A pair of denials by the U.S. Supreme Court on June 27, 2011 for review of two art restitution cases renews the importance of earlier rulings by the 9th Circuit Court of Appeals (1) applying the reach of the Foreign Sovereign Immunities Act (the “FSIA”) to a foreign sovereign other than the one who unlawfully took works of art, and (2) confirming the defeat of California’s legislative efforts to extend the statute of limitations for wartime art restitution claims. By declining to review these cases, the Supreme Court has, to the surprise of many observers and commentators, continued the recent trend in the Supreme Court of expanding the reach of the FSIA, while underscoring the continuing power of a statute of limitations defense to claims for artwork restitution, a defense against which claimants’ cases continue to founder. Stakeholders on either side of such claims should analyze this development carefully because it is likely to be the definitive word for the foreseeable future.
CASSIRER V. KINGDOM OF SPAIN AND THE FSIA
Since 1988, Spain has provided exhibition space for the renowned Thyssen-Bornemisza collection, originally the private holdings of Baron Hans-Heinrich Thyssen-Bornemisza. In 1993, Spain purchased the collection outright from the Thyssen-Bornemisza Foundation (the “Foundation”), and has exhibited it publicly ever since. One work in the collection is Rue Saint-Honoré, après-midi, effet de pluie by Camille Pissarro. The Pissarro was owned at one time by Lilly Cassirer, a Jewish collector who fled Germany in 1939. Before leaving, and faced with the outright expropriation of all her property, she sold the Pissarro to a Munich art dealer appointed by the government to appraise all works that anyone proposed to take out of the country. The agent paid Cassirer a paltry sum (which was paid into a blocked account) and sold the work to another dealer who was in turn persecuted before fleeing to the Netherlands with the painting. There, after Germany occupied that country, the painting was confiscated and sold at auction. After several changes in ownership, Baron Thyssen-Bornemisza bought the painting after 1976.
Claude Cassirer, heir to Lilly, learned in 2000 that the painting was on display in Madrid. After his request for its return was denied, he brought suit in U.S. District Court in Los Angeles—against Spain and the Foundation as the current owners, not Germany as the actor who actually took the property. Spain and the Foundation moved to dismiss, arguing that as instruments of a foreign sovereign, they were immune from suit. Relying on 28 U.S.C. § 1604, which excludes from sovereign immunity foreign actors who take “property in violation of international law,” Cassirer successfully opposed the motion in the District Court. In 2010, the 9th Circuit upheld the denial of the motion to dismiss, explicitly holding that the FSIA’s removal of sovereign immunity is not limited to the foreign sovereign that did the taking (Germany), but extends to any case where the rights in such property are “at issue.” Noting the passive-voice construction of the statute, the majority noted that “the statute states that property at issue must have been ‘taken in violation of international law.’ It does not state ‘taken in violation of international law by the foreign state being sued.’”
As the dissent from the decision noted, the 9th Circuit ruling was the first appellate court to rule on this issue, and it was quite controversial at the time. It continued the trend that began in the 9th Circuit, affirmed by the Supreme Court in 2004 in the Altmann v. Republic of Austria case that first ruled that FSIA could be applied retroactively (specifically to Nazi-era claims over paintings by Gustav Klimt) of an expanding view of U.S. court jurisdiction to sort out claims of wartime taking. Just as the Altmann case took many by surprise, so too did Cassirer, before which the general assumption among museums and scholars had been that FSIA was targeted at the wrongdoer, i.e. the sovereign that violated international law.
Spain and the Foundation sought review of the decision by the Supreme Court. Several interest groups submitted amicus briefs, and the Supreme Court even delayed its consideration of the petition to ask the Solicitor General to submit a brief with the views of the United States (which was supportive of Cassirer’s view of the more expansive reach of the FSIA). Faced with what many believed to be a novel interpretation of the FSIA, the Supreme Court declined without comment a discretionary review of the Cassirer case, leaving the 9th Circuit ruling as the most recent and most prominent decision on the subject. Other recent cases include a case against Russia concerning the Chabad Lubavitch library of Menachem Schneerson (see Sullivan & Worcester LLP Client Advisory A Thaw in the Ice? The United States Signals Interest in Court Fight Affecting Sovereign Immunity, Potential Seizure of Cultural Property and Exhibition Loans from Russia, April 27, 2011), which permitted claims against Russian state actors to proceed, and a 2010 lawsuit against the Republic of Hungary and some of its national museums (all of which moved to dismiss recently, relying in part on the FSIA). Sovereign immunity remains a viable defense to be sure, but one with less potency at the outset of a case than even a few years ago.
CALIFORNIA’S EFFORTS TO EXTEND ITS STATUTE OF LIMITATIONS RETROACTIVELY ARE REJECTED
If Cassirer stands for an expanding view of jurisdiction over art litigation, then the case denied review by the Supreme Court on the same day solidifies a contracting view of claimants’ underlying rights. In Von Saher v. Norton Simon Museum of Art at Pasadena, the Supreme Court affirmed a different 9th Circuit decision that bolsters what has been the most successful defense to recent wartime restitution claims: state law statutes of limitations that set the period within which the lawsuit must be filed, regardless of the merits of the underlying case. In so doing it let stand the defeat of the most far-reaching effort to date to aid these claims: California’s 2002 abolition of any statute of limitations over them.
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 purposeful targeting of the Goudstikker collection is among the most notorious examples of the plunder by high-level Nazi officials of prominent Jewish collectors. The U.S. Army recovered the Cranachs (and many other of Goudstikker’s paintings) after the war, 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, and Von Saher’s appeals were denied, largely on the rationale that the late Mrs. Goudstikker “made a conscious and well considered decision to refrain from asking for restoration of rights” concerning the Göring-confiscated property. The Dutch government and appellate courts decided this notwithstanding the by-then-well-known “Washington Principles.” The Washington Principles came out of the 1998 Conference on Holocaust-Era Assets, which encouraged investigation into wartime provenance, and appropriate restitution beyond objective legal obligations. Although the decisions rejecting Von Saher’s requests noted the existence of the Washington Principles, they held that the Goudstikker case was an exception where the original claimant had made a knowing waiver.
As part of the growing publicity over wartime art claims, California enacted Section 354.3 of its Code of Civil Procedure, which effectively abolished the statute of limitations for any claim to return Holocaust-era artwork, defined as “any article of artistic significance taken as a result of Nazi persecution during the period of 1929 to 1945.”
In 2007 Von Saher sued the Norton Simon Museum in U.S. District Court in California to return the Cranachs, and the museum moved to dismiss. The District Court dismissed the case on preemption grounds, concluding that the law abolishing the statute of limitations for wartime artwork claims “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 ruled slightly differently, holding the federal government’s role in external restitution ended in 1948, and thus did not occupy the area of law sufficient to forbid state laws on the subject under the Supremacy Clause (the basis of preemption law). The Court of Appeals upheld the dismissal, however, 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. Given the age of the claims and the history of the litigation, she will have a difficult burden.
As with the Cassirer case, this opinion is not new, but the Supreme Court’s rejection of Von Saher’s petition for further review (which was supported by the State of California and the Commission for Art Recovery, a leading organization devoted to restitution), coupled with the disposition of other cases on statute of limitations grounds in the interim, underscore that a statute of limitations defense remains among the most powerful available to museums and owners and one to which claimants have yet to mount a successful equitable challenge. In the last two years the most high-profile cases to address this question have come out unanimously against the claimant: the Museum of Fine Arts Boston, the Museum of Modern Art, and a collector in Louisiana are the most prominent owners to successfully assert statute of limitations defenses. The MFA and the Louisiana cases were affirmed by the First and Fifth Circuit Courts of Appeals in 2011 and 2010, respectively, and the MoMA case was upheld by New York’s highest court in December (applying a more lenient New York law that only starts to run when a demand for the object is refused).
Although not without controversy, the result of the litigation about California’s statute will likely put an end to any similar efforts to expand substantive rights elsewhere, and places the burden squarely on any claimant to prove that he or she did not know, and could not have known, about the claim to the artwork in question necessary to overcome statutes of limitation that are typically shorter than five years. The lesson is therefore clear: museums that document a claimant’s knowledge of a putative claim as early as possible stand the best chance of resisting any challenge to ownership, while conversely, claimants wait at their peril.
Although decided on very different grounds, and with very different outcomes—one expanding the scope of potential defendants, one restricting sharply possible claimants—the Supreme Court’s refusal to take up these cases does provide some guidance about art restitution cases. Claimants now have ever-broader rights to invoke the jurisdiction of U.S. federal courts to pursue those in the chain of ownership of artwork wrongfully taken regardless of the identity of the confiscator, but claimants face increasingly high burdens to overcome the statute of limitations. This burden will necessarily increase with the passage of time. Claimants, owners and museums should look to these developments to shape their strategy in confronting these difficult issues.