D.C. Circuit Court Gives Green Light to Lawsuit to Recover Nazi-Looted Art in Hungary

Last week, the U.S. Court of Appeals for the D.C. Circuit ruled in De Csepel v. Republic of Hungary that the descendants of Baron Mór Lipót Herzog, a Jewish collector who owned more than two thousand paintings, sculptures, and other artworks in pre-war Hungary, could proceed with their lawsuit against Hungarian museums and other entities holding or having an interest in artworks claimed to have been looted by the Nazis during World War II. Like many other cases involving Nazi-looted art, this litigation, ongoing since 2010, has been dismissed and appealed multiple times in the federal court system with lengthy battles over sovereign immunity and procedural issues.


The latest opinion in the case concerns the family’s addition of a new defendant, the Hungarian National Asset Management Inc. (“HNAM”), which exercises ownership rights over and manages certain Hungarian assets. The court also considered the trial court’s decision to dismiss Hungary on the grounds that it is immune from suit in the case, with defendants arguing that Hungary is an indispensable party and that the lawsuit cannot proceed without Hungary.


Regarding the family’s addition of HNAM as a defendant, the court of appeals held that:

  • the district court did not err in allowing the family to add HNAM as a party to its amended complaint;
  • the core functions of HNAM are predominantly commercial rather than governmental in nature;
  • HNAM is an agency or instrumentality of Hungary rather than being the state itself;
  • HNAM falls within the FSIA’s expropriation exception (in which a foreign sovereign loses its immunity where rights in property taken in violation of international law are at issue); and
  • the district court properly exercised jurisdiction over HNAM.


Responding to defendants’ attempts to dismiss the case on other grounds, the court further ruled that:

  • although Hungary has an interest in the property in dispute, it is not an indispensable party because the remaining defendants’ interests are almost identical to Hungary’s and Hungary consequently will not suffer sufficient prejudice by not being present; and
  • contrary to defendants’ assertion, the FSIA’s expropriation exception contains no requirement to exhaust potential remedies in Hungary.


With these rulings, the de Csepels’ case against HNAM can go forward. The Circuit Court’s decision is an important one for Holocaust-related claims, as it recognizes the claimant family’s right to proceed on the merits of the claims against HNAM as an agent or instrumentality of Hungary.


Dr. Jennifer Morris is a Senior Associate at Cultural Heritage Partners.