The Lawletter Vol 45 No 6
Laches is "a defense developed by courts of equity to protect defendants against unreasonable, prejudicial delay in commencing suit." SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954, 960 (2017) (internal quotation marks omitted). It is frequently said, however, that laches cannot be invoked to bar legal relief in the face of an express statute of limitations enacted by Congress. Id. at 959. But that is exactly what happened in Zuckerman v. Metropolitan Museum of Art, 928 F.3d 186 (2d Cir. 2019), cert. denied, 140 S. Ct. 1269 (2020).
In Zuckerman, the plaintiff, Laurel Zuckerman, brought suit to recover a painting—"The Actor" by Pablo Picasso—that had been owned by her great-granduncle and aunt, the Leffmanns. The Leffmanns were German Jews who were forced to flee the country in 1937. They arranged for the painting to be held by a Swiss acquaintance, who sold the painting in 1938 to raise funds for the Leffmanns to relocate to Brazil. The painting was eventually donated to the Metropolitan Museum of Art (the "Met") in New York in 1952, where it still resides. In 1947, the Leffmanns resettled in Switzerland, where they lived until Mr. Leffmann died in 1956 and Mrs. Leffmann in 1966. While they were still alive, the Leffmanns brought a number of successful claims with the assistance of counsel for Nazi-era losses, but those claims were limited to property that was taken in Germany before they fled the country. The Leffmanns never sought to reclaim the painting. In 2010, however, Zuckerman, the Leffmanns' great-grandniece, demanded that the Met return the painting. The Met refused.
In 2016, Congress passed the Holocaust Expropriated Art Recovery Act of 2016 (the "HEAR Act"). The HEAR Act provides that "a civil claim or cause of action against a defendant to recover any artwork or other property that was lost during [the period between 1933 and 1945] because of Nazi persecution may be commenced not later than 6 years after the actual discovery by the claimant." Pub. L. No. 114-308, § 5(a), 130 Stat. 1524 (2016). In September 2016, Zuckerman, acting as the Ancillary Administratrix of Mrs. Leffmann's estate, sued the Met to recover the painting on the theory that the 1938 sale was made under duress. The district court dismissed the action for failure to allege duress under New York law.
The Second Circuit affirmed but on the alternate ground that Zuckerman's claim was barred by laches. The court recognized the Supreme Court precedent that laches cannot be invoked to bar legal relief in the face of a statute of limitations enacted by Congress. Zuckerman, 928 F.3d at 195-96. The court concluded that this general rule does not apply to the HEAR Act, however, because the statute explicitly sets aside "any defense at law relating to the passage of time," HEAR Act § 5(a) (emphasis added), but "makes no mention of defenses at equity" such as laches, Zuckerman, 928 F.3d at 196. The court then concluded that laches barred Zuckerman's claim as a matter of law, as it was evident on the face of her complaint that the delay in bringing suit was (1) unreasonable, as the Leffmanns and their heirs had made no effort to recover the painting from the end of World War II to 2010, and (2) prejudicial to the Met, given that no witnesses remained who could testify as to whether the 1938 sale of the painting was voluntary or made under duress. Id. at 193-95.
The decision renders the HEAR Act largely useless in attempting to recover artworks and other property looted by the Nazis in the 1930s and 1940s. More broadly, however, Zuckerman shows that there may be rare cases where the equitable defense of laches can overcome an express statute of limitations, depending on the exact wording of the statute in question.