Supreme Court rules in French, Nazi, Spanish museum painting case

The U.S. Supreme Court unanimously ruled Thursday that California property law will be used to decide who owns a French painting — now in the possession of a renowned museum in Spain — that a Jewish woman s was surrendered to the Nazis in 1939 so she could escape Germany.

The Supreme Court has said that lower US court rulings wrongly applied Spanish law to determine that the Thyssen-Bornemisza Collection Foundation in Madrid was the rightful owner of Camille Pissarro’s painting, titled ‘Rue Saint-Honoré dans l’après noon, effect of the rain”.

In the ruling, Judge Elena Kagan wrote that the Foreign Sovereign Immunities Act requires a court to apply the same law that would apply in a similar lawsuit between two private parties. Kagan noted that in this case it would be California state property law, as argued by the Cassirer family in their lawsuit against the Thyssen-Bornemisza Collection.

The painting’s ownership dispute will now revert to a federal district court to be decided under that law.

Pissaro’s painting is thought to be worth tens of millions of dollars, Kagan wrote.

“The path to our decision was as short as the hunt for Rue Saint-Honoré was long; our decision is as simple as the dispute over its rightful owner was vexed,” Kagan wrote.

“A foreign state or entity participating in an FSIA [Foreign Sovereign Immunities Act] the prosecution is liable in the same way as a private party… This means that the standard rule of choice of law must apply. In a property law dispute like this, that standard rule is that of the forum state (here, California) – not one that derives from federal common law,” Kagan wrote.

Claude Cassirer, who was the original plaintiff in the case, died in 2010. His son, David Cassirer, succeeded him as plaintiff in the case. The estate of Claude’s late daughter, Ava, and the Jewish Federation of San Diego also succeeded him as plaintiffs.

“It’s a lucky day, a happy day and a long time coming,” David Cassirer told CNBC in a phone interview.

“It’s very important for the family,” Cassirer, 67, said. “Hoarding Nazi-era artwork that was forcibly taken from Holocaust victims? You can’t keep that. It’s insane.”

“My dad would have been thrilled ‘by the decision,” Cassirer said. “He always thought the happiest day of his life…was when he became an American citizen.”

Paul Cassirer, whose family owned a prominent art gallery in Berlin and a publishing house, bought the Impressionist work at the center of the case from an agent of Pissaro in 1900.

More than two decades later, the painting was inherited by Lilly Cassirer, the daughter-in-law of Paul’s cousin and fellow gallerist Bruno.

“But in 1933 the Nazis came to power. After years of intensifying the persecution of German Jews, Lilly decided in 1939 that she had to do whatever it took to flee the country,” Kagan wrote.

“To get an exit visa to England…she turned the painting over to the Nazis,” Kagan wrote.

Lilly and her husband Otto eventually ended up in the United States, as did their son Claude, after being released from a French internment camp in Morocco in 1941, according to David Cassirer.

After World War II ended, the Cassirer family searched for the painting but could not find it, despite it being in a private collection in St. Louis, Mo., from 1952 to 1976. according to Thursday’s decision.

“After being legally declared rightful owner, Lilly agreed in 1958 to accept compensation from the Federal Republic of Germany – approximately $250,000 in today’s dollars,” Kagan wrote in that ruling.

In 1976, the painting was purchased by Baron Hans Heinrich Thyssen-Bornemisza, a descendant of the founder of a German steel empire. The baron had it hung in his residence in Switzerland until
in the early 1990s, writes Kagan.

The baron then sold the painting, and much of the rest of his art collection, to the Thyssen-Bornemisza Collection Foundation, an entity created by the Kingdom of Spain. The kingdom gave the foundation a palace in Madrid, which serves as a museum for its art collection.

Claude, whose grandmother Lilly had died in 1962, learned in 1999 from an acquaintance that rue Saint-Honoré appeared in a catalog of the museum’s holdings.

After other efforts to recover the painting from the foundation failed, Claude sued him in federal court in California, where he was living at the time. He claimed that he was the rightful owner of rue Saint-Honoré and that he was entitled to its restitution.

Foreign sovereign immunities law normally grants foreign states or their instruments, such as the foundation, immunity from suit.

But the lower U.S. courts that handled Claude’s case first allowed him to sue on the grounds that “the Nazi confiscation of rue Saint-Honoré brought Claude’s lawsuit against the Foundation under the FSIA exception. for expropriated property,” Kagan noted in the decision.

To determine which proprietary law governed the case, lower courts had to apply what is known as the choice of law rule.

The Cassirer family wanted to use California’s choice of law rule, which would have meant that state property law would apply in the lawsuit.

But the foundation argued for a rule based on federal common law.

The district court opted for the federal option. He cited precedents from cases before the United States Circuit Court of Appeals for the 9th Circuit, the appeals court that covers western states, including California.

The 9th Circuit was the only federal appeals court to use the federal choice of law rule to choose which law to apply in FSIA cases related to non-federal claims such as property, contract, and tort. All other federal appellate courts “apply the choice of law of the forum state rule,” Kagan noted.

Following 9th Circuit guidelines, the district court determined after trial that Spanish law would apply in the case.

And under Spanish law, the lower courts had concluded that “the Foundation was the rightful owner [of the painting] because he bought rue Saint-Honoré without knowing that the painting had been stolen and that he had held it long enough to obtain title to it by possession,” Kagan noted in his decision.

Kagan wrote that the decision to use the federal option to determine which law would apply in such a lawsuit was a mistake.

She noted that Section 1606 of the FSIA provides that in any suit in which a foreign state is not entitled to immunity under that law, “the foreign state shall be liable in the same manner and to the extent same extent as an individual in similar circumstances.”

“When a foreign state is not immune from prosecution, it is subject to the same rules of responsibility (the same
substantive law) as a private party,” Kagan wrote.

Thursday’s ruling means that all federal courts, when considering similar FSIA lawsuits, must apply the choice of law rule for the state in which the lawsuit is filed.