Like so many court cases dealing with claims to Nazi-looted art, the Cassirer v Thyssen-Bornemisza case has placed much emphasis on the following questions:

  • Which law will the Court apply to the issues it is being asked to consider?
  • Has the current possessor acquired ownership of the artwork?
  • Is the claim to the artwork barred by limitation?

Each claim to looted art can turn on the answer to one of these questions, and have a radically different outcome, depending on the Court seized of the dispute. Nonetheless, the way in which Cassirer v Thyssen-Bornemisza has been approached in the most recent judgment of the Californian Court show some intriguing parallels with another case, City of Gotha v Sotheby’s and Cobert Finance SA., in which a common law judge had to apply civil law concepts and “made them work” in unison.

The following summary aims to provide the factual and procedural backgrounds to Cassirer v Thyssen-Bornemisza before turning to the controversial Summary Judgment of June 2015 and finally recounting the latest stage in this ongoing legal saga, the judgment on appeal of July 2017. Finally, some brief observations are provided that seek to put these lengthy proceedings into a broader context.

Factual background

Rue Saint-Honoré, dans l’après-midi, Effet de pluie’ is a stunningly atmospheric depiction of one of Paris’ most famous thoroughfares. It was painted in 1897 by the leading French Impressionist Camille Pissarro (the “Painting”). Sold by the artist in 1898 to a successful German-Jewish businessman, Julius Cassirer, the Painting subsequently remained with the Cassirer family in Germany for over four decades, eventually passing to Julius’ daughter-in-law, Lilly Cassirer.

In 1933, the Nazis seized power in Germany and proceeded to persecute, inter alia, Germany’s Jewish population. In 1939, as a consequence of that persecution, Lilly Cassirer attempted to leave Nazi Germany. Like all Jews at the time, she needed special permission from the Nazi authorities to leave the country. When Lilly applied for such permission, the authorities appointed a Munich art dealer, Jakob Scheidwimmer, to evaluate her artworks, including the Painting.

Scheidwimmer refused to allow her to take the Painting out of Germany and demanded that she hand it over to him for the (very modest) sum of 900 Reichsmark. Although the money was paid into a blocked account and Lilly Cassirer consequently never received it, she nonetheless agreed to Scheidwimmer’s demands, because she feared she might otherwise not be allowed to leave Germany at all.

Scheidwimmer then traded the Painting to another dealer, Julius Sulzbacher, who was also subject to Nazi persecution and left Germany for Holland. Upon Germany’s invasion and subsequent occupation of Holland, the Gestapo confiscated the Painting from Sulzbacher and returned it to Germany. The Painting was then sold at auction to an anonymous buyer in 1943 and its whereabouts remain unaccounted for until after WWII.

After the war, Lilly filed a timely restitution claim pursuant to Germany’s post-war Restitution Act, the Bundesrückgabegesetz (BRüG). Because the whereabouts of the Painting were unknown to Lilly, she ultimately settled her claim for monetary compensation with the German government. However, she did not waive her right to seek restitution or return of the Painting.

The Painting re-surfaced (without Lilly’s knowledge), when it was offered for sale in 1951 and subsequently acquired by an LA-based private collector, Sydney Brody. Less than a year later, a St Louis-based private collector, Sydney Schoenberg, purchased the Painting for $16,500.

In 1973, the Painting was sold to the New York dealer Stephan Hahn who, in turn, sold it on to Baron Hans-Heinrich Thyssen-Bornemisza, the famous industrialist and art collector for $275,000.

In 1988, Baron Thyssen-Bornemisza leased his extensive collection to the Kingdom of Spain for a period of ten years, but halfway into the lease, the Spanish state purchased the entire collection comprising of 775 paintings for $350m (estimated value at the time between $1-2 billion), including the Painting, thereby establishing the famous Thyssen-Bornemisza Museum and Foundation in Madrid (hereinafter, the “Foundation”).

Procedural background

In 2000, Claude Cassirer, Lilly’s grandson and heir, discovered the location of the Painting in Madrid and petitioned the Spanish government to have the Painting returned to him. The Spanish government rejected the petition. Three years later, five members of the US Congress lobbied the Spanish government on behalf of Claude Cassirer, again unsuccessfully so.

On 10 May 2005, Claude Cassirer commenced proceedings before the Central District Court of California (the “District Court”) against the Foundation and the Kingdom of Spain, arguing that the Nazis had confiscated the painting in the context of their genocide of the Jews in violation of international law, and Lilly was a Jew. The lawsuit further alleged that the Foundation engaged in commercial activities in the US, such as maintaining a website on which US citizens were capable of purchasing admission tickets to view paintings in the museum, including the Pissarro by using US credit cards.

The Foundation failed to convince the District Court that the claim should be dismissed, inter alia, based on the US Federal Sovereign Immunities Act, pursuant to which foreign states are immune from the jurisdiction of US courts. There are exceptions to this general rule, one of which is the so-called “expropriation exception” which provides that a “foreign state shall not be immune […] in any case […] in which rights in property taken in violation of international law are in issue […] .”

On appeal, the Foundation argued that this wording should be read as meaning that the state against whom the claim is being brought must be the same state that took the Painting in violation of international law. As Germany looted the Painting, and the claim was being made against Spain, the exception was not available. However, in 2009, the Ninth Circuit Court in California (the “Court of Appeals”) dismissed this argument and made clear that the exception was, in fact, available to the claimant in this case.

In September 2010, Claude Cassirer passed away. Daniel Cassirer, Ava Cassirer and the United Jewish Federation of San Diego County were substituted as claimants in the action (together, the “Heirs”).

In 2012, the District Court then found that the Heirs should be held to a three-year limitation period, because California’s six-year limitation was unconstitutional. Back before the Court of Appeals, the Californian appeal judges disagreed with the District Court on this issue in December 2013, holding that the California statute was not unconstitutional, just because it could benefit Holocaust-era claims. The statute had been applied to non-Holocaust-era claims, including 1970s photography.

Summary Judgment of the District Court, 4 June 2015

In March 2015, the Foundation applied for summary judgment, which was granted in June 2015 by the District Court. Presiding Judge John F. Walter ruled that Spanish law applied to the question of ownership, and that under Spanish law, the Foundation had acquired good title to the painting by publicly displaying it for years without any objection by the Heirs.

As an initial step, the District Court deliberated whether Californian law or Spanish law was applicable in determining the question as to whether the Foundation had acquired the Painting by so-called acquisitive prescription (sometimes also referred to as adverse possession). Acquisitive prescription denotes the (mostly civil law) doctrine of acquiring ownership by continuous possession over a specified period of time.

The District Court found that Spanish law should be applied, because if the application of Spanish law were to be “subordinated to California’s interest, [this subordination] would rest solely on the fortuitous decision of Lilly’s successor-in-title to move to California long after the Painting was unlawfully taken by the Nazis […].”

The court noted, in that context, that California had not extended the principle of acquisitive prescription to personal property. By contrast, Spain’s Civil Code, Article 1955, provided: “Ownership of movable property prescribes by three years of uninterrupted possession in good faith. Ownership of movable property also prescribes by six years of uninterrupted possession, without any other condition.”

Put differently, if the Foundation could prove three years of “ordinary acquisitive prescription”, i.e., possession in good faith, it would have acquired ownership. Alternatively, six years of “extraordinary acquisitive prescription”, i.e., possession in in bad faith, would also suffice in any event.

On that basis, the court held that as a matter of Spanish law, the Foundation was the rightful owner of the Painting. This was because it was an undisputed fact that the Foundation had held the Painting, whether in good faith or in bad faith, for longer than six years prior to the claim being made, i.e., from 1993 to 2001.

The Heirs sought to counter the application for summary judgment by arguing that the Spanish Civil Code was inapplicable, because Article 1956 barred the acquisition of ownership by acquisitive prescription in the event that

  • the Painting was misappropriated by theft or robbery;
  • the possessor was a principal, accomplice or accessory to the crime committed; and
  • the statute of limitations for that crime must not have expired.

The court held that it was undisputed that the Foundation was neither the principal, nor an accomplice of the crime. It therefore determined whether the Foundation could be seen to be an accessory (encubridor) to the crime committed by the Nazi regime. In accordance with the Spanish Civil Code and related Spanish case law, it therefore followed that, in order to be an accessory to that crime, the Foundation needed to have had the intent or purpose to prevent the crime from being discovered.

Judge Walters asserted that there was “absolutely no evidence that the Foundation purchased the Painting (or performed any subsequent acts) with the intent of preventing Scheidwimmer’s or the Nazis’ criminal offences from being discovered. Indeed, Scheidwimmer had already been convicted and sentenced after the war, and the 1939 forced sale had already been the subject of civil proceedings in Germany from 1948 to 1958 in which both Lilly and Scheidwimmer were parties.”

The District Court concluded that, as a matter of Spanish law, the Foundation had acquired ownership of the Painting on 21 June 1999, six years after it had purchased the Painting from Baron Hans-Heinrich Thyssen-Bornemisza. The Heirs’ claim appeared to have been defeated.

Court of Appeals Judgment, 10 July 2017

The District Court’s judgment, however, was then appealed by the Heirs. While the appeal was pending, in December 2016, the U.S. Holocaust Expropriated Art Recovery Act 2016 (“HEAR Act”) came into force. The HEAR Act created a six-year limitation period that started to run on the date of actual discovery of the artwork’s location by the claimant.

That six-year statute of limitations applies to any claims that are pending on the date the HEAR Act came into force, 16 December 2016. This included the Cassirer v Thyssen- Bornemisza case. As a result, the Court of Appeals was required to consider the relevant limitation period under the provisions of the HEAR Act. In so doing, it became the first circuit court in the U.S. to apply the HEAR Act’s limitation periods.

On 10 July 2017, the Court of Appeals held, inter alia, that (i) the Heirs had filed their claim in timely fashion pursuant to the HEAR Act (having discovered the Painting’s whereabouts in 2000 and having filed the claim in 2005), and (ii) the District Court had incorrectly granted Summary Judgment to the Foundation based on its incorrect application of Spain’s law of acquisitive prescription.

As a preliminary step, the Court of Appeals agreed with the District Court that Spanish law applied to the question as to whether the Foundation had acquired ownership to the Painting. Acknowledging the diverging rules of Spain and California, the court observed: “The property laws of both Spain and California seek to create certainty of title, discourage theft, and encourage owners of stolen property to seek return of their property in a timely fashion. Although these states have chosen different rules for moveable property, both sets of rules further the basic policies underlying property law.”

The Court of Appeals then analysed the District Court’s judgment and its application of the Spanish Civil Code to the facts of the case. If Article 1955 were to be “read alone”, the court would agree with the District Courts finding that Spanish law would “seem to vest title in one who gained possession, even absent good faith, after six years […].”

However, the court found that “the very next article in the Spanish Civil Code, Article 1956, modifies how acquisitive prescription operates.” Indeed, pursuant to Spain’s Civil Code 220 (2009), the effect of Article 1956 on an encubridor (accessory after the fact) is to extend the period of possession necessary to vest title under Article 1955 (six years) by adding, first, the criminal limitation period pursuant to Spain’s Penal Code (five years), and second, the civil limitation period pursuant to Spain’s Penal Code (15 years).

If it could be shown that the Foundation was, in fact, an encubridor for the purposes of Article 1956 of the Spanish Civil Code, the period of possession required to vest title would therefore be a total of 26 years, instead of six years.

As the Foundation would, in that case, have needed to possess the Painting for 26 years after 1993, it would have taken it until 2019 to acquire title via acquisitive prescription. The Heirs filed their claim in 2005, which meant that, if Article 1956 were to apply, the Foundation would not have acquired prescriptive title to the Painting.

In considering the substantive assessment of the Spanish legal term encubridor, the Court of Appeals observed that the District Court had merely followed the Foundation’s argument that encubridor should be defined by reference to the Spanish Penal Code that was in force at the time the Foundation acquired the Painting. That definition defined encubridor to include merely persons who, after the commission of the underlying crime, acted to aid those who committed the underlying crime to avoid penalties and prosecutions.

The Court of Appeals, however, was moved to accept the Heirs’ argument that, when Article 1956 was enacted, the Spanish legislature had in mind the definition of encubridor at the time, which hails from the 1870 Spanish Penal Code. In fact, Article 1956 has not been modified since 1889. The definition of encubridor in the 1870 Penal Code includes “one who knowingly benefits himself from stolen property.”

This, in effect, widened the definition of encubridor. Judge Walters’ assertion that there was “absolutely no evidence” of the Foundation having the “intent of preventing […] criminal offences from being discovered” was no longer decisive in the analysis as to whether Article 1956 applied. Instead, the Foundation was now capable of being an accessory of the crime (theft) simply because it had knowingly benefited from stolen property.

The Heirs, on the other hand, had adduced sufficient evidence to create a triable issue of fact that the Foundation knew that the Painting had been stolen from its original owner when they acquired it from Baron Hans-Heinrich Thyssen-Bornemisza. The Heirs’ arguments in this regard included the following submissions:

  • it was well-known that the Nazis had looted numerous paintings by Pissarro, which were favourites among many European Jewish collectors at the time;
  • the Painting contained a torn label on its back from a gallery in Berlin (the Cassirer’s gallery), but there was no documentation that the Painting had ever been voluntarily transferred out of Berlin;
  • in 1954, the United States Court of Restitution Appeals (“CORA”) had published a decision confirming that Lilly owned the Painting; and
  • for an official publication in 1992, the Foundation had published incorrect provenance information alleging the Painting had been purchased by the Baron through the Joseph Hahn Gallery in Paris, rather than the Stephen Hahn Gallery in New York (the Stephen Hahn Gallery was known to have sold at least one other artwork looted by the Nazis);
  • the purchase price paid for the Painting by the Foundation and the Kingdom of Spain was significantly below its market value; and
  • when investigating the Baron’s collection prior to the establishment of the Foundation, the decision was taken to assume the Baron had acquired his collection in good faith.

Based on these considerations, the Court of Appeals concluded that the District Court’s interpretation of encubridor under Spain’s Civil Code had been too narrow and that the case needed to be revisited in the District Court once again.

Observations

As so often in cases dealing with restitution claims to looted artworks, the Cassirer v Thyssen- Bornemisza saga has focussed on the main themes of

  • jurisdiction and applicable law;
  • the applicable limitation period and the question of ownership; and
  • the existence or lack of good faith at the point of acquisition of the artwork.

On the first of these points, Baron Thyssen-Bornemisza’s collection ended up with the Spanish state, despite the fact that it could have conceivably ended up in a number of other locations. For instance, the Baron was born in Hungary, became a Swiss national and was a resident in Spain as well as the United Kingdom. Had his collection wound up in a different jurisdiction, this case may have evolved in a very different direction.

Had the collection been held by a public institution in the United Kingdom, it is quite conceivable that the matter would not be before the courts today, but may have been submitted to the UK Spoliation Advisory Panel.  Unfortunately, unlike the UK and a handful of other European countries, neither California nor Spain has set up an ad hoc panel tasked with resolving issues of Nazi-dispossessed art.

That said, all of the recurring themes cited above were also at the heart of the UK’s landmark case involving Nazi-looted art, the High Court judgment in City of Gotha v Sotheby’s and Cobert Finance SA. Here, an English judge, Moses J, was asked to analyse German limitation periods and rules of acquisitive prescription, having first determined that, were the case to have been decided under English law, the painting in question would have to be returned to its original owner.

Moses J found a way of disapplying the “normal” rules of acquisitive prescription under the German Civil Code by virtue of the fact that the painting that was being claimed had been misappropriated, once more, in the period leading up to the claim by the original owner. That “second” misappropriation allowed the English judge to view the chain of possession as having been broken, which meant he was able to hold that the claim was not time-barred. In the absence of such a misappropriation shortly before the claim was made, the English judge would have found it very difficult to come to that view as a matter of German law.

In a fascinating obiter dictum, Moses J added that, had German law required him apply rules incompatible with English public policy considerations, he would have had no hesitation in disapplying German law altogether.

It seems as though Moses J and the Court of Appeals in California both demonstrated a good deal of determination to make the German and Spanish Civil Codes work in ways compatible with the outcome of the two disputes before them if they had been able to apply the laws of, respectively, England and Wales and California.

This throws up the question as to whether common law judges may be prepared, when applying civil law rules, to find ways to interpret them, if the outcome of the civil law analysis goes too far in contradicting the outcome of the case had common law rules been found to apply. It is often said that civil law jurisdictions may be characterised as being much more teleological than common law jurisdictions. Here, ironically, common law judges appear to be taking a teleological approach in interpreting the application of civil law.

Till Vere-Hodge

Published 28 September 2017