Acting in Good Faith?

Cassirer v Thyssen-Bornemisza – Latest US Ruling Upholds Spanish Museum’s Ownership of a Pissarro Painting yet invites Spain to respect the Washington Principles

We return to the ongoing proceedings between the Californian heirs of Lilly Cassirer and the Thyssen-Bornemisza Collection (“TBC”) in Madrid, Spain, which we last addressed in September 2017. This blog post brings the proceedings up to date, as US District Judge John F. Walter, sitting in Los Angeles, issued his latest ruling on 30 April 2019.[1] Whilst that may well not be the last word in the matter, we set out below the questions before the court, the substance of the ruling, and the potential next steps, including potential issues of public policy.

Summary

As previously instructed by the US Court of Appeals for the Ninth Circuit, there were two principal questions facing the US District Court:

  • As a matter of Spanish law, did TBC have actual knowledge that the painting was stolen property? and
  • Did Baron Hans Heinrich Thyssen-Bornemisza (the “Baron”) possess the painting in good faith under Swiss law?

The simple answers to those questions are that:

  • TBC did not have actual knowledge that, as a matter of Spanish law, the painting was stolen; accordingly, the District Court upheld TBC’s ownership of the painting;
  • The Baron did not possess the painting in good faith, however this did not alter the District Court’s findings under Spanish law.

Below we explain these points further.

TBC’s ownership upheld under Spanish Law

Although the claimants were based in California, the District Court stated that Spanish law applied, rather than Californian law, as per previous judgments. On the face of it, under Spanish law, between 1993 and 1999, TBC fulfilled the six-year period to gain lawful ownership of the painting under the law of ‘acquisitive prescription.’ The claimants argued, however, that TBC was an ‘accessory’ to the theft of the painting, in terms of handling stolen property, meaning that the relevant prescription period extended to twenty-six years, from 1993 to 2019. Since the claim was first made in 2001 and again 2005, TBC would not fulfil that requirement. The case turned on whether TBC could be construed as an ‘accessory’ under Spanish law.

The District Court ultimately held that TBC was not an ‘accessory’ because it did not have “actual knowledge” of the theft. There was little if any material publicly available to TBC on the painting’s looting; reputable lawyers had given legal opinions confirming the Baron’s good title, with no apparent facts to the contrary; the Baron had publicly shown the painting with no resulting claims against it; the Baron’s trust (‘Favorita’) had given TBC representations and warranties as to good title; TBC paid a fair purchase price and had publicly exhibited it since 1992 to millions of visitors. Therefore, TBC could not be found “wilfully blind” to the provenance risks. The District Court concluded that whilst the painting’s potential history might have raised TBC’s “suspicions,” the claimants fell “well short of demonstrating TBC’s “actual knowledge,” i.e. that TBC had certain knowledge that the Painting was stolen, or that there was a high risk or probability that the Painting was stolen. In other words, although failing to investigate the provenance of the Painting may have been irresponsible under these circumstances, the Court concludes that it certainly was not criminal.” [Original emphasis]

Lastly, the District Court dismissed TBC’s suggestion that the claimants’ legal challenge should be time-barred as it was brought unreasonably late. In fact, the claimants had “moved quickly to enforce their rights,” firstly in the war’s immediate aftermath, when they still believed the painting had been lost or destroyed. Secondly, once they discovered in 2000 that the painting had in fact survived and was on show in Madrid, they swiftly filed a claim in 2001 in Spain and again in 2005 in California. This finding may be of some reassurance to other families seeking the restitution of artworks many decades after they were first looted, assuming they too act swiftly on the information they receive.

The Baron’s lack of good faith under Swiss Law

The Baron had generally kept the painting at his Villa Favorita in Lugano, Switzerland between 1976 and 1992, so the TBC argued that he acquired title to it via the Swiss law of ‘acquisitive prescription,’ after holding it in ‘good faith’ for more than five years. However, the District Court accepted the claimants’ arguments that the Baron did not act in good faith, given multiple ‘red flags’ such as the prior deliberate removal of labels from the reverse of the painting. The District Court held that “because the Baron did not undertake any reasonable and suitable measures, such as contacting [noted Pissarro expert John Rewald] or another art expert to allay any suspicions he may (and should) have had, the Court concludes that the Baron did not possess the Painting in good faith and thus the Baron (and Favorita) did not acquire good title to the Painting under Swiss law. Accordingly, because the Baron (and Favorita) did not have good title to the Painting at the time of TBC’s purchase, the Court concludes that TBC did not become the lawful owner of the Painting via the 1993 Acquisition Agreement.”

This particular finding did not, however, change the final outcome under Spanish law in favour of TBC, as set out above.

Moral Suasion – or the Lack of It

The ruling is also noteworthy for its non-legal reasoning. After applying Spanish law, setting out its legal reasoning and ruling explicitly in favour of TBC, the District Court concluded by specifically referring to the ‘Washington Principles’ of 1998 and the ‘Terezin Declaration’ of 2009, both of which were signed by Spain. The District Court noted that both were “non-binding” and that the former “appeal[ed] to the moral conscience of participating nations.”

The District Court added, significantly, that “TBC’s refusal to return the Painting to the Cassirers is inconsistent with the Washington Principles and the Terezin Declaration. However, the Court has no alternative but to apply Spanish law and cannot force the Kingdom of Spain or TBC to comply with its moral commitments.” The District Court repeatedly stated that TBC is an “agency or instrumentality of the Kingdom of Spain,” i.e. a public body governed by those principles, even if the Spanish state may argue that TBC is a ‘private’ museum and not therefore covered by them.

By contrast, TBC has issued detailed statements in English and Spanish which present its arguments to the public. They cover inter alia the legal points discussed above and repeatedly focus on the financial compensation which Lilly Cassirer received in 1958 from the West German government. Given that the parties to that 1958 settlement understood the painting had not survived the war and assumed the same until finally notified otherwise in 2000, it is all the more remarkable that the latest TBC statement argues that the Cassirers ‘never showed interest in finding out the whereabouts of the work until in 2001 the heirs of Lilly went to the [TBC] for the first time to claim the property.’[2]

The District Court’s professed inability to ‘force’ what it considers to be a public body, such as TBC, and the Spanish state, to fulfil their own ‘moral commitments,’ shows in stark practical terms the clash between technical legal rights and a claimant’s moral case. As we previously highlighted in January 2019, it may also raise questions over the practical utility of such ‘non-binding’ commitments when they confront difficult legal questions.

Next Steps – Timeline

The ruling was not formally expressed to be a ‘judgment’ but rather ‘civil minutes,’ with a request to the parties to prepare a joint proposed ‘judgment’ by 6 May 2019 (i.e. a brief procedural document stating the relief granted to each party). The parties were granted an extension until 16 May 2019 for purely administrative reasons. However, the legal skirmishing continued beyond that date, with each party submitting rival documents to the court. TBC’s draft document included an explicit declaration that it was the legal owner of the painting. The claimants objected that the court had not tried a declaratory judgment action; instead, the court had merely ruled that the claimants had not met the burden of proof on their claim. The claimants further argued that the court had made numerous other findings beyond TBC’s legal ownership of the painting and it would be wrong to ignore them. On 17 May 2019, the court declined to sign TBC’s proposed judgment and instead signed the claimant’s rival version, which merely stated that the “Plaintiffs take nothing, and that the action be dismissed on the merits.” The court expressly cited the reasons given by the claimants, an indication of where the judge’s broader sympathies might lie.

In the meantime, there is no sign that the dispute is over, as the judge himself stated in his ruling that “the parties will certainly pursue additional appellate review.” Whilst counsel for TBC reportedly declared their satisfaction with the ruling and expected that the dispute was now over, counsel for the claimants reportedly stated that “we respectfully disagree that the court cannot force the Kingdom of Spain to comply with its moral commitments.”[3]

We will continue to cover this case and report on the next instalment in these proceedings, whenever that may be.

Simon Albert, with many thanks to Azmina Jasani and Manuel Valdecantos for their advice and research.


[1] See United States District Court: Central District Of California: Case No. CV 05-3459-JFW (Ex), April 30, 2019, David Cassirer, et al. -v- Thyssen-Bornemisza Collection Foundation, available at https://www.lootedart.com/web_images/pdf2019/CassirerThyssen-JUDGMENT%2030.4.19.pdf.

[2] In late 2018, TBC published an English language statement: https://imagenes.museothyssen.org/sites/default/files/document/2018-11/Nota_informativa_Pissarro_15.11.18_ING.pdf?_ga=2.102555460.475923542.1557316178-212521554.1557229205. On 1 May 2019, TBC published an updated statement in Spanish welcoming the District Court’s findings: https://www.museothyssen.org/sites/default/files/document/2019-05/Nota_sentencia_Pissarro_01.05.19.pdf.

[3] See ‘Nazi-looted painting won’t be returned to California family, judge rules,’ by Colleen Shalby, May 01, 2019, Los Angeles Times, at https://www.latimes.com/local/lanow/la-me-judge-ruling-nazi-stolen-art-20190501-story.html.