United States v. Portrait of Wally

Austrian artist Egon Schiele painted Portrait of Wally (Wally) (defendant), depicting Schiele’s model and lover. Lea Bondi Jaray (Bondi), an Austrian Jew who owned the Würthle gallery (Würthle), acquired Wally. After German annexation, Bondi sold Würthle to Friedrich Welz, who joined the Nazi party and Aryanized Würthle. Welz also acquired Schiele artworks from Heinrich Rieger, who later died in a concentration camp. After World War II, Welz was arrested, and the works from Bondi and Rieger were seized. Bondi and Rieger’s heirs sought to recover their property. Würthle was returned to Bondi. The Austrian Federal Ministry of Finance (AFMF) approved the restitution of certain paintings to Rieger’s heirs, including one called “Portrait of His Wife.” Wally was not named but was included in the works delivered to Rieger’s heirs. Wally was sold to an Austrian national gallery. Rudolph Leopold, a Schiele collector, knew that Bondi had fled Nazi persecution and recovered Würthle and was listed as Wally’s last owner in a 1930 art catalogue. Bondi sold art to Leopold, inquired about Wally’s whereabouts, and asked Leopold to retrieve and ship Wally to her. Leopold acquired Wally without informing Bondi and sold his collection to the Leopold Museum (LM). In 1997, LM loaned Wally to New York’s Museum of Modern Art (MOMA). After the exhibit closed, the United States (plaintiff) instituted a civil forfeiture action on behalf of Bondi’s estate, alleging that LM imported Wally knowing it was stolen or converted. LM and MOMA moved to dismiss, arguing that deference was owed to Austria’s restitution system. The court denied the motion, finding that LM had not identified any Austrian action, proceeding, or decree to which deference was owed; Austrian courts did not have exclusive jurisdiction over Holocaust property claims; there had been no formal or purposeful act by the Austrian judiciary, executive, or legislature with respect to Wally that rose to a level that implicated international comity; and the United States had a strong interest in enforcing its own laws regarding conduct in the United States. After discovery, all parties moved for summary judgment. LM argued that AFMF’s approval of the restitution of Schiele artworks to Rieger’s heirs required deference.