HEAR Act Introduced by Sen. Ted Cruz to Create Federal Standard for Holocaust Art Claims

Art Law Report 9 April 2016
By Nicholas O'Donnell

Among the many challenges that litigants over Nazi-looted art face in the United States is a lack of uniformity.  Statutes of limitations vary from jurisdiction to jurisdiction, and interpretations of jurisdictional laws like the Foreign Sovereign Immunities Act differ from one Court of Appeals to another.  This is particularly challenging in the context of the Washington Conference on Nazi Looted Art of 1998 because private disputes are where the issue has meaning in the United States.  There is no national commission to address potentially looted art in public possession like those in Austria, Germany, or the Netherlands (however well or poorly some of those commissions perform) because there is very little art in national ownership about which the federal government has any power to decide.  Thus, in assessing U.S. compliance with the Washington Principles, it is often left to private litigants to argue about what the Principles mean in individual disputes.  Happily, appellate courts have begun to reject consistently the denialist defenses of foreign countries that wish to keep stolen art just because they say so, holding that the Washington Principles support the ability of heirs to pursue claims.  Yet the uneven landscape is still daunting.

A new bill introduced this week would address that, though its chances of passage into law in a contentious election season are hard to be optimistic about.  Senators Ted Cruz and John Cornyn (both Texas Republicans), Charles Schumer (D-NY), and Richard Blumenthal (D-CT) have introduced the Holocaust Expropriated Art Recovery (HEAR) Act of 2016.  The HEAR Act reviews U.S. participation in international frameworks like the Washington Conference of 1998 and the Terezin Conference of 2009, as well as the Holocaust Victims Redress Act (Public Law 105–158, 20 112 Stat. 15).  It states its intended purpose directly:

Substantively, the law would create a national statute of limitations, expressly preempting any existing state law, and extending to all pending claims and future claims.  The HEAR Act would adopt a “discovery rule” approach, under which a six-year statute of limitations on claims would begin to run only upon (1) the identity and location of the artwork or cultural property; and (2) information or facts sufficient to indicate that the claimant has a claim for a possessory interest in the artwork or cultural property that was unlawfully lost. 

On the one hand, this kind of uniformity is sorely needed.  California’s laudable attempts to modernize its statute of limitations for stolen art claims has led to more than ten years of bitter litigation often focusing on the extent to which California had the constitutional authority to do so.  There is no question that Congress could do this. 

On the other hand, New York’s demand and refusal rule—under which the statute begins to run only on demand and unambiguous refusal—is the better rule.  That is in no small part because the demand and refusal rule actually encourages negotiation and gives the parties in discussion the ability to control the course of the timeliness discussion without a tolling agreement.  Of course if one side or the other is unreasonable, the counterparty can set up a completed demand and refusal, but it on balanced it is a more nuanced and thus better approached.

At the end of the day, it seems unlikely that the HEAR Act will become law.  First, almost nothing is happening in Congress right now.  And second, Senator Cruz’s name has headlined the release of the bill, rightly or wrongly.  Even though he is in the Senate majority, he is generally regarded as having poor relations within his own party members, which may ironically mean that the biggest challenge will be getting it to the floor.  Once there, Senator Schumer’s endorsement would almost certainly bring strong Democratic support, as would Senator Cornyn’s sponsorship add Republican votes.  

We will watch the bill’s progress.
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