Appendix — Orkin v. Taylor (No. 07-216)

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APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

FILED MAY 18, 2007

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 05-55364

ANDREW J. ORKIN; EF MARK ORKIN;

SARAH-ROSE JOSEPHA ADLER;

A. HEINRICH ZILLE,

Plaintiffs-Appellants,

v.

ELIZABETH TAYLOR,

Defendant-Appellee.

Argued and Submitted Feb. 12, 2007

Filed May 18, 2007

Before: WILLIAM C. CANBY, JR. and SIDNEY R. THOMAS,

Circuit Judges, and SUZANNE B. CONLON,* District Judge.

THOMAS, Circuit Judge.

Descendants of Jewish art collector Margarete Mauthner

(collectively, “the Orkins”) claim that their ancestor was

* The Honorable Suzanne B. Conlon, Senior United States

District Judge for the Northern District of Illinois, sitting by

designation.

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Appendix A

wrongfully dispossessed of a painting during Hitler’s Nazi

regime, entitling them to ownership of the painting, which

was later purchased by actress Elizabeth Taylor. In this

appeal, we conclude that the Holocaust Victims Redress Act

does not create a private right of action and that the Orkins’

state law claims are barred by the statute of limitations. We

affirm the judgment of the district court, dismissing the

complaint.

Vincent van Gogh is said to have reflected that “paintings

have a life of their own that derives from the painter’s soul.”

The confused and perhaps turbulent history of his painting

Vue de l’Asile et de la Chapelle de Saint-Rémy may prove

the truth of his observation.

In 1889, a few months after cutting off the lower part of

his left ear following a dispute with Paul Gauguin, van Gogh

entered the Saint-Paul-de-Mausole asylum near the town of

Saint-Rémy-de-Provence. During this period of his life, he

produced over 150 paintings, including some of his most

famous works, such as The Starry Night. In the summer or

fall of 1889, he painted Vue de l’Asile et de la Chapelle de

Saint-Rémy, which may have been part of a series that he

described to his brother Theo as “Sketches of Autumn.” The

painting portrays either the Church of Labbeville near the

town Auvers, a few miles from the asylum, or a monastery

that was part of the asylum. Within a year of completing the

painting, van Gogh died from a self-inflicted gunshot wound.

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Van Gogh sold only one painting during his lifetime.

Since his death, however, his works have indeed had lives

of their own. After Vincent’s death in 1890, and his brother

Theo’s death six months later, ownership of Vue de l’Asile

et de la Chapelle de Saint-Rémy passed to Theo’s widow,

Johanna. The German art dealer Paul Cassirer, an early

promoter of the works of van Gogh and other post-

impressionist artists, purchased the painting in 1906 or 1907.

Shortly thereafter, Cassirer sold the picture to Margarete

Mauthner, an early collector of van Gogh’s works. The parties

vigorously dispute the circumstances under which Mauthner

parted with the painting, and that dispute forms the basis of

the current controversy between the parties. We need not,

and we do not, resolve those factual disputes in this appeal

because the issues before us are purely legal in nature.

However, a description of the general factual background of

the case-highlighting where appropriate the factual disputes-

is helpful to frame the legal issues presented.

One of the tools used by art historians to trace ownership

is an artist’s catalogue raisonné. Acatalogue raisonné is an

annotated, illustrated book of a particular artist’s works,

usually prepared by art historians, scholars, and dealers,

which constitutes “a definitive listing and accounting of the

works of an artist.” DeWeerth v. Baldinger, 836 F.2d 103,

112 (2d. Cir. 1987). A catalogue raisonné published in 1928,

L’oeuvre de Vincent Van Gogh Catalogue Raisonné, shows

Margarete Mauthner as the owner of the painting. J.B. de la

Faille’s catalogue raisonné of van Gogh, published in 1939,

also identifies Mauthner as the owner.

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Appendix A

From the time of Adolf Hitler’s election as Chancellor

of Germany in 1933 until the end of World War II, Hitler’s

Nazi regime engaged in a systematic effort to confiscate

thousands of works of art throughout Europe. Hector

Feliciano, The Lost Museum: The Nazi Conspiracy to Steal

the World’s Greatest Works of Art 3 (Basic Books 1997).

Within Germany, the enactment of the Ordinance for the

Attachment of the Property of the People’s and State’s

Enemies and the Ordinance for the Employment of Jewish

Property gave Nazi officials the authority to seize artwork

from Jewish owners under color of law. Jonathan

Petropoulos, Art as Politics in the Third Reich 190

(University of North Carolina Press 1996).

As the Nazis’ persecution accelerated, Mauthner fled

Germany to South Africa in 1939, leaving her possessions

behind. She remained there until her death in 1947, at the

age of 84. What happened to Vue de l’Asile et de la Chapelle

de Saint-Rémy during that time is not clear from the record.

A 1970 catalogue raisonné prepared by a committee of

scholars in the Netherlands lists the next owner as Alfred

Wolf, a Jewish businessman who left Germany for

Switzerland in 1934 and ultimately relocated to South

America. The auction catalogue prepared by Sotheby & Co.

in 1963 lists the provenance, or chain of title, as including

three owners prior to Wolf. The Sotheby’s catalogue traces

the ownership of the painting from Mauthner to Paul Cassirer,

to Marcel Goldschmidt, and then to Alfred Wolf. The Orkins

contend that this chain of ownership cannot be correct

because Paul Cassirer had committed suicide in 1926, two

years before the 1928 catalogue raisonné was published,

listing Mauthner as the owner.

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Notably, the Orkins do not contend that the painting was

confiscated by the Nazis. Rather, they allege economic

coercion, contending that Mauthner sold the painting “under

duress.” They note that laws promulgated by the Allied Forces

after the conclusion of World War II established a >

presumption that any transfer or relinquishment of property

by a persecuted person within the period January 30, 1933

to May 8, 1945 was an act of confiscation. Military

Government Law No. 59 § 375(b).

Taylor contends that, at best, the record shows that the

painting was sold through two Jewish art dealers to a Jewish

art collector, with no evidence of any Nazi coercion or

participation in the transactions.

In short, the parties agree that Mauthner once owned the

painting and that it was later possessed by Alfred Wolf. At

this point in the development of the case, the rest of what

transpired with the painting during the 1930s in Berlin is

clouded in uncertainty. Sometime in the early 1960s, the

Estate of Alfred Wolf commissioned Sotheby’s to sell by

auction a number of Impressionist and Post-Impressionist

paintings, including Vue de l’Asile et de la Chapelle de Saint-

Rémy.

With the help of her father, who was an art dealer,

Elizabeth Taylor began collecting art in the 1950s, acquiring

works of Degas, Renoir, Pissarro, Monet, Cassatt and other

prominent artists. She had long wanted to acquire a van Gogh.

While living in London with her husband, Richard Burton,

Taylor learned that Vue de l’Asile et de la Chapelle de Saint-

Rémy would be offered at a Sotheby’s auction in April 1963.

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Appendix A

She authorized her father to bid for her at the auction, and

he was successful in purchasing the painting on her behalf

for £ 92,000.

Taylor’s acquisition was publicized at the time.

Subsequently, the 1970 catalogue raisonné referenced

Taylor’s ownership. From November 1986 until March 1987,

the painting was exhibited publicly at the Metropolitan

Museum of Art in New York, in an exhibition entitled Van

Gogh in Saint Rémy and Auvers.

In 1990, Taylor offered the painting for sale through

Christie’s auction house in London. The provenance for the

sale lists Taylor as the current owner, with the prior owners

being Alfred Wolf (of Stuttgart and Buenos Aires), Marcel

Goldschmidt & Co. (of Frankfurt), Margarete Mauthner

(of Berlin), Paul Cassirer (of Berlin), and Johanna van Gogh-

Bonger (of Amsterdam). The work did not sell at the auction.

In 1998, Congress enacted three statutes pertaining to

victims of Nazi persecution: the Holocaust Victims Redress

Act (“Act”), Pub.L. No. 105-158, 112 Stat. 15 (1998), the

Nazi War Crimes Disclosure Act of 1998, Pub.L. No. 105-

167, 114 Stat. 2865 (1998), and the United States Holocaust

Assets Commission Act of 1998, Pub.L. No. 105-186, 112

Stat. 611 (1998). The Orkins allege that their inquiry into

whether their ancestor, Mauthner, may have lost her art

collection due to Nazi persecution began upon the passage

of these acts. They retained a law firm in 2001 and claim

that, until their attorneys completed their investigation, they

did not discover the basis of their current claim. The Orkins

allege that, before they began that investigation, they did not

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Appendix A

know that Mauthner had owned Vue de I/’Asile et de la

Chapelle de Saint-Rémy, that she had lost the painting as a

result of Nazi persecution, that Taylor had bought the

painting, or that there was a legal basis for recovering the

painting. They also claim that they first learned of Taylor’s

ownership in 2002, through a rumor on the internet that

Taylor was interested in selling the painting.

In December 2003, the Orkins wrote a letter to Taylor,

demanding that she return the painting to them. After some

discussion of settlement, Taylor wrote a response letter

declining settlement and asserting that the Orkins’ claim to

the painting was untimely. Taylor then filed a complaint for

declaratory relief to establish her title.

In 2005, the Orkins filed their First Amended Complaint

for recovery of the painting under theories of specific

recovery, replevin, constructive trust, restitution, and

conversion. The district court dismissed the complaint,

concluding that the state-law actions were time-barred and

that the federal statute did not create a private right of action.

Because there is complete diversity between the parties and

because the painting is worth more than $75,000, the district

court had jurisdiction under 28 U.S.C. § 1332. We have

jurisdiction under 28 U.S.C. § 1291, and we review de novo

the district court’s dismissal of the complaint pursuant to

Rule 12(b)(6). Cervantes v. United States, 330 F.3d 1186,

1187 (9th Cir.2003).

Because the district court dismissed this case on a Rule

12(b)(6) motion, we must assume that all facts stated in the

complaint are true and that they are provable by admissible

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evidence. Although the parties vigorously dispute whether

the painting was effectively confiscated by the Nazis through

forced sale or was legitimately sold through Jewish art

dealers, we need not resolve that issue. We assume, for the

purposes of our discussion, that the allegations of the

complaint are true and that Mauthner was coerced into giving

up the painting before she left Germany.

II

The district court properly dismissed the Orkins’ federal

claims on the ground that the Holocaust Victims Redress Act

did not create a private right of action against private art

owners. In determining whether a federal statute creates a

private right of action, congressional intent is the cornerstone

of the analysis. The Supreme Court has established a four-

factor test for discerning whether a statute creates a private

right of action. Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45

L.Ed.2d 26 (1975). Under that test, we must ask: (1) whether

the plaintiff is a member of a class that the statute especially

intended to benefit, (2) whether the legislature explicitly or

implicitly intended to create a private cause of action,

(3) whether the general purpose of the statutory scheme

would be served by creation of a private right of action, and

(4) whether the cause of action is traditionally relegated to

state law such that implication of a federal remedy would be

inappropriate. 422 U.S. at 78, 95 S.Ct. 2080.

The most important inquiry under Cort is the second

factor: whether there is “any indication of legislative intent,

explicit or implicit, either to create such a remedy or to deny

one.” Opera Plaza Residential Parcel Homeowners Assn. v.

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Hoang, 376 F.3d 831, 834-35 (9th Cir.2004) (quoting Cort,

422 U.S. at 78, 95 S.Ct. 2080); First Pacific Bancorp, Inc. v.

Helfer, 224 F.3d 1117, 1121-22 (9th Cir.2000) (same). Indeed,

the three Cort questions that are not explicitly focused on

legislative intent are actually indicia of legislative intent, such

that the Cort test itself is focused entirely on intent. Touche

Ross & Co. v. Redington, 442 U.S. 560, 575-76, 99 S.Ct.

2479, 61 L.Ed.2d 82 (1979). The four Cort factors, thus, are

merely targeted inquiries to guide our central project of

discerning Congress’s intent. /d.

The plain text of the Holocaust Victims Redress Act

leaves little doubt that Congress did not intend to create a

private right of action. The Orkins rely on § 202 of the Act,

entitled “Sense of the Congress Regarding Restitution. of

Private Property, Such as Works of Art.” That section reads

in its entirety as follows:

It is the sense of the Congress that consistent with

the 1907. Hague Convention, all governments

should undertake good faith efforts to facilitate

the return of private and public property, such as

works of art, to the rightful owners in cases where

assets were confiscated from the claimant during

the period of Nazi rule and there is reasonable

proof that the claimant is the rightful owner.

Act § 202, 112 Stat. at 17-18.

“Sense of the Congress” provisions are precatory

provisions, which do not in themselves create individual

rights or, for that matter, any enforceable law. Yang v. Cal.

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Appendix A

Dept. of Soc. Servs., 183 F.3d 953, 958-59 (9th Cir.1999).

Although “sense of the Congress” provisions are sometimes

relevant to our determination of whether other mandatory

provisions create private rights of action, id. at 959 & n. 4,

the Orkins can point to no provision of the Act or of any of

its companion legislation that can fairly be characterized as

mandatory. There is simply no “right- or duty-creating

language” anywhere in the statutory scheme, Cannon v. Univ.

of Chicago, 441 U.S. 677, 690 n. 13, 99 S.Ct. 1946, 60

L.Ed.2d 560 (1979), and § 202’s announcement of a “sense

of the Congress” cannot, of its own force, imply a private

right of action, Yang, 183 F.3d at 958-59.

Additionally, the Act’s legislative history indicates that

even its most ardent supporter did not intend for the bill to

create a private right of action. Rather, the legislative intent

was to encourage state and foreign governments to enforce

existing rights for the protection of Holocaust victims. The

sponsor and primary champion of the legislation,

Representative Jim Leach (R-IA), believed that existing law

would suffice to restitute Nazi-stolen artworks to their Nazi-

era owners. At a hearing that occurred after passage of the

Act, Representative Leach noted the possibility that new

“domestic legislation” might assist in restitution of stolen

art, but he went on to conclude that “Congress may have

gone as far as it appropriately should on this subject in the

Holocaust Victims Redress Act.” Holocaust Victims’ Claims,

Hearing before the House Committee on Banking and

Financial Services, 105th Cong., 2d Sess. (1998). That

Statement strongly implies, consistently with the precatory

language of the legislation itself, that the Act was a limited

bill, passed with an understanding of constitutional

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Appendix A

limitations on congressional power. The second Cort factor,

thus, does not support the Orkins’ claim; the bill simply did

not intend to create a private right of action.

Examination of the remaining Cort factors buttresses this

conclusion. With respect to the first Cort factor, although

there is no doubt that the Act was focused on Holocaust

victims and (in a colloquial sense) intended to benefit them,

Holocaust victims do not constitute a “beneficiary class”

within the meaning of the Cort test. The provision’s focus is

on “governments” rather than individuals, urging those

governments “to facilitate” enforcement of preexisting

property rights. Act § 202, 112 Stat. at 17-18. The statute,

thus, does not “explicitly confer[{ ] a benefit on” Holocaust

victims; it merely expresses Congress’s sense that Holocaust

survivors and heirs should benefit fully from preexisting

protections. Cf. Cannon, 441 U.S. at 693-94, 99 S.Ct. 1946

(concluding that the first Cort factor was met because the

statute at issue “explicitly confers a benefit on” an identifiable

class and because the plaintiff was a member of that class).

The Orkins, thus, are not members of a class that Congress

“intended to benefit,” as that phrase is used in Cort.

With respect to the third Cort factor, the text and history

of the legislation reveal that its overarching purpose was not

to provide for private litigation. Rather, the general purpose

of the statutory scheme was to fund research efforts and to

declassify records, while simultaneously encouraging foreign

governments, as well as public and private institutions, to

do likewise. In other words, the motivating concern was not

access to courts; it was access to information. In fact,

throughout the committee hearings, witnesses testified that

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courts would likely do a poor job of resolving Holocaust

victims’ claims. Specifically, the committee heard testimony

that the difficulties of tracing information would likely

preclude effective judicial resolution of discrete claims, and

several museum directors testified that alternative fora such

as mediation and arbitration were preferable to litigation.

Holocaust Victims’ Claims, Hearing before the House

Committee on Banking and Financial Services, 105th Cong.,

2d Sess. (1998) (testimony of Philippe de Montebello,

director of the Metropolitan Museum of Art). The general

purposes of the statute, therefore, do not support the

conclusion that Congress intended to provide a private right

of action in this case.

Finally, with respect to the fourth Cort factor, there can

be no doubt-as this case amply demonstrates-that state law

provides causes of action for restitution of stolen artworks.

Furthermore, the torts asserted here are undoubtedly causes

of action that are traditionally relegated to state law.

Implication of a federal remedy in this case, therefore, would

be inappropriate under the fourth Cort factor. Representative

Leach’s statement that “Congress may have gone as far as it

appropriately should” when it passed the Act strongly

supports the conclusion that Congress did not intend to

supersede traditional state-law remedies when it passed the

Act. Holocaust Victims’ Claims, Hearing before the House

Committee on Banking and Financial Services, 105th Cong.,

2d Sess. (1998).

In short, the Act does not satisfy any of the Cort factors;

none of the relevant indicia of intent supports the conclusion

that Congress intended to create an implied private right of

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action in this case. The Act is a precatory announcement of

the “sense of the Congress,” which neither confers rights

nor creates duties. Given the absence of congressional intent

to create a private right of action, the Orkins’ assertion of a

federal right of action must fail.

II

The district court also properly concluded that the

Orkins’ state-law claims were time-barred. California

provides a three-year statute of limitations for any action

arising from the “taking, detaining, or injuring” of any “goods

or chattels.” Cal.Civ.Proc.Code § 338(c). In 1983, the statute

of limitations was amended to specify that a “discovery rule”

governs accrual of causes of action for recovery of “any

article of historical, interpretive, scientific, or artistic

significance.” Jd. In other words, under the new law, an action

for recovery of artwork accrues when the rightful owner

discovers the whereabouts of the artwork. Before 1983, the

statute did not specify when a cause of action for theft would

accrue.

The Orkins do not argue that the 1983 amendment applies

retroactively to their allegations of a 1939 theft and a 1963

conversion. Rather, they contend that the discovery rule

applies even under pre-1983 law, citing an intermediate

appeals court decision that so held. Naftzger v. Am.

Numismatic Soc’y, 42 Cal.App.4th 421, 49 Cal.Rptr.2d 784

(1996).

“The task of a federal court in a diversity action is to

approximate state law as closely as possible in order to make

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sure that the vindication of the state right is without

discrimination because of the federal forum.” Ticknor v.

Choice Hotels Intern., Inc., 265 F.3d 931, 939 (9th Cir.2001)

(quoting Gee v. Tenneco, Inc., 615 F.2d 857, 861 (9th

Cir.19$0)). If the state’s highest appellate court has not

decided the question presented, then we must predict how

the state’s highest court would decide the question. /d.

In doing so, we take state law as it exists without speculating

as to future changes in the law. /d.

The California Supreme Court has never confronted the

question of what rule governs accrual of pre-1983 causes of

action for theft and conversion. The California Supreme

Court has, however, specifically held that the discovery rule,

whenever it applies, incorporates the principle of constructive

notice. In Jolly v. Eli Lilly & Co., the California Supreme

Court held that, under California’s discovery rule, “[a]

plaintiff is held to her actual knowledge as well as knowledge

that could reasonably be discovered through investigation

of sources open to her.” 44 Cal.3d 1103, 1109, 245 Cal. Rptr.

658, 751 P.2d 923 (1988). In other words, under the discovery

rule, a cause of action accrues when the plaintiff discovered

or reasonably could have discovered her claim to and the

whereabouts of her property. In assessing California law, we

conclude that it is highly unlikely that the California Supreme

Court would abandon the Jolly rule, much less adopt a new

rule that eschewed the concept of constructive notice.

Under Jolly, the latest possible accrual date of the Orkins’

cause of action was the date on which they first reasonably

could have discovered, through investigation of sources open

to them, their claim to and the whereabouts of the van Gogh

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painting. From the face of the Orkins’ complaint, it is

apparent that Taylor’s acquisition of the painting was

certainly discoverable at least by 1990, when she held it out

for sale in an international auction, and most probably as

early as 1963, when she acquired the painting in a highly

publicized international auction. In fact, the complaint

alleges-and demonstrates by attachment-that Taylor bought

the painting at a publicized auction in 1963, that Taylor was

listed as the owner of the painting in a publicly available

1970 catalogue raisonné, and that Taylor publicly offered

the painting for sale in 1990. Had the Orkins investigated

any of those publicly-available sources, they could have

discovered both their claim to the painting and the painting’s

whereabouts long before the 2002 internet rumor was posted.

We therefore affirm the district court’s conclusion that

the Orkins’ state-law claims are time-barred. Even under the

most generous possible rule for accrual of the causes of

action, the claims expired in or before 1993-three years after

the last public announcement of Taylor’s ownership. The

district court correctly held that the Orkins’ state law claims

were untimely filed.

IV

Congress did not create a private right of action in

passing the Holocaust Victims Redress Act, which merely

reflected the sense of Congress. The Orkins’ state law claims

are time-barred. The district court was entirely correct in

dismissing the complaint. We need not, and do not, reach

any of the other issues urged by the parties.

AFFIRMED.

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APPENDIX B — OPINION OF THE UNITED STATES

DISTRICT COURT FOR THE CENTRAL DISTRICT

OF CALIFORNIA DATED FEBRUARY 2, 2005

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

No. CV 04-8472-RGK(FMOX)

SARAH-ROSE JOSEPHA ADLER, et al.

v.

ELIZABETH TAYLOR

February 2, 2005

CIVIL MINUTES-GENERAL

Present: The Honorable

R. GARY KLAUSNER, U.S. DISTRICT JUDGE

Proceedings: (IN CHAMBERS)

DEFENDANT ELIZABETH TAYLOR’S

MOTION TO DISMISS (DE 5)

I. INTRODUCTION

The issue in this case is the rightful ownership to “Vue

de |’ Asile et de la Chapelle de Saint-Remy,” (“the painting”)

which Vincent Van Gogh painted while a patient of the

asylum at Saint-Remy. Plaintiffs are heirs and descendants

of an art collector who owned the painting in early twentieth-

century Germany. In 1963, Elizabeth Taylor (“Taylor”)

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bought the painting at an auction in England. Plaintiffs are

essentially suing for four claims: replevin, constructive trust,

restitution, and conversion. Plaintiffs complicate matters

by bringing these four claims in four alternate forms:

(1) generally, for “recovery of the painting” under an action

implied by federal law; (2) for these four claims individually

under an action implied by federal law; (3) for these four

claims as implied by the “findings and declarations of the

California legislature”; and (4) for these four claims in their

traditional form, under California law. Essentially, Plaintiffs

argue that the painting rightfully belongs to them because it

was stolen from their heir through Nazi persecution. Taylor

moves to dismiss for failure to state a claim. For the following

reasons, the Court grants Taylor’s motion.

For the purposes of this Motion, the Court must consider

all facts alleged in the First Amended Complaint to be true.

Plaintiffs’ are descendants and heirs of the late Margarete

Mauthner, who bought the painting in 1914 in Germany.

Mauthner owned the painting through the 1920s and 1930s.

Mauthner and her family fled Nazi Germany for South Africa

in 1939. The painting was lost to Nazi persecution. Mauthner

died in South Africa in 1947. She was eighty-four.

Taylor bought the painting in 1963 at a Sotheby’s auction.

The Sotheby’s auction incorrectly stated that the painting had

passed to Paul Cassirer in 1928 (he had died in 1926). The

Sotheby’s auction also referred bidders to two catalogues

raisonné, which listed the history of the painting. This history

of ownership identified Mauthner as the owner of the painting

in tlie 1920s and 1930s, and included that she lived in Berlin.

It included other information inconsistent with the Sotheyby’s

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auction’s representations. Plaintiffs allege that Taylor ignored

these warning signs and bought the painting without properly

investigating its ownership history.

In the late 1990’s and early in this decade, Congress and

the California legislature both stated a strong public policy

favoring the return of property that the Nazi government had

stolen. Plaintiffs then became aware of the possibility that

Mauthner owned the painting and that it may have been stolen

from her. After some investigation, Plaintiffs brought the present

action.

Il. JURISDICTION

A. Diversity Jurisdiction

Diversity jurisdiction clearly exists in this case. Plaintiffs

are all foreign citizens, while Defendant is a California resident.

The painting is worth well over $75,000. Therefore, the Court

properly has jurisdiction over the case pursuant to 28 U.S.C.

§ 1332.

B. Federal Question Jurisdiction

Some of Plaintiffs’ claims are purportedly brought under

the 1998 Holocaust Victims Redress Act (“HVRA”), Pub.L.

No. 105-158, 112 Stat. 15 (1998), and its companion Nazi War

Crimes Disclosure Act (“Disclosure Act’), Pub.L. No. 105-567,

114 Stat. 2865 (1998). Plaintiffs ask the Court to find that these

grant the Court federal question jurisdiction. Such a

determination is unnecessary because the Court already has

jurisdiction pursuant to § 1332. Therefore, the Court need not

reach the question of whether federal question jurisdiction

applies to this case.

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lil. JUDICIAL STANDARD

In considering a motion to dismiss for failure to state a

claim pursuant to Federal Rules of Civil Procedure 12(b)(6),

the Court must assume the plaintiff's allegations are true,

and must construe the complaint in a light most favorable to

the plaintiff. See United States v. City of Redwood City, 640

F.2d 963, 967 (9th Cir.1981). The sole issue raised by such a

motion is whether the facts pleaded would, if established,

support a valid claim for relief. Thus, the facts alleged, no

matter how improbable, must be accepted as true for purposes

of the motion. See Neitzke v. Williams, 490 U.S. 319, 328-

329, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). However, a

court need not accept as true unreasonable inferences,

unwarranted deductions of fact, or conclusory legal

allegations cast in the form of factual allegations. See W.

Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981).

Upon review of a complaint, a court may not dismiss pursuant

to Rule 12(b)(6) “unless it appears beyond doubt that the

plaintiff can prove no set of facts in support of his claim

which would entitle him to relief.” Conley v. Gibson, 355

U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Russell v.

Landrieu, 621 F.2d 1037, 1039 (9th Cir.1980). However,

dismissal is proper if a complaint is vague, conclusory, and

fails to set forth any material facts in support of the allegation.

See North Star Int’l v. Ariz. Corps. Comm’n, 720 F.2d 578,

583 (9th Cir.1983).

The court cannot consider material outside the complaint

unless it converts the Rule 12(b)(6) motion into a summary

judgment motion. Arpin v. Santa Clara Valley Transp.

Agency, 26] F.3d 912, 925 (9th Cir.2001). For purposes of a

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Rule 12(b)(6) motion, the court may consider material

properly submitted with the complaint. See Hal Roach

Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542,

1555 (9th Cir.1989). Furthermore, the court may also

consider matters that may be judicially noticed pursuant to

Federal Rule of Evidence 201. /d. at 1555.

If the court chooses to dismiss the complaint, it must

decide whether to grant leave to amend. Courts grant leave

to amend unless it is clear that amendment would be futile,

and “that the deficiencies of the complaint could not be cured

by amendment.” Noll v. Carlson, 809 F.2d 1446, 1448 (9th

Cir. 1987).

IV. DISCUSSION

A. Plaintiffs’ Traditional Sate Law Claims

Before reaching Plaintiffs’ non-traditional claims (that

arise out of federal law or out of the California legislature’s

findings and declarations), the Court will first determine

whether the Complaint’s traditional claims can survive the

motion to dismiss. Taylor argues that these claims should be

dismissed because they are time-barred under California.

Plaintiffs argue that the discovery rule delayed the statute of

limitations from running until recently. For the following

reasons, the Court finds that Plaintiffs’ Complaint establishes

facts that show the statute of limitations began to run in 1963

and bars their claims.

21a

Appendix B

1. Plaintiffs’ First Amended Complaint States

a Prima Facie Case

Plaintiffs allege traditional state law claims for

conversion, replevin, constructive trust, and restitution.

Essentially, Plaintiffs allege (1) that they, through their heir,

are the rightful owner of the painting, (2) that the Nazi

government’s persecution resulted in their loss of the

painting, and (3) that Taylor wrongfully took possession of

the painting either knowing of its likely theft, or at least that

she failed to reasonably investigate its possible theft.

Generally, Plaintiffs’ state law claims are valid and

supported by the Complaint. First, Plaintiffs can prove

conversion by showing (1) that Plaintiffs have ownership or

a right to possession of the painting; and (2) that Taylor

wrongfully appropriated or exercised dominion over the

painting. See Dodge v. Meyer, 61 Cal. 405, 406-07 (1882);

Oakdale Vill. Group v. Fong, 43 Cal.App.4th 539, 540-41,

50 Cal.Rptr.2d 810 (1996). Here, Plaintiffs’ alleged facts, if

proven, would demonstrate that Plaintiffs’ (through their heir)

had rightful ownership to the painting, and that Taylor took

exclusive control of the painting in 1963 either knowing that

it was stolen or negligently failing to investigate its ownership

history. Alternatively, Plaintiff’s alleged facts could establish

that they are the rightful owners and that Taylor, although

she lawfully purchased the painting, is liable for conversion

arising out of her refusal to return it. See Edwards v. Jenkins,

214 Cal. 713, 720, 7 P.2d 702 (1932). Plaintiffs’ allegations

sufficiently state a claim for conversion under California law.

22a

Appendix B

Second, replevin is a common law remedy that permits the

prevailing party to recover both personal property and incidental

damages from an unlawful possessor. See 66 Am.Jur.2d

Replevin § | (2004). In federal courts, replevin is a remedy

specifically approved by rule, as governed by the appropriate

state law. See Fed.R.Civ.P. 64; Granny Goose Foods, Inc. v.

B’hd of Teamsters and Auto Truck Drivers Local No. 70, 415

U.S. 423, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974). In California,

courts allow for specific recovery of personal property and

incidental damages (but use the term “claim and delivery” rather

than “replevin’”). See Fran-Well Heater Co. v. Robinson, 182

Cal.App.2d 125, 5 Cal.Rptr. 900 (1960); Cal. Civ.Code § 3379;

Cal.Code Civ. P. § 511.010 et seg. For specific recovery,

Plaintiffs only need show (1) a right to possession of the property,

and (2) Taylor’s wrongful possession. /d. Stated more simply,

specific recovery is an available remedy for conversion. Because

the Complaint supports a conversion claim, it also supports a

specific recovery remedy.

Third, a constructive trust is an equitable remedy used to

compel a person holding property to transfer it to the person

entitled to possession. See Cal. Civ.Code §§ 2223, 2224; Haskel

Engineering & Supply Co. v. Hartford Acc. & Inc'2m. Co., 78

Cal.App.3d 371, 375, 144 Cal.Rptr. 189 (1978); B.E. Witkin,

Summary of California Law § 305 (9th ed. 1990 & Supp.2004).

For a court to create a constructive trust, the plaintiff only needs

to show that (1) the defendant wrongfully acquired the property,

and (2) that the defendant would be unjustly enriched if allowed

to keep the property. /d. Again, for the same reasons discussed

above, Plaintiffs’ Complaint alleges facts that support both

elements necessary for a constructive trust.

23a

Appendix B

Finally, Plaintiffs allege a claim for restitution. However,

in California, the restitution remedy is only applicable to

breach of contract claims. See Freedman v. St. Matthias

Parish, 37 Cal.2d 16, 230 P.2d 629 (1951). Here, Plaintiffs’

“restitution” claim is better termed a demand for specific

recovery and any incidental damages, which are already

properly alleged in the preceding three claims.

In summary, regardless of whether Plaintiff’s non-

traditional claims are valid, at the very least their First

Amended Complaint sufficiently alleges a claim for

conversion, and demands valid remedies of specific recovery

and a constructive trust.

2. California’s Statute of Limitations

Taylor alleges that the Complaint does not state a claim

because of California’s statute of limitations. Plaintiffs argue

that the statute did not begin tolling against them until

recently.

California limits causes of action to recover Holocaust-

era artwork from individuals. California passed a law giving

heirs the right to sue galleries and museums for the return of

such artwork until 2010, free from any statute of limitations.

See Cal.Civ.Proc.Code § 354.3. However, this exception does

not apply to suits against individuals. In “[a]n action for

taking, detaining, or injuring any goods or chattels, including

actions for the specific recovery of personal property,” a

plaintiff must sue within three years. Cal.Civ.Proc.Code

§ 338(c). A newer version of the California law includes an

explicit “discovery rule,” which states that the statute begins

24a

Appendix B

to run when the plaintiff was on notice of the property’s

whereabouts. However, the older version of the California

law did not include a “discovery rule.” The parties dispute

whether a discovery rule applies to this case, though both

agree that the Court should apply the old law given that Taylor

bought the painting in 1963.

a. The Discovery Rule Does Not Apply to

this Case

In Naftzger v. American Numismatic Society, one

California Court of Appeal held that there was an implied

discovery rule in the old statute. 42 Cal.App.4th 421, 49

Cal.Rptr.2d 784 (1996). However, in Society of California

Pioneers v. Baker another Court of Appeal disagreed.

43 Cal.App.4th 774, 783, 50 Cal.Rptr.2d 865 (1996). The

California Supreme Court has not resolved the conflict.

As the California Pioneers Court notes, the Naftzger

Court failed to address California precedent that rejected the

application of a discovery rule. California Pioneers, 43

Cal.App.4th at 780-83, 50 Cal.Rptr.2d 865. This precedent

establishes that the statute of limitations begins to run against

a subsequent purchaser of stolen property at the time the

subsequent purchaser obtains the property. /d. Thus, in this

case, the statute of limitations began to run in 1963. It has

long since expired.

b. Application of the Discovery Rule

Even if the California courts would apply a discovery

rule to this case, Plaintiffs’ Complaint does not state facts

25a

Appendix B

sufficient to survive the motion to dismiss. “The discovery

rule provides that, in an appropriate case, a cause of action

will not accrue until the injured party discovers, or by exercise

of reasonable diligence and intelligence should have

discovered, facts which form the basis of a cause of action.”

O’ Keefe v. Snyder, 83 N.J. 478, 491, 416 A.2d 862 (1980).

Plaintiffs’ own Complaint establishes several key facts:

(1) the world knew of Mauthner’s prior ownership of the

painting for years; (2) Mauthner was aware that the painting

was lost or stolen; and (3) Taylor’s purchase and ownership

of the painting was common knowledge and easily

discoverable. The facts establish that Plaintiffs, “by exercise

of reasonable diligence,” should have discovered Taylor’s

ownership in 1963. O'Keefe, 83 N.J. at 491, 416 A.2d 862.

The Complaint fails to allege any diligence on Plaintiffs part,

much less any reasonable diligence. Thus, even if the

discovery rule applied to this case, Plaintiffs have still failed

to state a claim.

Therefore, the Court dismisses Plaintiffs’ claims,

numbered nine through thirteen, for claims of conversion,

replevin, constructive trust, and restitution, as barred by the

California statute of limitations.

3. English Law

Taylor asserts that the California courts would apply

1963 English law to this case because the painting was bought

in England. Under that law, Taylor claims that Plaintiffs’ suit

is time-barred.

26a

Appendix B

The Court need not reach the merits of Taylor’s choice-

of-law argument at this time. Taylor relies on declaration

evidence that may or may not be contested to establish what

the result would be in this case under English law. However,

a motion to dismiss for failure to state a claim is judged on

the pleadings, not declarations such as Taylor has provided

to the Court. Moreover, the California statute of limitations

bars Plaintiffs’ claims.

B. Plaintiffs’ Non-Traditional Causes of Action

Plaintiffs have stated several non-traditional causes of

action. No court has ever found valid the causes of action

that Plaintiffs claim in their Complaint. For the following

reasons, the Court finds that Plaintiffs’ non-traditional claims

are invalid.

1. Claims Arising Out of Federal Law

Federal courts are reluctant to create a new cause of

action that Congress did not explicitly create through

legislative action. See United States v. Gilman, 347 U.S. 507,

74 S.Ct. 695, 98 L.Ed. 898 (1954); Wheeldin v. Wheeler, 373

U.S. 647, 651, 83 S.Ct. 1441, 10 L.Ed.2d 605 (1963). The

courts will only create a new cause of action where absolutely

necessary in order to effectuate Congress’s intent. See, e.g.,

Cannon v. University of Chicago, 441 U.S. 677, 688, 99 S.Ct.

1946, 60 L.Ed.2d 560 (1979); J.I. Case Co. v. Borak, 377

U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964).

The Supreme Court’s methodology on how to best

determine a Congressional intent to create a cause of action

27a

Appendix B

has shifted over the past thirty years, with a trend against

finding new causes of. action. See Erwin Chemerinsky,

Federal Jurisdiction § 6.3.3 (4th ed.2003). Under the older

approach, the Supreme Court looked to four factors: whether

the Plaintiff is a member of a class envisioned by Congress,

whether there is any indication of Congressional intent,

whether implying a cause of action is consistent with the

overall statutory scheme, and whether the cause of action is

one traditionally left to state law. Cort v. Ash, 422 US. 66,

78, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975).

Under the current approach, the courts create a private

right of action “only if there is affirmative evidence of

Congress’s intent to create a private right of action.”

Chemerinsky at 385 (citing Touche Ross & Co. v. Redington,

442 U.S. 560, 99 S.Ct. 2479, 61 L.Ed.2d 82 (1979)). The

courts also presume that Congress is well aware of this

philosophy of judicial restraint, and therefore would clearly

enunciate an intent to create a private right of action when

that desire exists. See Karahalios v. Nat’l Federation of

Federal Employees, 489 U.S. 527, 109 S.Ct. 1282, 103

L.Ed.2d 539 (1989).

Here, under any Supreme Court methodology, the

Congressional Record does not indicate an intent to create a

private cause of action. Rather, it indicates a Congressional

intent to encourage governments to aid in the restitution of

property through currently existing laws. Plaintiffs

completely fail to address the fourth Cort factor. This factor

makes it clear that courts should not create a new federal

law where a state law already exists. Here, California law

already provides for conversion and specific recovery.

28a

Appendix B

Therefore, the Court finds that Plaintiffs claims, numbered

one through five, for causes of action arising out of federal

law, are invalid and are dismissed.

2. Claims Arising Out of the California

Legislature’s Findings and Declarations

Plaintiffs also ask the Court to create a new California

claim that arises out of the California legislatures findings

and declarations. No California court has created a special

claim for the conversion of property in the maiuner proposed

by Plaintiffs. As a federal court of limited jurisdiction, this

Court is particularly reluctant to create a new California state

cause of action, particularly one that would contradict the

established California statute of limitations.

Therefore, the Court dismisses Plaintiffs’ claims,

numbered six through nine, for causes of action arising out

of the findings and declarations of the California legislature.

V. CONCLUSION

In light of the foregoing, Taylor’s motion to dismiss is

granted in its entirety.

IT IS SO ORDERED.

29a

APPENDIX C — HOLOCAUST VICTIMS

REDRESS ACT

PL 105-158, February 13, 1998, 112 Stat 15

HOLOCAUST VICTIMS REDRESS ACT

TITLE II—WORKS OF ART

Sec. 201. FINDINGS.

Congress finds as follows:

(1) Established pre-World War II principles of international

law, as enunciated in Articles 47 and 56 of the Regulations

annexed to the 1907 Hague Convention (IV) Respecting the

Laws and Customs of War on Land, prohibited pillage and

the seizure of works of art.

(2) In the years since World War II, international sanctions

against confiscation of works of art have been amplified

through such conventions as the 1970 Convention on the

Means of Prohibiting and Preventing the Illicit Import, Export

and Transfer of Ownership of Cultural Property, which

forbids the illegal export of art work and calls for its earliest

possible restitution to its rightful owner.

(3) In defiance of the 1907 Hague Convention, the Nazis

extorted and looted art from individuals and institutions in

countries it occupied during World War II and used such

booty to help finance their war of aggression.

(4) The Nazis’ policy of looting art was a critical element

and incentive in their campaign of genocide against

30a

Appendix C

individuals of Jewish and other religious and cultural heritage

and, in this context, the Holocaust, while standing as a civil

war against defined individuals and civilized values, must

be considered a fundamental aspect of the world war

unleashed on the continent.

(5) Hence, the same international legal principles applied

among states should be applied to art and other assets stolen

from victims of the Holocaust.

(6) In the aftermath of the war, art and other assets were

transferred from territory previously controlled by the Nazis

to the Union of Soviet Socialist Republics, much of which

has not been returned to rightful owners.

Sec. 202. SENSE OF THE CONGRESS REGARDING

RESTITUTION OF PRIVATE PROPERTY, SUCH AS

WORKS OF ART.

It is the sense of the Congress that consistent with the 1907

Hague Convention, all governments should undertake good

faith efforts to facilitate the return of private and public

property, such as works of art, to the rightful owners in cases

where assets were confiscated from the claimant during the

period of Nazi rule and there is reasonable proof that the

claimant is the rightful owner.

3la

Appendix C

U.S. HOLOCAUST ASSETS COMMISSION ACT OF 1998

An Act to establish a commission to examine issues

pertaining to the disposition of Holocaust-era assets in the

United States before, during, and after World War II, and to

make recommendations to the President on further action,

and for other purposes.

(a) ESTABLISHMENT.—There is established a Presidential

Commission, to be known as the “Presidential Advisory

Commission on Holocaust Assets in the United States”

(hereafter in this Act referred to as the “Commission’).

SEC. 3. DUTIES OF THE COMMISSION.

(a) ORIGINAL RESEARCH.—

(1) IN GENERAL.—Except as otherwise provided in

paragraph (3), the Commission shall conduct a thorough

study and develop a historical record of the collection and

disposition of the assets described in paragraph (2), if such

assets came into the possession or control of the Federal

Government, including the Board of Governors of the Federal

Reserve System and any Federal reserve bank, at any time

after January 30, 1933—

(A) after having been obtained from victims of the Holocaust

by, on behalf of, or under authority of a government referred

to in subsection (c);

(B) because such assets were left unclaimed as the result of

actions taken by, on behalf of, or under authority of a

government referred to in subsection (c); or

32a

Appendix C

(C) in the case of assets consisting of gold bullion, monetary

gold, or similar assets, after such assets had been obtained

by the Nazi government of Germany from governmental

institutions in any area occupied by the military forces of

the Nazi government of Germany.

(2) 1 YPES OF ASSETS.—Assets described in this

paragraph include—

(G) works of art; and

(H) books, manuscripts, and religious objects.

* * *

(3) COORDINATION OF ACTIVITIES.—In carrying out

its duties under paragraph (1), the Commission shall, to the

maximum extent practicable, coordinate its activities with,

and not duplicate similar activities already being undertaken

by, private individuals, private entities, or government

entities, whether demestic or foreign.

* * *

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated not more than

$3,500,000, in total, for the interagency funding of activities

of the Commission under this Act for fiscal years 1998, 1999,

and 2000, of which, notwithstanding section 1346 of title

33a

Appendix C

31, United States Code, and section 611 of the Treasury and

General Government Appropriations Act, 1998, $537,000

shall be made available in equal amounts from funds made

available for fiscal year 1998 to the Departments of Justice,

State, and the Army that are otherwise unobligated. Funds

made available to the Commission pursuant to this section

shall remain available for obligation until December 31,

1999.

NAZI WAR CRIMES DISCLOSURE ACT

SEC. 3. REQUIREMENT OF DISCLOSURE OF

RECORDS REGARDING PERSONS WHO COMMITTED

NAZI WAR CRIMES.

(a) NAZI WAR CRIMINAL RECORDS.—For purposes of

this Act, the term “Nazi war criminal records” means

classified records or portions of records that—

(1) pertain to any person with respect to whom the United

States Government, in its sole discretion, has grounds to

believe ordered, incited, assisted, or otherwise participated

in the persecution of any person because of race, religion,

national origin, or political opinion, during the period

beginning on March 23, 1933, and ending on May 8, 1945,

under the direction of, or in association with—

34a

Appendix C

(A) the Nazi government of Germany;

(B) any government in any area occupied by the military

forces of the Nazi government of Germany;

(C) any government esteblished with the assistance or

cooperation of the Nazi government of Germany; or

(D) any government which was an ally of the Nazi

government of Germany; or

(2) pertain to any transaction as to which the United States

Government, in its sole discretion, has grounds to believe—

(A) involved assets taken from persecuted persons during

the period beginning on March 23, 1933, and ending on May

8, 1945, by, under the direction of, on behalf of, or under

authority granted by the Nazi government of Germany or

any nation then allied with that government; and

(B) such transaction was completed without the assent of

the owners of those assets or their heirs or assigns or other

legitimate representatives.

’

(b) RELEASE OF RECORDS.—

(1) INGENERAL.—Subject to paragraphs (2), (3), and (4),

the Nazi War Criminal Records Interagency Working Group

shall release in their entirety Nazi war criminal records that

are described in subsection (a).

35a

Appendix C

SEC. 4. EXPEDITED PROCESSING OF FOIA REQUESTS

FOR NAZI WAR CRIMINAL RECORDS.

(a) EXPEDITED PROCESSING.—For purposes of

expedited processing under section 552(a)(6)(E) of title 5,

United States Code, any requester of a Nazi war criminal

record shall be deemed to have a compelling need for such

record.

(b) REQUESTER.—For purposes of this section, the term

“requester” means any person who was persecuted in the

manner described under section 3(a)(1) of this Act who

requests a Nazi war criminal record.

CALIFORNIA CIVIL PROCEDURE CODE 338(c)

335. The periods prescribed for the commencement of

actions other than for the recovery of real property, are as

follows:

338. Within three years:

(c) An action for taking, detaining, or injuring any goods

or chattels, including actions for the specific recovery of

personal property. The cause of action in the case of theft, as

defined in Section 484 of the Penal Code, of any article of

historical, interpretive, scientific, or artistic significance is

not deemed to have accrued until the discovery of the

36a

Appendix C

whereabouts of the article by the aggrieved party, his or her

agent, or the law enforcement agency that originally

investigated the theft.

JANUARY 7, 2002

An act to add Section 354.3 to the Code of Civil

Procedure, relating to limitation of actions.

LEGISLATIVE COUNSEL’S DIGEST

AB 1758, Nakano. Limitation of actions: Holocaust-

era artwork.

Existing law authorizes actions for the taking, detaining,

or injuring of any good or chattel, or for the specific recovery

of personal property to be commenced within 3 years.

Existing law authorizes actions for the theft of any article of

historical, interpretive, scientific, or artistic significance to

be commenced within 3 years of the discovery of the article

by various entities, as defined.

This bill would authorize any owner, or heir or

beneficiary of the owner, of Holocaust-era artwork, as

defined, to bring an action in superior court to recover that

artwork from any museum or gallery. This bill would provide

that any action brought under these provisions may not be

dismissed for failure to comply with the applicable statute

of limitation, provided the action is commenced on or before

December 31, 2010.

37a

Appendix C

SECTION 1. The Legislature finds and declares the

following:

(a) In addition to the many atrocities that befell the

victims of the Nazi regime, treasured pieces of artwork were

wrongfully taken.

(b) Thousands of victims of Nazi persecution, and the

heirs of victims of Nazi persecution, are residents of the State

of California. Many of these victims and descendants are

investigating the whereabouts of artwork that rightfully

belonged to their families.

(c) California has a moral and public policy interest in

assuring that its residents and citizens are given a reasonable

opportunity to commence an action in court for those pieces

of artwork now located in museums and galleries.

(d) Museums are committed to resolving claims for

Holocaust-era artwork in an amicable and timely manner,

and to undertaking every effort to conduct thorough

provenance research to identify artwork that may have been

stolen during the Holocaust Era.

(e) Currently, an individual has three years, after

discovering the whereabouts of the artwork, to commence

an action in court.

(f) Due to the unique circumstances surrounding the theft

of Holocaust-era artwork, commencement of an action

requires detailed investigation in several countries, involving

numerous historical documents and the input of experts.

38a

Appendix C

(g) In order to obtain all necessary data, investigating a

prospective action may take several years.

(h) The current three-year statute of limitation, after

discovery of the whereabouts of the artwork, is an insufficient

amount of time to finance, investigate, and commence an

action.

(1) To the extent that the enactment of this act will extend

the statute of limitation, that extension of the limitation

period is intended to be applied retroactively, irrespective of

whether the claims were barred by any applicable statute of

limitation under any other provision of law prior to the

enactment of this act.

SEC. 2. Section 354.3 is added to the Code of Civil

Procedure, to read:

354.3. (a) The following definitions govern the

construction of this section:

(1) “Entity” means any museum or gallery that displays,

exhibits, or sells any article of historical, interpretive,

scientific, or artistic significance.

(2) “Holocaust-era artwork” means any article of artistic

significance taken as a result of Nazi persecution during the

period of 1929 to 1945, inclusive.

(b) Notwithstanding any other provision of law, any

owner, or heir or beneficiary of an owner, of Holocaust-era

artwork, may bring an action to recover Holocaust-era

39a

Appendix C

artwork from any entity described in paragraph (1) of

subdivision (a). Subject to Section 410.10, that action may

be brought in a superior court of this state, which court shall

have jurisdiction over that action until its completion or

resolution. Section 361 does not apply to this section.

(c) Any action brought under this section shall not be

dismissed for failure to comply with the applicable statute

of limitation, if the action is commenced on or before

December 31, 2010.

40a

APPENDIX D — LAW NO. 59 RESTITUTION OF

IDENTIFIABLE PROPERTY

MILITARY GOVERNMENT — GERMANY

UNITED STATES AREA OF CONTROL

LAW NO. 59

RESTITUTION

OF IDENTIFIABLE PROPERTY

PART I

GENERAL PROVISIONS

ARTICLE 1

Basic Principles

1. It shall be the purpose of this Law to effect to the

largest extent possible the speedy restitution of identifiable

property (tangible and intangible property and aggregates of

tangible and intangible property) to persons who were

wrongfully deprived of such property within the period from

30 January 1933 to 8 May 1945 for reasons of race, religion,

nationality, ideology or political opposition to National

Socialism. For the purpose of this Law deprivation of

property for reasons of nationality shall not include measures

which under recognized rules of international law are usually

permissible against property of nationals of enemy countries.

2. Property shall be restored to its former owner or to

his successor in interest in accordance with the provisions

of this Law even though the interests of other persons who

had no knowledge of the wrongful taking must be

subordinated. Provisions of law for the protection of

purchasers in good faith, which would defeat restitution, shall

be disregarded except where this Law provides otherwise.

4la

Appendix D

ARTICLE 3

Presumption of Confiscation

1. It shall be presumed in favor of any claimant that the

following transactions entered into between 30 January 1933

and 8 May 1945 constitute acts of confiscation within the

meaning of Article 2:

a) Any transfer of relinquishment of property made

during a period of persecution by any person who

was directly exposed to persecutory measures on

any of the grounds set forth in Article 1;

we

Any transfer or relinquishment of property made

by a person who belonged to a class of persons

which on any of the grounds set forth in Article 1

was to be eliminated in its entirety from the cultural

and economic life of Germany by measures taken

by the State or the NSDAP.

2. In the absence of other factors proving an act of

confiscation within the meaning of Article 2, the

presumptions set forth in paragraph | may be rebutted by

showing that the transferor was paid a fair purchase price.

Such evidence by itself shall not, however, rebut the

presumptions if the transferor was denied the free right of

disposal of the purchase price on any of the grounds set forth

in Article 1.

5. A fair purchase price within the meaning of this

Article shail mean the amount of money which a willing

buyer would pay and a willing seller would take, taking into

42a

Appendix D

consideration, in the case of a commercial enterprise, the

normal good will which such enterprise would have in the

hands of a person not subject to persecutory measures referred

to in Article 1.

ARTICLE 4

Power of Avoidance

1. Any transaction entered into by a person belonging

to aclass referred to in Paragraph | b) of Article 3 within the

period from 15 September 1935 (the date of the first

Nuremberg laws) to 8 May 1945 may, because of the duress

imposed on such class, be avoided by a claimant where such

transaction involved the transfer or relinquishment of any

property unless:

a) The transaction as such and with its essential terms

would have taken place even in the absence of

National Socialism, or

b) The transferee protected the property interests of

the claimant (Article 7) or his predecessor in interest

in an unusual manner and with substantial success,

for example, by helping him in transferring his

assets abroad or through similar assistance.

2. In determining under paragraph | a) whether the

transaction would have taken place even in the absence of

National Socialism, the fact that

the transferor himself offered to sell the property to the

transferee, or

43a

Appendix D

the transferor received a fair purchase price (see Article

3, paragraph 3) the free right of disposal of which was

not denied him on any of the grounds set forth in

Article 1,

shall be considered by the Restitution Authority together with

all other facts, but neither fact, either singly or in conjunction

with the other, shall be sufficient to show that the transaction

would have taken place even in the absence of National

Socialism.

3. Similarly neither of these facts, either singly or in

conjunction with the other, shall be sufficient to .show that

the claimant is estopped from exercising the power of

avoidance by reason of his own previous conduct or that of

his predecessor in interest.

4. The term “claim for restitution” as used in this Law

shall be deemed to include all claims based on the right to

exercise the power of avoidance. The exercise of the power

of avoidance shall have the effect that the property transferred

or relinquished pursuant to the voided transaction shall for

the purposes of this Law be deemed to be confiscated

property.

5. The filing of a claim for restitution shall, whether or

not it is specifically stated, be deemed to be an exercise of

the right of avoidance on behalf of the person entitled to

exercise such right.

44a

Appendix D

ARTICLE 14

Persons Liable to Make Restitution

The person liable to make restitution (hereinafter referred

to as restitutor), within the meaning of this Law, is the present

possessor of confiscated tangible property or the present

holder of a confiscated intangible interest, or of an aggregate

of tangible and intangible property.

ARTICLE 19

Protection of Ordinary and

Usual Business Transactions

Except as provided in Articles 20 and 21, tangible

personal property shall not be subject to restitution if the

present owner or his predecessor in interest acquired it in

the course of an ordinary and usual business transaction in

an establishment normally dealing in that type of property.

However, the provisions of this Article shall not apply to

religious objects or to property which has been acquired from

private ownership if such property is an object of unusual

artistic, scientific, or sentimental personal value, or was

acquired at an auction, or at a private sale in an establishment

engaged to a considerable extent in the business of disposing

of confiscated property. |