Ninth Circuit Decides Cassirer in Favor of Spain
January 10, 2024
Camille Pissarro, Rue Saint-Honoré,
dans l’après-midi. Effet de pluie.
In 2005, Claude Cassirer sued a state-owned museum in Spain to recover a painting by Camille Pissarro that the Nazis stole from his grandmother. The case went to the U.S. Supreme Court on a choice-of-law question, and the Court held that state, rather than federal, choice-of-law rules should determine the applicable law in cases under the Foreign Sovereign Immunities Act (FSIA). Yesterday, the Ninth Circuit issued its decision on remand. Applying California’s comparative impairment approach to choice of law, the court held that Spanish law applies and that the museum acquired good title to the painting.
To the Supreme Court and Back Again
In Germany in 1939, the Nazis forced Lilly Neubauer to sell the painting “Rue Saint-Honoré in the Afternoon, Effect of Rain.” In 1951, the painting was sold to a buyer in California and then, in 1952, to another buyer in Missouri, who kept it in his personal collection until 1976. That year, the Baron Hans Heinrich Thyssen-Bornemisza bought the painting for his collection in Switzerland. In 1988, the Baron agreed to loan paintings from his collection to the Thyssen-Bornemisza Collection (TBC), a museum created by Spain. In 1992, the painting was transferred to the TBC, which purchased it from the Baron the following year.
Claude Cassirer, Lilly Neubauer’s grandson and sole heir, moved to California in 1980. In 2000, he learned that the painting was in the Spanish museum. After his petition asking Spain to return the painting was denied, he sued the museum in federal court in California under the FSIA. When Claude died in 2010, his son David continued with the case. The district court applied federal choice-of-law rules and held that Spanish law applied.
Under Spanish law on acquisitive prescription, a person who possesses moveable goods acquires title after three years of uninterrupted possession in good faith and after six years of uninterrupted possession even in bad faith. The district court held that the museum did not know that the painting was stolen when it bought the painting from the Baron. Therefore, the museum acquired title after three years as a possessor in good faith. Under California law, by contrast, thieves cannot pass good title, which means that neither the Baron nor the museum would have legally owned the painting.
The Ninth Circuit affirmed the district court’s application of federal choice-of-law rules. In a unanimous opinion, the Supreme Court reversed, holding that state rules govern choice of law in suits under the FSIA. On remand, the Ninth Circuit first asked the California Supreme Court to answer the choice-of-law question. But the California Supreme Court refused the request, which left the question for the federal court.
The Ninth Circuit’s Decision
To resolve choice-of-law disputes, California uses a form of governmental interest analysis known as comparative impairment. There are three steps. First, a court looks to see if the potentially applicable laws are different. Second, the court asks whether each jurisdiction has an interest in applying its law under the circumstances of the case. Third, the court compares the interest of each jurisdiction “to determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state.” The Ninth Circuit reaffirmed its prior conclusions that there is a true conflict between the laws of California and Spain and that both jurisdictions have an interest in applying their laws to this case.
At step three of the analysis, the court of appeals concluded that Spain’s interest would be more impaired than California’s if its law were not applied. The plaintiffs argued that Spain’s interest had diminished because its laws on acquisitive prescription—particularly the provision granting title after six years to a bad faith possessor—are archaic and out of step with the international consensus on Nazi-looted art. Carlos Vázquez argued at TLB that Spain’s law differs from all of the other jurisdictions with interests in the dispute, not just California but also Germany, New York, Missouri, Switzerland, England, and Ohio. But the Ninth Circuit considered the bad-faith-possessor provision irrelevant, based on the district court’s finding that the museum did not actually know that the painting was stolen. Noting that both California and Spain filed amicus briefs in the case, the court concluded that both jurisdictions currently have a strong commitment to their laws as applied to this case.
The Ninth Circuit looked next to where the relevant conduct occurred. “California Supreme Court precedent teaches that the place in which the relevant conduct occurs in the particular case is a crucial factor in measuring the jurisdictions’ relative interests,” the court reasoned, “because a jurisdiction has a strong interest in ‘establishing a reliable rule of law’—especially one that may limit future liability—with respect to conduct that occurs within its borders” (quoting McCann v. Foster Wheeler, LLC). Here, none of the relevant conduct occurred in California. “California’s governmental interest rests solely on the fortuity that Claude Cassirer moved to California in 1980, at a time when the Cassirer family believed the Painting had been lost or destroyed.” Spain, by contrast, has a strong interest in applying its law because the purchase and display of the painting occurred in Spain.
Finally, the Ninth Circuit noted that a court applying California’s comparative impairment approach should strive for “maximum attainment of underlying purpose by all governmental entities” quoting (Offshore Rental Co. v. Continental Oil Co.). In this case, “applying Spanish law would only partially undermine California’s interests in facilitating recovery of stolen art for California residents” because California’s statute of limitations “already contemplates that a person whose art … is stolen may eventually lose the ability to reclaim possession.” Spanish law also “accommodates California’s interest in deterring theft” because Spanish law extends the prescriptive period to six years when the possessor had knowledge of the theft. It is possible, of course, to flip this analysis. One could just as easily say that applying California law would only partially undermine Spain’s interests because Spain already contemplates that a buyer may be found not to have good title and that California’s law accommodates Spain’s interests in quieting title through California’s statute of limitations.
In the end, the Ninth Circuit’s analysis turns heavily on where the painting was purchased and displayed. This will tend to favor the buyers of stolen goods over the original owners and perhaps even encourage buyers to seek out jurisdictions whose laws are particularly favorable. Indeed, Carlos suggested that favorable Spanish law may have played a role in the Baron’s choice.
The plaintiffs’ lawyer has said they will seek rehearing en banc. If the petition fails, however, that may be the end of this long-running litigation. The Supreme Court is unlikely to grant cert again, especially because the decision turned on state law.