New Legislation to Protect Foreign Art Lenders From Lawsuits on U.S. Soil

“The court held, in effect, that immunity from seizure does not mean immunity from being sued,” said art-law attorney Howard Spiegler of Herrick Feinstein, who represented the Malewicz heirs. The new legislation means that “immunity from seizure also means immunity from being sued, except in certain limited circumstances,” he stated.

The “limited circumstances” in the proposed legislation are in a carve-out for claims related to art taken by the Nazis. The law would prevent claims like those of the Malewicz family and those related to stolen antiquities. It would also not permit claims related to artworks on loan that were “stolen through other means or in other wars that end up in foreign national collections,” said Patty Gerstenblith, a professor at DePaul University College of Law and an expert in art museum and cultural law.

“No one has a right to deal with stolen property,” said Mr. Goldstein. “The museums want a right that no one else has.”

Some lawyers fear that the Nazi-era exception is so ambiguously drafted that it will keep even some Holocaust victims from getting through the courthouse door. The bill exempts only claims to artwork “taken in Europe in violation of international law by a covered government.” So it apparently precludes claims based on seizures during the Nazi era if they occurred in culture-rich North Africa, Asia or elsewhere.

And the bill’s definition of a “covered government” is limited to the Nazis and its allies and affiliated governments, so apparently no claims can be brought against U.S. World War II allies such as the Soviet Union, which plundered cultural treasures in Nazi-occupied territory at the end of the war. Mr. Goldstein, among other art-law specialists, also fears that limiting Holocaust-era claims to art “taken” by a “covered government” might result in the dismissal of lawsuits based on the action of nongovernmental third parties. Many claims, he said, are based not on the Nazi government’s taking of the art but on forced sales or sales under duress. Auction houses, for example, conducted below-market sales of art owned by Jews as the price of their fleeing Germany. The Claims Conference, which works to return Jewish-owned art plundered during the Holocaust, is “trying to work with Feinstein’s staff to change the bill,” Mr. Goldstein said.

Asked why the legislation has been introduced only in 2012, seven years after the Malewicz decision, Mr. Spiegler said he would be “speculating,” but suggested that the Jewish sect Chabad’s high-profile case against Russia, which triggered Russia’s embargo on lending art to U.S. museums, “may have spurred interest in immunity again. Certainly, the museums that have been affected [by the embargo] may have felt that this was the time to try to assist foreign governments.”

If what Mr. Goldstein calls “the Russia factor” did play a part in instigating the new legislation, it would not be the first time that Russia’s actions have resulted in protective legislation for art loans. The Immunity From Seizure Act itself was passed in 1965 in response to the Soviet Union’s concerns that its art would be seized if it was shown in the U.S.

Update, April 3: An earlier version of this article incorrectly reported that Rep. Conyers had stated that the Russian and Czech governments were refusing to loan to the DIA. In fact, he said that the DIA director had informed him that those governments were refusing to lend to American museums.

New Legislation to Protect Foreign Art Lenders From Lawsuits on U.S. Soil