Sixth Appellate Ruling in Cassirer v. Thyssen-Bornemisza Collection Affirms Nazi-Looted Painting Belongs to Museum

On January 9, 2024, the Ninth Circuit issued its sixth appellate opinion in Cassirer v. Thyssen Bornemisza Collection, affirming that the Thyssen Bornemisza Collection (“TBC”) gained title to the Nazi-looted painting, Camille Pissarro’s Rue Saint Honoré, après midi, effet de pluie, through Spanish principles of acquisitive prescription.This appears to signal the end of over 18 years of litigation, four appeals (total 6 appellate opinions), one vacatur from the Supreme Court, and one certified question to the California Supreme Court, which was denied. Plaintiffs petitioned for rehearing on Feb. 22, 2024.

As recounted in previous articles in this Newsletter, the Painting was stolen by the Nazis from Lilly Neubauer in exchange for exit visas to leave Germany. She ultimately received post-war compensation for the painting from Germany, but did not relinquish the right to seek restitution, although she believed the painting had been destroyed. The painting actually surfaced in the US in the 1970s and was purchased from a reputable dealer by Baron Thyssen-Bornemisza of Spain, who ultimately gifted it to the Kingdom of Spain with an eponymous museum and foundation. The Neubauer’s heir Claude Cassirer, a California resident, learned of the painting’s whereabouts in 2000 and brought suit in 2005.

To call the case merely “precedent-setting” feels like an understatement. The case articulated the scope of the “expropriation exception” of the Foreign Sovereign Immunities Act when the sovereign in question was not itself responsible for any “taking in violation of international law,” tested the expansion of the statute of limitations for Nazi-looted art (first through California’s Code of Civil Procedure section 338(c), and subsequently through the federal Holocaust Expropriated Art Recovery Act of 2016), and brought into stark relief the consequences of applying California versus Spanish substantive law to stolen property bought by a good-faith purchaser. It is also one of the few, if not the only, Holocaust art cases to have gone to trial on the merits.

The final set piece of this case was a choice- of-law issue: In the United States, generally, “thieves cannot pass good title to anyone, including a good faith purchaser.” But in Spain and many civil law countries, a good faith purchaser may obtain good title through acquisitive prescription principles, which are similar to adverse possession in real property. This presented a true conflict requiring resolution through choice-of-law principles.

The district court had already determined in 2015 that Spanish law dictated the outcome of the case under either federal choice-of-law principles or California choice-of-law principles. But in 2017, the Ninth Circuit had affirmed relying only on federal choice-of- law principles, per its binding precedent at the time. In 2021, the plaintiffs successfully petitioned for certiorari to the Supreme Court, who eventually ruled that California’s choice-of-law test, not the federal common law test, should have been applied to determine the substantive law of the case.

Plaintiffs then argued that California’s “governmental interest” choice-of-law test should not apply outside of the tort context, and requested the Ninth Circuit certify the question of what test to apply to the California Supreme Court, hoping, apparently, that that court would articulate a test more favorable to the Cassirers. On August 9, 2023, however, the California Supreme Court denied certification.

After additional supplemental briefing by the parties, the Ninth Circuit affirmed the lower court’s award of the Painting to TBC. Applying the governmental interest test, the Ninth Circuit found that 1) Spain’s laws and Califiornia’s laws differed with respect to the ownership of stolen property, 2) this present- ed a “true conflict” requiring resolution, and, critically, 3) Spain’s governmental interest would be more impaired by the application of California law than the opposite.

The Cassirers argued that Spain’s acquisitive prescription law was “archaic” because, among other reasons, it was “out of step with international consensus supporting the return of Nazi-looted art[.]” But, as the California Supreme Court had held previously, the “comparative impairment” analysis involved in the third prong of the government interest test “is not to determine whether the [foreign jurisdiction] rule or the California rule is the better or worthier rule.” The Ninth Circuit held that the Cassirers’ argument in favor of the application of California law “strikes at the social worthiness of” the Spanish acquisitive prescription statute, which was “an invalid basis upon which to weigh the scope of Spain’s interests.” Instead, the critical inquiry was where the relevant conduct took place—and here, that place was Spain.

Judge Callahan, in a concurrence, raised the moral difficulty of the decision, stating, “Sometimes our oaths of office and an appreciation of our proper roles as appellate judges require that we concur in a result at odds with our moral compass. For me, this is such a situation.” Noting Spain had committed to the Washington Principles on Nazi-Confiscated Art and the Terezin Declaration on Holocaust Era Assets, she reaffirmed the belief that Spain should have voluntarily relinquished the Painting.

The Cassirers petitioned for rehearing and rehearing en banc on February 22, 2024, arguing that the panel misapplied California’s choice-of-law test by discounting California’s and federal interest in restituting Nazi-looted art to Holocaust victims, as ex-pressed through legislation such as the Holocaust Expropriated Art Recovery Act of 2016. If the petition is rejected, the panel’s decision will stand.