I’ve been talking quite a bit to friends, colleagues and clients about the impact of last week’s decision in the Cassirer v. Thyssen Bornemisza case. The New York Times had a follow up article yesterday which was an interesting treatment of the various themes at work in the case and in restitution cases in the United States generally these days. In fact, I think the effect is mostly limited, except to the extent that the decision assumes and treats as uncontroversial important principles about sales under duress and is a case that resolved title under the Foreign Sovereign Immunities Act (FSIA). As we predicted, the Times article makes clear that the museum has absolutely no intention of giving the painting back, but did float the idea of some recognition of the historical circumstances, which is progress (certainly compared to other instances in which obvious circumstances of duress are denied).
A first and important point is that this decision does not change the landscape on jurisdiction. The defendants resisted jurisdiction vigorously, but the Ninth Circuit checked their request (finding jurisdiction) and the case was decided on a substantive, not a procedural, basis. Thus, the expropriation exception to sovereign immunity (under the FSIA and following Altmann) is a definitively valid means to resolve the title to a work of art. The opinion refers repeatedly to the illicit taking of the painting from Lilly Cassirer Neubauer as a fact, yet the Thyssen Bornemisza Collection has been found to be the legal owner of title to Camille Pissarro’s Rue St. Honoré, après-midi, êffet de pluie. Thus, the scenario that we have been discussing as a possibility in the context of another Pissarro, Léone Meyer’s claim against the Fred Jones, Jr. Museum at the University of Oklahoma: a ruling that concludes a painting was stolen, yet finds that the victim’s heir is not the owner today. In Oklahoma the looming issue is a Swiss judgment against Meyer’s father, in Cassirer the issue was adverse possession.
One question I have been asked repeatedly in the wake of last week’s decision is, “how can this be?” The basic answer is that European and American law are very different about personal property; in Europe (whether through good faith subsequent purchase or adverse possession), the paramount consideration is the stability of translations. In the United States, generally, it is the reverse: the victim of theft is treated as the primary interest. Whether this should or should not be, it is.
What about the future of this case? While the defendant and its attorney were quite sanguine that the case is over, I’m not so sure. The dispositive holding in the decision is the choice of Spanish law over California law. If the court had instead selected California law, the plaintiffs would not necessarily have won yet, but they would not have lost. One assumes that any appeal will therefore focus on that choice of law analysis. In this respect the plaintiffs have important precedent: the Bakalar v. Vavra case in New York concerning an Egon Schiele drawing. In that case, the U.S. District Court initially chose to apply Swiss law, and with the presumption afforded to good faith purchasers, ruled against the heirs of Fritz Grünbaum. But the Second Circuit reversed, concluding that New York’s interests in the issue of potentially stolen art were more important. Ultimately Bakalar still prevailed, but on the defense of laches (and on a finding that the painting in question was not stolen, one of the very rare cases ever to reach that conclusion).
Critically, that analysis by the judge in Cassirer is a legal question that will be reviewed in any appeal de novo, that is, from scratch and with no deference to the initial conclusion. That is the most favorable posture for an appellant (the party appealing). While one expects the defendant to argue that the District Court’s analysis was sound, the Court of Appeals considers the question as though it were being posed for the first time. By contrast, findings of fact are entitled to great deference and will only be overturned if there is a clear error or abuse of discretion (think NFL replay).
So I give the Cassirer plaintiffs a reasonable chance relative to the usual uphill battle that all appeals are, but it will not be easy. The Thyssen’s lawyers did a very skillful job of framing the issues and persuading the trial judge, who I think from reading the opinion was genuinely conflicted. His invocation of the Washington Principles has no legal effect because he dismissed the case, but it underscores their continued importance.
Lastly, the treatment of the circumstances of Lilly’s dispossession is very important. The key facts recited for the conclusion that the 1930s transaction was illegitimate was that it was a forced sale, and regardless, that the proceeds of the transaction were paid into a blocked account. Thee matter of fact treatment of that conclusion is indeed significant.