March 4, 2004
High Court’s New Territory: Nazi Loot
"I feel that I gave my best performance at the right time and in the right place," said a jubilant E. Randol Schoenberg.
Schoenberg's performance hadn't won him an Oscar but something else that he believed was infinitely more important -- an appearance before the U.S. Supreme Court.
The 37-year-old West Los Angeles attorney, partner in a two-man law firm, was pleading a case he had pursued for nearly six years and against formidable opposition. On the other side was not only a nationally known law firm with 600 lawyers, but also the U.S. Department of Justice, with its huge resources, and the Austrian government.
Schoenberg represented Maria V. Altmann, an 88-year-old Cheviot Hills resident, who is seeking to recover six paintings -- now valued at $150 million -- by Austrian artist Gustav Klimt, including a portrait of her aunt, Adele Bloch-Bauer.
The paintings were confiscated by the Nazis when they took over the Bloch-Bauer mansion in Vienna and the rest of Austria in 1938. They are currently in the hands of the Austrian Gallery, which claims that Bloch-Bauer willed the paintings to the gallery before her death.
Altmann is contesting this claim, but the Supreme Court hearing on Feb. 25, the first art theft case of the Nazi era to reach the highest court, revolved around a more fundamental legal question.
"The basic issue is whether a foreign country can be sued in an American court," said professor Michael Bazyler of the Whittier Law School, whose recent book, "Holocaust Justice," analyzes the Altmann case.
Schoenberg answers yes, and two lower courts agreed with him. But the U.S. government, backing the Austrian claim, fears that if the Supreme Court upholds this position, the United States, in turn, could be sued in foreign courts and this could lead to a flood of World War II property claims.
Scott Cooper of the Proskauer Rose law firm in Century City, representing the Austrian government, did not respond to a request for comment.
The Supreme Court will not rule on the case until the end of June, but if it favors Altmann's plea, the case will be returned to a Los Angeles Superior Court judge, who will decide to whom the paintings belong.
For Schoenberg, the grandson of two world-famous Viennese composers, Arnold Schoenberg and Eric Zeisl, the David vs. Goliath case goes beyond prestige and money.
"Having grown up in an Austrian Jewish exile family, which had close friendship ties with the Altmann family in Vienna, the case has deep emotional and personal meaning for me," he said.
Two days before the Supreme Court hearing in Washington, another case rooted in the Holocaust era and also centering on federal vs. state jurisdiction unfolded in a Los Angeles court. It pitted survivors Manny Steinberg of West Hills and Dr. Jack Brauns of Covina, both in their late 70s, against the International Commission on Holocaust Era Insurance Claims (ICHEIC) and its chairman, former U.S. Secretary of State Lawrence Eagleburger.
Steinberg, Brauns and their attorney, William Shernoff, had earlier filed suit in a California court, charging ICHEIC with unfair business practices. They accused the commission of being in league with Assicurazioni Generali of Italy, one of Europe's largest insurance companies, to stonewall, deny or lower 60-year-old, justified insurance policy claims.
The commission countered by filing a motion for dismissal of the case but lost when U.S. District Judge Ronald S. W. Lew denied the motion and ordered the case returned to a California Superior court. Underlying the legal wrangling of which court should try the case was an important fact of litigation, Shernoff said.
"We have found that the judiciary in state courts, particularly in California, are sympathetic to survivors, while federal courts are more disposed toward the insurance companies," he said.
Law professor Bazyler observed that the "threshold question" of which court has jurisdiction in a given case may determine 90 percent of the outcome.
"Once the jurisdiction is decided, the parties usually settle," he said.
Attorney Constantinos Panagopoulos of New York, defending ICHEIC, said in a phone interview that his client had been "diligent" in processing survivor claims and that he would vigorously contest the survivors' charges in California courts.
On the same day that it heard arguments on the Altmann art theft case, the U.S. Supreme Court also ruled that states were within their rights to deny scholarships to students studying to be priests, ministers or rabbis. The decision revived some of the contentious issues of church-state separation and also divided national Jewish organizations, the Jewish Telegraphic Agency reported.
The ruling was hailed by the American Jewish Committee, American Jewish Congress and the Anti-Defamation League but denounced by the Orthodox Union and Agudath Israel of America.