Russian Revolution Redux

by Sheppard Mullin Richter & Hampton LLP

The long-ago Russian Revolution has been fought anew in the Federal courts in New York. The case is Konowaloff v. Metropololitan Museum of Art, and it involves a lawsuit seeking to recover a Cezanne painting seized in the aftermath of the Russian Revolution. In December, the United States Court of Appeals for the Second Circuit affirmed the dismissal of the case, holding that the act of state doctrine barred plaintiff’s action. The Konowaloff case is interesting because it may be seen as an attempt to extend to Bolshevik-loot claimants the steps that U.S. museums have taken to address art expropriation in Nazi-loot cases. The Konowaloff decision makes clear that plaintiffs seeking recovery of, or compensatory damages for, art seized by decree during the Bolshevik/Soviet regime will not succeed under the act of state doctrine – at least not in New York.

In Konowaloff, plaintiff Pierre Konowaloff sought to recover the Paul Cezanne painting Madame Cezanne in the Conservatory (the “Painting”) as well as compensatory damages for “wrongful acquisition, possession, display, and retention” of the painting by the Metropolitan Museum of Art (the “Museum”). Konowaloff alleged that the Painting, which belonged to his great-grandfather, industrialist and aristocrat Ivan Morozov, was taken “by force and without compensation” by the Bolshevik government in 1918. The painting was later sold to Stephen C. Clark in 1933, who, as the Trustee of the Met, bequeathed it to the Museum upon his death in 1960. In May 2010, after learning the ownership history of the Painting, Konowaloff demanded its return from the Met. When the Museum refused, Konowaloff instituted an action alleging that the Museum did nothing to inquire as to whether Clark had good title, locate Morozov’s heirs, or ascertain whether Morozov’s heirs received compensation for the Painting. The Museum moved to dismiss on the grounds that Konowaloff’s claims were barred by the act of state doctrine, the political question doctrine, the doctrine of international comity, and the statute of limitation or laches, or, in the alternative, for failure to state a claim upon which relief can be granted. The Federal District Court found that the Museum met its burden of showing that the act of state doctrine applied to bar Konowaloff’s claims and dismissed the action, and the Second Circuit affirmed.

The District Court explained that the act of state doctrine precludes U.S. courts from inquiring into the validity of public acts of a recognized foreign sovereign power committed within its own territory. Further, the court noted that “[c]onfiscations by a state of the property of its own nationals, no matter how flagrant and regardless of whether compensation has been provided, do not constitute violations of international law.” Even if international law had been violated, the act of state doctrine applied and Konowaloff’s action was barred.

Although Konowaloff submitted that the United States government had not recognized the Bolshevik regime until May of 1933, the Southern District explained that “recognition is retroactive in effect and validates all the actions and conduct of the government so recognized from the commencement of its existence.” The Supreme Court and the Second Circuit have consistently held Bolshevik/Soviet nationalization decrees to be official acts. Thus, the 1918 confiscation of the Painting by the Bolshevik regime was an official act of a sovereign – and the validity of the decree under which the Painting was taken was precisely the sort of inquiry precluded by the act of state doctrine.

Konowaloff also attempted to characterize the 1918 taking of the Painting and the 1933 sale to Clark as acts of a political party (the Politburo) rather than acts of the Soviet state. The Court rejected this argument, finding that the alleged activities of the Politburo pertained only to the sale of the painting, not to its confiscation. Because the Soviet government took ownership of the Painting in 1918 through an official act of state, “the Painting’s sale abroad in 1933 – whether legal or illegal, an act of party or an act of state – becomes irrelevant, as Konowaloff lacks any ownership stake in the Painting.”

Konowaloff raised other arguments against application of the act of state doctrine, including that the Painting was not seized for a legitimate governmental purpose or operation, that the Soviet Union (which collapsed in 1991) was no longer a recognized regime, and that adjudication of his claims would not harm United States relations with the Russian Federation. Having concluded that the act of state doctrine precluded inquiry into the validity of the 1918 decree under which the Painting had been confiscated, the Court found it unnecessary to address the Museum’s alternative grounds for dismissal and dismissed Konowaloff’s claims for declaratory, injunctive and monetary relief.

The Second Circuit affirmed, and held that “[a]s Konowaloff has no right to or interest in the Painting other than as an heir of Morozov, and Morozov did not own the Painting after the 1918 Soviet appropriation, Konowaloff has no standing to complain of any sale or other treatment of the Painting after 1918” or to seek monetary or injunctive relief, or a declaratory judgment.

The Second Circuit has spoken: the Russian Revolution is over, to the victor belong the spoils.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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