On 30 April 2019, the United States District Court for the Central District of California (“DCCDC”) delivered Findings of Fact and Conclusions of Law in David Cassirer et al. v Thyssen-Bornemisza Collection Foundation (Cassirer). The case was remanded to the DCCDC by the Ninth Circuit after an appeal of the DCCDC’s first instance decision, which found in favour of Thyssen-Bornemisza Collection Foundation (TBC).
The plaintiffs, the Cassirers, sought restitution of a painting, Rue Saint-Honoré, Après Midi, Effet de Pluie (Rue Saint-Honoré), which was wrongfully dispossessed of one of their ancestors by the Nazi regime. The defendant, TBC, possessed the painting. TBC is an agency or instrumentality of the Kingdom of Spain. In precis, the DCCDC ruled that it could not order the restitution sought as TBC had acquired ownership of the painting under Spain’s laws of acquisitive prescription (the civil law equivalent of adverse possession).
The case involves both public and private international law, and it produces an instinctively unsatisfactory ruling. In doing so, it illustrates how inadequate the law is vis-à-vis the international restitution of Nazi-looted art, of which there are an estimated 650,000 pieces scattered around the world. This article discusses that aspect of the case.
The Provenance of the Painting
Rue Saint-Honoré has a complex provenance. Lilly Cassirer, a Jewish woman, was forced to surrender the painting to Jakob Scheidwimmer, a Nazi art appraiser, in 1939. She did so in order to flee Germany.
Lilly filed a post-war restitution claim against Scheidwimmer pursuant to Military Zone Law No. 59. Lilly abandoned that claim and filed a new claim against the German Federal Republic after it gained sovereignty in 1957. The painting, however, could not be located. Lilly therefore agreed to monetary compensation, but never waived her right to seek restitution of the painting.
Unknown to Lilly, the painting resurfaced in the United States in 1951. It passed from collector to collector, eventually ending up in Missouri in 1952, where it stayed until 1976.
In 1976, a Swiss Baron bought the painting. In 1988, the Baron, through an entity that he created, Favorita Trustees Limited (Favorita), loaned the painting to TBC for payment. Favorita expressly warranted to TBC that it owned the painting. Provenance searches by Spain’s legal counsel using 1980 as the ‘root of title’ confirmed this.
In 1993, TBC purchased the painting, and other pieces of the Favorita’s collection for $338,216,958. Favorita again warranted that it was the legal owner. TBC conducted another provenance search which assumed that Favorita owned those works acquired prior to 1980 based on Swiss laws of acquisitive prescription. Accordingly, the painting was never included in any provenance search.
Clause Cassirer, Lilly’s heir, learnt of the painting’s whereabouts in 2000 and, after unsuccessfully petitioning Spain and TBC for its return in 2001, filed this action against Spain and TBC on 10 May 2005, seeking either the painting be returned or compensation.
The Decision of the Court
The sole issue for the Court was to determine who owned the painting. That first required a determination of the applicable law. The Ninth Circuit had previously applied choice of law principles contained in the Second Restatement of the Conflict of Laws, and the lex situs rule, to find that the law governing the question of ownership was that of Spain (the lex causae). That finding was not in dispute. It was also significant. Californian law does not recognise acquisitive prescription for personal property, whereas Spanish law does.
The Court, thus applying Spanish law, first ruled that TBC acquired no ownership of the painting when it acquired it from Favorita, as Favorita itself did not have good title. To determine Favorita’s title, the DCCDC assumed the role of a Spanish court and looked to Swiss law as the lex situs of the painting at the time of TBC’s acquisition. The Court applied the Swiss law of acquisitive prescription and found that the Baron had not possessed the painting in good faith for five years, as required by art 728 of the Swiss Civil Code for ownership to vest, and thus did not own it. Therefore, TBC could not acquire ownership from the Baron through Favorita.
Ultimately, however, the Court ruled that TBC acquired ownership of the painting under Spain’s own laws of acquisitive prescription as contained in art 1955 of the Spanish Civil Code. Those laws recognise six years of uninterrupted possession, whether in good faith or not, as vesting ownership in the possessor. Ownership in the painting therefore vested in TBC in 1999, and the Cassirer’s restitution claim was defeated.
The Washington Principles
In its conclusion, the Court lamented TBC’s international commitments. Spain, the Court recalled, committed to the Washington Conference Principles on Nazi Confiscated Art on 3 December 1998 (‘Washington Principles’). Principle Eight of those non-binding principles relevantly provides that:
‘If the pre-War owners of art that is found to have been confiscated by the Nazis and not subsequently restituted, or their heirs, can be identified, steps should be taken expeditiously to achieve a just and fair solution, recognizing this may vary according to the facts and circumstances surrounding a specific case.’
(emphasis added)
On 30 June 2009, Spain reaffirmed its commitment to the Washington Principles by signing the Terezin Declaration, which recalls and restates those Principles.
TBC’s legal rights under Spanish law were thus in conflict with Spain’s international commitments. Of that, the DCCDC said this (at p 34):
‘TBC’s refusal to return the Painting to the Cassirers is inconsistent with 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. […] TBC is the lawful owner of the Painting and the Court must enter judgment in favour of TBC.’
Discussion
Foremost, the case illustrates the difficulty associated with the international restitution of property. The difficulty arises in the following way. Restitution of this kind turns on ownership, which is a matter governed by domestic legal systems. Ownership is a protean concept and, thus, the laws of domestic legal systems differ. The principle of lex situs in private international law dictates that ownership of moveable property is governed by the law of the place where the property is situated. In such cases, the Court is often tasked with interpreting and applying foreign law, the existence and content of which must be proved, as an evidentiary matter, by the parties. Choice of law becomes critical as the application of different lex causae, as designated by the lex situs or any other choice of law rule, can lead to opposite outcomes, as in Cassirer.
The difficulty presents a fortiori in the case of property of unclear provenance, such as Nazi-looted art. As Cassirer exemplifies, potential claimants are often unaware of the whereabouts or existence of such property. By the time claimants become aware, post-war restitution laws have long expired and foreign limitation periods or laws of acquisitive prescription often apply to extinguish any claim to restitution, notwithstanding illegal acquisition.
For restitution to become a reality, reform is needed at the domestic level. Prohibiting acquisitive prescription claims to Nazi-looted art, and choice of law rules that designate the forum’s laws to govern restitution cases have been suggested as possible solutions: p 23. In 2016, the US Congress passed the Holocaust Expropriation Art Recovery Act (HEAR), which sought to facilitate restitution by overriding state limitation acts and instating six-year limitation periods commencing from the date of discovery of the artwork’s location by the claimant. It was HEAR that enabled the Cassirers to bring their claim. That, however, was in vain as it did not protect them, as it will not other claimants, from laws of acquisitive prescription.
Second, the case exposes how inadequate the current state of international law is for the purposes of realising such domestic reforms. Indeed, no binding international instruments on or relating to the restitution of Nazi-looted art exist.
The Washington Principles and the Terezin Declaration are non-binding instruments and have failed to realise their objects to facilitate ‘just and fair solutions’. In 2014, the Claims Conference reported that of the 44 signatories to the Washington Principles (of which Australia is one), only Austria, France, Germany, the Netherlands and the UK had, as called for, implemented alternative dispute resolution mechanisms for restitution: pp 1, 21, 22, 33 and 44. A 2018 EU Draft Report recalled the Washington Principles, but regretted that ‘no EU legislation exists that explicitly and comprehensively governs restitution claims for works of art and cultural goods looted in armed conflicts by private individuals’. Germany and the US recently reaffirmed their commitment to the Washington Principles in a 2018 Joint Declaration, but are yet to act on it.
Other conventions which deal with the return of cultural property, such as the 1954 Hague Convention and the 1970 UNESCO Convention, are binding. However, those Conventions do not address competing ownership claims, which are paradigmatic of modern disputes relating to the restitution of Nazi-looted art. The 1970 UNESCO Convention, for example, sets up a regime under which unlawfully obtained cultural property (cf. Nazi-looted art) must be returned to its country of “origin”, irrespective of ownership. What is more, even if the Cassirer’s claim fell within such a class, the Conventions are non-retroactive, and would not apply to a painting stolen in 1939.
The problem for the Cassirers was this. Spain was, and is, one of the many States that have not implemented the Washington Principles, and are not otherwise bound by any law to return Nazi-looted art at international law, but are bound by orthodox domestic property laws which blindly vest the ownership of such art in modern collectors. These laws simply are not alive to the moral imperative that the restitution of Nazi-looted art presents. Why it is that States have been slow to implement the Washington Principles is unclear. Perhaps States prefer, as is more common, to meet their moral obligations through ad hoc, good faith restitution (which is, unfortunately, stultifying to the development of international law), as opposed to burdensome and complicated reforms to their domestic law. The Court made a plea for just this kind of ad hoc, good faith restitution in its conclusion.
The path to restitution is complex, but it is clear that more needs to be done, particularly at the international level. For now, Cassirer illustrates how difficult the international restitution of Nazi-looted art is, and how powerless the law, in its present state, renders claimants.
Benjamin Teng is a Judge’s Associate.