United States District Court, S.D. New York
JULIUS H. SCHOEPS, BRITT-MARIE ENHOERNING, and FLORENCE VON KESSELSTATT, Plaintiffs,
FREISTAAT BAYERN, or FREE STATE OF BAVARIA, A STATE OF THE FEDERAL REPUBLIC OF GERMANY, Defendant,
For Julius H. Schoeps, Britt-Marie Enhoerning, Florence Von Kesselstatt, Plaintiffs: Thomas Joseph Hamilton, PRO HAC VICE, John Joseph Byrne, Jr., Byrne, Goldenberg & Hamilton, P.L.L.C., Washington, DC.
For Freistaat Bayern, Defendant: Andreas Albert Frischknecht, LEAD ATTORNEY, Andrew Lawrence Poplinger, James Milton Hosking, Chaffetz Lindsey LLP, New York, NY.
For Free State of Bavaria, A State of The Federal Republic of Germany, Defendant: Andreas Albert Frischknecht, LEAD ATTORNEY, Chaffetz Lindsey LLP, New York, NY.
OPINION AND ORDER
JED S. RAKOFF, U.S.D.J.
On March 27, 2013, plaintiffs Julius H. Schoeps, Britt-Marie Enhoerning, and Florence Von Kesselstatt, heirs of the late Jewish banker Paul von Mendelssohn-Bartholdy, commenced this action against the German State of Bavaria to recover a painting by the legendary artist Pablo Picasso entitled Madame Soler. Previously owned by Mendelssohn-Bartholdy, Madame Soler
was the subject in 1934 Berlin of an alleged forced transfer under the then-Nazi
regime, and after another change in custody, now resides in a Munich museum
under the custody of Bavaria. Second Amended Complaint
(" Am. Compl." ) ¶ ¶ 1-2.
Following commencement of this action, defendant Bavaria brought a motion pursuant to the Federal Rules of Civil Procedure 12(b)(1) to dismiss this action for lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(2) (" FSIA" ). The FSIA " provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989). Section 1605(a)(2) of the FSIA provides for jurisdiction over a foreign state in three instances: (1) where a plaintiff's claim is " based upon" " a commercial activity carried on in the United States by the foreign state" ; (2) where a plaintiff's claim is " based upon" " an act performed in the United States in connection with a commercial activity of the foreign state elsewhere" ; or (3) where " an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere causes a direct effect in the United States." 28 U.S.C. § 1605(a)(2).
After initial briefing and oral argument on December 23, 2014, the Court determined that an evidentiary hearing was required. That hearing was held on two dates, February 28, 2014 and March 18, 2014, after which the Court received post-hearing supplemental briefing. In what follows below, the Court has made factual findings where the evidentiary hearing gave it a basis for so doing, and has otherwise taken the facts most favorably to the plaintiffs.
According to the Amended Complaint (" Am. Compl." ), in 1934 the late Jewish banker, Mendelssohn-Bartholdy, after nearly two years of " intensifying Nazi persecution had devastated him financially, professionally, and socially," consigned Madame Soler to the Berlin art dealer Justin K. Thannhauser, in what was allegedly a " paradigmatic forced transfer." Am. Compl. ¶ ¶ 1-2. Thirty years later, Madame Soler remained in the custody of Thannhauser, who had by then relocated to New York. See, e.g., Am. Compl. ¶ 4.
In October of 1963, Kurt Martin, the then-Director General of the State Paintings Collections Munich (" State Paintings Collection" ), an organization operating under the auspices of the Bavarian State Ministry for Education and Cultural Affairs, see Pl. Ex. 47., sent a letter to the Bavarian State Ministry for Education and Culture, seeking approval for a trip to the United States by Halldor Soehner, a Senior Curator in the department of " 17th and 18th Century Spanish and French Paintings," see Pl. Ex. 33. The purpose of the trip, according to the letter, was so that Soehner, who was likely the heir apparent to Martin, could become " familiar with the most modern methods of museum organization . . . the systemization of scholarly and public education work, the administration of museums, the security measures, the purchase and so forth [of artworks] . . . ." Pl. Ex. 40 (alteration in the original). On January 10, 1964, Martin's permission for Soehner's requested trip " to study museums in the USA" was granted by the Bavarian State Ministry for Education and Cultural Affairs, with the caveat that " [a] leave of absence beyond 3 months is not possible in light of the imminent change in the leadership of the State Paintings Collections." Pl. Ex. 41. On March 30, 1964, Soehner, as Senior Curator,
and soon to be Director General of the State Paintings Collections, departed for the ...