U.S. v. Portrait of Wally

• Decision Date: 19 July 2000
• Docket Number: No. 99 CIV. 9940 (MBM).,99 CIV. 9940 (MBM).
• Citation: 105 F.Supp.2d 288
• Parties: UNITED STATES of America v. PORTRAIT OF WALLY, A Painting by Egon Schiele, Defendant in Rem.
• Court: U.S. District Court — Southern District of New York

105 F.Supp.2d 288

UNITED STATES of America v. PORTRAIT OF WALLY, A Painting by Egon Schiele, Defendant in Rem.

No. 99 CIV. 9940 (MBM).

United States District Court, S.D. New York.

July 19, 2000.

Mary Jo White, United States Attorney for Southern District of New York, Barbara A. Ward, Sharon Cohen Levin, Assistant United States Attorneys, New York City.

William M. Barron, Karl Geercken, Brigit Kurtz, Julian C. Swearengin, Walter, Conston, Alexander & Green, P.C., New York City, for Claimant Leopold Museum-Privatstiftung.

Stephen M. Harnik, John McGowan, Law Offices of Stephen M. Harnik, New York City, for Claimant Leopold Museum-Privatstiftung.

OPINION and ORDER

MUKASEY, District Judge.

Defendant in rem Portrait of Wally, a painting by Egon Schiele ("the painting"), was brought into the United States to be shown at the Museum of Modern Art ("MoMA"), on loan from an Austrian museum, Leopold Museum-Privatsiftung ("the Leopold"). The United States claims that the painting is stolen, and seeks its forfeiture under 19 U.S.C. § 1595a(c) (1994) and 22 U.S.C. § 401(a) (1994). The Leopold moves to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). For the reasons stated below, I find that under controlling law, the painting can not be considered stolen. Accordingly, the Leopold's Rule 12(b)(6) motion is granted.¹

I.

For the purpose of deciding the Leopold's motion to dismiss, the material facts alleged in the complaint are taken as true. See Cooper v. Pate, 378 U.S. 546, 546, 84 S.Ct. 1733, 12 L.Ed.2d 1030 (1964) (per curiam). In March 1938, Germany annexed Austria, and the property of many Austrian Jews was "aryanized" — confiscated and given to "aryans." (Compl.¶ 5(b))² In that year, and as part of the aryanization program, an art gallery owned by Lea Bondi Jaray, a Viennese Jew, was confiscated and given to Friedrich Welz. (Id. ¶¶ 5(b))

In 1939, Welz joined the Nazi party and visited Jaray at her apartment. (Id. ¶¶ 5(c)-(d)) He saw the painting hanging on a wall, and "insisted" that the 1938 aryanization of Jaray's gallery entitled him to it. (Id. ¶ 5(d)) Jaray responded that the painting was part of her private collection and had nothing to do with the gallery, but "Welz continued to pressure [her] for the painting. [Jaray's] husband finally told her that, as they wanted to leave Austria, perhaps as soon as the next day, she should not resist Welz because `you know what he [Welz] can do.'" (Id.) (third bracket in the complaint) Jaray then turned over the painting and fled to London. (Id. ¶¶ 5(d))

After World War II ended, Welz was interned on suspicion of having committed war crimes. (Id. ¶ 5(g)) His possessions, including artwork, were seized and placed under the authority of the United States Forces in Austria. (Id.) With respect to "art restitution," the U.S. Forces were charged with sorting the paintings of imprisoned suspects and returning them to the countries from which they had been taken "in order for those countries to return them to their rightful owners." (Id.) The U.S. Forces holding the property recovered from Welz erroneously listed the painting as having belonged to one Heinrich Rieger, and placed it in his collection. (Id. ¶ 5(h))

That collection was then distributed to Rieger's heirs, who sold some artworks, including the painting, to the Osterreichische Galerie Belvedere ("the Belvedere"), the Austrian National Gallery. (Id. ¶ 5(m)) In 1954, Rudolph Leopold acquired the painting from the Belvedere, and in 1994 he sold it to the Leopold. (Id. ¶¶ 5(r), (aa))

In 1997, the Leopold sent the painting from Austria to New York, where it was displayed at a MoMA exhibit from October 8, 1997 to January 4, 1998. (Id. ¶ 5(bb)) Three days after the exhibit ended, the New York County District Attorney's Office issued a subpoena for the painting; on September 21, 1999, that subpoena was quashed by the New York Court of Appeals.³ See In the Matter of the Grand Jury Subpoena Duces Tecum Served on Museum of Modern Art, 93 N.Y.2d 729, 697 N.Y.S.2d 538, 719 N.E.2d 897 (1999).

That day, United States Magistrate Judge James C. Francis IV issued a seizure warrant for the painting, and the next day the United States started this forfeiture action. (Compl. Ex. A; Dkt. No. 1) Under the statutes cited in the complaint, goods must be forfeited if they were brought into the United States illegally, or if they are to be removed from the United States illegally. See 19 U.S.C. § 1595a(c); 22 U.S.C. § 401(a). The government claims that the painting is stolen and that therefore it was imported, and would be exported, in violation of the National Stolen Property Act, 18 U.S.C. § 2314 (1994) (" § 2314"), which prohibits transporting stolen goods in foreign commerce.

II.

Under the common law, "one cannot be convicted of receiving stolen goods if, before the stolen goods reached the receiver, the goods had been recovered by their owner or his agent, including the police." United States v. Muzii, 676 F.2d 919, 923 (2d Cir.1982). This doctrine ("the doctrine") is well-established federal law; federal courts routinely apply it in cases involving federal statutes that prohibit the receipt or transportation of stolen goods without inquiring into whether the doctrine is part of the relevant body of local law, as they would have to do if local law controlled this issue.⁴ See, e.g., United States v. Golomb, 811 F.2d 787, 792 (2d Cir.1987) (18 U.S.C. § 641); Muzii, 676 F.2d at 923 (18 U.S.C. § 659); United States v. Dove, 629 F.2d 325 (4th Cir.1980) (§ 2314); United States v. Egger, 470 F.2d 1179, 1181 (9th Cir.1972) (18 U.S.C. § 2113(c)); United States v. Cawley, 255 F.2d 338, 340 (3d Cir.1958) (18 U.S.C. § 1708).

Relying on the doctrine, the Leopold argues that even if the painting was stolen by Welz in 1939, it "ceased being stolen when it was recovered by the United States Forces." Accordingly, the Leopold contends, the painting is not forfeitable because it was not brought into the United States, and would not be removed from the United States, in violation of § 2314. (Leopold Mem. at 23-26)

In response, the government argues that the doctrine is irrelevant because (a) Austrian law, and not federal law, controls, and (b) the doctrine applies only when the police use stolen goods as part of a sting operation. For the reasons explained below, I disagree with both arguments.

A.

The government first argues that Austrian law controls the question of whether the painting is "stolen" within the meaning of § 2314, and that the doctrine does not apply because it is not a part of Austrian law. (Gov't Mem. at 65-68) The government relies on two Fifth Circuit cases, United States v. McClain, 545 F.2d 988 (Wisdom, J.) (5th Cir.1977) (McClain I), and United States v. McClain, 593 F.2d 658, 664 (5th Cir.1979), which reviewed the convictions of five people charged, inter alia, with violating § 2314 by bringing Mexican antiquities into the United States.

The government contends that the McClain cases hold that § 2314 "appl[ies] to the importation of pre-Columbian artifacts ... classified as stolen under Mexican ... law[]." (Gov't Mem. at 66-67) Not so. It is true that the McClain Courts referred extensively to Mexican law, but only to determine whether the artifacts were owned such that they could be stolen. See McClain I, 545 F.2d at 997-1000 (parsing Mexican statutes to determine when the Mexican state "vested itself with ownership of all pre-Columbian objects"). The McClain Courts looked exclusively to federal law to determine whether the artifacts were stolen. See id. at 994-95 (parsing federal cases for the meaning of "stolen" and relying, inter alia, on United States v. Turley, 352 U.S. 407, 77 S.Ct. 397, 1 L.Ed.2d 430 (1957)).

This distinction between ownership as defined by local law and stealing as defined by federal law was further apparent in the McClain I Court's rejection of the appellants' argument that Mexican law could not be considered for any purpose. Appellants argued that reference to Mexican law was barred by Jerome v. United States, 318 U.S. 101, 63 S.Ct. 483, 87 L.Ed. 640 (1943), under which the meaning of a federal criminal statute may not ordinarily depend on non-federal law. Judge Wisdom responded:

The reasoning of Jerome does not support the appellants' position here. We suggest that the key to Jerome is that behavior punishable in one state would not be punishable in another state. Here, our decision to refer to foreign declarations of ownership does not create the state-by-state divergence avoided in Jerome. It poses the possibility, of course, that similar exportations from different countries might lead to different results in the United States. But the National Stolen Property Act has a specific scienter requirement — knowledge that stolen goods are stolen — that protects a defendant who might otherwise be trapped by such differences.

See McClain I, 545 F.2d at 1001 n. 30. In other words, under Jerome the conduct that is proscribed by the federal criminal laws — "behavior punishable" — may not ordinarily vary from one jurisdiction to another. However, Jerome does not imply that the core of proscribed conduct must lead to the same consequences for property from every jurisdiction — "different results" are permissible so long as there is a mechanism that protects defendants "who might otherwise be trapped by such differences." In the case of § 2314, that mechanism is a uniformly applied scienter requirement. Given this reading of what is "key to Jerome," "stolen" must be defined by reference to federal law, regardless of how ownership is defined. Otherwise, the conduct proscribed by § 2314 would vary between jurisdictions, and such inconsistency is forbidden by Jerome.

The Fifth Circuit's McClain cases cut against the government's argument that the meaning of "stolen" is controlled by Austrian law. The McClain cases do not hold that § 2314 applies to items that are "classified as...