Grossman LLP | District Court Rules Against Claimants To a Pissarro Work Looted By Nazis
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  • District Court Rules Against Claimants To a Pissarro Work Looted By Nazis
    This blog has covered many recent stories involving Nazi-looted artworks.  In early June, the U.S. District Court for the Central District of California ruled on the choice of law to be applied to one such dispute, and in the process dealt a blow to the claimants who were seeking the return of a long-lost artwork.  The case highlights the difficulty of litigating these disputes that not only span decades of time, but also cross borders, jurisdictions, and legal regimes.

    At the center of the lawsuit is a Pissarro painting, Rue St. Honore, après midi, effet de pluie.  Before the Nazis rose to power, the work belonged to Lilly Cassirer, a German Jew.  In 1939, facing increased persecution, Lilly and her husband sought to flee Germany; to obtain visas, however, they were forced to transfer the artwork to a Nazi art appraiser.  They were “paid” a fraction of the work’s value, which was deposited into a blocked account they could not access.  Lilly survived the war but could not locate the painting; she later settled her claim for monetary compensation from the German government, but did not waive her right to seek restitution or return of the work.

    The painting’s trail after the war is unclear, but it is undisputed that during the 1950s it made stops in Los Angeles and St. Louis, among other places.  By 1976, it had returned to Europe, purchased by Baron H. Thyssen-Bornemisza of Switzerland.  In 1988, the Baron loaned his collection to the Kingdom of Spain, and the work was on public display in Madrid beginning in 1992.  In 1993, a foundation controlled by the Spanish government purchased the Baron’s collection outright.

    Lilly’s heirs, residents of California, learned of the painting’s whereabouts around 2000.  After an unsuccessful petition to the Spanish government, the heirs commenced suit in the United States in 2005.  Since then, the parties have been enmeshed in complex litigation involving, among other things, whether U.S. courts could properly exercise jurisdiction over the Spanish instrumentality that owns the works, as well as issues related to California’s statute of limitations on the heirs’ claims; the case has already made two trips to the Ninth Circuit Court of Appeals to resolve those issues.

    Now, Lilly’s heirs face a ruling that may spell the end of their claim.  In the latest round of litigation, the foundation moved for summary judgment on the ground that under Swiss or Spanish law, the foundation has good title to the painting.  The federal court engaged in a lengthy analysis of choice-of-law principles, which are used by courts to determine which jurisdiction’s law should apply to a dispute.  The court concluded that Spain “has the most significant relationship to the Painting and the parties,” and therefore that Spanish law should govern.

    Once the court held that Spanish law controls the case, the Cassirer heirs could not prevail.  This is because, like many other European jurisdictions, Spain’s legal principles governing personal property allow a possessor of an object to obtain good title to it via “adverse possession.”  Specifically, under Spanish law, if someone publicly possesses the property in question for a period of three years (or six years in cases of “bad faith”), and essentially behaves as its owner for that uninterrupted stretch of time, the possessor becomes the rightful owner in the eyes of the law.  Here, since the work had been publicly displayed for more than six years in Spain, the foundation had acquired good title to the painting.  (The result might have been different if the foundation had been somehow itself responsible for the original looting of the painting, but the court held that the foundation could not be considered even an “accessory” to the events that wrested the work from Lilly Cassirer.)

    It is possible that a successful appeal could resurrect the plaintiffs’ claims, but this decision is a major and potentially fatal setback.  In the larger sense, the case is a stark illustration of some troubling realities in the field of Holocaust-era restitution litigation, including the fact that key differences between American law and European law can produce very different results in a property dispute; the fact that courts often reach the merits of these cases only after years of expensive litigation; and the fact that, even where it is apparently undisputed that the Nazi regime took an artwork from its owners under duress, a claimant may still lose in court.

    Interestingly, the court closed its written order with a paragraph encouraging the foundation to “pause, reflect, and consider whether it would be appropriate to work towards a mutually-agreeable resolution of this action, in light of Spain’s acceptance of the Washington Conference Principles and the Terezin Declaration, and, specifically, its commitment to achieve ‘just and fair solutions’ for victims of Nazi persecution.”  The district court’s invocation of the Washington Conference Principles admirably reflects American courts’ increased willingness to look to those principles in cases involving Nazi looting, but (barring a successful appeal by Cassirer’s heirs), any application of those principles here by the Spanish government will be voluntary, perhaps spurred by public pressure to recognize victims of persecution even where that may not be strictly required by law.