Grossman LLP | Innocent Owner Defense Cannot Defeat Forfeiture of Stolen Art Under Customs Law
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  • Innocent Owner Defense Cannot Defeat Forfeiture of Stolen Art Under Customs Law
    03/15/2013
    The Art Loss Register—the world’s largest database of stolen art—lists almost 400,000 works as stolen.  A decision from the Second Circuit Court of Appeals in United States v. Davis, 648 F.3d 84 (2d Cir. 2011) highlights the problems faced even by “innocent owners” of stolen art, and serves as a reminder of the importance of confirming a work’s provenance before purchasing it, particularly when the work originated abroad.

    Twenty-seven years ago, Sharyl Davis purchased a monotype by Camille Pissarro, entitled Le Marché, from a Texas art gallery. Unbeknownst to her, the work had been stolen four years earlier from the Musée Faure in France.  In 2003—almost two decades after she acquired the work—Ms. Davis consigned the work to Sotheby’s for sale at auction.  When the French and American authorities learned that the work had surfaced, they intervened, and the U.S. government commenced civil-forfeiture proceedings against the monotype.

    The government brought three forfeiture claims, including two under 18 U.S.C. § 981, which provides that the government may seize property that is “traceable to a violation of . . . any offense constituting ‘specified unlawful activity,’” including a violation of the National Stolen Property Act. (The NSPA criminalizes the possession or sale of stolen goods worth $5,000 or more that have moved in interstate or international commerce with knowledge that the goods were stolen.)  The third claim invoked a customs statute, 19 U.S.C. § 1959a, which allows forfeiture of goods “introduced . . . into the United States contrary to law.”

    The government moved for summary judgment on the customs claim, while Ms. Davis moved for summary judgment on all three claims, pointing to a federal statute, 18 U.S.C. § 983(d), which provides that “[a]n innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute.”

    The district court agreed that she had established she was an innocent owner of Le Marché, and was therefore entitled to summary judgment on the two forfeiture claims under 18 U.S.C. § 981.  As to forfeiture under the customs law, however, the district court held that the innocent-owner defense was unavailable because 18 U.S.C. § 983(d) did not apply to forfeitures under Title 19.  For the customs claim, then, the district court held that, because the government had met its initial burden of showing that the property was subject to forfeiture, the burden shifted to Ms. Davis to show that the monotype was not stolen merchandise introduced to the United States “contrary to law.” A jury subsequently found that she could not make this showing.

    On appeal, Ms. Davis’s argued primarily that the district court should have applied the innocent-owner defense to the government’s customs claim under Section 1595a. The Second Circuit disagreed, holding that, based on the statutory language, the “innocent owner defense” was not available against this type of customs forfeiture claim. The Second Circuit also upheld the district court’s burden-shifting approach and rejected Davis’s arguments that the forfeiture violated her constitutional right to be free of “excessive fines” under the Eighth Amendment, as well as her constitutional rights under the Takings Clause of the Fifth Amendment.

    This case illustrates the risks confronted by collectors or dealers when buying any art or antiquities of unclear or unverifiable provenance, particularly when the work originated or traveled from abroad.  Should the work turn out to be stolen, an innocent owner may have a viable defense to some types of forfeiture proceedings, but that defense did not aid Ms. Davis where her monograph was forfeited under a customs law.  She ultimately had the unenviable task of “proving a negative” and was unable to convince a jury that Le Marché was not stolen art that had come to the United States illegally.  Careful provenance research into the history of every potential purchase and retention of all the records related to every purchase can help a buyer protect a valuable investment.
    ATTORNEY: Kate Lucas
    CATEGORY: Uncategorized