317 F.3d 954 (9th Cir. 2002), 01-56003, Altmann v. Republic of Austria

Docket Nº:01-56003, 01-56398.
Citation:317 F.3d 954
Party Name:Maria V. ALTMANN, an individual, Plaintiff-Appellee, v. REPUBLIC OF AUSTRIA, a foreign state; and the Austrian Gallery, an agency of the Republic of Austria, Defendants-Appellants.
Case Date:December 12, 2002
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 954

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

Maria V. ALTMANN, an individual, Plaintiff-Appellee,


REPUBLIC OF AUSTRIA, a foreign state; and the Austrian Gallery, an agency of the Republic of Austria, Defendants-Appellants.

Nos. 01-56003, 01-56398.

United States Court of Appeals, Ninth Circuit

December 12, 2002

Argued March 7, 2002.

Submitted May 24, 2002.

Page 955

[Copyrighted Material Omitted]

Page 956

[Copyrighted Material Omitted]

Page 957

[Copyrighted Material Omitted]

Page 958

Scott P. Cooper, Jonathan E. Rich, Tanya L. Forsheit, Proskauer Rose LLP, Los Angeles, CA, for the appellants.

E. Randol Schoenberg, Los Angeles, CA, for the appellee.

David A. Lash, Bet Tzedek Legal Services, Los Angeles, CA; Margot A. Metzner, Janie F. Schulman, Sheila Recio, Michael J. Bostrom, Morrison & Foerster LLP, Los Angeles, CA, for the amicus.

Appeal from the United States District Court for the Central District of California; Florence-Marie Cooper, District Judge, Presiding. D.C. No. CV-00-08913-FMC

Before: WARDLAW, W. FLETCHER, Circuit Judges and WHYTE,[*] District Judge.

WARDLAW, Circuit Judge.

At issue is whether the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602-1611, confers jurisdiction in the United States District Court for the Central District of California over the Republic of Austria and the state-owned Austrian Gallery in a suit alleging wrongful appropriation of six Gustav Klimt paintings from their rightful heirs. Maria Altmann, a United States citizen, seeks the recovery of the paintings from the Republic of Austria, which now houses them in the Austrian Gallery. She alleges that (i) the Nazis took the paintings from her Jewish uncle to "Aryanize" them in violation of international law; (ii) the pre-World War II and wartime Austrian government was complicit in their original takings; (iii) the current government, when it learned of the heirs' rights to the paintings, deceived the heirs as to the circumstances of its acquisition of the paintings; and (iv) the Republic and the Gallery now wrongfully assert ownership over the paintings. The Republic of Austria appeals from the district court's denial of its motion to dismiss for want of jurisdiction. Rejecting the Austrian Republic's assertions, the district court found, inter alia, that the FSIA applied retroactively and generally to the events of the late 1930s and 1940s, and that the seizure of the paintings fell within the expropriation exception to the FSIA's grant of immunity.

For the reasons stated below, we determine that the exercise of jurisdiction in this case does not work an impermissible retroactive application of the FSIA. If true, the facts alleged by Altmann establish a taking in violation of international law that confers jurisdiction upon our federal courts, and thus Altmann has presented a substantial and nonfrivolous claim. See Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 711 (9th Cir. 1992) ("At the jurisdictional stage, we need not decide whether the taking actually violated international law; as long as a 'claim is substantial and nonfrivolous, it provides a sufficient basis for the exercise of our jurisdiction.'"

Page 959

(quoting West v. Multibanco Comermex, S.A., 807 F.2d 820, 826 (9th Cir. 1987))), cert. denied, 507 U.S. 1017, 113 S.Ct. 1812, 123 L.Ed.2d 444 (1993). Because Appellants profit from the Klimt paintings in the United States, by authoring, promoting, and distributing books and other publications exploiting these very paintings, these actions are sufficient to constitute "commercial activity" for the purpose of satisfying the FSIA, as well as the predicates for personal jurisdiction. Finally, because the Republic of Austria "does business" in the Central District of California, venue is appropriate there and the principles of forum non conveniens do not counsel otherwise. Thus we uphold the district court's assertion of jurisdiction under the FSIA.

I. Background

In the early 1900s Ferdinand Bloch, a wealthy Czech sugar magnate, commissioned a portrait of his young wife, Adele Bloch-Bauer, by the Austrian painter Gustav Klimt. Adele and Ferdinand, members of the wealthy Viennese intellectual elite, commissioned Klimt's painting at a time when the artist commanded a fee in excess of a quarter of the price of a furnished country villa. Klimt made hundreds of sketches of Adele, culminating in 1907 with the shimmery golden portrait, Adele Bloch-Bauer I. Before Adele's untimely passing in 1925, she owned six Klimt paintings, including another portrait of herself, a portrait of a close friend, and three landscapes: Adele Bloch-Bauer I & II, Amalie Zuckerkandl, Apple Tree I, Beech-wood, and Houses in Unterach am Attersee. Obviously oblivious to the terror to come, which would dramatically affect Austria generally and her husband Ferdinand intimately, Adele left a will "kindly" requesting that Ferdinand donate the paintings to the Austrian Gallery upon his death.

The Nazi invasion of Austria on March 12, 1938, worked a dramatic upheaval on the lives of Ferdinand and all Austrians. Many of the Austrians embraced the Nazis, moving Adolf Hitler to declare the Anschluss—the annexation of Austria to Nazi Germany—the next day. To imbue these actions with a quasi-legal basis, a mock Council of Ministers was convened, which adopted the resolution for the Anschluss. The legitimate Austrian cabinet leaders were arrested and deported to concentration camps. The country was split into single districts under the direct control of Berlin. Even the name "Austria" was abolished. Ferdinand, who was Jewish and had supported anti-Nazi efforts before the annexation of Austria, fled the country to avoid persecution, leaving behind all his holdings, including his paintings, a valuable porcelain collection, and his beautiful home, castle, and sugar factory. He settled in Zurich, Switzerland.

In the meantime, Nazi officials, accompanied by representatives of what later became the Austrian Gallery, convened a meeting to divide up Ferdinand's property. His sugar company was "Aryanized" and his Vienna home was reduced to a German railway headquarters. Reinhardt Heydrich, the author of the infamous Final Solution, moved into Ferdinand's castle. Ferdinand's vast porcelain collection was sold at a public auction, with the best pieces going to Vienna's museums. Hitler and Hermann G# 37# ring confiscated some of Ferdinand's Austrian Masters paintings for their private collections. Others were bought for Hitler's planned museum at Linz. Dr. Erich Fuerher, the Nazi lawyer liquidating the estate, chose a few paintings for his personal collection. Dr. Fuerher purported to give two of the paintings at issue, Adele Bloch-Bauer I and Apple Tree I, to the Austrian Gallery in 1941, in exchange for a painting donated by Ferdinand in 1936. He accompanied

Page 960

the transaction with a note claiming to deliver the paintings in fulfillment of the last will and testament of Adele and signed it "Heil Hitler." In March 1943, Dr. Fuerher sold Adele Bloch-Bauer II to the Gallery and Beechwood to the Museum of the City of Vienna. He kept Houses in Unterach am Attersee for his personal collection. It is not clear what immediately happened to Amalie Zuckerkandl, although it ended up in the hands of the art dealer Vita K# 3C# nstler.

Ferdinand died in Switzerland in November 1945. He left a will, revoking all prior wills, and leaving his entire estate to one nephew and two nieces, including Maria Altmann. Like Ferdinand, Altmann and her husband had been forced to flee Austria. When the Nazis invaded Austria, they imprisoned her husband Fritz in the labor camp at Dachau and moved Altmann to a guarded apartment. Her brother-in-law managed to get Fritz released from Dachau, after which they escaped to Holland. Ultimately, they ended up in Hollywood, California, where Altmann became a United States citizen in 1945.

Also in 1945, the Second Republic of Austria was born and the next year, it declared that all transactions motivated by the Nazis were void. Despite this official policy, Altmann and her family members were unsuccessful in recovering the Klimt paintings. Altmann's brother could retrieve only Houses in Unterach from the private collection of Dr. Fuehrer. In December 1947, the Museum of the City of Vienna offered to return the painting Beechwood, but only in exchange for a refund of the purchase price. This offer was rejected by Ferdinand's heirs. The heirs then unsuccessfully sought return of three of the paintings from the Gallery; the Gallery refused to transfer the paintings, asserting that they had been bequeathed to it by the terms of Adele's will. Under color of the will, the legal effect of which has yet to be determined,1 the museum even began to prepare suit for return of the Klimt paintings not yet in its possession. Despite the museum's aggressive stance, a private letter from Dr. Karl Garzarolli dated March 8, 1948, of the Gallery to his Nazi-era predecessor revealed that nothing in the files of the Gallery would document the donation of the paintings to the Gallery. This letter was kept hidden from Ferdinand's heirs.

In 1948, an agent of Austria's Federal Monument Agency contacted Dr. Rinesch, the Austrian lawyer hired by the family, to discuss the artworks in question. He informed Dr. Rinesch that the artworks could not be exported without resolution of their ownership. In a practice later declared illegal by the Austrian government, the Agency informed Dr. Rinesch that it would grant export permits on some of the family's other recovered artworks in exchange for a "donation" of the Klimt paintings. With little hope of otherwise exporting the other artworks, Dr. Rinesch agreed that Ferdinand's heirs would acknowledge the will of Adele Bloch-Bauer and...

To continue reading