AuthorDrawdy, Stephanie

Since heirs of German Jewish art dealers who owned the Welfenschatz (or 'Guelph Treasure') prior to World War II began efforts over a dozen years ago to seek its return, they have traversed many hurdles. Initially, the heirs received adverse responses from both the German governmental body that maintains the Welfenschatz, the Stiftung Preussischer Kulturbesitz ('SPK'), and the German Advisory Commission for the Return of Cultural Property Seized as a Result of Nazi Persecution, Especially from Jewish Possession. In March 2014, the Commission ruled that the Nazi State of Prussia entered into a fair transaction for a fair price with the dealers. (1) This remarkable presumption of fairness between the Third Reich and Jews in 1935 Germany--two years into Chancellor Hitler's anti-Semitic reign--triggered the heirs to then file suit in the United States. (2) The heirs were making (slow) strides in US courts and now have received a mixed result in America's highest court.

The opinion issued by the US Supreme Court turns on the text, context and history of the 'expropriation exception' of the Foreign Sovereign Immunities Act ('FSIA'). While many learned individuals have disagreed in this case about the interpretation of the exception (and the very history of the Holocaust), the much-anticipated ruling from the Supreme Court in February 2021 came down strongly with those who sought to strengthen immunity for foreign States and to narrow application of the exception. In a sixteen-page opinion, the Court noted the expropriation exception was enacted to lift the "baseline presumption of immunity from suit" given to foreign States under the FSIA and applied only in certain instances when property was taken "in violation of international law". (3) The Court then rendered precedent on which international law would trigger this exception--"violations of the international law of expropriation" that "thereby incorporates the domestic takings rule". (4)

Chief Justice John Roberts, delivering the opinion on behalf of the Court, declined to adopt the heirs' argument that the sale was "an act of genocide" that "violated the international law of genocide" and gave rise to application of the exception; and the international law of expropriation's domestic takings rule, which "assumes that what a country does to property belonging to its own citizens within its own borders is not the subject of international law", was inapplicable. (5) The Court opined that to accept the heirs' interpretation of the expropriation exception would lead to "an all-purpose jurisdictional hook for adjudicating human rights violations." (6)

Instead, the Court upheld Germany's argument that expropriation law, which deals with governmental taking of property, applied to Prussia's 1935 acquisition of the ecclesiastical art collection known as the Welfenschatz. (7) Germany's interpretation of the exception, according to Justice Roberts, was in line with both the exception's wording and the FSIA's goal of restrictive sovereign immunity. (8) This interpretation was also found to be in step with the Court's prior rejections of attempts "to insert modern human rights law into FSIA exceptions ill suited to the task". (9) An additional support of this reading was foreign policy objectives "to avoid, where possible, producing friction" with foreign States. (10)

The citizenship of the dealers at the time of the 1935 sale is central in an 'alternative argument' presented by the heirs that, if preserved, will be heard on remand according to the Court's unanimous opinion." The opposing position to this argument advanced by Germany and the SPK is that the dealers were German 'nationals', and the heirs have forfeited "any novel argument to the contrary". (12) The heirs deny any such forfeiture, noting that Germany and the SPK have made a "technical distinction about the citizenship of the Nazis' victims" that is "nonsensical and at odds with Congress". (13) The Court's opinion closed with an order for the Court of Appeals to "direct the District Court to consider this argument, including whether it was adequately preserved below." (14)


During the Mediaeval Period, the European House of Welf collected an amalgam of treasures made of precious metals, ivory, sea lion tusk and even human remains, forming the Welfenschatz. (15) From a gold cloisonne enamel altar and crosses to reliquaries housing Christian saints' bones, the collection grew to over 80 pieces. (16) In 1929, three German-Jewish art dealerships formed a consortium to acquire the majority of these Christian relics and sold 40 pieces to various European and US buyers over the first two years of their ownership. (17) The pieces of the Welfenschatz that remained with the Consortium at that time are believed to have been "the most valuable". (18)

Through "explicit correspondence" and collusion during the early 1930s, it appears the Nazis sought to "save the Welfenschatz" for Germany, and Hitler learned the remaining Welfenschatz pieces could be purchased for a suppressed price. (19) Correspondence from the Mayor of Frankfurt to Hitler includes a pointed statement that the Welfenschatz was possibly available "at around 1/3 of its earlier value" and his request to Hitler to "create the legal and financial preconditions for the return of the [Welfenschatz]". (20) The Nazi-controlled Dresdner Bank, an institution that quickly adopted Nazi policy to "confiscate[e] Jewish property and wealth" after the Third Reich's ascent to power, was the facilitator of the 1935 sale. (21)

The arc of exchange between Dresdner Bank and the Consortium show the latter's demands reduced by millions throughout their 'negotiations' with the buyer, the State of Prussia. In early 1934, the Consortium relayed to Dresdner that the Consortium would "not go down under 6.5 million RM [Reichsmarks], perhaps 6 million RM in extreme circumstances". (22) In spring 1934, the Consortium "advised that they had an offer in hand for 7 million RM, probably from a Berlin private banker". (23)

By mid-1934, however, acquisition of the Welfenschatz had become the mission of the Secretary of the Prussian State Ministry and Secretary of the Ministry of Science who stated the Welfenschatz was "obviously politically valuable for Prussia in its later rise in the Reich." (24) The record then indicates at some point after spring 1935 that a new museum was to purchase the Welfenschatz--a deal that the heirs allege was derailed by the Nazis, whose "authoritative entities were to be invited to review the plans at [the prospective buyer museum] to ensure that there was no 'conflict'", after which that purchaser was no longer an interested buyer. (25)

Throughout the 'negotiations', the heirs allege the Consortium members were threatened with violence, declared "enemies of the state", "publicly accused of selling national treasures", and had very little, if any, income. (26) Finally, in June 1935, the Consortium agreed to sale of the Welfenschatz to Nazi-ruled Prussia for 4.25 million RM. (27)

These are the facts presented by the heirs that surround Prussia's acquisition of the remaining 42 Welfenschatz pieces still in the Consortium's inventory in 1935 in a single transaction for approximately 35 per cent of their value (28) Further facts presented show the full amount of this payment was not freely accessible to the Consortium: a portion of it was placed in a blocked account, another portion was required for 'flight taxes' that Jews were made to pay to leave Germany, and 100,000 RM went to a Nazi-appointed art dealer as commission for his work as go-between with Dresdner. (29) Also, a portion of the payment was made in art works "worth nothing like their promised value", which the Consortium 'agreed' would be chosen by them, but were instead chosen by museum officials. (30)

In November 1935, Prussian Prime Minister Hermann Goring gave the Welfenschatz as a "surprise gift" to Hitler. (31)

Germany has publicly displayed the highly valued Welfenschatz collection "almost continuously since the Sale", considers it to be its "national treasure" and has "refused to return" it to the Consortium's heirs. (32)


Going forward in this case, the question of whether the Consortium members were German 'nationals' at the time of the 1935 sale may be relevant, making certain historical facts related to Germany's treatment of its Jewish population during the rise of the Third Reich relevant. One such fact is when the genocide of the Holocaust is deemed to have begun. The heirs have stressed that: "[f]rom the London Declaration in 1943 through today, January 30, 1933 has been rightly seen as a bright line for the start date of Germany's historic misdeeds"; and that the London Declaration declared such misdeeds to have included "illegitimate" takings--even when guised as voluntary transactions: (33)

In January 1943, the Allies issued the Inter-Allied Declaration Against Acts of Dispossession Committed in Territories Under Enemy Occupation or Control (the "London Declaration"), which declared Nazi takings illegitimate "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." (34) Germany and the SPK do not appear to have addressed this 1933 "start date". Instead, pointing to factors that would suggest the 1935 sale was voluntary, Germany and the SPK emphasised the neutral location of the Welfenschatz during the Consortium's 'negotiations' and the "millions" paid for it in support of their argument that the 1935 'transaction' was a legitimate domestic matter and "not a genocidal taking":

The purchase of art [the Welfenschatz], stored in unoccupied Amsterdam, for millions of dollars, does not constitute an act calculated to physically destroy the Jewish people. (35) According to the heirs...

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