Dunnington Partner Raymond J.
Dowd will present the luncheon keynote lecture at the annual meeting of the
Trusts and Estates Law Section of the New York Bar Association on January 28,
2015. The Trusts and Estates Law Section is one of the largest sections
of the New York State Bar Association, and its annual meeting attracts over six
hundred attendees. Mr. Dowd will address the topic Nazi Art Looting, Stolen Art and Our
Museums: Why The Ghosts of The Past Still Haunt Us. Tickets
to the luncheon are available through http://www.nysba.org/Trusts/.
The
Controversy Over Stolen Art In U.S. Museums
Why do American museums contain
stolen European artworks acquired during and after World War II? The
National Stolen Property Act and comparable state laws have criminalized
transporting, receiving and concealing stolen property for decades, yet the problem
persists. The keynote address will explore the reasons for this and the
implications for trusts and estates practitioners.
The Payne-Aldrich Tariff Act of
1909 cleared the way for America’s wealthiest citizens to import a vast
collection of European art into the United States tax-free. In the 1930s,
a dispute between Andrew W. Mellon and the Internal Revenue Service resulted in
the allowance of a tax deduction for the fair market value of art donated to
U.S. museums.
Following World War II, affluent
American collectors clamored for bargain-priced art to donate to U.S. museums
in exchange for substantial reductions on their personal income taxes.
Nazi spoliations and the murders of millions of Jews and others meant that the
international markets were flooded with cheap, albeit stolen, artworks.
From 1945 through the early 1960s, the U.S. State Department issued warnings to
U.S. museums, collectors, and dealers, advising them not to acquire artworks
without solid provenance and requesting that they assist the U.S. in recovering
artworks belonging to European citizens. These State Department warnings
were ignored by museums hungry to build world-class collections of European
art. Their donors, buoyed by a strong dollar, bought stolen art on the
cheap and took massive tax deductions based on sale prices of comparable pieces
from the latest auctions.
The loophole in the tax code
incentivizing donations of stolen art persists today, raising profound
questions of tax fairness and abuse of not-for-profit corporations
nationwide. As a result of this breach of the public trust, the American
public continues to subsidize museums with tax breaks yet will inherit
collections tainted by stolen or undocumented artworks. As U.S. museums
have repeatedly acknowledged, the problem of artworks lacking appropriate
provenance documentation in U.S. museums is a tremendous one, raising serious
questions about the stewardship of our nation’s museums.
Over the last decade, Mr. Dowd
has represented a number of heirs of Holocaust victims and owners in trying to
reclaim artworks stolen during World War II faced with laches defenses.
In 2006, Mr. Dowd was retained by the heirs of artist George Grosz to recover
three artworks at the Museum of Modern Art stolen from Grosz’s Jewish art
dealer Alfred Flechtheim shortly after Grosz fled in January 1933 to New York,
where he taught at the Art Students League on 57th Street. Grosz was
declared “cultural enemy number one” by the Nazis, who were enraged by Grosz’s
caricatures of Hitler and other prominent party members. Flechtheim’s
inventory of Grosz artwork was stolen (“Aryanized”) in 1933. Mr. Dowd
sued on April 9, 2009, within three years of the MoMA’s trustees refusing to
return the artworks. Under New York’s traditional “demand and refusal”
rule, the suit was timely. However, the Southern District of New York
found an “implied refusal” because the MoMA had spent a lengthy amount of time
in settlement discussions. Grosz
v. MoMA, 772 F.Supp.2d 473 (S.D.N.Y. 2010). Mr. Dowd went all
the way to the U.S. Supreme Court in challenging this ruling. 403
Fed.Appx. 575 (2d Cir. 2010); 132 S.Ct. (2011)(denying cert.). MoMA
continues to resist sharing evidence necessary for the heirs to demonstrate
that the artworks were stolen from Alfred Flechtheim and laundered through Curt
Valentin, an agent for the Nazis operating in New York.
In 2008, Mr. Dowd was lead trial
counsel in the Southern District of New York the first Holocaust-era art case
in U.S. federal court history ever to go to trial: Bakalar v. Vavra, 2008 WL 4067335 (S.D.N.Y.
2008). The trial judge applied Swiss law to give a 1964 purchaser good
title to the artwork. Mr. Dowd successfully appealed to the Second
Circuit, obtaining a reversal and remand for the trial judge to consider
evidence of Nazi looting in the record and to apply New York law. 619
F.3d 136 (2d. Cir. 2010). The trial judge, in decisions affirmed by the
Second Circuit Court of Appeals, excluded an expert report by Dr. Jonathan
Petropoulos concluding that the artworks were looted from Fritz Grunbaum by the
Nazis and instead decided that although the purchaser could not show good chain
of title, Grunbaum heirs’ claims were barred by the doctrine of laches, despite
there being no evidence that the family knew that any artworks had survived
World War II. 819 F. Supp.2d 298 (S.D.N.Y. 2011) aff’d 500 Fed. Appx. 6 (2d
Cir. 2012), cert. denied
133 S.Ct. 2038 (2013). Grunbaum’s heirs continue to advocate for the
consideration by the authorities of the expert evidence of Nazi looting of
Grunbaum’s collection and for restitution to be made.
On November 4, 2014, Mr. Dowd
succeeded in recovering for the heirs of Fritz Grunbaum Town on the Blue River (1910),
a watercolor drawing by the Austrian artist Egon Schiele which was auctioned at
Christie’s following its recovery. Grunbaum was a renowned Viennese
cabaret performer who had eighty-one Schiele artworks in his apartment when the
Gestapo arrested him on March 22, 1938 and deported him to the Dachau
Concentration Camp, where he died penniless on January 14, 1941. Town on the Blue River
sold at auction for 2.5 million dollars—more than double Christie’s high
estimate—and was the subject of an October 24, 2014 New York Times article, Dispute Over Nazi Victim’s Art: Christie’s and Sotheby’s Differ
on Handling of 2 Schieles. European and American museums and private
collectors today hold many artworks stolen from Fritz Grunbaum, and Mr. Dowd
continues recovery efforts on behalf of the Grunbaum family.
In Matter of Flamenbaum, 22 N.Y.3d 962, 1 N.E.3d
782 (2013), Mr. Dowd succeeded on behalf of the world-famous Pergamon Museum in
Berlin in persuading the New York Court of Appeals to order the return of an ancient
Assyrian tablet dating to the reign of King Tukulti-Ninurta II (1200
B.C.). The tablet went missing when Stalin’s troops invaded and occupied
East Berlin in 1945. It turned up in 2006 during a contested accounting
proceeding in Nassau County Surrogate’s Court in a safe deposit box that
belonged to a deceased Auschwitz survivor. Ultimately, the New York Court
of Appeals rejected the executor’s argument that the “spoils of war” doctrine
permitted the decedent to retain the amulet. The Court further rejected
the argument that the doctrine of laches barred the Museum’s restitution
claim. In the wake of Flamenbaum,
it is clear that under New York law, where there is a thief in the
chain of title, no subsequent possessor can take good title and that the burden
of proving the affirmative defense of laches is a heavy one.
In 2013, Mr. Dowd wrote “Nazi Looted Art and Cocaine: When Museum Directors Take It,
Call The Cops” 14 Rutgers
Journal of Law & Religion (May 2013). In the article, Mr.
Dowd argues that statutes of limitations and laches cannot be used to launder
title to stolen property, that Nazi looted art ought to be treated like
contraband or drugs, and that due to the unique facts of World War II and U.S.
foreign policy repudiating Nazi acts of property spoliation, U.S. museums
should not be able to shield Nazi-era stolen art in their collections from
scrutiny and restitution. In 2013, as a result of advocacy efforts in
which Mr. Dowd participated, the Federal Bar Association now advocates that
Congress should create a Commission on Nazi-Confiscated Art Claims to assist
heirs in recovering Holocaust-era looted assets.
About Ray
Dowd
Mr. Dowd’s first case in New York
County Surrogate’s Court was Matter
of Doris Duke, a dispute over the estate of the American Tobacco
heiress. In 1994, Mr. Dowd successfully petitioned for the removal of
Doris Duke’s butler, Bernard Lafferty, and U.S Trust Company as co-executors of
the Duke estate. These efforts aided in the recovery of millions in
misspent funds. Mr. Dowd’s efforts were chronicled in Vanity Fair magazine and
on the front pages of New York’s tabloids. The case garnered worldwide
headlines and was immortalized by Hollywood. As part of the subsequent
proceedings, Mr. Dowd succeeded in upholding the first testamentary honorary pet
trust in New York State history by using the life of the trustee as the
measuring life to create a $100,000 trust fund for Ms. Duke’s dogs. Mr.
Dowd has since litigated numerous contested probate matters, guardianship
proceedings, and accountings, including a rare contested adoption proceeding in
Surrogate’s Court on behalf of a 9/11 victim.
Mr. Dowd is a partner in the law
firm of Dunnington, Bartholow & Miller LLP in New York City. He
currently serves on the Board of Directors of the Federal Bar Association,
having served as General Counsel (2011-2012), Vice President for the Second
Circuit (2008-2013), President of the Southern District of New York Chapter
(2006-2008), on the Editorial Board of The
Federal Lawyer (2009-2011), and on the FBA Government Relations
Committee (2010-2013). From 2013-2014, Mr. Dowd served as President of
Network of Bar Leaders, a coalition of over fifty bar associations in the
Metropolitan New York area. In 2013, he was appointed to serve on the
Planning Committee for the 2014 Second Circuit Judicial Conference titled Cybersecurity in an Age of
Cyberterrorism. Mr. Dowd is the author of Copyright
Litigation Handbook (West 8th Ed. 2014-2015) (updated
annually).
Mr. Dowd’s practice consists of
federal and state trial and appellate litigation, arbitration and
mediation. He served as lead trial counsel in notable cases involving art
law, copyrights, trademarks, cybersquatting, privacy, trusts and decedents
estates, licensing, corporate and real estate transactions. He has litigated
questions of Austrian, Canadian, French, German, Italian, Russian and Swiss
law.
Mr. Dowd lectures frequently on
copyright litigation, including the prestigious Copyright Society of the U.S.A.
At the 2009 Prague Conference on Holocaust-Era Assets, he was selected
for an expert legal panel, and he has lectured worldwide on the matter of
looted art, including at the Jewish Museum in Berlin, Yad Vashem in Jerusalem,
the Pennsylvania Academy of the Fine Arts, the San Francisco War Memorial, the
U.S. District Court for the District of Columbia, and many chapters of the
Federal Bar Association. In 2007, he co-founded the annual Art Litigation
and Dispute Resolution Institute at New York County Lawyers’ Association.
In 2014, Mr. Dowd was selected by the Brandeis Society to deliver a lecture
commemorating the 76th anniversary of Kristallnacht. He currently serves
on the Board of Governors and is Chair of the Education Committee at the
National Arts Club in New York City.
Mr. Dowd is a graduate of
Manhattan College (B.A. International Studies cum laude, 1986) and Fordham Law School
(1991), where he served on the Fordham
International Law Journal. He speaks French and Italian.
He is admitted to practice in the State of New York, to the Southern and
Eastern Districts of New York, and to the First, Second, Fifth, Seventh, Ninth,
and Tenth Circuit Courts of Appeals.
About
Dunnington
Dunnington, Bartholow
& Miller LLP was selected as a 2014 Top Ranked Law Firm for Intellectual
Property by Corporate Counsel/ALM/The American Lawyer. Dunnington is a
full-service law firm providing corporate, litigation, intellectual property,
real estate, taxation and estate planning services for an international
clientele. Find out more at www.dunnington.com.
Attorney advertising. Past results do not guarantee future
outcomes.
www.dunnington.com
Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2012-2013) by Raymond J. Dowd
