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July 19, 2000


The opinion of the court was delivered by: 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.*fn1


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))*fn2 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 Österreichische 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.*fn3 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.


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.*fn4 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 ...

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