In a unanimous decision, the US Supreme Court has brought to a close an 83-year quest by the family of Jewish refugees from Nazi Germany to recover a stolen painting.
Lilly Cassirer was a member of the family of a prominent German-Jewish art dealer. She inherited a painting entitled Rue Saint-Honoré in the Afternoon, Effect of Rain, by the Impressionist master Camille Pissarro. As the price of an exit visa from Germany on the brink of WWII in 1939, she was compelled by the Nazi authorities to surrender the painting to them.
Lilly and her grandson Claude ended up in the United States. So did the painting, but in a private collection, and so the family could not locate it despite their efforts to do so. In 1976, the painting was purchased by the Baron Hans Heinrich Thyssen-Bornemisza. He hung it at his Swiss residence until the early 1990s, when he sold the painting to the Spanish government along with much of the rest of his art collection. Spain created an entity called the Thyssen-Bornemisza Collection Foundation to own the collection and a museum to house it, which published a catalog to publicize its holdings. With the Pissarro at long last out of private hands, a friend of Claude’s saw the catalog and reported to him that the painting was found.
Claude sued the Thyssen-Bornemisza Collection Foundation in California federal court to recover the painting. The first hurdle to Claude’s lawsuit was that as an instrumentality of the Spanish government, the Foundation asserted that it was immune from suit under the Foreign Sovereign Immunities Act (FSIA). But there is an expropriation exception to the FSIA that removes immunity for “property taken in violation in international law.” The District Court determined, and the Ninth Circuit agreed, that this case fell within that exception and the case could proceed.
Here is where the case faced a critical fork in the road over the seemingly technical issue of choice of law. The District Court found that the Foundation was unaware that the painting had been stolen. Under Spanish law, this would give the Foundation good title by virtue of possession. California law, on the other hand, does not permit even an innocent purchaser to take good title from a thief. Both the District Court and the Ninth Circuit determined that federal common law should determine the outcome of the case and applied Spanish law. The Supreme Court reversed in a unanimous ruling.
In the Court’s opinion, the resolution is a simple one. If a foreign state is subject to suit, then the same rules should apply to it as to a private party. This includes both the substantive law of liability and the applicable choice-of-law rules. The standard choice-of-law rule in a property dispute is that of the forum state, and so the law of California must apply. The case was remanded to the District Court for further proceedings, but with the facts undisputed, there can be little doubt as to the final result.