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Unpublished Paper
Dismissing Provenance: the Use of Procedural Defenses to Bar Claims in Nazi-Looted Art and Securitized Mortgage Litigation
ExpressO (2015)
  • Christian J Bromley, Emory University
Abstract
The litigation surrounding an estimated 650,000 works looted by the Nazis in the Second World War and the millions of securitized mortgages foreclosed in the wake of the Great Recession converge on a fundamental legal principle: who really holds rightful title? Seemingly worlds apart, these separate yet remarkably similar forms of property challenge the American judiciary to allocate property rights between adversaries steadfast in their contention of rightful ownership. The legal fulcrum in this allocation often rests not on the equity or righteousness of either parties’ claim—whether museum versus heir or bank versus former homeowner—but instead on procedural defenses that stand to conclude such litigation at the outset. Scholarship is well versed in analyses of the equitable claims surrounding these plundered masterpieces and foreclosed homesteads. For the heirs of works allegedly stolen in the Second World War, the families seek restitution; to be reunited with what they believe is rightfully theirs. For the collectors, museums, and other institutions with these disputed works, they often did purchase or receive the art through entirely legal transactions with international governments. For the foreclosed homeowners, financial institutions never held the right to foreclose in the first place and destroyed their American dream. For those financial institutions, the right to foreclose transferred through the securitization of millions of mortgages and denying this right over the collateral securing their loans would fracture the American economy at its core. Right or wrong, rightful ownership determination in American Courts often turns not on equity, but on the respective adversaries’ ability to navigate the procedural techniques of the nation’s litigation schematic. Those owners of Nazi-looted works faced with claims by heirs may raise two procedural defenses as a means of terminating the litigation regardless of any equitable position to the contrary. Under the statute of limitations, the court determines that the heir simply ran out of time to bring his or her claim and similarly under the latches defense, the court prevents the heir from unreasonably delaying such claims. When former homeowners challenge the legality of a mortgage securitization and subsequent foreclosure, financial institutions and good-faith purchasers of real estate may also conclude the litigation swiftly if it is shown that the former homeowner lacks standing to bring such a challenge. Despite the arguments for returning all art and reversing the foreclosure of all improperly securitized mortgages, the trajectory of both Nazi-looted art and improper foreclosure litigation depends largely on the applicability of these technical defenses. If the statute of limitations has run or the laches doctrine applies, there is simply no claim to the works of art. Similarly, some interpretations of state law deny homeowners standing to challenge contracts if they were never a party, thus preventing any challenge to the process by which their foreclosed mortgage was securitized. When these technical grounds are applicable, equity is irrelevant in allocating title rights amongst adversaries. The so-called rightful owners of hundreds of thousands of works and millions of properties are based on technical defenses, not necessarily an analysis of the merits.
Keywords
  • Cultural Heritage,
  • Cultural Property,
  • Art Law,
  • Nazi-Looted Art,
  • Restitution,
  • Foreclosure,
  • Securitized Mortgage,
  • Great Recession,
  • Title,
  • Procedural Defense,
  • Statute of Limitations,
  • Laches,
  • Standing,
  • Civil Procedure,
  • Litigation
Publication Date
September 1, 2015
Citation Information
Christian J Bromley. "Dismissing Provenance: the Use of Procedural Defenses to Bar Claims in Nazi-Looted Art and Securitized Mortgage Litigation" ExpressO (2015)
Available at: http://works.bepress.com/christian_bromley/2/