A unique statute for unique circumstances?

Some feel Congress does not frequently come together behind bipartisan legislation, so perhaps we should cheer when it does so. In March of this year, the House of Representatives unanimously passed, and on April 13 the President signed, the Holocaust Expropriated Art Recovery Act of 2025. And many did cheer.

The statute has a profound effect on a narrow set of circumstances that appears to be unique in U.S. legislation. But first, some background is in order.

As is well-known, the Nazis undertook a comprehensive and unprecedented effort to dispossess Jews and others of artworks and other valuables. Likely hundreds of thousands of paintings, drawings, sculptures, and other artworks were taken by the Nazis or otherwise lost by Jews and others as they were rounded up or fled continental Europe. Many of the owners of such works perished in the Holocaust.

There were efforts by the allies to return works to their rightful owners in the years immediately after World War II, but the efforts were very incomplete. Many works lost under the Nazis made their way through the art market and were later acquired by good-faith purchasers in the United States--buyers who usually did not have knowledge of the tragic history of the works. Many such artworks were later resold, and many were ultimately donated to or otherwise acquired by U.S. museums.

And, for some decades and for many reasons, very few families sought to recover works they had lost under the Nazis--out of reticence to revisit a dark period in their family's history, because they did not know what artworks their slain relatives owned in the 1930s, or because they did not know where the works were now located. 

That began to shift in the 1990s, when additional records became available after the fall of communism, and accelerated in the 2000s, with the greater availability of information about the history and present location of works of art, especially as more ownership documents, museum holdings and auction records were available online. As more lawsuits were brought in U.S. courts to recover artworks lost under the Nazis that were now in this country or sometimes overseas, some current owners asserted time-based defenses. They argued the suits could and should have been brought sooner and so were barred by the applicable statute of limitations or the equitable doctrine of laches (which bars a claim by a party that has delayed unreasonably in suing where that delay has prejudiced the defendant's ability to defend the case--such as through death of witnesses or other loss of evidence).

In some cases, these defenses succeeded. And that success brought critics. In the Washington Conference Principles of 1998, a non-binding agreement among many nations, the U.S. had committed to taking steps "to achieve a just and fair solution" in cases where "pre-War owners of art that is found to have been confiscated by the Nazis and not subsequently restituted, or their heirs, can be identified." Some viewed statutes of limitation in particular as a "technical defense," inconsistent with a "just and fair solution."

In response, Congress passed and President Obama signed the Holocaust Expropriated Art Recovery Act of 2016 (the HEAR Act). This statute instituted a nationwide six-year statute of limitations for any claims to recover art that changed hands under the Nazis and specified that the time period to bring suit only ran from actual knowledge of both the claim and the whereabouts of the artwork. This six-year limitations period, applicable in all federal and state courts, was to sunset Dec. 31, 2026, apparently on the theory that claimants with rights to art looted by the Nazis should be in a position to bring their claims by then.

The HEAR Act made timely many claims that would otherwise have been time-barred. But over the ensuing decade, some claims to recover Nazi-looted art still failed. In one appellate decision in New York last year, for example, the court upheld dismissal of a claim based on laches, where a Jewish family had known since the early 1960s that a Picasso painting, Woman Ironing, had been promised to the Guggenheim Museum. The family did not demand return of the painting from the museum until 2021, long after numerous witnesses to the painting's history during and after the Nazi regime had died.

In another case that has been litigated in federal court in Los Angeles since 2005 (!), making numerous trips to the 9th Circuit and the U.S. Supreme Court, the Cassirer family sought return of a Camille Pissarro painting that has been in Europe since World War II, the past many decades at the Thyssen-Bornemisza Collection Foundation in Madrid, a state-owned museum. 

After rounds of litigation over foreign sovereign immunity and choice-of-law, among other issues, the 9th Circuit held in 2024 that under California's choice-of-law rule (which the Supreme Court had held applied), Spanish law should govern the case. And under Spanish law, because the museum had held the painting for decades without bad faith prior to the filing of the lawsuit, title in the work had vested in the museum under the civil law doctrine of acquisitive prescription--a rule that is along the lines of adverse possession for personal property.

Again, some felt meritorious claims to recover Nazi-looted art were foundering on the shoals of "technical defenses." Of course, doctrines such as laches and acquisitive prescription (and even statutes of limitation) are fundamentally about fairness and predictability for defendants and society, so it is not at all clear they are "technical" defenses (or not "merit-based" defenses). But they are still viewed by some as defenses that led to unfair results for heirs of families that may have lost artworks in the Holocaust.

So, Congress stepped in again, enacting the Holocaust Expropriated Art Recovery Act of 2025 (HEAR 2025), passed into law earlier this year. HEAR 2025 extends the sunsetting six-year statute of limitations indefinitely. But the new statute goes much, much further.

First, it not only extends the statute of limitations for suits to recover Nazi-looted art; it eliminates from such cases any "defenses based on the passage of time, including laches, adverse possession, acquisitive prescription, and usucapion" (the last being a Roman law concept meaning "acquisition through use," applicable in some civil law countries). So now laches (applied in the Guggenheim case) is not an available defense, as is most any civil law doctrine such as acquisitive prescription (applied in the Cassirer litigation).

Second, HEAR 2025 bars consideration in this class of cases of various longstanding rules of international law applied by U.S. courts, including "the act of state doctrine, international comity, forum non conveniens, prudential exhaustion, and similar doctrines." This means that in suits to recover art that changed hands under the Nazis, a U.S. court would not consider the actions or jurisdiction of a foreign court or sovereign. For example, if a foreign sovereign had previously decided to return a disputed artwork to one of two claimants, this act of a foreign state would not bar the disappointed claimant from seeking a different result in courts here.

Third, the new statute makes it somewhat easier to sue a foreign sovereign (or an instrumentality of it, such as a state-owned museum) to recover Nazi-looted art.

Taken together, the provisions of HEAR 2025 are dramatic. The Act eliminates not just most defenses a good-faith purchaser of art that changed hands under the Nazis might have, but most any other doctrinal considerations that a court might ordinarily entertain to reach a resolution under the specific facts of a case.

And, the provisions of HEAR 2025 apply to any claim that is not final (including any appeals) as of the date of the statute's enactment. So the Guggenheim and Cassirer cases, along with numerous other recent high-profile decisions that were the target of the Act, may now be revisited, perhaps with different outcomes (or, at least, additional issues to be litigated).

The drafters of HEAR 2025 would argue that sweeping aside such defenses or doctrines to allow recovery of artworks lost by Jewish families in the Holocaust is a sufficiently important priority that we should not be concerned that we are changing the legal rules to favor claimants in such cases. And many of us might agree. Indeed, as a society, we have in other circumstances swept aside legal defenses and procedural rules in specific classes of cases where the goal of ensuring appropriate compensation was seen as paramount. For example, soon after the Sept. 11 attacks in 2001, Congress enacted a scheme for victims of 9/11 and their families to be compensated. The federal government and some states have enacted systems for ensuring compensation for victims of crimes, and the federal government has a particular program to provide support for victims of terrorism.

The critical difference, and what appears to make HEAR 2025 unique, is that while Congress has removed virtually all defenses to claims to recover art looted under the Nazis, the federal government is not funding the recovery such claimants will obtain. Rather it is, in a sense, funded by the private parties--whether individuals or institutions, domestic or foreign--that currently possess the artworks at issue.

A simple and valid response to these concerns is that HEAR 2025 simply requires that disputes over ownership of Nazi-looted art be decided "on the merits." If a claimant demonstrates that their ancestor owned the artwork under the Nazis and did not voluntarily sell it for value, then the claimant should be entitled to recover the work from a good-faith purchaser, even if many decades have passed after a unique period of human cruelty and suffering.

But "on the merits" can be a tricky concept when so many decades have passed. Suppose there is evidence a family owned a painting in the 1930s but no evidence as to how they lost it--whether they sold it for value before the Nazis took control, they sold it later under duress, or the Nazis forcibly took it from them, for example. And suppose those who might have known what happened to the painting over many decades following all died in the 1990s or 2000s. HEAR 2025 essentially tilts the scale in favor of a family bringing a claim now to recover the painting from its current good-faith possessor (especially in New York, a venue for many art disputes, where the law effectively shifts the burden of proving ownership to the defendant once a plaintiff has made a prima facie case of prior ownership). In a sense, this result is not necessarily a judgment "on the merits," as the underlying merits may no longer be knowable. Instead, it is an outcome that reflects a policy judgment--a decision that, as between a family that apparently suffered loss of a work of art under the Nazis and a later good-faith purchaser, and in the absence of additional evidence of what happened to the work, the family should prevail as to ownership of the work. 

Again, that may be a valid policy judgment by Congress--effectively, reflecting a societal preference that families who arguably lost artworks under the Nazis should, finally, be able to recover the works. In this sense, HEAR 2025 is a unique statute for unique historical circumstances.

And it may spawn unusual litigation in at least two respects. One is that we may see some odd results from HEAR 2025 in disputes over artworks now located overseas. For example, in the Cassirer litigation, the federal court may ultimately hold under the new statute that the Cassirer family, not the Thyssen-Bornemisza museum in Madrid, holds good title to--that is, owns--the Pissarro painting in Spain. Will the Spanish museum--which believes that, under Spanish law of acquisitive prescription, it has good title to the painting--comply with such a judgment from a U.S. court? If the Cassirer family seeks to enforce the U.S. judgment in Spain, will Spanish courts consider a U.S. court decree--one premised on a rejection of Spanish law but purporting to adjudicate ownership of property located in Spain--to be valid? These are difficult issues, and it is difficult to predict how they will play out. We will have to see, over many years to come.

In addition, we will likely see unusual constitutional challenges to the statute. Can Congress control not only the jurisdiction of federal courts, but the rules of decisions applied by those courts (as well as state courts, to which HEAR 2025 also applies)? More specifically, one commentator (William Charron, in the Harvard Art Law Review) has already argued that Congress cannot give federal courts jurisdiction over disputes while surgically limiting that jurisdiction (by eliminating the equitable defense of laches). There may also be arguments that Congress's elimination of judicial doctrines such as international comity, forum non conveniens, and the act of state doctrine violates the constitutional separation of powers.

Stay tuned for some interesting court decisions.