In April, the U.S. Supreme Court upended a decades-long lawsuit over the ownership of a painting by the French Impressionist Camille Pissarro. The Court's ruling is a perfect example how an otherwise mundane procedural legal ruling may have a profound, if not determinative, impact on the eventual outcome of a case even before addressing its merits.
At stake is the ownership of Pissarro's 1897 painting, Rue Saint-Honoré, AprèsMidi, Effet de Pluie, estimated to be worth tens of millions of dollars. Paul Cassirer, a member of a prominent German-Jewish family who owned an art gallery in Germany, purchased the painting from Pissarro's agent in 1900. Lilly Cassirer inherited the painting from Paul, but was forced to surrender it to the Nazis in 1939 in exchange for an exit visa to England to escape persecution. Lilly and her grandson, Claude Cassirer, eventually ended up in the United States, searching in vain for the whereabouts of the painting. Having been declared the painting's rightful owner by the German Federal Republic, Lilly agreed in 1958 to accept $13,000 (approximately $250,000 today) in compensation from the German Government in satisfaction of her claim.
Unbeknownst to the Cassirers, the painting also had made its way
to the United States and was in a private collection between 1952
and 1976, when the Swiss art collector Baron Hans Heinrich Thyssen
Bornemisza purchased it and took it back to Europe. In the 1990s
the Baron sold much of his collection, including Rue
Saint-Honoré, to Spain, which created and controlled the
Thyssen-Bornemisza Collection Foundation, the Madrid museum of
houses the painting.
Claude Cassirer's 2005 California federal court lawsuit requesting that Spain return the painting to him is a classic art title dispute between two innocent parties, one the heir of the original owner from whom the painting was stolen, the other a purchaser decades after the theft, paying without knowing it was stolen. The bad actor in this story, the original thief, is not a party in the case. In "innocent purchaser" cases like this, there can be no harmonious outcome – either the owner from whom the painting was stolen, or the person who paid good value for the painting without knowledge that it was stolen, loses title without being compensated.
The threshold legal issue in this case was whether Spain could even be sued in an American court for this type of dispute. Under the Foreign Sovereign Immunities Act (FSIA) of 1976, a foreign nation is granted immunity from suit by a U.S. citizen except under certain very limited exceptions.
Cassirer asserted that the expropriation exception, which removes immunity in cases involving "rights in property taken in violation of international law", conferred jurisdiction over Spain in a U.S. court to decide the issue of ownership. The Ninth Circuit Court of Appeals, California's highest court, agreed and affirmed the lower court's ruling.
But whose law applies in determining ownership – Spain's, or California's? Under Spanish law, a person who acquires an item in good faith and retains possession for 10 years has a right of ownership superior to that of the original lawful owner. But under United States law, a thief can never pass good title to stolen property. Applying federal common law, the Ninth Circuit affirmed the lower court's ruling that Spanish law, not. California law, controlled in adjudicating ownership to the painting, and that Spain retained ownership.
In the appeal to the U.S. Supreme Court, the sole issue was whether the Ninth Circuit correctly applied the choice-of-law rule as to which jurisdiction's law governs in determining ownership.
The Supreme Court disagreed with the Ninth Circuit's application of the choice-oflaw rule in finding that Spanish law applied as to who held title to the painting. Rather, it concluded that where a foreign nation is sued in a U.S. court on a non-federal claim, such as property rights, it is to be treated no differently than a private party; it is not to be accorded any special rights simply because it is a foreign nation, and therefore federal common law does not apply. It is the law of the jurisdiction where the suit is brought – in this case California – that applies in determining ownership, and Spain cannot claim ownership of the painting under the Spanish law of "acquisitive prescription".
Ownership in this case turns on the application of a single, technical procedural rule: where one interpretation, which the Supreme Court struck down, awarded title to Spain, and the other favours the Cassirers, who are likely to prevail upon rehearing in Federal district court.
The lesson learned is that where informal attempts at restitution of property have failed, a U.S. citizen would be advised to commence a lawsuit against a foreign nation in a U.S. court, which cannot apply that foreign nation's laws in resolving the ultimate issue of ownership.
This article was originally published in Arts & Collections June 2022 Issue. Please find the full article here.
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