This Report summarizes cases granted review on September 30, 2021 (Part I).
Case Granted Review: Cassirer v. Thyssen-Bornemisza Collection Foundation, 20-1566
Cassirer v. Thyssen-Bornemisza Collection Foundation, 20-1566. At issue is “[w]hether a federal court hearing state law claims brought under the [Foreign Sovereign Immunities Act] must apply the forum state’s choice-of-law rules to determine what substantive law governs the claims at issue, or whether it may apply federal common law.” In 1900 Paul Cassirer bought Rue Saint-Honoré, Afternoon, Rain Effect, an 1897 oil painting by the renowned French impressionist Jacob Abraham Camille Pissarro (the “Painting”). Lilly Cassirer inherited the Painting in 1926. In 1939, the Nazis forced Lilly to “sell” the Painting for the equivalent of $360 (paid to a blocked account she could never access) so that she could obtain exit visas for herself and her husband to flee Germany. Lilly attempted to recover the Painting in Germany after the War, and while the United States Court of Restitution Appeals declared Lilly to be the rightful owner, it was believed that the Painting had been lost or destroyed in the War. It was not until 2000 that Lilly’s grandson Claude Cassirer (the original plaintiff in this action) learned that the Painting not only still existed but was in the possession of respondent Thyssen-Bornemisza Collection Foundation (TBC), an instrumentality of Spain. (Claude became a U.S. citizen in 1947 and resided in California since 1980.) After Spain refused to return the Painting, Claude sued TBC in 2005 under the Foreign Sovereign Immunities Act (FSIA) in the District Court for the Central District of California asserting claims under California law. The district court found in June 2015 that Spanish law governed the parties’ dispute, rather than the law of California, the forum state. It then applied the Spanish law doctrine of acquisitive prescription (adverse possession) and held that the undisputed evidence entitled TBC to summary judgment on that basis.
The Ninth Circuit upheld the district court’s decision to apply Spanish law. It went on to reverse the award of summary judgment, finding that the district court had incorrectly interpreted and applied Spanish law, and that the Cassirers’ evidence had created a genuine issue of material fact as to whether TBC was an “encubridor”—roughly, an accessory after the fact to the Nazis’ theft of the Painting, which would have precluded application of TBC’s acquisitive prescription defense here. On the choice-of-law issue, the Ninth Circuit stated: “This Court has held that, when jurisdiction is based on the FSIA, ‘federal common law applies to the choice of law rule determination. Federal common law follows the approach of the Restatement (Second) of Conflict of Laws.’” The court then concluded that Spanish law applied under federal common law, and remanded on that basis. Following a trial, the district court found in favor of TBC. The Ninth Circuit affirmed the trial court’s award of title to TBC under Spanish law.
Petitioners―David Cassirer, the Estate of Ava Cassirer, and the Jewish Federation of San Diego County―assert that the “Second, Fifth, Sixth and D.C. Circuits agree that the law of the forum state governs the choice-of-law analysis for state law claims brought under the FSIA.” Those other courts reason that the FSIA mandates that a “foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances.” 28 U.S.C. §1606. The Second Circuit (for example) concluded that “[b]ased on this language” it “has held that, as a general matter, state substantive law is controlling in FSIA cases.” And, say petitioners, “when an action is brought in state court, the forum state’s choice-of-law rules apply.” Petitioners also point to the Second Circuit’s reasoning that “when Congress created the FSIA, it did not intend to alter the substantive law of liability or ‘to create new federal causes of action[.]’” Petitioners add that “the Ninth Circuit’s position that ‘federal common law’ governs choice-of-law for state law FSIA claims violates this Court’s proscription against federal courts applying federal common law except in situations where it is ‘necessary to protect uniquely federal interests.’” Finally, petitioners maintain that “proper application of California choice-of-law principles requires application of California substantive law, which indisputably voids TPC’s title to the Painting.” (The Ninth Circuit did not reach the question of whose law applies under California choice-of-law principles. The district court ruled that Spanish law applies under them.)
[Editor’s note: Some of the language in the background section of the summary above was taken from the petition for writ of certiorari and brief in opposition.]