By: John Jordan, J.D. Candidate, May 2019, St. Thomas University School of Law.

In Zuckerman v. Metropolitan Museum of Art,[1] the United States District Court for the Southern District of New York properly dismissed the replevin and conversion claims of Laurel Zuckerman, the representative of the estate of Alice Leffman, which alleged that the Met lacked good title for Pablo Picasso’s “The Actor” due to a forced sale made under the duress of Nazi and Fascist persecution in 1938.  Zuckerman is the great-grandniece of Paul Leffman, a Jewish industrialist who fled Germany at sixty-eight years of age with his sixty year-old wife, Mrs. Leffman, during the rise of Hitler; the Leffmans then fled to Italy during the rise of Mussolini to a short stay in Switzerland before reaching adequate refuge in Brazil.[2] Leffman sold the painting via a non-Jewish German acquaintance, who held the painting in Switzerland while Leffman was in Italy; the painting was sold below market value in France to an art dealer to provide cash for the Leffmans’ continued escape.[3] Subsequently, the painting was purchased by an American businessperson in 1941 who later donated it to the Met in 1952.[4] Zuckerman’s counsel relied on the erroneous ruling of Schoeps v. Museum of Modern Art[5] to establish Italian law as the controlling law for the case and failed to adequately establish a prima facie case for economic duress under New York law that could go before a jury.[6]

Plaintiff’s counsel detailed the facts where the Leffmans were forced to transfer their business to their non-Jewish partner due to Aryanization, to sell their home and other real estate to German corporations for nominal rates, and to buy an Italian home under an agreement to later sell it for a low payment.[7]  In every country that the Leffmans sought refuge, they were highly taxed, forced to pay bribes, and not allowed to work.  The Leffmans left Germany in 1937 because of the Nuremburg laws, and the Leffmans left Italy in 1938 because of the Italian policing of subversives and anti-Semitic racial laws; the Leffmans faced threats of violence, imprisonment, or death in both countries. Fleeing to Switzerland later in 1938, the Leffmans were allowed to stay for only a short time before escaping to Brazil in the same year.  The Leffmans were able to return to Europe after World War II in 1947 at the age of seventy-seven and sixty-nine respectively. The cash from the forced sale of the painting allowed the Leffmans to flee and to not get stuck in Italy or Switzerland and become imprisoned or die like so many other Jews of that era. Judge Preska considered the Leffmans’ circumstances but applied the law.

Under New York law, the elements for economic duress are that the plaintiff’s transaction “was procured by a means of (1) a wrongful threat that (2) precluded the exercise of its free will.”[8] Additionally, the threat must arise from the defendant’s actions.[9] Judge Preska found that the Leffman sale of the painting was between private individuals, not under the control of the Nazi or Fascist government and unaffected by the actions of the defendant.[10] Courts have noted that many contracts often have degrees of economic duress due to bargaining,[11] creating a heavy burden for a plaintiff pleading economic duress where “…financial circumstances, not caused by the defendant…” or general economic conditions are insufficient.[12] Plaintiff counsel’s argument was not strong enough to convince Judge Preska, and she found the facts analogous to Bakalar v. Vavra.[13]

Judge Preska found that Mr. Leffman’s small amount of mitigation in moving the painting to Switzerland so that it was not seized by the Nazis and in attempting to minimally negotiate to get the best below market value price he could was an exercise of free will.[14] While plaintiff’s counsel prepares for appeal, the law challenges argument; but ought Congress amend the Holocaust Expropriated Art Recovery (HEAR) Act of 2016 so that Jewish families may recover more art separate from only “…Nazi-confiscated and looted art…”?[15]

[1] Zuckerman, No. 16 Civ. 7665 (LAP), 2018 WL 791351, at *1–2 (S.D.N.Y. Feb. 7, 2018) (Preska, J.).

[2] See Zuckerman, 2018 WL 791351, at *2–6; see also Jonathan Stempel, New York’s Met Can Keep Picasso Sold During Nazi Flight: Judge, Reuters(Feb. 7, 2018, 2:09 PM), https://www.reuters.com/article/us-usa-new-york-picasso-lawsuit/new-yorks-met-can-keep-picasso-sold-during-nazi-flight-judge-idUSKBN1FR2VH; JTA, Judge Says the Met Can Keep Picasso Sold By Jew Fleeing the Nazis, Times of Israel (February 8, 2018, 6:34 PM), https://www.timesofisrael.com/judge-says-met-museum-can-keep-picasso-sold-by-jew-fleeing-the-nazis/.

[3] See Zuckerman, 2018 WL 791351, at *2, 5.

[4] Id. at *6.

[5] Schoeps, 594 F.Supp.2d 461 (S.D.N.Y. 2009) (following German law for a replevin and conversion case about a forced transfer of two Picasso paintings by a Jewish man facing Nazi duress in 1935 by applying the five factors of the “center of gravity test,” which under New York law is the test for contracts while “interest analysis” is the correct test for torts).  But see Zuckerman, 2018 WL 791351, at *15 (citing Globalnet Financial.com, Inc. v. Frank Crystal & Co., 449 F.3d 377 384 (2d Cir. 2006 (finding that plaintiff counsel’s use of Schoeps and the five factor test was misguided when the Second District Court of Appeals has held that the conflict-of-laws test for torts is “interest analysis”)).

[6] See Zuckerman, 2018 WL 791351, at *10–11, 16.

[7] Amended Complaint & Demand for Jury Trial at 3–8, Zuckerman v. Metropolitan Museum of Art, 2018 WL 791351, at *1–2 (S.D.N.Y. Feb. 7, 2018)(No. 16 Civ. 7665 (LAP)).

[8] See Zuckerman, 2018 WL 791351, at *10 (quoting Interpharm, Inc. v. Wells Fargo Bank, Nat. Ass’n., 655 F.3d 136, 142 (2d Cir. 2011)).

[9] See Zuckerman, 2018 WL 791351, at *10 (citing Kramer v. Vendome Group, LLC, 11 Civ. 5245, 2012 WL 4841310, at *6 (S.D.N.Y. Oct. 4, 2012)).

[10] See Zuckerman, 2018 WL 791351, at *11.

[11] See Zuckerman, 2018 WL 791351, at *10 (citing VKK Corp. v. Natn’l Football League, 244 F.3d 114, 123 (2d Cir. 2001)).

[12] See Zuckerman, 2018 WL 791351, at *10 (citing Mfrs. Hanover Tr. Co. v. Jayhawk Assocs., 766 F. Supp. 124, 128 (S.D.N.Y. 1991)).

[13] See Bakalar, 819  F.Supp.2d 293, 300 (S.D.N.Y. 2011), aff’d, 500 F. App’x 6 (2d Cir. 2012), cert. denied sub nom. Vavra v. Bakalar, 569 U.S. 968 (2013) (holding that there was no evidence of duress proving that the Nazis had possession of or seized an Egon Schiele drawing owned by a Jewish prisoner who died at Dachau but signed a power of attorney for his wife while in prison).

[14] See Zuckerman, 2018 WL 791351, at *11 (citing Austin Instrument v. Loral Corp., 324 N.Y.S.2d 22, 25 (N.Y. Ct. of App. 1971) (finding economic duress between a contractor and subcontractor working on supplying the Navy with gear components for radar sets where subcontractor rose prices and demanded acceptance or threatened not to deliver and where contractor had no alternative).

[15] Memorandum of Law in Opposition to Defendant’s Motion to Dismiss at 2, Zuckerman v. Metropolitan Museum of Art, 2018 WL 791351, at *2 (S.D.N.Y. Feb. 7, 2018)(No. 16 Civ. 7665 (LAP (citing Holocaust Expropriated Art Recovery Act of 2016, Pub. L. No. 114-308 (2016) § 2(5)­-(6))); see also, Matthew Marcucci, Federal Court Rules That Met Can Keep Picasso Sold As Owners Fled Pre-World War II Europe (Feb. 9, 2018), http://www.grossmanllp.com/federal-court-rules-that-met-can-keep-picassonbsp.