Hal R. Morris & Megan Warshawsky, Saul Ewing LLP, Chicago
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Van Gogh’s Sunflowers, Nazi-Stolen Art Restitution, and the HEAR Act
People sometimes ask whether it is still necessary to address Holocaust-era restitution, almost 80 years since the end of WWII. Shouldn’t that be finished by now? Sadly, it’s not. Numerous restitution issues remain unfinished in a variety of countries. See Ellen Germain, U.S. Department of State, Special Envoy for Holocaust Issues, Bureau of European and Eurasian Affairs, Remedies for Looted Art and Cultural Property — Civil, Criminal or Consensual, Fordham University School of Law (Feb. 28, 2025).
The issue of how to deal with Nazi-confiscated art has plagued both Holocaust survivors and courts for years. Various governments, including the United States, have sought to address this issue through the non-binding but influential 1998 Washington Principles to identify and provide resources to return Nazi-era confiscated art. See Washington Conference Principles on Nazi-Confiscated Art, Office of the Special Envoy for Holocaust Issues, U.S. Department of State, www.state.gov/washington-conference-principles-on-nazi-confiscated-art. Later, these principles were expanded by the 2009 Terezin Declaration, which recognized that “there remain[ed] substantial issues to be addressed, because only a part of the confiscated property has been recovered or compensated” and “urge[d] that every effort be made to rectify the consequences of wrongful property seizures, such as confiscations, forced sales and sales under duress of property, which were part of the persecution of these innocent people and groups, the vast majority of whom died heirless.” See 2009 Terezin Declaration on Holocaust Era Assets and Related Issues, Office of the Special Envoy for Holocaust Issues, U.S. Department of State, www.state.gov/prague-holocaust-era-assets-conference-terezin-declaration.
In 2016, the Holocaust Expropriated Art Recovery Act of 2016, Pub.L. No. 114-308, 130 Stat. 1524 (Jan. 1, 2016) (the “2016 HEAR Act”), was passed and later revised by Congress with the Holocaust Expropriated Art Recovery Act of 2025, S.B. 1884, 119th Cong., 1st Sess. (2025) (the “2025 HEAR Act”), which recognized: “Some courts have frustrated the intent of this Act by dismissing recovery lawsuits in reliance on defenses based on the passage of time.” 2025 HEAR Act, §2(a)(1)(B). Although the 2016 HEAR Act did not provide for a private right of action, it did recognize that “ ‘steps should be taken expeditiously to achieve a just and fair solution’ to claims involving such art that has not been restituted if the owners or their heirs can be identified.” 2016 HEAR Act, §2(3).
It was on this palette that Schoeps v. Sompo Holdings, Inc., 160 F.4th 815 (7th Cir. 2025), was decided. Schoeps presents significant implications for restitution claims to recover Nazi-looted artwork under the 2016 HEAR Act.
Schoeps was decided before the United States Court of Appeals for the Seventh Circuit, on appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division. In Schoeps, the plaintiffs were the heirs of Paul von Mendelssohn-Bartholdy, a German banker and private art collector. In the 1930s, Mendelssohn-Bartholdy acquired Vincent van Gogh’s Sunflowers as part of his private art collection. 160 F.4th at 819. Through the following years, Mendelssohn-Bartholdy — who was Jewish and a prominent community member — was targeted and persecuted by the Nazi government for his religion. Mendelssohn-Bartholdy was subject to a campaign of discrimination in which he was involuntarily removed from various professional organizations, including the Berlin Stock Exchange, and lost his company when it was involuntary transferred to non-Jewish ownership.
As a result of such persecution, Mendelssohn-Bartholdy was left without a livelihood and was forced to liquidate his private art collection, which at the time included Sunflowers. He placed Sunflowers on consignment with a Parisian art dealer who sold the painting to an individual. Sunflowers was sold again in 1987 at the Christie’s auction house in London for $40 million. Id. The purchaser was Yasuda Fire and Marine Insurance Company, which later became part of Sompo, the current owner of Sunflowers.
In September 2001, Sunflowers was loaned to the Art Institute of Chicago for a four-month exhibit. 160 F.4th at 820. In exchange, the Art Institute of Chicago promised to lend certain Van Gogh paintings to a Tokyo exhibition in 2003. Id. In preparation for the Chicago exhibit, concerns were expressed about Sunflowers’ provenance, specifically that it may be a Nazi-looted artwork. Nevertheless, Sunflowers was shown at the Art Institute of Chicago for several months before it returned overseas.
The plaintiffs, the heirs of Mendelssohn-Bartholdy, sued Sompo Holdings, Inc.; Sompo International Holdings Ltd.; Sompo Japan Insurance, Inc.; and Sompo Fine Art Foundation, seeking recovery of Sunflowers (or the current fair value of the painting), damages, and injunctive relief. They brought various state law claims, as well as unjust enrichment and restitution claims under the federal common law and ostensibly pursuant to the district court’s plenary equitable authority under Article III, §2 of the U.S. Constitution. The plaintiffs asserted their claims were timely under the 2016 HEAR Act, which preempted state and federal statutes of limitations for civil claims to recover Nazi-era artwork, allowing the plaintiffs to file suit within six years of discovering a certain artwork and their possessory interest therein. 160 F.4th at 821. As stated above, however, the 2016 HEAR Act did not supply a standalone private cause of action.
The defendants moved to dismiss the plaintiffs’ complaint, and the district court granted the motion. The district court found no federal subject-matter jurisdiction over the federal claims on the grounds that no such claims existed under the federal common law, absent any conflict between federal policy and Illinois state law. 160 F.4th at 822. It also noted that the court’s plenary equitable authority was an insufficient basis to hear claims that otherwise do not arise under federal law or diversity jurisdiction. Id. Regarding the state claims, the district court held that while the 2016 HEAR Act’s extension of state limitation periods was sufficient to vest the court with federal subject-matter jurisdiction, the court still lacked personal jurisdiction over the defendants. 160 F.4th at 823.
The plaintiffs appealed, challenging the dismissal of the federal claims for lack of subject-matter jurisdiction and the dismissal of the state claims for lack of personal jurisdiction. The plaintiffs also argued that the district court abused its discretion by refusing to permit them the opportunity to file a second amended complaint. Id.
On appeal, the Seventh Circuit affirmed the ruling of the district court. As to the federal claims, the plaintiffs argued that since the 2016 HEAR Act did not explicitly deprive the court of its equitable authority and did not create a discreet statutory remedy, the court maintained such authority and could therefore consider unjust enrichment and restitution remedies. Id. The Seventh Circuit rejected this argument, instead pointing to the explicit language of the 2016 HEAR Act, which stated: “Nothing in this Act shall be construed to create a civil claim or cause of action under Federal or State law.” 2016 HEAR Act §5(f). Pursuant to this text, the court found no “implied” federal cause of action and, therefore, no implied remedy. 160 F.4th at 823 – 824.
The plaintiffs also argued that the court had subject-matter jurisdiction over the restitution and unjust enrichment claims under the federal common law because the 2016 HEAR Act implicated U.S. foreign policy. The Seventh Circuit held that, while U.S. foreign policy supports restitution of Nazi-looted art between private parties, the plaintiffs failed to establish a conflict between state law causes of action and U.S. foreign policy, as required for the application of federal common law. 160 F.4th at 824 – 825. Based on the above, the Seventh Circuit held that the district court properly dismissed the federal claims for lack of federal question jurisdiction. 160 F.4th at 826.
As to the state claims, the Seventh Circuit agreed that there was no personal jurisdiction over the defendants. The plaintiffs argued that the exercise of personal jurisdiction by an Illinois court was appropriate because the defendants displayed Sunflowers at the Art Institute of Chicago, they used Sunflowers to market their business in Illinois, and the painting was integral to the defendants marketing practices. 160 F.4th at 829. The court considered this jurisdictional interpretation to be far too broad. It explained that while, for example, the defendants had a subsidiary that sold insurance in Illinois, such activity did not give the defendant sufficient notice of a potential lawsuit related to Sunflowers, a painting purchased by its parent company in Europe and typically displayed in Japan. Id. The court also held that the exhibition in Chicago did not constitute an injury to the plaintiffs; rather, the true injury — i.e., the sale of the artwork — occurred in various European countries, not Illinois. Consequently, none of the plaintiffs’ claims “ar[ose] out of or relate[d] to” the exhibition in Illinois. 160 F.4th at 830. In light of these jurisdictional deficiencies, the court chose to forgo further jurisdictional analysis.
For these reasons, the Seventh Circuit affirmed the judgment of the district court, finding no federal subject-matter jurisdiction over the federal claims and no personal jurisdiction over the defendants regarding the state claims.
Schoeps has significant implications for restitution claims related to the recovery of Nazi-era artwork. The Seventh Circuit essentially affirmed that courts do not have jurisdiction to hear such restitution claims under the 2016 HEAR Act, at least not without a separate basis of authority — and such authority cannot be found in federal common law. This decision narrows the jurisdictional viability of such restitution claims and is likely to discourage similar claims in this circuit. And, it goes without saying, Schoeps strongly undermines the plain congressional intent behind the 2016 HEAR Act.
Subsequent to this Seventh Circuit decision, Congress — in a show of bipartisanship — passed the 2025 HEAR Act, which expressly provides:
The intent of this Act is to permit claims to recover Nazi-looted art to be brought, notwithstanding the passage of time since World War II. Some courts have frustrated the intent of this Act by dismissing recovery lawsuits in reliance on defenses based on the passage of time, such as laches (for example, Zuckerman v Metropolitan Museum of Art, 928 F.3d 186 (2d Cir. 2019)) or adverse possession, acquisitive prescription, or usucapion (for example, Cassirer v. Thyssen-Bornemisza Foundation, 89 F.4th 1226 (9th Cir. 2024)) or on other non-merits discretionary defenses, such as the act of state doctrine (for example, Von Saher v Norton Simon Museum, 897 F.3d 1141 (9th Cir. 2018)), forum non-conveniens, international comity, or prudential exhaustion. In order to effectuate the purpose of the Act to permit claims to recover Nazi-looted art to be resolved on the merits, these defenses must be precluded. 2025 HEAR Act, §2(a)(1)(B).
Whether the 2025 HEAR Act will have greater success in the courts than its 2016 counterpart remains to be seen. Congress’ acknowledgment of the inconsistencies between the intent of the 2016 HEAR Act and its practical application in the courts may win the U.S. Supreme Court’s attention, especially if subsequent decisions by other circuits conflict with Schoeps. In any case, until then, the practical effects of the 2025 HEAR Act remain subject to a circuit split.
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