Zuckerman v. The Metropolitan Museum of Art, 062619 FED2, 18-634

Docket Nº:18-634
Opinion Judge:Katzmann, Chief Judge:
Party Name:Laurel Zuckerman, as Ancillary Administratrix of the Estate of Alice Leffmann, Plaintiff-Appellant, v. The Metropolitan Museum of Art, Defendant-Appellee.
Attorney:Lawrence M. Kaye (Ross L. Hirsch, Yael M. Weitz, on the brief), Herrick, Feinstein LLP, New York, NY, for Plaintiff-Appellant. David W. Bowker, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC; Michael D. Gottesman, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, for Defendant- ...
Judge Panel:Before: Katzmann, Chief Judge, Livingston and Droney, Circuit Judges.
Case Date:June 26, 2019
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Laurel Zuckerman, as Ancillary Administratrix of the Estate of Alice Leffmann, Plaintiff-Appellant,

v.

The Metropolitan Museum of Art, Defendant-Appellee.

No. 18-634

United States Court of Appeals, Second Circuit

June 26, 2019

Argued: February 27, 2019

Plaintiff-Appellant Laurel Zuckerman appeals from the judgment of the United States District Court for the Southern District of New York (Preska, J.) dismissing her complaint for failure to state a claim. Zuckerman seeks recovery of a painting by Pablo Picasso that has been in the Metropolitan Museum of Art's possession since 1952. The painting once belonged to Zuckerman's ancestors, Paul and Alice Leffmann, who sold it in 1938 to a private dealer to obtain funds to flee fascist Italy after having already fled the Nazi regime in their native Germany. The district court concluded that Zuckerman failed to allege duress under New York law. We do not reach the issue of whether Zuckerman properly alleged duress because we find that her claims are barred by the doctrine of laches. Accordingly, we AFFIRM.

Lawrence M. Kaye (Ross L. Hirsch, Yael M. Weitz, on the brief), Herrick, Feinstein LLP, New York, NY, for Plaintiff-Appellant.

David W. Bowker, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC; Michael D. Gottesman, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, for Defendant- Appellee.

Thomas J. Hamilton, John J. Byrne, Jr., Byrne Goldenberg & Hamilton, PLLC, for Amicus Curiae Holocaust Art Restitution Project.

Stanley W. Levy, Benjamin G. Shatz, Diana L. Eisner, Danielle C. Newman, Manatt, Phelps & Phillips, LLP, for Amici Curiae The 1939 Society and Bet Tzedek.

Owen C. Pell, White & Case LLP, for Amici Curiae Natalia Indrimi, Professor Guido Alpa, and Avv. Renzo Gattenga.

Jennifer A. Kreder, Cincinnati, OH, for Amici Curiae Bnai Brith International, Raoul Wallenberg Centre for Human Rights, Simon Wiesenthal Center, Omer Bartov, Michael Berenbaum, Stuart Elliot Eizenstat, Richard Falk, Eugene Fisher, Irving Greenberg, Peter Hayes, Marcia Sachs Littell, Hubert G. Locke, Wendy Lower, Bruce F. Pauley, Carol Rittner, John K. Roth, Lucille A. Roussin, William L. Shulman, Stephen Smith and Alan Steinweis.

Before: Katzmann, Chief Judge, Livingston and Droney, Circuit Judges.

Katzmann, Chief Judge:

In the 1930s, the German government, under the control of Adolf Hitler's National Socialist German Workers' Party (the "Nazis"), launched a campaign of oppression against German Jews and other minorities. As part of its reign of terror, the Nazis and their affiliates forced Jews out of their homes, seized their businesses, and stripped them of their property. By the late 1930s, life in Germany for Jewish people became so dangerous that many were forced to flee the country. Of those who were unable to escape, most were removed from their homes, shipped to concentration camps, and murdered.

In recent decades, with the passage of time and as the number of survivors of Nazi brutality diminishes, there has been a sense of urgency that some measure of justice, albeit incomplete, be given to those victims and their heirs. International conferences and subsequent declarations have outlined principles designed to ensure, for example, that "legal systems or alternative processes, while taking into account the different legal traditions, facilitate just and fair solutions with regard to Nazi-confiscated and looted art." Prague Holocaust Era Assets Conference: Terezin Declaration, Bureau of European and Eurasian Affairs, U.S. Department of State (June 30, 2009), https://2009-

2017.state.gov/p/eur/rls/or/126162.htm. What was a moral imperative has appropriately been converted into statute, with such landmark legislation as the Holocaust Expropriated Art Recovery Act of 2016 (the "HEAR Act"). Pub L. No. 114-308, 130 Stat. 1524. These efforts are grounded in the recognition that the claims of survivors and their heirs must be given serious and sympathetic consideration. To facilitate the processing of such claims, the HEAR Act creates a nationwide statute of limitations for bringing claims to recover artwork and other property lost during the Holocaust era. The HEAR Act directs that every case be given individual attention, with special care afforded to the particular facts. In that effort to render justice, the law does not eliminate equitable defenses that innocent defendants may assert, where to do otherwise would be neither just nor fair.

Paul and Alice Leffmann (the "Leffmanns") were German Jews who, prior to Hitler's rise to power, enjoyed a flourishing and prosperous life in Germany. They had "sizeable assets," including a manufacturing business and multiple properties. J. App'x 33. Among the items they owned, purchased in 1912, was The Actor, a "masterwork" painting by the famed artist Pablo Picasso. Id. When the Leffmanns were forced to sell their business and flee Germany in 1937, they lost much of their property. Once in Italy, they sold their Picasso painting to raise money to escape Hitler's growing influence in Italy and relocate to Brazil.

Plaintiff-Appellant Laurel Zuckerman is the Leffmanns' great-grandniece. Zuckerman seeks replevin of the painting from Defendant-Appellee the Metropolitan Museum of Art (the "Met"). Zuckerman argues the Leffmanns sold the Painting under duress and that the sale is therefore void. The district court (Preska, J.), concluding that Zuckerman had failed to adequately allege duress under New York law, dismissed her complaint.

On appeal, the Met argues, inter alia, that Zuckerman's claims are barred by the doctrine of laches and that such a determination can be made on the pleadings. In this Court's narrow ruling, we agree. Laches is an equitable defense available to a defendant who can show "that the plaintiff has inexcusably slept on [its] rights so as to make a decree against the defendant unfair," and that the defendant "has been prejudiced by the plaintiff's unreasonable delay in bringing the action." Merrill Lynch Inv. Managers v. Optibase Ltd., 337 F.3d 125, 132 (2d Cir. 2003).1 Here, despite the facts that the painting was a significant work by a celebrated artist, that it was sold for a substantial sum to a well-known French art dealer, and that it has been in the Met's collection since 1952, neither the Leffmanns nor their heirs made any demand for the painting until 2010. Such a delay is unreasonable, and the prejudice to the Met is evident on the face of Zuckerman's complaint. We further conclude that the HEAR Act does not preempt the Met's laches defense. Accordingly, we AFFIRM the judgment of the district court.

Background

The following facts are drawn from the allegations in Plaintiff-Appellant's Amended Complaint or are "matters of which judicial notice may be taken." Wilson v. Merrill Lynch & Co., 671 F.3d 120, 123 (2d Cir. 2011).

I. The Leffmanns

Paul Friedrich Leffmann, a German Jew from Cologne, purchased The Actor, a painting by Pablo Picasso, in 1912 (the "Painting"). Mr. Leffmann and his wife, Alice, lent the Painting for various exhibitions throughout Germany in the early 20th Century. The Painting was also featured in articles, magazines, and monographs.

After the adoption of the Nuremberg Laws in September 1935, the Leffmanns' lives in Germany became untenable. Stripped of the rights and privileges of German citizenship, they were forced to sell their property and businesses to "Aryan" corporations, receiving "nominal compensation." J. App'x 34.

By 1937, it became clear that life in Germany for Jews like the Leffmanns was no longer simply difficult, but genuinely perilous. The Leffmanns decided to flee Germany for Italy. After paying exorbitant "flight taxes," the Leffmanns arrived in Italy in April 1937. They engaged in financial transactions at a loss in order to settle in Italy. For example, the Leffmanns arranged to purchase a home for 180, 000 Reichsmark ("RM") but pre-agreed to later sell it back to the original owners at a substantial loss. These "triangular agreements" were common at the time, as they allowed individuals outside of Germany to acquire RM while simultaneously permitting German emigrants to...

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