The U.S. Court of Appeals for the Ninth Circuit heard oral argument last week in two high-profile World War II art restitution claims, Von Saher v. Norton Simon Museum of Art, and Cassirer v. Kingdom of Spain.  The Supreme Court’s previous decision not to hear earlier appeals of those cases with regard to statutes of limitations has had a broad effect for years now, and last year’s dismissal was widely observed.  At its core, the Von Saher case poses a direct question: is a claim that alleges procedural unfairness with the restitution claims process in another country after World War II (i.e., the Netherlands) so wrapped up in the State Department’s foreign policy apparatus that courts cannot intervene (requiring dismissal at the outset of the case), or is that fairness a question of fact that entitles the plaintiff to survive the threshold analysis and proceed to discovery or a trial?  Although comments from the bench are never a predictor of the results, the spirited argument underscored the importance of the two cases to the future of restitution claims in federal courts, and whether the restitution question is incompatible with the separation of powers in the U.S. government.

Goudstikker and Von Saher

Marei Von Saher is the daughter-in-law and sole heir of Jacques Goudstikker, a well-known Dutch art dealer during the interwar period.  Goudstikker purchased two paintings by Lucas Cranach the Elder, Adam and Eve from the Soviet Union in 1931.  Goudstikker fled the Netherlands in 1940 following the German occupation.  His extensive collection was forcibly sold in two events; the first an auction by the German bank Alois Miedl who purchased Goudstikker’s art dealership and some his property; the second the expropriation by Hermann Göring of virtually the entire Goudstikker fine art collection, including the two Cranachs.  The U.S. Army recovered the Cranachs and they were returned to the Dutch government in 1946.

Goudstikker’s widow filed timely claims with the Dutch government for her family’s property, and reached a settlement in 1952.  Under that settlement, she received most of the property obtained by Miedl, but the settlement did not cover the art collection taken by Göring.  The Dutch deadline for claims lapsed.  The paintings were then the subject of a claim concerning Goudstikker’s initial acquisition from the Soviet Union.  George Stroganoff-Scherbatoff successfully petitioned the Dutch government to return the paintings to him on the grounds that the Soviet Union had illegally taken the works before Goudstikker bought them.  Stroganoff-Scherbatoff eventually sold the Cranachs to the Norton Simon Art Foundation around 1971, and they have been exhibited by the Norton Simon Museum roughly since then.

In 1998, Von Saher filed a claim with the Dutch Secretary for Education, Culture, and Science, seeking the return of property taken by Göring.  The claim was rejected as untimely.  In 2007 Von Saher sued the Norton Simon Museum in U.S. District Court in California to return the Cranachs (alleging the inadequacy of the Dutch claims process), and the museum moved to dismiss.  The District Court dismissed the case on preemption grounds, concluding that the then-recent California law abolishing the statute of limitations for wartime artwork claims (California Section 354.3 of Code of Civil Procedure)  “intrudes on the federal government’s exclusive power to make and resolve war, including the procedure for resolving war claims.”  On appeal in 2010, the Court of Appeals upheld the dismissal, because “the power to legislate restitution and reparation claims[] is one that has been exclusively reserved to the national government by the Constitution.”  After thus striking down the abolition of the statute of limitations, the court remanded for further proceedings to determine when Von Saher “discovered” her claim to the painting to enable the District Court to rule on whether the claim was timely.

Von Saher petitioned the Supreme Court to take the case, and the Supreme Court solicited the views of the United States.  The Solicitor General urged the high court not to take up the question of preemption for laws like California Section 354.3 of Code of Civil Procedure on the theory that the Ninth Circuit got that question right in 2010.  Whether the Soliicitor General believed that preemption applied to the common law claims under all circumstances was left unsaid.  The Supreme Court declined to hear the case.

Last year, the Norton Simon’s second motion to dismiss was granted, not on a finding of timeliness, but rather on the notion that complaints about the Dutch restitution claims process were preempted by the Executive Branch’s foreign affairs domain.  Von Saher v. Norton Simon Museum of Art, 862 F. Supp. 2d 1044, 1052-53 (2012).  This idea, known as “conflict preemption,” has been described by the Supreme Court as “that state laws that conflict with federal law are ‘without effect.’” Von Saher’s appeal from that decision was the subject of the recent hearing.  Later in the same year, the District Court applied the same principle in Cassirer v. Kingdom of Spain, concerning the painting Rue Saint-Honoré, après-midi, effet de pluie by Camille Pissarro that was owned at one time by Lilly Cassirer, a Jewish collector who fled Germany in 1939.

The Hearing

The Ninth Circuit held its hearing on August 22, 2012.  Harry Pregerson, Dorothy Wright Nelson, and Kim McLane Wardlaw presided over the hearing, of of which is available on the court’s website (and well worth a listen).  Von Saher’s attorney (Howard N. Spiegler) argued that the issue on remand should have been a simple, factual one: namely, even without the benefit of the more recent statute of limitations abolishment, were Von Saher’s claims timely.  Spiegler pointed out that the Solicitor General’s Supreme Court brief was limited to the question of preemption of the statute of limitations.  That leaves, he argued, common law claims for the recovery of art.  More to the point, he argued for Von Saher that the District Court’s findings about the Dutch proceedings were premature findings of fact, when the court should have deferred to the allegations of the complaint.  In response to a question from the bench about how it could write an opinion without criticizing the Dutch government’s process, Spiegler argued that the Dutch government has already deemed the dispute a private dispute.

Fred Anthony Rowley, Jr. argued the for the Norton Simon, opening that Von Saher’s case is a direct attack on foreign policy as expressed in the Solicitor General’s brief.  It was at this point, moments into his argument, that the discussion became contentious.  Judge Pregerson initiated a 10-minute back and forth about what evidence the Norton Simon has of the U.S. stated policy.  Rowley was prepared, quoting the brief where it says “When a foregin nation, like the Netherlands here, has conducted a bona fide investigation.”  His fundamental point is that once the U.S. has spoken, whether the U.S. was right is not for federal courts to decide.

Pregerson was clearly unconvinced, and veered into some slightly odd questing, invoking his personal experience in WWII (which should have no bearing on the outcome), criticizing (incorrectly) Rowley’s (correct) pronunciation of “Göring,” and chastising Rowley for not knowing the 1940s sale price.  Rowley was ready, however, and noted that the U.S. has long stated that it does not want to untangle questions of title in, for example, cases of inadequate compensation (i.e., coerced sales) as opposed to outright appropriation.  The bottom line, Rowley argued, is that once the Executive Branch has stated its satisfaction with another country’s claims process, the federal courts cannot step in and second-guess a specific adjudication.

The case was extremely well argued by both sides.  The stakes could scarcely be higher.  The DC Circuit recently declined to apply foreign affairs preemption in the claims against the Hungarian museums by David de Csepel, and if the Ninth Circuit reverses the District Court it would likewise be a huge swing in claimants’ favor as far as getting into court.  Questions about prudential reasons that courts should stay out of certain questions are always complicated, and if the Ninth Circuit affirms it could give the Supreme Court a question it wants to take to resolve the DC/Ninth Circuit disagreement.  With that said, if the battleground remains statutes of limitations (which is what von Saher argued for), it does not necessarily portend a bright future.