“Wherever the plaintiffs’ alleged injury occurred, it did not occur in Illinois,” U.S. Circuit Judge Kenneth Ripple wrote in the Seventh Circuit’s opinion and order, issued Friday morning.
CHICAGO (CN) — A Seventh Circuit panel on Friday reaffirmed the dismissal of a lawsuit brought by the heirs of a German Jewish banker to recover a Vincent Van Gogh painting they say was sold under pressure from the Nazis.
The heirs of banker and art collector Paul von Mendelssohn-Bartholdy sued Sompo Holdings in 2022 to recover one of Van Gogh’s Sunflower paintings, arguing it was only surrendered to escape Nazi persecution. A lower court dismissed the case in 2024 for lack of “general suit contacts” in Illinois, a ruling the Seventh Circuit upheld.
Sompo’s corporate predecessor, Yasuda, bought the painting at a Christie’s auction in London in 1987. It remained in Japan until 2001, when it was loaned to the Art Institute of Chicago for a temporary exhibition. The heirs sued under the Holocaust Expropriated Art Recovery Act of 2016, also seeking to recoup any unjust enrichment Sompo gained from the loan.
Congress enacted the Holocaust Expropriated Art Recovery Act to help victims of Holocaust-era persecution and their heirs reclaim art confiscated or otherwise misappropriated from them during World War II.
The Seventh Circuit panel concurred with the lower court, in part, because the heirs failed to articulate how their injury connected to the Japanese insurance company.
“Wherever the plaintiffs’ alleged injury occurred, it did not occur in Illinois,” U.S. Circuit Judge Kenneth Ripple wrote in the panel’s opinion. “The exhibition in Chicago is only relevant to the extent that it facilitated Sompo Japan’s sale of insurance in Illinois. But Sompo Japan sells no insurance in Illinois.”
The panel found the heirs relied on an overly broad application of personal jurisdiction, and said Sompo’s online marketing that featured the Sunflowers painting did not alter that conclusion.
“If such were the rule, then specific personal jurisdiction would exist over a corporation anywhere it did any business because its business would ‘relate to’ all other acts of the corporation,” the opinion reads.
Thomas Hamilton, an attorney with Byrne Goldberg, argued before the Seventh Circuit in September that the HEAR Act gives federal courts inherent authority to craft unjust-enrichment and restitution remedies.
“We cannot accept the plaintiffs’ view. It overlooks the fundamental principle that a federal court has no authority to imply a remedy unless that remedy is predicated on a cognizable cause of action,” Ripple, a Ronald Reagan appointee, wrote in the panel’s majority opinion issued Friday morning.
Ripple continued that the phrasing of the statute makes it clear that the lower court had no authority to offer remedies: “‘It clearly would be inconsistent with the text and design of the statute to find an implied federal cause of action. If there is no federal cause of action, there can be no implied remedy.”
Hamilton wrote in the appellant’s brief that the “HEAR Act represented a U.S. diplomatic commitment to 46 fellow signatory nations to the Terezin Declaration of 2009. The Declaration – although legally non-binding in that its signatories cannot reciprocally judicially enforce it – committed each government to ensure that its discrete legal system facilitated returning Nazi-confiscated artworks to rightful owners, and to resolve such claims fairly, expeditiously and on their substantive merit.”
But the panel of judges wasn’t wholly convinced. During oral arguments, U.S. Circuit Judge John Lee, a Joe Biden appointee, pressed Hamilton on the Terezin Declaration, particularly because it’s non-binding. Hamilton replied that the non-binding issue is “something of a red herring.”
“The Garamendi decision of the Supreme Court explains that the president enjoys extensive foreign policy authority under the Constitution, and Congress has basically gone along with and acknowledged that,” Hamilton continued, referring to the court’s 2003 decision in American Insurance Ass’n v. Garamendi.
Under Garamendi, Hamilton argued, the declaration may represent a way in which the president has chosen to achieve a foreign policy objective. How that’s enforced, Hamilton maintained, is irrelevant.
In its dismissal of the case, the lower court determined that because the declaration is non-binding, “the heirs’ claims are premised upon merely ‘desirable social policy,’ and eschewed judicial authority to enforce such mere ‘matters of conscience.’”
The panel of judges reaffirmed the lower court’s determination and, in a footnote, noted that the heirs failed to articulate how the declaration violates state law. Joining Ripple and Lee on the three-judge panel was U.S. Circuit Judge Doris Pryor, a Joe Biden appointee.
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