

conceded by Defendants’ own expert) (PSGD at 363) and by the GON’s officials’

own conclusions that the GON’s transfer of the Cranachs to Stroganoff was a sale

and not a restitution. PSGD at 276.

Besides concluding that Plaintiff’s claims did not conflict with United States

policy, the Court of Appeals went further and held that her claims are “in concert”

with federal policy:

Von Saher is just the sort of heir that the Washington

Principles and Terezin Declaration encouraged to come

forward to make claims . . . . Moreover, allowing her

lawsuit to proceed would encourage the Museum, a private


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entity, to follow the Washington Principles, as the Terezin

Declaration urged. Perhaps most importantly, this

litigation may provide Von Saher an opportunity to

achieve a just and fair outcome to rectify the consequences

of the forced transaction with Göring during the war. . . . 25

Von Saher, 754 F.3d at 723. Having held that there is no conflict with the

Executive’s conduct of foreign policy and indeed having determined that Plaintiff’s

claims are consistent with that policy, the Court of Appeals concluded that this is “a

dispute between private parties.” Id. at 725.

Defendants nevertheless seek to challenge the Court of Appeals’s conclusions

by resurrecting old arguments rejected by that Court. First, Defendants claim that

Plaintiff did “initiate and receive[] Dutch postwar internal restitution proceedings as

to the Cranachs” by seeking compensation from the Dutch Court of Appeal in 1998

for the Cranachs sold by the GON. Defs. Memo at 51. By citing Plaintiff’s reply

brief submitted to the Ninth Circuit, Defendants’ admit that this argument was made

to the Court of Appeals. It was obviously rejected. The Court of Appeals’s

conclusion is clear:

By the time Von Saher requested in 1998 that the Dutch

government surrender all of the Goudstikker artworks

within state control, the Cranachs had been in the

Museum’s possession for 27 years. Even if Desi’s 1998

request for surrender could be construed as a claim for

restitution -- made nearly 50 years after the deadline for

filing such a claim lapsed -- the Cranachs were no longer

in possession of the Dutch government and necessarily fell

outside that claim.

Von Saher, 754 F.3d at 723. Since Marei did not seek “restitution,” of the Cranachs,

25

As the Court of Appeals emphasized, in the Terezin Declaration, “’[t]he

Participating States urge[d] that every effort be made to rectify the consequences of

wrongful property seizures, such as confiscations, forced sales and sales under

duress[.]’” Id. at 721.


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the Court of Appeals concluded that there could be no conflict with any federal

restitution policy. Id. at 721.

Indeed, despite Defendants’ contention that compensation for sold artworks

under these circumstances was permitted under Dutch law, both the State Secretary

in 1998 and the Dutch Court of Appeal in 1999 noted that the 1997 policy under

which Marei’s 1998 claim was submitted provided only for claims to artworks still

in the GON’s custody. PSGD at 406. There was no provision for damage claims

(nor is there under the Restitutions Committee’s current guidelines), so everything

requested beyond the return of specific artworks was additional relief outside of the

GON’s policy. PSGD at 407. Neither the State Secretary’s 1998 decision nor the

1999 Court of Appeal decision even addressed the request for damages.26

Defendants’ second argument is, once again, that because Dési waived,

abandoned and settled her claims to the Göring looted artworks, she should be

deemed to have been subject to post War restitution proceedings. This also flies in

the face of the Court of Appeals decision as well as the determinations and findings

of the Restitutions Committee and the State Secretary in 2005-06, which, as acts of

state, cannot be challenged or invalidated (see III.A.4., supra). The Court of

Appeals determined that, inter alia, since “Dési chose not to participate in the initial

postwar restitution process,” (a fact admitted by Defendants at FAA, ¶32), there

could be no interference with U.S. restitution policy. Id. at 723. Defendants’

assertion of any policy interference with federal restitution policy has been resolved

against them and should no longer be considered in this case.

26

Plaintiff set forth all of these points on page 10 of her reply brief submitted to the

Court of Appeals, based on the 1997 policy under which Marei’s 1998 claim was

submitted, as confirmed by the State Secretary and the Court of Appeal, which

Defendants do not address. Defs. Memo at 51; Von Saher v. Norton Simon Museum

of Art at Pasadena, No. 12-55733 (9th Cir.), Docket No. 25.


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D. Soviet Nationalizations Transferred Title To The Cranachs To The Soviet Union Prior To The Lepke Auction

From the commencement of this litigation over nine years ago, Defendants

have falsely alleged that the Cranachs were owned by the Stroganoff family prior to

their appropriation by the Soviet Union. Defendants’ Answer, pp. 2-3, ¶¶ 11-12; p.

16, ¶5. As explained in detail below (see III.E.2., infra), Defendants had no basis

for a good-faith belief that the Cranachs belonged to the Stroganoff family and knew

that even before Plaintiff learned of her claim. Questions about the paintings’

provenance were brought to the attention of Norton Simon himself before they were

purchased, and Amy Walsh, a prominent provenance researcher hired by

Defendants, eliminated the Stroganoff family from the Cranachs’ ownership history

in 1998, ultimately concluding that there is “no evidence” that the Cranachs were

ever in the Stroganoff collection. See pp. 55-56, infra. Even worse, Walsh’s

damaging findings have been deliberately suppressed during this litigation at the

instruction of Defendants’ counsel. See p. 56, infra. Now that discovery has

revealed the true facts, including Defendants’ prior knowledge all along of the

falsity of their allegation of any Stroganoff family ownership of the Cranachs,

Defendants have finally dropped that assertion, resorting only to innuendo about it.

See n.29, infra.

Nevertheless, in their cynical but vain effort to suggest that Defendants’ have

a superior “moral” claim to the Cranachs over that of Jacques Goudstikker, whose

family, as this Court emphasized, “suffered terrible atrocities at the hands of the

Nazis” (April 2 Order at 11), Defendants resort to accusing Jacques of purchasing

“stolen” property at the Lepke auction. This is based solely on Defendants’ own

characterization of Soviet nationalizations of property after the Bolveshik

Revolution as “stolen property.” Defs. Memo at 53. Defendants cite Plaintiff’s

Response to Defendants’ Interrogatory No. 10 (DSUF, ¶ 2-5, cited at Defs. Memo at

4) for support, even though it says nothing of the kind, and Defendants also


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conveniently omit Plaintiff’s initial statement in that Response that “[t]he Soviet

Union had acquired title to the Cranachs by operation of law.” Id. (citations

omitted)

Indeed, the courts have long held that any inquiry into the validity of the

Soviet nationalizations in the course of the Bolshevik Revolution is barred by the act

of state doctrine. Therefore, the title of the property sold by the Soviet Union at the

Lepke auction may not be challenged in this case, pursuant to long established

federal law. See Konowaloff v. Metro. Museum of Art, 702 F.3d 140, 146 (2d Cir.

2012); Yale Univ. v. Konowaloff, 5 F. Supp. 3d 237, 241 (D. Conn. 2014), aff'd, 620

F. App'x 60 (2d Cir. 2015). Indeed, one such case involved Stroganoff himself,

claiming another artwork sold at the 1931 Lepke auction in Berlin. See Stroganoff-

Scherbatoff v. Weldon, 420 F. Supp. 18, 22 (S.D.N.Y. 1976), citing Princess Paley

Olga v. Weisz, [1929] 1 K.B. 718, a British Court of Appeal decision involving

similar facts.

In Yale Univ., 5 F. Supp 3d at 240-41, the most recent of these cases, the

court’s reasoning is particularly pertinent to Defendants’ contentions here:

“[T]he validity of the foreign state's act may not be

examined" even when there is a claim that the taking of

property was in violation of ‘customary international law’

or ‘the foreign state's own laws.’ Konowaloff, 702 F.3d at

145-46. Moreover, in Oetjen v. Central Leather Co., the

Court held that:

[W]hen a government which originates in revolution

or revolt is recognized by the political department of

our government as the de jure government of the

country in which it is established, such recognition

is retroactive in effect and validates all the actions

and conduct of the government so recognized from

the commencement of its existence.

Konowaloff, 702 F.3d at 146 (quoting Oetjen, 246 U.S.

297, 302-03, 38 S. Ct. 309, 62 L. Ed. 726 (1918))


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(emphasis in Konowaloff). "The Supreme Court has

repeatedly applied this principle to cases involving

nationalizations ordered during the Russian Revolution—

appropriating the property and assets of [*241] various

Russian corporations—notwithstanding the fact that

formal recognition of the Soviet government by the United

Sates occurred years after the decrees themselves."

Konowaloff, 702 F.3d at 146 (citing United States v. Pink,

315 U.S. 203, 230-33, 62 S. Ct. 552, 86 L. Ed. 796 (1942);

United States v. Belmont, 301 U.S. 324, 326, 330, 57 S.

Ct. 758, 81 L. Ed. 1134 (1937)).

Getting Plaintiff to admit at deposition that she thought the Soviet

nationalizations were wrongful and tragic on a personal level (PSGD at 399) may

have some dramatic effect in Defendants’ view, but it is irrelevant, and any

suggestion that Jacques wrongfully purchased stolen property is completely

baseless. Indeed, numerous artworks in the collection of the National Gallery of Art

in Washington, D.C. were obtained by Secretary of the Treasury Andrew Mellon

through sales in Germany of property nationalized by the Soviet Union. PSGD at

400. No one could ever successfully claim that the National Gallery acted

wrongfully and does not have good title to those artworks because they were

nationalized through sometimes violent means as a result of the Bolshevik

Revolution. Since the validity of the actions of the Soviet Government cannot be

challenged in light of the act of state doctrine, Defendants’ presentation of the

details of the Bolshevik Revolution, no matter how horrific they claim them to be, is

irrelevant, designed solely to prejudice Plaintiff’s case, and should not be admitted

as evidence in this case.27

27

Since the act of state doctrine bars any inquiry into the validity of the Soviet

nationalization of the Cranachs, that should be the end of the matter. The Cranachs

had been discovered in a church in Kiev so they were nationalized pursuant to, inter

alia, the January 19, 1919 Decree of the Interim Worker and Peasant Government of

the Ukraine on separation of the Church from the State and the School from the


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E. Plaintiff’s Claim Are Timely

1. Plaintiff’s Claim Under Section 496 Is Timely

Quite remarkably -- and disingenuously -- Defendants argue that Plaintiff’s

treble damages claim is untimely without any reference to the statute on which

Plaintiff is basing that claim: Cal. Penal Code §496. Defendants are well-aware of

the statutory basis of Plaintiff’s claim, not only because it is set forth at FAC, ¶¶ 77-

82, but Defendants also specifically refer to the treble damages that are exclusively

provided for in that statute. Defs. Memo at 54 n.11. By attempting to ignore §496,

Defendants hope to avoid the separate rules pertaining to accrual of the statute of

limitations held by the courts to apply to violations of that statute, and instead try to

apply an irrelevant discovery rule to Plaintiff’s claim. See Naftzger v. American

Numismatic Society, 42 Cal. App. 4th 421, 432-33, 49 Cal. Rptr. 2d 784, 791 (Dist

Church, which states in §13: “all the property of the Ukrainian church and religious

societies is to be declared nationalized.” PSGD at 324.

But it should also be noted that German courts at the time of the 1931 Lepke

auction had already held that Soviet nationalizations provided good title to the

Soviet Union. PSGD at 322. Thus, a German auction sale on behalf of the Soviet

Union to Goudstikker passed title to Goudstikker under German law. Kaye Decl.,

Ex. 275, at 21-22 (Expert Report of Eltjo Schrage dated April 10, 2016); Kaye

Decl., Ex. 267, at 5-8 (Expert Report of Kurt Siehr dated April 8, 2016); Kaye Decl.,

Ex. 268, (Landgericht II Berlin, 11 December 1928, Scherbatov v. Lepkes

Kunstauktionshaus, Die Deutsche Rechtsprechung auf dem Gebiete des

internationalen Privatrechts in Jahre 1929, No. 9). In fact, one of the very cases in

which the German court ruled that the Soviet government’s nationalizations gave it

good title to sell at an auction, was brought, and lost, by Olga Scherbatoff,

Stroganoff’s mother, through whom he claimed his inheritance rights to the

Cranachs. PSGD at 323. Under Dutch law, title obtained from a lawful sale in

Germany would be given effect in the Netherlands. Kaye Decl., Ex. 275, at 21-22

(Expert Report of Eltjo Schrage dated April 10, 2016); Kaye Decl., Ex. 267, at 5-8

(Expert Report of Kurt Siehr dated April 8, 2016); Kaye Decl., Ex. 268,

(Landgericht II Berlin, 11 December 1928, Scherbatov v. Lepkes

Kunstauktionshaus, Die Deutsche Rechtsprechung auf dem Gebiete des

internationalen Privatrechts in Jahre 1929, No. 9).


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Ct. App. 1996) (comparing the limitations periods in §496 with Cal. Code Civ. Proc.

338(c)).

Based on the uncontested facts, Plaintiff has established all of the elements of

her claim under §496, which provides that individuals whose property has been

stolen may bring a civil case against possessors who unlawfully withhold the

property, and may obtain damages up to three times the value of the stolen goods.

Cal. Penal Code §496(c). As Defendants acknowledge, Plaintiff’s expert appraisal

shows that the combined value of the Cranachs is currently $150 million. PSGD at

309.28

§496 imposes a continuing affirmative duty to restore stolen property to its

rightful owner upon anyone who withholds property knowing it to be stolen.

Naftzger, 42 Cal. App. 4th at 432, 49 Cal. Rptr. 2d at 791 (citations to other cases

omitted). There is no dispute between the parties concerning the forced sale by

Göring of Goudstikker’s artworks, including the Cranachs. PSGD at 268. Property

obtained by a forced sale or “extortion” is considered “stolen” under the applicable

provisions of §496 and the related definitions in the Penal Code. See Penal Code

§496(a); §518. See generally Vineberg v. Bissonnette, 529 F. Supp. 2d 300, 307

(D.R.I. 2007), aff’d, 548 F.3d 50 (1st Cir. 2008) (Nazi forced sales are “properly

classified as looting or stealing.”). Such stolen property remains stolen regardless of

how many years have passed since the original theft or the good faith of any

subsequent transferees, including purchasers, of such property. See April 2 Order at

9 (citations omitted).

28

Randomly citing the prices paid for certain other artworks in the expert’s appraisal

report, Defendants (Defs. Memo at 54 n.11) seem to take issue with his appraisal

while ignoring his comprehensive comparison of “similar and like works, which

embrace recent sales of all major works of art” and other factors, including the

Cranachs’ “rarity,” not to mention that the appraised value is of both works together.

PSGD at 309.


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Even an innocent buyer of stolen property who subsequently learns that the

property was stolen, but refuses to return the property, violates §496 based on the

continuing duty to restore stolen property to its rightful owner. People v. Scott, 108

Cal. App. 2d 231, 233 (Dist. Ct. App. 1951); Goldman v. Sup. Ct. of L.A. Cnty., 124

Cal. App. 2d 165 (Dist. Ct. App. 1954); People v. Scaggs, 153 Cal. App. 2d 339,

352 (Dist. Ct. App. 1957). The requisite guilty knowledge can be inferred from

circumstantial evidence. People v. Hartridge, 134 Cal. App. 2d 659, 665 (Dist. Ct.

App. 1955). Once the complaint in this case was served upon Defendants, they

were made aware that the Cranachs were stolen from Plaintiff’s predecessors and

had an obligation to restore them to Plaintiff. By withholding them from her, they

are in violation of §496.

Although the statute of limitations for receiving, buying or selling stolen

property begins to run upon the receipt, purchase or sale, “when the defendant is

charged with concealing or withholding the property in violation of section 496 . . .

the start of the statutory period may be delayed, . . . if the defendant continues to

commit specific acts . . . in violation of the affirmative duty to return it . . . to its

rightful owner.” People v. Allen, 21 Cal. 4th 846, 861 n.14, 89 Cal. Rptr. 2d 279,

289 n.14 (1999), citing Williams v. Sup. Ct., 81 Cal. App. 3d 330, 343-44, 146 Cal.

Rptr. 311, 318-19 (App. Ct. 1978) (emphasis added). Indeed, concealing (or

withholding) stolen property in violation of §496 “can be a continuing offense.”

People v. Chatmajian, No. B141742, 2002 WL 220603, at *11 (Cal. App. Ct. Feb.

13, 2002), citing the portion of People v. Allen that referred to withholding property

in violation of §496 as well. See People v. Grant, 113 Cal. App. 4th 579, 595, 6

Cal. Rptr. 3d 560, 573 (App. Ct. 2003) (“Unlike the crime of receiving stolen

property, however, the crime of concealing stolen property is a continuing offense.”)

Thus, the limitations period for Plaintiff’s claim against Defendants for

withholding stolen property in violation of §496 began to run upon Plaintiff’s

demand in her complaint for return of the Cranachs, in response to which


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Defendants have knowingly withheld them from her. Since their withholding has

been continuing, there is “continuing accrual” of this claim. 43 Cal. Jur. 3d

Limitation of Actions §32. In either event, Plaintiff’s claim under §496 is timely.

2. Defendants Have Failed To Establish Laches

In order to establish their laches defense, Defendants must show both

unreasonable delay on the Plaintiff’s part and resulting prejudice to Defendants. In

re Estate of Kampen, 201 Cal. App 4th 971, 997, 135 Cal. Rptr. 430, 410 (App. Ct.

2011). The burden of proving laches is on Defendants. Miller v. Eisenhower Med.

Ctr., 27 Cal. 3d 614, 624, 166 Cal. Rptr. 826, 832 (1980); Conti v. Bd. of Civil Serv.

Comm’rs, 1 Cal. 3d 351, 361, 82 Cal. Rptr. 337, 344 (1969); see also 30 Cal. Jur. 3d

Equity §53. Defendants fail to establish either element.

First, Defendants’ contention that unreasonable delay was caused by Dési’s

waiver of her claims to the works taken by Göring, based on her failure to file a

claim with the GON after the War, has been rejected by the GON itself, which

found that Dési waived none of her claims at that time, in an act of state that cannot

be challenged in this case. See III.A.4, supra. Dési did not delay contacting the

GON about her claim, as she made several trips to the Netherlands beginning in

1946 in order to arrange the restitution of the Goudstikker property forcibly

transferred to Göring and Miedl. PSGD at 272.

Second, Defendants’ claim that Plaintiff unreasonably delayed asserting her

claim to the Cranachs is unsupported by the uncontested facts. Defendants have

offered no evidence to show that Plaintiff was even aware before 1997 of the looting

by Göring or any basis of her claim to the paintings taken by him. Nor is there any

evidence that Plaintiff was aware that the Cranachs had been sold by the GON until

1998. Marei first learned that the Cranachs were at the Museum on or about

October 25, 2000 when she was so advised by a researcher named Konstantin

Akinsha and she contacted the Museum shortly thereafter. PSGD at 283.

Considering that beginning in 1998, she was engaged in numerous proceedings to


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recover the hundreds of artworks looted by Göring and still in the GON’s custody

(PSGD at 285), it was certainly not unreasonable that she first learned of the

Cranachs’ presence at the Museum a few years after first learning that they were no

longer in the GON’s custody. Cf. In re Estate of Flamenbaum, 1 N.E.3d 782, 784

(N.Y. 2013) (citation omitted):

While the [claimant] could have taken steps to locate the

tablet . . . , the [claimant] explained that it did not do so for

many other missing items, as it would have been difficult

to report each individual object that was missing after the

war.

[T]o place the burden of locating stolen artwork on the

true owner and to foreclose the rights of that owner to

recover its property if the burden is not met would . . .

encourage illicit trafficking in stolen art. (citation omitted).

In any event, Defendants cannot demonstrate any possible prejudice that could have

resulted from this short “delay.”

As detailed below, because of the Museum’s own wrongful conduct when it

acquired the Cranachs, Defendants are unable to establish any prejudice that might

have resulted from any alleged delay. They resort instead to a gross

mischaracterization of Marei’s testimony at deposition in an attempt to do so. She

testified that in 1996, when her husband Edo was very ill and after his mother had

passed away, he went through Dési’s documents superficially and in her presence

organized them and discarded some portions thereof. Marei has no knowledge of

what the documents contained. PSGD at 401. Citing only this testimony as support,

Defendants falsely characterize this as “Plaintiff’s admitted spoliation of evidence:

Plaintiff acknowledged under oath that she and her husband destroyed Desi’s

personal papers. . . . Those documents might well have further illuminated Desi’s

understanding and decision-making, including the Firm’s decision not to annul the

Göring transaction.” Defs. Memo at 58. The true facts are that Marei did not


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participate in any such destruction and there is no evidence of the subject matter of

any of the discarded documents, let alone that they were in any way related to the

Goudstikker Gallery or the Cranachs. Further, Marei also testified that Edo never

shared with her any of the facts relating to the history of the Gallery or its collection,

or Dési’s attempts to reclaim her property after the War, so any suggestion that they

intentionally destroyed relevant documents makes no sense. PSGD at 402. Indeed,

Defendants’ own expert admits that Dési and Edo gifted relevant documents to the

Amsterdam City Archives, thus preserving them, not destroying them. PSGD at

403.

Prejudice may not be presumed by the court, but rather must be “affirmatively

demonstrated by the defendant in order to sustain his burdens of proof and the

production of evidence on the issue.” Miller, 27 Cal. 3d at 624, 166 Cal. Rptr. at

832. “It is not so much a question of the lapse of time as it is to determine whether

prejudice has resulted. If the delay has caused no material change in status quo,

ante, i.e., no detriment suffered by the party pleading the laches, his plea is in vain.”

Conti, 1 Cal. 3d at 360, 82 Cal. Rptr. at 343 (quoting Brown v. State Pers. Bd., 43

Cal. App. 2d 70, 79 (Dist. Ct. App. 1941) (internal citations removed)); see also

Kampen, 201 Cal. App. 4th at 1001-02, 135 Cal. Rptr. 3d at 433-34.

As will be shown below based on uncontested facts, Defendants cannot claim

any prejudice because it was their own delay and indifference to the facts before

them that caused them to acquire stolen property that they knew or should have

known could be claimed by the Goudstikker family. Further, by ignoring the fact

that they were acquiring stolen property, Defendants have unclean hands and

therefore cannot assert the equitable defense of laches. Their defense should be

dismissed as a matter of law.

As established by Defendants’ records and testimony elicited at deposition

from current and former employees of Defendants, as detailed below, they were on

notice at the time they acquired the Cranachs that the second highest ranking Nazi


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figured prominently in the provenance of the paintings. PSGD at 281. This would

have been a red flag to any purchaser, but especially to a sophisticated museum, that

the Cranachs had been looted by the Nazis and could be the subject of a restitution

claim. In addition, Defendants were aware that the provenance that they had been

given by Stroganoff did not match the provenance given in known publications

about the Cranachs, thus raising another red flag. PSGD at 377, 378. At the very

least, Defendants should have taken steps to clarify the provenance of the artworks

and if they had, they would have learned that their acquisition was subject to

challenge. They instead did nothing until decades later when their research revealed

what should have been uncovered before they acquired the works. PSGD at 385,

389-390.

Sara Campbell was employed at the Norton Simon Art Foundation, which at

the time was called Norton Simon, Inc. Museum of Art, beginning in November

1969 and was therefore employed there before and at the time that the Cranachs

were purchased by the Museum on May 11, 1970. PSGD at 374. Campbell

admitted at deposition that the late Norton Simon collected artworks without

attention to provenance, and that Defendants did no provenance research relating to

the Cranachs before they were purchased. PSGD at 375. She identified a March 25,

1970 memo from Museum curator Darryl Isley to Norton Simon. PSGD at 376. In

this memo, sent to Norton Simon himself before Defendants purchased the

Cranachs, Isley highlighted the fact that the provenance provided to the Museum by

Spencer A. Samuels (the dealer who handled the sale of the Cranachs from

Stroganoff), differed from the provenance for the paintings in both the 1932 Max J.

Friedläender and Jakob Rosenberg catalogue raisonné of Lucas Cranach the Elder,

and an article by James A. Schmidt in the art journal Pantheon about the Cranachs at

the Lepke auction at which Goudstikker purchased them. Isley states that he

attached copies of both publications to his memo. PSGD at 377, 378. Whereas the

provenance provided by Samuels indicated that the Cranachs had been owned by


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Paul Stroganoff before they were purchased at auction by Goudstikker, neither the

catalogue raisonné (PSGD at 379) nor the Schmidt essay (PSGD at 380), both of

which were cited by Samuels, show that the Cranachs were ever owned by a

member of the Stroganoff family. In fact, the Museum was in contact with Jakob

Rosenberg (the surviving author of the Cranach catalogue raisonné) and Dieter

Koepplin, who was working with Rosenberg to update the catalogue, but there is no

indication that the Museum inquired as to why Stroganoff was not listed as an owner

of the Cranachs before the Lepke auction. PSGD at 382. Defendants simply turned

a blind eye to the truth. Campbell also testified that she obtained an 1835 catalogue

of Stroganoff works from the Portland Art Museum in 2000 and the Cranachs were

not included there either. PSGD at 383.

More telling was the fact that the Samuels provenance, as set forth on the

invoice to the Museum for the sale of the Cranachs, explicitly included “Hermann

Goering” as the Cranachs’ owner following ownership by “J. Goudstikker,

Amsterdam”. PSGD at 281. Campbell testified that, as a result, there was

discussion at the Museum that the Cranachs may have been looted by the Nazis,

even though those words were not used in those days. PSGD at 384. Faced with

inconsistencies regarding alleged ownership by Stroganoff and a clear indication of

Nazi possession directly after Goudstikker, the Museum was on notice that looting

had occurred and Goudstikker might have a claim to the Cranachs. At the very

least, by failing to do any further research in these circumstances, any prejudice to

the Museum arising from its acquisition of Nazi-looted artworks was of its own

making. Farahani v. San Diego Cmty. Coll. Dist., 175 Cal. App. 4th 1486, 1494, 96

Cal. Rptr. 3d 900, 907 (App. Ct. 2009) (“In determining whether a defendant has

sustained its burden of proving laches, the court may consider the extent to which

the defendant is partially responsible for the delay.”).

According to Campbell, however, absolutely no further research into the

provenance of the Cranachs was conducted by the Museum until the early 1990’s,


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some twenty years later, when Amy Walsh was assigned to do so. PSGD at 385.

Walsh was retained by the Museum and Foundation as an independent contractor.

PSGD at 386. Defendants admit that she “has extensive experience in the field of

provenance research” and in the field of Northern European Art and “has authored

significant publications” in both fields. PSGD at 387. Walsh testified that she was

asked by Gloria Williams, one of the curators of the Museum, to prepare a catalogue

of Northern European paintings in the Museum’s collection. She began work on the

catalogue in 1995. PSGD at 388. As part of her work, Walsh prepared a catalogue

entry for the Cranachs. Her conclusion was that there was no evidence that anyone

in the Stroganoff family ever owned the Cranachs. PSGD at 389. Indeed, Walsh

concluded that the acquisition of the Cranachs from Goudstikker, a Jewish art

dealer, by Göring was “problematic.” PSGD at 390. The information in her

catalogue draft was shared with the Museum. PSGD at 391.

As Walsh explained and then summarized in detail at her deposition, in 1998,

she removed any reference to Stroganoff in the provenance listing of the Cranachs

in the catalogue entry that she was preparing. PSGD at 392. Although Walsh knew

how to contact Spencer Samuels, she never did so. PSGD at 393. In December

2000, she sent Gloria Williams a memo stating that there was no evidence that the

Cranachs had come from the Stroganoff collection. PSGD at 394. Just before that,

Walsh had sent Williams an email pointing out that Konstantin Akinsha, who wrote

an article about the Cranachs and later published an essay about them in the

American Association of Museums Guide to Provenance Research, had concluded

that there was no evidence that the Cranachs had belonged to the Stroganoff family.

PSGD at 395. Finally, when Walsh prepared her “final” draft of the catalogue entry

on July 27, 2004, she stated categorically that there was no evidence of any prior


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Stroganoff ownership. All of this information was provided to the Museum. PSGD

at 396.29

If Walsh or someone else had been asked to conduct this research at the time

of the Cranachs’ acquisition 20 years before, the Museum would have learned that

critical facts relating to the Cranachs’ provenance had been falsely presented by

Spencer Samuels, and therefore could have avoided any possible prejudice resulting

from its acquisition. The Museum could have tried to contact Dési Goudstikker

herself before her death in 1996. Further, Sara Campbell testified that she failed to

have any discussions with Spencer Samuels to explain the discrepancies between the

provenance he provided on his invoice and the sources to which he referred. PSGD

at 397. In light of its own refusal to take any steps to follow up on red flags in the

Cranachs’ provenance and seek further information when it could have, the Museum

cannot now complain that witnesses with information are now dead, prejudicing

their position in this case. Farahani, 175 Cal. App. 4th at 1494, 96 Cal. Rptr. 3d at

907 (court rejected laches defense and affirmed lower court’s findings that “any

prejudice incurred by [the Defendant] was of [its] choosing. . .”).

Faced with the instant lawsuit after Walsh had completed her catalogue entry

on the Cranachs, the Museum decided to withhold publication of its catalogue

(PSGD at 398), apparently for fear of admitting the “problematical” nature of the

Cranachs’ provenance. By so doing, the Museum continued its decades-long

conduct of ignoring the truth about these Nazi-looted artworks. Such misconduct is

29

Thus, Defendants’ implication that Jacques knew, when he purchased the

Cranachs at the Lepke auction that included artworks nationalized by the Soviet

Union from the Stroganoff collection, that the Cranachs had been part of that

collection (Defs. Memo at 5-6) is baseless. An insert prepared with the catalogue

for the Lepke auction and other sources make it clear that the Cranachs and other

artworks included in the auction were not part of the Stroganoff collection. PSGD

at 318. Nor would it have mattered given the applicable German law. See n.27,

supra.


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a classic case of unclean hands, which alone defeats the Museum’s equitable laches

defense. See, e.g., Quick v. Pearson, 186 Cal. App. 4th 371, 380, 112 Cal. Rptr. 3d

62, 69 (App. Ct. 2010) (citations omitted) (“Regarding [the defendant’s] attempt to

assert the equitable doctrine of laches, a party who seeks equity must also do equity.

‘The unclean hands doctrine closes the doors of a court of equity to one tainted with

inequitableness or bad faith relative to the matter in which he seeks relief’”).

Finally, the laches defense must be viewed in the context of the legislative

adoption of amended §338, which provided, for the first time, that laches may be

raised as a defense to actions covered by the statute. Legislative History of

California Assembly Bill No. 2765. As this Court explained in the April 2 Order:

[T]he California Legislature recognized by enacting [§338,

as amended], museums are sophisticated entities that are

well-equipped to trace the provenance of the fine art that

they purchase. After carefully weighing the equities, the

Legislature determined that the importance of allowing

victims of stolen art an opportunity to pursue their claims

supersedes the hardship faced by museums and other

sophisticated entities in defending against potentially stale

ones.

Dkt. 119 at 11. Especially in light of the Museum’s “don’t ask, don’t tell” approach

when they purchased the Cranachs, as detailed above, the equities clearly weigh

here in favor of Plaintiff, as the California legislature recognized in general. See

Cortez v. Purolator Air Filtration Prods. Co., 23 Cal. 4th 163, 180, 96 Cal. Rptr. 2d

518, 530 (2000) (“A court cannot properly exercise an equitable power without

consideration of the equities on both sides of a dispute. This principle of equity

jurisprudence has been applied in a variety of contexts in which the court is called

upon to exercise equitable power.”); Lickiss v. Fin. Indus. Regulatory Auth., 208

Cal. App. 4th 1125, 1133-34, 146 Cal. Rptr. 3d 173, 178-79 (App. Ct. 2012) (“in

any given context in which the court is prevailed upon to exercise its equitable


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powers, it should weigh the competing equities bearing on the issue at hand and then

grant or deny relief based on the overall balance of these equities.”). For all these

reasons, Defendants’ laches defense should be rejected.

F. Adverse Possession Of Personal Property Is Not Recognized In California Law

In the April 2 Order, this Court indicated that “California law does not appear

to extend the doctrine of adverse possession to personal property.” April 2 Order at

10 n.7 (citing San Francisco Credit Clearing House v. C.B. Wells, 196 Cal. 701,

707-08 (1925)). The Court’s decision did not decide this issue, however, and it held

that Defendants were not precluded from arguing it.

Subsequently, however, in Cassirer v. Thyssen-Bornemisza Collection

Found., No. CV 05-3459-JFW (EX), 2015 WL 9464458, at *6 (C.D. Cal. June 4,

2015), the issue had to be resolved in order for this Court to determine a critical

conflicts of law issue necessary to the decision in that case, and this Court expressly

held that adverse possession of personal property is inapplicable under California

law. That holding should be followed in this case and Defendants’ adverse

possession defense should be rejected on that basis.

In Cassirer, a critical issue in the case was whether Spanish or California law

governed the defendant’s claim that it acquired good title to the artwork at issue. In

determining this choice of law issue, this Court first had to determine whether

Spanish law differed from California law regarding the acquisition of personal

property by adverse possession or prescription. The Court held that “California has

not extended the doctrine of adverse possession to personal property,” id. (citing San

Francisco Credit Clearing House, 196 Cal. at 707-08; Soc’y of Cal. Pioneers v.

Baker, 43 Cal. App. 4th 774, 785 n.13, 50 Cal. Rptr. 865, 872 n.13 (App. Ct. 1996)),

and therefore that there was a true conflict of laws with Spanish law, which had

adopted laws that expressly permit the acquisition of ownership of personal property

by adverse possession or acquisitive prescription. Cassirer, 2015 WL 9464458, at


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*6. In light of the Cassirer case, Defendants have no basis for urging that adverse

possession of personal property can be found in California law.

This Court’s holding in Cassirer is consistent with the reasoning of the

California Supreme Court in San Francisco Credit Clearing House, 196 Cal. at 707-

08. In that case, the Court held that regardless of whether adverse possession was

meant to apply to personal property, “it is very clear that [the law on adverse

possession] in nowise modifies or limits the effect of . . . §338, of the Code of Civil

Procedure,” which provides for the period during which an action may be

commenced in conversion or replevin. Id. at 707. Thus, even if adverse possession

were held to apply to personal property under California law in certain

circumstances (which it has not), it would not apply where, as here, §338 governs

the time period within which this action for conversion and replevin may be

brought. See Soc’y of Cal. Pioneers, 43 Cal. App. 4th at 785 n.13, 50 Cal. Rptr. 2d

at 872, n.13 (“The court in San Francisco Credit Clearing House . . . suggested that

the doctrine of adverse possession would not apply to personal property, and no

California case has been cited in support of such an application.”).30

30

Defendants mischaracterize what is said about adverse possession in 13 Witkin, Summary 10

th (2005) Pers. Prop, ¶123, p. 139. Defs. Memo at 58. The full relevant

portion of that section reads as follows: “C.C. 1007, which gives title by occupancy after ‘the period prescribed by the Code of Civil Procedure,’ would seem to establish the right to acquire title to personal property by adverse possession. The court in San Francisco Credit Clearing House v. Wells (1925) cast some doubt upon this conclusion by suggesting that C.C. 1007 did not apply to personal property.” (Citations omitted; emphasis in original) In another mischaracterization by Defendants, Keeler v. Sup. Ct,, 2 Cal. 3d 619, 87 Cal. Rptr. 481 (1970), says nothing about the term “occupancy.” Defs. Memo at 59.


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IV. CONCLUSION

For all of the foregoing reasons, Defendants’ motion for summary judgment

should be denied in all respects.

Dated: July 1, 2016

Respectfully submitted,

GARTENBERG GELFAND HERRICK, FEINSTEIN LLP

HAYTON LLP

By: /s/ Edward Gartenberg By: /s/ Lawrence M. Kaye

Edward Gartenberg Lawrence M. Kaye

Attorneys for Plaintiff

Marei von Saher


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