Can a state law assist heirs of Jews whose fine art was removed from their possession during the Nazi regime in recovering that fine art? The California Code of Civil Procedure 338(c)(3) specifies a six year statute of limitation for the recovery of fine art against a museum, gallery, auctioneer or dealer, when the work is unlawfully taken or stolen, including by fraud or duress. The statute of limitations starts to run when the identity and whereabouts of the fine art is discovered by the claimant. The district court dismissed the heirs’ complaint without leave to amend, ruling that the statute intrudes on the federal government’s foreign affairs powers by creating a remedy for wartime injuries and is therefore unconstitutional.
The Ninth Circuit ruled that §338(c)(3) does not intrude on foreign affairs, that the increased statute of limitations does not, by itself, violate the possessor’s Fourteenth Amendment due process rights and that the statute does not violate the possessor’s First Amendment rights. The Ninth Circuit remanded the case to the district court for further proceedings.
- 1897 Camille Pissarro painted Rue Saint-Honoré, après-midi, effet de pluie (the Painting).
- 1898 Julius Cassirer, from a prominent Jewish family in Germany, purchased the Painting.
- 1935 Nuremberg Laws enacted in Germany, stripping Jews of their civil rights and citizenship.
- 1939 Lilly and Fritz, who inherited the Painting from Julius, decide to decamp from Germany. They were not allowed to take the Painting out of Germany.
- 1943 The Painting is sold to an anonymous purchaser.
- 1962 Lilly died, naming grandson Claude Cassirer as her sole heir. Lilly was unsuccessful in her attempts to locate the Painting after the war.
- 1976 Baron Hans-Heinrich Thyssen-Bornemisza, a world renowned private art collector, bought the Painting.
- 1993 Thyssen-Bornemisza Collection Foundation (the Foundation) bought the Painting. The Painting was displayed at the Thyssen-Bornemisza Museum in Spain.
- 2000 Claude Cassirer discovered that the Painting was on display at the Thyssen-Bornemisza Museum in Spain.
- 2005 Claude filed this lawsuit against the Foundation in the U.S. District Court, Central District of California. He was a resident of California .
- 2010 Claude died. His heirs, son David, daughter Ava, and the United Jewish Federation of San Diego County, were substituted as plaintiffs.
Cal. Civ. Proc. Code § 338(c)(3) is Not Unconstitutional on the Basis of Field Preemption
Under the U.S. Constitution, the federal government is granted exclusive authority over foreign affairs. Federal government actions pre-empt state government actions in this area. The two grounds for foreign affairs preemption are 1) conflict preemption and 2) field preemption. Conflict preemption occurs when a state law conflicts with federal action. Conflicts preemption was not at issue in this case. Field preemption occurs when a state exceeds traditional state responsibility and intrudes on the field of foreign affairs.
The Ninth Circuit ruled that §338(c)(3) does not intrude on the federal government’s foreign affairs powers. Intrusion on the federal government’s foreign affairs powers requires “more than some incidental or indirect effect on foreign affairs.” (Opinion pdf page 9).
States may not create their own remedies to the problem of looted Holocaust-era art or other wartime injuries, and they may not require their courts to make politically sensitive determinations on matters of foreign policy. Section 338(c)(3), however, does not create a remedy for wartime injuries by creating a new cause of action for the recovery of artwork. Section 338(c)(3) extends the statute of limitations for preexisting claims concerning a class of artwork that is unrelated to foreign affairs on its face. It does not require that those claims arise out of wartime injuries, or from any other specific source that might implicate the federal government’s foreign affairs power. Because § 338(c)(3) is silent on matters of foreign affairs, it does not convey a distinct juristic personality from that of the United States when it comes to matters of foreign affairs. Nor is there any evidence in the record at this stage in the proceedings that California courts are applying § 338(c)(3) to establish the State’s own foreign policy.
(Opinion pdf page 11).
Does §338(c)(3) Violate the Foundation’s Due Process Rights?
Section §338(c)(3) was enacted in 2011, enlarging the statute of limitations from three years to six years for the recovery of fine art. It replaced a statute that specifically applied to Holocaust-era artwork and was found to unconstitutionally pre-empt the field of the federal government’s foreign affair powers. Claude filed this lawsuit in 2005, after discovering the whereabouts of the Painting in 2000. This action would be time-barred under a three year statute of limitations, but not under a six year statute of limitations.
The Foundation argues that § 338(c)(3) violates its due process rights by retroactively stripping it of its vested property interest acquired in the Painting when the longstanding three-year statute of limitations period expired.
(Opinion pdf page 13).
The Ninth Circuit agreed with the district court that the record before the court, i.e., the facts presented to the court, did not answer the question of whether legal title was vested in the Foundation. Was the Foundation the unconditional owner of the Painting?
Where lapse of time has not invested a party with title to real or personal property, a state legislature, consistently with the Fourteenth Amendment, may repeal or extend a statute of limitations.
(Opinion pdf pages 13-14).
The Ninth Circuit ruled that, on the record before it, the Fourteenth Amendment due process issue could not be conclusively resolved in favor of either party.
Section 338(c)(3) Does Not Violate the Foundation’s First Amendment Rights
The Foundation argued that §338(c)(3) targets museums and art galleries for unfavorable treatment, thereby violating its First Amendment rights.
The Ninth Circuit agreed with the district court that
§338(c)(3) does not burden expression in any manner cognizable under the Supreme Court’s First Amendment jurisprudence.
(Opinion pdf page 15).
The Ninth Circuit ruled that
the statute merely permits a claim to go forward or not depending on the timing of the discovery of the claim, not on the basis of any protected speech.
(Opinion pdf page 16).
The Ninth Circuit also ruled that
the Legislature clarified that the statute of limitations period for the six-year period is triggered on actual notice. Thus, § 338(c)(3) passes rational basis review and is not unconstitutional.
(Opinion pdf page 16).
This case is Cassirer v. Thyssen-Bornemisza, No. 12-56159, Ninth Circuit Court of Appeals.