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Fate of Nazi-looted art case uncertain at Supreme Court

The justices grappled with an international tug of war over a French impressionist painting stolen by the Nazis. 

WASHINGTON (CN) — The justices revealed little about how they would rule in a two-decade-old legal fight over a French painting stolen by the Nazis that asks how foreign states should be held accountable on Tuesday. 

Over 80 years ago, Lilly Cassirer — a Jewish woman living in Germany — transferred her art collection, including Camille Pissarro’s “Rue Saint-Honoré in the Afternoon, Effect of Rain,” in exchange for her safe passage out of the country. The Nazis gave Cassirer around $360 for the painting, but the money was stored in an account she could never access.

While Lilly would never see the painting again, her grandson who survived the Holocaust, Claude Cassirer, recognized it on display at the Thyssen-Bornemisza Museum in Madrid in 2000. Cassirer asked Spain to return the painting, setting in action a legal battle traversing the globe. 

The details of the case tell a compelling story, but they weren’t the focus of Tuesday’s arguments. 

“I think that the context in which this case arose is obviously very compelling but to the extent people were looking to see if the justices were going to delve into the background and the fact of Nazi theft, and there was none of that,” William Charron, partner and co-chair of Pryor Cashman’s Art Law group, said in a phone call. “They were very in the weeds and they were very focused on a particular question that is important far beyond the context in which this case arose.” 

The U.S. government has backed Cassirer, pointing the high court on Tuesday to the clear signal in the Foreign Sovereign Immunity Act that foreign states should be held accountable in the same way private individuals would be. 

“Rather than creating an independent liability standard for FSIA cases, Congress directed that a foreign state should be liable in the same manner and to the same extent as a private individual under like circumstances,” said Masha Hansford, assistant to the solicitor general at the Department of Justice. “That language provides a clear answer to the question presented.” 

A federal judge found the case had jurisdiction under FSIA, and the Ninth Circuit affirmed after an en banc rehearing. To decide which jurisdiction’s law applied in the lawsuit, the court used the choice-of-law rules. Finding that Spanish law should be used, the court applied their version of what is colloquially described as squatter’s rights and asserted that the foundation was the lawful owner of the painting.

The case went to the high court after a bench trial that ended with the district court finding that the foundation should be considered the rightful owner because it didn’t know the painting was stolen.

Representing Cassirer, attorney David Boies argued that the foundation was not entitled to immunity and should be treated like any other private individual. “If the respondent were a private museum and every other circumstance for exactly the same, California choice of law and rules would apply,” said Boies, who participated in the arguments remotely. 

The foundation argued meanwhile that Congress did not mean for California’s choice-of-law rules to apply to a foreign state accused of committing a crime within its own borders. 

“In the absence of an explicit statement, Congress did not intend the California choice of law test to determine the substantive law to apply to a foreign state alleged to have committed a wrong within its own borders,” said Thaddeus John Stauber, an attorney for Nixon Peabody representing the foundation. “But for Mr. Cassirer’s retirement to San Diego, California would have no interest in this case.” 

Justice Elena Kagan said the foundation’s case goes against FSIA. 

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“That seems to be treating the foreign state in a way that’s really the opposite of the way the FSIA instructions in 1606,” the Obama appointee said. “Because what I take 1606 to essentially be saying is, once you've decided that the sovereign immunity doctrines of the FSIA don't apply, the foreign state really isn't very special.” 

Kagan noted that the case concerned state claims, not federal claims. 

“You seem to be suggesting that we should understand this is a federal question case but these are not federal question claims, these are state claims,” Kagan said to the foundation’s attorney. 

Justice Clarence Thomas remarked that a foreign state couldn’t be treated the same as an individual if different rules applied to them. 

“I don't quite understand how the sovereign can be treated in the same manner as a private individual if you apply different choice-of-law rules,” the Bush appointee said.

Chief Justice John Roberts suggested the foundation was exploiting the law to get special treatment. 

“It seems to me that you're seeking the benefit of the fact that your, or your client is, that it is a foreign sovereign sort of at every different stage of the analysis before you can get held into court and how you can be treated at different stages,” the Bush appointee said. “And it seems to me that, at some point, 1606 sort of says, okay, you've gotten the advantage of being a foreign sovereign in our treatment, in our courts, but no more. Now that you've gotten down to this level, we're going to treat you like a private party, and that should extend the choice of law issues at that point as any other.” 

Roberts said if private citizens move from state to state, the laws change as well. 

“Welcome to the United States,” Roberts said. “That’s how the courts work. And a private citizen of the United States moves from New York to Ohio, the law that applies to him is going to change as well.”

Justice Sonia Sotomayor — who participated remotely — accused the foundation of being scared of what would happen if state rules were applied. 

“I’m too much a practical person for this argument that you're raising,” the Obama appointee said. “If California law and federal law, you say both correctly point to the application of Spanish law, what are you afraid of? You're afraid of something. You're afraid that they're right, that some aspect of California law can hurt you, correct?” 

Justice Stephen Breyer summed up his thoughts on the arguments by saying Cassirer’s case was much more straightforward. 

“It sounds a little complicated, your view,” the Clinton appointee said to the foundation’s attorney. “At least the opposite view is simple.”  

Justice Neil Gorsuch said he agreed with Roberts’ arguments that state rules should be used but was hesitant about constitutional barriers to applying those rules in this case. He also noted that the longevity of the case could mean it was time to end it. 

“I’m just wondering if I were to think that the Chief Justice's line of questioning has some force and that the state law should be the default, but there might be some constitutional backstop arguments, and if I have serious doubts about whether those constitutional backstop arguments have been presented, whether it might be time to call this one to a close,” the Trump appointee said.  

Breyer remarked that at least they could agree on one thing. 

“Can everyone agree that this is a beautiful painting,” Breyer said.  

Charron said it’s possible that the court could send the case back down to the Ninth Circuit to decide if applying California law would change the outcome in the case. It’s also possible that the California Supreme Court could also get involved dragging the case out further. 

This case gives the Supreme Court an opportunity to put its stamp on a question that could affect many stolen art cases involving the FSIA. 

“The implication there is it just provides certainty to the courts, and I think would also take it out of the realm of the federal courts having to develop their own body of common law for this particular situation, which I don't think is favored,” Charron said. 

Stephen Zack, an attorney from Boies Schiller Flexner, said he was glad the justices decided to hear the case in the first place. 

“I'm glad the court accepted certiorari because without that we were kind of at the end of a long road that’s lasted 20 years,” Zack said in a phone call.   

Following the arguments, Zack said they were pleased with the justices’ questions. 

“The questions were right on point, and I never speculate as to what the court is going to do, but … we were very satisfied with where the argument went,” Zack said.

In a statement following arguments, the foundation expressed its appreciation for the justices' attention to the case and reiterated that it was the rightful owner of the painting. 

“The foundation appreciates the Supreme Court’s attention to the choice-of-law question presented by this case,” the foundation said. “As the California federal district court previously recognized, both the California and the federal common law test hold that Spanish law applies and that, therefore, following the merits trial, the Foundation is the owner of the painting under either test.”

Using property-law claims for constructive trust, conversion and possession of the painting, Cassirer requested a declaration statement of his ownership over the painting and that it should be returned to him. Cassirer used an exception within the Foreign Sovereign Immunities Act of 1976 — which is the sole basis for jurisdiction in a civil suit against a foreign state. Foreign states aren’t immune from jurisdiction if property is taken in violation of international law, and the exception fit the case since the Nazis had stolen the painting. 

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