No.

10-

IN THE
Supreme Court of the United States

MARTIN GROSZ AND LILIAN GROSZ,

Petitioners,

v.

THE MUSEUM OF MODERN ART,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF A PPEALS FOR THE SECOND CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

RAYMOND J. DOWD
Counsel of Record
LUKE MCGRATH
DUNNINGTON BARTHOLOW
& MILLER LLP
1359 Broadway, Suite 600
New York, NY 10018
(212) 682-8811
rdowd@dunnington.com

ROBERT PFEFFER
3225 Turtle Creek Boulevard
Dallas, TX 75219

Attorneys for Petitioners

A
236087

(800) 274-3321 • (800) 359-6859

 i

QUESTIONS PRESENTED

By summary order, the Second Circuit affi rmed a

district court’s dismissal pursuant to Rule 12(b)(6) of
the Federal Rules of Civil Procedure of a complaint
alleging timely claims that artworks held by the Museum
of Modern Art were stolen in Nazi-era Germany. In so
doing, the Second Circuit sanctioned a departure from
the traditional role of U.S. courts as a post-War means of
redress for victims of theft of readily identifiable property
during wartime—particularly to undo Nazi-era theft and
duress transactions. Because the issue of access by victims
of the Nazis to federal courts for restitutionary remedies
for stolen property has received disparate treatment by
the various circuits, the Second Circuit’s decision raises
exceptionally important issues requiring resolution by
this Court.

Two questions are presented:

1. On a motion to dismiss under Rule 12(b)(6) of the

Federal Rules of Civil Procedure, may a federal court
rely on materials extrinsic to a complaint to decide
disputed factual issues governing the accrual of statutes
of limitations, where this court in Republic of Austria v.
Altmann, 541 U.S. 677 (2004) applied a different standard
to a foreign museum?

2. Where the Executive and Congress have adopted

a remedial scheme that relies on traditional legal and
equitable remedies to return art stolen during the Nazi era
to its true owners and where a state statute of limitations
requires actual notice to trigger accrual, does a federal
court impermissibly frustrate the Executive’s foreign
affairs powers by adopting a doctrine of constructive
notice where that doctrine will cause a forfeiture of rights
to stolen artworks?
 ii

TABLE OF CONTENTS
Page
QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . i

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . ii

TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . viii

TABLE OF CITED AUTHORITIES . . . . . . . . . . . x

OPINIONS BELOW. . . . . . . . . . . . . . . . . . . . . . . . . . 1

STATEMENT OF JURISDICTION . . . . . . . . . . . . 1

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . 1

REASONS FOR GRANTING THE PETITION. . 6

I. R E V I E W I S WA R R A N T E D T O
CONSIDER THE CONFLICT BETWEEN
THE RELIANCE OF U.S. FOREIGN
A ND DOMESTIC POLICY ON U.S.
COURTS TO RESTITUTE STOLEN
PROPERTY AND THE COLLECTIVE
UN W ILLINGNESS OF FEDER A L
COURTS TO PERMIT CLAIMANTS
ACCESS TO THE FEDERAL COURTS
...................................... 6

A. The Issue Of Access To Traditional

Restitutionary Remedies Is Implicated
In Von Saher, Now Pending On Certiorari
To The Ninth Circuit. . . . . . . . . . . . . . . 7
 iii

Table of Contents
Page
B. U.S. Foreign And Domestic Policy
Chose The Federal Judiciary As The
Vehicle For Supplying Restitutionary
Remedies In Federal Courts For
Na z i T hef t A nd D u ress W here
Jurisdictionally Appropriate, And The
Federal Judiciary Accepted And Has
Traditionally Exercised That Role . . . . 8

1. U.S. Foreign Policy Consistently

Opposed Na z i-Era P roper ty
Crimes . . . . . . . . . . . . . . . . . . . . . . . . 8

2. Post-War Property Recovery

Efforts And The Role Of The U.S.
Courts . . . . . . . . . . . . . . . . . . . . . . . . 9

C. Congress Enacted The Holocaust

Victims Redress Act of 1998 Based On
The Presumption That The Judicial
Branch Would Continue To Provide
Adequate Restitutionary Remedies
Grounded In State Law For Holocaust-
Era Claimants Of Stolen Art. . . . . . . . . 10

1. Executive Action To Provide

Redress For Victims Of Nazi
Property Crimes . . . . . . . . . . . . . . . 11
 iv

Table of Contents
Page
2. Congressional Understanding
That State Law-Based Remedies
Would Provide Adequate Relief
For Nazi Crime Victims . . . . . . . . . 11

D. Federal Courts Have Established

Post-1998 A Variety of Measures
To Effectively Deny Remedies To
Holocaust-Era Claimants. . . . . . . . . . . . 13

1. I n Vo n S a h e r, T h e N i n t h
Circuit Construed California’s
Statute Of Limitations To Deny
Remedies To The Very Persons
That The Legislature Sought
t o A s s i st : V ic t i m s O f Na z i
War Crimes. . . . . . . . . . . . . . . . . . . . 13

2. Ju d i c i a l Fe d e r a l i z a t i o n O f
Constructive Notice Doctrines
Inhibits Both The Broad Role
Of Congress In Shaping Foreign
Policy Objectives And The More
Specific Power Of The Executive
To Refine The Foreign Policy Of
The Nation And To Take Care That
It Be Faithfully Executed . . . . . . . . 14
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Table of Contents
Page
E. The Second Ci rcu it ’s Denia l Of
Access To The Courts Based On An
Implied Refusal And Equivocation
Nullif ies New York’s Statute Of
Limitations Rules Protecting True
Owners Of Stolen Art. . . . . . . . . . . . . . . 17

1. Because An Actual Refusal Gives

A True Owner Fair Notice Of The
Need To Protect Property Rights,
The Second Circuit’s Endorsement
Of An Implied Refusal Rule Defeats
An Important Protection Under
New York Law That Serves To
Avoid Forfeitures By True Owners
Of Stolen Artworks . . . . . . . . . . . . . 18

2. New York Retained Its Demand-

And-Refusal Rule At The Behest
Of The Federal Government To
Effectuate An Important Federal
Policy Endorsed By The Executive
Branch; The Second Circuit’s
Endorsement Of An Implied Refusal
Rule Frustrates The Executive’s
Policy Against Defeating The
Trafficking Of Stolen Art . . . . . . . . 19
 vi

Table of Contents
Page
F. Petitioners Seek Review Of The Second
Circuit’s Decision Because It, Like The
Ninth Circuit’s Decision In Von Saher,
Frustrates A Remedial Plan For Nazi-
Era Crime Victims Consonant With
Federal Restitution Policy . . . . . . . . . . . 22

II. R E V I E W I S WA R R A N T E D T O
CONSIDER THE CONFLICT BETWEEN
THE DI V ERGENT PROCEDURA L
STA NDA RD A PPLIED TO A U. S .
MUSEUM BY THE SECOND CIRCUIT
ON A RULE 12(b)(6) MOTION WITH
THIS COURT’S TREATMENT OF AN
AUSTRIAN MUSEUM IN REPUBLIC
OF AUSTRIA V. ALTMANN . . . . . . . . . . . . 24

A. In Altmann, This Court Assumed

The Truth Of Allegations Of Nazi Art
Looting, Possession And Concealment
Against An Austrian Museum And
Should Requi re That The Same
Standard Be Applied To A U.S.
Museum . . . . . . . . . . . . . . . . . . . . . . . . . . 24

B. The Second Circuit’s Sanction Of Use

Of Extrinsic Evidence To Dismiss
Claims Against A U.S. Museum
Frustrates Federal Restitution Policy
And Promotes A Procedural Standard
That Lacks Uniformity. . . . . . . . . . . . . . 26
 vii

Table of Contents
Page
C. Judicial Nullification Of Common
Law Doctrines To Deprive Claimants
Of Remedies Poses Par ticularly
Important Concerns Warranting This
Court’s Exercise Of Its Supervisory
Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

III. R E V I E W I S W A R R A N T E D
BECAUSE THE SECOND CIRCUIT’S
DECI SION, T O GET H ER W I T H
O THER DECISIONS DEPRI V ING
RESTITUTIONARY REMEDIES, RISK
MAKING U.S. MUSEUMS HAVENS
FOR STOLEN ART . . . . . . . . . . . . . . . . . . . . 28

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
 viii

TABLE OF APPENDICES
Page
A PPENDIX A — SUMMARY ORDER OF
T H E U N I T ED S TAT E S C OU RT OF
APPEALS FOR THE SECOND CIRCUIT,
FILED DECEMBER 16, 2010 . . . . . . . . . . . . . . . 1a

APPENDIX B — DECISION AND ORDER

D E N Y I N G P L A I N T I F F S ’ M O T IO N
F OR R EC ONSI DER AT ION OF T H E
UNITED STATES DISTRICT COURT,
S OU T H ER N DI S T R IC T OF N E W
YORK, FILED MARCH 3, 2010 . . . . . . . . . . . . . 7a

A PPENDI X C — J U DGMEN T OF THE

UNITED STATES DISTRICT COURT,
SOUTHERN DISTRICT OF NEW YORK,
FILED JANUARY 11, 2010 . . . . . . . . . . . . . . . . . 31a

APPENDIX D — DECISION AND ORDER OF

THE UNITED STATES DISTRICT COURT,
SOUTHERN DISTRICT OF NEW YORK,
FILED JANUARY 6, 2010 . . . . . . . . . . . . . . . . . . 33a

A P P E N DI X E — O R D E R D E N Y I N G
PETITION FOR REHEARING OF THE
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT, FILED
FEBRUARY 9, 2011 . . . . . . . . . . . . . . . . . . . . . . . . 67a

APPENDIX F — WASHINGTON PRINCIPLES

ON HOLOCAUST-ERA ASSETS, DATED
DECEMBER 3, 1998 . . . . . . . . . . . . . . . . . . . . . . . 69a
 ix

Table of Appendices
Page
A PPENDIX G — PRAGUE HOLOCAUST
ERA ASSETS CONFERENCE: TEREZÍN
DECLARATION, DATED JUNE 30, 2009
.......................................... 72a

APPENDIX H — THE DEPARTMENT OF

STATE BULLETIN, DATED JANUARY 9,
1943 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89a
 x

TABLE OF CITED AUTHORITIES

Page
FEDERAL CASES

Ashcroft v. Iqbal,
129 S. Ct. 1937 (2009) . . . . . . . . . . . . . . . . . . . . . 25

Ball v. Liney,
48 N.Y. 6 (1871) . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Bakalar v. Vavra,
619 F.3d 136 (2d Cir. 2010) . . . . . . . . . . . . . . . . . 15

Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007) . . . . . . . . . . . . . . . . . . . . . . . 25

Bernstein v. N.V. Nederlandsche-Amerikaansche

Stoomvaart-Maatschappij,
210 F.2d 375 (2d Cir. 1954) . . . . . . . . . . . . . . . . . 8, 10

Blue Tree Hotels Inv. (Canada) Ltd. v.

Starwood Hotels & Resorts Worldwide, Inc.,
369 F.3d 212 (2d Cir. 2004) . . . . . . . . . . . . . . . . . 26

Church of the Lukumi Babalu Aye v.

City of Hialeah, (91-948),
508 U.S. 520 (1993). . . . . . . . . . . . . . . . . . . . . . . . 8

DeWeerth v. Baldinger,
836 F.2d 103 (2d Cir. 1987) . . . . . . . . . . . . . . . . . 18

Dunbar v. Seger-Thomschitz,
625 F.3d 574 (5th Cir. 2010) . . . . . . . . . . . . . . . . . 15
 xi

Cited Authorities
Page
Erie R. Co. v. Tompkins,
304 U.S. 64 (1938). . . . . . . . . . . . . . . . . . . . . . . . . 17

McEntee v. New Jersey Steamboat Co.,

45 N.Y. 34 (1871) . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Medellin v. Texas,
552 U.S. 491 (2007) . . . . . . . . . . . . . . . . . . . . . . . 23

Museum of Fine Arts, Boston v.

Seger-Thomschitz,
623 F.3d 1 (1st Cir. 2010) . . . . . . . . . . . . . . . . . . . 14

Orkin v. Taylor,
487 F.3d 734 (9th Cir. 2007) . . . . . . . . . . . . . . passim

Republic of Austria v. Altmann,

541 U.S. 677 (2004) . . . . . . . . . . . . . . . . . . . 24, 25, 26

Saltus & Saltus v. Everett,

20 Wend 267 (1838) . . . . . . . . . . . . . . . . . . . . . . . 18

Schoeps v. Museum of Modern Art,

594 F. Supp. 2d 461 (S.D.N.Y. 2009) . . . . . . . . . . 15

Schwartz v. Cincinnati Museum Association,

35 Fed. Appx. 128, 2002 WL 554492
(6th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Solomon R. Guggenheim Foundation v. Lubell,

77 N.Y.2d 311 (1991) . . . . . . . . . . . . . . . . . . . . . . 18, 20
 xii

Cited Authorities
Page
The Detroit Institute of Arts v. Ullin,
2007 WL 1016996 (E.D. Mich. 2007) . . . . . . . . 14, 16

Toledo Museum of Art v. Ullin,

477 F. Supp. 2d 802 (N.D. Ohio 2006). . . . . . 14, 15, 16

Vineberg v. Bissonnette,
548 F.3d 50 (1st Cir. 2008). . . . . . . . . . . . . . . . . . 15

Von Saher v. Norton Simon Museum of Art,

131 S. Ct. 379 (Oct. 4, 2010) . . . . . . . . . . . . . . . 6, 7, 14

Von Saher v. Norton Simon Museum of Art,

592 F.3d 954 (9th Cir. 2009) . . . . . . . . . . . . . . . . 7

Von Saher v.
Norton Simon Museum of Art at Pasadena,
578 F.3d 1016 (9th Cir. 2009) . . . . . . . . . . . . . . passim

FEDERAL STATUTES

28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 1

28 U.S.C. § 1332(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 2

FEDERAL RULES

S. Ct. Rule 10(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Fed. R. Civ. P. 12(b)(6) . . . . . . . . . . . . . . . . . . . . . passim

 xiii

Cited Authorities
Page
Fed. R. Civ. P. 12(d) . . . . . . . . . . . . . . . . . . . . . . . . . 26

Fed. R. Civ. P. 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Fed. R. Evid. 408 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 28

TREATIES AND INTERNATIONAL ACCORDS

Washington Conference Principles on Nazi-

Confiscated Art (December 3, 1998). . . . . . . 11, 27, 28

Terezín Declaration (June 30, 2009). . . . . . . . . . . . 11

The London Declaration (January 5, 1943) . . . . . . 9

MISCELLANEOUS

“3 U.S. Agencies Urge Veto of Art-Claim Bill,”

NY Times (July 23, 1986) . . . . . . . . . . . . . . . . . . . . 20

Eizenstat, Stuart E., Imperfect Justice: Looted

Assets, Slave Labor, and the Unfinished
Business of World War II (PublicAffairs,
January 7, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Graefe, Emily, The Conf licting Obligations

of Museums Possessing Nazi-Looted Art,
51 B.C. L. Rev. 473 (March 2010) . . . . . . . . . . . . . 12

Gressman, Eugene et al ., Supreme Cour t

Practice, § 4.15 (Ninth Ed. 2007) . . . . . . . . . . . . . 28
 xiv

Cited Authorities
Page
Hall, Ardelia R., The Recovery of Cultural
Objects Dispersed During World War II,
25 Dept. St. Bull. 337 (1951) . . . . . . . . . . . . . . . . 9

Kreder, J., Guarding the Historical Record

From the Nazi-Era Art Litigation Tumbling
Toward the Supreme Court, U. Pa. L. Rev.
PENNumbra 253 (2011) . . . . . . . . . . . . . . . . . . . . 13, 16

Kreder, J., The New Battleground of Museum

Ethics and Holocaust-Era Claims: Technicalities
Trumping Justice or Responsible Stewardship
of the Public Trust?, 88 Or. L. Rev. 37, 59-75
(2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Tate, Jack B., Jurisdiction of U.S. Courts Re

Suits for Identifiable Property Involved In
Nazi Forced Transfers, 20 Dep’t State Bull. 592
(1949). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Testimony of American Association of Museum

Directors President James Cuno to Congress,
(July 27, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
 1

OPINIONS BELOW

The opinion of the United States Court of Appeals

for the Second Circuit is reported at Grosz v. Museum
of Modern Art, 403 Fed. Appx. 575 (2d Cir. 2010). The
Second Circuit affi rmed the January 6, 2010 decision of
the United States District Court for the Southern District
of New York, reported at 2010 WL 88003 (S.D.N.Y. Jan.
6, 2010). Judgment was entered on January 11, 2010. The
United States District Court for the Southern District of
New York denied reconsideration by decision dated March
3, 2010. Pet. App. 1a-66a.

STATEMENT OF JURISDICTION

This Court’s jurisdiction is invoked under 28 U.S.C.

§ 1254(1).

The Second Circuit’s opinion was rendered December

16, 2010. Petitioners sought rehearing on December 29,
2010. The Second Circuit denied the Petition for Rehearing
or Rehearing En Banc on February 9, 2011. Pet. App.
67a-68a.

STATEMENT OF THE CASE

Petitioners seek a review of a decision of the Second

Circuit that permitted the Museum of Modern Art to
invoke a statute of limitations defense. Petitioners fi led
a complaint alleging conversion and seeking replevin of
three paintings by the artist George Grosz (“Paintings”)
currently located at the Museum of Modern Art (“MoMA”)
in New York and claimed by Petitioners, the undisputed
heirs of George Grosz (“Grosz”). Petitioner Lilian Grosz
 2

is a New Jersey resident, and Petitioner Martin Grosz is a

Pennsylvania resident. The value of the Paintings exceeds
$75,000 and MoMA is located in New York, so the district
court had diversity jurisdiction pursuant to 28 U.S.C.
§ 1332(a)(2).

Grosz was a world-renowned German artist who fled

Nazi persecution in 1933. Grosz left his artworks in his
Berlin studio and in the care of his Jewish art dealer,
Alfred Flechtheim, a Nazi persecutee who also fled Nazi
Germany in 1933. The Paintings were lost during this
fl ight due to Nazi persecution. In 1937, Flechtheim died
in London.

After fleeing Hitler, Grosz landed in 1933 in New York

City, where he raised his family through the end of World
War II. After the war, Grosz and his family fi led claims
against Germany for all artworks lost by Grosz. By the
time Germany determined the works to be lost due to Nazi
persecution, Grosz was dead.

In 1994, the Grosz family retained art historian

Ralph Jentsch to trace artworks stolen from Grosz.
After a decade-long search, in 2003, Jentsch discovered
documents revealing how the Paintings were stolen from
Flechtheim and Grosz. Jentsch promptly wrote to MoMA
demanding the Paintings’ return. Following the demand,
the Grosz Heirs and MoMA agreed that MoMA would hold
the Paintings and work with Jentsch to investigate the
title of the Paintings. From 2003 through 2006, the parties
shared research and engaged in extensive settlement
communications.
 3

During settlement negotiations, in response to

Jentsch’s expressed concerns that MoMA had refused
the Grosz Heirs’ claims, MoMA Director Glenn Lowry
repeatedly denied that he had refused the claims and
reassured Jentsch that he had no power to make any
refusal, writing on January 18, 2006, “As I have told you
many times … any decision on a matter like this must
be considered by the Museum’s Trustees.” 2d. Cir. App.,
Vol. I, A-323. Throughout that period, Lowry repeatedly
asserted that only the Board of Trustees had the power
to refuse the Grosz heirs’ claims to the Paintings. 2d. Cir.
App., Vol. I, A-191, A-323.

On April 11, 2006, MoMA’s Board of Trustees voted

to refuse to return the Paintings. 2d. Cir. App., Vol. II,
A-326-335. On April 12, 2006, MoMA sent a notice of the
refusal to the Grosz Heirs. 2d. Cir. App., Vol. I, A-186.
Prior to that notice, no representative of MoMA told
Jentsch or any of the Plaintiffs that the museum’s trustees
had decided to reject Plaintiffs’ claims.

MoMA’s Associate General Counsel Henry Lanman

reiterated the April 12, 2006 refusal date in a letter
on June 26, 2008 to Plaintiffs’ counsel David Rowland:
“At the conclusion of his investigation, Mr. Katzenbach
recommended to the Museum’s Board of Trustees
that it reject your clients’ claims, a decision that was
communicated to your clients on April 12, 2006.” 2d. Cir.
App., Vol. II, A-540.

On April 10, 2009, the Grosz Heirs fi led this action

alleging a claim for conversion, replevin, and to impress a
constructive trust based on MoMA’s April 12, 2006 refusal
to return the Paintings. The complaint was commenced
 4

within three years of the April 12, 2006 refusal date

stated in the aforementioned letters and the Complaint.
MoMA moved to dismiss the action as time-barred.
MoMA appended settlement communications to the motion
papers, including a letter dated July 20, 2005 from Lowry
offering to share ownership of the Paintings—a letter
that was not referred to nor relied on in the Complaint.
2d. Cir. App., Vol. I, A-187. The Petitioners objected to
consideration of extrinsic evidence. The district court
denied the arguments on statute of limitations grounds.

The district court issued a decision and order dated

January 6, 2010. Pet. App. 33a-36a. The district court
determined that MoMA’s retention of the Paintings
following Petitioners’ original demand letter in November
2003 was an implicit “refusal” triggering a three-year
statute of limitations under New York’s demand-and-
refusal rule as a matter of law. The district court stated of
the July 20, 2005 Lowry letter offering to share ownership
of the Paintings that “Lowry’s temporizing language was
almost certainly designed to entice plaintiffs to continue
negotiating and to prevent the dispute from becoming
public or escalating into litigation.” Pet. App., 58a-59a.
However, the district court also found the offer to share
ownership in that letter also to be a “refusal” triggering
New York’s three-year statute of limitations for conversion
as of July 20, 2005. Pet. App., 54a, 56a. Finding the
three-year statute of limitations to have expired prior to
Petitioners fi ling this action on April 10, 2009, the district
court dismissed the complaint and denied leave to amend.

Petitioners appealed, contesting the District Court’s

application of New York’s demand-and-refusal rule on
these grounds: (i) since Petitioners had consented to
 5

MoMA’s possession of the Paintings pending the outcome

of the investigation, no conversion occurred and thus the
statute of limitations was not triggered prior to April 12,
2006; (ii) Rule 408 of the Federal Rules of Evidence and
Rule 12(b)(6) of the Federal Rules of Civil Procedure
forbid consideration of extrinsic evidence on a motion to
dismiss, particularly an inadmissible offer to compromise;
(iii) the July 20, 2005 Lowry letter was not a refusal and
could not reasonably be construed as such under New
York law; (iv) Lowry had no actual or apparent authority
to make a refusal as required by New York law; (v) even if
a refusal had occurred, New York law entitled Petitioners
to equitable estoppel based on Lowry’s temporizing
behavior and MoMA Assistant General Counsel Lanman’s
later representation that MoMA had refused Petitioners’
demand on April 12, 2006; and (vi) the complaint alleged
timely claims of unjust enrichment and constructive trust.

On December 16, 2010, the Second Circuit summarily

affi rmed the district court’s decision dismissing without
leave to replead.
 6

REASONS FOR GRANTING THE PETITION

I. REVIEW IS WARRANTED TO CONSIDER THE

CONFLICT BETWEEN THE RELIANCE OF U.S.
FOREIGN AND DOMESTIC POLICY ON U.S.
COURTS TO RESTITUTE STOLEN PROPERTY
AND THE COLLECTIVE UNWILLINGNESS OF
FEDERAL COURTS TO PERMIT CLAIMANTS
ACCESS TO THE FEDERAL COURTS

In addressing unfinished business of World War II,

both Congress and the Executive relied on federal courts
as a forum to unwind transactions resulting from Nazi
persecution. In 1998, Congress relied on pre-existing
state law remedies and access to the courts in crafting
solutions for true owners to recover Nazi-era stolen
artworks. After 1998 however, a wave of federal judicial
decisions developed constructive notice doctrines that
effectively denied Holocaust-era property claimants the
opportunity to reclaim stolen property. In Von Saher
v. Norton Simon Museum of Art, No. 091254, 131 S.
Ct. 379 (Oct. 4, 2010), a petition for certiorari currently
pending, this Court solicited the views of the Solicitor
General on the judicial invalidation of a State’s attempt
to provide remedies to claimants seeking to recover art
stolen in the Nazi-era. This Petition presents for review
the same central questions: the degree to which federal
courts may deprive claimants to artworks stolen during
the Nazi era of traditional common law remedies and the
extent to which such denial inhibits the Executive’s power
to set foreign policy and the remedial scheme envisioned
by Congress.
 7

A. T h e I s s u e O f A c c e s s To T r a d i t io n a l
Restitutionary Remedies Is Implicated In
Von Saher, Now Pending On Certiorari To The
Ninth Circuit.

In Von Saher, supra, 131 S.Ct. 379, this Court

sought the views of the Solicitor General in a petition
for certiorari challenging a decision of the Ninth Circuit
holding unconstitutional California’s extension of a statute
of limitations for Holocaust victims to recover Nazi-looted
artworks from California museums. See 131 S.Ct. 379;
Petition for Writ of Certiorari, 2010 WL 1557533, at *3, *7.
Reviewing the efforts of recent Administrations to remedy
the problem of recovering stolen art from museums, the
Ninth Circuit noted that the history of federal action is so
comprehensive and pervasive as to leave no room for state
legislation. Von Saher v. Norton Simon Museum of Art
at Pasadena, 578 F.3d 1016, 1029 (9th Cir. 2009) modified
en banc at 592 F.3d 954. Although the Ninth Circuit’s
en banc panel affi rmed the decision on other grounds,
the original panel in Von Saher pointed out a central
truth: that federal action in the area of providing relief
to claimants of artworks stolen during the Holocaust is
pervasive and that whether and if remedies are available
to claimants is essentially a question that by tradition
has been dictated by the foreign policy of the federal
government. Accordingly, this Petition seeking review of
the Second Circuit’s denial of traditional state remedies
implicates the same important question of U.S. foreign
policy in favor of providing restitutionary remedies to
victims of Nazi art theft raised in the Von Saher petition.
 8

B. U.S. Foreign And Domestic Policy Chose

The Federal Judiciary As The Vehicle For
Supplying Restitutionary Remedies In Federal
Courts For Nazi Theft And Duress Where
Jurisdictionally Appropriate, And The Federal
Judiciary Accepted And Has Traditionally
Exercised That Role

In 1954, at the behest of the U.S. State Department,

the Second Circuit reversed its earlier decision declining
to review Nazi depredations under the act of state
doctrine, and it decided that the U.S. District Court
for the Southern District of New York would provide a
forum for redress of Nazi property crimes against its
victims. Bernstein v. N.V. Nederlandsche-Amerikaansche
Stoomvaart-Maatschappij, 210 F.2d 375, 376 (2d Cir. 1954)
(quoting Jack B. Tate). Ever since, the federal courts have
played this valuable role and have been relied upon by the
Executive to do so.

1. U.S. Foreign Policy Consistently Opposed

Nazi-Era Property Crimes

Outrageous acts of persecution and spoliation are well

known and were reported regularly on the front pages of
the New York Times. Church of the Lukumi Babalu Aye v.
City of Hialeah (91-948), 508 U.S. 520 (1993). The London
Declaration of January 5, 1943, signed by the United
States and seventeen other nations, served as a “formal
warning to all concerned, and in particular persons in
neutral countries,” that the Allies intended “to do their
utmost to defeat the methods of dispossession practiced
by the governments with which they [were] at war….”
Pet. App., 89a-90a; Von Saher, 578 F.3d 1016, 1023 (9th
Cir. 2009).
 9

After the Allied victory over the Third Reich in 1945,

the United States reaffi rmed the commitment of the 1943
London Declaration by requiring European nations to
repudiate all purported transactions in art stolen by the
Nazis between 1933 and 1945 and to draft laws mandating
return of all property stolen from Nazi persecutees. After
the Allies withdrew from Europe in the 1950’s at the start
of the Cold War, Western Europe largely ignored those
commitments to assist the return of hundreds of thousands
of stolen artworks to the rightful, legal owners.

2. Post-War Property Recovery Efforts And

The Role Of The U.S. Courts

The U.S. worked diligently to restore stolen artworks

to their true owners for years thereafter. In 1951, a U.S.
State Department bulletin proclaimed: “For the fi rst
time in history, restitution may be expected to continue
for as long as works of art known to have been plundered
during a war continue to be rediscovered.” Hall, Ardelia
R., The Recovery of Cultural Objects Dispersed During
World War II, 25 Dept. St. Bull. 337, 339 (1951). In 1954,
once the State Department made clear that federal courts
should provide a forum for restitution of property stolen
or obtained by Nazi duress, the Second Circuit stripped
Nazi Germany of sovereign immunity. In so doing, the
court cited a crucial letter of the Legal Adviser:

This Government has consistently opposed the

forcible acts of dispossession of a discriminatory
and confiscatory nature practiced by the
Germans on the countries or people subject to
their controls…. The policy of the Executive,
with respect to claims asserted in the United
States for the restitution of identifiable property
 10

(or compensation in lieu thereof) lost through

force, coercion, or duress as a result of Nazi
persecution in Germany, is to relieve American
courts from any restraint upon the exercise of
their jurisdiction to pass upon the validity of
the acts of Nazi officials.

Bernstein, 210 F.2d 375, 376 (quoting Jack B. Tate);

Jurisdiction of U.S. Courts Re Suits for Identifi able
Property Involved In Nazi Forced Transfers, 20 Dep’t
State Bull. 592, 592-93 (1949).

During this period, in accord with the doctrine of

separation of powers, the judiciary deferred to the role of
the Executive in articulating the role that courts should
play by providing traditional common law remedies to
victims of Nazi depredations.

C. Congress Enacted The Holocaust Victims

Redress Act of 1998 Based On The Presumption
That The Judicial Branch Would Continue To
Provide Adequate Restitutionary Remedies
Grounded In State Law For Holocaust-Era
Claimants Of Stolen Art

Following the collapse of the Soviet Union, the

Executive branch renewed its efforts to provide remedies
worldwide for victims of Nazi property crimes. Congress
followed suit, passing legislation to promote uncovering
crimes and to ensure that stolen property would be
returned. In doing so, the Executive and Congress relied
on the Judiciary to continue to play its role in effectuating
state-law based restitutionary remedies.
 11

1. Executive Action To Provide Redress For

Victims Of Nazi Property Crimes

Consistent with its restitution policy, the United

States spearheaded efforts to reclaim Nazi-looted artwork
and obtained new commitments from nations, including
nations of the former Soviet Union, to facilitate restitution
to the true, legal owners of stolen property pursuant
to merits-based determinations of ownership. The
United States’ efforts are embodied in the Washington
Conference Principles on Nazi-Confiscated Art (Dec. 3,
1998) (Pet. App. 69a-71a) and the declaration of forty-
six nations that adopted the Terezin Declaration (30
June 2009) (Pet. App. 72a-88a). Respondent Museum of
Modern Art participated in and supported the Washington
Principles, which affirmatively welcome potential
claimants to come forward. To honor obligations under
the Washington Principles, numerous countries set up
restitution commissions.

2. Congressional Understanding That State

Law-Based Remedies Would Provide
Adequate Relief For Nazi Crime Victims

In 1998 Congress passed the Holocaust Victims

Redress Act (the “HVRA”). In doing so, it solicited
testimony of U.S. museums:

“ W hen public awareness of Nazi-Looted

art increased during the 1990’s Congress
considered enacting legislation to set standards
for returning stolen art. Museum directors,
however, testified that they could better handle
the subject themselves, resulting in codes
 12

of ethics promulgated by [the Association of

American Museum Directors and American
Association of Museums]....”

Graefe, Emily, The Conflicting Obligations of Museums

Possessing Nazi-Looted Art, 51 B.C. L. Rev. 473 (March
2010). In enacting the HVRA, Congress concluded that
no federal remedy was necessary to effectuate restitution
of stolen art in the United States because pre-existing
state law remedies sufficed. Orkin v. Taylor, 487 F.3d 734,
739 -741 (9th Cir. 2007) (holding that because Congress
believed that state law provided pre-existing adequate
remedies, the HVRA did not imply a federal remedy). As
the Ninth Circuit observed:

[T]he legislative intent was to encourage state

and foreign governments to enforce existing
rights for the protection of Holocaust victims.
The sponsor and primary champion of the
legislation, Representative Jim Leach (R-IA),
believed that existing law would suffice to
restitute Nazi-stolen artworks to their Nazi-
era owners.

***

Finally, …. there can be no doubt—as this

case amply demonstrates—that state law
provides causes of action for restitution of
stolen artworks. … Holocaust Victims’ Claims,
Hearing before the House Committee on
Banking and Financial Services, 105th Cong.,
2d Sess. (1998).
 13

Orkin, 4 87 F. 3d at 739 -741 (emphasis supplied).

Accordingly, the current legal scheme initiated by the
Executive and relied upon by Congress is for the federal
judiciary to diligently enforce the restoration of stolen
artworks to the true owners using the traditional common
law and equitable remedies available in state law.

D. Federal Courts Have Established Post-1998

A Variety of Measures To Effectively Deny
Remedies To Holocaust-Era Claimants

A fter Cong ress acted in 1998, federal courts

nationwide have adopted constructive notice doctrines
having the effect of frustrating the workings of traditional
common law restitutionary remedies and denying redress
to claimants of artworks stolen in the Nazi era. See,
Kreder, J., Guarding the Historical Record From the
Nazi-era Art Litigation Tumbling Toward the Supreme
Court, 159 U. Pa. L. Rev. PENNumbra 253 (2011). This
nullification of the common law and principles of equity
has taken several forms.

1. In Von Saher, The Ninth Circuit Construed

California’s Statute of Limitations To
Deny Remedies To The Very Persons That
The Legislature Sought to Assist: Victims
Of Nazi War Crimes

California’s statutes of limitations have been

interpreted in such a way as to deny claimants of Nazi-era
looted artworks relief. When the California legislature
tried to restore the status quo ante and to extend the
statute of limitations to afford claimants relief, the Ninth
Circuit struck the statute down as unconstitutional. In
 14

doing so, the Ninth Circuit has directly challenged the

remedial scheme envisioned by Congress in enacting the
HVRA. A petition for certiorari is pending, and this Court
has solicited and is awaiting the Solicitor General’s views.
Von Saher, 1315 S.Ct. 379 (2010).

2. Judicial Federalization Of Constructive

Notice Doctrines Inhibits Both The Broad
Role Of Congress In Shaping Foreign
Policy Objectives And The More Specific
Power Of The Executive To Refine The
Foreign Policy Of The Nation And To Take
Care That It Be Faithfully Executed

In 1998, Congress was correct in believing that the

common law provides remedies for restitution of stolen
property, since traditional common law would give
claimants a jury trial on whether they had notice or should
reasonably have discovered the whereabouts of Nazi-
looted artworks.1 After the adoption of the Washington
Principles, however, museums suing Holocaust victims
persuaded the courts to dismiss ownership claims pursuant
to Rule 12(b)(6) by imputing to the victims constructive
notice of Nazi-era transactions. See, e.g., Toledo Museum
of Art v. Ullin, 477 F.Supp.2d 802; The Detroit Institute
of Arts v. Ullin, 2007 WL 1016996; Orkin, 487 F.3d at 739
-741. To be sure, not all federal courts have been hostile to

1. In jurisdictions that follow the discovery rule for accrual

of statute of limitations of conversion claims, both actual and
constructive notice are factual questions, determined by a
jury. Schwartz v. Cincinnati Museum Association, 35 Fed.
Appx. 128, 131, 2002 WL 554492 at *4 (6th Cir. 2002)(Ohio law);
Museum of Fine Arts, Boston v. Seger-Thomschitz, 623 F.3d at 9
(Massachusetts law).
 15

claimants alleging Nazi theft or duress. See, e.g., Bakalar

v. Vavra, 619 F.3d 136 (2d Cir. 2010) (vacating trial court’s
dismissal under Swiss law and remanding for fi ndings
under New York law); Vineberg v. Bissonnette, 548 F.3d
50 (1st Cir. 2008)(granting summary judgment on Nazi
duress sale); Schoeps v. Museum of Modern Art, 594
F.Supp.2d 461 (S.D.N.Y. 2009)(denying museum’s motion
for summary judgment and finding genuine issue of fact as
to whether museum had unclean hands due to knowledge
of misappropriation).

It is fair, however, to note the growing tendency

among federal judges to impute knowledge of Nazi era
transactions to persecuted victims and to observe that this
tendency is itself contrary to the common law principle
that such questions are reserved for the jury and must be
pleaded and proven. Some federal judges have overlooked
the dictates of the common law—with the Fifth Circuit
notably permitting Louisiana law to launder title to stolen
art. 2

In one example of a federal court using constructive

notice to trigger a statute of limitations, Toledo Museum of
Art v. Ullin, the district court, in considering a museum’s
quiet title action against heirs of a Jewish Nazi persecutee,
dismissed the heirs’ counterclaims pursuant to Rule 12(b)
(6) of the Federal Rules of Civil Procedure, even though
the court acknowledged that the defendants disputed

2. The Fifth Circuit has permitted Louisiana’s prescriptive

laws to launder title to allegedly stolen property located in
Louisiana. Louisiana grants title to a holder of stolen property
after ten years of possession under the doctrine of acquisitive
prescription. Dunbar v. Seger-Thomschitz, 615 F.3d 574 (5th Cir.
2010) cert. den. 131 S. Ct. 1511 (Feb. 22, 2011).
 16

the existence of a sale or that they had knowledge of the

artwork’s location and provenance. The district court
imputed an earlier constructive notice date because the
Toledo Museum’s possession of the artwork was “easily
discoverable”. 477 F.Supp.2d at 806 n. 1-808.

In an even more problematic instance, in The Detroit

Institute of Arts v. Ullin, a carbon copy of the Toledo
case brought against the same heirs on the same day in
retaliation for coming forward under the Washington
Principles, the district court determined that the
discovery rule did not apply since it was a “commercial
conversion” case, so Michigan’s statute of limitations
started running in 1938, the time of the alleged forced
transaction. 2007 WL 1016996 at *3. As Professor Kreder
observes, “A consequence of the suit is that the painting
remains on display as if Ms. Nathan had been perfectly
free to engage in fair commercial transactions while on
the run from a genocidal regime.” Kreder, J., Guarding
the Historical Record at 261.

In an additional example of courts adopting problematic

constructive notice doctrines, the Ninth Circuit, in
affi rming a dismissal pursuant to Rule 12(b)(6) a claim
based on a coerced sale by Jewish heirs to a painting in
California, the Ninth Circuit observed: “Had the Orkins
investigated any of those publicly-available sources, they
could have discovered both their claim to the painting and
the painting’s whereabouts long before the 2002 internet
rumor was posted.” Orkin, 487 F.3d at 738.

In sum, the trend of federal courts’ constructive notice

doctrines nullifying traditional common law restitutionary
remedies contrary to the expectations of the Executive
 17

and Congress is widespread, creating an urgent national

need for this Court to exercise its supervisory powers
to restore proper restraint and respect for traditional
common law and equity. Erie R. Co. v. Tompkins, 304
U.S. 64 (1938).

E. The Second Circuit’s Denial Of Access To The

Courts Based On An Implied Refusal And
Equivocation Nullifies New York’s Statute Of
Limitations Rules Protecting True Owners Of
Stolen Art

The Second Circuit’s decision warrants review by this

Court because it has nullified an important protection of
true owners of stolen property that is well-grounded in New
York law and that was retained at the request of the federal
government as a measure to combat the traffic in stolen
art. By affi rming the district court’s decision nullifying
this protection, the Second Circuit has thus defeated an
important federal policy of encouraging states to adopt
rules that will protect interstate commerce from traffic
in stolen property. The Second Circuit’s decision further
warrants review because it fairly presents an example
of the post-1998 judicially-crafted constructive notice
doctrines denying access to the courts, and thus presents
important national and international issues confl icting
with federal policy that this Court should address. See
Kreder, J., The New Battleground of Museum Ethics and
Holocaust-Era Claims: Technicalities Trumping Justice
or Responsible Stewardship of the Public Trust?, 88 Or.
L. Rev. 37, 59-75 (2009).
 18

1. Because An Actual Refusal Gives A True

Owner Fair Notice Of The Need To Protect
Property Rights, The Second Circuit’s
Endorsement Of An Implied Refusal Rule
Defeats An Important Protection Under
New York Law That Serves To Avoid
Forfeitures By True Owners Of Stolen
Artworks

New York case law has long protected the right of the
owner whose property has been stolen to recover that
property, even if it is in the possession of a good-faith
purchaser for value. Solomon R. Guggenheim Found. v.
Lubell, 77 N.Y.2d 311, 317-18, 569 N.E.2d 426, 567 N.Y.S.2d
623 (1991) citing Saltus & Saltus v Everett, 20 Wend 267,
282 (1838). New York courts have explicitly chosen and
endorsed the demand-and-refusal statute of limitations
rule because it is the most protective of true owners of
stolen art. Guggenheim at 317-318. 3 Under New York
law, a cause of action for replevin against the good-faith
purchaser of a stolen chattel accrues when the true owner
makes demand for return of the chattel and the person in
possession of the chattel refuses to return it. Id. at 317-
318. Until demand is made and refused, possession of the
stolen property by the good-faith purchaser for value is
not considered wrongful. Id. at 318.

A refusal must be unqualified to constitute a refusal

under New York’s demand-and-refusal rule. Ball v.
Liney, 48 N.Y. 6, 12 (1871) (only an unqualified refusal to
3. In Guggenheim, the New York Court of Appeals explicitly
criticized the Second Circuit for incorrectly grafting a due
diligence requirement on true owners of stolen art. Guggenheim
at 318-319 criticizing DeWeerth v. Baldinger, 836 F.2d 103 (2d Cir.
1987) cert denied 486 U.S. 1056 (1928).
 19

return Plaintiffs’ property would constitute a conversion);

McEntee v. New Jersey Steamboat Co., 45 N.Y. 34 (1871)
(refusal to deliver goods to a person entitled to receive
them constitutes a conversion unless the refusal is
qualified).

The reason that New York requires an actual,

unequivocal and unqualified refusal is to protect a true
owner of property from the risk of forfeiture in any
ambiguous situations. Under New York law, where a
situation is unclear, the true owner of property is not at
risk. Critically, the Second Circuit’s decision endorses an
implied refusal rule that fl ips this presumption and shifts
the risk of loss during lengthy negotiations to true owners
of stolen property, rather than, as New York requires, to
the possessor. The Second Circuit’s nullification of this
important protection for true owners of stolen property
frustrates important federal interests and implicates
important federal policies relating to the administration
of justice in protecting good faith settlement negotiations
as a means of fostering dispute resolution.

2. New York Retained Its Demand-And-

Refusal Rule At The Behest Of The
Federal Government To Effectuate An
Important Federal Policy Endorsed
By The Executive Branch; The Second
Circuit’s Endorsement Of An Implied
Refusal Rule Frustrates The Executive’s
Policy Against Defeating The Trafficking
Of Stolen Art

New York’s demand-and-refusal rule was preserved

in part at the request of the federal government to carry
out the important federal policy of fighting the traffic in
 20

stolen art. New York rejected less protective measures

at the behest of the U.S. State Department, the U.S.
Department of Justice, and the U.S. Information Agency:

Governor Cuomo vetoed the measure … on

advice of the United States Department of
State, the United States Department of Justice
and the United States Information Agency
(see, 3 U.S. Agencies Urge Veto of Art-Claim
Bill, NY Times, July 23, 1986, at C15, col 1).
In his veto message, the Governor expressed
his concern that the statute “[did] not provide
a reasonable opportunity for individuals or
foreign governments to receive notice of a
museum’s acquisition and take action to recover
it before their rights are extinguished.” The
Governor also stated that he had been advised
by the State Department that the bill, if it went
into effect, would have caused New York to
become “a haven for cultural property stolen
abroad since such objects [would] be immune
from recovery under the limited time periods
established by the bill.”

The history of this bill and the concerns

expressed by the Governor in vetoing it, when
considered together with the abundant case
law spelling out the demand and refusal rule,
convince us that that rule remains the law in
New York and that there is no reason to obscure
its straightforward protection of true owners by
creating a duty of reasonable diligence.

Guggenheim, 77 N.Y.2d at 318 -319 (1991).

 21

In affi rming the district court’s decision permitting

an implied refusal or alternatively implying a refusal from
equivocal communications on a Rule 12(b)(6) motion, the
Second Circuit’s decision failed to give effect to a state
limitations provision that would have allowed a claim to
Nazi-looted art to be resolved on the merits. In doing so,
the Second Circuit joined the federal courts nullifying
common law remedies and defeating the federal policy
of returning property looted during the Holocaust to its
rightful owners.

Review of the Second Circuit’s decision is warranted

because by permitting the district court to imply a refusal
from MoMA’s mere retention of the Paintings, by drawing
unfavorable inferences from settlement communications
that the district court itself found to be “temporizing”,
and by permitting MoMA to assert Lowry’s authority
to issue a refusal without having to prove it, the Second
Circuit impermissibly nullified law established by the New
York Court of Appeals. By doing so, the Second Circuit’s
decision caused petitioners to forfeit remedies and
property protected under New York law, unjustly creating
a windfall for the MoMA based on its inequitable conduct
during settlement negotiations. 4 In sum, the Second

4. The district court held: “Nothing in the rule’s history or

purpose suggests that a party who receives a demand, and who
thereafter acts in a manner that is inconsistent with the demander’s
claim to ownership, should be held not to have ‘refused’ the demand
simply because he failed to recite some magic words of rejection.
Actions, as we all know, can sometimes speak louder than words.”
Pet. App., 52a-53a. “If MoMA’s failure to return the Paintings for
more than a year and a half after plaintiffs demanded them did
not constitute a refusal as a matter of law (and this Court thinks
that it did), then the July 20, 2005 letter—in which the defendant
 22

Circuit has endorsed a rule forcing the true owner to guess

at the meaning of equivocal settlement communications
at the risk of forfeiting property, thereby sacrificing
clarity and frustrating the important restitutionary and
settlement policies built into the demand-and-refusal rule.

F. Petitioners Seek Review Of The Second

Circuit’s Decision Because It, Like The Ninth
Circuit’s Decision In Von Saher, Frustrates A
Remedial Plan For Nazi-Era Crime Victims
Consonant With Federal Restitution Policy

Since the Executive and Congress have entrusted the

courts with carrying out the job of restoring artworks
stolen in the Nazi era, the Second Circuit’s affi rmance
denying Petitioners frustrates the remedies envisioned by
the Executve and Congress. The Ninth Circuit’s opinion in
Von Saher similarly challenges both the Executive’s policy
choice of confiding the fact-finding necessary in recovery
of stolen artworks to the sound discretion of the judiciary
and is a direct challenge to Congress’s policy choice in
enacting the HVRA in reliance on continued confidence
in the courts to achieve restitution through pre-existing
remedies. In these decisions, both the Second Circuit and
Ninth Circuit have failed to apply clearly applicable state
law remedies furthering the important federal policy of

clearly communicated its intent to keep [the Paintings] despite

plaintiffs’ demand—was an act utterly inconsistent with plaintiffs’
claim of right. It thus constituted the sort of refusal contemplated
by the demand and refusal rule.” Id. at 54a; “Lowry’s July 20, 2005
letter, coupled with the museum’s continued retention of the works
after it was sent, indicates its continuing intent to interfere with
the rights asserted by plaintiffs in their demand. This is all the
‘refusal’ the law could possibly require….” Id. at 56a.
 23

promoting the restitution of Nazi-looted artwork in U.S.

museums and of resolving claims on the merits. Although
the return of Nazi-looted artwork has important foreign
policy implications that concern the federal government,
Congress made the considered judgment to allow claims
for restitution of this property to be made primarily
under state law. Orkin 487 F.3d at 740. Without review
from this Court, the confl ict between the Executive’s
policies, congressional choices, and the post-1998 decisions
expanding the various constructive notice doctrines will
have irreparably harmed national and international
confidence in the ability of the courts to adhere to
traditional common law in carrying out its functions and
will have irreparably frustrated the Executive’s ability
to conduct foreign policy, an important concern of this
Court. Medellin v. Texas, 552 U.S. 491 (2007). Therefore,
this Court’s review is critical to determine whether the
policy choices made by the Executive and Congress to
confide in the courts is still a viable one. This Court’s
review is essential to ensure that the traditional state
court remedies prescribed by Congress and the Executive
be made available to litigants and not be disturbed by
decisions like the Second Circuit’s, the Ninth Circuit’s in
Von Saher, and the other decisions crafting constructive
notice doctrines that have the effect of depriving claimants
of access to justice.
 24

II. REVIEW IS WARRANTED TO CONSIDER THE

CONFLICT BETWEEN THE DIVERGENT
PROCEDURAL STANDARD APPLIED TO A
U.S. MUSEUM BY THE SECOND CIRCUIT ON
A RULE 12(b)(6) MOTION WITH THIS COURT’S
TREATMENT OF AN AUSTRIAN MUSEUM IN
REPUBLIC OF AUSTRIA V. ALTMANN

This Court has previously instructed that in a case

involving possession and concealment of Nazi-looted art
against an Austrian museum, all well-pleaded allegations
are to be deemed true on a motion to dismiss. The Second
Circuit, by affi rming the district court’s consideration of
settlement communications to work a forfeiture against the
claimants, has created the problematic appearance that
U.S. museums will not be subjected to the same standard
as foreign museums. Significantly, the Second Circuit’s
decision has also undermined important federal policies
favoring offers of compromise by permitting the district
court to consider the offer in evidence and permitting the
offer to work a forfeiture on a motion to dismiss, making
review of this decision especially important.

A. In Altmann, This Court Assumed The Truth

of Allegations of Nazi Art Looting, Possession
And Concealment Against An Austrian
Museum and Should Require That The Same
Standard Be Applied To A U.S. Museum

In Republic of Austria v. Altmann, 541 U.S. 677

(2004), this Court treated the allegations of the complaint
as true and drew all inferences in the light most beneficial
to the complainant. The parallels between Altmann and
this case are striking, yet, in the present action where
 25

the allegations involved a U.S. museum, the Second

Circuit affi rmed a dismissal in which the district court
weighed evidence, made credibility determinations, drew
inferences in favor of the defendant and resolved disputed
issues of fact relating to Respondent’s affi rmative defense
of limitations on a motion to dismiss pursuant to Rule
12(b)(6).

Federal Rule of Civil Procedure 12(b)(6) provides that

a complaint may be dismissed if it “fail[s] to state a claim
upon which relief can be granted.” This Court has made
clear that a court presented with a Rule 12(b)(6) motion
must assume the truth of the allegations presented in the
complaint and is restricted from considering materials
outside of the complaint. Notably, in Altmann, this
Court faced the same scenario presented in this case:
the remarkable facts of Nazi expropriation of Austria’s
Jewish population in the 1930’s and a decades-long pattern
of concealment by a museum. In Altmann, this Court
explicitly reaffirmed the unremarkable proposition that on
a motion to dismiss, a court must assume the allegations
of the complaint to be true. 541 U.S. at 680; Ashcroft v.
Iqbal, 129 S. Ct. 1937, 1950 (2009); Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 589 (2007).

Regardless of the ultimate merits, cases involving

cultural property and museums invoke great sensitivities
relating to national identity and cultural pride. The
United States has asked foreign nations to undergo
a painful process of self-examination, bringing back
wartime memories. In this context, the Second Circuit’s
sanction of a markedly different treatment on a motion
pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure of a U.S. museum facing allegations similar
 26

to those faced by the Austrian museum in Altmann risks

creating the problematic perception that U.S. courts are
not willing to subject domestic museums to the same
scrutiny prescribed for foreign museums. Accordingly,
given the important international repercussions, the
Second Circuit’s departure from this Court’s teachings
in Altmann warrants review here.

B. The Second Circuit’s Sanction Of Use Of

Extrinsic Evidence To Dismiss Claims Against
A U.S. Museum Frustrates Federal Restitution
Policy And Promotes A Procedural Standard
That Lacks Uniformity

The Second Circuit’s decision approved a dismissal of

a claim—based upon a settlement communication extrinsic
to the complaint that contested a factual issue—after
drawing negative inferences from documents extrinsic
to the complaint containing offers of compromise made
during settlement communications. The Second Circuit
has thus permitted an intrusion on the traditional province
of the jury and closed the courthouse doors based on
factual findings without fi rst developing a record.

Generally, on a Rule 12(b)(6) motion a court may not

dismiss a case based upon an affirmative defense such as a
statute of limitations, the validity of which is not apparent
from the face of the complaint. See Blue Tree Hotels Inv.
(Canada) Ltd. v. Starwood Hotels & Resorts Worldwide,
Inc., 369 F.3d 212 (2d Cir. 2004). The limited nature of
materials that a court can consider when confronted with
a Rule 12(b)(6) motion is reinforced by Federal Rule of
Civil Procedure 12(d) which mandates converting to a
summary judgment motion under Rule 56 of the Federal
Rules of Civil Procedure.
 27

In the specific context in which this issue is raised,

the Second Circuit’s permitting a district court to take
procedural shortcuts not authorized by the Federal Rules
of Civil Procedure has the effect of denying claimants
of stolen artworks of even the opportunity to present
evidence in support of their cases or to engage in discovery
that would support their claims. Where the Executive has
taken an international stand urging resolution of claims on
the merits, the Second Circuit’s approval of such shortcuts
gives the appearance to the international community that
claimants are not receiving a fair opportunity to be heard.
Given these foreign policy ramifications, this Court’s
guidance in reestablishing both the perception and reality
of justice is critical.

C. Judicial Nullification Of Common Law

Doctrines To Deprive Claimants of Remedies
Poses Particularly Important Concerns
Warranting This Court’s Exercise of Its
Supervisory Powers

Traditional common law principles require a jury to

determine such issues as actual or constructive notice or
whether a disputed fact triggering a statute of limitations
occurred. This Petition warrants review because the
Second Circuit’s affi rmation of a district court order that
overlooked Petitioner’s right to have factual disputes
determined by a jury in disregard of the accepted and
usual course of judicial proceedings (S. Ct. Rule 10(a)) is
part of a trend of federal courts engaging in nullification
of traditional state law remedies to such an extent that
this Court should exercise its supervisory powers.

The Washington Principles encouraged heirs to come

forward and present their claims. By permitting the
 28

district court to rely on extrinsic materials protected

by Rule 408 of the Federal Rules of Evidence to trigger
statutes of limitations, the Second Circuit’s decision
discourages compliance with the Washington Principles
and jeopardizes this Court’s policies favoring offers of
compromise. This risks creating a general atmosphere
of unhealthy gamesmanship and sharp practice in
settlement negotiations. In this particular case, in light
of the international importance of the issues involved,
the Second Circuit’s decision presents an important
opportunity for this Court to provide guidance on these
important issues of civil procedure, which is subject to
its supervisory authority. See Eugene Gressman et al.,
Supreme Court Practice, § 4.15, at 273 (Ninth Ed. 2007)
(“On the Supreme Court rests the prime responsibility for
the proper functioning of the federal judiciary.”).

III. REVIEW IS WARRANTED BECAUSE THE

SECOND CIRCUIT’S DECISION, TOGETHER
W I T H O T H ER DECI SION S DEPRI V I NG
RESTITUTIONARY REMEDIES, RISK MAKING
U.S. MUSEUMS HAVENS FOR STOLEN ART

The practical result of the Second Circuit’s decision is

a forfeiture in favor of an entity that may not be the true
owner of property belonging to it. If this and other post-
1998 decisions stand, true owners of art stolen during the
Nazi era are left with no restitutionary remedies against
U.S. museums. Accordingly, U.S. museums risk becoming
havens for the tens of thousands of potentially stolen
artworks in their collections. This is an important issue
for this Court to address before another generation of
victims passes from this earth—and it was not the result
intended by the Executive and Congress when the role of
 29

carrying out U.S. restitution policy was delegated to the

discretion of the courts.

After being advised by newspapers, magazines,

formal government warnings of the risks of acquiring
artworks entering the U.S. after 1932 that were created
prior to 1946, U.S. museums spent decades accumulating
great collections European art, often without asking
for provenance paperwork. This system gave wealthy
patrons large tax deductions and filled U.S. museums with
toxic assets at taxpayer expense. In 2006, James Cuno,
director of the American Association of Museum Directors
(“AAMD”), confessed that “the amount of research to be
undertaken on the tens of thousands of works of art that,
by definition, may have Nazi-era provenance problems is
significant, requiring large allocations of staff time and
money….” Testimony of AAMD President James Cuno to
Congress, July 27, 2006 (http://www.aamd.org/advocacy/
documents/Testimony--JCuno.pdf).

Following World War II, European nations enacted

the world’s strictest privacy laws at the behest of the
Allies. Paradoxically, these privacy laws, intended to
prevent the rise of another Hitler, had the unintended
consequences of depriving populations of displaced
survivors of information regarding who their relatives
are and what they owned. Litigation commenced in U.S.
courts together with U.S. diplomatic efforts finally forced
Western European nations to confront Nazi pasts, to
start to open up records, and to engage in restitution and
compensation efforts. See Eizenstat, Stuart E., Imperfect
Justice: Looted Assets, Slave Labor, and the Unfinished
Business of World War II (PublicAffairs, January 7,
2003). U.S. museums, in the best position to publish the
 30

provenances of artworks and to determine true owners

after 1945, instead remained silent as three generations of
Holocaust survivors—many with claims to the museums’
art—died. Leaving stolen art in the hands of those who
have acted so inequitably is deeply unfair.

The Second Circuit’s decision and the Ninth Circuit’s

decision in Von Saher, raise the specter that U.S. museums
will receive a windfall of stolen property because of judicial
nullification of common law remedies. These decisions, if
left unreviewed by this Court will leave stolen art in
U.S. museums irretrievable by true owners. In relying
on pre-existing common law remedies and the ability of
the judiciary to enforce these remedies in crafting the
Holocaust Victims Remedies Act of 1998, Congress could
not have intended and did not intend the grotesque result
of blocking victims from recovering property and giving
museums an unjust windfall.

If litigants are denied recourse through the courts, the

United States will have no effective means of complying
with the standards it imposes on other nations. Given
the policy of the Executive to urge foreign governments
and museums to disgorge stolen property from their
collections and given Congress’ reliance on traditional
common law remedies to return art stolen during the Nazi
era to its true owners, the decision of the Second Circuit,
together with other federal court decisions denying
common law remedies, puts the federal judiciary at great
risk of sanctioning an inequitable result—immunizing
U.S. museums from scrutiny of the potentially stolen art in
their collections—raising an issue of tremendous national
and international importance and cultural significance
warranting this Court’s review.
 31

CONCLUSION

For all the foregoing reasons, petitioners respectfully

request that the Supreme Court grant review of this
matter.

Respectfully submitted,

RAYMOND J. DOWD
Counsel of Record
LUKE MCGRATH
DUNNINGTON BARTHOLOW
& MILLER LLP
1359 Broadway, Suite 600
New York, NY 10018
(212) 682-8811
rdowd@dunnington.com

ROBERT PFEFFER
3225 Turtle Creek Boulevard
Dallas, TX 75219

Attorneys for Petitioners

APPENDIX
 1a

Appendix A ORDER OF THE

APPENDIX A — SUMMARY
UNITED STATES COURT OF APPEALS FOR THE
SECOND CIRCUIT, FILED DECEMBER 16, 2010

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

Rulings by summary order do not have precedential

effect. Citation to a summary order filed on or after
January 1, 2007, is permitted and is governed by Federal
Rule of Appellate Procedure 32.1 and this court’s
Local Rule 32.1.1. When citing a summary order in
a document filed with this court, a party must cite
either the Federal Appendix or an electronic database
(with the notation “summary order”). A party citing
a summary order must serve a copy of it on any party
not represented by counsel.

At a stated term of the United States Court of

Appeals for the Second Circuit, held at the Daniel Patrick
Moynihan United States Courthouse, 500 Pearl Street,
in the City of New York, on the 16th day of December, two
thousand and ten.

PRESENT:
JOSE A. CABRANES,
BARRINGTON D. PARKER,
Circuit Judges,

EDWARD R. KORMAN,*
District Judge.

* The Honorable Edward R. Korman, of the United States

District Court for the Eastern District of New York, sitting by
designation.
 2a

Appendix A

No. 10-257

M ARTIN GROSZ AND LILIAN GROSZ,

Plaintiffs-Appellants,

v.

THE MUSEUM OF MODERN A RT, HERMANN-NEISSE

WITHCOGNAC, PAINTING BY GROSZ, SELF-PORTRAIT
WITH MODEL, PAINTING BY GROSZ, REPUBLICAN
AUTOMATONS, PAINTING BY GROSZ,

Defendants-Appellees,

A MERICAN JEWISH CONGRESS, COMMISSION FOR A RT

RECOVERY, FILIPPA M ARULLO A NZALONE, YEHUDA BAUER,
MICHAEL J. BAZYLER, BERNARD DOV BELIAK,
MICHAEL BERENBAUM, DONALD S. BURRIS, JUDY CHICAGO
AND DONALD WOODMAN, TALBERT D’A LEMBERTE,
M ARION F. DESMUKH, HEDY EPSTEIN, HECTOR FELICIANO,
IRVING GREENBERG, GRACE COHEN GROSSMAN,
M ARCIA SACHS LITTEL, HUBERT G. LOCKE,
CARRIE MENKEL-MEADOW, A RTHUR R. MILLER,
CAROL RITTNER, JOHN K. ROTH, LUCILLE A. ROUSSIN,
WILLIAM L. SHULMAN, STEPHEN D. SMITH,
FRITZ WEINSCHENK,

Amici Curiae.

Plaintiffs Martin and Lilian Grosz (“plaintiffs” or

“Grosz heirs’’) are the legal heirs to the estate of the late
 3a

Appendix A

painter George Grosz (“Grosz”). Three of Grosz’s works

of art, Hermann-Neisse with Cognac, Self-Portrait with
Model, and Republican Automatons are currently in the
possession of the Museum of Modern Art in New York
(“MoMA”). Plaintiffs fi led suit against MoMA on April
10, 2009 in the Southern District of New York, alleging
claims for, among other things, conversion, replevin,
declaratory judgment, and constructive trust with respect
to the works of art. On June 4, 2009, defendants moved
under Federal Rule of Civil Procedure 12(b)(6) to dismiss
the Complaint as time-barred. In its Decision and Order
Granting Defendant’s Motion to Dismiss the Complaint,
Grosz v. Museum of Modern Art, et al., No. 09-CIV-3706,
2010 WL 88003 (S.D.N.Y. Jan. 6, 2010), the District Court
granted MoMA’s motion. The District Court dismissed the
case as barred by the three-year statute of limitations for
conversion and replevin under New York law, N.Y. C.P.L.R.
§ 214(3). Plaintiffs appeal the judgment of the District
Court, claiming that the three-year statute of limitations
had not passed at the point at which suit was brought or, in
the alternative, that the statute of limitations in this case
should have been subject to equitable tolling. We assume
the parties’ familiarity with the facts and procedural
history of this action.

I.

We review the dismissal of a complaint pursuant

to Federal Rule of Civil Procedure 12(b)(6) de novo,
construing the complaint liberally and accepting all factual
allegations in the complaint as true. See Chambers v. Time
Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002).
 4a

Appendix A

Under New York State Law, “[a]n innocent purchaser

of stolen goods becomes a wrongdoer only after refusing
the owner’s demand for their return.” Kunstsammlungen
Zu Weimar v. Elicofon, 678 F.2d 1150, 1161 (2d Cir. 1982).
This “demand-and-refusal” rule dates back to 1966, when
the New York Supreme Court became the fi rst court in
the country to address the statute of limitations issue for
innocent purchasers of chattel in art dealings. See Menzel
v. List, 49 Misc. 2d 300 (NY. Sup. Ct. 1966). In Menzel, a
case involving a good faith purchase of a painting by Marc
Chagall, the court held that a cause of action for conversion
or replevin accrues “against a person who lawfully comes
by a chattel ... not upon the stealing or the taking, but
upon the defendant’s refusal to convey the chattel upon
demand.” Id. at 304.

The Grosz heirs do not affirmatively assert that

MoMA was a bad faith purchaser. Accordingly, a judgment
declaring the plaintiffs’ claims as time-barred rests on
whether suit was brought within three years of refusal by
MoMA. All parties agree that refusal by MoMA has taken
place, they only disagree on when. As the District Court
explained in its thoughtful and comprehensive opinion,
the record indicates that refusal took place, at the latest,
in a letter from the Director of MoMA to the Grosz heirs’
agent on July 20, 2005, and that the agent of the Grosz
heirs’ confi rmed his understanding that refusal had taken
place in at least two subsequent letters to MoMA. Because
plaintiffs did not fi le suit until April 10, 2010, more than
three years after refusal took place, the District Court
correctly dismissed the action as falling outside the statute
of limitations.
 5a

Appendix A

II.

Plaintiffs claim, in the alternative, that MoMA should

be equitably estopped from using the statute of limitations
as a defense because plaintiffs relied upon continuing
negotiations with MoMA in choosing not to file suit. Under
New York law, “[t]he doctrine of equitable estoppel applies
where it would be unjust to allow a defendant to assert
a statute of limitations defense”—specifically, “where
plaintiff was induced by fraud, misrepresentations or
deception to refrain from filing a timely action,” Zumpano
v. Quinn, 6 N.Y.3d 666, 673-74 (N.Y. 2006) (internal
quotation marks and citation omitted). “[T]he plaintiff
must demonstrate reasonable reliance on the defendant’s
misrepresentations.” Id.

The mere existence of settlement negotiations is

insufficient to justify an estoppel claim. See Cranesville
Block Co., Inc. v. Niagara Mohawk Power Corp,
572 N.Y.S.2d 495, 296-97 (N.Y. App. Div. 3d Dep’t
1991). Indeed, where “there was never any settlement
agreement[;] continued difficulties in trying to settle the
matter[;] no fraud or misrepresentation by defendants[;
and] no agreement or promise by defendants upon which
plaintiffs relied in failing to commence their lawsuit within
the requirement period,” equitable estoppel does not apply.
Marvel v. Capital Dist. Transp. Auth., 494 NY.S.2d 215
(N.Y. App. Div. 3d Dep’t 1985).

The record indicates no fraud or misrepresentation

on the part of MoMA, nor does it indicate evidence
of reasonable reliance by plaintiffs on any alleged
 6a

Appendix A

misrepresentations by MoMA. We therefore hold that

the District Court correctly denied plaintiffs’ equitable
tolling claim.

CONCLUSION

We have considered all of plaintiffs’ claims on appeal

and find them to be without merit. Accordingly, the
judgment of the District Court is AFFIRMED.

FOR THE COURT:

Catherine O’Hagan Wolfe,
Clerk of Court
/s/
 7a

Appendix
APPENDIX B — B AND ORDER
DECISION
DENYING PLAINTIFFS’ MOTION FOR
RECONSIDERATION OF THE UNITED STATES
DISTRICT COURT, SOUTHERN DISTRICT OF
NEW YORK, FILED MARCH 3, 2010

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

09 Civ. 3706 (CM) (THK)

MARTIN GROSZ and LILIAN GROSZ,

Plaintiffs,

-against-

THE MUSEUM OF MODERN ART,

Defendant,

HERRMANN-NEISSE WITH COGNAC,

SELF-PORTRAIT WITH MODEL
and REPUBLICAN AUTOMATONS,
Three Paintings by Grosz,

Defendants-in-rem.

DECISION AND ORDER DENYING PLAINTIFFS’

MOTION FOR RECONSIDERATION
 8a

Appendix B

McMahon, J.:

INTRODUCTION

On January 6, 2010, this Court granted defendant’s

motion to dismiss, on the ground that the statute of
limitations barred Plaintiffs from maintaining an action
in conversion to recover three paintings held by the
museum (the defendants-in-rem). See Grosz v. Museum of
Modern Art, No. 09 Civ. 3706. 2010 WL 88003 (S.D.N.Y.
Jan. 6,2010).

On January 19, 2010, Plaintiffs filed a motion to amend

their now-dismissed complaint and to supplement the
record (docket no. 61).

On January 20, 2010, Plaintiffs fi led a motion for

reconsideration or reargument (docket no. 64), which they
amended on January 21, 2010 (docket no. 66).

By this decision, the Court denies both of Plaintiffs’

motions.

FACTS

Plaintiffs Martin and Lilian Grosz (“Plaintiffs” or

“Grosz Heirs”) are the son and daughter-in-law of the
late German artist George Grosz. They sued the Museum
of Modern Art (“MoMA”) seeking the return of three
artworks currently in MoMA’s collection: Republican
Automatons, Portrait of the Poet Max Herrman-Neisse
mit Cognakf lasche (“Poet”), and Self-Portrait with
 9a

Appendix B

Model (“Self-Portrait”) (collectively, the “Paintings”). On

November 24, 2003, Plaintiffs fi rst “demanded return” of
the Paintings, via a letter from their authorized agent,
Ralph Jentsch, to MoMA. (First Am. Compl., May 29,
2009 (“Compl.”), ¶ 117 & Ex. 26.) The record reflects that
Jentsch and MoMA exchanged a series of letters—some
of them quite heated—and had several meetings between
July 20, 2005, and April 12, 2006. (See Decl. of L. Solomon,
June 4, 2009 (“06/04/2009 Solomon Decl.”), Ex. A.) At
no time during this process did MoMA acknowledge
Plaintiffs’ ownership of the Paintings or relinquish
custody of them to Plaintiffs.

Plaintiffs waited until April 10, 2009, to commence this

action. The statute of limitations in a conversion case is
three years. In a case where the defendant did not come
into possession of the converted article in bad faith, the
three year period begins to run “not upon the stealing
or the taking, but upon the defendant’s refusal to convey
the chattel upon demand.” Menzel v. List, 49 Misc. 2d 300,
304·05 (N.Y. Sup. Ct. 1966) (citing Cohen v. M. Keizer,
Inc., 246 App. Div. 277 (1st Dep’t 1936)).

Plaintiffs alleged that their action was commenced

before the statute of limitations ran because MoMA
rejected their demand for return of the Paintings by
a letter from MoMA’s director, Glenn Lowry, to their
agent, Ralph Jentsch, dated April 12, 2006. (Compl. ¶
31.) Plaintiffs attached to their pleadings their November
24, 2003 demand letter and a portion of MoMA’s alleged
refusal letter dated April 12, 2006. (Id. Exs. 26- 27.)
 10a

Appendix B

In their Complaint,1 Plaintiffs acknowledged that

there was intervening communication between the parties,
and acknowledged that this communication included,
inter alia, “MoMA’s absolute refusal to toll the statute of
limitations.” (See, e.g., id. ¶ 23). Plaintiffs did not append
any of that communication to their Complaint.

On June 4, 2009, MoMA moved to dismiss the amended

complaint as barred by the statute of limitations. In
support of its motion, MoMA appended portions of that
intervening correspondence. The museum argued that this
correspondence was “integral” to Plaintiffs’ Complaint
because it bore on Plaintiffs’ allegation that the Museum
had not refused its demand until April 12, 2006. (Mem. of
Law in Supp. of Mot. to Dismiss, June 4, 2009 (“MTD”),
at 18-19.)

Plaintiffs did not object to MoMA’s submission of this

correspondence. Nor did they dispute MoMA’s assertion
(later adopted by this Court) that the correspondence
between the parties was integral to the Complaint.
Instead, Plaintiffs attached yet another letter from the
correspondence that, in their view, bore on the issue of
demand-and-refusal. (See Decl. of R. Dowd, June 25, 2009
(“06/25/2009 Dowd Decl.’’), Ex. 1 (attaching January 18,
2006 letter).) At no time did Plaintiffs argue that the
Court would have to convert the motion to dismiss into
one for summary judgment in order to consider any of
these documents.
1. Plaintiffs amended their complaint as of right by fi ling an
amended pleading on May 29, 2009. References in this opinion to
the “Complaint” are in fact to the Amended Complaint.
 11a

Appendix B

While the motion to dismiss was sub judice, the

parties engaged in discovery. On October 26, 2009,
Plaintiffs sought production of the minutes of certain
meetings of MoMA’s Board of Trustees. Defendant turned
over those minutes within a matter of weeks.

On November 20, 2009, Plaintiffs wrote a letter to this

Court, asking permission to “supplement” their opposition
to the motion to dismiss with selected minutes from
meetings of MoMA’s Board of Trustees and Executive
Committee that were held between July 26, 2005 and
April 11, 2006. (the “Meeting Minutes”). (See Decl. of R.
Dowd, Nov. 17, 2009 (“11/17/2009 Dowd Decl.”), Exs. 1&2.)
Plaintiffs argued that these Meeting Minutes supported
their position that MoMA did not refuse Plaintiffs’ demand
until April 12, 2006.

MoMA opposed Plaintiffs’ request. In a letter dated

November 24, 2009, the Museum argued that minutes
were not material to the disposition of its motion to
dismiss, because (unlike the parties’ correspondence) they
had not been sent to Plaintiffs during Lowry’s negotiations
with Jentsch, and so could not have affected Plaintiffs’
perception about whether and when MoMA rejected their
demand for the Paintings.

However, in case the Court agreed to consider

Plaintiffs’ November 20 submission, MoMA asked that the
Court also take into account certain testimony from Ralph
Jentsch’s deposition, which they attached. The tenor of
that testimony (which the Court did not read at the time)
will be discussed later in this opinion.
 12a

Appendix B

There followed the usual flurry of correspondence

back and forth. Plaintiffs sent two letters, one dated
November 25, 2009, and one dated December 1, 2009; and
MoMA responded in a letter dated December 2. Plaintiffs
appended additional questions and answers from Jentsch’s
deposition testimony to their November 25 letter. And in
the December 1 letter, Plaintiffs mentioned the possibility
of amending their Complaint yet again. Since Plaintiffs
had already used their one amendment as of right, further
amendment would have required leave of Court (see Fed.
R. Civ. P. 15(a)(2)) but Plaintiffs did not make a motion for
leave to amend.

At the time these letters were flying back and forth. the
Court had already done considerable work on the motion to
dismiss, based solely on the record submitted in June 2009.
The Court had reached tentative conclusions and was in
the process of drafting an opinion. I had no inclination to
start the process over. Furthermore, I recognized that
consideration of deposition testimony (which could not
possibly have been relied on in drafting the Complaint) and
most likely consideration of the Meeting Minutes—would
require me to convert the motion to dismiss into a motion
for summary judgment. It was inevitable that the parties
would greet any such announcement with the submission
of yet more material in support of their respective
arguments. So the Court declined to consider any of
the parties’ submissions—not the Meeting Minutes, not
Jentsch’s deposition testimony—and directed the parties
to end the battle of correspondence. See Grosz v. Museum
of Modern Art, No. 09 Civ. 3706, Mem. Endorsement, Dec.
2, 2009 (docket no. 47).
 13a

Appendix B

The decision that was already in the works in

December 2009 issued on January 6, 2010. See Grosz
v. Museum of Modern Art, No. 09 Civ. 3706, 2010 WL
88003 (S.D.N.Y. Jan. 6, 2010) (the “January 6 Decision”).
The Court granted MoMA’s motion to dismiss, holding
principally that the statute of limitations had begun to run
no later than July 20, 2005, when MoMA refused Plaintiffs’
demand for purposes of the demand-and-refusal rule. The
Court also concluded that the action was barred using
various other possible refusal dates, and even allowing for
a brief tolling of statute early in 2006. Familiarity with
the January 6 Decision is presumed.

DISCUSSION

I. Legal Standard

To prevail on a motion for reconsideration, the movant

must demonstrate “an intervening change of controlling
law, the availability of new evidence, or the need to correct
a clear error or prevent manifest injustice.” See Doe v.
New York City Dept. of Soc. Servs., 709 F.2d 782, 789
(2d Cir. 1983) (citations omitted). The Court’s review “is
narrow and applies only to already-considered issues;
new arguments and issues are not to be considered.” See
Morales v. Quintiles Transnational Corp., 25 F. Supp.
2d 369, 372 (S.D.N.Y. 1998). A motion for reconsideration
“is not a substitute for appeal and ‘may be granted only
where the Court has overlooked matters or controlling
decisions which might have materially influenced the
earlier decision.’” See id. (citations omitted).
 14a

Appendix B

Plaintiffs’ motion for reconsideration is denied because

they have demonstrated none of the three required factors.

A. There Has Been No Intervening Change of

Controlling Law

Plaintiffs point to no intervening change of controlling

law on the subject of the statute of limitations for
conversion claims, or the demand-and-refusal rule. They
do cite a case that was not included in the opposition to
the motion to dismiss—Ball v. Liney, 3 Sickels 6 (N.Y. Ct.
App. 187). But a case decided more than 125 years ago
can hardly be considered new law.

In any event, Ball supports the Court’s conclusion that

Plaintiffs’ claims are time barred. In Ball, the New York
Court of Appeals held that a person who had acquired
property in good faith would be afforded only a “brief
period” to investigate a claim that the property had been
stolen before his continuing possession of the property
would ripen into conversion under the demand-and-refusal
rule and the three year statute of limitations would begin
to run. 3 Sickels at 12-13. The Ball court concluded that
even three months was too long to qualify as a “brief
period,” and specifically stated that it could “hardly
conceive of a case where the bailee would be justified in
detaining property from the real owner, from May 15 to
August 6, nearly three months, to inquire into the title.”
Id. at 13 (emphasis added).

This case involves claims to works of art that are

alleged to have fallen prey to Nazi looting in the years
 15a

Appendix B

leading up to World War II. It would hardly be appropriate

to measure the “brief period” for looking into the
Paintings’ ownership in days, or weeks, or even the few
months that were not brief enough for the Ball court.
Matters of provenance are notoriously complicated, and
the circumstances under which the Paintings made their
way to MoMA (as alleged by Plaintiffs) made the museum’s
investigation difficult.

But nothing in Ball suggests that the period for

investigation allowed by the Court in this case-twenty
months from the date Plaintiffs made their demand—
would qualify as “brief’ for the purposes of New York’s
demand and refusal rule. Moreover, as discussed in the
January 6 Decision, the date on which the Court concluded
that Plaintiffs’ conversion accrued was three months after
the date by which MoMA agreed to respond, one way
or the other, to Plaintiffs’ demand. Grosz v. Museum of
Modern Art, No. 09 Civ. 3706, 2010 WL 88003, at *12-13
& n.7 (S.D.N.Y. Jan. 6, 2010).

B. There Is No New Evidence That Would Affect

the Disposition of the Case

Plaintiffs have not submitted any “new evidence” that

would alter the Court’s original determination.

The purported “new evidence” consists principally of

the Meeting Minutes from MoMA’s Executive Committee
dated April 4, 2006, and MoMA’s Board of Trustees dated
April 11, 2006. (Mem. of Law in Supp. of Mot. for Recons.,
Jan. 20, 2010 (“Pls. Br.”), at 16.)
 16a

Appendix B

Plaintiffs allege that the Meeting Minutes demonstrate

that the Museum did not reject their demand until the
Board’s April 11, 2006 meeting, at which the Board
voted to adopt the Report of Nicholas deB. Katzenbach.
Katzenbach had concluded that the museum did nothing
wrong by refusing to turn the Paintings over to Plaintiffs.2

However, the Meeting Minutes add nothing substantive

to the record that was already before the court in connection
with the motion to dismiss. It has always been Plaintiffs’
position in this lawsuit that “rejection” did not occur until
Katzenbach completed his work and the Board affirmed it.
Plaintiffs attached to their Complaint the April 12, 2006
letter in which Katzenbach’s conclusions, and the Board’s
decision to adopt his recommendations, were conveyed
to Plaintiffs (via Jentsch). So the “new evidence” that
Plaintiffs want the Court to consider—the minutes of the
meeting at which the decisions memorialized in the April
12 letter were taken—is not “new” at all. The Court has
already considered Plaintiffs’ argument that the Board’s
April 11 action triggered the statute of limitations, and

2. The Court sees no need to rehash everything that is

contained in the original decision, but I take this opportunity
to remind the reader that, in January 2006, MoMA’s Board
comm issioned for mer Att or ney G enera l K atzenbach t o
re-examine the work done on the provenance of two of the
Paintings (Self-Portrait and Poet) and to provide his “opinion and
recommendations with respect to two paintings in the Museum’s
Collection by the artist George Grosz.” (06/04/2009 Solomon Decl.
Ex. E (Katzenbach Report (cover letter), at 1).) Katzehbach did
as asked and submitted a report to the Board on March 22, 2006.
The Board voted to adopt the Report on April 11, 2006.
 17a

Appendix B

that nothing that happened earlier constituted “refusal”

as a matter of law. For the reasons discussed exhaustively
in the January 6 Decision, I rejected plaintiffs’ contention.

Second, I agree with MoMA that internal Museum

documents reflecting communications among MoMA’s
Executive Committee and its Board of Trustees and
Minutes of Board meetings—documents that were not
shared with Plaintiffs until many months after this
lawsuit commenced—have no bearing on when the statute
of limitations began to run. In a case governed by the
demand-and-refusal rule, the issue is when, by word or
deed, MoMA conveyed to Plaintiffs its intent to continue
interfering with their asserted right to possession of the
disputed property. That is the meaning of “refusal.” See
Feld v. Feld, 279 A.D.2d 393, 395 (N.Y. App. Div. 1st Dep’t
2001) (“A refusal need not use the specific word ‘refuse’ so
long as it clearly conveys an intent to interfere with the
demander’s possession or use of his property.”) (citation
omitted). Documents that the Plaintiffs never saw could
not have conveyed anything to them, and so are irrelevant.

The Court has held that Plaintiffs should have

concluded that the Museum had refused their demand
long before the Board voted to affi rm the Katzenbach
Report on April 11, 2006, based on the Museum’s words
(Lowry’s July 20, 2005 letter to Jentsch) and its deeds
(its continued refusal to turn over the Paintings). Grosz v.
Museum of Modern Art, No. 09 Civ. 3706, 2010 WL 88003,
at *9-10 (discussing Borumand v. Assar). In fact, as
discussed in the January 6 Decision, the museum rejected
Plaintiffs’ demand over and over again—by keeping
 18a

Appendix B

the Paintings for years after the demand was made;

by sending letters saying “the available evidence does
not lead to any definitive conclusion that challenges the
Museum’s ownership” and “we cannot reach the conclusion
that restitution ... would be appropriate at this time”; by
suggesting shared ownership or arbitration—even by
delaying and temporizing (as the museum surely did). An
aggrieved owner of property cannot delay the accrual of
his cause of action for conversion indefinitely by eliciting
multiple rejections from the person who is interfering with
his right to possession. And once his claim accrues, the
clock does not reset to zero every time the parties reopen
the subject of who owns the disputed property.

But even if I were to consider the Meeting Minutes

that plaintiff submits, they would not save the Complaint
from dismissal. The Meeting Minutes tend to confi rm,
rather than undermine, MoMA’s contention that Plaintiffs’
claim accrued far earlier than April 12, 2006. For
example, the minutes from MoMA’s April 11, 2006 Board
of Trustees’ meeting—the meeting at which the Board
adopted the Katzenbach Report—chronicle the history of
the museum’s interactions with Plaintiffs. They recount
that the museum had offered “to ‘share’ ownership [with
Plaintiffs] pending further defi nitive research” on the
Paintings (Letter from R. Dowd to the Court, Nov. 25, 2009
(“11/25/2009 Dowd Decl.”), Ex. A at 3), and to “arbitrate
and/or mediate” the dispute (id.; see also id. Ex. D at 3
(July 26, 2005 minutes).) The January 6 Decision explains
why both sharing and arbitrating are inconsistent with
Plaintiffs’ claim of ownership in the disputed property,
and in and of themselves, indicate rejection of the demand
that the Paintings be conveyed to Plaintiffs. Additionally,
 19a

Appendix B

minutes from MoMA’s April 4, 2006 Executive Committee

meeting state that “the consensus” of the Trustees on that
date more than three years before Plaintiffs fi led suit”
was that while the Museum would always remain open
to studying any new facts that Mr. Jentsch might wish
to bring before the Museum, without more, the Museum
would stand with its position rejecting his claims.” (Id.
Ex. D at 2 (April 4, 2006 minutes) (emphasis added).) The
only fair inference one can draw from that statement is
that the Museum had already rejected Plaintiffs’ demand
by April 4, 2006.

C. No Manifest Injustice Would Result From

Denial of Plaintiffs’ Motion

Finally, Plaintiffs have not argued, and this Court

cannot conclude, that manifest injustice would result from
a denial of their motion for reconsideration.

Plaintiffs suggest in their motion papers that this

Court could only have reached its conclusion on the
limitations question by failing to “take judicial notice of
the fact that Adolph Hitler came to power in March 1933,”
and by underestimating the significance of the Holocaust.
(Pls. Br. at 24.) It may be that Plaintiffs are suggesting
that it would work a manifest injustice if the Court were
not to reconsider its decision because the circumstances
in which Grosz lost his Paintings were themselves unjust.
If so, the Court cannot accept the argument.

First, it is obviously not the case that the Court was

unaware of the circumstances that led to the loss of Grosz’s
paintings. Hitler’s rise to power and its effect on Grosz’s
 20a

Appendix B

career were documented in the January 6 Decision. See.

e.g., Grosz v. Museum of Modern Art, No. 09 Civ. 3706,
2010 WL 88003, at *1 (noting that Hitler ascended to
Chancellor in 1933); id. (“... the Third Reich branded him
[Grosz] an ‘enemy of the state”’); id. at 2 (“[T]he three
Paintings fell prey to a network of unscrupulous art
professionals, who took advantage of the political climate
of the time to divest Grosz of his ownership.”). However,
the Court was confronted with a legal, not a historical,
question: how soon after Plaintiffs demanded return of
the Paintings in November 2003 did their cause of action
for conversion accrue, and the statute of limitations begin
to run? The answer to that question is not a function
of circumstances in Germany in the 1930s and 1940s,
unspeakably vile though they were.

It may be that Plaintiffs are contending (albeit

obliquely) that the statute of limitations ought to be waived
because Grosz was a victim of the hideous regime known
as the Third Reich. Plaintiffs append several treatises
about the loss of art during the period of Nazi domination
and the Holocaust to their proposed amended complaint.
No such argument was made in opposition to the motion to
dismiss—it was not, for example, the basis for Plaintiffs’
claim of equitable tolling—so the Court cannot consider it
on a motion for reconsideration. But any such suggestion
would lack merit. Aside from equitable tolling, New York
does not recognize case-by-case exceptions to its statutes
of limitations. For the reasons discussed in the January 6
Decision, the record in this case does not support a finding
that the statute should be equitably tolled. Furthermore,
as discussed in that opinion, even if the equitable tolling
 21a

Appendix B

argument made by Plaintiffs in opposition to MoMA’s

motion were accepted, it would not save Plaintiffs’ claims
from dismissal on limitations grounds. See id., 2010 WL
88003, at *14-16.

Accordingly, nothing in the record suggests that

manifest injustice would result from a denial of Plaintiffs’
motion.

II. Whether the Court Should Have Converted the

Motion to Dismiss to a Motion for Summary
Judgment Is Not Properly Considered On A Motion
For Reconsideration

Plaintiffs argue that the Court should reconsider the

January 6 Decision because it should not have considered
the documents submitted by both sides in connection with
the museum’s motion to dismiss without converting the
motion into one for summary judgment.

As noted above, Plaintiffs did not make this suggestion

until after the motion was decided against them. That
alone makes it improper for the Court to consider the
issue on a motion for reconsideration. Official Comm. of
the Unsecured Creditors of Color Tile, Inc. v. Coopers
& Lybrand, LLP, 322 F. 3d 147, 159 (2d Cir. 2003)
(argument waived if made for the fi rst time on a motion
for reconsideration). However, two things warrant brief
discussion.

First, in this Circuit (though not in all circuits),

affirmative defenses are routinely considered under
 22a

Appendix B

Federal Rule Civil Procedure 12(b)(6). See, e,g., McKenna

v. Wright, 386 F.3d 432, 436 (2d Cir. 2004) (citing cases);
see also 5 Charles Alan Wright & Arthur R. Miller,
Federal Practice & Procedure § 1226 (3d ed. 2004)
(“[The current trend in the cases is to allow [the statute
of limitations defense] to be raised by a motion to dismiss
under Rule 12(b)(6) when the defect appears on the face of
the complaint.”). Plaintiffs clearly understood this. They
failed to object to MoMA’s submission of the portions of
the parties’ correspondence that it deemed relevant to the
limitations issue; and they submitted additional portions
of that correspondence for the Court’s consideration as
part of their response to defendant’s motion.

Second, although courts in this jurisdiction refer to

the statute of limitations in the context of the demand-and-
refusal rule as an “affirmative defense,” see, e.g., Lehman v.
Lehman, 591 F. Supp.1523, 1527 (S.D.N.Y. 1984), in a cause
of action for conversion against a good faith purchaser of
chattels, “demand and refusal are substantive elements”
of the claim, Deweerth v. Baldinger, 836 F.2d 103, 107 n.3
(2d Cir. 1987) (citing cases), rev’d on other grounds by
Solomon R. Guggenheim Found. v. Lubell, 153 A.D.2d 143
(1st Dep’t 1990); accord Kunstsammlungen Zu Weimar
v. Elicofon, 678 F.2d 1150, 1161 (2d Cir. 1982). Therefore,
Plaintiffs were required to plead compliance with the
statute of limitations in their complaint, which necessarily
rendered the parties’ correspondence “integral” to the
complaint. This obviated any need to convert the motion
to dismiss to a motion for summary judgment. Of course,
when Plaintiffs affirmatively pleaded that they commenced
this action within three years of the Museum’s denial of
Plaintiffs’ demand for the Paintings, Plaintiffs attached to
 23a

Appendix B

their complaint the lone letter that they contend supported

this allegation. But Plaintiffs did not thereby restrict the
Court to considering only the April 12, 2006 letter.

A court may consider matters outside the pleading

for the purposes of adjudicating a motion to dismiss if
those documents are “integral” to a plaintiff’s claims—
even if the plaintiff fails to append or allude to them to
his complaint. As the Second Circuit explained in Cortec
Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 44 (2d
Cir. 1991), cert. denied, 503 U.S. 960 (1992), “Plaintiffs’
failure to include matters of which as pleaders they had
notice and which were integral to their claim—and that
they apparently most wanted to avoid—may not serve as
a means of forestalling the district court’s decision on the
motion.” Otherwise, a plaintiff could “evade a properly
argued motion to dismiss simply because plaintiff has
chosen not to attach the [document] to the complaint or to
incorporate it by reference.” I. Meyer Pincus & Assocs.,
P.C. v. Oppenheimer & Co., 936 F.2d 759, 762 (2d Cir. 1991)
(citations omitted).

Plaintiffs clearly relied on the entire course of

correspondence between the parties when they framed
their Complaint. By affirmatively pleading that the
April 12, 2006 letter was MoMA’s “refusal” of their
demand, Plaintiffs necessarily represented that those
earlier letters did not convey any “refusal.” This made
the correspondence between the parties “integral”
to Plaintiffs’ claim of conversion, specifically to the
contention in their Complaint that they had complied
with the statute of limitations. Plaintiffs could not evade
MoMA’s statute of limitations argument by ignoring the
 24a

Appendix B

earlier letter that was unfavorable to their point of view—

including especially the July 20, 2005 letter from Lowry to
Jentsch that MoMA (and eventually the Court) identified
as the Museum’s actual refusal of Plaintiffs’ demand for
purposes of the demand-and-refusal rule. 3

As will be seen in connection with the Court’s

discussion of Plaintiffs’ motion for leave to amend their
amended complaint, the Court might have saved itself a
lot of work if it had converted the motion last December.
In light of the testimony of Plaintiffs’ agent, there is
absolutely no way Plaintiffs could have raised a genuine
issue of material fact that would have saved their claim
from dismissal. (See infra Part III). But the Court was
not required to convert the motion, and plaintiffs are not
entitled to reconsideration on that basis.

III. The Motion To Amend The Complaint Is Denied

Because Amendment Would Be Futile

In addition to moving for reconsideration of the prior

decision, Plaintiffs have moved for leave to amend their
Complaint and to supplement the record. Plaintiffs argue

3. The July 20, 2005 letter was effectively brought to the

Court’s attention in another way—and by Plaintiffs themselves—
when Plaintiffs chose to call the Court’s attention to a letter
dated January 18, 2006, as support for their argument that the
statute of limitations should be equitably tolled. (See 06/25/2009
Dowd Decl. Ex. 1 (attaching the January 18 letter).) The January
18 letter refers to earlier correspondence between the parties,
leading the Court inexorably back to the letter that proved fatal
to Plaintiffs’ lawsuit.
 25a

Appendix B

that amendment is required because the so-called “new

evidence” discussed above—the Meeting Minutes, in
addition to select excerpts from the deposition of Ralph
Jentsch, which they fi rst submitted to the Court last
November—supports their claim that MoMA did not
refuse Plaintiffs’ demand until April 12, 2006.

MoMA responds that amendment would be futile,

because none of the evidence proffered by Plaintiffs in
support of the motion could possibly alter the Court’s
conclusion that their claims are barred as a matter of law.

MoMA is correct.

Although leave to amend is to be freely granted,

courts have discretion to deny an application for leave
where amendment would be futile. See Marchi v. Bd. of
Coop. Educ. Servs., 173 F.3d 469, 477-78 (2d Cir. 1999)
(citation omitted). Here, there can be no question that
amendment would be futile.

Plaintiffs’ motion for leave to amend relies on the

same argument that the court has already rejected in
connection with their claim of “new evidence:” namely,
that the April 11, 2006 Board Minutes and certain other
minutes from MoMA’s Executive Committee compel the
conclusion that the Museum did not really reject their
demand until April 12, 2006, when Lowry conveyed the
results of the April 11 Board meeting to Jentsch. Both
motions are predicated on the assumption that the Court
would have denied defendants’ motion to dismiss if only the
Court had considered the evidence Plaintiffs proffered to
 26a

Appendix B

it in November 2009. For the reasons discussed at length

above, that assumption is simply wrong.

However, i n order t o decide t he mot ion for

reconsideration and the motion for leave to amend, I
have had to become familiar with the submissions that I
refused to consider last November. Among the evidence
submitted to the Court at that time is certain deposition
testimony of Ralph Jentsch, Plaintiffs’ agent and the
person who dealt with MoMA on their behalf. Jentsch’s
testimony dooms Plaintiffs’ contention that their lawsuit
was timely brought.

Both sides submitted excerpts from Jentsch’s

deposition to the court last November. To support their
contention that MoMA did not reject Plaintiffs’ demand
until after the April 11, 2009 Board meeting, Plaintiffs
offered the following:

Q: Now, is that true what Mr. Lowry wrote to you that

any decision on a matter like this must be considered by
the museum’s trustees?

***

A: Yes, he said that many times to me.

Q: Okay, what did he say to you many times?

A: Well, that any decision about the restitution could

not be made by him but only by the museum’s trustees.
 27a

Appendix B

(11/25/09 Dowd Decl., Ex. B (Jentsch Tr. 295:10-

296:3).)

Plaintiffs did not send the court the following

additional excerpts from Jentsch’s deposition—but MoMA
did:

Q: Did any representative of MoMA ever agree to

transfer any of the three works to you or to the Grosz
Estate?

A: That would have—no.

Q: And did you—you said you were puzzled before

the May meeting. Were you—were you puzzled after the
meeting as well when Mr. Lowry kept saying, “We have
a different opinion?”

A: I got suspicious.

Q: When did you—when did you first reach the

conclusion that MoMA was not returning these works
of art to you?

***

A: After that letter of Glenn Lowry, which I think

was July 20th, August.

Q: July 20th of 2005?

A: Yes.
 28a

Appendix B

(Letter from L. Solomon to the Court, Nov. 24, 2009

(“11/24/2009 Solomon Decl.”), Ex. A (Jentsch Tr. 132:8-
133:2) (emphasis added).)

In a second excerpt, Jentsch testified as follows:

Q: What was your understanding of MoMA’s position

when you got this letter [the July 20, 2005 letter from
Glenn Lowry]?

A: My understanding was that MoMA never had the

intention to return or accept our claim and that I was
dragged along all of the time, that the time frame was
extended twice; that, in spite of all the polite exchange,
exchanging words, there was no serious intention to return
any of the works, nor acknowledge any of the findings of
the documentation which I provided being taken seriously.

Q: Did you communicate that to Mr. Lowry?

A: Yes.

Q: When did you do that?

A: In my letter of August 11th.

(Id. at Ex. B (Jentsch Tr. 143:11-144:7).)

MoMA argues that the portions of Jentsch’s testimony

it submitted render any attempt at amendment futile. I
agree. Jentsch’s own words confirm his understanding that
the museum had rejected Plaintiffs’ demand for the return
 29a

Appendix B

of the Paintings well before April 2006. Although Jentsch

stated that he believed that MoMA’s Trustees would
have to make any decision to “restitute” the Paintings,
he clearly explained that it was his understanding that
the demand had been refused in July 2005, the very date
found by the Court to be the date MoMA unmistakably
communicated its refusal to Plaintiffs. Jentsch’s
testimony thus underscores the correctness of the Court’s
original conclusion—as well as its subsidiary finding that
Jentsch’s January 5, 2006 letter to Lowry acknowledged
the museum’s rejection of Plaintiffs’ demand. Grosz v.
Museum of Modern Art, No. 09 Civ. 3706, 2010 WL 88003,
at 14-15 (S.D.N.Y. Jan. 6, 2010).

Plaintiffs’ argument is, and has always been, that the

limitations clock “reset” and began to run all over again
when MoMA’s Board decided to re-examine the Museum’s
decision and retained Katzenbach. That, of course, is
not the way statutes of limitations work. Once a cause of
action accrues, the limitations period begins to run, and
it continues to run—regardless of intervening events—
unless something tolls it. Plaintiff affirmatively pleaded
that the museum refused to toll the statute of limitations
(Compl. ¶ 23), so once the limitations period started to run
it kept on running.

Furthermore, even if the Board’s decision to revisit

the matter somehow equitably tolled the statute as of
January 18—which was Plaintiffs’ argument in opposition
to the original motion—Plaintiffs still waited too long to
bring suit. See Grosz, 2010 WL 88003, at 15. Nothing in
the proposed amended Complaint cures that defect.
 30a

Appendix B

For these reasons, the motion for leave to amend is

denied as futile.

CONCLUSION

Plaintiffs’ motion for reconsideration (docket no. 66) is

denied. Plaintiffs’ motion for leave to amend (docket no. 61)
is denied. The Clerk of the Court is instructed to remove
these motions from the Court’s outstanding motion list
and to close the case.

This constitutes the decision and order of this Court.

Dated: March 3, 2010

/s/
U.S.D.J.

BY ECF TO ALL COUNSEL

 31a

APPENDIX CAppendix C
— JUDGMENT OF THE
UNITED STATES DISTRICT COURT,
SOUTHERN DISTRICT OF NEW YORK,
FILED JANUARY 11, 2010

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

09 CIVIL 3706 (CM)

MARTIN GROSZ AND LILIAN GROSZ

Plaintiffs,

-against-

THE MUSEUM OF MODERN ART,

Defendant

HERRMANN-NEISSE WITH COGNAC,

SELF-PORTRAIT WITH MODEL AND
REPUBLICAN AUTOMATONS,
Three Paintings by Grosz,

Defendants-in-rem.

JUDGMENT

The defendants having moved to dismiss, and the

matter having come before the Honorable Colleen
McMahon, United States District Judge, and the Court,
on January 10, 2010, having rendered its Decision and
 32a

Appendix C

Order, granting defendants’ motion to dismiss, dismissing

the case and declaring the pending Objection to the
Magistrate Judge’s ruling is moot, it is,

ORDERED, ADJUDGED AND DECREED: That

for the reasons stated in the Court’s Decision and Order
dated January 10, 2010, the defendants’ motion to dismiss
is granted, the case is dismissed and the pending objection
to the Magistrate Judge’s ruling is moot.

Dated: New York, New York

January 11, 2010

J. MICHAEL McMAHON
Clerk of Court

BY: /s/
Deputy Clerk
 33a

Appendix D AND ORDER OF

APPENDIX D — DECISION
THE UNITED STATES DISTRICT COURT,
SOUTHERN DISTRICT OF NEW YORK,
FILED JANUARY 6, 2010

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

09 Civ. 3706 (CM) (THK)

MARTIN GROSZ and LILIAN GROSZ,

Plaintiffs,

-against-

THE MUSEUM OF MODERN ART,

Defendant,

HERRMANN-NEISSE WITH COGNAC, SELF-

PORTRAIT WITH MODEL and REPUBLICAN
AUTOMATONS, Three Paintings by Grosz,

Defendants-in-rem.

DECISION AND ORDER GRANTING

DEFENDANT’S MOTION TO DISMISS
THE COMPLAINT

McMahon, J.:

INTRODUCTION

George Grosz was an early twentieth-century German

artist and prominent member of a movement known as
 34a

Appendix D

the Berlin Dada and New Objectivity Group. His artwork,

consonant with the larger movement, was strongly anti-
totalitarian and therefore anti-Nazi. (See First Am.
Compl. (“Complaint”), May 28, 2009, ¶¶ 2-3.)

Grosz’s son and daughter-in-law, Martin and Lilian

Grosz (plaintiffs in this lawsuit), explain that, although
Grosz was not Jewish, his work “typified” the kind of
“‘degenerate’ art Hitler hated.” Id. ¶ 13.) As a result,
Grosz was forced to flee Germany in the wake of Hitler’s
ascension to Chancellor in 1933. Id. ¶¶ 3, 45-46.) After his
departure, the Third Reich branded him an “enemy of
the state” (id. ¶ 124), and in March 1938, the government
rendered him “stateless,” revoking his citizenship and
confiscating what remained of his German assets (id. ¶
102).

This action relates to the ownership of three of

Grosz’s caricatural paintings, which are alleged to have
fallen prey to Nazi looting (albeit indirectly) in the years
between Grosz’s emigration from Germany in 1933 and
the German government’s confiscation of his assets in
1938. Specifically, the plaintiffs allege that the Museum of
Modern Art (“MoMA”) obtained and now wrongfully holds:
Hermann-Neisse with Cognac (“Poet”), Self-Portrait with
Model (“Self-Portrait”), and Republican Automatons
(“Automatons”) (collectively, the “Paintings”). (Id. ¶¶ 11-
15.) The plaintiffs seek declaration of title and replevin for
each, as well as damages for unlawful dominion and control
over the artworks, attorneys’ fees, costs, and disgorgement
 35a

Appendix D

of profits and revenues received by MoMA from possession

of the Paintings. (Id. ¶¶ 25, 149-74 (claims).)1

Because this action is barred by the statute of

limitations, the defendant’s motion to dismiss is granted.

DISCUSSION

I. Standard of Review

In deciding a motion to dismiss pursuant to Rule 12(b)

(6), the Court must liberally construe all claims, accept all
factual allegations in the complaint as true, and draw all
reasonable inferences in favor of the plaintiff. See Cargo
Partner AG v. Albatrans, Inc., 352 F.3d 41, 44 (2d Cir.
2003); see also Roth v. Jennings, 489 F.3d 499, 510 (2d
Cir. 2007).

To survive a motion to dismiss, “a complaint must

contain sufficient factual matter ... to ‘state a claim to relief
that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct.
1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant

1. Plaintiffs’ Complaint includes two sets of paragraphs

numbered 149-171, presumably because, when they amended
their initial pleading, they failed to adjust the numbering of the
paragraphs. For ease of reference, the Court will use the plaintiffs’
numbering but will indicate parenthetically when the numbering
refers to the “claims” portion of plaintiffs’ complaint (located at
pages 33-36).
 36a

Appendix D

is liable for the misconduct alleged.” Id. (citing Twombly,

550 U.S. at 556). “While a complaint attacked by a Rule
12(b)(6) motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide the grounds
of his entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of
a cause of action will not do.” Twombly, 550 U.S. at 555
(internal quotations, citations, and alterations omitted).
Thus, unless a plaintiffs well-pleaded allegations have
“nudged [its] claims across the line from conceivable to
plausible, [the plaintiff’s] complaint must be dismissed.”
Id. at 570; Iqbal, 129 S. Ct. at 1950-51.

In deciding a motion to dismiss, this Court may

consider the full text of documents that are quoted in the
complaint or documents that the plaintiff either possessed,
or knew about and relied upon in bringing the suit.
Rothman v. Gregor, 220 F.3d 81, 88-89 (2d Cir. 2000); San
Leandro Emergency Med. Group Profit Sharing Plan v.
Philip Morris Cos., 75 F.3d 801, 808 (2d Cir. 1996).

II. Timeliness

The lapse of a limitations period is an affi rmative

defense that a defendant must plead and prove. Fed. R. Civ.
P. 8(c)(1). However, a defendant may raise an affi rmative
defense in a pre-answer Rule 12(b)(6) motion if the defense
appears on the face of the complaint. McKenna v. Wright,
386 F.3d 432, 436 (2d Cir. 2004) (affi rmative defense of
qualified immunity); see also 5 Charles Alan Wright &
Arthur R. Miller, Federal Practice & Procedure § 1226
(3d ed. 2004) (“[T]he current trend in the cases is to allow
[the statute of limitations defense] to be raised by a motion
 37a

Appendix D

to dismiss under Rule 12(b)(6) when the defect appears on

the face of the complaint.”). Timeliness is “material when
testing the sufficiency of a pleading.” Fed. R. Civ. P. 9(f).

Ill. Background

The Complaint alleges that George Grosz created

the Paintings at various dates between 1920 and 1929. It
appears undisputed that he created Automatons fi rst, in
1920 (id. ¶ 15), followed by Poet, which he painted in 1927
or 1928 (id. ¶ 38 (1927); id. ‘¶ 11, (1928)). Self-Portrait is
alleged to have been created in either 1928 or 1929. (Id. ¶
39 (1928); id. ¶ 13 (1929).)

The plaintiffs contend that each of the Paintings was

consigned at one time or another to Alfred Flechtheim,
Grosz’s art dealer (id. ¶¶ 38-39), and that after Flechtheim’s
death in 1937, the three Paintings fell prey to a network
of unscrupulous art professionals, who took advantage
of the political climate of the time to divest Grosz of his
ownership. First, they allege that within one month of the
dealer’s death, an opportunistic art historian (Charlotte
Weidler) stole Poet, which she is alleged to have hidden
in Germany until 1952, when she sold it to MoMA. Less
than one year later, in February 1938, a plundering Dutch
art dealer (Carel van Lier) stole and then purported to
auction off Self-Portrait and Automatons. The plaintiffs
allege that the auction was a “sham,” designed to obfuscate
the true nature of van Lier’s operations—laundering
Nazi-looted art—as evidenced by the fact that van Lier
“purchased” both pieces himself at suspiciously below
market prices. Shortly thereafter, the Dutch dealer sold
the pieces to private collectors for a handsome profit.
 38a

Appendix D

Automatons eventually made its way to Canada;

MoMA purchased it from its owner in 1946. (Id. ¶¶ 58-
59.) Eight years later, after a failed attempt to sell Self-
Portrait, Leo Lionni, then-Art Director for Fortune,
gifted the piece to the museum in 1954. (Id. ¶ 56.)

The precise path the Paintings allegedly took on their

journey from Berlin to MoMA, and the role of each of the
alleged middlemen, is chronicled in detail below.

A. Grosz’s Art Dealer: Alfred Flechtheim

George Grosz’s art dealer was Alfred Flechtheim, who

owned and operated Galerie Flechtheim (the “Galerie”),
which had outposts in both Berlin and Dusseldorf. (Id. ¶
47.) Grosz’s fi rst art exhibition took place at Flechtheim’s
Berlin gallery in the early 1920s. (Id. ¶ 37.) The Complaint
does not specify which works were displayed, but states
that the show was such a resounding success that, by
1925, Galerie Flechtheim had entered into an agreement
with Grosz to be his exclusive dealer. (Id.) The terms of
the agreement provided that Grosz would receive monthly
payments of 300 to 800 Reichmarks (“RM”) in exchange
for consigning his work solely to the Galerie. (See id.)

Pursuant to this agreement, Poet was consigned to

Flechtheim in 1928 as “Kleiner Portrait Max Hermann
(mit cognac flasche).” It appears to have been the fi rst of
the Paintings Grosz consigned to the Galerie. (Id. ¶¶ 38,
137 & Ex. 1.) One year later, Grosz consigned Self-Portrait,
known then as “Das Modell,” to Flechtheim. (Id. ¶ 39 &
Ex. 1.) The Complaint does not allege when Automatons
might have been consigned to the Galerie.
 39a

Appendix D

Some documents attached to the Complaint suggest

that Grosz offered Flechtheim one or more of his artworks
as “security” for a debt Grosz owed to the dealer. For
example, a letter from Flechtheim to Grosz written in
April 1934 refers to “watercolors which you sent me as
security” as well as “oil pictures, which you also sent
me as security.” (Id. Ex. 7.) A subsequent letter from
Flechtheim’s liquidator to Grosz reminds the artist that
he “still owe[s] the gallery RM 16,255.” (Id. Ex. 6.)2

Flectheim apparently went out of business at some

point. The plaintiffs speculate that his liquidation was the
result of Nazi coercion, but that theory is contradicted by
certain documents they have attached to their Complaint,
including letters between Grosz and Flechtheim. These
documents suggest that Flechtheim’s liquidation was
precipitated by his acute financial troubles, going back as
far as 1931, before the Nazis came to power. (See id. Ex.
3.) A letter from Flechtheim to Grosz dated April 15, 1934,
explains that the dealer’s “German galleries [had] totally
collapsed financially,” that it “was only with great effort ...
that [his] liquidator succeeded in preventing bankruptcy,”
and that he was selling “all [his] pictures ... for the account
of creditors in London” where he had spent 2 months “and
hope[d] to get [his] feet on the ground.” (Id. Ex. 7.) By the
time he wrote this letter to Grosz, Flechtheim’s Berlin

2. The plaintiffs dispute the validity of the debt they suggest

that the Nazis coerced Flechtheim into liquidating his holdings
in exchange for his safe departure from the country, the debt
having been fabricated as part of the Nazi scheme. (Id. ¶ 47.) In
the alterative, they argue that at least Poet “could not possibly
have been transferred as an offset” against any alleged debt. (Id.
¶¶ 131, 137-38.)
 40a

Appendix D

gallery had already been liquidated, though it was not

“officially dissolved and removed from Berlin’s commercial
registry” until nearly three years later, on February 20,
1937. (Id. ¶¶ 52, 137.)

Notwithstanding his financial missteps, Flechtheim

continued to consign Grosz’s works on an ad hoc basis until
his death in London in 1937. (See, e.g., id. ¶¶ 16, 48, 149
& Ex. 7.) At the time of the dealer’s death, the Complaint
alleges that Flechtheim had consigned Self-Portrait to
Kunstzaal van Lier in Amsterdam and Automatons to
the Mayor Gallery in London. (See id. ¶ 51 (Self-Portrait);
id. ¶ 57 (Automatons).) The Complaint further alleges
that, while Poet had been consigned from time to time—
including one consignment in 1932 when it was displayed at
Palais des Beaux Arts in Brussels—by 1937 the painting
was back in Berlin, unconsigned. (Cf. id. ¶ 55.)

B. Amsterdam Art Dealer Carel van Lier

Carel van Lier is alleged to have been a cunning Dutch

art dealer who ran Kunstzaal van Lier in Amsterdam,
where Self-Portrait was consigned in 1936 (and where it
remained upon Flechtheim’s death the following year).
(Id. ¶ 51.) In early 1938, van Lier arranged to have
Automatons transferred to his Kunstzaal from the Mayor
Gallery in London, where Flechtheim had consigned it in
1934. (Id. ¶¶ 16, 57.) The Complaint does not allege who
authorized the transfer.

Later that year, van Lier, whom the plaintiffs accuse

of having “lacked any moral compass,” allegedly arranged
a “sham” auction at the Mak van Waay auction house in
 41a

Appendix D

Holland to launder artworks stolen by the Nazis. (See id.

¶ 57.) At that “auction,” van Lier purportedly purchased
a collection of Grosz’s pieces that he himself had “put up
for auction,” including Self-Portrait, which the plaintiffs
suggest he bought at a deeply discounted price. (Id. ¶ 56
(16 guilder for Self-Portrait).) A couple of months later,
he resold the piece for a handsome profit to Leo Lionni,
who was then the Art Director of Fortune magazine. Id.)

Meanwhile, Automatons was bundled with three

other watercolors and one drawing, which were collectively
sold at the same auction for 25 guilders. (Id. ¶ 57.) An
individual known simply as “Brant” or “Brandt” (both
names appear in the Complaint) is alleged to have been
the purchaser. (Id. ¶¶ 16, 57.) Brandt then sold the work to
Dr. Herbert Tannenbaum in 1939 for an unknown amount,
and Dr. Tannenbaum soon thereafter sold the piece to Dr.
William Landman of Toronto, from whom MoMA would
ultimately purchase the piece in 1946. (Id. ¶¶ 58-59.)

C. Art Historian Charlotte Weidler

While van Lier was auctioning off Self-Portrait and

Automatons, Charlotte Weidler is alleged to have been
busy embezzling the third of the three Paintings (Poet).
Weidler was a German art dealer, critic and curator
for the Carnegie Institute in Pittsburgh. (Id. ¶ 74.) One
month after Flechtheim’s death in April 1937, in a letter
to a fellow art historian, Weidler claimed that she had
“inherited” Poet from the late dealer. (Id. ¶¶ 12, 74-75 &
Ex. 16.) The plaintiffs suggest that Weidler was actually an
international art thief and/or Nazi agent, who wrongfully
and willfully converted the painting. (Id. ¶¶ 76, 12.)
 42a

Appendix D

In support of their theory, the plaintiffs recount the

fate of the art collection of one Paul Westheim. Westheim
was a modernist art collector who entrusted his portfolio
to Weidler shortly before he fled Berlin. (Id. ¶ 79.) The
Complaint says nothing about the precise date Westheim
left Germany, but it appears to have been some time in the
1920s, and in any event before the Nazis came to power
in 1933, because Weidler attempted to sell Westheim’s
collection to MoMA in either 1929 or 1930 (with no
authorization to do so). (Id. ¶ 80 & Ex. 20.)

The plaintiffs further allege that Weidler would come

to New York in 1939 as a Nazi agent. (See id. ¶¶ 77-78.) The
plaintiffs back their allegation with a handful of letters (all
of them rank hearsay) between an assistant director of the
Freer Gallery of Art in Washington, D.C., and a trustee
of the Carnegie Institute, in which the two speculate that
Weidler might be a Nazi—though, their suspicions, as they
acknowledge, lacked a certain “logical” basis. (Id. ¶ 78 &
Ex. 17.) For example, one of the letters explains:

Not for one minute do I want to persuade you

that Dr. Weidler is in truth what she claims to
be—anti-Nazi. I, personally, have a hunch that
she is not ... but there is nothing I can offer in
proof. Nothing at all; but at times I am blessed
with a feminine intuition and you know that
often it is as certain as it is without logic.

(Id. Ex. 17.)

Whether or not Weidler may was an agent of the Third

Reich, she did contact MoMA in 1950 in an attempt to sell
 43a

Appendix D

Poet to the museum. (Id. ¶ 87.) Unable to persuade MoMA

to purchase the piece, Weidler then contacted Alfred
Flechtheim’s one-time assistant, Curt Valentin, to help
her liquidate the work. (Id. ¶ 90.) In 1952, Valentin was
successful in brokering a deal with MoMA for Poet, which
became museum property on April 10 of that year. (Id.)

The Complaint does not explain how Weidler was

acquainted with Valentin, although the plaintiffs do allege
that Valentin, like Weidler, was a “Nazi agent” who set
up the Buchholz Gallery in New York, through which the
deal with MoMA over Poet was brokered, in order “to sell
Nazi-looted artworks.” (Id. ¶ 60 Heading)

D. MoMA’s Director: Alfred Barr

The man who purchased Poet on MoMA’s behalf was

Afred Barr, the long-time director of the museum. (Id. ¶
90.) The plaintiff’s allege that, when Weidler approached
MoMA, “Barr clearly knew that Weidler was trying
to sell a stolen Grosz to him.” (Id. ¶ 88.) In support of
their assertion, the plaintiffs offer three circumstantial
allegations.

First, they point out that thirteen years before he

purchased Poet from Weidler, Barr may have purchased
Nazi-looted art through Alfred Flechtheim’s former
assistant, Curt Valentin. (See id. ¶¶ 65-67 & Ex. 13.)
Specifically, the Complaint alleges that Barr used Valentin
as his agent in 1939 to purchase five pieces (none by Grosz)
at an auction in Lucerne, Switzerland—works that had
been “part of a monstrous Nazi seizure of all modern
 44a

Appendix D

works from German museums and private owners during

the previous year.” (Id. Ex. 14.)

Second, the Complaint alleges that MoMA never

contacted the artist to sign or restore the painting, even
though the museum knew that Grosz lived in New York.
(Id. ¶ 91.)

Third, the Complaint argues that neither Barr nor

anyone else at MoMA did any research into the painting’s
ownership or provenance before its purchase, intimating
that Barr sought actively to avoid being confronted with
what he knew to be the painting’s tainted history. (Id.)

In their response to defendants’ motion to dismiss,

plaintiffs disavow any suggestion that these allegations
are intended to allege that MoMA purchased the painting
in bad faith. Stating that “the words ‘bad faith’ do not
appear in the Complaint” (and indeed those precise
words do not appear in the pleading), they contend that
the Complaint alleges “only that MoMA was on notice
of facts warranting investigation because it knew the
Paintings had been held on consignment by Flechtheim, a
Jew persecuted by the Nazis.” (Pls. Mem. of Law in Opp.
to Mot. to Dismiss (“MTD Opp.”), June 25, 2009, at 15-16
(citation omitted).) The reason for this wholly unconvincing
change of position will become apparent when the Court
discusses the peculiarities statute of limitations relating to
conversion and how that affects the timeliness of plaintiffs’
claim to Poet. See infra Part IV.
 45a

Appendix D

E. Grosz Sees Poet in MoMA But Does Not Try to

Reclaim the Painting

The artist himself saw Poet on display at the museum

in 1953, barely a year after Barr had purchased it from
Weidler. At that time, the Grosz wrote to his brother-in-
law: “Modern Museum exhibits a painting stolen from
me (I am powerless against that) they bought it from
someone, who stole it.” (Compl. ¶ 105.) In a second letter
dated January 9, 1953, Grosz wrote: ‘Modern Museum
bought a painting that was stolen from me... (one cannot
do anything) old affair.’ (Id.) Sadly, the artist would die
six and a half years later, on July 6, 1959; during those six
and one half years he never contacted anyone at MoMA
to seek restitution of the painting.

F. The Instant Action

On November 24, 2003, forty-four years after Grosz’s

death, Ralph Jentsch, “managing director of the George
Grosz Estate and author of [the artist’s] catalogue
raisonne,” fi nally asked MoMA to return Poet to the
estate—along with Self-Portrait and Automatons, which
he also thought had been wrongfully taken from Grosz
during his lifetime. (Id. ¶ 117 & Ex. 26.)

Plaintiffs assert that this demand was not refused

MoMA until the museum sent them a letter on April 12,
2006. (MTD Opp. at 9.) They fi led their Complaint, which
included, inter alia, claims for conversion, replevin,
declaratory judgment and “constructive trust” on April
10, 2009—almost three years to the day after the letter
on which plaintiffs rely. (Id. ¶¶ 149-174 (claims).)
 46a

Appendix D

On June 4, 2009, defendants moved to dismiss the

Complaint as time barred, under a variety of theories.

IV. The Statute of Limitations

New York Civil Practice Law and Rules (“CPLR”)

provides that “an action to recover a chattel or damages for
the taking or detaining of a chattel [replevin or conversion]
... must be commenced within three years,” CPLR § 214(3),
computed from “the time the cause of action accrued to
the time the claim is interposed,” CPLR § 203(a). While
a claim for declaratory judgment without a prescribed
limitations period usually enjoys a six-year limitations
period under CPLR 213(1), in cases like this where a claim
“could have been made in a form other than an action for
a declaratory judgment [i.e., an action for conversion or
replevin] and the limitations period for an action in that
form has already expired, the time for asserting the
claim cannot be extended through the simple expedient of
denominating the action one for declaratory relief.” New
York City Health & Hospitals Corp. v. McBarnette, 84
N.Y.2d 194, 201 (1994). Finally, it is settled law that where,
as here, both “a legal and an equitable remedy exists as
to the same subject-matter, the latter is under the control
of the same statutory bar as the former.” Keys v. Leopold,
241 N.Y. 189, 189 (1925) (action for accounting and breach
of contract); accord Norris v. Grosvenor Mktg Ltd., 803
F.2d 1281 (2d Cir. 1986). Accordingly, the three year
statute of limitations for conversion and replevin (CPLR
§ 214(3)) applies to all of the plaintiffs’ claims.

The question before this Court is when that three

years began to run.
 47a

Appendix D

A. Accrual: New York’s Demand and Refusal Rule

Under New York law, the statute of limitations for

conversion and replevin automatically begins to run
against a bad faith possessor on the date of the theft or
bad faith acquisition—even if the true owner is unaware
the chattel is missing. Close-Barzin v. Christie’s, Inc.,
51 A.D.3d 444, 444 (N.Y. App. Div. 1st Dep’t 2008). By
contrast, “An innocent purchaser of stolen goods becomes
a wrongdoer only after refusing the owner’s demand for
their return.” Kunstsammlungen Zu Weimar v. Elicofon,
678 F.2d 1150, 1161 (2d Cir. 1982) (citing cases, emphasis
added). Therefore, a cause of action accrues against a
bona fide purchaser when the purchaser refuses to return
the property in question. Id. Dubbed the “demand-and-
refusal rule,” this axiom of New York law dates back to
1966, when the New York County Supreme Court became
the fi rst court in the country to address the statute of
limitations issue in the context of an action to recover a
stolen painting. See Menzel v. List, 49 Misc. 2d 300 (N.Y.
Sup. Ct. 1966).

The plaintiff in Menzel sought to recover a piece by

Marc Chagall that she and her late husband had been
forced to leave behind when they fled Belgium after the
Nazis occupied that country. Id. at 302. Shortly after their
departure, the Nazis declared the piece to be “decadent
Jewish art” and seized it for “safekeeping.” Id. at 301. The
piece resurfaced in Paris in 1955, when a New York art
dealer purchased it and then promptly resold it. Id. at 303.
The plaintiff had been diligently searching for the work
since the end of the war, but was unable to locate it until
1962. When the purchaser refused to return the painting,
she fi led suit. Id. at 301.
 48a

Appendix D

At trial, the defendant established that he was an

innocent purchaser who had no notice that the painting
had been stolen. He pleaded the statute of limitations as
a defense, based on either (1) the lapse of time since 1941,
when the plaintiff had fi rst been divested of custody, or
in the alternative, (2) the lapse of time since 1955, when
he purchased the piece.

The court disagreed with his argument, holding

instead that a cause of action for conversion or replevin
accrues “against a person who lawfully comes by a chattel
arises, not upon the stealing or the taking, but upon the
defendant’s refusal to convey the chattel upon demand.” Id.
at 304 (citing Cohen v. M. Keizer, Inc., 246 App. Div. 277
(1st Dep’t 1936); Gillet v. Roberts, 57 N.Y. 28 (1874)). The
court reasoned that until a demand is made and refused,
an innocent purchaser’s possession is neither wrongful nor
unlawful. He should be “informed of the defect in his title
and have an opportunity to deliver the property to the true
owner, before he shall be made liable as a tortfeasor for
a wrongful conversion.” Gillet, 57 N.Y. at 34 (alterations
omitted). Thus, the court concluded, Menzel was entitled
to replevy her painting.

B. Unreasonable Delay

Under the demand-and-refusal rule as set forth in

Menzel, it appears that a person who knows where a
missing item is could delay the accrual of an action against
a good faith purchaser indefinitely simply by failing to
make a demand. It is undisputed that Grosz knew where
at least one of the works—Poet—was a half century before
plaintiffs demanded its return. But Grosz never demanded
 49a

Appendix D

the return of the work. Since plaintiffs have no more right

to Poet than Grosz would have had if he were still alive,
MoMA argues that Grosz’s unreasonable delay caused the
statute to begin running shortly after he encountered the
work in 1953.

Whether unreasonable delay starts the statute

running remains an open question under New York law.
Clearly, a party cannot delay making demand indefinitely.
However, one judge in this district has concluded that the
issue of “unreasonable delay” is relevant only to laches,
not to accrual of the action. See Republic of Turkey v.
Metropolitan Museum of Art, 762 F. Supp. 44, 46 (S.D.N.Y.
1990).

Republic of Turkey involved artifacts that were

excavated from burial mounds in the Ushak region of
Turkey, exported to the United States in contravention of
Turkish law, and eventually purchased by the Metropolitan
Museum of Art. Id. at 45. In that case, the Turkish
government (plaintiff) was alleged to have had “actual
knowledge of the facts needed to make a demand” more
than a decade and a half before it fi led its action. Id. at 46.
In denying the defendant’s motion to dismiss the action as
time barred, the court held that the reasonableness of the
plaintiffs’ delay in fi ling suit did not bear on the statute
of limitations but was properly raised only in the context
of laches. Id. at 46 -47.

This Court agrees with the reasoning of Republic of

Turkey, and holds that the issue of unreasonable delay
is relevant only to the defense of laches—even where, as
here, it is undisputed that a potential plaintiff (Grosz) had
 50a

Appendix D

actual knowledge of the whereabouts of at least one of the

missing art works (Poet) a half century before anyone
tried to replevy the piece. In light of the fact-sensitive
nature of a laches inquiry, it would be premature to resolve
the question now – especially as it is unnecessary to reach
the issue, because plaintiffs’ suit is plainly time barred.

C. Plaintiffs’ Demand and MoMA’s Refusal

For purposes of deciding this motion, I will assume

arguendo that the position taken by plaintiffs in their
opposition papers—namely, that the Complaint does
not allege that any of the works were purchased by the
museum with knowledge that they had been stolen—is
true. 3 On that assumption, the demand and refusal rule
governs when the statute of limitations began to run, and
plaintiffs’ claims against the museum accrued on the date
MoMA rejected plaintiffs’ November 24, 2003 demand.4

3. This assumption contradicts certain allegations in the

complaint—notably that “Barr clearly knew that Weidler was
trying to sell a stolen Grosz to him” when he purchased Poet
(Compl. ¶ 88)—but since plaintiffs could amend their Complaint to
remove those assertions (which admit only of the conclusion that
MoMA was not a bona fide purchaser without notice), I will decide
the motion as though the Complaint alleged that the museum took
title to all three works in good faith.
4. If (as is actually alleged in the Complaint) MoMA took
title to Poet in bad faith, then absent any tolling of that limitations
period (and there is no basis to toll the statute, see infra Part V),
plaintiffs’ claims to Poet have been time barred since I956—three
years after they allege that the museum knowingly acquired
wrongful ownership. See Close-Barzin v. Christie’s, Inc., 51 A.D.3d
444 (N.Y. App. Div. 1st Dep’t 2008).
 51a

Appendix D

All parties agree that MoMA has in fact rejected plaintiffs’

demand and refused to return the Paintings. They differ
only on the date when rejection occurred.

Though there is little case law addressing what

constitutes a “refusal” for purposes of the statute of
limitations, the cases that exist hold that, “A refusal need
not use the specific word ‘refuse’ so long as it clearly
conveys an intent to interfere with the demander’s
possession or use of his property.” Feld v. Feld, 279 A.D.2d
393, 395 (N.Y. App. Div. 1st Dep’t 2001) (citation omitted,
emphasis added); see also Spanierman Gallery v. Merritt,
No. 00 Civ. 5712, 2004 WL 1781006, at *5 (S.D.N.Y. Aug.
10, 2004) (citing Feld). In Feld, a letter in response to a
demand conditioned the return of disputed property on
the resolution of other disputes between the parties. The
plaintiff insisted that the letter was not sufficiently definite
to constitute “refusal” of his demand; not only did it not
use the word “refuse,” but it even indicated that there
were circumstances under which the property might be
returned at some unspecified moment in the future. But
the First Department disagreed with this argument.
Because the sender retained the disputed property and
indicated that he would not return it unless his demands
were met, his conduct was inconsistent with a plaintiff s
claim of ownership, and so constituted a “refusal,” thus
causing plaintiffs cause of action to accrue. Feld, 279
A.D.2d at 395.

In Borumand v. Assar, No. 01 Civ. 6258, 2005 WL

741786 (W.D.N.Y. Mar. 31, 2005), a federal court in New
York took the Feld doctrine one step further, holding that
 52a

Appendix D

refusal need not be conveyed in words at all. Rather, the

court explained, “Actions may be sufficient to constitute
a refusal if they amount to ‘an overt and positive act of
conversion.’” Id. at *14 (citation omitted). In Borumand,
the defendant “never explicitly informed [plaintiff] that
he would not relinquish possession [but] he never in
fact turned over the [chattels] and [instead] continually
maintained that he would do so at some future time.” Id.
The court ultimately held that the plaintiff’s claim accrued
one year after her initial demand, since by that time, she
should have “reasonably concluded” that the defendant’s
actions in putting her off amounted to a refusal. Id.

In line with Feld and Borumand, a court must analyze

the actions as well as his words of a person who receives a
demand before deciding whether and when it was refused.
If either the recipient’s words or actions evidences “an
intent to interfere with the demander’s possession or use
of his property,” see Feld, 279 A.D.2d at 395—which is
an “overt and positive act of conversion,” see Borumand,
2005 WL 741786, at *14—then the demand has been
refused and the cause of action accrues, even if the words
“I refuse your demand” were not explicitly used. This
conclusion comports with the purpose behind the demand-
and-refusal rule, which is to give an innocent purchaser
the opportunity to turn over chattel in his possession
after learning that it had been stolen from someone else.
Nothing in the rule’s history or purpose suggests that a
party who receives a demand, and who thereafter acts in
a manner that is inconsistent with the demander’s claim
to ownership, should be held not to have “refused” the
demand simply because he failed to recite some magic
 53a

Appendix D

words of rejection. Actions, as we all know, can sometimes

speak louder than words.

With this in mind, we examine the dealings between

the Grosz Estate and MoMA in the months and years after
the demand was made, which occurred in a November
24, 2003 letter from Ralph Jentsch (acting on behalf of
the Grosz estate) to MoMA’s Director, Glenn Lowry. (See
Compl. ¶ 117 & Ex. 26.)5

In the twenty-nine months following receipt of that

letter, MoMA took a number of actions with respect to
the Paintings. It engaged researchers from Yale to look
into the Paintings’ provenance, met periodically with
representatives of the Grosz Estate, and engaged in
sporadic correspondence with Jentsch. In January 2006,
the museum’s Board retained former Attorney General
Nicholas de B. Katzenbach to review the work that had
been done and to prepare a report and recommendation
for the Board. At all times while this activity was going
on, MoMA retained custody of the artworks.

MoMA argues that it clearly communicated its refusal

to return the Paintings in one of its letters to Jentsch—the
one dated July 20, 2005—and asks the Court to dismiss
this action because plaintiffs’ claims had to have accrued
no later than that date. (See MoMA MTD at 18.)

Plaintiffs argue that the museum did not reject its

demand until April 12, 2006 (MTD Opp. at 9), when

5. For purposes of the demand and refusal rule, everyone

agrees that this letter is the demand.
 54a

Appendix D

MoMA sent a letter notifying plaintiff that its Board of

Trustees had voted to accept Katzenbach’s conclusion that
the museum had no obligation to return, and should not
return, Poet and Self-Portrait.6 (See Solomon Decl. Ex. E
(Katzenbach report).)

I conclude that defendant has the better of this

argument. If MoMA’s failure to return the Paintings for
more than a year and a half after plaintiffs demanded them
did not constitute a refusal as a matter of law (and this
Court thinks that it did), then the July 20, 2005 letter—in
which the defendant clearly communicated its intent to
keep all three works despite plaintiffs’ demand—was an
act utterly inconsistent with plaintiffs’ claim of right. It
thus constituted the sort of refusal contemplated by the
demand and refusal rule.

MoMA’s Director, Glenn Lowry, began his July

20 letter to Ralph Jentsch as follows: “I enjoyed our
recent meeting and continue to appreciate the frank and
open dialogue that we have created together in order
to deal with the Grosz estate’s questions concerning
the [Paintings] at the Museum of Modern Art that are
under discussion.” (Solomon Decl. Ex. A at 1.) But Lowry
expressed “concern” about what he believed to be a
misunderstanding by Jentsch. Specifically, he wrote:

6. Automatons was not mentioned in the Katzenbach report.

In fact, the work is mentioned only in the November 24, 2003
demand letter and in Lowry’s July 20, 2005 letter to Jentsch.
After that, all mention of Automatons ceases. The parties have
not explained why, and in view of the Court’s conclusion the reason
is irrelevant.
 55a

Appendix D

I am concerned that we may have a different

interpretation over some of what has been
said in the last two years about these works
and I want to clarify our position in order to
avoid—given the importance of the issues under
consideration—any confusion. We have, as you
know, a fiduciary obligation to our collection.
Before we remove a work from the Museum’s
collection, we need to establish convincing and
conclusive evidence that another party—in
this instance, the Estate of George Grosz—has
ownership rights superior to the Museum’s....
For this reason, I think it is critical to state
that I never said—nor could I have said—that
MoMA would restitute the Grosz works if no
documents could be found contradicting the
documentation for your initial restitution claim.

(Id.)

Lowry explained the museum’s position on Poet:

I think it is fair to say that we have now

reached a point where it appears that no more
information is currently available for us to
consider, a point on which I sense, we both
agree. We have, however, reached somewhat
different conclusions about the results of our
extensive study of the provenance of [Poet]: we
believe that the available evidence does not lead
to any definitive conclusion that challenges
the Museum’s ownership of the picture. In
 56a

Appendix D

fact, much of what we know argues in favor of

MoMA’s clear title.

(Id. (emphasis added).)

With respect to the other two Paintings (Self-Portrait

and Automatons), Lowry stated: “Although we are aware
of the restitution of a painting with similar provenance [to
Self-Portrait], based on the material that you have shared
with us, and on our own extensive research—much of which
we have done in collaboration with Yale University—we
cannot reach the conclusion that restitution of either this
picture [Self-Portrait], or of the drawing, Republican
Automaton, would be appropriate at this time.” (Solomon
Decl. Ex. A at 2) (emphasis added).

Lowry’s statements, especially the highlighted

portions thereof, plainly indicate that, as of July 20, 2005,
MoMA rejected plaintiffs’ assertion that they had an
immediate right to possession of the three Grosz works.
Lowry plainly asserts that MoMA has superior title to
Poet, and stated that it “could not conclude” that plaintiffs
were entitled to possession of either Self-Portrait or
Automaton. And he stated that the museum intended to
keep all three paintings (at least “at this time”)—which
it did.

Lowry’s July 20, 2005 letter, coupled with the

museum’s continued retention of the works after it was
sent, indicates its continuing intent to interfere with
the rights asserted by plaintiffs in their demand. This
is all the “refusal” the law could possibly require before
plaintiffs’ causes of action for conversion and replevin (as
 57a

Appendix D

well as the corresponding equitable claims) accrued. After

reading the July 20 letter, no reasonable person could have
concluded that MoMA agreed with plaintiffs’ assertion
that they were the rightful owners of the Paintings, and
as such were entitled to immediate possession of them.
The only conceivable reading of the letter is that MoMA
emphatically disagreed with plaintiff ’s position—a
reading that is supported by its continued retention of the
purportedly purloined Paintings, which, as the Borumand
court ruled, is an “overt and positive act of conversion.” See
Borumand, 2005 WL 741786, at *14. Therefore, this Court
holds that plaintiffs’ claims accrued, and the limitations
period began to run, on July 20, 2005.

Underscoring this conclusion is the fact that the

parties had previously agreed that MoMA would respond
to plaintiffs’ demand no later than March 2005 (Solomon
Decl., Ex. D at 1-2). By the time the July 20, 2005 letter
was sent, the museum had already kept the Paintings
for three months beyond the date it set for answering
the demand—which is itself an “overt and positive act of
conversion.”

Plaintiffs dispute the conclusion that MoMA had

refused their claims on July 20, 2005. They insist that
MoMA’s July 20 letter does not constitute a sufficiently
clear rejection of their claim. They base this argument
on Lowry’s use of temporizing language elsewhere in his
letter. Specifically, with respect to Poet, he said:

In the spirit of friendship and recognition

of the limitations on the present state of our
knowledge about the provenance of the work, I
 58a

Appendix D

suggested the possibility of shared ownership of

[Poet] at our May 31 meeting. I did this not out
of a conviction that the picture was tainted in
some way, but because shared ownership would
be a gracious, amicable means of addressing the
fact that we may never be able to understand
fully the work’s history in the decades before
the Museum purchased it in 1952.
....
I proposed five or ten year benchmarks
as opportunities for MoMA and the Grosz
Foundation to review their positions and to
consider any new information that might come
to light. If further research produced conclusive
facts, one way or another, either the Foundation
or MoMA could withdraw its ownership claims.
If no new or conclusive evidence comes to light,
the shared arrangement could continue, more
or less in perpetuity.

(Id. at 2.) Plaintiffs also note that Lowry invited Grosz

family to meet with museum representatives sometime
in the “early fall” “to review the facts and determine an
appropriate course of action.... to best serve[ ] the needs
of George Grosz.” (Id.)

Insofar as plaintiffs interpret these statements as

having somehow tempered the museum’s clearly stated
refusal to return the artworks “at this time,” as well as its
flat-out rejection of plaintiffs’ claims to ownership of Poet,
their interpretation is misguided. Lowry’s temporizing
language was almost certainly designed to entice plaintiffs
to continue negotiating and to prevent the dispute from
 59a

Appendix D

becoming public or escalating into litigation. And indeed,

throughout the parties’ dealings, MoMA indicated a
willingness to resume looking into the matter anew if new
evidence surfaced—as any responsible museum would.
(See Solomon Decl. Ex. A at 2 (July 20, 2005 letter from
G. Lowry to R. Jentsch); id. Ex. E at 1 (April 12, 2006
letter from G. Lowry to R. Jentsch).)

However, nothing Lowry said contradicts his clearly

stated rejection of plaintiffs’ demand that the three
Paintings be returned to them, the “rightful” owners. The
fact that additional research or evidence might someday
cause MoMA to alter the conclusions it had obviously
reached by July of 2005 is irrelevant to whether plaintiffs’
causes of action accrued. Plaintiffs made a demand for
return of the works in November 2003. At some point
MoMA had to return the Paintings in order to avoid
converting them. In the July 20, 2005 letter, it expressly
refused to do so. The museum’s suggestions about “shared
ownership” of Poet pending “further research,” and future
meetings to “review the facts,” suggest that perhaps
MoMA might one day be open to giving plaintiffs one
or more of the works—but that is no different from the
Feld defendant’s assertion that he would return the stolen
property if the parties could resolve their other disputes.
The museum’s actions and its statements were inconsistent
with the demander’s claim to ownership of the works.

In sum, MoMA had reached a conclusion after nearly

two years of research; its conclusion was inconsistent with
plaintiffs’ claim of ownership; Lowry, acting on behalf of
MoMA, communicated that conclusion to plaintiffs; and
the museum kept the Paintings after Lowry sent that
 60a

Appendix D

message. From and after that moment when Lowry sent

the July 20, 2005 letter, plaintiffs were on notice that
their demand (which was for immediate possession of
the works) had been refused. At that point, their rights
of action were fully ripe, and the three year limitations
period began to run.

Plaintiffs’ contend, in conclusory fashion, that they

relied on Lowry’s temporizing language to forbear
from bringing suit. But two letters written by Jentsch
in January 2006—more than three years prior to the
commencement of suit on April 12, 2009 —make it clear
beyond peradventure that Jentsch understood that
plaintiffs’ demand had been refused. (See Solomon Decl.
Exs. C & D.)

In the fi rst letter, dated January 5, 2006, Jentsch

sought to “memorialize the substance” of a meeting he
had previously had with Lowry. According to Jentsch,
the purpose of that meeting was “to clarify once and
for all MoMA’s position with regard to the restitution to
the Grosz Estate of two works [Poet and Self-Portrait]
by George Grosz.” (Id. Ex. C at 1.) Jentsch wrote: “I
presented to you [Lowry] a letter authorized by the
George Grosz heirs demanding return of the two works by
February 3, 2006. You rejected the demand and advised
that the works would not be returned by this date or any
date.” (Id. (emphasis added).)7

7. Whatever was said at the referenced meeting to cause

Jentsch to write the January 5, 2006 letter, Lowry absolutely
refused to countenance plaintiffs’ demand for the return of the
Paintings by February 3, 2006—which he called their “ultimatum.”
 61a

Appendix D

The second letter, dated January 20, 2006 (see Solomon

Decl. Ex. D.), is even more compelling evidence that
plaintiffs (through their representative) well knew that
MoMA had rejected their original demand the summer
before. Jentsch not only reiterated his understanding
that MoMA was not going to return the Paintings,
but acknowledged that MoMA had “outright declined
restitution” of the works in Lowry’s “letter to me, July
20, 2005.” (Id. at 2 (emphasis added, errors in original).)
Jentsch went on to say, “I responded to you in a letter
August 11, 2005, and asked you the question on what
basis MoMA would deny restitution of the oil ‘Maler und
Modell’ [Self-Portrait]....” (Id. (emphasis added).) Jentsch’s
statements in this second letter fully support the court’s
conclusion that the statute began to run no later than
July 20, 2005.

Plaintiffs’ claims to all three Paintings are thus time

barred under the demand and refusal rule.

In a letter dated January 18, 2006, Lowry wrote: “the Museum of

Modern Art has determined not to respond to your ultimatum.”
(Dowd Decl. Ex. 1 at 2). As the Paintings were obviously not
conveyed to plaintiffs by February 3, 2006 deadline Jentsch
imposed, it is obvious that this later demand, too, was explicitly
rejected by the museum well before April 12, 2006—in any event,
no later than February 3, 2006, when the Paintings stayed where
they were. If we were to ignore everything that went before, and
accept February 3, 2006, as the date of the museum’s refusal (of
plaintiffs’ demand that the Paintings be returned by that date),
this lawsuit was still fi led more than two months too late. However,
that is not the conclusion the Court has reached.
 62a

Appendix D

V. Equitable Tolling

Anticipating a fi nding that their claims are stale,

plaintiffs suggest that this Court apply the doctrine of
equitable tolling to suspend the statute of limitations for
the period of “compromise negotiations from 2003 to April
12, 2006.” (MTD Opp. at 12.) In support of their argument,
plaintiffs cite two cases: Smith v. McGinnis, 208 F.3d
13 (2d Cir. 2000), and Lord Day & Lord v. Socialist
Republic of Vietnam, 134 F. Supp. 2d 549 (S.D.N.Y.2001).
In neither of these cases did the court conclude that the
limitations period should be equitably tolled, and in any
event both are factually inapposite. Insofar as they are
at all relevant, these cases establish that equitable tolling
“applies only in the ‘rare and exceptional circumstance,’”
and is appropriately invoked only where a plaintiff has
“acted with reasonable diligence throughout the period
he seeks to toll.” Smith, 208 F.3d at 17 (citations and
alterations omitted). In other words, the plaintiff must
show that he has been ‘prevented in some extraordinary
way from exercising his rights.’ Id. (internal quotations
omitted). This case does not present one of the “rare and
exceptional circumstances” in which any tolling of the
limitations period would be equitable.

Although plaintiffs contend that the entire two and one

half year period of negotiations ought to be excluded from
the limitations period, they do not explain why this should
be so. Instead, plaintiffs argue as follows: “On January
18, 2006, Lowry wrote to the [plaintiffs] telling them
to wait and assuring them that MoMA had not refused
their claims until the Board considered the Katzenbach
report and made their decision. Lowry’s January 18, 2006
 63a

Appendix D

letter equitably tolls the statute of limitations because

the [plaintiffs] reasonably relied on it.” (MTD Opp. at
12.) It thus appears that plaintiffs are contending that
the museum’s decision to involve the Board in the matter,
and the Board’s retention of Katzenbach to review the
situation, is the basis for an equitable toll, because it
somehow led plaintiffs to believe that MoMA had not yet
refused their demand.

This argument is utterly unpersuasive.

First of all, in the January 18 letter to which plaintiffs

refer, Lowry did not disavow MoMA’s determination
to keep the Grosz works in its collection in derogation
of plaintiffs’ purported rights. On the contrary, he
emphasized that the museum—although willing to return
works of art in the face of legitimate claims—had no
reason to question its conclusion that plaintiffs’ claims
were unfounded:

The Museum of Modern Art has demonstrated

that it is willing to engage in serious, scholarly
provenance research on works in its collection.
We have further demonstrated that, where
the facts support it, we are willing and able
to conclude that a claim is legitimate and that
someone else has an ownership right superior
to the Museum’s .... No such compelling facts
exist in this instance.

(Dowd Decl. Ex. 1 at 2, emphasis added.) Lowry indicated

that the museum’s Board had decided to retain Katzenbach
“notwithstanding that” (i.e., notwithstanding the fact that
 64a

Appendix D

there was no compelling evidence to support plaintiffs’

claims), but he plainly stated:

We take this extraordinary step [of asking

Katzenbach to review the matter] not out of any
sense of uncertainty about our conclusions, or
any wavering in our resolve, but rather to obtain
an intelligent, candid, independent assessment
of the situation.

(Id.)

The January 18 letter underscores, rather than

undermines, the museum’s previously-stated belief that
it had superior rights in the works in suit. It suggests
no “sense of uncertainty about our conclusions” and
no “wavering in our resolve.” If I may paraphrase, the
January 18 letter says, “We still think we were right—in
fact, we have no reason at all to think we were wrong—
back on July 20, when we told you we would not give you
the Paintings. But because we are the Museum of Modern
Art, we are going to ask an outsider to look at the matter
yet again.” In the context of everything that had gone
before, Lowry’s statements on January 19, 2006, gave
plaintiffs no reasonable basis to conclude that MoMA’s
July 20, 2005 letter did not constitute a rejection of their
original demand—as Jentsch himself recognized in a
letter sent to Lowry only two days later.

Furthermore, there is a logical fl aw in plaintiffs’

argument that the statute ought to be equitably tolled for
the entire twenty-nine month period of its interaction with
MoMA. Katzenbach’s retention did not and could not alter
 65a

Appendix D

or undo the fact that the museum had refused plaintiffs’

demand some six months earlier. Put otherwise, the
Board’s action did not cause a claim that had accrued 182
days earlier to “unaccrue” and restart the limitations clock
at Day One. At best, what plaintiffs can argue is that the
Board’s decision to commission a report from Katzenbach
tolled (suspended) the running of the statute during the
period while he did his work—i.e., from January 18 until
April 12, 2006—a period of 84 days. Adding 84 days to the
limitations period moves the date by which suit had to be
brought from July 20, 2008, to October 13, 2008—which
is not enough to save plaintiffs’ Complaint from dismissal.

Finally, plaintiffs have not established that the

circumstances surrounding their lengthy period of
inaction “adversely affected [their] capacity to function
generally or in relationship to the pursuit of [their] rights.”
Pena v. Potter, 326 Fed. App’x 33, 35 (2d Cir. 2009)
(citation omitted). The Second Circuit has explained that a
plaintiff must do more than declare that equitable tolling
is appropriate in order to establish his right to such relief.
See Boos v. Runyon, 201 F.3d 178 (2d Cir. 2000) (single
sentence alleging mental illness insufficient). But in this
case, that is all plaintiffs have done. Nothing in Lowry’s
January 18, 2006 letter or in the Board’s retention of
Katzenbach prevented the plaintiffs from bringing suit
during the period when Katzenbach was reviewing the
matter or at any time thereafter. Indeed, by January 18,
2006, litigation was clearly warranted—more than two
years had passed since plaintiffs had made their original
demand, MoMA still had not returned the Paintings, and
it had repeatedly indicated that it would not do so.
 66a

Appendix D

Accordingly, this Court declines to apply equitable

tolling to suspend the running of the limitations period
for the period November 2003 until April 12, 2006.

CONCLUSION

The defendant’s motion to dismiss is granted. The

Clerk of the Court is instructed to remove the motion
to dismiss (Docket No. 13) from the Court’s outstanding
motion list, and to enter judgment for defendant dismissing
the case.

In view of the disposition of the motion, the pending

Objection to the Magistrate Judge’s ruling on a discovery
dispute (Docket No. 55) is moot.

This constitutes the decision and order of this Court.

Dated: January 6, 2010 /s/

U.S.D.J.

BY ECF TO ALL COUNSEL

 67a

Appendix
APPENDIX E — ORDER E
DENYING PETITION
FOR REHEARING OF THE UNITED STATES
COURT OF APPEALS FOR THE SECOND
CIRCUIT, FILED FEBRUARY 9, 2011

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a stated Term of the United States Court of

Appeals for the Second Circuit, held at the Daniel Patrick
Moynihan United States Courthouse, 500 Pearl Street,
in the City of New York, on the 9th day of February, two
thousand eleven,

ORDER

Docket Number: 10-257

Martin Grosz, Lilian Grosz,

Plaintiff - Appellant,

v.

The Museum of Modern Art, Herrmann-Neisse with

Cognac, Painting by Grosz, Self-Portrait With Model,
Painting by Grosz, Republican Automatons, painting by
Grosz,

Defendant - Appellee.

Appellants Martin Grosz and Lilian Grosz file a

petition for rehearing, or, in the alternative, for rehearing
 68a

Appendix E

en banc. The panel that determined the appeal has

considered the request for panel rehearing, and the active
members of the Court have considered the request for
rehearing en banc.

IT IS HEREBY ORDERED that the petition is

denied.

For the Court:

Catherine O’Hagan Wolfe, Clerk
/s/
 69a

Appendix F
APPENDIX F — WASHINGTON PRINCIPLES
ON HOLOCAUST-ERA ASSETS,
DATED DECEMBER 3, 1998

Washington Principles on Holocaust-Era Assets

(December 3, 1998)
http://www.state.gov/www/regions/eur/holocaust/
heacappen.ndf

On December 3, 1998, 44 governments participating in

the Washington Conference on Holocaust-Era Assets
endorsed the following principles for dealing with Nazi-
looted art.

In developing a consensus on non-binding principles to

assist in resolving issues relating to Nazi-confi scated
art, the Conference recognizes that among participating
nations there are differing legal systems and that
countries act within the context of their own laws.

1. Art that had been confiscated by the Nazis and not

subsequently restituted should be identified.

2. Relevant records and archives should be open and

accessible to researchers, in accordance with the
guidelines of the International Council on Archives.

3. Resources and personnel should be made available

to facilitate the identification of all art that had
been confiscated by the Nazis and not subsequently
restituted.
 70a

Appendix F

4. In establishing that a work of art had been confiscated

by the Nazis and not subsequently restituted,
consideration should be given to unavoidable gaps or
ambiguities in the provenance in light of the passage
of time and the circumstances of the Holocaust era.

5. Every effort should be made to publicize art that is

found to have been confiscated by the Nazis and not
subsequently restituted in order to locate its pre-War
owners or their heirs.

6. Efforts should be made to establish a central registry

of such information.

7. Pre-War owners and their heirs should be encouraged

to come forward and make known their claims to art
that was confiscated by the Nazis and not subsequently
restituted.

8. If the 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, steps
should be taken expeditiously to achieve a just and fair
solution, recognizing this may vary according to the
facts and circumstances surrounding a specific case.

9. If the pre-War owners of art that is found to have

been confiscated by the Nazis, or their heirs, cannot
be identified, steps should be taken expeditiously to
achieve a just and fair solution.
 71a

Appendix F

10. Commissions or other bodies established to identify

art that was confiscated by the Nazis and to assist in
addressing ownership issues should have a balanced
membership.

11. Nations are encouraged to develop national processes

to implement these principles, particularly as they
relate to alternative dispute resolution mechanisms
for resolving ownership issues.
 72a

APPENDIX G —Appendix
PRAGUE G HOLOCAUST
ERA ASSETS CONFERENCE: TEREZÍN
DECLARATION, DATED JUNE 30, 2009

Prague Holocaust Era Assets Conference:

Terezín Declaration

Upon the invitation of the Prime Minister of the Czech

Republic we the representatives of 46 states listed below
met this day, June 30, 2009 in Terezín, where thousands
of European Jews and other victims of Nazi persecution
died or were sent to death camps during World War II.
We participated in the Prague Holocaust Era Assets
Conference organized by the Czech Republic and its
partners in Prague and Terezín from 26-30 June 2009,
discussed together with experts and non-governmental
organization (NGO) representatives important issues
such as Welfare of Holocaust (Shoah) Survivors and
other Victims of Nazi Persecution, Immovable Property,
Jewish Cemeteries and Burial Sites, Nazi- Confiscated
and Looted Art, Judaica and Jewish Cultural Property,
Archival Materials, and Education, Remembrance,
Research and Memorial Sites. We join affi rming in this

Terezín Declaration on Holocaust Era Assets and

Related Issues

- Aware that Holocaust (Shoah) survivors and other

victims of Nazi persecution have reached an advanced age
and that it is imperative to respect their personal dignity
and to deal with their social welfare needs, as an issue of
utmost urgency,
 73a

Appendix G

- Having in mind the need to enshrine for the benefit of

future generations and to remember forever the unique
history and the legacy of the Holocaust (Shoah), which
exterminated three fourths of European Jewry, including
its premeditated nature as well as other Nazi crimes,

- Noting the tangible achievements of the 1997 London

Nazi Gold Conference, and the 1998 Washing ton
Conference on Holocaust-Era Assets, which addressed
central issues relating to restitution and successfully set
the stage for the significant advances of the next decade,
as well as noting the January 2000 Stockholm Declaration,
the October 2000 Vilnius Conference on Holocaust Era
Looted Cultural Assets,

- Recognizing that despite those achievements there

remain substantial issues to be addressed, because only
a part of the confiscated property has been recovered or
compensated,

- Taking note of the deliberations of the Working Groups

and the Special Session on Social Welfare of Holocaust
Survivors and their points of view and opinions which
surveyed and addressed issues relating to the Social
Welfare of Holocaust Survivors and other Victims of
Nazi Persecution, Immovable Property, Nazi Confiscated
Art, Judaica and Jewish Cultural Property, Holocaust
Education, Remembrance and Research, which can be
found on the weblink for the Prague Conference and will
be published in the Conference Proceedings,
 74a

Appendix G

- Keeping in mind the legally non-binding nature of this

Declaration and moral responsibilities thereof, and without
prejudice to applicable international law and obligations,

1. Recognizing that Holocaust (Shoah) survivors and

other victims of the Nazi regime and its collaborators
suffered unprecedented physical and emotional trauma
during their ordeal, the Participating States take note of
the special social and medical needs of all survivors and
strongly support both public and private efforts in their
respective states to enable them to live in dignity with the
necessary basic care that it implies.

2. Noting the importance of restituting communal and

individual immovable property that belonged to the
victims of the Holocaust (Shoah) and other victims of Nazi
persecution, the Participating States urge that every
effort be made to rectify the consequences of wrongful
property seizures, such as confiscations, forced sales and
sales under duress of property, which were part of the
persecution of these innocent people and groups, the vast
majority of whom died heirless.

3. Recognizing the progress that has been made in

research, identification, and restitution of cultural
property by governmental and non-governmental
institutions in some states since the 1998 Washington
Conference on Holocaust-Era Assets and the endorsement
of the Washington Conference Principles on Nazi-
Confiscated Art, the Participating States affirm an urgent
need to strengthen and sustain these efforts in order to
ensure just and fair solutions regarding cultural property,
 75a

Appendix G

including Judaica that was looted or displaced during or

as a result of the Holocaust (Shoah).

4. Taking into account the essential role of national

gover n ment s, t he Holocaust (Shoa h) su r v ivors’
organi zations, and other speciali zed NGOs, the
Participating States call for a coherent and more effective
approach by States and the international community to
ensure the fullest possible, relevant archival access with
due respect to national legislation. We also encourage
States and the international community to establish
and support research and education programs about the
Holocaust (Shoah) and other Nazi crimes, ceremonies of
remembrance and commemoration, and the preservation
of memorials in former concentration camps, cemeteries
and mass graves, as well as of other sites of memory.

5. Recognizing the rise of Anti-Semitism and Holocaust

(Shoah) denial, the Participating States call on the
international community to be stronger in monitoring and
responding to such incidents and to develop measures to
combat anti-Semitism.

The Welfare of Holocaust (Shoah) Survivors and

other Victims of Nazi Persecution

Recognizing that Holocaust (Shoah) survivors and

other victims of Nazi persecution, including those who
experienced the horrors of the Holocaust (Shoah) as small
and helpless children, suffered unprecedented physical
and emotional trauma during their ordeal.
 76a

Appendix G

Mindful that scientific studies document that these

experiences frequently result in heightened damage to
health, particularly in old age, we place great priority on
dealing with their social welfare needs in their lifetimes.
It is unacceptable that those who suffered so greatly
during the earlier part of their lives should live under
impoverished circumstances at the end.

1. We take note of the fact that Holocaust (Shoah) survivors

and other victims of Nazi persecution have today reached
an advanced age and that they have special medical and
health needs, and we therefore support, as a high priority,
efforts to address in their respective states the social
welfare needs of the most vulnerable elderly victims
of Nazi persecution — such as hunger relief, medicine
and homecare as required, as well as measures that will
encourage intergenerational contact and allow them to
overcome their social isolation. These steps will enable
them to live in dignity in the years to come. We strongly
encourage cooperation on these issues.

2. We further take note that several states have used

a variety of creative mechanisms to provide assistance
to needy Holocaust (Shoah) survivors and other victims
of Nazi persecution, including special pensions; social
security benefits to non-residents; special funds; and the
use of assets from heirless property. We encourage states
to consider these and other alternative national actions,
and we further encourage them to find ways to address
survivors’ needs.
 77a

Appendix G

Immovable (Real) Property

Noting that the protection of property rights is an essential

component of a democratic society and the rule of law,

Acknowledging the immeasurable damage sustained

by individuals and Jewish communities as a result of
wrongful property seizures during the Holocaust (Shoah),

Recognizing the importance of restituting or compensating

Holocaust-related confiscations made during the Holocaust
era between 1933-45 and as its immediate consequence,

Noting the importance of recovering communal and

religious immovable property in reviving and enhancing
Jewish life, ensuring its future, assisting the welfare
needs of Holocaust (Shoah) survivors, and fostering the
preservation of Jewish cultural heritage,

1. We urge, where it has not yet been effectively achieved,

to make every effort to provide for the restitution of former
Jewish communal and religious property by either in rem
restitution or compensation, as may be appropriate; and

2. We consider it important, where it has not yet been

effectively achieved, to address the private property claims
of Holocaust (Shoah) victims concerning immovable (real)
property of former owners, heirs or successors, by either
in rem restitution or compensation, as may be appropriate,
in a fair, comprehensive and nondiscriminatory manner
consistent with relevant national law and regulations,
as well as international agreements. The process of
 78a

Appendix G

such restitution or compensation should be expeditious,

simple, accessible, transparent, and neither burdensome
nor costly to the individual claimant; and we note other
positive legislation in this area.

3. We note that in some states heirless property could

serve as a basis for addressing the material necessities of
needy Holocaust (Shoah) survivors and to ensure ongoing
education about the Holocaust (Shoah), its causes and
consequences.

4. We recommend, where it has not been done, that

states participating in the Prague Conference consider
implementing national programs to address immovable
(real) property confiscated by Nazis, Fascists and their
collaborators. If and when established by the Czech
Government, the European Shoah Legacy Institute
in Terezín shall facilitate an intergovernmental effort
to develop non-binding guidelines and best practices
for restitution and compensation of wrongfully seized
immovable property to be issued by the one-year
anniversary of the Prague Conference, and no later than
June 30, 2010, with due regard for relevant national laws
and regulations as well as international agreements, and
noting other positive legislation in this area.

Jewish Cemeteries and Burial Sites

Recognizing that the mass destruction perpetrated

during the Holocaust (Shoah) put an end to centuries of
Jewish life and included the extermination of thousands
of Jewish communities in much of Europe, leaving the
 79a

Appendix G

graves and cemeteries of generations of Jewish families

and communities unattended, and

Aware that the genocide of the Jewish people left the

human remains of hundreds of thousands of murdered
Jewish victims in unmarked mass graves scattered
throughout Central and Eastern Europe,

We urge governmental authorities and municipalities as

well as civil society and competent institutions to ensure
that these mass graves are identified and protected and
that the Jewish cemeteries are demarcated, preserved
and kept free from desecration, and where appropriate
under national legislation could consider declaring these
as national monuments.

Nazi-Confiscated and Looted Art

Recognizing that art and cultural property of victims

of the Holocaust (Shoah) and other victims of Nazi
persecution was confiscated, sequestered and spoliated,
by the Nazis, the Fascists and their collaborators through
various means including theft, coercion and confiscation,
and on grounds of relinquishment as well as forced sales
and sales under duress, during the Holocaust era between
1933-45 and as an immediate consequence, and

Recalling the Washington Conference Principles on

Nazi-Confi scated Art as endorsed at the Washington
Conference of 1998, which enumerated a set of voluntary
commitments for governments that were based upon the
moral principle that art and cultural property confiscated
 80a

Appendix G

by the Nazis from Holocaust (Shoah) victims should be

returned to them or their heirs, in a manner consistent
with national laws and regulations as well as international
obligations, in order to achieve just and fair solutions,

1. We reaffi rm our support of the Washington Conference

Principles on Nazi-Confiscated Art and we encourage
all parties including public and private institutions and
individuals to apply them as well,

2. In particular, recognizing that restitution cannot be

accomplished without knowledge of potentially looted
art and cultural property, we stress the importance
for all stakeholders to continue and support intensified
systematic provenance research, with due regard to
legislation, in both public and private archives, and where
relevant to make the results of this research, including
ongoing updates, available via the internet, with due
regard to privacy rules and regulations. Where it has not
already been done, we also recommend the establishment
of mechanisms to assist claimants and others in their
efforts,

3. Keeping in mind the Washington Conference Principles

on Nazi-Confiscated Art, and considering the experience
acquired since the Washington Conference, we urge
all stakeholders to ensure that their legal systems or
alternative processes, while taking into account the
different legal traditions, facilitate just and fair solutions
with regard to Nazi-confiscated and looted art, and to
make certain that claims to recover such art are resolved
expeditiously and based on the facts and merits of the
 81a

Appendix G

claims and all the relevant documents submitted by all

parties. Governments should consider all relevant issues
when applying various legal provisions that may impede
the restitution of art and cultural property, in order to
achieve just and fair solutions, as well as alternative
dispute resolution, where appropriate under law.

Judaica and Jewish Cultural Property

Recognizing that the Holocaust (Shoah) also resulted

in the wholesale looting of Judaica and Jewish cultural
property including sacred scrolls, synagogue and
ceremonial objects as well as the libraries, manuscripts,
archives and records of Jewish communities, and

Aware that the murder of six million Jews, including entire

communities, during the Holocaust (Shoah) meant that
much of this historical patrimony could not be reclaimed
after World War II, and

Recognizing the urgent need to identify ways to achieve

a just and fair solution to the issue of Judaica and Jewish
cultural property, where original owners, or heirs of
former original Jewish owners, individuals or legal
persons cannot be identified, while acknowledging there
is no universal model,

1. We encourage and support efforts to identify and

catalogue these items which may be found in archives,
libraries, museums and other government and non-
government repositories, to return them to their original
rightful owners and other appropriate individuals or
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Appendix G

institutions according to national law, and to consider a

voluntary international registration of Torah scrolls and
other Judaica objects where appropriate, and

2. We encourage measures that w ill ensure their

protection, will make appropriate materials available to
scholars, and where appropriate and possible in terms of
conservation, will restore sacred scrolls and ceremonial
objects currently in government hands to synagogue
use, where needed, and will facilitate the circulation and
display of such Judaica internationally by adequate and
agreed upon solutions.

Archival Materials

Whereas access to archival documents for both claimants

and scholars is an essential element for resolving questions
of the ownership of Holocaust-era assets and for advancing
education and research on the Holocaust (Shoah) and other
Nazi crimes,

Acknowledging in particular that more and more archives

have become accessible to researchers and the general
public, as witnessed by the Agreement reached on the
archives of the International Tracing Service (ITS) in
Bad Arolsen, Germany,

Welcoming the return of archives to the states from whose

territory they were removed during or as an immediate
consequence of the Holocaust (Shoah),
 83a

Appendix G

We encourage governments and other bodies that

maintain or oversee relevant archives to make them
available to the fullest extent possible to the public and
researchers in accordance with the guidelines of the
International Council on Archives, with due regard
to national legislation, including provisions on privacy
and data protection, while also taking into account the
special circumstances created by the Holocaust era and
the needs of the survivors and their families, especially
in cases concerning documents that have their origin in
Nazi rules and laws.

Education, Remembrance, Research and Memorial

Sites

Acknowledg ing the impor tance of education and

remembrance about the Holocaust (Shoah) and other Nazi
crimes as an eternal lesson for all humanity,

Recognizing the preeminence of the Stockholm Declaration

on Holocaust Education, Remembrance and Research of
January 2000,

Recognizing that the Universal Declaration of Human

Rights was drafted in significant part in the realization
of the horrors that took place during the Holocaust, and
further recognizing the U.N. Convention on the Prevention
and Punishment of the Crime of Genocide,

Recalling the action of the United Nations and of other

international and national bodies in establishing an annual
day of Holocaust remembrance,
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Appendix G

Saluting the work of the Task Force for International

Cooperation on Holocaust Education, Remembrance
and Research (ITF) as it marks its tenth anniversary,
and encouraging the States participating in the Prague
Conference to cooperate closely with the Task Force, and

Repudiating any denial of the Holocaust (Shoah) and

combating its trivialization or diminishment, while
encouraging public opinion leaders to stand up against
such denial, trivialization or diminishment,

1. We strongly encourage all states to support or

establish regular, annual ceremonies of remembrance and
commemoration, and to preserve memorials and other
sites of memory and martyrdom. We consider it important
to include all individuals and all nations who were victims
of the Nazi regime in a worthy commemoration of their
respective fates,

2. We encourage all states as a matter of priority to include

education about the Holocaust (Shoah) and other Nazi
crimes in the curriculum of their public education systems
and to provide funding for the training of teachers and
the development or procurement of the resources and
materials required for such education.

3. Believing strongly that international human rights

law reflects important lessons from history, and that
the understanding of human rights is essential for
confronting and preventing all forms of racial, religious
or ethnic discrimination, including Anti-Semitism, and
Anti-Romani sentiment, today we are committed to
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Appendix G

including human rights education into the curricula of our

educational systems. States may wish to consider using
a variety of additional means to support such education,
including heirless property where appropriate.

4. As the era is approaching when eye witnesses of the

Holocaust (Shoah) will no longer be with us and when the
sites of former Nazi concentration and extermination
camps, will be the most important and undeniable evidence
of the tragedy of the Holocaust (Shoah), the significance
and integrity of these sites including all their movable and
immovable remnants, will constitute a fundamental value
regarding all the actions concerning these sites, and will
become especially important for our civilization including,
in particular, the education of future generations. We,
therefore, appeal for broad support of all conservation
efforts in order to save those remnants as the testimony
of the crimes committed there to the memory and warning
for the generations to come and where appropriate to
consider declaring these as national monuments under
national legislation.

Future Action

Further to these ends we welcome and are grateful for the

Czech Government’s initiative to establish the European
Shoah Legacy Institute in Terezín (Terezín Institute)
to follow up on the work of the Prague Conference and
the Terezín Declaration. The Institute will serve as a
voluntary forum for countries, organisations representing
Holocaust (Shoah) survivors and other Nazi victims,
and NGOs to note and promote developments in the
 86a

Appendix G

areas covered by the Conference and this Declaration,

and to develop and share best practices and guidelines
in these areas and as indicated in paragraph four of
Immovable (Real) Property. It will operate within the
network of other national, European and international
institutions, ensuring that duplicative efforts are avoided,
for example, duplication of the activities of the Task Force
for International Cooperation on Holocaust Education,
Remembrance and Research (ITF).

Following the conference proceedings and the Terezín

Declaration, the European Commission and the Czech
Presidency have noted the importance of the Institute
as one of the instruments in the fight against racism,
xenophobia and anti-Semitism in Europe and the rest
of the world, and have called for other countries and
institutions to support and cooperate with this Institute.

To facilitate the dissemination of information, the Institute

will publish regular reports on activities related to the
Terezín Declaration. The Institute will develop websites to
facilitate sharing of information, particularly in the fields
of art provenance, immovable property, social welfare
needs of survivors, Judaica, and Holocaust education. As
a useful service for all users, the Institute will maintain
and post lists of websites that Participating States,
organizations representing Holocaust (Shoah) survivors
and other Nazi victims and NGOs sponsor as well as a
website of websites on Holocaust issues.

We also urge the States participating in the Prague

Conference to promote and disseminate the principles
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Appendix G

in the Terezín Declaration, and encourage those states

that are members of agencies, organizations and other
entities which address educational, cultural and social
issues around the world, to help disseminate information
about resolutions and principles dealing with the areas
covered by the Terezín Declaration.

A more complete description of the Czech Government’s

concept for the Terezín Institute and the Joint Declaration
of the European Commission and the Czech EU Presidency
can be found on the website for the Prague Conference
and will be published in the conference proceedings.

List of States

1. Albania
2. Argentina
3. Australia
4. Austria
5. Belarus
6. Belgium
7. Bosnia and Herzegovina
8. Brazil
9. Bulgaria
10. Canada
11. Croatia
12. Cyprus
13. Czech Republic
14. Denmark
15. Estonia
16. Finland
17. France
 88a

Appendix G

18. FYROM
19. Germany
20. Greece
21. Hungary
22. Ireland
23. Israel
24. Italy
25. Latvia
26. Lithuania
27. Luxembourg
28. Malta
29. Moldova
30. Montenegro
31. The Netherlands
32. Norway
33. Poland
34. Portugal
35. Romania
36. Russia
37. Slovakia
38. Slovenia
39. Spain
40. Sweden
41. Switzerland
42. Turkey
43. Ukraine
44. United Kingdom
45. United States
46. Uruguay

The Holy See (observer)

Serbia (observer)
 89a

Appendix
APPENDIX H — THE H
DEPARTMENT OF STATE
BULLETIN, DATED JANUARY 9, 1943

THE DEPARTMENT OF STATE BULLETIN

JANUARY 9, 1943

Vol. VIII, No. 185—Publication 1863

***

DECLARATION REGARDING FORCED

TRANSFERS OF PROPERTY IN ENEMY-
CONTROLLED TERRITORY

[Released to the press January 5]

The text of a declaration which has been made by

the United States and certain others of the United
Nations, regarding forced transfers of property in enemy-
controlled territory, follows:

“The Union of South Africa, the United States

of America, Australia, Belgium, Canada, China, the
Czechoslovak Republic, the United Kingdom of Great
Britain and Northern Ireland, the Union of Soviet Socialist
Republics, Greece, India, Luxembourg, the Netherlands,
New Zealand, Norway, Poland, Yugoslavia and the French
National Committee:

“Hereby issue a formal warning to all concerned,

and in particular to persons in neutral countries, that
they intend to do their utmost to defeat the methods of
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Appendix H

dispossession practiced by the governments with which

they are at war against the countries and peoples who
have been so wantonly assaulted and despoiled.

“Accordingly the governments making this declaration

and the French National Committee reserve all their
rights to declare invalid any transfers of, or dealings
with, property, rights and interests of any description
whatsoever which are, or have been, situated in the
territories which have come under the occupation or
control, direct or indirect, of the governments with
which they are at war or which belong or have belonged,
to persons, including juridical persons, resident in such
territories. This warning applies whether such transfers
or dealings have taken the form of open looting or plunder,
or of transactions apparently legal in form, even when they
purport to be voluntarily effected.

“The governments making this declaration and

the French National Committee solemnly record their
solidarity in this matter.”

****