Herzog Heirs Sue Hungary in US Court to Recover Art

The heirs of Baron Mór Lipót Herzog, a Budapest collector of fine art who assembled one of the greatest art collections in Europe before World War II, filed suit against Hungary and certain Hungarian museums in U.S. District Court for the District of Columbia on July 27, 2010. The family is seeking to recover many paintings and other works of art taken in the early 1940s that either remained in or came into the possession of Hungarian government museums. The list includes major paintings of the highest quality by artists such as El Greco, Lucas Cranach the Elder, Zurbarán, Sir Anthony van Dyck, Camille Corot and Gustave Courbet. It also includes Renaissance paintings and sculptures and some ancient works of art.

The family tried negotiating with the government from the time of the Soviet bloc's dissolution, but after eight fruitless years filed suit in Hungary for a small portion of the Herzog Collection. Although a lower court decision in Hungary in 2000 was favorable, after eight more years of litigation, the family was denied restitution. The lawsuit filed in the District of Columbia seeks to recover all of the artworks held by the defendants. The family’s claim is for the subsequent breaches of bailment agreements they claimed they entered into with Hungary and not for the original expropriation of the Collection.

A motion to dismiss the action made by the defendants was denied on September 1, 2011 except for an attempt to reopen the earlier Hungarian court proceeding involving 11 paintings. On March 2, 2012, the U.S. Court of Appeals for the District of Columbia granted both parties’ petitions for permission for leave to appeal.

Hungary’s appeal repeated many of the arguments it made in the district court, namely, that the district court lacked jurisdiction under the FSIA, the claimant failed to state a claim for bailment and that the family’s claims were barred by the FSIA’s “treaty exception”, the statute of limitations, the political question doctrine, and the act of state doctrine. The Herzog family’s cross-appeal concerned the dismissal of their claims to the 11 paintings on international comity grounds.

The U.S. Court of Appeals upheld the district court’s partial denial of its motion to dismiss and reversed the district court decision dismissing the family’s claims at issue in the earlier litigation.

The Herzog heirs have set up a website about the collection and their claims. See: http:www.hungarylootedart.com. Similar issues to the ones dealt with in this case can be found in Abelesz v. Magyar Nemzeti Bank (7th Cir. Aug. 22, 2012) available on the right.

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