In Cassirer v. Thyssen-Bornemisza Collection Foundation the U.S. Supreme Court will decide whether a federal court hearing state law claims brought under the Foreign Sovereign Immunities Act must apply the forum state’s choice-of-law rules to determine what substantive law governs the claims, or whether it may apply federal common law.
In 1939, the Nazis forced Lilly Cassirer to “sell” a painting by Camille Pissarro (paid to a blocked account she could never access) so that she could obtain exit visas for herself and her husband to flee Germany.
In 2000, Lilly’s grandson, Claude Cassirer, discovered that the Thyssen-Bornemisza Collection (TBC), a Spanish Museum, had the painting. To get the painting back, he sued TBC under the Foreign Sovereign Immunities Act in federal court asserting claims under state law. The Foreign Sovereign Immunities Act provides that where a foreign nation is not immune from jurisdiction in the courts of the United States, it “shall be liable in the same manner and to the same extent as a private individual under like circumstances.”
The Ninth Circuit applied Spanish law rather than California state law to decide the merits of the case. It concluded that because TBC didn’t actually know that the painting was stolen it had good title to it and didn’t have to return it to Claude.
The Ninth Circuit applied federal common law choice-of-law rules to determine that Spanish law applied in this case.
The Ninth Circuit’s reasoning for why it applied federal common law was brief: “This Court has held that, when jurisdiction is based on the FSIA, ‘federal common law applies to the choice of law rule determination. Federal common law follows the approach of the Restatement (Second) of Conflict of Laws.’” Under the Second Restatement, Spain’s substantive law governed TBC’s claim that it was the rightful owner of the painting.
Cassirer argues the Ninth Circuit should have applied California’s choice-of-law rules: “In four circuits, the courts of appeals have held that this statutory requirement of parity with private litigation means that a federal court hearing an FSIA case must apply the choice-of-law rules of the State in which it is sitting.”
Cassirer also notes that “[u]nder proper application of California choice-of-law rules, California substantive law must be applied in this case, and the Cassirers’ claim to the Painting upheld.”