Claude
Cassirer (Plaintiff) claims that, in 1939, an agent of the Nazi regime
unlawfully seized a painting by French impressionist painter Camille Pissaro
[1830‑93] from his grandmother Lilly Cassirer. It is entitled “Rue Saint‑Honore,
Apres‑midi, Effet de Pluie.” Mme Cassirer’s great‑grandfather, Julius, a German
citizen, had bought the painting in 1898.
Eventually,
Cassirer’s grandmother inherited the painting. As the persecution of Jews in
Germany increased, Lilly sought permission to leave Germany with her
possessions. A government appraiser forced her to sell the painting for about
$360. She agreed only because she was afraid that, otherwise, they would not
let her leave the country. Decades later, Baron Hans‑Heinrich Thyssen‑Bornemisza,
a private art collector, bought the work.
The Museum
of the Thyssen‑Bornemisza Collection Foundation (Foundation) in Madrid, Spain
is now displaying the Pissaro painting. At some point, the Kingdom of Spain
(Spain) agreed to acquire the painting as well as the rest of the Foundation’s
collection. Cassirer first unsuccessfully petitioned the Spanish Minister for
Education, Culture and Sports, the Chair of the Foundation’s Board, to return
the painting. Cassirer did not file any further claims in Spain.
Instead
Plaintiff brought suit in a California federal court, naming the Foundation and
Spain as Defendants. The district court denied the Defendants’ challenges to
personal jurisdiction, standing, and the existence of a justiciable case or
controversy, and this interlocutory appeal ensued. The U.S. Court of Appeals
for the Ninth Circuit dismisses the appeal as to these rulings.
As to the
collateral order doctrine, however, the Court does find jurisdiction to review
the sovereign immunity question. In a matter of first impression, the Court
considers whether the expropriation exception of the Foreign Sovereign Immunities
Act (FSIA), 28 U.S.C. § 1605(a)(3) applies when the foreign state defendant is
not the entity that originally expropriated the property in violation of
international law. In a two to one vote, the Court concludes that it does.
Plaintiff
argued that neither the Foundation nor Spain are immune because of the
“expropriations exception” of § 1605(a)(3); it provides that a “foreign state
shall not be immune ... in any case .... in which rights in property taken in
violation of international law are in issue ...” Its language does not
literally limit the class of Defendants to the very sovereign entity that
seized the property in violation of international law. In this case, both sides
agree that it was Germany that originally expropriated the painting. The
Defendants urged the Court to avoid reading such a requirement into §
1605(a)(3). The Court agrees with the Plaintiff.
“We find §
1605(a)(3) to be unambiguous. Where ‘the intent of Congress is clear and
unambiguously expressed by the statutory language,’ that is normally the end of
the statutory analysis. Zuni Pub. Sch. Dist. No. 89 v. Dep’t of Educ., 550 U.S.
81, 93 (2007). We hold that the plain language of § 1605(a)(3) does not require
that the foreign state (against whom the claim is made) be the entity who
expropriated the property in violation of international law.”
“Our holding
is consistent with the legislative history ... In reviewing Congress’s intent
in enacting the FSIA, we consider§ 1602, which sets forth Congress’s findings
and purpose. This section expresses Congress’s understanding that foreign
states are not immune from suit ‘insofar as their commercial activities are
concerned.’... In explaining § 1602, the House Report states that Congress is
adopting the restrictive theory of sovereign immunity, that is, ‘[T]he
sovereign immunity of foreign states should be ‘restricted’ to cases involving
acts of a foreign state which are sovereign or governmental in nature, as
opposed to acts which are either commercial in nature or those which private
persons normally perform.’ H.R. Rep. No. 94‑1487 at 14 (1976), reprinted in
1976 U.S.C.C.A.N. 6604, 6613.” [Slip op. 12‑13]
“Because
nothing in the plain language of the FSIA or the legislative history requires
us to read additional language into the statute, we hold that the expropriation
exception to sovereign immunity found in § 1605(a)(3) does not require that the
foreign state against whom the [federal] claim is made be the [same] foreign
state that took property in violation of international law.” [Slip op. 15]
The Court
then turns to the “commercial activity” exception of the FSIA. It removes
immunity where “property or any property exchanged for such property is owned
or operated by an agency or instrumentality of the of the foreign state and
that agency or instrumentality is engaged in a commercial activity in the
United States.” 28 U.S.C. § 1605(a)(2). The district court had reviewed the
Foundation’s activities in the U.S., which included buying books and other
materials from U.S. sources; selling posters and books to U.S. purchasers; and
contracting with U.S. museums for the lending of art works. The district court
concluded that the Foundation had in fact engaged in such commercial activity.
The
Appellate Court agrees. It remands the matter to the district court to
consider, in light of Sarei, whether the circumstances of this case require an
exhaustion of other available local remedies.
The Court
then turns to the question of whether Plaintiff should have exhausted his
remedies elsewhere. Spain claims that Section 1605(a)(3) does not apply because
Plaintiff failed to pursue legal remedies in either Spain or Germany. Whether §
1605(a)(3) requires such exhaustion is also a matter of first impression. The
FSIA’s language and its legislative history give no indication whether it
demands preliminary exhaustion of local remedies.
“Neither
Congress nor this court have imposed an absolute exhaustion of remedies
requirement in cases brought against foreign states under an exception to the
FSIA. Yet, where principles of international comity and rules of customary
international law require exhaustion, we exercise sound judicial discretion and
consider exhaustion on a prudential, case‑by‑case basis. See Sarei v. Rio
Tinto, PLC, 550 F.3d 822, 828 (9th Cir. 2008) (en banc) (plurality opinion)
[see 2008 International Law Update 190].”
“In Sarei,
we held that domestic prudential standards and core principles of international
law require a district court to consider exhaustion in appropriate cases. Id.
at 824 ... Under our prudential approach, when a defendant affirmatively pleads
failure to exhaust remedies, the district court must, as a discretionary
matter, determine in the first instance whether to impose such a requirement on
a plaintiff. Id. at 832.”
“Although
Sarei addressed exhaustion in the context of the [ACTA], where Congress has not
clearly adopted or rejected exhaustion as a jurisdictional prerequisite, our
formulation of prudential exhaustion applies equally to cases brought against
foreign states (and their instrumentalities) under the FSIA ... In this case,
Appellants have asserted that Plaintiff failed to exhaust available remedies in
Spain or Germany. Although the district court correctly concluded that the FSIA
does not [explicitly] require exhaustion of remedies, the court erred by
failing to conduct a prudential exhaustion analysis.”
“On remand,
the district court should be guided by the principles we outlined in Sarei.
Summarizing the Sarei framework generally, we first note that the district
court need only consider exhaustion to the extent the defendant has
affirmatively pleaded Plaintiff’s failure to exhaust local remedies. See Sarei,
supra at 832 (‘The defendant bears the burden to plead and justify an
exhaustion requirement, including the availability of local remedies.’) ...”
“Second, the
court must consider whether Congress has clearly required exhaustion for the
specific claims asserted in the complaint. If, as in this case, Congress has
not imposed or rejected such a requirement, the court must then determine
whether the applicable substantive law would require exhaustion. ...”
“Third, the
court must consider whether the defendant has met its burden to show the
availability of local remedies and that such remedies have not been exhausted.
Id. The plaintiff may rebut a showing of unexhausted remedies abroad by
demonstrating the futility of exhaustion (‘by showing that the local remedies
were ineffective, unobtainable, unduly prolonged, inadequate, or obviously
futile.’). Id. ...”
“Finally, the court may, in its sound
discretion, impose or waive exhaustion after assessing the availability,
effectiveness, and possible futility of any unexhausted remedies in light of
various prudential factors, including but not limited to: (1) the need to
safeguard and respect the principles of international comity and sovereignty,
(2) the existence or lack of a significant United States ‘nexus,’ ... (3) the
nature of the allegations and the gravity of the potential violations of
international law, and (4) whether the allegations implicate matters of
‘universal concern’ for which a state has jurisdiction to adjudicate the claims
without regard to territoriality or the nationality of the parties. See id. at
830‑31.” [Slip op. 22‑26]
Case: Cassirer v. Kingdom of Spain, 580
F.3d 1048 (9th Cir.).
*** About Sarah Ellen Cox: Sarah E. Cox is a Personal Injury attorney in Fort Myers, Florida. Ms. Cox received her Juris Doctor from Whittier School of Law in 2005, and was admitted to the Florida Bar in 2008. News about Sarah E. Cox are at: https://attorneygazette.com/sarah-ellen-cox# Attorney Profile at: https://solomonlawguild.com/sarah-ellen-cox Blog at: http://SarahECoxBlog.blogspot.com
