In May 2023, the Heidi Horten jewelry sale at Christie\u2019s auction house broke
\nall records. However, the second half of the highly anticipated sale was can
\nceled by August 31, 2023. Horten\u2019s wealth originated via her husband, Helmut
\nHorten, who obtained his wealth by purchasing Jewish businesses as Jews fled
\nGermany or were deported to death and concentration camps. Christie\u2019s loss in
\nthis sale is representative of a bigger legal risk.
\nThis article makes two claims: one descriptive and one normative. The article
\ndescribes the legal and moral problems associated with the sale, typically by
\nauction houses, of property obtained or unfairly acquired under duress or at
\ntimes of conflict: what this paper calls \u201csecondary liability conflict property.\u201d
\nSecondary liability conflict property gives rise to legal liability and negative
\nreputational impacts. This article argues that by adopting a framework used in
\na seemingly disparate context\u2014corporations assessing their responsibilities for
\nfossil fuel emissions\u2014auction houses can minimize harms associated with sec
\nondary liability conflict property and avoid financial harm from canceled auc
\ntions and negative press.
\nThe article organizes around two case studies: Christie\u2019s Heidi Horten jew
\nelry sale and the U.S. government\u2019s seizure of a superyacht owned by Russian
\noligarch Suleiman Kerimov. The article then continues by outlining the funda
\nmental principles and regulations related to conflict property and distinguishes
\nbetween primary conflict property and secondary liability conflict property. Next,
\nthe article provides an overview of environmental, social, governance, and cor
\nporate social responsibility initiatives in the U.S. corporate setting, and surveys
\nauction houses\u2019 current engagement (or non-engagement) with these programs.
\nThen, the article provides proposals for auction houses to change and explains
\nhow these proposals can affect auction houses\u2019 profitability. The article then
\nanticipates and answers potential critiques of secondary liability conflict property and the application of environmental, social, governance, and corporate social responsibility frameworks to auction houses. It also enumerates other normative reasons why auction houses should accept these proposals. Finally, the paper concludes with suggesting broader justifications and rationales for this proposal and why it is a critical issue.<\/p>\n
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