United States v. Portrait of Wally

Hay, Bruce L.

doi:10.1007/978-3-319-64967-2_2

Bruce L. Hay²

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2 Citations

Abstract

In United States v. Portrait of Wally, federal authorities seized a Schiele painting in New York and brought a forfeiture proceeding on behalf of the heirs of Jewish art dealer Lea Bondi, who claimed that the Nazis had stolen the work from her in Vienna in 1939. The resulting 12-year litigation raised an intricate series of legal and factual questions concerning ownership of the painting, which are examined in this chapter.

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Notes

1.
United States v. Portrait of Wally, 663 F. Supp.2d 232, 245 (S.D.N.Y. 2009).
2.
See Dobrzynski (1997).
3.
A documentary film, Portrait of Wally: The Face that Launched a Thousand Lawsuits (P.O.W. Productions, 2012), tells the story of the case and the events underlying it.
4.
In the Matter of the Grand Jury Subpoena Duces Tecum Served on the Museum of Modern Art, 93 N.Y.2d 729 (N.Y. 1999). On loaned art’s immunity from seizure, see Kaye (2010) and van Woudenberg (2012).
5.
In federal forfeiture actions, which are considered in rem rather than in personam proceedings, it is customary to designate the contested property as the nominal defendant. The federal government’s case was accordingly styled “United States v. Portrait of Wally, a Painting by Egon Schiele.”
6.
National Stolen Property Act, 18 U.S.C. § 2314. Items that are imported to the United States in violation of this law are subject to forfeiture. See 19 U.S.C. § 1595a.
7.
United States v. Portrait of Wally, 105 F. Supp.2d 208 (S.D.N.Y. 2000). This was the first of four opinions the district court issued in the case. To distinguish it from the later opinions, we will refer to it as “Wally I.”
8.
United States v. Portrait of Wally, 2000 WL 1890403 (S.D.N.Y. 2000) (“Wally II”).
9.
United States v. Portrait of Wally, 2002 WL 553532 (S.D.N.Y. 2002) (“Wally III”).
10.
United States v. Portrait of Wally, 663 F. Supp.2d 232 (S.D.N.Y. 2009) (“Wally IV”). In 2006, the judge originally assigned to the case, Michael Mukasey, retired from the court, and the case taken over by Judge Loretta Preska.
11.
Austrian State Treaty of 1955, art. 26(2).
12.
Wally III, 2002 WL 553532 at *7.
13.
Id.
14.
Id.
15.
Id.
16.
Id.
17.
Id. at *8.
18.
In re Maxwell Communications Corp., 93 F.3d 1036, 1047 (2d Cir. 1996). On international comity in American law, see generally Dodge (2015).
19.
Wally III, 2002 WL 553532 at *9 (quoting Spatola v. United States, 925 F.2d 615, 618 (2d Cir. 1991)).
20.
Wally III, 2002 WL 553532 at *9.
21.
Id. at *10.
22.
Id.
23.
Id.
24.
Id.
25.
Id.
26.
Id.
27.
Id. Employing this reasoning, the court later ruled that international comity did not warrant summary judgment in the museum’s favor. Wally IV, 663 F. Supp.2d at 248–49.
28.
Robins Island Presidential Fund, Inc. v. Southold Development Corp., 959 F.2d 409, 423 (2d Cir. 1992) (internal quotation marks omitted), quoted in Wally IV, 663 F. Supp.2d at 274.
29.
Robins Island, 959 F.2d at 423, quoted in Wally IV, 663 F. Supp.2d at 274.
30.
Wally IV, 663 F. Supp.2d at 274.
31.
Quoted in id. at 275.
32.
To be sure, Leopold’s long undisturbed possession of the painting was relevant to the merits of the case, being part of his claim to having acquired ownership by prescription. See Section 2.4.3 below.
33.
Wally IV, 663 F. Supp.2d at 275–76.
34.
19 U.S.C. § 1595a.
35.
18 U.S.C. § 2314. On civil forfeiture of stolen art, see generally Kreder (2005, 2011). See also Spiegler (2007).
36.
19 U.S.C. § 1615. In a 2000 amendment to the civil forfeiture laws, the government’s initial burden of proof was raised from “probable cause” to “preponderance of the evidence,” the standard a plaintiff must meet in most civil actions. See Civil Asset Forfeiture Reform Act of 2000, Pub. L. No. 106-185, 114 Stat. 202, codified at 18 USCA § 983. This amendment was ruled inapplicable to the Wally proceeding because the case had been commenced in 1999, before the amendment’s effective date. Wally IV, 663 F. Supp.2d at 251 n. 12.
37.
Wally IV, 663 F. Supp.2d at 251 (quoting United States v. An Antique Platter of Gold, 991 F. Supp. 222, 228 (S.D.N.Y. 1997)).
38.
Wally IV, 663 F. Supp.2d at 251.
39.
Id. (quoting United States v. Parcel of Property, 337 F.3d 225, 232 (2d Cir. 2003)).
40.
Wally III, 2002 WL 553532 at *29. On constitutional aspects of civil forfeiture, see Bridy (2014) and Piety (1991).
41.
United States v. $2,500 in U.S. Currency, 689 F.2d 10, 13–15 (2d Cir. 1982).
42.
United States v. $250,000 in U.S. Currency, 808 F.2d 895, 900 (1st Cir. 1987).
43.
Wally III, 2002 WL 553532 at *29.
44.
If Welz had acquired Wally as part of the gallery purchase, the painting might still have qualified as stolen on the ground that the sale had been under duress . However, the government did not pursue this theory; its argument was that Wally was not part of the gallery inventory but rather was in Bondi’s private collection, and that Welz had pressured Bondi into giving it to him under the implied threat that he would prevent her emigration from Austria.
45.
United States v. Long Cove Seafood, Inc., 582 F.2d 159, 163 (2d Cir. 1978) (quoting United States v. Turley, 352 U.S. 407, 417 (1957)), quoted in Wally IV, 663 F. Supp.2d at 252.
46.
Long Cove Seafood, 582 F.2d at 163 (2d Cir. 1978), quoted in Wally IV, 663 F. Supp.2d at 252.
47.
Wally IV, 663 F. Supp.2d at 252 (quoting United States v. Schultz, 333 F.3d 393, 399 (2d Cir. 2003)).
48.
Quoted in Amended Memorandum of Law of Plaintiff United States of America and Claimant Estate of Lea Bondi Jaray in Support of their Joint Motion for Summary Judgment (filed February 26, 2009), United States v. Portrait of Wally, a Painting by Egon Schiele, No. 99 Civ. 9940 (S.D.N.Y.), at 11.
49.
Quoted in Amended Statement of Material Facts in Support of Joint Motion for Summary Judgment by Plaintiff United States of America and Claimant Estate of Lea Bondi Jaray (filed February 26, 2009), United States v. Portrait of Wally, a Painting by Egon Schiele, No. 99 Civ. 9940 (S.D.N.Y.), at 4.
50.
Letter to Otto Kallir (dated August 22, 1966), quoted in Amended Statement of Material Facts, note 49 above, at 5.
51.
Quoted in Amended Statement of Material Facts, note 49 above, at 9.
52.
Federal Rule of Evidence 901(a). See generally Mueller and Kirkpatrick (2012), pp. 999–1064.
53.
Federal Rule of Evidence 901(b)(8).
54.
Wally IV, 663 F. Supp.2d at 254.
55.
Id.
56.
Id. (quoting 5 Weinstein’s Federal Evidence § 901.11[2]).
57.
See Federal Rule of Evidence 803(16).
58.
Wally III, 2002 WL 553532 at *16, quoted in Wally IV, 663 F. Supp.2d at 256.
59.
Wally IV, 663 F. Supp.2d at 256.
60.
Id.
61.
Wally IV, 663 F. Supp.2d at 257.
62.
Id. at 257–58.
63.
Id. at 258.
64.
Id.
65.
Id.
66.
Wally IV, 663 F. Supp.2d at 259.
67.
Id.
68.
Supreme Headquarters Allied Expeditionary Forces, Provisional Handbook for Military Government in Austria, Decree No. 3, “Blocking and Control of Property,” Article I (April 1945), quoted in Third Amended Complaint, United States v. Portrait of Wally, a Painting by Egon Schiele, No. 99 Civ. 9940 (S.D.N.Y.), ¶ 5(f). On American armed forces’ recovery of Nazi-looted art, see generally Kurtz (2006).
69.
Message from War Department to U.S. Forces in Austria, No. WARX 99226 (March 4, 1946), quoted in Wally IV, 663 F. Supp.2d at 239.
70.
United States v. Muzii, 676 F.2d 919, 923 (2d Cir. 1982), quoted in Wally IV, 663 F. Supp.2d at 259. The doctrine is usually traced to two nineteenth-century English cases, Regina v. Schmidt, L.R. 1 Cr. Cas. Res. 15 (1866), and Regina v. Dolan, 29 Eng. Law & Eq. 533 (1855).
71.
United States v. Muzii, 676 F.2d 919, 923 (2d Cir. 1982), quoted in Wally IV, 663 F. Supp.2d at 259.
72.
Wally I, 105 F. Supp.2d at 293.
73.
As noted above, the district court initially ruled that the case should be dismissed under the recovery doctrine (Wally I), but allowed the government to file an amended complaint (Wally II). In light of the new allegations in the amended complaint, the court rescinded its earlier ruling (Wally III).
74.
Wally III, 2002 WL 553532 at *15.
75.
Wally IV, 663 F. Supp.2d at 260.
76.
Id.
77.
Id. at 261.
78.
See generally O’Donnell (2011), pp. 62–63; Presidential Advisory Commission on Holocaust Assets in the United States (2000) at SR23–SR25.
79.
Wally IV, 663 F. Supp.2d at 242.
80.
Quoted in id.
81.
Quoted in id. (internal quotation marks omitted).
82.
Quoted in id.
83.
Id. at 262.
84.
The court addressed this issue in the portion of its opinion devoted to jurisdictional issues rather than the merits of the case. I discuss it here because the museum’s act of state defense essentially required the court to decide whether it could consider the painting stolen in spite of the Austrian authorities’ actions. On the act of state doctrine, see generally Harrison (2016); Keitner (2013).
85.
Schiele married Edith Anna Harms in 1915. Portrait of Wally, painted in 1912, depicts Valerie Neuzil.
86.
The intricacies of this course of events are recounted in the Amended Memorandum of Law, note 48 above, at 14–20, and in Wally IV, 663 F. Supp.2d at 239–42.
87.
Wally III, 2002 WL 553532 at *8.
88.
Id.
89.
Id.
90.
Id. The court found it unnecessary to rule on the contention of the United States that, during the Allied occupation that lasted until 1955, the Austrian authorities lacked the requisite sovereignty to qualify as a “state” for purposes of the act of state doctrine .
91.
Id. at *9.
92.
Id.
93.
Kirkpatrick, 493 U.S. at 409.
94.
Wally III, 2002 WL 553532 at *9.
95.
Id.
96.
Wally IV, 663 F. Supp.2d at 248.
97.
Kirkpatrick, 493 U.S. at 409, quoted in Wally IV, 663 F. Supp.2d at 248.
98.
Wally IV, 663 F. Supp.2d at 248.
99.
Wally III, 2002 WL 553532 at *16 (quoting Wally I, 105 F. Supp.2d at 292), quoted in Wally IV, 663 F. Supp.2d at 262.
100.
Wally III, 2002 WL 553532 at *17, quoted in Wally IV, 663 F. Supp.2d at 263. There were several possible prescription periods applicable to the case, the shortest of which was three years. See id. at 265.
101.
Wally III, 2002 WL 553532 at *17, quoted in Wally IV, 663 F. Supp.2d at 263.
102.
Wally IV, 663 F. Supp.2d at 263.
103.
Id.
104.
Id.
105.
Id. at 264.
106.
Quoted in id. at 264.
107.
Id.
108.
Id. at 265.
109.
Id. at 266 (quoting declaration of Rudolf Leopold).
110.
Id. at 267.
111.
Id.
112.
Id.
113.
Id.
114.
Id.
115.
Id. at 268.
116.
Id.
117.
Id.
118.
Id. at 269.
119.
Id.
120.
Id. at 269 (emphasis in original).
121.
Wally III, 2002 WL 553532 at *24. The court declined the museum’s later request to revisit this issue. Wally IV, 663 F. Supp.2d at 273–74.
122.
As the district court noted, the National Stolen Property Act applies to property known to have been “stolen or converted,” where conversion is defined as “the ‘unauthorized exercise of dominion and control over another’s personal property, to exclusion of or inconsistent with the rights of the owner.’” Wally IV, 663 F. Supp.2d at 273 (brackets omitted) (quoting United States v. Smith, 686 F.2d 234, 242 (5th Cir. 1982). The government argued both that the museum knew Wally to have been stolen and that it knew the painting to have been converted. The court devoted most of its analysis to the former contention, giving only passing attention to the latter (see note 137 below).
123.
Wally IV, 663 F. Supp.2d at 269.
124.
Id.
125.
United States v. Reyes, 302 F.3d 48, 54 (2d Cir. 2002), quoted in Wally IV, 663 F. Supp.2d at 269.
126.
Wally IV, 663 F. Supp. 2d at 269.
127.
Wally IV, 664 F. Supp.2d at 270.
128.
Quoted in id. The offeror was not identified by name, but the government argued that it must be Leopold.
129.
Id.
130.
Quoted in id.
131.
In his catalogue raisonné of Schiele’s works, Otto Kallir listed Emil Toepfer as Wally’s first owner, followed by Richard Lanyi and then Lea Bondi. Kallir (1966). Leopold’s 1972 book claimed to correct errors in the Kallir catalogue. See Wally IV, 663 F. Supp.2d at 270.
132.
Wally IV, 663 F. Supp.2d at 271.
133.
Id.
134.
Id.
135.
Id. at 272.
136.
Id. at 272–73.
137.
Id. at 273.
138.
Id.
139.
On the settlement, see Henry (2010), Hickley and Schneeweiss (2010), and Kline (2010). Details of the case’s resolution are presented in the documentary film Portrait of Wally: The Face that Launched a Thousand Lawsuits (P.O.W. Productions, 2012).

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Law School, Harvard University, Cambridge, Massachusetts, USA
Bruce L. Hay

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Hay, B.L. (2017). United States v. Portrait of Wally. In: Nazi-Looted Art and the Law. Springer, Cham. https://doi.org/10.1007/978-3-319-64967-2_2

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