USA Trends and Developments Contributed by: Frank K. Lord IV and Sarina Taylor, Withers
Instead, courts have rejected claims on other grounds. A commonly accepted defence has been laches, which prevents claimants from recovering property because a delay in bringing a claim has resulted in prejudice to the current holder – even if the claim was brought within the limitations period. With Nazi-era claims, courts have primarily cited loss of evidence (eg, the loss of documents or death of witnesses) to find prejudice. Other defences that have been suc - cessfully employed include the Act of State doctrine (which holds that United States courts will generally not review the acts of a foreign sovereign undertaken in its own territory) and the Foreign Sovereign Immuni - ties Act (which, with a few exceptions, renders foreign sovereigns immune from suit in the USA). And soon the HEAR Act may cease to have any effect at all. It was given its own limitations period and is currently set to expire on 1 January 2027. HEAR Act The 2025 Act extends the HEAR Act’s special statute of limitations beyond the current sunset date, but it also goes farther than its predecessor. It would elimi - nate the defences that have been used successfully to block claims. The ultimate goal of the 2025 Act is to ensure that claims are adjudicated solely on their mer - its. S. 1884, 119th Cong. Section 2 (a)(1)(B). There is also a broader message: by implication, the 2025 Act says that the issue of “whether artworks lost due to Nazi-era persecution should be restituted” has been resolved. The only questions remaining, therefore, are whether an artwork was lost to persecution and whether it was restituted after the War. The Effects of the 2025 Act The full effects of the 2025 Act are impossible to pre - dict, but assuming it passes constitutional challenges – which are expected – there are some things we can say based on the text itself. The 2025 Act will maintain the same extended statute of limitations period and cases brought under the HEAR Act that are currently being litigated will continue. According to its terms, pending litigations will receive the benefits of the 2025 Act. Previously litigated cases where a final judgment was rendered will not be revived. Section 5 (g). The 2025 Act
Whether there would be different outcomes under the 2025 Act is an open question. Of the cases that were litigated to final judgment under the HEAR Act, at least three (two of which were cited in the text of the 2025 Act) could have had different outcomes if the 2025 Act had been in place. But it is difficult to determine whether those cases would have had different outcomes. Several were decided on motions to dismiss, where the facts had not been fully developed. Its potential effect on those cases cannot be judged. For example, in Zuckerman v Metropolitan Museum of Art, 928 F.3d 186 (2d Cir. 2019), the claimants alleged a sale under duress. While a laches defence, the basis on which the Sec - ond Circuit Court of Appeals denied the claim, would no longer be available, the District Court’s decision focused on the lack of adequate proof of a duress sale. 307 F. Supp. 3d 304 (S.D.N.Y. 2018). So, the claim might well have been dismissed even under the 2025 Act. Regardless of its ultimate impact, the 2025 Act rep - resents a seismic shift in the landscape of Nazi-era claims. Until now, most cases have been decided on matters of law – issues in which attorneys special - ise. Going forward, the focus will be on the facts. The strength of the surviving documents and the testimo - ny of expert witnesses will determine outcomes, and questions of history – a discipline in which attorneys or judges are not typically trained – will take prec - edence. That means that, in order to bring or defend against these claims, an in-depth understanding of the documentary materials and historical realities of the era will be paramount. Actions needed Anyone in possession of or with a claim to valuable artworks that might have traded hands in continental Europe between 1 January 1933 and 31 December 1945 needs to ensure they have documented prov - enances, or ownership history, for those works, and it is important for all who may be affected to act quickly. Works potentially subject to claims often enter the market after a collector’s death. As a result, the exist - ence of potential claims is generally not discovered until works are being evaluated for sale and often not until an upcoming sale has been publicly announced.
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