Artnet writes about the importance of the Second Circuit’s decision in Barnet et al v. Ministry of Culture and Sports of the Hellenic Republic. Amineddoleh & Associates LLC is proud of its work on this important case. https://news.artnet.com/art-world/barnet-case-sothebys-1883349
On June 9, 2020, the United States Court of Appeals for the Second Circuit issued an order ruling in favor of Amineddoleh & Associates LLC’s client, the Ministry of Culture and Sports of the Hellenic Republic in the Barnet case, previously named as one of the art law cases to watch in 2018. The ruling states that the Foreign Sovereign Immunities Act (FSIA) does not provide jurisdiction over cases involving the exercise of a sovereign entity’s protection of its cultural heritage, an activity that the Second Circuit deemed to be sovereign, not commercial, in nature. This ruling is poised to have major repercussions for the US antiquities market.
The case stemmed from a letter sent by the Greek Ministry of Culture to auction house Sotheby’s in New York City. In mid-April 2018, Sotheby’s began publicly advertising an auction titled The Shape of Beauty, which included a bronze horse in the Corinthian style and from the Geometric Period, indisputably from Greece. The horse was consigned for sale by the Barnets, whose parents had purchased it some decades earlier from Robin Symes. Symes, who was infamously referred to as a “fence” by museum officials, is a former dealer well-known in the art world due to his prominent role in the market for looted antiquities. Symes’ inclusion in the Bronze Horse’s provenance within the auction catalog pointed towards the very real possibility that the object had been looted before it made its way to the Barnets.
Understanding Symes’ role in the art market is important in order to fully comprehend the Barnet dispute. Symes and his partner, Christo Michaelides, conducted millions of dollars of business by unlawfully selling antiquities. Symes sold looted items through dealers, museums, and auction houses, and created fictitious “paper trails” to launder antiquities internationally. After his partner’s untimely death, Symes hid a hoard of plundered antiquities in Switzerland, London, and New York to conceal them from Michaelides’ family. Symes fabricated a multitude of lies about these items under oath in court proceedings, was held in contempt of court, and was ultimately sentenced to two years’ imprisonment. Symes’ fall from grace exposed him as a “linchpin in the networks that once traded with impunity in such material.” Investigations during those proceedings revealed that Symes possessed vast quantities of objects. In the aftermath of these legal battles, it was revealed that Symes’ illicit activities had a far reach, with numerous museums and collectors repatriating looted items they had inadvertently purchased from Symes, including the Getty Museum. In addition, auction houses have recently withdrawn lots from auctions to avoid supporting the market for looted antiquities.
The name Barnet itself is also tied to problematic antiquities and has come under scrutiny. In 1999, Howard Barnet made a charitable contribution to the Metropolitan Museum of Art with the donation of a Laconian kylix. In 2006, after it was revealed that the antiquity was looted, the museum repatriated the item to the Italian Ministry of Culture as part of a widely celebrated deal. This was a significant act of repatriation, as it was one of the first agreements between the Republic of Italy and the Metropolitan Museum of Art for the return of looted antiquities.
The Ministry sent a formal inquiry letter to Sotheby’s, requesting that the auction house withdraw the lot. The auction house did so, but rejected all of Greece’s assertions. The Barnet Family (the consignors) and Sotheby’s jointly filed a claim in the United States District Court for the Southern District of New York.
The Ministry filed a motion to dismiss based upon the Foreign Sovereign Immunities Act (FISA), which provides foreign sovereigns (and their agencies) with immunity from suit in the U.S. The exceptions enumerated in FSIA are the only means for U.S. courts to exert jurisdiction over a foreign state or agency, such as the Ministry.
Sotheby’s argued that the commercial activity exception applied, making the Ministry subject to jurisdiction in the U.S. We countered that Greece was immune from suit because the regulation of its cultural heritage is an act that is not commercial in nature, but sovereign, as it emanates from a constitutional duty of the State toward its people. Private parties cannot exercise such policing and regulatory actions. The Ministry has long fought to protect Greece’s rich cultural heritage for its people and all of humanity. Under a mandate of the Greek Constitution, the Ministry works is tasked with the daunting task of protecting the sovereign nation’s valuable cultural heritage against looting the and exploitation of stolen goods on the illicit market.
In fulfilling its public national interest, the Ministry actively and diligently monitors the art market for items lacking sufficient documentation and ownership history. As a result, the Ministry sent a letter to the auction house, about an object scheduled for auction. The letter set forth the Ministry’s national interest in an object indisputably from within the sovereign borders of the Greek State. Rather than resolve the inquiry through a private, non-litigious process, the Plaintiffs filed a lawsuit against the foreign state agency.
We urged the district court to dismiss the case according to these principles, but the Southern District found that the Ministry’s act of sending the letter was carried out in relation with commercial activity because private actors may, and do, send demand letters claiming ownership of artifacts slated for auction. However, this determination did not take into account the particular nature of cultural heritage/patrimonial items and the role States play in ensuring that this type of property is protected from looting and unlawful exploitation. As a law firm specializing in cultural heritage disputes, Amineddoleh & Associates worked tirelessly to distinguish the Ministry’s acts from commercial activity both in the district court case and on appeal – which ultimately proved successful.
Today, the Second Circuit released its opinion reversing the district court and stating that Greece’s enactment and enforcement of patrimony laws are archetypal sovereign activities and therefore do not provide the requisite connection to commercial activity that would authorize suit under FSIA. Barnet et al v. Ministry of Culture and Sports of the Hellenic Republic, 19-2171 (2d Cir. 2020). After reviewing Greece’s laws governing its cultural heritage, including items like the Bronze Horse, the Second Circuit determined that the core act carried out by the Ministry – sending a letter asserting ownership over the figurine – was of a sovereign nature. In the court’s own words, “nationalizing property is a distinctly sovereign act,” as an extension of its police power. As we argued in the district court, the Second Circuit held that private parties simply cannot nationalize historical artifacts and regulate their export and ownership – this power belongs to sovereign nations alone.
We were pleased to have been joined by with colleagues from Foley Hoag on this appeal to the Second Circuit. We are also pleased that the Second Circuit made a correct decision in keeping with international norms of comity and the applicable judicial precedent, which will support foreign sovereigns and agencies in tracking down and preventing the sale of looted antiquities and cultural heritage items in the U.S.
In addition to offering compelling information to historians and art lovers, provenance often plays a central role in ownership disputes. Essentially, you cannot demand the return of an object, if it wasn’t yours to begin with. Without proof of ownership, a party lacks legal standing to successfully make a claim for restitution. (“Standing” is a requirement of Article III of Constitution. It is the term for the ability of a party to demonstrate a sufficient connection to and harm from the law or action challenged to support that party’s participation in the case. In simple terms, courts use “standing” to ask, “Does this party have a ‘dog in this fight?’”) For this reason, determining provenance is vital in lawsuits involving stolen property because only parties with an ownership interest can demand restitution.
Oftentimes provenance is central to matters related to Nazi-looted art. But proving ownership can be extremely difficult for individuals victimized by the Nazis because of the events that occurred during WWII. The displacement of art during the war was vast; it is estimated that 20% of art and valuables in Europe were looted by the Nazis (this includes items such as musical instruments, jewelry, furniture, porcelain, books, and other personal property). Sadly, most owners lack documentation to support their restitution demands. As people fled their homes and countries, they left behind not only their property, but paperwork associated with those items. Without that documentation, it is an incredible burden to make a claim for restitution because it is nearly impossible to prove ownership. But for the small minority of owners able to successfully demand return of their property, crucial evidence is sometime found in the most unexpected of places.
That was exactly what led the Goodman (Gutmann) Family to pursue a restitution case against Daniel Searle, a collector who had purchased a stolen Degas landscape. The Gutmanns (a wealthy banking family) had an enviable art collection that the Nazis coveted. Landscape with Smokestacks was placed in storage by the Gutmann Family in 1939 in order to save it from Nazi seizure. However, it was eventually taken by the Nazis after the work’s custodians perished in concentration camps. The Degas painting then resurfaced in Switzerland after the war, and then was acquired by a New York collector in 1951. It was eventually sold to Daniel Searle in 1987, with the assistance of the Art Institute of Chicago.
Interestingly, the Gutmann heirs began a quest to recover an impressive art collection after one of the heirs discovered his true identity. Simon Goodman, whose father had moved to England and changed his name from Gutmann to Goodman, had grown up unaware that he was Jewish or that his family owned an incredible art collection. He had discovered this information after receiving a collection of boxes after his father’s death that contained information about his family’s looted collection and ownership information about some of the pieces.
The Degas painting was on the inventory of missing family treasures. During their research, the Gutmann heirs came across a photograph of the work. “Monuments Woman” Rose Valland heroically recorded information about plundered art, and after the war, presented one of the surviving Gutmann family members with images of their looted property. Although only a black-and-white photo, it was used to establish the provenance, verify legal ownership claims, and resolve the legal dispute. The lawsuit lasted over two years, and ended with a settlement. Searle donated a fifty percent ownership interest in the work to the Art Institute of Chicago, and ceded a fifty percent interest to the Gutmann heirs. As part of the agreement, the museum purchased the Gutmann’s interest based on the market value. It was the first dispute over Nazi-looted art settled in the U.S.(For more information about the Gutmann Family’s provenance research and legal battles, Simon Goodman’s The Orpheus Clock is a gripping book about his family’s struggles.)
Determining provenance can be very challenging. Over time, information about a works’ ownership is lost. Sales documents and receipts are lost, first-hand knowledge about transactions slowly disappears as individuals involved in a sale pass away and memories fade. It is especially challenging to piece together a provenance when parties conceal this vital information. Thieves (whether they are individuals or groups) attempt to erase the truth about works, or create a false provenance, so that they can lay claim to the property. This is exactly what the Nazi Party did as it stole art and valuables across Europe.
In 1943, the Monuments, Fine Arts, and Archives program (MFAA) was established under the Civil Affairs and Military Government sections of the Allied armies. Its members, better known as the Monuments Men, worked to protect artworks, archives, and monuments in Europe. 345 men and women served in this group, including well-known art professionals, including curators and historians from the National Gallery of Art, the Metropolitan Museum of Art, Harvard and the New York City Ballet. With an overwhelming task to protect sites and return works to rightful owners, the Monuments Men faced an incredible hurdle. Making things even harder were limited resources and a short timeframe in which to conclude their work. Although many works remain missing to this day, the Monuments Men were able to return more than five million looted cultural items.
The first museum in the United States to hire a full-time provenance researcher was the Museum of Fine Arts in Boston. In 2003, they hired Victoria Reed to serve as Curator for Provenance. She has been instrumental in conducting research that has led to the return of a number of stolen arts or payment of financial settlements to rightful owners, such as with Eglon van der Neer’s Protrait of a Man and Woman in an Interior. (Following the MFA’s lead, a number of other institutions have hired provenance researchers to examine items in their collections.) While the MFA Boston is closed, Dr. Reed is posting daily tweets about artworks from the museum’s collection that feature interesting provenance information.
Our founder has served as counsel on a number of stolen art matters. One of the cases in which she served as lead litigation counsel involved a civil forfeiture. Civil forfeiture occurs when government agents seize property suspected of being involved in criminal activity. The property owner doesn’t have to be charged with a crime, so the case is actually against the property itself which is why some forfeiture cases have unusual names. Case in point: United States of America v. The Painting Known and Described as ‘Madonna and Child’ attributed to the Florentine Painter Active In The Ambit of Cimabue, Circa 1285–1290, held by Sotheby’s in New York.
The three-decade long disappearance of the thirteenth century painting is a tale about the development of provenance in a legal battle. The story begins in 1977 with the purchase of the panel from a religious mission in London. Co-owners of the painting sold partial interests in the work to other art collectors so that each of the parties owned a percentage of the work. After its purchase, the parties placed the work in a jointly-rented safe deposit in Switzerland, and tried to market the work to sell it.
Unbeknownst to the other parties, one of the co-owners moved the painting to his own safe deposit box in the mid-1980s. In early 1990, he was brought to court. There was an order from an English judge restraining him from selling the painting. However, he used aliases to market the painting. Eventually he hid the painting and he fled to France, and a series of legal conflicts and international police investigations began. The situation quieted down and the co-owner died in Florida in 2006. He left his interest in the painting to his wife who eventually consigned the work in Sotheby’s in 2013.
Due diligence at Sotheby’s revealed that the painting was stolen after the Art Recovery Group discovered that the work appeared in its database of stolen art. The January 2014 sale was stopped. In June of that year, the US Attorney for the Southern District of New York filed a complaint against the stolen painting, and Sotheby’s voluntarily forfeited the work. At that point, anyone with an ownership interest was invited to file a claim with supporting documentation. Although there was a gap of over twenty years during which time the painting was hidden, there was substantial documentation supporting our clients’ claims. We developed the evidentiary record in the form of an extensive provenance by supplying the original purchase and sales documents (from the 1970s), bank records from the safe deposit, signed and notarized affidavits, police and INTERPOL reports, the power of attorney allowing one of the owners to sell he work on behalf of the consortium of owners, postmarked letters from the time of the painting’s disappearance, one of the owner’s wills that specifically named the piece, a 1990 article in the Antiquities Trade Gazette, and court decisions against the thief.
With such strong proof of ownership, the case was resolved in the spring of 2015; title was returned to the legitimate owners, and the work was auctioned at Christie’s, with proceeds going to the rightful parties. The co-owner’s widow thought she would be able to sell the work painting because the other co-owners had lost track of the piece over the long lapse of time. However, ownership is part of the permanent provenance that accompanies a work.
Our civil forfeiture case cleared any clouds on the title and the current owner (the individual who purchased the painting at auction) has perfect title because a US court made a definitive ownership determination (as Christie’s noted in its catalog.) The only unanswered question now is attribution (we will address attribution in future posts). The lack of provenance prior to the 1977 purchase makes it particularly challenging to identify the attribution. As of now, the author is identified as “a close follower of Duccio.”
Armory Show Panel: Art Market Remains Unpredictable
On March 3, 2017, the Armory Show in New York held a panel called Conversation on Collecting: Hypotheses on the Future of the Art Market. The talk, presented by Athena Art Finance Corp and moderated by art market reporter Kelly Crow of the Wall Street Journal, encompassed expert panelists in the market: auctioneer Simon de Pury, gallerist Dominique Lévy, collector Alain Servais, Todd Levin, director of the Levin Art Group, and Athena Art Finance CEO, Andrea Danese.
The panelists’ predictions on the art market’s future recapped the longstanding debate about the motivations of collectors—whether the purchase of art is driven by personal and artistic tastes or the artwork’s investment potential. Some argue that collectors should not be focused on the monetary value of the work when purchasing artworks, finding the notion offensive. Rather, panelist Dominique Lévy encourages art collectors to focus on the intangible and emotional aspects of art—rather than letting the market drive their decision-making.
But still, with one Deloitte report finding that 72% of collectors purchase art as a hobby “with an investment view,” a perspective emphasized throughout the panel and in much public discourse about current collecting habits. Armory panelist Simon de Pury acknowledged the even those collectors who purchase out of love still want to know that they are not wasting their money when purchasing an artwork.
The panel also reinforced the oft-repeated warning that the art market is unpredictable: relying on past performances and numbers is very risky in a market where tastes habitually change daily and the slightest misstep of one artwork at auction can affect an entire artist’s oeuvre. And the modern and contemporary art market is particularly that way, due to many factors including the changing tastes of collectors and the speculative nature of investing in emerging, still-living artists. In fact, some experts have speculated Christie’s recent employment cutbacks and shutdown of its South Kensington location indicates a dangerously shortsighted emphasis on notoriously volatile modern and contemporary art.
The recent record-setting auction at Sotheby’s London also underscores the fickle nature of the art market: On March 1st at Sotheby’s Impressionist, Modern, and Surrealist Art sale, a Gustav Klimt painting for $59 million, the third most expensive artwork sold in Europe for a total combined results estimate of $241 million—the highest amount ever fetched at any London Auction. The results also came after the release of Sotheby’s Fourth Quarter earnings in late February, which indicated a significant increase in the company’s share price, which has doubled over the past year.
But for Sotheby’s and many others, the recent increased confidence in the art market was a welcome change to the art market, which experienced a significant slowdown in 2016. In spite of its recent successes, Sotheby’s itself had reported less than stellar earnings throughout 2016, including one auction in May where one-third of its lots went unsold. According to one gallerist, the overall art market saw a 30 to 40 percent decline in 2016, with many external economic factors that affect major buyers of artwork have been attributed to the art market slowdown.
Factors such as anxiety about the Chinese market and the falling oil prices, that have significantly impacted Russian and Saudi collectors have increased uncertainty in the future of the art market. Recently, it was reported that in a recent Christie’s auction, four of the top lots came from the collection of Russian billionaire Dmitry Rybolovlev. Rybolovlev’s own recent legal battles revealed that he had likely paid much higher prices for the paintings than their estimates at auction.
Of course, to counteract the market’s unpredictability, financial experts have attempted to quantify art market data to predict market trends. Still, the Armory panelists contend that the abundance of graphs, charts, and quantitative information now available on the Internet, will do little to replace the traditional connoisseurship, personal experience and knowledge to predict valuable art investments. And these experts reiterated one of the key challenges of the current art market: the lack of public information about art market transactions makes it difficult to truly quantify and monitor movements in the art market.
But experts agree that that the art market will likely continue to flourish so long as there is the United States retains its tremendous wealth gap, and current executive policies in the United States indicate that nothing will drastically change the wealth distribution time soon. And with more money pouring into the art market, especially from collectors who have a background in finance, panelist Danese noted that data might become more reliable and efficient, as investment savvy collectors demand a more quantitative analysis of their potential art market investments.
But then again, another change could counteract this trend—Todd Levin, a panelist at the Armory show talk, noted in 2016 that collectors are likely turning to more private forums, like galleries to sell high valued artworks, rather than selling at auction. This would deprive the market of data about what tastemakers are buying and selling and whether this will actually be true in light of the recent success at auction is, of course, unpredictable.
We are pleased to share this article and press release from Art Recovery International (ARI). ARI discovered the sale of a disputed painting, Madonna and Child, at Sotheby’s, notified law enforcement agencies, and the work was removed from the sale after the US District Attorney seized the work. Leila Amineddoleh was contacted by ARI to handle the asset forfeiture litigation while ARI worked to discover factual evidence about the art theft that occurred over 25 years ago.
Madonna and Child was jointly owned by a group of owners, but went missing 25 years ago. Amineddoleh worked with ARI to represent two of the owners (their interest totaled one-third of the value of the work). Our law firm is thrilled with the outcome of the case because we successfully represented our clients in litigation and recovering their entire share of the work.
The value of Madonna and Child is unclear because of the work’s attribution. The last time it was offered for sale it had an estimated value of $800,000. However there is speculation that the work could be by the hand of fourteenth-century Florentine master Duccio di Buoninsegna. If the work is indeed by him, then the value of the painting is in the tens of millions of dollars. As written by Cynthia Saltzman in Old Masters, New World, “When, in 2004, the Metropolitan [Museum of Art] acquired Madonna and Child by Duccio di Buoninsenga, painted around the year 1300, they paid some $45 million for a painting no larger than a sheet of typing paper…It is one of only twelve Duccios in existence and, unless another is discovered, the last that will ever be sold.”
The owners plan to place the work for sale within the year.