Cassirer v. Thyssen-Bornemisza decision is helpful for looted art claimants, but is not a silver bullet

While the U.S. Supreme Court’s recent decision in Cassirer v. Thyssen-Bornemisza Collection Foundation 20-1566 (U.S. Supreme Court, filed May 5, 2021) certainly represents an important and exciting step forward for the heirs of Lilly Cassirer Neubauer, it is unlikely to have a broad impact on art restitution cases going forward.

The Court did not decide who owns the work, Rue St Honoré, apres-midi, effet de pluie (1897) by Danish-French Impressionist painter Camille Pissarro Still the decision, which remands the case back to the Ninth Circuit for evaluation under California law, will likely be determinative in the conclusion over its rightful ownership.

Lilly Cassirer sold the painting to a Nazi appraiser in 1939 to get exit visas to flee Germany. For the sale, Cassirer received a small sum that, as a Jew, she was then barred from accessing, making the transfer a theft or unlawful forced sale. The work was bought and sold several times before it was purchased by Swiss billionaire Baron Hans Heinrich Thyssen-Bornemisza, who sold it as part of a collection to the Kingdom of Spain in 1993. The work is currently held by the Thyssen-Bornemisza Collection Foundation, an instrumentality of the government of Spain that manages the Museo Nacional Thyssen-Bornemisza in Madrid. The heirs of Cassirer filed suit against the Foundation in a California federal district court seeking the return of the painting.

Before ruling on the substantive property, tort, and contract claims in the Cassirer heirs’ case, the district court needed to make a choice of law determination. This procedural step caused the case to take its extended frolic and detour to the Supreme Court. It was established in Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U. S. 487 (1941), that a federal court sitting in diversity uses the forum state’s choice-of-law rule. But here, the question was whether a federal court sitting in diversity and hearing state law claims against a foreign nation under the Foreign Sovereign Immunities Act (FSIA) should apply the forum state’s choice-of-law rules or federal common law to determine what substantive law governs the claims at issue.

Applying textualist reasoning, the Court unanimously ruled that the fact that a case is against a foreign nation (instead of a private party) should not impact the choice-of-law analysis. Consistent with Klaxon, the federal court should apply the forum state’s choice-of-law rules and need not derive a choice-of-law rule from federal common law. This determination resolves a split between the Ninth and all other circuits and reverses the lower court’s decision in this case.

Thus, the Cassirer case will be remanded to the lower court, which will decide the heirs’ claims based on the property laws of California, as opposed to those of Spain, where the painting is currently held in a state-run museum. And under the property laws of California, the museum does not have good title to the painting, so the museum will likely be ordered to return it to the Cassirer heirs, more than eighty years after it was unlawfully taken.

While this case seems destined for a just and happy ending, the Supreme Court’s decision is unlikely to have a broad impact for claimants in the art world or elsewhere, because most suits against foreign sovereigns are blocked by the FSIA, which lays down a baseline principle of foreign sovereign immunity from civil actions. The Cassirer suit was brought under the FSIA’s “expropriation exception,” which removes immunity for cases involving “rights in property taken in violation of international law.” 28 U.S.C. § 1605(a)(3). But in the narrow universe of suits brought under this exception, the Cassirer decision is momentous because the choice-of-law question will often be outcome-determinative given the myriad different property law regimes in other countries. With the Cassirer decision, the Court has ruled that in such cases, once a plaintiff overcomes the jurisdictional hurdles of foreign sovereign immunity, the foreign sovereign has to be treated like any other private litigant and is subject to the forum state’s rules of liability when they are in possession of the stolen property.

Not only does the decision ensure there is consistency in cases where stolen property ends up in the hands of a private actor versus a foreign state, but it is the morally right result, providing for restitution even where the defendant was not the original wrongdoer. Not to mention that resolution of this circuit split eliminates one of the many procedural and jurisdictional hurdles theft victims face when bringing their claims in the United States. This hopefully will allow them and their counsel to dedicate more resources to tackling evidentiary hurdles, which, particularly as the era of Nazi looting recedes further into the past, will become harder to overcome.

The decision could motivate other potential claimants to stolen property held by a foreign nation to bring suit in the United States, as courts here will treat the foreign nation no differently than a private citizen and apply the American rule that a thief can never transfer good title to stolen goods. The ruling thus opens up another avenue of redress for victims of Nazi looting and victims of nationalization and expropriation from other parts of the world.

Specifically, the decision might have implications for art expropriated and nationalized by Fidel Castro’s regime in Cuba. Potential claimants who have been stymied by the current legal landscape but who can identify their property that fits within either the FSIA expropriation exception or the exception disallowing immunity for property “taken in connection with the acts of a foreign government as part of a systematic campaign of coercive confiscation or misappropriation of works from members of a targeted and vulnerable group,” can bring suit in U.S. courts and potentially receive a favorable ruling.

The Cassirer decision also represents a positive development for potential future claimants of cultural property being looted in the war in Ukraine. In the first few months of the war in 2022, Russian forces allegedly looted museums and homes, and in 2014 following the Russian invasion and annexation of Crimea, there were reports of the “massive transfer of priceless cultural objects from Crimean museums to the Russian capital.” The Cassirer precedent will make American courts an enticing port in a storm as Ukrainian claimants strategize on how to reassemble their lives following the invasion and ongoing siege.