Emden v. The Museum of Fine Arts, Houston

UNITED STATES DISTRICT COURT May 02, 2022

SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk

HOUSTON DIVISION

JUAN CARLOS EMDEN et al, §

§

Plaintiffs, §

VS. § CIVIL ACTION NO. 4:21-CV-3348

§

THE MUSEUM OF FINE ARTS, §

HOUSTON §

§

Defendant.

MEMORANDUM & ORDER

The Court held a hearing on Defendant’s Motion to Dismiss (doc. 13) on March 24, 2022.

At that hearing, the Court took the Motion under advisement. The Court now GRANTS

Defendant’s Motion to Dismiss without prejudice and provides this Memorandum & Order to

document its rulings and reasoning.

I. FACTUAL BACKGROUND1

This controversy centers around two paintings. The first is “The Marketplace at Pirna” by

Bernardo Bellotto, currently owned by the Houston Museum of Fine Arts (MFA). The second is

“After Bellotto” painted by an unknown Bellotto imitator. The second is relevant only because

plaintiffs claim that it caused confusion that renders invalid the MFA’s title to “The Marketplace

at Pirna.” Two other Bellotto paintings once owned by plaintiffs’ relative, Dr. Max Emden, are

mentioned briefly to provide context, but those two Bellottos are not at issue here.

1 These facts are taken from the plaintiffs’ Complaint and reflect plaintiffs’ view of the matter, as is appropriate at the

motion to dismiss stage.

A. “The Marketplace at Pirna”

In 1753, Bernardo Bellotto painted “The Marketplace at Pirna” as a royal commission for

Augustus III who was the king of Poland and the elector of Saxony. (Doc. 1 at ¶15). In the late

1700s, “The Marketplace at Pirna” was acquired by Leipzig art collector Gottfried Winckler, who

marked it with inventory number 1025 on its bottom right-hand corner. (Doc. 1 at ¶18). By 1930,

Dr. Max Emden, a German Jewish merchant and grandfather to the Emden plaintiff-heirs, owned

the painting, along with two other Bellotto paintings. (Id.). But on June 30, 1938, Dr. Emden—

under Nazi-orchestrated economic duress—sold “The Marketplace at Pirna”, as well as his two

other Bellotto paintings, to Nazi art dealer Karl Haberstock. (Id. at ¶23). The very same day,

Haberstock sold all three Bellottos to the Reich Chancellery as they were intended for Hitler’s

Führermuseum in Linz, Austria. (Id.). Dr. Emden died two years later in June 1940. (Id.).

In May of 1945, “The Marketplace at Pirna” was found by the Monuments Men and

Women in an Austrian salt mine. (Id. at ¶33). The Monuments Men and Women were a group of

mostly American and British museum curators, art historians, librarians, architects, and artists

tasked with preserving the artistic and cultural achievements of western civilization from the

destruction of war and theft by the Nazis. (Id. at ¶31). In June of 1945, “The Marketplace at Pirna”

was moved by the Monuments Men and Women to the Munich Central Collecting Point (MCCP)

to be held there pending return to its rightful owner. (Id. at ¶34).

B. “After Bellotto”

In 1928, Hugo Moser, a German art dealer and collector, purchased “After Bellotto”, a

work by an unknown imitator of Bernardo Bellotto’s “The Marketplace at Pirna.” (Id. at ¶28).

Artists of the late 1700s and 1800s regularly copied Bellotto’s urban landscape scenes in his style

because his original works of art became even more popular and valuable after his death. (Id.) In

1933, when the Nazis came to power, Moser fled Germany for the Netherlands; and when the Nazi

invasion of the Netherlands became imminent, he fled to the United States, leaving his painting in

the care of an art restorer in Amsterdam. (Id. at ¶29).

Without Moser’s permission or knowledge, Moser’s brother-in-law then took “After

Bellotto” from the art restorer and sold it to a dealer called Douwes Fine Art. (Id. at ¶37). And

Douwes Fine Art then sold the painting to the Amsterdam-based Goudstikker Gallery where it was

purchased by Nazi art dealer Maria Almas-Dietrich. (Id. at ¶29-30). Moser was not compensated

for any of these sales. (Id. at ¶37). At war’s end, “After Bellotto” was found in a storage facility

containing dozens of other works of art owned by Almas-Dietrich. (Id. at ¶30). And in November

of 1945, the painting was moved to the MCCP to be held there pending return to its rightful owner,

since works owned by Almas-Dietrich were presumed to be stolen. (Id. at ¶31).

C. The Alleged Mix-Up

In March 1946, Dutch officials filed Dutch Declaration Form 7056, alerting the

Monuments Men and Women that they sought a Bernardo Bellotto painting called “The

Marketplace at Pirna” which the Goudstikker Gallery claimed it had sold to Nazi dealer Maria

Almas-Dietrich. (Id. at ¶35). The Dutch Declaration Form complied with the requirements of the

Netherlands Art Property Foundation (Dutch: Stichting Nederlands Kunstbezit or “SNK”), the

Dutch government agency that dealt with post-WWII restitution. (Id.) However, plaintiffs claim

that the Dutch government’s Declaration Form contained a clerical error, because the Goudstikker

Gallery had never owned “The Marketplace at Pirna” by Bellotto; instead, the Goudstikker had

allegedly owned the near-identical “After Bellotto”—rendered by an unknown artist in the style of

Bellotto. (Id.) Nevertheless, in April 1946, pursuant to external restitution policies and Dutch

Declaration Form 7056, the Monuments Men and Women sent Bellotto’s “The Marketplace at

Pirna” to the Netherlands. (Id. at ¶35).

In May of 1948, German art dealer Hugo Moser wrote to the Dutch officials stating that he

was the true owner of “After Bellotto” (by an unknown artist in the style of Bellotto), which he

had purchased in 1928 then left in Amsterdam when he fled Nazi occupation in 1940. (Id. at ¶37).

The Dutch government then allegedly compounded its initial mistake by restituting “The

Marketplace at Pirna”—instead of “After Bellotto”—to Hugo Moser. (Id. at ¶39).

In 1949, the Monuments Men discovered that they may have mistakenly given over “The

Marketplace at Pirna” to the Dutch government. (Id.). Therefore, they wrote a letter (“The Munsing

Letter”) to Dutch officials suggesting that their conveyance to the Dutch had been in error. (Id.)

However, the Dutch government declined to return the painting as they had already restituted it to

Hugo Moser. (Id.).

In 1952, Hugo Moser sold “The Marketplace at Pirna” to American collector Samuel H.

Kress. (Id. at ¶40). In doing so, plaintiffs allege that Moser presented Kress with a completely

fabricated provenance, omitting key information about where, when, and from whom he had

purchased the painting. (Id. at ¶41). In 1953, Samuel H. Kress, through the Kress Foundation,

placed “The Marketplace at Pirna” on long term loan with the MFA. (Id. at ¶42). And in 1961, the

Kress Foundation converted the loan to an outright donation of the painting to the MFA. (Id.).

In 2019, the German Advisory Commission on the restitution of stolen war art (“the

Commission”) determined that Dr. Emden was a victim of the “systematic destruction of people’s

economic livelihoods by the Third Reich as a tool of National Socialist racial policy.” (Id. at ¶45).

Therefore, the Commission recommended that Mr. Emden’s two Bellotto paintings that had been

turned over to the new German government by the Monuments Men and Women be restituted to

plaintiffs as the sole heirs of Dr. Emden. (Id.).2 The German government accepted the

recommendation of the Commission and immediately returned both Bellotto paintings to the

Emden heirs. (Id.). The Commission noted that the third Emden Bellotto, “The Marketplace at

Pirna” at issue in this case, “was of the same origin [and] was erroneously restituted to the

Netherlands after 1945 and is now considered lost.” (Id.).

Thus, according to plaintiffs, but for the erroneous restitution of “The Marketplace at

Pirna” to the Netherlands in 1946, and its subsequent restitution to Hugo Moser, “all three Emden

Bellottos would have been together in Germany. (Id. at ¶46). And all three would have been

returned to the Emden Heirs in accordance with the German Advisory Commission’s findings and

recommendation.” (Id.)

In summer of 2021, researchers for the Monuments Men and Women Foundation

discovered and analyzed a 1930 photo of “The Marketplace at Pirna,” identifying a unique

distinguishing fingerprint in the form of a “1025” marking. (Id. at ¶47). Said marking concretely

distinguished the MFA-owned “The Marketplace at Pirna” from all imitations. (Id.) When

presented with this finding in June of 2021, the MFA unequivocally refused restitution of “The

Marketplace at Pirna.” (Id. at ¶48). Plaintiffs filed their Complaint on October 12, 2021, seeking

declaratory relief and alleging conversion and a violation of the Texas Theft Liabilities Act for

unlawful appropriation of property. (Id. at 58-80).

2 As already mentioned, Mr. Emden owned three Bellotto paintings in total; all of them were sold to Nazi dealer

Karl Haberstock, and two of them were subsequently restituted to Germany. But only one of his paintings—“The

Marketplace at Pirna” which was restituted to the Netherlands—is at issue in this case.

II. DISCUSSION

A. Legal Standard

A court may dismiss a complaint for “failure to state a claim upon which relief can be

granted.” FED. R. CIV. P. 12(b)(6). When considering a Rule 12(b)(6) motion to dismiss, a court

must “accept the complaint's well-pleaded facts as true and view them in the light most favorable

to the plaintiff.” Johnson v. Johnson, 385 F.3d 503, 529 (5th Cir. 2004). “To survive a Rule

12(b)(6) motion to dismiss, a complaint ‘does not need detailed factual allegations,’ but must

provide the plaintiff's grounds for entitlement to relief—including factual allegations that when

assumed to be true ‘raise a right to relief above the speculative level.’” Cuvillier v. Taylor, 503

F.3d 397, 401 (5th Cir. 2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). That

is, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief

that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550

U.S. at 570).

In determining whether to grant a motion to dismiss, a court cannot look beyond the

pleadings. Peacock v. AARP, Inc., 181 F. Supp. 3d 430, 434 (S.D. Tex. 2016) (citing Spivey v.

Robertson, 197 F.3d 772, 774 (5th Cir. 1999)). However, when the motion to dismiss contains

exhibits that are referenced in the plaintiff’s complaint and central to the pleadings, they are part

of the pleadings, and the court may consider them in ruling on the motion. Johnson v. Bowe, 856

F. App’x 487, 490-92 (5th Cir. 2021); Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285,

288 (5th Cir. 2004). A plaintiff is under no obligation to attach to her complaint documents upon

which her action is based, but a defendant may introduce certain pertinent documents if the plaintiff

failed to do so. Romani v. Shearson Lehman Hutton, 929 F.2d 875, 879 n. 3 (1st Cir.1991)

(quoting 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1327 at 762–

63 (2d ed.1990)).

When a party presents “matters outside the pleadings” with a Rule 12(b)(6) motion to

dismiss, the Court has discretion to accept or to exclude the evidence for purposes of the motion

to dismiss. Isquith ex rel. Isquith v. Middle South Utilities, Inc., 847 F.2d 186, 194 n. 3 (5th

Cir.1988). However, per Fed. R. Civ. P. 12(d), if documents outside of the pleadings are placed

before a district court, and not excluded, the court must convert the defendant's 12(b)(6) motion to

one for summary judgment and afford the plaintiff an opportunity to submit additional evidentiary

material of his or her own. Carter v. Stanton, 405 U.S. 669, 671 (1972) (per curiam).

B. Analysis

1. The Act of State Doctrine

Under the Act of State doctrine, “the courts of one country will not sit in judgment on the

acts of the government of another, done within its own territory.” Underhill v. Hernandez, 168

U.S. 250, 252 (1897). The doctrine is grounded in the principle that “juridical review of acts of

state of a foreign power could embarrass the conduct of foreign relations by the political branches

of the government.” First Nat'l City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 765 (1972).

The doctrine thus overlaps in many respects with the political question doctrine, as it is rooted in

constitutional separation-of-powers concerns. See Banco Nacional de Cuba v. Sabbatino, 376 U.S.

398, 425 (1964). It recognizes “‘the thoroughly sound principle that on occasion individual

litigants may have to forgo decision on the merits of their claims because the involvement of the

courts in such a decision might frustrate the conduct of [United States] foreign policy.’” Callejo v.

Bancomer, 764 F.2d 1101, 1113 (5th Cir. 1985) (quoting First Nat'l City Bank, 406 U.S. at 769).

“For Act of State [] purposes, the relevant acts are not merely those of the named

defendants, but any governmental acts whose validity would be called into question by

adjudication of the suit.” Callejo, 764 F.2d at 1115, 1116 (emphasis added). The burden lies on

the proponent of the doctrine to establish the factual predicate for the doctrine's

application. See Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 694 (1976).

As described previously, plaintiffs claim that the Dutch government’s receipt and

subsequent restitution to Hugo Moser of “The Marketplace at Pirna” was the result of a clerical

error by the Dutch. (Doc. 1 at ¶ 46.) Therefore, plaintiffs contend that the Dutch government’s

conveyance of the painting to Hugo Moser was of no effect because Mr. Moser did not have a true

right of ownership or possession in the painting; it follows then, that Mr. Moser could not pass

good title to the Kress Foundation, and the Foundation could not pass good title on to defendant.

(Doc. 1 at ¶ 63). Defendant claims that plaintiffs’ asserted ownership claims explicitly depend on

this Court’s invalidation of the Dutch government’s official action when it restituted “The

Marketplace at Pirna” to Hugo Moser; as such, the Act of State would prevent such invalidation

by this Court.

i. Portrait of Wally

Plaintiffs offer United States v. Portrait of Wally, 663 F. Supp. 2d 232 (S.D.N.Y. 2009) as

authority for the proposition that (1) there is a difference between “invalidating” the Dutch

government’s restitution of the painting and “determining its effect” on present ownership rights;

and that (2) the Netherlands’ restitution of “The Marketplace at Pirna” to Mr. Hugo Moser does

not qualify as an “official act” for purposes of the Act of State doctrine. However, as the Court

discusses in detail below, the “invalidation” versus “determination of effect” distinction does not

apply to quiet title actions where the court is asked to nullify a foreign nation’s conveyances. And

Wally’s “official act” factual predicates differ from the present matter in several dispositive ways,

thus making the Ninth Circuit’s holding in the factually-similar case Von Saher v. Norton Simon

Museum of Art at Pasadena, 897 F.3d 1141 (9th Cir. 2018), far more apt persuasive authority.

In Wally, the controversy surrounded the proper ownership of a painting (‘the Wally”),

originally owned by a Jewish art collector and forcefully acquired by a Nazi dealer named

Friedrich Welz. The parties disagreed about which Jewish art collector had owned the painting

before its forceful acquisition: defendant Leopold Museum claimed the Wally had belonged to a

Jewish dentist named Heinrich Rieger who sold it under duress to Mr. Welz; plaintiff heirs claimed

that the painting had belonged to a Jewish gallery owner named Lea Bondi Jaray until Mr. Welz

stole it from her. Wally, 663 F. Supp. at 236, 239-40.

After the war, U.S. forces gained possession of the Wally, among other works of art owned

by Nazi dealer Friedrich Welz. Id. at 240. Counsel for Mr. Rieger’s heirs wrote to the U.S. forces

and to the Austrian government asking for the restitution of several paintings, but failing to

mention the Wally by name, even though the letter mentioned other desired paintings by name. Id.

The U.S. forces then released several paintings to the Austrian government to be held pending the

determination of their ownership. Id. Eventually, the Austrian government restituted the Wally to

the Rieger heirs, assuming it was part of the Rieger collection. Id. However, during this

conveyance, the Austrian government never specifically referred to or identified the Wally. Id.

Later, the Rieger heirs negotiated a sale of the Rieger collection to the Belvedere, a national

gallery owned by the Austrian government; the sale included the Wally, which again, was never

explicitly referenced. Id. at 242. Years later, an Austrian citizen named Rudolph Leopold bought

the Wally from the Belvedere, donating it to the newly established Austrian Leopold Museum in

1994. Id. at 245. The Leopold Museum loaned the Wally, along with other paintings, to the New

York Museum of Modern Art (“MoMA”) in 1997. Id. at 246. After the MoMA exhibition had

closed and the Wally was soon to be on its way back to Austria, the U.S. Government initiated a

forfeiture action on behalf of the Bondi estate, alleging that the Leopold Museum imported and/or

intended to export the Wally, while knowing that it was stolen from the Bondi estate. Id. at 246.

The Wally court began by holding that “[a]s a threshold matter, the Court is not being asked

to invalidate any action by an Austrian governmental authority, but only to determine the effect of

such action, if any, on Wally 's ownership.” Wally, 663 F.Supp. at 248. In support of this holding,

the Wally court cited W.S. Kirkpatrick & Co., Inc. v. Environmental Tectonics Corp., Intern. 493

U.S. 400 (1990), in which the Supreme Court held that “[t]he Act of State doctrine does not

establish an exception for cases and controversies that may embarrass foreign governments, but

merely requires that, in the process of deciding, the acts of foreign sovereigns taken within their

own jurisdictions shall be deemed valid.” Id. at 409-10. Plaintiffs claim that in the present matter,

as in Wally, the Court’s determination regarding the effect of government action on ownership

does not invalidate said government action, and thus does not implicate the Act of State doctrine.

However, even assuming sufficient factual similarity between Wally and the present

matter—at least where the Court is being asked to determine proper ownership of a painting

notwithstanding putative governmental action—we run into an issue. The Wally court’s attempt to

distinguish between “invalidation” and mere “determination of the effect” of a governmental

action is directly contradicted by the facts of W.S. Kirkpatrick; there, the Supreme Court found it

dispositive that, while plaintiff alleged that Nigerian government officials had unlawfully accepted

bribes in exchange for a government contract awarded to defendant, plaintiff “. . . was not trying

to undo or disregard the governmental action, but only to obtain damages from private parties who

had procured [the unlawful government contract].” Id. at 407.

In contrast, Wally and the present matter ask the Court to determine whether a foreign

government passed on good title to subsequent owners—i.e., whether the government’s

conveyance should be “undo[ne] or disregard[ed].” Id. On this point, the Supreme Court has long

held that the Act of State doctrine applies to quiet title actions that require the court to nullify a

foreign nation’s official conveyances. See Oetjen v. Central Leather Co., 246 U.S. 297, 303–04

(1918); Ricaud v. Am. Metal Co., 246 U.S. 304, 310 (1918)). Here, where the Emden plaintiffs ask

this Court to render ineffective the Dutch government’s restitution of “The Marketplace at Pirna”

to Mr. Hugo Moser and thus invalidate the Museum of Fine Art’s subsequent ownership claims,

the Act of State Doctrine is implicated.

As a second basis for the inapplicability of the Act of State doctrine, the Wally Court

pointed out that no official act of state seemed be in play because (1) the Wally was never legally

transferred to the Rieger heirs pursuant to an official Austrian government determination of the

painting’s ownership; and (2) the Austrian government did not utilize Restitution Commission

proceedings to dispose of Wally. 663 F.Supp. at 248. As already mentioned, the Wally was lumped

together with the larger Rieger collection even though the Rieger heirs never explicitly claimed it

in restitution proceedings. Thus, the Wally court held, the Austrian government’s acquisition of

the Rieger collection could not fairly be characterized as official state action determining the

Wally’s proper ownership, as the Wally was never even individually acknowledged during the

transaction. United States v. Portrait of Wally, A Painting By Egon Schiele, No. 99 CIV. 9940

(MBM), 2002 WL 553532, at *8 (S.D.N.Y. Apr. 12, 2002).

Further, because the Austrian government side-stepped authorized Restitution Commission

proceedings when it bought the Wally from the Rieger heirs then exchanged the Wally for one of

Mr. Leopold’s paintings, the court held that such acts were not “official acts” implicating the Act

of State doctrine. See id. (“The court is notably not being asked to review a decision by a

Restitution Commission regarding the restitution of Wally.”)

Here, where “The Marketplace at Pirna” was specifically requested by the Dutch

government, then restituted to Hugo Moser per the Dutch Restitution Commission’s determination

of its ownership, the Act of State doctrine is implicated; indeed, plaintiffs’ allegation that the Dutch

government misidentified the painting does not undermine the Act of State doctrine’s relevance to

the present matter, particularly where plaintiffs do not allege that the Dutch agree about the claimed

misidentification.

Finally, the Wally court found it “most important[]” that the balance of interests favored

adjudication of the claim. Id. at 248. The court reiterated, “the Act of State doctrine is intended to

prevent courts from inquiring into the validity of foreign acts where doing so would ‘embarrass or

hinder the executive in its conduct of foreign relations’ and this concern is not implicated here,

where both the executive branch actively seeks adjudication of its claim and Austrian law favors

restoration of ownership.” Id. at 248. As already mentioned, the Wally forfeiture action was

brought by the U.S. Government on behalf of the Bondi estate; clearly, the executive branch was

not concerned about the effect that its legal action would have on its conduct of foreign relations

with Austria. The U.S. government is not a party to the present matter, and certainly has not

indicated that application of the Act of State doctrine would not embarrass or hinder it in its

conduct of foreign relations with the Netherlands.

For the above reasons, the Court finds United States v. Portrait of Wally to be inapposite.

It now turns to Von Saher v. Norton Simon Museum of Art at Pasadena, 897 F.3d 1141 (9th Cir.

2018).

ii. Von Saher

In Von Saher, plaintiff was the only living heir of a Jewish Dutch art dealer who was the

victim of a forced sale of artworks to the Nazis. Id. at 1144. After the defeat of the Nazis, the

artworks were restituted to the Dutch government by allied forces. Id. In 1949, plaintiff’s family

members declined to seek restitution of the stolen art, releasing any claim they had to the artworks.

Id. at 1145. Therefore, in 1960, the Dutch government sold the artworks to a claimant named

George Stroganoff-Sherbatoff (“Stroganoff”) who claimed they had actually been stolen from him

by the Soviets; the Dutch sold the works to Stroganoff on the condition that he would agree to drop

his claims of restitution. Id. at 1147.

In the 1990s, plaintiff-heir Von Saher began seeking restitution of the artwork sold by the

Dutch to Stroganoff (and later given to the Norton Simon Museum of Art in Pasadena) alleging,

as the Emden plaintiffs do now, that the Dutch government erred by delivering the artwork to the

wrong claimant. Id. at 1146. Seeking to recover the paintings, Von Saher sought declaratory relief

and alleged conversion and various other causes of action, as do the Emden plaintiffs. Id. The

matter went before the Ninth Circuit three times, twice on appeal of the lower court’s grant of

defendant’s motions to dismiss (in 2010 and 2014), and the third and final time on appeal of the

lower court’s grant of defendant’s motion for summary judgment (in 2018). The Court will refer

to the Ninth Circuit’s 2018 ruling as “Von Saher” and to its 2014 ruling as “Von Saher II”. The

2010 ruling is not relevant to the present matter, as it does not touch on the Act of State doctrine.

One of the most important factual predicates for the Ninth Circuit’s holding in Von Saher

is the fact that the Dutch sale of the paintings to Mr. Stroganoff was pursuant to Dutch restitution

proceedings. This factual predicate was so crucial that the Von Saher II court remanded the matter

for further discovery on that point alone. Von Saher v. Norton Simon Museum of Art at Pasadena,

754 F.3d 712, 726 (9th Cir. 2014) (“If on remand, the Museum can show that the Netherlands

returned the [paintings] to Stroganoff to satisfy some sort of restitution claim, that act could

constitute a considered policy decision by a government to give effect to its political and public

interests ... and so [would be] ... the type of sovereign activity that would be of substantial concern

to the executive branch in its conduct of international affairs.”) (internal citations omitted).

Ultimately, discovery led the Ninth Circuit to conclude that the sale from the Dutch

government to Stroganoff was indeed “a part of the Dutch government’s sovereign restitution

process” and thus qualified as an “official act of the sovereign.” Von Saher, 897 F.3d at 1149

(“[e]xpropriation of private property is a uniquely sovereign act.”); see, e.g., Oetjen v. Central

Leather Co., 246 U.S. 297, 303 (1918) (applying the Act of State doctrine to governmental seizures

of property). Here, no such discovery is needed as it is undisputed that Mr. Moser received “The

Marketplace at Pirna” pursuant to the Dutch government’s sovereign restitution process.

Having found that the conveyance to Stroganoff was an official act within the Act of State

doctrine’s definition, the Ninth Circuit then simply followed Supreme Court precedent which holds

that the Act of State doctrine applies to quiet title actions that require the court to nullify a foreign

nation’s official conveyances. Von Saher, 897 F.3d at 1149 (citing Oetjen v. Central Leather Co.,

246 U.S. 297, 303–04 (1918); Ricaud v. Am. Metal Co., 246 U.S. 304, 310 (1918)). Applying the

precedent, the Ninth Circuit panel wrote,

Von Saher’s recovery hinges on whether she—not the Museum—holds good title

to the paintings. The Museum’s defense, in turn, depends on its having received

good title from Stroganoff, who forfeited his own restitution claim to the paintings

when he bought them from the Netherlands in 1966. It is therefore a necessary

condition of Von Saher’s success that the Dutch government’s conveyance of the

paintings to Stroganoff be deemed legally inoperative.

Id. at 1149.

Similarly, the Emden heirs’ recovery hinges on whether they—not the Museum of Fine

Arts—hold good title to the paintings. The Museum’s defense, in turn, depends upon it having

received good title from Samuel H. Kress, who bought the painting from Hugo Moser, who

received it as restitution from the Netherlands in 1948. It is therefore a necessary condition of the

Emden heirs’ success that the Dutch government’s conveyance of “The Marketplace at Pirna” to

Moser be deemed legally inoperative.

iii. Exceptions to the Act of State doctrine

Although there are exceptions to the Act of State doctrine, they do not apply here. First, as

the Court has already discussed in detail, the Dutch government’s restitution of “The Marketplace

at Pirna” was a sovereign act. The exception for “purely commercial acts” therefore does not apply.

See Von Saher II, 897 F.3d at 1154 (recognizing that “expropriation, claims processing, and

government restitution schemes are not the province of private citizens”). Nor does the exception

known as the “Second Hickenlooper Amendment,” codified at 22 U.S.C. § 2370(e)(2). That

exception applies only where there has been a “confiscation or other taking after January 1, 1959,

by an act of that state in violation of the principles of international law[.]” 22 U.S.C. § 2370(e)(2).

Here, the only alleged taking, which was not by defendant, occurred in 1938 during Emden’s

forced sale to a Nazi art dealer. Thus, this exception does not apply either.

iv. Policy Considerations

Even where “the validity of the act of a foreign sovereign within its own territory is called

into question, the policies underlying the Act of State doctrine may not justify its application.” W.S.

Kirkpatrick Co. v. Environ. Tectonics Corp., Int’l, 493 U.S. 400, 409 (1990). The Supreme Court

laid out three such underlying policies in Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398,

428 (1964): “[1][T]he greater the degree of codification or consensus concerning a particular area

of international law, the more appropriate it is for the judiciary to render decisions regarding it ....

[2][T]he less important the implications of an issue are for our foreign relations, the weaker the

justification for exclusivity in the political branches. [3]The balance of relevant considerations

may also be shifted if the government which perpetrated the challenged act of state is no longer in

existence.”

First, “no one has identified an international consensus regarding the invalidity of the

Dutch post-war restitution procedures.” Von Saher, 897 F.3d at 1155. If anything, the U.S. State

Department and Office of the Solicitor General expressed in their amicus brief in Von Saher that

post-war restitution proceedings in the Netherlands were “bona fide.” See Von Saher II, 754 F.3d

at 729–30 (Wardlaw, J., dissenting).

Second, the State Department and Solicitor General’s Office confirmed in their Von Saher

amicus brief that upholding the Dutch government’s restitution proceedings is important for U.S.

foreign policy:

When a foreign nation, like the Netherlands here, has conducted bona fide post-war

internal restitution proceedings following the return of Nazi-confiscated art to that

nation under the external restitution policy, the United States has a substantial

interest in respecting the outcome of the nation’s proceedings.

Von Saher, 897 F.3d at 1155 (emphasis added). This position makes practical sense. Reaching into

the Dutch government’s post-war restitution system would require sensitive political judgments

that would undermine international comity. See W.S. Kirkpatrick, 493 U.S. at 408 (underscoring

that “international comity, respect for the sovereignty of foreign nations on their own territory, and

the avoidance of embarrassment to the Executive Branch in its conduct of foreign relations” are

policies behind the doctrine).

Third, the Dutch government still exists.

Therefore, policy considerations weigh in favor of invocation of the Act of State doctrine

in this matter.

2. Laches and Statute of Limitations

The Court does not reach the laches and statute of limitations arguments as they are mooted

by the Court’s finding regarding the Act of State Doctrine.

3. Plaintiff’s Objections to Admission of Evidence

Plaintiffs object to the admission of (1) plaintiff counsel’s 2006 and 2007 demand letters

sent to the Museum of Fine Arts and (2) portions of defendants’ exhibit 10, as appended to

defendants reply in support of motion to dismiss.

As articulated above, documents that a defendant attaches to a motion to dismiss are

considered part of the pleadings if they are referred to in the plaintiff's complaint and are central

to her claim. Collins v. Morgan Stanley Dean Witter 224 F.3d 496, 498–99 (5th Cir. 2000)

(emphasis added). When a party presents “matters outside the pleadings” with a Rule 12(b)(6)

motion to dismiss, the Court has discretion to accept or to exclude the evidence for purposes of the

motion to dismiss. Isquith ex rel. Isquith v. Middle South Utilities, Inc., 847 F.2d 186, 194 n. 3 (5th

Cir.1988). However, per Fed. R. Civ. P. 12(d), if documents outside of the pleadings are placed

before a district court, and not excluded, the court must convert the defendant's 12(b)(6) motion to

one for summary judgment and afford the plaintiff an opportunity to submit additional evidentiary

material of his or her own. Carter v. Stanton, 405 U.S. 669, 671 (1972) (per curiam).

Plaintiffs did not refer to the evidence to which they object in their complaint; therefore,

the Court has not considered and will not consider such evidence at the motion to dismiss stage.

I. CONCLUSION

For the reasons set forth above and those stated on the record at the March 24, 2022,

hearing, the Court GRANTS defendant’s Motion to Dismiss without prejudice.

IT IS SO ORDERED.

SIGNED at Houston, Texas, on this the 2nd day of May, 2022.

P Chess

AH NN _ ED

KE . ELLISON

UNITED STATES DISTRICT JUDGE

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