Four descendants of the late Margarete Mauthner, whose possessions were seized by the Nazis after she fled Germany in 1939, claimed in a 2004 lawsuit that Taylor failed to review the ownership history of "View of the Asylum of Saint-Remy" before acquiring the painting more than 40 years ago.
The heirs contended a sales brochure warned the painting was likely confiscated by Nazis. They asked for restitution and for the painting, which was appraised at between $10 million and $15 million when it hung in Taylor's living room about two years ago.
But the 9th U.S. Circuit Court of Appeals said a lower federal court properly ruled in 2005 that the statute of limitations had expired for the state law under which the family filed its claim.
The lower court also correctly ruled that the Holocaust Victims Redress Act did not establish a right to sue for the return of confiscated property, the appeals court held.
In court documents, Taylor's attorneys acknowledged that Nazis forced Mauthner and her family to give up jobs, pensions and homes, but said they had no information on whether Mauthner sold the painting or it was stolen from her.
In its opinion Friday, the 9th Circuit took note of the geographic and legal journey the painting has made.
"Vincent van Gogh is said to have reflected that 'paintings have a life of their own that derives from the painters soul.' The confused and perhaps turbulent history of his painting Vue de lAsile et de la Chapelle de Saint-Rémy may prove the truth of his observation," the court wrote.
Elizabeth Taylor said she had never seen information suggesting the painting was ill-gotten by the Nazis. Her father, Francis Taylor, bought the painting in 1963 on his daughter's behalf for $257,600 at a Sotheby's auction in London.
The descendants who sued are Andrew J. Orkin of Canada and three South African residents, F. Mark Orkin, Sarah-Rose Josepha Adler and A. Heinrich Zille.