Petition for Writ of Certiorari — Juan Carlos Emden, et al., Petitioners v. The Museum of Fine Arts, Houston

Supreme Court briefSep 23, 2024

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APPENDIX TABLE OF CONTENTS

OPINIONS AND ORDERS

Opinion, U.S. Court of Appeals for the

Fifth Circuit (May 29, 2024) .............................. 1a

Memorandum & Order, U.S. District Court,

Southern District of Texas

(Signed April 20, 2023,

Entered April 24, 2023) .................................... 30a

Memorandum & Order, U.S. District Court,

Southern District of Texas

(May 2, 2022) .................................................... 39a

REHEARING ORDER

Order Denying Petition for Rehearing,

U.S. Court of Appeals for the Fifth Circuit

(June 25, 2024) ................................................. 61a

App.1a

OPINION, U.S. COURT OF APPEALS

FOR THE FIFTH CIRCUIT

(MAY 29, 2024)

[ PUBLISH ]

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

________________________

JUAN CARLOS EMDEN;

NICOLAS EMDEN; MICHEL EMDEN,

Plaintiffs—Appellants,

THE MUSEUM OF FINE ARTS, HOUSTON,

Defendant—Appellee.

________________________

No. 23-20224

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:21-CV-3348

Before: SMITH, HAYNES, and

DOUGLAS, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

In the years leading up to World War II, the

Nazis’ persecution of European Jews forced Max

Emden to sell his three Bernardo Bellotto replica

paintings. After the war, the Monuments Men found

App.2a

those paintings in a salt mine in Austria and began

the restitution process.1 One was shipped to the

Netherlands to fulfill a claim forwarded by the Dutch

Art Property Foundation (the “SNK”) from a gallery

in Amsterdam. But the SNK omitted one key detail:

Bernard Bellotto had not painted the gallery’s version.

Failing to recognize that it had received the wrong

painting, the SNK adjudicated the competing claims

of the gallery and of a former Netherlands resident.

It determined that the latter’s claim was stronger

and shipped the painting to him in the United

States. The painting eventually made its way to the

Museum of Fine Arts in Houston (the “Museum”),

where it resides.

Plaintiffs—Juan Carlos Emden, Nicolas Emden,

and Michel Emden (collectively, the “Emdens”)—are

Max Emden’s heirs, seeking to recover the painting.

The district court dismissed their claim because of

the act of state doctrine, reasoning that any evaluation

would require it to question an action of the Dutch

government—a foreign state. It would, and that is

precisely what the act of state doctrine prohibits, so

we affirm the dismissal.

1 The Monuments Men were a group of “scholar soldiers”—

museum curators, art historians and professors, librarians,

architects, and artists who were also U.S. military officers—

acting to facilitate the restitution of art stolen by the Nazis.

App.3a

Pre- and Intra-War

The dispute centers on two paintings—one owned

by Max Emden and one by Hugo Moser—recovered

from the Nazis after World War II.

1. Emden

Emden owned three paintings by Bernardo

Bellotto, including a c. 1764 replica of Belloto’s The

Marketplace at Pirna. Because Bellotto had painted

Emden’s replica himself, it is known in art parlance

as a “By Bellotto.”

As they ascended to power, the Nazis persecuted

and restricted Jews throughout Germany, pursuing

even those non-residents who merely owned businesses

or property there. Facing Nazi-induced financial distress, Emden was forced to part with his three

paintings, selling them—at below-market prices—to

an art dealer, who immediately resold them to the

Reichskanzlei (Reich Chancellery) for inclusion in the

Führermuseum.

2. Moser

Moser was a German art dealer and collector

who purchased a replica of The Marketplace at Pirna

in 1928. Though his copy was originally sold as a “By

Bellotto,” an unknown artist—not Bellotto—had painted

it. Moser’s copy is therefore known, in art parlance,

as an “After Bellotto.”

Moser fled Germany for the Netherlands when

the Nazis came to power in 1933, bringing his After

Bellotto Pirna with him. Several years later, just

App.4a

ahead of the Nazi invasion, he fled the Netherlands,

leaving the painting with an art restorer in Amsterdam.

The painting then made its way to the Goudstikker

Gallery, from which a Nazi art dealer purchased it

for Hitler’s Führermuseum in 1942.

Post-War

In 1945, the Monuments Men found Emden’s

three Bellotto paintings in a salt mine in Austria. Six

months later, they recovered Moser’s After Bellotto

Pirna from a storage facility. The Monuments Men

transferred all four paintings to the Munich Central

Collecting Point (“MCCP”) and analyzed each painting,

attempting to ascertain each’s artist, subject matter,

and condition.

Under official American policy, the Monuments

Men returned “readily identifiable” art to claimants

through their respective allied governments.2 In the

Netherlands, those claims were received and processed

by the SNK—a foundation created by the Dutch

government. Though the SNK served as a repository

for returned artwork, the Dutch government never

decreed that the SNK owned the artworks in its

possession.3

2 For a detailed recap of the United States’s post-war

restitution processes, see Von Saher v. Norton Simon Museum

of Art at Pasadena (Von Saher I), 592 F.3d 954, 957–58, 962–63

(9th Cir. 2010).

3 According to the Emdens, “[a]t the outset, the SNK’s post-war

creation was as a foundation to serve as a repository for

returned artwork with no authority to transfer the works, and

it operated outside existing government Ministries and

departments.” The First Amended Complaint also alleges an

abbreviated, but troubled, history of the SNK, including the

App.5a

After receiving a claim from the Goudstikker

Gallery for the After Bellotto Pirna, the SNK submitted

a request to the MCCP. Crucially, though, the SNK’s

request did not specify which version of the painting

the Gallery had claimed. Instead, it merely referred

to the Pirna as one “by” Bellotto. With only one By

Bellotto Pirna at the MCCP, the Monuments Men

responded to the SNK’s request by shipping Emden’s

painting.

Upon its arrival in the Netherlands, Dutch

Lieutenant Colonel Vorenkamp signed a custody receipt

confirming its delivery to the SNK.4 But, before it

could restitute the painting to the Gallery, the SNK

received a conflicting claim from Moser. After adjudicating the conflict in Moser’s favor, the SNK

shipped him what it believed was the After Bellotto

Pirna—which was, in actuality, Emden’s By Bellotto

Pirna.5

It was not until 1949 that the Monuments Men

discovered their error—they had sent Emden’s By

Bellotto Pirna to fulfill a claim for Moser’s After

Bellotto Pirna. The Monuments Men requested the

Netherlands to return the painting, but it was too

late: The painting was no longer in the SNK’s custody,

arrest of its head for fraud and grifting, a serious lack of

expertise, and a “downright chaotic” administration.

4 That receipt conditioned the delivery of the painting on the

Netherlands’s agreeing to restore any object that had been

delivered to it by mistake.

5 In 1952, Moser sold the By Bellotto Pirna to the American

collector Samuel Kress, who, a year later, loaned the By

Bellotto Pirna to the Museum, converting the loan into a

donation in 1961.

App.6a

and the Dutch government had begun winding down

the entire foundation. So, the request went unfulfilled.

Modern Restitution Efforts

In recent years, the Emdens have attempted to

restitute all three Bel-lotto paintings.

In 2019, the German Advisory Commission on

the Return of Cultural Property Seized as a Result of

Nazi Persecution, Especially Jewish Property (the

“Commission”), reviewed the Emdens’ claim for restitution of the other two Bellotto paintings. The

Commission’s detailed ruling was unequivocal: The

Nazis had caused Emden’s financial hardship, forcing

him to sell the paintings. Additionally, the Commission

concluded that the Monuments Men had erroneously

restituted Emden’s By Bellotto Pirna to the Netherlands.

Perceiving the Commission’s conclusion as confirming Max Emden’s ownership of the painting at

the Museum, the Emdens sued the Museum. The

district court dismissed their first complaint without

prejudice, relying on the act of state doctrine.6 Though

their amended complaint attributed more of the

errors to the SNK than to the Dutch government, the

court again applied the act of state doctrine, this

time dismissing with prejudice.7

6 See generally Emden v. Museum of Fine Arts, Hous., No. 4:21CV-3348, 2022 WL 1307085 (S.D. Tex. May 2, 2022).

7 See generally Emden v. Museum of Fine Arts, Hous., No. 4:21CV-3348, 2023 WL 3571973 (S.D. Tex. Apr. 24, 2023).

App.7a

Standard of Review

We review a Federal Rule of Civil Procedure

12(b)(6) dismissal under the act of state doctrine de

novo. Spectrum Stores, Inc. v. Citgo Petro. Corp., 632

F.3d 938, 948 (5th Cir. 2011) (citing Lane v. Halliburton, 529 F.3d 548, 557 (5th Cir. 2008)). “In undertaking this review, we take the well-pled factual

allegations of the complaint as true and view them in

the light most favorable to the plaintiff.’” Id. (quoting

Lane, 529 F.3d at 557).8 Still, the plaintiff must

“state a claim to relief that is plausible on its face.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting

Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570 (2007)).

Upon a party’s providing notice of an issue concerning

the laws of a foreign state, we “may consider any

relevant material or source”— including those “not

submitted by a party”—about that foreign state’s

laws. FED. R. CIV. P. 44.1; see also Access Telecom,

Inc. v. MCI Telecomms. Corp., 197 F.3d 694, 713 (5th

Cir. 1999).

Act of State Doctrine

A judicial creation rooted in separation-of-powers

principles, the act of state doctrine bars American

courts from “sit[ting] in judgment on the acts of the

government of another [state], done within its own

8 Though we may not consider other materials beyond the

pleadings, we may examine “any documents attached to the

complaint, and any documents attached to the motion to

dismiss that are central to the claim and referenced by the

complaint.” Lone Star Fund V (U.S.), L.P. v. Barclays Bank

PLC, 594 F.3d 383, 387 (5th Cir. 2010) (citation omitted).

App.8a

territory.”9 It “limits, for prudential rather than

jurisdictional reasons, the adjudication in American

courts of the validity of a foreign sovereign’s public

acts.”10 The doctrine “is a vital rule of judicial

abstention in the field of foreign relations.”11 That is

because “juridical review of acts of state of a foreign

power could embarrass the conduct of foreign relations

by the political branches of the government.”12

The act of state doctrine applies “even if the

defendant is a private party, not an instrumentality

of a foreign state, and even if the suit is not based

specifically on a sovereign act.”13 When applicable, it

“provides . . . a substantive defense on the merits.”14

9 Spectrum Stores, 632 F.3d at 954 (quoting Underhill v.

Hernandez, 168 U.S. 250, 252 (1897)); see also W.S. Kirkpatrick

& Co. v. Envt’l Tectonics Corp., Int’l, 493 U.S. 400, 405 (1990);

Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401 (1964),

superseded in part by 22 U.S.C. § 2370(e)(2); Ricaud v. Am.

Metal Co., 246 U.S. 304, 309 (1918); see generally GEORGE A.

BERMANN & DONALD E. CHILDRESS, TRANSNATIONAL LITIG. IN A

NUTSHELL 179–93 (2d ed. 2021); RESTATEMENT (FOURTH) OF

FOREIGN RELATIONS LAW § 441 (AM. L. INST. 2024).

10 Walter Fuller Aircraft Sales, Inc. v. Republic of Phil., 965

F.2d 1375, 1387 (5th Cir. 1992) (citing W.S. Kirkpatrick, 493

U.S. at 404); see also Banco Nacional, 376 U.S. at 418 (quoting

Ricaud, 246 U.S. at 309) (The act of state doctrine “does not

deprive the courts of jurisdiction once acquired over a case.”);

Republic of Austria v. Altmann, 541 U.S. 677, 700 (2004).

11 Indus. Inv. Dev. Corp. v. Mitsui & Co., 594 F.2d 48, 55–56

(5th Cir. 1979).

12 Spectrum Stores, 632 F.3d at 954 (quoting First Nat’l City

Bank v. Banco Nacional de Cuba, 406 U.S. 759, 765 (1972)).

13 Geophysical Serv., Inc. v. TGS-NOPEC Geophysical Co., 850

F.3d 785, 796 (5th Cir. 2017) (quoting Callejo v. Bancomer, S.A.,

App.9a

III

The Emdens contend that the By Bellotto Pirna

belongs to them because Moser never obtained good

title to it. Passing judgment on the merits of that

claim requires us first to resolve whether the act of

state doctrine applies. Specifically, we must determine

whether the SNK’s transmission of the painting was

an act of the Dutch government.15

According to the Emdens, the act of state doctrine

does not apply for four reasons: First, there was no

act of state because the SNK believed it was restituting

the After Bellotto Pirna. Second, the SNK illegitimately,

and therefore, necessarily, unofficially delivered the

By Bellotto Pirna to Moser. Third, U.S. and Dutch

foreign policy favors restituting stolen art. Fourth,

the Dutch government’s acts did not occur exclusively

within its territorial boundaries.

We reject each of those theories. First, the SNK’s

shipping of the misidentified painting is an act of

state. Second, the foundation had sufficient governmental trappings—and has been recognized as an

official actor—such that we cannot call its actions

unofficial. Third, the prudential concerns laid out in

Banco Nacional tilt in favor of finding an implied

negative foreign relations impact. Fourth, all the

actions necessary to transfer the painting to Moser

764 F.2d 1101, 1113 (5th Cir. 1985)).

14 Spectrum Stores, 632 F.3d at 949 (quoting Altmann, 541

U.S. at 700).

15 That the Netherlands is not a party to the suit is of no

moment. See supra note 13 and accompanying main text.

App.10a

occurred within the Netherlands. Therefore, the district

court properly applied the act of state doctrine.

Whether There Was an Act of State

The SNK knew only that it had a replica of

Bellotto’s Marketplace at Pirna. Ignorant of whether

the copy was a By Bellotto or an After Bellotto, the

SNK unknowingly assumed it was the latter when

adjudicating its ownership and shipping the painting

to Moser. Therefore, the Emdens aver, the SNK did

not undertake any action with respect to the By

Bellotto Pirna.

The district court, rejecting that contention,

explained that “the Dutch government[‘s] misidentif[ying] the painting does not undermine the Act of

State doctrine’s relevance to the present matter”

because any ruling still must ask “whether the

[foreign] government’s conveyance should be ‘undone

or disregarded.’”16

On appeal, the Emdens maintain that the misidentification precluded any action by the SNK on

the By Bellotto Pirna. Relying on several in- and outof-circuit cases, they submit that the act of state

doctrine bars only the review of an act’s validity—not

its effect.

The Emdens primarily rely on Geophysical Service

for the proposition that our court evaluates the

“effect” of an action separately from its “validity.” In

that case, a Canadian company sued its Texas-based

16 2022 WL 1307085, at *5–6 (quoting W.S. Kirkpatrick, 493

U.S. at 407) (cleaned up); see also id. (citing Oetjen v. Cent.

Leather Co., 246 U.S. 297, 303–04 (1918); Ricaud, 246 U.S. at

310).

App.11a

competitor, alleging violations of U.S. copyright law

by, inter alia, importing copies of the company’s

seismic line data. 850 F.3d at 788–89. But the

competitor received that data from a Canadian agency

that was authorized, under Canadian law, “to release

it to members of the public upon specific request.” Id.

at 788. In defense, the competitor asserted that the

“first-sale doctrine” applied and that the act of state

doctrine prevented judicial inquiry into whether its

copy was “lawfully made.” Id. at 793; 17 U.S.C. § 109.

The district court agreed, reasoning that any finding

to the contrary would have the effect of “deciding

that a foreign government acted unlawfully.” 850

F.3d at 796.

We reversed, clarifying that the doctrine did not

bar review of issues collateral to an act of state.

“[E]ven if . . . the copies were not ‘lawfully made under

[U.S. copyright law],’ that . . . determination [would]

not speak to the validity of the Canadian government’s

actions . . . . ” Id. at 797. Nor would that determination

speak to the legal effectiveness of the agency’s transmitting that data to third parties. Instead, it would

resolve only questions of liability arising from that

third party’s using the data in a way that violates U.S.

distributing copies of the seismic data—did not purport

to insulate the recipients of those copies from liability

under U.S. copyright law. So, holding a recipient liable

for copyright infringement would resolve only the

“effect” of the Canadian agency’s act in the United

States and would not question its validity.

The Emdens interpret Geophysical Service as

going further, though. In their view, it adopts United

States v. Portrait of Wally, 663 F. Supp. 2d 232

App.12a

(S.D.N.Y. 2009), in full, such that we can, and must,

review any effect of an act of state. See Geophysical

Serv., 850 F.3d at 797.

In Portrait of Wally, the New York district court

traced a detailed history of that painting’s provenance—

one not unlike the By Bellotto Pirna’s. Bondi, a

European Jew, allegedly sold the painting under

duress in the prelude to World War II. 663 F. Supp.

2d at 237–39. The U.S. government later recovered

the painting and transferred it to the Austrian Federal

Office for the Preservation of Historical Monuments

(“BDA”). Id. at 240.17 Subsequently, the BDA erroneously restituted Wally to the claimant for a

different piece of art, entitled Portrait of his Wife. Id.

at 241. Later that same year, an Austrian national

gallery bought Wally under the name Portrait of a

Woman. Id.

Four years later, a collector bought Wally, under

its actual name, from the national gallery and later

sold his collection to the Leopold Museum in Vienna.

Id. at 243–45.18 In 1996, the Leopold loaned Wally to

the Museum of Modern Art in the United States. Id. at

246. After the exhibit ended—but before the Museum

of Modern Art shipped Wally back—the United States

brought a forfeiture action against the painting. Id.

17 Like the SNK faced difficulties in differentiating between

the After and By Bel-lotto Pirnas, the BDA struggled to tell

Wally apart from the painter’s Portrait of his Wife. See Portrait

of Wally, 663 F. Supp. 2d at 240–42.

18 As part of its act of state defense, the Leopold alleged that

the Austrian government had to approve both the national

gallery’s purchase and sale of Wally. Id. at 248.

App.13a

The district court rejected the act of state

defense, offering three rationales. First, it held that

it was “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.” Id. at 248 (citing W.S. Kirkpatrick, 493

U.S. at 409–10). Second, it cast doubt on any claims

that the “approvals” were official acts as “the [Leopold]

has submitted nothing to show that the BDA, the

Austrian Ministry of Finance, or the Austrian Federal

Ministry of Education had any authority to dispose of

artwork other than through the Restitution Commissions.” Id. (cleaned up). Third, “and perhaps most

importantly, the [Leopold had] offer[ed] nothing to

alter [the] determination [made in an earlier denial

of the motion to dismiss] that the balance of interests

favors adjudication of this action.”19

If Portrait of Wally bound us, the Emdens would

be correct—the act of state doctrine would not bar an

inquiry into whether the Museum had converted the

By Bellotto Pirna. But we and the Emdens read

Geophysical Service differently. True, as part of its

discussion of the act of state doctrine, Geophysical

Service noted that Portrait of Wally’s holding was

“persuasive” and even analogized to it. 850 F.3d at

797. Yet that does not end the matter. Similarity as

19 Id. (citing United States v. Portrait of Wally, A Painting By

Egon Schiele, No. 99 CIV. 9940, 2002 WL 553532, at *9

(S.D.N.Y. Apr. 12, 2002) (“An inquiry into the BDA’s shipment

of a painting under the post-war Austria regime would not

impinge upon the executive’s preeminence in foreign relations,

particularly where the restoration of ownership has always

been a professed goal of Austrian law and where it is the

executive branch itself that brings this forfeiture action . . . . ”)).

App.14a

to outcome is in no way an endorsement of the ratio

decidendi underlying Portrait of Wally. Geophysical

Service’s analogy merely assumed, without deciding,

that the New York district court’s “considering the

rightful ownership of the portrait” would not “invalidate any action by [the foreign governmental authority].” Id. (cleaned up). On the other hand, in this

case, we could consider whether the Emdens are the

rightful owners only by calling into question the

validity of the Dutch government’s actions when the

SNK sent the painting to Moser. That we may not do

so is confirmed by precedent in our own circuit, our

sister circuits, and the Supreme Court.

In Walter Fuller Aircraft Sales, the act of state

doctrine did not bar us from resolving an ownership

dispute over a jet aircraft—even though the defendants

were foreign governments. 965 F.2d at 1388. We so

ruled because the case “ha[d] nothing to do with title

to the aircraft, but [wa]s instead a damages action

arising from a contract breach.” Id. So there was no

need to “adjudicate the validity of any of the public

acts” of the defendant governments. Id. Indeed, as

Walter Fuller explained, “all the public acts and

decisions cited by the defendants may be valid and

yet the [government party] still may have breached

the contract.” Id.

In Celestin v. Caribbean Air Mail, Inc., 30 F.4th

133 (2d Cir. 2022), the court similarly reversed the

dismissal of an antitrust claim related to price-fixing

for remittances and phone calls between the United

States and Haiti. The act of state doctrine did not

apply because “no official act of Haiti must be deemed

invalid for liability to attach under federal law.” Id.

App.15a

at 135; see also id. at 142–43 (citing W.S. Kirkpatrick,

493 U.S. at 405–06).

The act of state doctrine did not bar review in

Walter Fuller and Celestin because the issues presented

were collateral to the validity or legal effect of the

foreign state act. At issue in Celestin was the unlawful

motivation behind the foreign state action—not its

validity. Id. at 144.20 Similarly, Walter Fuller dealt with

the enforcement of the terms of a valid contract—not

the question of whether the parties, one of which was a

foreign state actor, had the capacity to enter that

contract in the first place. See 965 F.2d at 1388. So, as

in Geophysical Service, the act of state doctrine did not

bar review.

But those claims are quite different from the

Emdens’. The act of restitution legally established

the owner and possessor of the By Bellotto Pirna.

The SNK could not have sent the painting without

concurrently determining its rightful owner. Thus,

any evaluation of the effect of the SNK’s act intrinsically

implicates its validity.

The decision in W.S. Kirkpatrick puts the final

nail into the coffin of the Emdens’ theory. Per the

Supreme Court, the act of state doctrine applies

“when a court must decide—that is, when the outcome

of the case turns upon—the effect of official action by

a foreign sovereign.” 493 U.S. at 406 (second emphasis

20 See also 30 F.4th at 140 (declining to apply the act of state

doctrine even after “assum[ing] that a foreign state’s official

acts executed within that state’s territory are valid in that they

have the legal effects—like transfers of title, assumptions or

repudiations of contractual obligations, and grants of public

authority—that they purport to have”).

App.16a

added). That is fundamentally incompatible with the

reasoning underlying Portrait of Wally. So, like the

district court, we decline to adopt the ratio decidendi

of Portrait of Wally.

The SNK shipped the By Bellotto Pirna to

Moser. Any adjudication of the shipping’s effect on

the painting’s ownership would call into question the

validity of that act.

The Emdens’ first claim fails.

Whether the Act Was Official

The Emdens next assert that, even if the SNK

“acted” by delivering the By Bellotto Pirna to Moser,

the SNK lacked state-granted legitimacy, making its

act unofficial: Not only did the Dutch government

never give the SNK official authority to transfer any

paintings, but also the SNK arose from a morass of

laws and found legal clarity only in those cases it

appealed to the courts and official ministries.

Further, the Emdens assert, the Dutch State

Secretary for Education, Culture, and Science has

since renounced the SNK, calling it “not a decisionmaking body” and explaining that the Dutch government only considers “a restitution case settled if

the claim for restitution has consciously and deliberately resulted in a settlement or if the claimant has

waived the claim for restitution.”

The Museum responds to the alleged renunciation

by averring that those attributed statements are

conclusory and unsupported, a position the district

court found compelling. 2023 WL 3571973, at *2. We

concur. The Emdens’ pleadings lack sufficient support

to assert plausibly that the Dutch government has

App.17a

renounced the SNK. See Iqbal, 556 U.S. at 678

(quoting Twombly, 550 U.S. at 557).

1. The Dutch Royal Decrees and the Von

Saher Trilogy

As for the SNK’s alleged illegitimacy, we turn to

our sister court’s thorough analysis of Dutch Royal

Decrees E100 and E133 in the Von Saher trilogy to

refute that position.

At the end of World War II, the Dutch government

issued Royal Decrees E100 and E133: Royal Decree

E100 “established a Council for Restoration of Rights

(‘the Council’), with broad and exclusive authority to

declare null and void, modify, or revive ‘any legal

relations that originated or were modified during

enemy occupation of the [Netherlands].’” Von Saher

v. Norton Simon Museum of Art at Pasadena (Von

Saher III), 897 F.3d 1141, 1144 (9th Cir. 2018)

(alteration in original). “The Council had the exclusive

power to order the return of property and to restore

property rights to the original Dutch owners.” Id. Royal

Decree E133 permitted the Netherlands to “expropriate

enemy assets in order to compensate the Netherlands

for losses it suffered during World War II” and “automatically passe[d]” enemy property “in ownership to

the State . . . . ” Id. at 1145.

Combined, those two decrees created a system

by which the Dutch government automatically expropriated Dutch property stolen by the Nazis under

E133 and then undid that expropriation and revested rights in the original owner or his/her heir(s)

under E100.21 Until its dissolution, the SNK handled

21 See Lars van Vliet, The Dutch Postwar Restoration of Rights

App.18a

the restitution process under these decrees. See Von

Saher v. Norton Simon Museum of Art at Pasadena

(Von Saher II), 754 F.3d 712, 717–18 (9th Cir. 2014).

In the Von Saher trilogy, the Ninth Circuit

thrice ruled on a dispute like the one before us. Von

Saher was the only surviving heir of Jacques Goudstikker. Von Saher I, 592 F.3d at 959. The Norton

Simon Museum had obtained a diptych painted by

Lucas Cranach the Elder, which Von Saher asserted

had been looted by the Nazis from Goudstikker’s

collection. Id. Then, after the war, the Allies sent the

diptych to the MCCP, and it was returned to the

Netherlands. Id. But “after restitution proceedings in

the Netherlands, the Dutch government delivered

the two paintings to” another claimant in the 1960s.

Id.

In Von Saher III, the court affirmed the summary

judgment for the museum on act-of-state grounds.

897 F.3d at 1156. The court focused its analysis on

“whether the conveyance constituted an official act of

the sovereign.” 897 F.3d at 1149 (cleaned up). As it

explained, “the Netherlands passed Royal Decrees

E133, to expropriate enemy property, and E100, to

administer a system through which Dutch nationals

filed claims to restore title to lost or looted artworks.”

Id.

Then, the court confirmed that “[e]xpropriation

of private property is a uniquely sovereign act.” Id.

at 1150. It further agreed with the Norton Simon

Museum’s contention that the “Netherlands considered

itself the lawful owner of the works sold to [Nazi

Regime Regarding Movable Property, 87 LEGAL HIST. REV. 651,

651 (2019).

App.19a

Reichsmarschall Hermann Goering] and acted as

their true owner” when it “agree[d] to convey them

to” the latter claimant. Id. (cleaned up). “Considered

holistically, the administration of E100 and E133,

the settlement with [V]on Saher’s family, and the

conveyance of the Cranachs to [the latter claimant]

in consideration of his restitution claim constitute an

official act of state . . . . ” Id. at 1151.22

There is no reason to reach any different conclusion

here. The SNK effectuated E100 and E133 until its

dissolution, meaning that its “administration of [those

decrees] . . . and the conveyance of the [By Bellotto

Pirna] to [Moser] in consideration of his restitution

claim constitute[d] an official act of state . . . . ” Id.

That the court in Von Saher III had additional

grounds on which it could support its decision that

the restitution was an official act, see supra note 22,

and that the ultimate restitution process it described

occurred after the SNK folded has no impact on our

analysis.23 The SNK was the de facto arm of the

Dutch government handling restitution, and both

22 The Ninth Circuit also considered the impact of the Dutch

Court of Appeals’s 1999 refusal to restore Von Saher’s rights to

the paintings, 897 F.3d at 1151, and the Dutch government’s

2004 “binding decision on [the] restitution claim that . . .

concluded that the [V]on Saher claim was ‘settled’ by the 1999

‘final decision’ of the Court of Appeals,” id. at 1153 (emphasis

omitted).

23 Similarly, that the Von Saher trilogy never dealt with any

issues of mistaken identity—the latter claimant and Von Saher

both asserted ownership over the same piece of art and the

Dutch government ruled on that same piece of art—does not

affect its analysis of the Royal Decrees.

App.20a

expropriation and restitution are expressly governmental actions.24

The Emdens instead point to Von Saher III’s

discussion of the Dutch government’s 2001 Restitution

Committee, contending that we should adopt that

analysis alone and hold that the SNK’s determination

was similarly unofficial. See id. at 1152–53. But their

comparison is inapt.

The Dutch government did change its approach

to restitution in 2001. Id. at 1152. But

the new restitution policy was not an official

pronouncement that the previous Dutch

policy was however invalid. Nor was the

new policy established to re-examine old

cases. Far from it, the new policy categorically

did not apply to “settled cases,” defined as

those in which “either the claim for restitution

resulted in a conscious and deliberate settlement or the claimant expressly renounced

his claim for restitution.”

Id. The new committee merely recommended to the

State Secretary actions to take on new restitution

claims. Id. Von Saher claimed that such recommendations were subsequent acts of state, but the

Ninth Circuit disagreed: They were purely advisory,

which meant they were not acts of state. Id. at 1153

(citations omitted).

Contrary to the Emdens’ claims, that new

approach to restitution has no impact on our review of

the SNK’s actions here. Once the SNK decided to

24 See Von Saher III, 897 F.3d at 1150 (citing Oetjen, 246 U.S.

at 303); id. at 1154.

App.21a

ship the By Bellotto Pirna, it did so. It did not need

the Dutch State Secretary to approve its decision.

Thus, the SNK’s decisions were not advisory; they

were executory.

2. Alternate Grounds

Even if we chose not to rely on Von Saher III

and the Royal Decrees, we would still affirm.

The district court ruled that a sentence from the

Short General History portion of the 1998 “Origins

Unknown report” on the SNK indicated that it was

an official actor because it had been “set up by [both]

the Ministry of Education, Arts[,] and Sciences and

the [M]inistry of Finance.” 2023 WL 3571973, at

*3.25 The Emdens respond by suggesting that the

historical context of the SNK—namely, that it was a

“separate organization” from the Ministries and that

it was not funded by them—demonstrates that the

district court erred. Further, they contend that the

court gave improperly short shrift to the First Amended

Complaint’s allegations.

But the Origins Unknown report includes not

only the “set up” phrase. It also details how the SNK

25 The Origins Unknown project was created by the Dutch

government “to trace the original owners of the artwork in [the

Dutch government’s] custody.” Von Saher II, 754 F.3d at 717;

see generally EKKART COMM., ORIGINS UNKNOWN REPORT ON

THE PILOT STUDY INTO THE PROVENANCE OF WORKS OF ART

RECOVERED FROM GERMANY AND CURRENTLY UNDER THE

CUSTODIANSHIP OF THE STATE OF THE NETHERLANDS (Apr.

1998). The Emdens quoted the report in their amended

complaint, and the museum attached it to the motion to

dismiss, making the district court’s and our consideration of the

entire document proper. See Lone Star Fund V, 594 F.3d at 387.

App.22a

worked within the Dutch government’s post-war

restitution program. A body set up by the government,

operating within it, and exercising governmental

powers—even if not funded by it—is best categorized

as an official actor. The SNK meets those criteria.

The pleadings further support that understanding.

They state that the SNK was the restitution agency

for the Netherlands: It could request allegedly Dutch

art from the MCCP; the foundation’s representative

was a Dutch military officer, and he signed off on behalf

of the government; and the SNK submitted Dutch

Declaration Form 7056—an official Dutch government

form—to claim paintings from the MCCP. Set up as it

was and exercising its powers as it did, the SNK was an

official actor.26

The Emdens’ second claim fails.

Whether There Would Be a Negative Impact

on Foreign Relations

The Emdens contend, third, that the consensus

between U.S. and Dutch foreign policies supports our

not applying the act of state doctrine. They point to

the U.S. government’s advocating for the return of

looted art to victims, and, more broadly, to the U.S.’s

and Netherlands’s embrace of the Washington Prin26 We make that determination, of course, for the sake of this

case only. We do not claim competence to evaluate the legal

structure of a foreign government if such is disputed.

Even accepting, arguendo, that the Dutch government has

disavowed the SNK in some way, the Emdens lack sufficient

citations to suggest that the SNK was not an official actor in

the 1940s. If they care to do so, they likely must pursue such a

claim in the Netherlands.

App.23a

ciples.27 Thus, they contend, even if the SNK performed an official act in shipping the By Bellotto

Pirna, “the policies underlying the . . . doctrine may

not justify its application.”28

The Museum offers two rebuttals. First, it points

to the Dutch government’s modern-day process for

revoking post-war restitution decisions. In its telling,

the failure to use that process suggests that government’s implicit endorsement of the SNK’s restitution decision. Second, the Museum contends the policies

underlying the act of state doctrine explicated in

Banco Nacional, and quoted in Von Saher III, support

applying the doctrine. Those policy considerations

are

(1) The 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) The 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

27 See U.S. DEPARTMENT OF STATE, WASHINGTON CONFERENCE

PRINCIPLES ON NAZI-CONFISCATED ART (1998), https://www.

state.gov/washington-conference-principles-on-nazi-confiscatedart/.

28 Von Saher III, 897 F.3d at 1155 (quoting W.S. Kirkpatrick,

493 U.S. at 409); see also Geophysical Serv., 850 F.3d at 797

(“We are unable to see . . . how passing on TGS’s first sale

defense will ‘imperil the amicable relations between governments

and vex the peace of nations.’” (quoting Jimenez v. Aristeguieta,

311 F.2d 547, 558 (5th Cir. 1962))).

App.24a

relevant considerations may also be shifted

if the government which perpetrated the

challenged act of state is no longer in

existence.[29]

In Von Saher III, all three policy considerations

weighed in favor of applying the act of state doctrine:

There was no “identified . . . international consensus

regarding the invalidity of the Dutch post-war

restitution procedures,” and “the State Department

and Solicitor General’s Office confirmed . . . that upholding the Dutch government’s actions is important

for U.S. foreign policy.” Id. at 1155. Further, the

Dutch government had “been in continuous existence

since the relevant acts of state.” Id. at 1156.

Here, the second consideration may tilt slightly

against applying the act of state doctrine. Still, the

other two outweigh the second. So, the policy

considerations encourage the application of the doctrine.

As was true in Von Saher III, the Emdens have

not alleged any form of codification concerning the

area of law. But, they contend the respective governments have reached a semblance of a consensus on

international restitution law with the Washington

Principles: The United States has called out American

museums for blocking restitution through the use of

affirmative defenses in contravention of the Washington

Principles;30 the Dutch government has joined the

29 Von Saher III, 897 F.3d at 1155 (quoting Banco Nacional,

376 U.S. at 428) (cleaned up).

30 U.S. policy includes the following tenets:

(1) a commitment to respect the finality of

‘appropriate actions’ taken by foreign nations to

facilitate the internal restitution of plundered art;

App.25a

United States in adopting the Washington Principles;

and the Dutch government has even changed the

Dutch art restitution policy to favor museums over

individual victims no longer. We read those allegations

together to assert that our foreign relations will be

immune from, if not benefited by, a review for consistency with the Washington Principles.

Still, consensus regarding the Washington Principles does not equate to consensus casting doubt on

the Dutch post-war restitution process. The closest

the Emdens come to making such an allegation is

where they describe the United States as having

“criticized as contrary to the Washington Principles

the Dutch government’s restitution analysis for adding

in a new ‘balancing’ test.” First Am. Compl. ¶ 79

(emphasis added). In other words, even assuming

that the restitution decisions may not have been “just

and fair solutions” under the Washington Principles,

the Emdens have still not shown that they were

invalid at the time they were made.

We turn to the second consideration. Read charitably, but see supra note 26, the Emdens claim that

(2) a pledge to identify Nazi-looted art that has not

been restituted and to publicize those artworks in

order to facilitate the identification of prewar owners

and their heirs; (3) the encouragement of prewar

owners and their heirs to come forward and claim

art that has not been restituted; (4) concerted efforts

to achieve expeditious, just and fair outcomes when

heirs claim ownership to looted art; (5) the

encouragement of everyone, including public and

private institutions, to follow the Washington

Principles; and (6) a recommendation that every

effort be made to remedy the consequences of forced

sales.

App.26a

the Dutch government has disavowed the SNK and

its restitution proceedings. Thus, the Emdens’ claim

may differ from Von Saher’s claim in that upholding

the Dutch government’s actions is “[un]important for

U.S. foreign policy.” 897 F.3d at 1155. Whether the

Emdens have sufficiently pleaded that fact, though, is

irrelevant. The Dutch government still exists, so, as in

Von Saher III, the third factor tilts towards our

applying the act of state doctrine.

Therefore, though the United States and the

Netherlands have expressed a desire to restitute

stolen art properly, the policy justifications underlying

the act of state doctrine still justify our applying it

here. The Emdens have pleaded little-to-no codification

concerning, or consensus regarding, the validity of

the SNK’s decisions; the Dutch government still

exists; and the Dutch have not sought to disclaim the

SNK’s actions regarding the By Bellotto Pirna nor

proceeded through the Netherlands’s alternative

recovery process for wrongly restituted art. We conclude

that adjudicating the Emdens’ claim could create a

negative impact on foreign relations, even if a limited

one. And that is exactly what the act of state doctrine

prohibits.

The Emdens’ third claim fails.

D. Whether the Act Was Extraterritorial

Fourth, the Emdens assert that the Dutch government did not act solely within the Netherlands. The

By Bellotto Pirna moved from Austria to the MCCP,

to the Netherlands, to the United States—all, the

Emdens claim, in a single transaction. Because the

act of state doctrine applies only to a sovereign’s “act

within its own boundaries,” Ricaud, 264 U.S. at 310,

App.27a

they contend that the multi-national nature of the

transaction prevents the doctrine’s application.

True, the act of state doctrine includes a territoriality requirement. American courts may, where

otherwise proper, sit in judgment on acts of foreign

governments that occurred in the United States. See

Geophysical Serv., 850 F.3d at 796 (citing W.S.

Kirkpatrick, 493 U.S. at 405). But that is not what

happened here. The sole extraterritorial action was the

ultimate delivery of the By Bellotto Pirna to Moser.

Even if we focus only on the shipment of the painting—

not the adjudication of the competing claims—the

shipping occurred in the Netherlands. Therefore, the

territoriality requirement is met.

The Emdens cite Maltina Corp. v. Cawy Bottling

Co., 462 F.2d 1021 (5th Cir. 1972), to contend that

the act of state doctrine does not bar claims where

the property sought is sited in the United States.

That case focused on whether Cuba’s expropriation of

a beer and “malta” company’s assets included its

United States trademark. 462 F.2d at 1023. We ruled

that the act of state doctrine did not bar our review

of that expropriation because “trademarks registered

in this country are generally deemed to have a local

identity—and situs—apart from the foreign manufacturer.” Id. at 1026 (internal quotation marks and

citation omitted).

But those facts make the Emdens’ claims entirely

distinguishable. The “act” here occurred purely in the

Netherlands because the “act” was the shipping of

the By Bellotto. In other words, the conveyance

“c[a]me to complete fruition” in the Netherlands. Id.

at 1028. Thus, the Emdens’ claim is more like the

expropriation of sugar that occurred in Banco Nacional

App.28a

than like the transfer of the trademark in Maltina.

Compare Maltina, 462 F.2d at 1028, with Banco

Nacional, 376 U.S. at 413–15.

The Emdens’ fourth claim fails.

Alternatively, the Emdens ask us to reverse the

dismissal of their Declaratory Judgment Action alleging

Texas state law claims. They contend that, even if

the act of state doctrine prevents their recovery of

the By Bellotto Pirna, they still should be able to

pursue declaratory relief.

But their request shows exactly why we must

affirm the district court’s ruling on this too. The

Emdens request a declaration that they are the “sole,

joint owners of the” By Bellotto Pirna and that the

Museum’s possession constitutes conversion and theft

under Texas state law. If we allowed that claim to go

forward, and if the Emdens prevailed, the declaratory

judgment would inherently cast doubt on the validity

of the Dutch government’s actions. Worse, it would

undercut our application of the act of state doctrine

while leaving the Emdens without recompense.

The Emdens’ fifth claim fails.

*****

The most straightforward and charitable reading

of the Emdens’ complaint inevitably requires a ruling

by a U.S. court that the Dutch government invalidly

sent Moser the By Bellotto Pirna. The Emdens may

be right: The Monuments Men may have improperly

sent the By Bellotto Pirna to the SNK; the SNK may

have unjustifiably sent Moser the By Bellotto Pirna

App.29a

even though he had a claim to only the After Bellotto

Pirna; and the Museum may be violating the Washington Principles by refusing to return the painting

to the Emdens.

But, per the act of state doctrine, it is not our job

to call into question the decisions of foreign nations.

As pleaded, the SNK’s shipping Moser the By Bellotto

Pirna is an official act of the Dutch government. The

validity and legal effect of that act is one that we

may not dispute.

The judgment of dismissal is AFFIRMED.

App.30a

MEMORANDUM & ORDER, U.S. DISTRICT

COURT, SOUTHERN DISTRICT OF TEXAS

(SIGNED APRIL 20, 2023,

ENTERED APRIL 24, 2023)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

________________________

JUAN CARLOS EMDEN ET AL,

Plaintiffs,

THE MUSEUM OF FINE ARTS, HOUSTON,

Defendant.

________________________

Civil Action No. 4:21-CV-3348

Before: Keith P. ELLISON,

United States District Judge.

MEMORANDUM & ORDER

Pending before the Court is Defendant’s Motion

to Dismiss Plaintiffs’ First Amended Complaint and

Plaintiffs’ Motion to Disqualify. (ECF Nos. 45, 49).

The Court held a hearing on Defendant’s Motion to

Dismiss on February 23, 2023. At that hearing, the

Court took the Motion under advisement. After considering the Motion, the Parties’ briefs, oral arguments,

and all applicable law, the Court now determines

App.31a

that Defendant’s Motion (ECF No. 45) should be

GRANTED WITH PREJUDICE and provides this

Memorandum & Order to document its rulings and

reasoning.

BACKGROUND

The factual background of the dispute is set

forth in the Memorandum and Order (ECF No. 38)

issued by this Court on May 2, 2022. The extensive

discussion in the May 2022 Order will not be repeated

here, but is incorporated by reference. The Court

acknowledges that the Plaintiffs’ First Amended

Complaint attributes the restitution of the painting

to the Netherlands Art Property Foundation (“SNK”),

rather than the Dutch government.

II. LEGAL STANDARD

a. Motion to Dismiss

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

App.32a

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 mate-

App.33a

rial of his or her own. Carter v. Stanton, 405 U.S.

669, 671 (1972) (per curiam).

b. 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).

App.34a

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. (ECF No.

45 at ¶ 7). 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.

(ECF No. 45 at ¶ 100). 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.

III. DISCUSSION

The question before the Court is whether Plaintiffs

have sufficiently plead facts to establish that the

SNK is a different entity from the Dutch government,

which results in Plaintiffs’ claims no longer implicating

the Act of State doctrine.

a. SNK & The Dutch Government

With these principles in mind, the Court turns

to Plaintiffs’ arguments. First, Plaintiffs allege that

there is no reason to invalidate the actions of the

Dutch government because the Dutch government

made a decision only about the “After Bellotto” and

not the “The Marketplace at Pirna.” However, the

Court already rejected this argument in its decision

on the first Motion to Dismiss stating, “[P]laintiffs’

App.35a

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.” (ECF No 38 at

11-12).

Second, Plaintiffs argue that the transfer of the

Emden 1025 Pirna did not constitute an “official act”

because the SNK lacked authority to bind the Dutch

government and as a result could not make “official

acts.” In their FAC, Plaintiffs allege that “according

to the actual Dutch government, any decision by the

SNK regarding what is believed to be the ‘After

Bellotto’ was not an official act of the Netherlands.”

(ECF No. 42 at 15). Plaintiffs further attempt to

differentiate the SNK from the Dutch Government

by arguing that the organization was merely an

extra-governmental body (ECF No. 52 at 22). Although

Plaintiffs argue that they have pleaded sufficient

facts “to plausibly show that the SNK did not wield

the power of the Dutch government thus did not

engage in any official acts by mistakenly transferring

the Emden 1025 Pirna,” they have provided no

citations for these assertions. Id. at 23.

Third, Plaintiffs allege that the SNK had “no

authority to transfer the works, and it operated

outside existing government ministries and departments.” (ECF No. 42 at 16). Again, Plaintiffs provide

no citation for this assertion. Moreover, Plaintiffs’

assertion directly contradicts the source material,

which describes how the Netherlands Art Property

Foundation (SNK) was “set up by the Ministry of

Education, Arts and Sciences and the ministry of

Finance . . . [which was responsible for] namely the

App.36a

tracing of artworks which had been shipped off to

Germany, and the custodianship and, where possible,

return of the recovered objects to the rightful owners.”

(ECF No. 46 at 13-14). Additionally, Plaintiffs attempt

to delegitimize the 1946 restitution decision by arguing

that the SNK lacked actual authority and engaged in

bureaucratic misdeeds and mismanagement. However,

these arguments ultimately fail as they do not rise

above mere conclusionary allegations. Keane v. Fox

Television Stations, Inc., 297 F. Supp. 2d 921, 925

(S.D. Tex. 2004) (courts “are not required to accept as

true conclusory allegations which are contradicted by

documents referred to in the complaint”), aff’d, 129

F. App’x 874 (5th Cir. 2005).

For the above reasons, the Court finds that the

SNK was a part of the Dutch government. Therefore,

the Act of State doctrine prevents adjudication of the

Plaintiffs’ claims.

b. 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.

c. Plaintiffs’ Objection to Admission of

Evidence

Plaintiffs object to the admission of (1) the

parties’ 2006-2007 communications sent to the Museum

of Fine Arts and (2) Defendant’s exhibits 2-7 and 912.

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

App.37a

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.

IV. CONCLUSION

The Court must note that it feels enormous

sympathy for Plaintiffs. To lose valuable personal

property with strong family connection is always an

occasion for anguish. To suffer such a loss as a

consequence, however remote, of Nazi influence is a

tragedy. Nonetheless, the law is clear and the Court

cannot displace it.

For the foregoing reasons, Defendant’s Motion to

Dismiss is GRANTED. Therefore, Plaintiffs’ Motion

to Disqualify (ECF No. 49) is DENIED WITH PREJUDICE AS MOOT.

App.38a

IT IS SO ORDERED.

SIGNED at Houston, Texas, on this the 20th

day of April, 2023.

/s/ Keith P. Ellison

United States District Judge

App.39a

MEMORANDUM & ORDER, U.S. DISTRICT

COURT, SOUTHERN DISTRICT OF TEXAS

(MAY 2, 2022)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

________________________

JUAN CARLOS EMDEN ET AL,

Plaintiffs,

THE MUSEUM OF FINE ARTS, HOUSTON,

Defendant.

________________________

Civil Action No. 4:21-CV-3348

Before: Keith P. ELLISON,

United States District Judge.

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.

App.40a

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.

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

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.

App.41a

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

App.42a

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 AlmasDietrich. (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).

App.43a

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

App.44a

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

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.

App.45a

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).

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

App.46a

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

App.47a

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

App.48a

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

App.49a

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

App.50a

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

App.51a

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

App.52a

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 sidestepped 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

App.53a

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

App.54a

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

App.55a

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.

App.56a

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

App.57a

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 postwar 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:

App.58a

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’

App.59a

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.

III. 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.

App.60a

SIGNED at Houston, Texas, on this the 2nd day

of May, 2022.

/s/ Keith P. Ellison

United States District Judge

App.61a

ORDER DENYING PETITION FOR

REHEARING, U.S. COURT OF APPEALS

FOR THE FIFTH CIRCUIT

(JUNE 25, 2024)

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

________________________

JUAN CARLOS EMDEN;

NICOLAS EMDEN; MICHEL EMDEN,

Plaintiffs—Appellants,

THE MUSEUM OF FINE ARTS, HOUSTON,

Defendant—Appellee.

________________________

No. 23-20224

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:21-CV-3348

Before: SMITH, HAYNES, and

DOUGLAS, Circuit Judges.

ON PETITION FOR REHEARING AND

REHEARING EN BANC

PER CURIAM:

The petition for rehearing is DENIED. Because

no member of the panel or judge in regular active

App.62a

service requested that the court be polled on rehearing

en banc (FED. R. APP. P. 35 and 5TH CIR. R. 35), the

petition for rehearing en banc is DENIED.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.