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Burkle Center Director Kal Raustiala Comments on Dispute with Spain over World War II Era Art

The Daily Journal discusses how a Holocaust survivor's six-year legal battle to recover a family painting stolen by the Nazis during World War II received a major boost after the Justice Department told the U.S. Supreme Court that his lawsuit should proceed in federal courts.

DOJ Says Spain Can Be Sued Over Painting

By Deidre Crawford

Special to the Daily Journal

A Holocaust survivor's six-year legal battle to recover a family painting stolen by the Nazis during World War II received a major boost after the Justice Department told the U.S. Supreme Court that his lawsuit should proceed in federal courts.

In 2005, Claude Cassirer sued Spain and the Thyssen-Bornemisza Collection Foundation, where the disputed heirloom has been displayed for years. Cassirer's estate has continued his fight following his death last year. His lawsuit seeks return of the French Impressionist painting "Rue St-Honore, Apres-Midi, Effet de Pluie," estimated to be worth $20 million.

The painting first left Cassirer's family in 1939 when Nazis demanded his Jewish grandmother surrender it when she sought permission to leave Germany. After a series of sales throughout the years, the foundation obtained it as part of a 1993 sale by a Swiss collector. The Spanish government gave the foundation $327 million to purchase the artwork.

Last August, the 9th U.S. Circuit Court of Appeals found that Spain and the foundation were not immune from being sued simply because they didn't originally take the painting, upholding a district court in Los Angeles. Spain challenged the circuit court's decision in a December petition at the Supreme Court.

Cassirer's case could settle whether American plaintiffs can sue a foreign entity under the Foreign Sovereign Immunities Act, or FSIA, even if that entity is not accused of directly stealing the artwork. A high court decision could steer other pending cases against foreign governments where allegedly stolen artwork is displayed, according to Thaddeus J. Stauber of Nixon Peabody LLP, who represents Spain in the dispute.

"At this stage, the case is about respecting the independent courts of other countries and understanding that the U.S. is not the proper forum for resolving disputes over property in other countries," said Stauber, who added that the case is "very important in the scope of international affairs."

Stauber also represents Hungary in a similar case involving more than 40 works of art valued at $100 million and said to have been looted from a Jewish banker during the Holocaust. The case against Spain is somewhat different because the government and the museum are accused of merely harboring the painting.

The May 27 brief filed by Acting Solicitor General Neal K. Katyal dealt a serious blow to Spain's attempt to block the suit. The justices considered whether to hear the challenge to the 9th Circuit decision during their March 18 conference, then asked the Justice Department for its advice. Although the court doesn't blindly follow the Justice Department's views, it gives them great weight.

Government lawyers said in the brief that the 9th Circuit correctly interpreted FSIA and that review of the decision is not warranted.

"We share their view on the law," said the Cassirer estate's advocate, Stuart R. Dunwoody of Davis Wright Tremaine LLP. "We think the solicitor general basically got it right."

Stauber said he expects to file a reply to the solicitor general's brief today. Kingdom of Spain and Thyssen-Bornemisza Collection Foundation v. Estate of Claude Cassirer, 10-786.

Spain and the foundation argue that U.S. federal courts lack jurisdiction under the FSIA to hear the dispute. Their petition asks the court to consider whether the FSIA "expropriation exception" allows U.S. courts to strip a country's sovereign immunity "simply because it owns property allegedly taken in violation of international law by another nation."

The FSIA has become a point of contention in several high-profile cases involving efforts to recover artwork obtained during the Holocaust. Much of the legal debate in the Cassirer case revolves around the act's language and whether "the foreign state" can only be applied to the party that unlawfully obtained the property or can also be applied to a third-party nation, like Spain.

"The courts are partly guessing in these situations - they are making predictions or using assumptions, and if they get that wrong, it could be changed by Congress," said Kal Raustiala, a professor at UCLA School of Law and director of the Ronald W. Burkle Center for International Relations. "It's an issue of statutory interpretation - Congress could come back and say, 'No, that's not what we meant.'"

E. Randol Schoenberg, a partner with Burris, Schoenberg & Walden LLP, litigated other prominent cases on stolen art, prevailing at the Supreme Court in a major FSIA dispute in 2004. The court held in the case that FSIA could be applied to violations of international law before its passage in 1976. Austria v. Altmann, 541 U.S. 677.

"If you really research sovereign immunity and the history of sovereign immunity - it's not a right, it's not owned by the other country," Schoenberg said. "It's a gift that we give occasionally to other countries, and this has been the law in the U.S. for 200 years."

He said many museums in possession of stolen goods "have done the right thing" and returned the artwork, but some heads of museums are "fighting just to keep a painting on a wall."

Staff writer Robert Iafolla contributed to this report.

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Published: Tuesday, June 07, 2011