The U.S. Supreme Court unanimously ruled Thursday that California property law will be used to decide who owns a French painting — now in the possession of a renowned museum in Spain — that a Jewish woman surrendered to the Nazis in 1939 so that she could flee Germany.

The Supreme Court said lower U.S. court rulings had incorrectly applied Spanish law to determine that the Thyssen-Bornemisza Collection Foundation in Madrid was the rightful owner of the Camille Pissarro painting, titled “Rue Saint-Honoré in the Afternoon, Effect of Rain.”

Justice Elena Kagan indicated in her decision that the Foreign Sovereign Immunities Act mandates that a court applies the same law to similar cases between two private individuals. Kagan pointed out that California’s state property law would apply in the case. This is what the Cassirer family argued against in the lawsuit it brought against the Thyssen–Bornemisza collection.

The painting dispute will be remanded to the federal district court for resolution under this law.

Kagan said that Pissaro’s painting is worth several hundred million dollars.

“The path of our decision has been as short as the hunt for Rue Saint-Honoré was long; our ruling is as simple as the conflict over its rightful owner has been vexed,” Kagan wrote.

“A foreign state, or instrumentality within an FSIA [Foreign Sovereign Immunities Act]Suit is just like a private person…. This means that the rule of choice-of law must be applied. In a property-law dispute like this one, that standard rule is the forum State’s (here, California’s)—not any deriving from federal common law,” Kagan wrote.

In 2010, Claude Cassirer, the first plaintiff in the case died. David Cassirer was his son and he became a plaintiff in this case. Ava Cassirer, Claude’s daughter and deceased, succeeded him as a plaintiff. The Jewish Federation of San Diego was also his successor.

Paul Cassirer purchased the Impressionist artwork that is at the centre of the case, which was acquired from an agent for Pissaro, in 1900.

Cassirer’s cousin, Lilly Cassirer, took the painting home more than twenty years later.

The Nazis took power in 1933. Lilly, after years of persecution of German Jews intensifying over the years, decided that in 1939 she would do whatever was necessary to flee the country.” Kagan said.

Kagan explained that in order to get an exit visa for England where her grandson Claude Cassirer already moved, she had to surrender the painting to Nazis.

Eventually Lilly, Claude and Claude settled in the United States.

The Cassirer family tried to locate the painting after World War II was over, but it wasn’t there, even though it had been in St. Louis from 1952 until 1976 according to Thursday’s ruling.

“After being legally declared the rightful owner, Lilly agreed in 1958 to accept compensation from the German Federal Republic — about $250,000 in today’s dollars,” Kagan wrote in that decision.

The painting was purchased by Hans Heinrich Thyssen in 1976. He is the descendant from the founder of German Steel Empire. It was displayed in the Swiss residence of Baron Hans Heinrich Thyssen–Bornemisza until then.
Kagan wrote in the 1990s.

Later, the baron sold the painting and most of his other art collections to Thyssen-Bornemisza Collection Foundation. This foundation was established by the Kingdom of Spain. Madrid is home to the Thyssen-Bornemisza Collection Foundation, which has a museum that houses its art collection.

Claude, whose grandmother Lilly was long dead by then, learned in 1999 from an acquaintance that the Rue Saint-Honoré was in a catalog of the museum’s holdings.

After all other attempts to retrieve the painting from its foundation were unsuccessful, Claude filed a lawsuit in California federal court. He was living at that time. He claimed he was the rightful owner of Rue Saint-Honoré, and entitled to its return.

Foreign Sovereign Immunities Ordinarily gives immunity to foreign states and their instrumentalities (e.g., the foundation) from lawsuits.

But the lower U.S. courts who first handled Claude’s case allowed it to proceed on the grounds that “the Nazi confiscation of Rue Saint-Honoré brought Claude’s suit against the Foundation within the FSIA exception for expropriated property,” Kagan noted in the ruling.

The lower courts were required to use the so-called choice-of law rule in order to determine the property law that governed the case.

Cassirer’s family wanted California’s choice of law rule to apply to the case. This would have required that California’s property laws would be applied.

The foundation however argued that the rule should be based on federal common law.

The federal option was chosen by the district court. The court cited cases from the U.S. as precedent. Circuit Court of Appeals, 9th Circuit is the appellate court covering western states and California.

Only the 9th Circuit used the federal choice of law rule for FSIA cases that were not related to federal claims, such as contracts and property, to choose the law to be applied. Kagan pointed out that the other federal appeals court courts all “apply to the choice-of law rule of the forestate.”

After trial, following the 9th Circuit’s direction, the district court ruled that Spanish law would be applicable.

Spanish law had already ruled that the Foundation is the rightful owner. [of the painting] because it purchased Rue Saint-Honoré without knowing the painting was stolen and had held it long enough to gain title through possession,” Kagan noted in her ruling.

Kagan stated that Kagan’s decision to use federal law for the determination of which law applies in such a case was an error.

She mentioned that FSIA’s Section 1606 stipulates that any suit in which a foreign government isn’t entitled to immunity due to that act “the foreign State shall be liable as a private citizen under like circumstances in the same manner”

“The same rules of liability apply to foreign states if they are not subject to suit (the same).
Kagan wrote:

This ruling on Thursday means all federal courts will have to apply the choice of law rule in the jurisdiction where they are considering FSIA lawsuits similar.