Update: California Court Dismisses Suit Against Sotheby’s for Non-Disclosure of Nazi Connection

By Dan Arnheim

The Art Newspaper reports that a California federal court this week dismissed a lawsuit brought by a collector against Sotheby's for failing to disclose that a painting he bought at auction in London in 2004 was once owned by the Nazi war criminal Hermann Goering. Goering's ownership came to light when the collector, Steven Brooks, sought to sell the painting, Allegorical Portrait of a Lady as Diana Wounded by Cupid by Louis-Michel van Loo, at Christie's in 2010. Christie's researchers discovered that Goering had bought the painting from an art dealer in 1939, and refused to accept the consignment. Sotheby's, too, refused to accept the painting for auction and denied Brooks' request for a refund of the 2004 purchase price, $96,000.

The California court determined that the case had to be heard in England. In reaching its decision the court agreed with Sotheby's that the terms and conditions contained in the auction catalogue created a contract between the buyer and Sotheby's. Therefore, the jurisdictional provisions of the contract, giving the Courts of England exclusive jurisdiction, are binding.

Although the court did not rule on the merits of Brooks' suit, its finding that the catalogue terms and conditions create a binding contract is significant. (See our past coverage: Order of Business At Auction, Red Flag or Paddle?) Indeed, the court noted that the van Loo painting was Brooks' 32nd purchase from a Sotheby's auction in London. The court stated: “His participation in similar transactions suggests he was familiar with the type of catalogue in dispute,” and he “had a large incentive to study the contract provisions, since this single transaction involved the purchase of a $96,000 painting.”