The U.S. Court of Appeals for the 9^th Circuit ruled on 9 January, 2024 that the Thyssen-Bornemisza Collection (TBC) Foundation in Madrid is the owner of Rue Saint–Honoré, après-midi, effet de pluie by Camille Pissarro, a painting sold by German Jew Lilly Cassirer under Nazi duress. After the Cassirer family prevailed in the Supreme Court in 2023 that the 9^th Circuit had previously applied the wrong legal test, the question before the 9^th Circuit was the choice of which law to apply. In any case where the parties and subject matter are in different jurisdictions (or within overlapping jurisdictions like state and federal), a court must first decide which body of law to apply in analysing a particular case. Here, the 9^th Circuit ruled that Spanish law applied, because Spanish law would be harmed more than California law if the other body of law was applied (known as comparative impairment analysis). This, in turn, led to the holding that the Thyssen-Bornemisza Collection Foundation acquired good title after holding the painting for long enough that prior claims were extinguished.

The decision is thinly-reasoned. It looks to the “place of relevant conduct” as paramount to choosing applicable law, but concluded that the only relevant conduct was Spain’s purchase in 1993 of the Baron Thyssen-Bornemisza’s collection. Not the Baron’s Swiss residence, not his purchase of a stolen painting in New York (not located in Spain when last we checked) in 1976, not the earlier (New York) sale by Knoedler Gallery, nor the painting’s passage through California in the 1950s, nor the source of the defect in the first place: Nazi Germany. Rather, the court insultingly referred to Holocaust survivor and refugee Claude Cassirer’s life in California as a “fortuity”. As the late Justice Antonin Scalia might have said, “pure applesauce”.

The upshot is that a state (Spain, through the TBC) that did not acquire good title to a painting that was indisputably dispossessed by the Nazis will (barring further review) keep this ill-gotten property. Spain should have returned the painting the first time it was asked to do so. Digging its heels in over 18 years of litigation is a mockery of the commitments Spain made in the 1998 Washington Principles on Nazi-Confiscated Art. Nothing about Spanish law is impaired by refusing to honor a transaction at the direction of the Nazis.

The family has vowed to fight on.

The Painting

Lilly Cassirer was a German Jew whom the Nazis targeted in 1939 for a forced sale of the Pissarro. A Nazi opportunist named Jakob Scheidwimmer approached her with an obviously inadequate price, which she needed to pay the flight tax to leave Germany. Lilly later testified in 1951 that: “I went along with it, although I knew this price didn’t even remotely reflect its true value. Theoretically, I would have the option of trying to sell the painting to another Aryan art dealer…. Furthermore, we had to consider the possibility that Scheidwimmer—we weren’t sure whether he had connections with the Gestapo—might take offense at our refusal to sell.” This was precisely the dynamic that many German Jews faced, and the law has long regarded such ‘sales’ as invalid.

The Pissarro was seized in Rotterdam by the occupying German forces from Jakob Sulzbacher, a department store owner in a borough of Munich who had obtained it from Scheidwimmer.  The painting somehow made its way from there into the hands of Ari Walter Kampf, son of painter Eugen Kampf and nephew of Nazi-approved landscape painter Arthur Kampf. It was auctioned in 1943 in Berlin at Hans W. Lange auction house for RM 95,000, more than 100 times what Lilly had been paid. Claude Cassirer—born Klaus—had to flee Germany as a teenager and then Czechoslovakia as a Jew, only to find his grandmother’s painting in Spain 60 years later.

The Pissarro was sold in 1952 in New York at the Knoedler & Co. Gallery to Sydney Schoenberg in St. Louis, Missouri. Then in 1976, it was purchased by Baron Hans Heinrich Thyssen-Bornemisza, a Dutch born Swiss industrialist at the Hahn Gallery, again in New York. He sold it, and his vast art collection, to the Kingdom of Spain in 1993, where it has hung ever since in the Thyssen-Bornemisza museum.

The Lawsuit

The lawsuit was first filed in U.S. federal court in 2005 by Claude, who passed away while the case was pending, against the Kingdom of Spain and the TBC Foundation as an “instrumentality” of Spain. The family invoked the Foreign Sovereign Immunities Act (FSIA), which contains the exclusive set of circumstances under which a foreign sovereign or instrumentality can be sued in U.S. court. The Cassirers invoked the expropriation exception of the FSIA, which confers jurisdiction over claims that concern “rights in property taken in violation of international law”. Spain did not contest that the taking violated international law. That was a choice quite unlike the actual perpetrator Germany later made (with the support of the United States government, no less), eventually convincing the Supreme Court in Federal Republic of Germany v. Philipp, 141 S.Ct. 703 (2021) (a case I argued at the Supreme Court in 2020) that the Nazi’s repression of German Jews as part of the largest organised property theft in history was no injury recognised by international law.

In Philipp, which sought the return of the so-called Welfenschatz from the Stiftung Preussischer Kulturbesitz in Berlin, the court ruled that the so-called “domestic takings rule” is incorporated into international law, such that a government taking property from its own nationals does not violate international law. On remand, the D.C. Circuit ruled that our complaint in 2015 alleging that the Welfenschatz owners in 1935 “were officially no longer considered German” somehow failed to raise in time the argument that they… were not considered German by the Nazi government (Philipp v. Stiftung Preussischer Kulturbesitz, 77 F.4th 707 (D.C. Cir. 2023)). And, for good measure, in that and a companion case, the D.C. Circuit held that it would not matter unless the victims affirmatively acquired new citizenship, holding that international law is indifferent to stateless persons (Simon v. Republic of Hungary, 77 F.4^th 1077 (D.C. Cir. 2023)).

In 2019, after multiple appeals, the 9^th Circuit ruled that Spanish law should apply. The 9^th Circuit used a federal court test to choose applicable law. The Cassirers appealed, and the Supreme Court reversed in 2023, holding that under federal jurisdiction principles, the court should have applied California’s choice of law rule. We filed an amicus brief in support of the family with Mark Feldman, the former Acting Legal Adviser at the State Department when the FSIA was enacted.

Back in the 9^th Circuit, the appeals court asked the California Supreme Court to weigh in. This is known as certifying a question, because state supreme courts are the highest authority on their own state’s law. Somewhat surprisingly, the California Supreme Court declined earlier this year without comment, sending the question back to the federal court.

Here, the question was an all-or-nothing one because of the two bodies of law. California law, like most U.S. states (except Louisiana) holds that a thief cannot convey good title. So, if Jakob Scheidwimmer compelled Lily Cassirer to sell the Pissarro (which is undisputed), no one in the chain of title thereafter would get good title without some intervening event. Swiss law (where Thyssen-Bornemisza lived) might be that intervening event had he purchased the painting in good faith and unaware of the history, but the trial court in this case already held that he was not a good-faith purchaser because he did not engage in sufficient inquiry. That was not, to be clear, a finding that he was a wrongdoer, only that he could not claim essentially to be an innocent victim. So, if California law applied, the transfers from Scheidwimmer, eventually to the Knoedler and Hahn galleries, to Thyssen-Bornemisza, to Spain would all have carried that title defect, and the Cassirer family would prevail.

By contrast, Spanish law allows for what is called prescriptive title. That is another way of saying that an acquirer can obtain valid title even over the true owner by holding it long enough and under circumstances that the true owner could know of and be expected to object. Under Article 1955 of the Spanish Civil Code, ownership in personal property vests after either (1) three years of uninterrupted possession of the property in good faith, (2) or six years of uninterrupted possession, even absent good faith. That six-year prescriptive period is tolled if the possessor is a principal, accomplice or accessory (encubridor) to the theft. Spain had held the painting longer than six years, and earlier rulings found TBC not to be an accomplice. So if Spain’s law applied, TBC would win.

The Ruling

Choice of law is a question that has been known to lull generations of law students to sleep when the subject of the case isn’t as compelling as this one. The key question to answer under California’s choice of law rule is which law would be impaired to a greater degree if the other law applied. In other words, which law would be harmed more: California if Spanish law applied, or Spain if California’s law were applied?

Under California’s choice of law test, impairment is judged based on “which jurisdiction’s interest ‘would be more impaired if its policy were subordinated to the policy of the other state’” (Offshore Rental Co. v. Cont’l Oil Co., 583 P.2d 721, 726 (Cal. 1978)). The court is then to apply the law of the state “whose interest would be the more impaired were its law not applied” (Offshore Rental Co. v. Cont’l Oil Co.,).

 The 9^th Circuit held that Spanish law would suffer the greater impairment. First, the opinion observed California decisions that “a court’s task ‘is not to determine whether the [foreign jurisdiction] rule or the California rule is the better or worthier rule.’ [] Rather, the inquiry rests on the “relative commitment of the respective states to the laws involved,” and suggested that the Cassirers’ argument was in fact an attack on the “worthiness” of Spain’s law of prescription.

The 9^th Circuit stressed “that the place where the relevant conduct occurs receives significant weight,” claiming injury to a state’s law to “conduct that occurs within its borders.” By contrast, the 9^th Circuit implied that “none of the relevant conduct occur[red] in California”.

Applying this reasoning, the court held that “California’s governmental interest rests solely on the fortuity that Claude Cassirer moved to California in 1980,” resulting in “minimal” impairment to California law (emphasis added). The court waived away in a footnote that the painting actually passed through California in the 1950s as stolen property.

 The court then framed the “relevant conduct” in a way that ensured TBC’s victory. The only relevant conduct the court acknowledged was Spain’s purchase of the painting. There is no mention, however, of Thyssen-Bornemisza’s purchase of the painting—failing to obtain good title—in the United States of America in 1976, nor the underlying theft itself. The relevant chain of events that led to Spain’s acquisition was an inadequate inquiry and the purchase of a stolen painting in New York. It is like saying the only relevant conduct to recover a stolen watch is its later purchase by a pawn shop.

The court expressed concern with protecting that state above all else. The court worried that “Spain could not provide any ‘reasonable assurance[s]’ to persons who possess property within Spain’s borders.” It is difficult to perceive an interest worth protecting there. Spain—who purchased a problematic collection with its eyes wide open, was rewarded for its “interests in promoting reliance, predictability, and investment.”

Judge Consuelo Callahan issued a short concurrence, fully agreeing with the opinion and then observing:

Spain, having reaffirmed its commitment to the Washington Principles on Nazi-Confiscated Art when it signed the Terezin Declaration on Holocaust Era Assets and Related Issues, should have voluntarily relinquished the Painting. However, as we previously held, “we cannot order compliance with the Washington Principles or the Terezin Declaration.” Id. Our opinion is compelled by the district court’s findings of fact and the applicable law, but I wish that it were otherwise.

Image Credits:

Camille Pissarro, Rue Saint–Honoré, après-midi, effet de pluie, 1897, public domain via Wikimedia Commons.

A longer version of this article appeared on Nicholas M. O’Donnell’s blog, Art Law Report.