Amicus Curiae Brief — Orkin v. Taylor (No. 07-216)

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Supreme Court of the United States

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ANDREW J. ORKIN, F. MARK ORKIN

and SARAH-ROSE JOSEPHA ADLER,

Petitioners,

Vv.

ELIZABETH TAYLOR,

Respondent.

ON PETITION FOR A Writ OF CERTIORARI TO THE

Unitep States Court OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF OF THE CENTER FOR HOLOCAUST AND

GENOCIDE STUDIES AND THE HOLOCAUST

RESTITUTION CLAIMS PRACTICUM OF THE BENJAMIN

N. CARDOZO SCHOOL OF LAW AS AMICI CURIAE IN

SUPPORT OF PETITIONERS

Avww G. KALMANSON*

THE McMiitan Law Firm

Attorneys for Amici Curiae

4670 Nebo Drive

La Mesa, CA 91941-5230

(619) 464-1500

Micuae J. Bazyier, Of Counsel

Lucuwe A. Roussin, Of Counsel

* Counsel of Record

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TABLE OF CONTENTS

TABLE OF CITED AUTHORITIES

INTEREST OF THE AMICI CURIAE

SUMMARY OF THE ARGUMENT

ARGUMENT

1.

THE DECISIONS OF THE COURTS BELOW

IN THIS CASE RUN COUNTER TO THE

CONSISTENTLY AFFIRMED PUBLIC

POLICY OF THE UNITED STATES

GOVERNMENT TO RETURN NAZI-

LOOTED ART TC ITS RIGHTFUL OWNERS.

WITH RESPECT TO NAZI-LOOTED ART,

THE CALIFORNIA STATUTE OF

LIMITATIONS IS PREEMPTED BY THE

DOMESTIC POLICY. OF THE UNITED

STATES THAT SUCH ART BE RESTITUTED

TO THE TRUE OWNERS. ...cccccccoes:

THE NINTH CIRCUIT FAILED TO

FOLLOW CALIFORNIA STATE LAW WITH

RESPECT TO STATUTES OF LIMITATIONS

APPLICABLE IN THE CIRCUMSTANCES

OF ‘TH SRE cient sckchaceneeeisere

IN THE CONTEXT OF NAZI-LOOTED ART,

STATUTES OF LIMITATION MUST BE

BALANCED AND RECONCILED WITH THE

PRINCIPLE OF NEMO DAT, INCLUDING BY

REQUIRING POSSESSORS TO ESTABLISH

DUE DILIGENCE AND CLEAN HANDS. .

CONCLUSION

16

il

TABLE OF CITED AUTHORITIES

Page

FEDERAL CASES

American Insurance Association v. Garamendi,

539 U.S. 396 (2003) ...... 2... cee eee eee 3,9

Orkin y. Taylor,

487 F.3d 734 (9th Cir.2007) ............008.. 11-14

Exxon Company, U.S.A

v. Banque de Paris et des Pays-Bas,

488 U.S. 920 (1988) ......... 0 eee eee eee 10

Republic of Austria v. Altmann,

UR be ke) \ 12

Rosenberg v. Seattle Museum,

124 F. Supp. 2d 1207 (W.D. Wash.2000) ....... 17

Six Companies of California v. Highway District,

Dit U.S. ISO CUSED) 2... ccc ccc cen sevcvcncs 10

Stoner v. New York Life Ins. Co.,

311 U.S. 464 (1940) 2.2.2.2... jsse0hanen< 10

United States v. Portrait of Wally,

2002 U.S. Dist. LEXIS 6445,

2002 WL 553534 (S.D.N.Y.2002) ........... 8

United States v. Portrait of Wally,

105 F.Supp.2d 288 (S.D.N.Y.2000) ........ * 8

iii

Cited Authorities

U.S. v. One Oil Painting Entitled “Femme en Blanc”

by Pablo Picasso,

362 F.Supp.2d 1175 (C.D.Cal.2005) .......... &

West v. Am. Tel. & Tel. Co.,

DAE Te SE iva cdcouwnnstenevaers 10

STATE CASES

Aubry v. Tri-City Hospital Dist.,

2 Ca Sa ee MES kc be vccvessreceses 15

E-Fab, Inc. v. Accountants, Inc. Services,

153 Cal. App. 4th 1308 (2007) ............... tl

Fox v. Ethicon Endo-Surgery, Inc.,

55 CA FEF COED cork So cces ves ctedes 3, 11-15

Jolly v. Eli Lilly & Co.,

GE Ge BOSE CEE. So nvccccnabececrivacs 11-13

Menzel v. List,

SOG FE Va ATO CRD ons k ceceeeevadetes 17

Norgart v. Upjohn Co.,

21 Cal.4th 383 at 398 (1999) ................ 13

FEDERAL STATUTES

Holocaust Victims Redress Act,

, Ta. 5, Sih) 2. ee 6

Military Government Law No. 59 .............. 5, 6

iv

Cited Authorities

Page

National Stolen Property Act, 18 U.S.C. § 2314 ... 7

Nazi War Crimes Disclosure Act, Pub. L. 105-567,

a OR aR eating ae ae i eh ae 6

United States Holocaust Assets Commission Act,

Pub. L. 105-186, 112 Stat.611 ............... 6

STATE STATUTES

California Holocaust Victims Insurance Relief Act of

1999, Cal. Ins. Code Ann. §§ 13800-13807 ..... 9,10

SUPREME COURT RULES

as plu caus seh ewadweaed | ]

ES oa dae tig bab hab eeen bceaenae oe 1

OTHER AUTHORITIES

Marilyn E. Phelan, Scope of Due Diligence

Investigation in Obtaining Title to Valuable

Artwork, 23 Seattle Univ. L.R. 631 (2000) ..... 16

INTERNET SITES

http://www.state.gov/www/regions/eur/981203 _

I ED in'vcd cdnsveessenveneeas 7

http://www.state.gov/p/eur/rv/hlest .............. 5

~)

http://www.state.gov/p/eur/rv/hicsvc10071.htm ....

Cited Authorities

attp://www.state.gov/p/eur/ris/rm/83392.htm ..... 5

http://www.usembassy-israel.org.il/publish/press/

treasure/archive/2000/april/dt20407.htm ....... 5

]

INTEREST OF THE AMICI CURIAE'

The Center for Holocaust and Genocide Studies at the

University of Minnesota (“the Center”) is a leading resource

for information, scholarly study, and teaching about the

Holocaust and contemporary aspects of genocide. The Center

is an independent center at the University of Minnesota,

established in 1997, and administered through its history

department. The issue of Holocaust-era looted art has been one

of the Center’s concerns and areas of expertise. The Center also

has one of the largest web sites in the world (http://

www.chgs.umn.edu) related to art and the Holocaust, which was

visited approximately 15 million times last year alone.

The Director of the Center, Dr. Stephen Feinstein, has

particular expertise in the Holocaust, including the issues of art

and the Holocaust, having written extensively and taught in this

area. Additionally, Dr. Feinstein served on a National

Endowment for the Humanities Review panel that reviewed,

among other films, the newly-released documentary The Rape

of Europa (2007), the most comprehensive documentary about

the looting of art by the Nazis, and the efforts by the United

States government and the allies immediately after World War

II, and still ongoing, to restitute art to its rightful owners.

The Holocaust Restitution Claims Practicum of the

Benjamin N. Cardozo School of Law (“the Practicum”) was

founded in 2000 by Dr. Lucille A. Roussin, a lawyer and art

historian. The Practicum provides pro bono legal assistance,

under the supervision of Dr. Roussin, to various agencies and

* Pursuant to this Court’s Rule 37 subd. 2.(a), all parties have

consented to the filing of this brief by the amici curiae. Letters

evidencing such consent are being filed with the Clerk of the Court

with this brief. Pursuant to this Court’s Rule 37 subd. 6, amici confirm

that no counsel for any party authored this brief in whole or in part, and

no person or entity, other than amici, their members and their counsel,

made a monetary contribution to the preparation or submission of this

brief.

law firms that represent Holocaust victims. Dr. Roussin teaches

a seminar for the Practicum’s students, entitled “Remedies for

War Time Confiscation,” which examines the historical and legal

framework of the restitution process. The Practicum is the only

program of its kind at an American law school. Dr. Roussin is

also in private practice.

Amici are interested in the instant litigation because its

resolution by American courts will have a significant impact

worldwide on the ongoing efforts to restitute Nazi-era looted

art. Amici are concerned that the summary dismissal of the

petitioners’ well-founded and well-pleaded claims by the courts

below on statute of limitations grounds, if allowed to stand,

will have a chilling effect on the outcome of future and current

unresolved claims involving Holocaust-era looted art. It is

imperative that the law reasonably reflect the difficulties in

establishing provenance of artworks looted during times of war,

and especially during the Second World War.

Historically, the Holocaust represents the most extreme

example of pillage of property that has been a prelude to almost

every genocide. Amici’s involvement in this case is rooted in

their conviction that the restitution of Nazi-looted property to

its rightful owners is an integral part of efforts to ensure that the

law does not sanction genocide and pillage.

Amici therefore urge the Supreme Court of the United States

to grant the petition for certiorari in this case.

SUMMARY OF THE ARGUMENT

1. The decisions of the federal courts below, which

determined at the preliminary stage of a motion to dismiss,

without a hearing, that the petitioners’ claim was time-barred

under California law, run directly counter to the express,

consistently affirmed and continuing foreign and domestic

public policy of the United States government to have Nazi-era

looted art claims decided on their merits and to have such art

returned to its rightful owners.

3

2. In light of this policy, and pursuant to this Court’s ruling

in American Insurance Association vy. Garamendi, 539 U.S. 396

(2003), a summary application of the California statute of

limitations by the federal courts below interferes with the foreign

and domestic policy of the United States with respect to

Nazi-looted art, with the consequence that the state statute is

pre-empted in these circumstances.

3. The courts below also erred in their determination of

State law. In applying a supposed California strict doctrine of

constructive notice in the circumstances of this case, the District

Court and the Ninth Circuit overlooked a more recent On-point

holding of the California Supreme Court in Fox v. Ethicon Endo-

Surgery, Inc., 35 Cal.4th 797, (2005), which articulated a

“delayed discovery rule” applicable when reasonable

investigation could not have led to earlier discovery of the

plaintiff's claim. In contravention of California authority, the

Ninth Circuit completely failed to consider whether petitioners

could reasonably have discovered their Cause of action earlier.

Such failure to ascertain and apply correct state law is itself

grounds for granting the writ.

4. In the context of Nazi-looted art, statutes of limitations

must be balanced with equitable Principles such as nemo dat

qui non habet, that require possessors of such art to establish

due diligerce and clean hands. The courts below failed to

consider salient facts with respect to these factors raised by the

petitioners. This approach, if allowed to stand, will essentially

entrench the inevitability of adverse Possession with respect to

stolen art. This cannot be correct.

4

ARGUMENT

i. THE DECISIONS OF THE COURTS BELOW IN

THIS CASE RUN COUNTER TO THE

CONSISTENTLY AFFIRMED PUBLIC POLICY OF

THE UNITED STATES GOVERNMENT TO

RETURN NAZI-LOOTED ART TO ITS RIGHTFUL

OWNERS.

The pernicious result created by the decision of the District

Court and affirmed by the Ninth Circuit is that a family whose

artwork was stolen by the Nazis cannot be permitted to present

evidence showing that it is legally entitled to claim such art.

Moreover, the family is not even allowed to show that it made

reasonable efforts to investigate their cause of action before

bringing suit. Rather, according to the courts below, the family’s

claim can be summarily dismissed on statute of limitations

grounds by a motion to dismiss, with the court simply concluding

from the pleadings alone that the family should have earlier

discovered the existence of their claim. The family is not given

the opportunity to rebut this finding by showing either (1) that

they could not have been reasonably aware of their claim, or (2)

that the defendant possessor misled the claimants by her

representations about the provenance of the artwork. Rather,

on a motion to dismiss, and without regard to the facts alleged

in the complaint concerning the reasonableness of any delay,

the court can decide that the claim is conclusively time-barred.

Such a result is contrary to the consistent and expressed

foreign and domestic policy of the United States to have Nazi-

era looted art claims decided on their merits and to have such

art returned to its rightful owners.’

2 See U.S. Department of State website, “Holocaust issues”:

The Office of the Special Envoy for Holocaust Issues

develops and implements U.S. policy with respect to the

return of Holocaust-era assets to their rightful owners,

(Cont'd)

The United States government has played a leading role in

efforts to restitute Nazi-era looted art to the Jewish families or

their heirs. Ambassador J. Christian Kennedy, the current U.S.

State Department’s Special Envoy on Holocaust Issues recently

explained: “The United States was spared the ravages of the

war, but as one of the Allied Powers it had a major role in

returning artworks found in salt mines and other places of

safekeeping after the war.”

This effort started in 1945 with the creation of Allied Forces’

Monuments, Fine Arts and Archives section and its elite cadre

(the so-called “Monuments Men”) charged with locating and

returning the art works to the countries from which the Nazis

had stolen them.

Critical to the restitution effort was the promulgation of

Military Government Law No. 59. enacted in 1947 in the

American zone and similarly enacted in the British and French

zones of occupation. Under this law all transfers of property

(Cont'd) Pr 7

compensation for wrongs committed during the Holocaust,

and Holocaust remembrance . . . This is an important issue

in our bilateral relations with countries of central and

eastern Europe and with the state of Israel

(Emphases added), available at http://www state .gov/p/eur/rvhlesv (last

visited September 18, 2007).

See also Testimony of the Honorable Stuart Eizenstat, Under

Secretary for Economic Affairs, U.S. Department of State before the

U.S. Senate Foreign Relations Committee, April 5, 2000: “Our policy

on Holocaust issues also serves important U.S. foreign policy interests

-” available at hitp://www.usembassy-israel org.il/publish/press/

treasure/archive/2000/april/dt20407.htm (last visited September 18,

2007).

’ J. Christian Kennedy, “The Role of the United States Government

in Art Restitution,” Address in Potsdam, Germany, April 23, 2007,

available at www.state g0v/p/eur/ris/rm/83392.htm (last visited

September 18, 2007),

6

after 1933 were presumed to be confiscations. Article 1 of MGL

59 states that “It shall be the purpose of this law to effect to the

largest extent possible the speedy restitution of identifiable

property . . . to persons who were wrongfully deprived of such

property within the period from 30 January 1933 to 8 May 1945.”

While the immediate post-war efforts to locate, sort, identify

and return Nazi-era looted artworks were partially successful,

many stolen artworks were not restituted. According to

Ambassador Kennedy, “{wJith some important exceptions it was

not until the collapse of communism [in the 1990’s] that a serious

effort commenced to identify artworks that still had not been

returned to rightful owners.” (Kennedy address, supra n.3)

The United States again took the lead in these post-Cold

War efforts to seek justice for Holocaust victims. In 1998,

Congress asserted its jurisdiction over Holocaust restitution

issues by enacting three laws: (1) the Holocaust Victims Redress

Act, Pub.L. 105-158, 112 Stat. 15; (2) the Nazi War Crimes

Disclosure Act, Pub. L. 105-567, 114 Stat. 2865; and (3) and

the United States Holocaust Assets Commission Act, Pub. L.

105-186, 112 Stat. 611. In the Holocaust Victims Redress Act,

Congress expressly affirmed its policy that “the same

international legal principles applied among states should be

applied to art and other assets stolen from victims of the

Holocaust” (§ 201(5)). Section 202 of the Act provides:

{Ajll 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

claimants during the period of Nazi rule and there is

reasonable proof that the claimant is the rightful

owner. (emphases added)

In 1998, the U.S. Department of State organized the

Washington Conference on Nazi-Looted Assets, and looted art

was a major focus of this conference. At the behest of the United

7

States, forty-four nations adopted the so-called Washington

Conference Principles on Nazi-Confiscated Art (the

“Washington Principles”). Ambassador Kennedy explained the

straightforward goal of this U.S.-led initiative: “The Washington

Principles are based on the simple premise that artworks

displaced during the 1933-1945 period should be returned to

rightful owners” (Kennedy address, supra n.3). The Principles

thus expressly encourage “[p]re-war owners and their heirs...to

come forward and make known their claims to art that was

confiscated by the Nazis and not subsequently restituted”

(Principle 7), and recognize the challenges that have delayed

such efforts, by affirming that “i]n establishing that a work of

art had been confiscated by the Nazis and not subsequently

restituted, consideration should be given to unavoidable gaps

or ambiguities in the provenance in light of the passage of time

and the circumstances of the Holocaust era” (Principle 4).

Support for the Washington Principles remains a central element

of U.S. foreign policy.’

The Picasso forfeiture case in California and the Schiele

forfeiture case in New York are emblematic of the considerable

efforts undertaken by U.S. federal officials to enforce the policy

of restituting Nazi-era looted art to their rightful owners.

In 2000, the United States Attorney’s Office in New York

filed a civil forfeiture action under the National Stolen Property

Act, 18 U.S.C. 2314 (“NSPA”) to seize the painting by Egon

Schiele, Portrait of Wally, which had been displayed in a Schiele

exhibition at the Museum of Modern Art, on loan from the

* Washington Conference Principles On Nazi-Confiscated Ant,

Released in connection with the Washington Conference on Holocaust-

Era Assets, Washington, DC, December 3, 1998, available at http://

www state. gov/www/regions/eur/981203_heac art princ.html (last

visited September 18, 2007).

* U.S. Department of State website, “Holocaust Issues”, available

at hittp://www.state.gov/p/eur/rVhicsvc 10071 htm (last visited September

18, 2007),

Rudolph Leopold Collection in Vienna, Austria. See United

States v. Portrait of Wally, 2002 U.S. Dist. LEXIS 6445, 2002

WL 553534 (S.D.N.Y. 2002) and 105 F.Supp. 2d 288 (S.D.N.Y.

2000). The U.S. Government will turn over the painting to its

proper owner only after a trial is held to determine on the merits

which competing claimant is the rightful owner of the painting.

In 2004, the United States Attorney’s Office in Los Angeles

filed a civil forfeiture proceeding to seize a Picasso painting,

La Femme en Blanc, in the possession of a private owner in

Chicago. See U.S. v. One Oil Painting Entitled “Femme en

Blanc” by Pablo Picasso, 362 F.Supp.2d 11 75 (C.D.Cal. 2005).

Thomas Bennigson, the grandson of the pre-war Jewish owner,

commenced parallel legal proceedings in California against the

current possessor of the painting, Marilyn Alsdorf, alleging that

La Femme en Blanc was stolen by the Nazis from his

grandmother. In the forfeiture proceeding, commenced after

Alsdorf transported the painting from Los Angeles to Chicago

after learning of Bennigson’s California suit, the U.S.

government argued that the painting was transported across state

lines in violation of the NSPA. The seizure action was dropped

after the parties settled the litigation.

The U.S. federal government today remains committed to

seeing Nazi-era looted art returned to rightful owners.

Ambassador Kennedy recently set out how Nazi-era looted art

claims should be resolved. He explained that the United States

seeks to have cases of Nazi-era looted art decided on the

“circumstances under which the artwork in question moved from

one holder to another during the turmoil that prevailed in Europe

during the Nazi era and the immediate postwar period” rather

than on “legal arguments that frequently deal solely with

procedural issues” (Kennedy address, supra).

The decisions of the District Court and the Ninth Circuit

below in the instant litigation are directly in opposition to the

policy of the federal government, by allowing claims for the

return of Nazi-looted art to be summarily dismissed on statute

of limitations grounds.

9

2. WITH RESPECT TO NAZI-LOOTED ART, THE

CALIFORNIA STATUTE OF LIMITATIONS IS

PREEMPTED BY THE DOMESTIC POLICY OF

THE UNITED STATES THAT SUCH ART BE

RESTITUTED TO THE TRUE OWNERS.

In American Insurance Association v. Garamendi, 539 U.S.

396 (2003), this Court considered a challenge to the California

Holocaust Victims Insurance Relief Act of 1999 (“HVIRA”),

Cal. Ins. Code Ann. §§ 13800-13807, on the basis that the state

Statute interfered with the United States government’s conduct

of foreign relations. The Court concluded that the state statute

was preempted. Amici submit that this same reasoning applies

in the current case: a summary application of the California

statute of limitations by the federal courts below interferes with

the consistently affirmed domestic policy of the United States

with respect to Nazi-looted art, with the consequence that the

State statute is preempted in these circumstances.

The conclusions articulated by this Court in Garamendi

apply in respect of Nazi looted art that is now held by United

States residents and located within our borders. First, this is a

matter well within the Executive’s responsibility for foreign

affairs. Moreover, with respect to Nazi-looted art, the

Executive’s responsibility is also rooted in the Constitution’s

Commerce Clause, which gives the federal government power

to regulate interstate and foreign commerce. In the current case,

as in many cases arising in U.S. courts concerning works of art

in which there is evidence of Nazi coercion-tainted provenance,

the painting was transported by the respondent across state lines

(interstate commerce), after having entered the United States

from abroad (foreign commerce).

Second, as in Garamendi, the United States Government

has articulated and followed a particular policy. In Garamendi,

this policy “to encourage European governments and companies

to volunteer settlement funds in preference to litigation or

10

coercive sanctions” (539 U.S. 396 at 421) was expressed

principally in the executive agreements with Germany, Austria

and France, in addition to the pronouncements of state officials.

In the current case, the federal policy is expressed, inter alia, in

Acts of Congress, the Washington Principles adopted at the

behest of the United States following the international

Washington Conference organized by the U.S. Department of

State, actions of the United States Attorney’s Office, and

consistent pronouncements of state officials.

It is thus evident that with respect to credible Nazi-looted

art claims, the federal policy has been to resolve such claims on

their merits, rather than by resort to procedural devices such as

the statute of limitations. The state law as applied by the federal

courts below is therefore in “clear conflict” with federal policy

concerning the restitution of Nazi looted art, and pursuant to

Garamendi the Califomia statute of limitations cannot be applied

so as to defeat federal policy concerning the restitution of such

art to its rightful owners.

3. THE NINTH CIRCUIT FAILED TO FOLLOW

CALIFORNIA STATE LAW WITH RESPECT TO

STATUTES OF LIMITATIONS APPLICABLE IN

THE CIRCUMSTANCES OF THIS CASE.

In a diversity case such as this, federal courts are required

to follow and apply the law as articulated by state courts, and

failure to do so constitutes a ground for granting certiorari.

See Exxon Company, U.S.A. v. Banque de Paris et des Pays-

Bas, 488 U.S. 920 (1988); Stoner v. New York Life Ins. Co., 311

U.S. 464 (1940); Six Companies of California v. Highway

District, 311 U.S. 180, 188 (1940). Moreover, in a diversity

case, “it is the duty of the [federal court] in every case to ascertain

from all the available data what the state law is and apply sg

West v. Am. Tel. & Tel. Co., 311 U.S. 223, 237 (1940). When a

federal court fails to follow state law, certiorari may be granted

on this question alone (Six Companies, supra at 185:

“We granted certiorari limited to the question whether there

1]

was error in that ruling [of the federal Circuit Court of Appeal

in refusing to follow a state Court of Appeal decision]”).

In the instant case, the Ninth Circuit correctly understood

its obligation to ascertain state law: “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. In doing so, we take state law as it exists without

speculating as to future changes in the law” Orkin v. Taylor,

487 F.3d 734 at 741 (9 Cir.2007). However, the federal court’s

prediction of how the California Supreme Court would have

ruled on the issue of statute of limitations in this case was

patently incorrect. In applying a strict reading of Jolly v. Eli

Lilly & Co. 44 Cal.3d 1103 (1988) to the circumstances of the

current case, the Ninth Circuit clearly erred in its determination

of state law, by overlooking the directly on-point and more recent

holding of the Supreme Court of California in Fox v. Ethicon

Endo-Surgery, Inc., 35 Cal.4th 797, 110 P.3d 914 (2005).°

In Fox, the Supreme Court of California considered a

motion to dismiss (demurrer) raising a statute of limitations

defense — precisely the same procedural route as was employed

in the present case. The court in Fox reviewed its previous

decisions with respect to statutes of limitations, including Jolly,

ané articulated a “delayed discovery rule” applicable when

reasonable investigation by the plaintiff could not have led to

earlier discovery:

We conclude that, under the delayed discovery rule,

a cause of action accrues and the statute of limitations

begins to run when the plaintiff has reason to suspect

an injury and some wrongful cause, unless the

plaintiff pleads and proves that a reasonable

investigation at that time would not have revealed a

* Further authority for the salience of the principle of delayed

accrual announced in Fox appears recently in E-Fab, inc. v. Accountants,

Inc. Services, 153 Cal. App. 4th 1308, 1323 (2007).

12

factual basis for that particular cause of action. In

that case, the statute of limitations for that cause of

action wiil be tolled until such time as a reasonable

investigation would have revealed its factual basis.

(35 Cal.4th at 803, emphasis added) ,

The Fox decision further sets out the burden to be placed upon

the plaintiff who invokes the delayed discovery rule:

Simply put, in order to employ the discovery rule to

delay accrual of a cause of action, a potential plaintiff

who suspects that an injury has been wrongfully

caused must conduct a reasonable investigation of

all potential causes of that injury ... In order to

adequately allege facts supporting a theory of

delayed discovery, the plaintiff must plead that,

despite diligent investigation of the circumstances

of the injury, he or she could not have reasonably

discovered facts supporting the cause of action

within the applicable statute of limitations period.

(35 Cal.4th at 808-809).

The Ninth Circuit’s strict application in the present case of

Jolly’s principle of constructive notice, without taking account

of the subsequently-decided Fox decision, is clearly inconsistent

with the delayed discovery rule set out in Fox. The Ninth Circuit

said that “[ijn 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” (487 F.3d at 741). Yet it is

apparent that in Fox, the Supreme Court of California did eschew

a strict conception of constructive notice, by articulating the

delayed discovery rule.

Contrary to the requirements of Fox — and without even

considering what the “reasonable investigation” described in

Fox would have included in the circumstances of this case — the

Ninth Circuit concluded that “[e]ven under the most generous

13

thus concluded that a claim against respondent Taylor was time-

barred solely because her ownership of the Van Gogh painting

had been publicly announced, once in 1963 when she purchased

the painting and again in 1990 when she unsuccessfully

attempted to sell it (487 F.3d at 74] -742).

In this analysis, the Ninth Circuit erroneously concluded

that merely because the claimants had constructive notice of

the identity of the potential defendant, the claimants necessarily

had the notice of all elements of their cause of action required

to trigger the commencement of the Statute of limitations.

As the California Supreme Court confirmed in Fox, “ignorance

of the identity of the defendant does not delay accrual of a cause

of action, but that ignorance of a generic element of the cause

of action does” (35 Cal.4th at 813). One “generic element” was

described by the court in Fox as “wrongdoing” (35 Cal.4th at

807). Furthermore, as was affirmed in Fox, a “plaintiff has reason

to discover a cause of action when he or she “has reason at least

to suspect a factual basis for its elements” (35 Cal.4th at 807,

quoting Norgart v. Upjohn Co., 21 Cal.4th 383 at 398 (1999)

citing Jolly, supra at 1110). A cause of action will only accrue

for statute of limitations Purposes when such “inquiry notice”

of the elements of the cause of action can be reasonably ascribed

to the claimant: “[P)laintiffs are required to conduct a reasonable

investigation after becoming aware of an injury, and are charged

with knowledge of the information that would have been

revealed by such an investigation” (Fox, supra, 35 Cal.4th

at 808).

It is evident that the Ninth Circuit, like the District Court,

completely failed to consider whether petitioners in fact could

reasonably have discovered their cause of action years earlier.

Neither court stopped to consider what would constitute a

“reasonable investigation” in the circumstances of the heirs of

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a Holocaust-era refugee, or what such reasonable investigation

would have disclosed at an earlier time with respect to the key

elements of petitioners’ cause of action.

The Ninth Circuit recognized that it was required to

“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.” Orkin v. Taylor,

supra, 487 F.3d at 738. However, the court did not consider, as

Fox required, whether the petitioners’ cause of action would

have been revealed by a reasonable investigation, at the time

when Taylor’s possession of the painting was publicly

announced. Indeed, petitioners’ complaint alleged facts amply

supporting the conclusion of delayed accrual, by demonstrating

their requisite “inability to have discovered the necessary

information earlier despite reasonable diligence” (Fox, supra,

35 Cal.4th at 815).

Petitioners alleged that the grossly misleading information

of the painting’s provenance published in the ostensibly

authoritative information provided by Sotheby’s, Christie’s and

Taylor in 1963 and 1990 would not have revealed the true facts.

Petitioners pleaded that those persons who might have had first-

hand knowledge of the exact circumstances under which the

painting was lost were unavailable when the painting surfaced

in 1963. Mauthner died in 1947 at the age of 84, and her son-in-

law and immediate heir died in 1964 in South Africa at the age

of 86 after a long illness. Yet the courts below summarily

assumed that an aged heir, living on another continent and ill,

had reasonable notice of his claim when Taylor purchased the

painting in 1963 in London.

Moreover, as noted in the petitioners’ complaint, the sales

brochure produced by Sotheby’s for this 1963 auction was

materially misleading with respect to the painting’s provenance

during the period between 1928 and 1945. Thus, according to

petitioners’ allegations, any reasonable investigation by them

in 1963, or in the following years, could not have revealed the

15

elements of their cause of action against Taylor. Furthermore,

as pleaded by the petitioners, the critical 1963 misinformation

concerning the painting’s provenance during the 1928-1945

period was not corrected. Rather, it was reproduced and further

entrenched by Taylor and her agent, Christie’s, when Taylor’s

Possession received publicity in 1990, See Petitioners’ original

complaint as amended October 1 3, 2004, paragraphs 10-30 and

100; Plaintiffs’ Memorandum in Opposition to Defendant’s

Motion to Dismiss, January 31, 2005, page 18; Brief of

Appellants before the Ninth Circuit, pages 16-17, 27.

Instead of assuming the facts as alleged by petitioners to

be true and then applying the law of delayed accrual to these

facts — as required by the California Supreme Court in Fox ~

the Ninth Circuit erroneously concluded that constructive notice

of the identity of the Possessor was sufficient to bar the claim in

its entirety, In so doing, the court denied the petitioners the

Opportunity to present evidence that any reasonable investigation

could not have revealed their cause of action at an earlier time.’

The Ninth Circuit thus impermissibly failed to apply the current

law of the State of California, as clearly articulated in Fox.

Amici emphasize that the facts of this case amply illustrate

the complex challenges inherent in establishing the provenance

of art works between 1933 and 1945; extraordinary international

efforts, good fortune, expertise and considerable resources are

required for claimants to discover and substantiate the existence

of claims. There is no established test for how “provenance” is

defined, what materials constitute “authoritative” provenance,

” In the event that the courts below felt that the Petitioners did not

sufficiently plead the reasonable non-discoverability of the claim, it

ought to have permitted Petitioners, pursuant to California law as

confirmed in Fox, to file an amended complaint to plead such facts

more particularly rather than granting the motion to dismiss. (“[I]t is an

abuse of discretion to sustain a demurrer without leave to amend if the

plaintiff shows there is a reasonable Possibility [that the] defect...can

be cured by amendment.” Fox, supra at 810, quoting Aubry y. Tri-City

Hospital Dist., 2 Cal.4th 962, 967 (1992)).

16

how gaps in such information should be treated, or how the

available information should be interpreted or presented, and

errors are frequent and easily compounded. See Marilyn E.

Phelan, Scope of Due Diligence Investigation in Obtaining Title

to Valuable Artwork, 23 Seattle Univ. L.R. 631, 688-690 (2000).

These challenges are further exacerbated by concealment and

falsification of records that have been prevalent in the art market,

particularly during WWII and in the post-Holocaust era.

For example, as noted by this Court in Republic of Austria v.

Altmann, 541 U.S. 677, 681-685 (2004), Maria Altmann only

became aware of the key elements supporting her cause of action

when Austrian archives were opened to private researchers in

1998 and a journalist discovered that the Museum had in

previous decades attempted to conceal the details of its

acquisition of the Klimt paintings.

The lower courts in this case completely ignored the real-

world complexity of claims concerning Nazi-looted art, and

California state law as articulated in Fox, when they summarily

concluded — without any factual inquiry — that the petitioners

“reasonably could have discovered, through investigation of

sources open to them. their claim to and the whereabouts of the

Van Gogh painting.” Orkin v. Taylor, supra, 487 F.3d at 741.

This error alone constitutes a recognized ground for granting

certiorari.

4. IN THE CONTEXT OF NAZI-LOOTED ART,

STATUTES OF LIMITATION MUST BE BALANCED

AND RECONCILED WITH THE PRINCIPLE OF

NEMO DAT, INCLUDING BY REQUIRING

POSSESSORS TO ESTABLISH DUE DILIGENCE

AND CLEAN HANDS.

Amici are deeply concerned that the decisions of the courts

below granting the motion to dismiss brought by the respondent

could set a very disturbing precedent with respect to both Nazi

looted and other art stolen in zones of conflict that may be

trafficked in the United States and abroad. The courts below

17

concluded that petitioners’ claim was time-barred without

considering the challenges of establishing provenance of art

stolen during the Nazi period and the difficulties introduced by

the widespread post-war practices of museums, dealers and

Private collectors to launder such art even in the face of

questionable provenances. See Menzel y List, 298 N.Y.S. 2d

979 (1969); Rosenberg v. Seattle Museum, |24 F. Supp.2d 1207

(W.D. Wash. 2000). All of these factors are amply raised by the

claim presented by the petitioners, whose allegations must be

deemed true at this stage of the proceedings.

The lower courts ignored all of these salient facts: the

indifferent manner in which Tespondent bought the painting at

Sotheby’s in 1963; her constructive notice of the painting’s status

as Nazi looted art; her corresponding failure to take appropriate

due diligence precautions against acquiring such art: the

expertise of respondent’s father, a professional art dealer who

acted as her legal agent for the purchase in 1963: and

respondent’s own unclean hands in disseminating material

misinformation concerning the painting’s provenance, through

the sales brochure produced by her agent Christie’s in 1990.

In the case of art stolen during a time of war or genocide,

the established principle of Anglo-American common law, nemo

dat qui non habet, forms the legal expression of our moral belief

that pillaging and theft should not be tolerated, much less

rewarded. The passage of time should not dilute this principle,

as unjust enrichment should have no Statute of limitations when

the victim could not and did not know of the facts constituting

the injustice. The contrary approach — and the one at least

implicitly adopted by the courts below in this case — essentially

entrenches the inevitability of adverse Possession with respect

to stolen art. This cannot be correct.

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CONCLUSION

For all of the above reasons, the petition for a writ of

certiorari should be granted.

Dated: La Mesa, California

September 19, 2007

Respectfully submitted,

ALVIN G. KALMANSON*

THE McMILLAN Law Firm

Attorneys for Amici Curiae

4670 Nebo Drive

La Mesa, CA 91941-5230

(619) 464-1500

MICHAEL J. BazyLer, Of Counsel

LuciLLe A. Rousswn, Of Counsel

* Counsel of Record