Nixon Peabody successfully represents Hungary in precedent-setting decision involving challenge to Hungary’s ownership of art collection

January 07, 2019

Senior Manager, Media Relations
Nicholas Braude

Washington, DC. Nixon Peabody continues to successfully represent Hungary in a lawsuit involving valuable artworks owned by Hungary and displayed at three museums and a university in Budapest. Yesterday, the Supreme Court rejected the plaintiffs’ challenge to an appellate court’s decision which recognized that Hungary is immune from jurisdiction in the case.

On June 20, 2017, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision recognizing that U.S. courts lack jurisdiction over Hungary in de Csepel v. Hungary. That decision held, as a matter of first impression, that the Foreign Sovereign Immunities Act’s (FSIA) expropriation exception could not apply to strip Hungary of its sovereign immunity since the claimed property is not located in the United States. Following that decision, and the appellate court’s denial of the plaintiffs’ petition for rehearing en banc, the plaintiffs filed a petition for a writ of certiorari with the U.S. Supreme Court.

The original action, filed in 2010 by a U.S. citizen and two Italian citizens, involves an adverse ownership claim to more than 40 artworks that were once part of the Herzog Collection, including masterpieces by world-renowned artists El Greco, Lucas Cranach the Elder, Francisco de Zurbarán, Gustave Courbet, Velázquez and important Hungarian artists.

On Monday, the Supreme Court denied the plaintiffs’ petition, leaving firmly in place the appellate court’s holding that Hungary, which owns the artworks, is immune and thus must be dismissed from the case. The Supreme Court’s order follows the recommendation advanced by the U.S. Solicitor General in an amicus curiae brief, which explained that the appellate court’s decision—which adopted Hungary’s jurisdictional challenge—correctly interpreted the FSIA.

Nixon Peabody, selected by Hungary to take on what the New York Times called the largest unresolved World War II–related case when it was first filed, succeeded in developing and presenting Hungary’s challenge to the U.S. courts. Through Nixon Peabody, Hungary has long argued that in light of the historical events at issue, adverse ownership claims should be heard in Hungary, not the U.S. courts.

“The Supreme Court’s order denying the plaintiffs’ petition confirms Hungary’s sovereignty; it is a welcome affirmation that Hungary’s historical events are for Hungary to continue to address in Hungary, not in the courts of the United States,” said Thaddeus J. Stauber and Sarah Erickson André of Nixon Peabody.

The Nixon Peabody team is led by Mr. Stauber, head of the firm’s Arts and Cultural Institutions practice, and appellate and Supreme Court partner Ms. André. Nixon Peabody’s Hungarian co-counsel is Dr. Zoltán Novák, with prior assistance from Dr. Orsolya Bánki.

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