David Cassirer v. Thyssen-Bornemisza Collection , 737 F.3d 613 ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DAVID CASSIRER; AVA CASSIRER; No. 12-56159
UNITED JEWISH FEDERATION OF SAN
DIEGO COUNTY, a California non- D.C. No.
profit corporation, 2:05-cv-03459-
Plaintiffs-Appellants, GAF-E
v.
OPINION
THYSSEN-BORNEMISZA COLLECTION
FOUNDATION,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Gary A. Feess, District Judge, Presiding
Argued and Submitted
August 22, 2013—Pasadena, California
Filed December 9, 2013
Before: Harry Pregerson, Dorothy W. Nelson,
and Kim McLane Wardlaw, Circuit Judges.
Opinion by Judge Pregerson
2 CASSIRER V. THYSSEN-BORNEMISZA
SUMMARY*
Field Preemption
The panel affirmed in part and reversed in part the district
court’s order granting the Thyssen-Bornemisza Collection
Foundation’s motion to dismiss the complaint in an action
brought to recover a masterpiece French impressionist
painting that was allegedly taken from the plaintiffs’
ancestors by the Nazi regime.
California Code of Civil Procedure § 338(c)(3) provides
for a six-year limitation period for the recovery of fine art
against a museum, gallery, auctioneer, or dealer. The panel
held that the district court erred in concluding that § 338
intruded on foreign affairs and therefore striking § 338 down
as unconstitutional on the basis of field preemption. The
panel further held that the district court correctly concluded
that the Foundation’s due process challenge to § 338(c)(3)
could not be resolved on the Foundation’s motion to dismiss.
Finally, the panel held that § 338(c)(3) does not violate the
Foundation’s First Amendment rights.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
CASSIRER V. THYSSEN-BORNEMISZA 3
COUNSEL
Stuart R. Dunwoody (argued), Victor A. Kovner, and
Catherine E. Maxson, Davis Wright Tremaine LLP, Seattle,
Washington, for Plaintiffs-Appellants.
Thaddeus J. Stauber (argued), Sarah E. André, and Michael
O. Azat, Nixon Peabody LLP, Los Angeles, California, for
Defendant-Appellee.
Kamala D. Harris, Attorney General of California, Susan
Duncan Lee, Acting Solicitor General, Mark Breckler, Chief
Assistant Attorney General, Angela Sierra, Acting Senior
Assistant Attorney General, Antonette Benita Cordero and
Catherine Z. Ysrael, Deputy Attorneys General, Los Angeles,
California, for Amicus Curiae State of California.
Luis Li, Eric Tuttle, and Amelia L. B. Sargent, Munger Tolles
& Olson LLP, Los Angeles, California, for Amici Curiae
California Association of Museums.
4 CASSIRER V. THYSSEN-BORNEMISZA
OPINION
PREGERSON, Circuit Judge:
The Cassirers appeal the district court’s grant of the
Thyssen-Bornemisza Collection Foundation’s motion to
dismiss their complaint without leave to amend. The
Cassirers’ lawsuit seeks to recover a masterpiece French
impressionist painting that was allegedly taken from their
ancestors by the Nazi regime. For the Cassirers’ claims to be
timely, they must rely on amended California Code of Civil
Procedure § 338(c)(3), which provides for a six-year
limitation period for the recovery of fine art against a
museum, gallery, auctioneer, or dealer. The district court
held that § 338(c)(3), as amended, is unconstitutional on the
basis of field preemption. We have jurisdiction under
28 U.S.C. § 1291. We affirm in part, reverse in part, and
remand for further proceedings.
STANDARD OF REVIEW
We review the district court’s grant of the Foundation’s
motion to dismiss de novo. TwoRivers v. Lewis, 174 F.3d
987, 991 (9th Cir. 1999). In reviewing the Cassirers’ claims,
we treat the allegations in the complaint as true. Id.
FACTUAL AND PROCEDURAL BACKGROUND
Camille Pissarro completed the impressionist painting
Rue Saint-Honoré, après-midi, effet de pluie (the “Painting”)
in 1897. Julius Cassirer purchased the Painting in 1898. The
Cassirers were a well-known Jewish family that played a
prominent role in Germany’s economic and cultural life.
CASSIRER V. THYSSEN-BORNEMISZA 5
When Julius died, his son Fritz and Fritz’s wife, Lilly,
inherited the Painting.
In 1939, Lilly decided to flee Germany because of the
discriminatory Nuremberg Laws enacted in 1935 that stripped
Jews of their civil rights and citizenship. Lilly and Fritz had
to obtain permission to leave Germany and had to subject any
works of art that they wished to take with them to an official
appraiser. The appraiser was appointed by the Nazis. He told
Lilly that she could not take the Painting out of Germany.
The appraiser demanded that Lilly hand the Painting over to
him for a payment of 900 Reichsmarks (around $360 at 1939
exchange rates). Lilly surrendered the Painting.
In 1943, the Painting was sold to an anonymous
purchaser. After the war, Lilly attempted to locate the
Painting without success. She obtained compensation for the
loss of the Painting in the German courts. When Lilly died in
1962, she named her grandson Claude Cassirer as her sole
heir.
In 1976, Baron Hans-Heinrich Thyssen-Bornemisza, one
of the world’s most prolific private art collectors, bought the
Painting. In 1993, the Thyssen-Bornemisza Collection
Foundation (the “Foundation”), an agency of the Kingdom of
Spain, purchased the Thyssen-Bornemisza collection,
including the Painting. Spain provided a palace to house the
Thyssen-Bornemisza Museum.
In 2000, Claude first discovered that the Painting was on
display in the Thyssen-Bornemisza Museum. By that time,
he was living in California. Claude filed this lawsuit in May
2005 against the Foundation and the Kingdom of Spain.
6 CASSIRER V. THYSSEN-BORNEMISZA
Defendants filed an initial motion to dismiss on the
ground that the district court lacked subject matter
jurisdiction over the dispute. The district court ruled that it
had subject matter jurisdiction under the Foreign Sovereign
Immunity Act’s exception to sovereign immunity for lawsuits
involving rights in property taken in violation of international
law. That decision was upheld by a three-judge panel and an
en banc panel of the Ninth Circuit. See Cassirer v. Kingdom
of Spain, 580 F.3d 1048, 1064 (9th Cir. 2009); Cassirer v.
Kingdom of Spain, 616 F.3d 1019, 1037 (9th Cir. 2010) (en
banc).
After the en banc ruling, Claude died. On remand,
Claude’s heirs — his son David, daughter Ava, and the
United Jewish Federation of San Diego County — were
substituted as plaintiffs (collectively, the “Cassirers”). The
Cassirers voluntarily dismissed Spain, and the Foundation
agreed not to challenge personal jurisdiction.
The Foundation moved to dismiss the Cassirers’
complaint on the ground that § 338(c)(3), as amended, is
unconstitutional. The district court granted the motion to
dismiss without leave to amend on the grounds that:
(1) § 338(c)(3) is unconstitutional under foreign affairs field
preemption; and (2) as a consequence, the Cassirers’ claims
are untimely under the more general three-year statute of
limitations for recovery of property. The Cassirers timely
appealed.
STATUTORY BACKGROUND
At the time the Cassirers initiated their lawsuit, the
California Code of Civil Procedure provided a three-year
general statute of limitations for “[a]n action for taking,
CASSIRER V. THYSSEN-BORNEMISZA 7
detaining, or injuring any goods or chattels, including actions
for the specific recovery of personal property.” Cal. Civ.
Proc. Code § 338(c) (1998). In filing their lawsuit, however,
the Cassirers relied on the then-applicable California Code of
Civil Procedure § 354.3 enacted in 2002. That statute
provided that the owner of “Holocaust-era artwork” —
defined as an “article of artistic significance taken as a result
of Nazi persecution during the period of 1929 to 1945” —
may recover the article from “any museum or gallery” so long
as the action is commenced by December 31, 2010. Cal. Civ.
Proc. Code § 354.3. We struck down § 354.3 as
unconstitutional on the basis of field preemption in Von Saher
v. Norton Simon Museum of Art at Pasadena, 578 F.3d 1016,
1026–30 (9th Cir. 2009), as amended by 592 F.3d 954 (9th
Cir. 2010).
Shortly after the ruling in Von Saher, the California
Legislature amended § 338, the general statute of limitations
provisions. The original provisions of § 338(c) were
renumbered as § 338(c)(1) and § 338(c)(2). The Legislature
added a new provision, (c)(3), which is at the heart of this
appeal, that provides for a six-year statute of limitations for
“an action for the specific recovery of a work of fine art
brought against a museum, gallery, auctioneer, or dealer.”
Cal. Civ. Proc. Code § 338(c)(3) (2011). The amended
statute specifies that the six-year period is triggered on “the
actual discovery” by plaintiff of (1) “[t]he identity and the
whereabouts of the work of fine art” and (2) “[i]nformation
or facts that are sufficient to indicate that the claimant has a
claim for a possessory interest in the work of fine art that was
unlawfully taken or stolen.” Id. § 338(c)(3)(A)(i)–(ii). The
statute applies to “all pending and future actions commenced
on or before December 31, 2017,” so long as “the action
concerns a work of fine art that was taken within 100 years
8 CASSIRER V. THYSSEN-BORNEMISZA
prior to the date of enactment of this statute.” Id.
§ 338(c)(3)(B). That includes any pending actions that have
not yet reached final judgment or whose time to appeal has
not expired. Id.
DISCUSSION
A. Foreign Affairs Preemption Standards
“The Constitution gives the federal government the
exclusive authority to administer foreign affairs.” Movsesian
v. Victoria Versicherung AG, 670 F.3d 1067, 1071 (9th Cir.
2012) (en banc), cert. denied, 133 S. Ct. 2795 (2013).
Accordingly, “state laws that intrude on this exclusively
federal power are preempted” under the foreign affairs
doctrine. Id.
Under foreign affairs preemption there are two grounds
for preemption: (1) conflict preemption and (2) field
preemption. Id. Conflict preemption occurs when a state acts
under its traditional power, but the state law conflicts with a
federal action such as a treaty, federal statute, or executive
branch policy. Id. at 1071–72. The district court held that
§ 338(c) was not preempted on the basis of conflict
preemption, and the Foundation does not challenge that ruling
on appeal.
Field preemption occurs when a state, “in the absence of
any express federal policy . . . intrudes on the field of foreign
affairs without addressing a traditional state responsibility.”
Id. at 1072. The Cassirers argue that the district court erred
when it held that § 338(c)(3), as amended, is unconstitutional
on the basis of field preemption. We agree.
CASSIRER V. THYSSEN-BORNEMISZA 9
B. Whether Cal. Civ. Proc. Code § 338(c)(3) is
Unconstitutional on the Basis of Field Preemption
Field preemption exists “when a state law (1) has no
serious claim to be addressing a traditional state
responsibility and (2) intrudes on the federal government’s
foreign affairs power.” Id. at 1074.
We need not consider whether § 338(c)(3) addresses an
area of traditional state responsibility, because we conclude
that § 338(c)(3) does not intrude on the federal government’s
foreign affairs power.
To intrude on the federal government’s foreign affairs
power, a statute must have “‘more than some incidental or
indirect effect’ on foreign affairs.” Movsesian, 670 F.3d at
1076 (quoting Zschernig v. Miller, 389 U.S. 429, 434 (1968)).
For example, in Zschernig v. Miller, the Supreme Court
struck down as unconstitutional an Oregon probate statute on
the basis of field preemption. 389 U.S. at 430-41. There, the
Oregon statute provided that nonresident aliens could not
receive personal property unless they could show:
(1) the existence of a reciprocal right of a
United States citizen to take property on the
same terms as a citizen or inhabitant of the
foreign country; (2) the right of United States
citizens to receive payment here of funds from
estates in the foreign country; and (3) the right
of the foreign heirs to receive the proceeds of
Oregon estates “without confiscation.”
Id. at 431–32 (quoting Or. Rev. Stat. § 111.070 (1957)).
10 CASSIRER V. THYSSEN-BORNEMISZA
As applied, “Oregon judges in construing [the Oregon
probate statute sought] to ascertain whether ‘rights’ protected
by foreign law are the same ‘rights’ that citizens of Oregon
enjoy.” Id. at 440. In so doing, Oregon courts had repeatedly
determined that if “the alleged foreign ‘right’ may be
vindicated only through Communist-controlled state agencies,
then there is no ‘right’ of the type [the Oregon statute]
requires.” Id. Consequently, the Oregon statute “ha[d] a
direct impact upon foreign relations.” Id. at 441.
In our other field preemption cases, we found intrusion
into foreign affairs on the face of the statutes. Section 354.3,
the statute for Holocaust-era artwork, explicitly created a
“special rule that applie[d] only to a newly defined class” of
plaintiffs who had suffered wartime injuries. Von Saher,
592 F.3d at 966 (quoting Deutsch v. Turner Corp., 324 F.3d
692, 708 (9th Cir. 2003)). Section 354.4 “express[ed] a
distinct political point of view on a specific matter of foreign
policy” by labeling the actions of the Ottoman Empire
“genocide” and providing relief only for “‘Armenian
Genocide victim[s].’” Movsesian, 670 F.3d at 1076 (quoting
Cal. Civ. Proc. Code § 354.4(b)). Likewise, § 354.6 intruded
on the federal government’s foreign affairs power because
“California [sought] to redress wrongs committed in the
course of the Second World War” by providing a right of
recovery only to “‘Second World War slave labor victims’
and ‘Second World War forced labor victims.’” Deutsch,
324 F.3d at 712.
The district court concluded that § 338(c)(3) intruded on
foreign affairs on two grounds: (1) § 338(c)(3) created a
remedy for wartime injuries and (2) § 338(c)(3) is
functionally equivalent to unconstitutional § 354.3. We
conclude that the district court erred on both counts.
CASSIRER V. THYSSEN-BORNEMISZA 11
First, the district court accurately noted that under Von
Saher, Movsesian, and Deutsch, “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.”1 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. Contra Von Saher,
592 F.3d at 966. 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.’”
Id. at 965. Nor is there any evidence in the record at this
stage in the proceedings that California courts, as in
Zschernig, are applying § 338(c)(3) to “establish [the State’s]
own foreign policy.” 389 U.S. at 441.
1
The district court initially reasoned that adjudicating the Cassirers’
claims would require it “to review the legitimacy of the compensation
provided to Lilly Cassirer Neubauer by the German government in 1958”
because “whether [Lilly] was adequately compensated for the Painting
will necessarily bear on the question whether [the Cassirers] retain title to
it today.” But in considering the Cassirers’ motion for reconsideration, the
district court acknowledged that this would not be the case. The district
court held that the German Federal Court of Justice’s written decision in
Sachs v. Deutches Historisches Museum shows that “under German law,
the compensation received by Ms. Neubauer in 1958 did not divest her or
her heirs of title to the [Painting].”
12 CASSIRER V. THYSSEN-BORNEMISZA
Second, the district court incorrectly determined that
§ 338(c)(3) was functionally equivalent to unconstitutional
§ 354.3. The district court emphasized that the statute “limits
its application to claims to art taken after 1910” by fraud or
duress, which “clearly indicates that the extended limitations
period encompasses Holocaust-era claims.” But whether a
statute of limitations may permit Holocaust era-claims is not
the test for preemption. In Von Saher, we remanded
plaintiff’s claims so that the district court could determine
whether plaintiff’s claims to recover Holocaust-era artwork
were timely under the general provisions of § 338, before the
statute was amended. 592 F.3d at 968–70.
And in fact, § 338 is not functionally equivalent to
unconstitutional § 354.3. While § 354.3 covered only claims
to recover “Holocaust-era artwork,” § 338(c)(3) extends to
any “work of fine art.” Indeed, since its enactment, non-
Holocaust-era artwork cases have invoked § 338(c)(3). See
W. Prelacy of the Armenian Apostolic Church v. J. Paul Getty
Museum, No. BC438824 (L.A. Cnty. Super. Ct. Aug. 1, 2011)
(suing over a manuscript allegedly stolen in 1915); Rafaelli
v. Getty Images, Inc., No. 2:12-cv-00563-CAS-PJW (C.D.
Cal. Jan. 20, 2012) (suing over photographs created in the
1970s).
We find that the district court erred in concluding that
§ 338 intrudes on foreign affairs. We thus conclude that the
district court erred in striking § 338 down as unconstitutional
on the basis of field preemption.
CASSIRER V. THYSSEN-BORNEMISZA 13
C. Whether § 338(c)(3) Violates the Foundation’s Due
Process Rights
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.
We affirm the district court’s ruling that “the Foundation
cannot establish such a claim on the basis of the current
record.”
In Campbell v. Holt, the Supreme Court established that:
It may . . . very well be held that in an action
to recover real or personal property, where the
question is as to the removal of the bar of the
statute of limitations by a legislative act
passed after the bar has become perfect, that
such act deprives the party of his property
without due process of law. The reason is
that, by the law in existence before the
repealing act, the property had become the
defendant’s. Both the legal title and the real
ownership had become vested in him, and to
give the act the effect of transferring this title
to plaintiff would be to deprive him of his
property without due process of law.
Campbell v. Holt, 115 U.S. 620, 623 (1885).
But as the district court emphasized, Campbell applies
only when the property at issue had vested and had become
the defendant’s. The Supreme Court explained in Chase
Securities Corp. v. Donaldson that, “where lapse of time has
14 CASSIRER V. THYSSEN-BORNEMISZA
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.”
325 U.S. 304, 311-12 (1945) (emphasis added). Accordingly,
we have explained that “[w]here a lapse of time has not
invested a party with title to real or personal property, a state
legislature may extend a lapsed statute of limitations without
violating the fourteenth amendment, regardless of whether the
effect is seen as creating or reviving a barred claim.” Starks
v. S. E. Rykoff Co., 673 F.2d 1106, 1109 (9th Cir. 1982).
The district court found that whether a lapse of time
invested the Foundation with title to the Painting required the
development of the following factual disputes, not pleaded in
the complaint: (1) the history of the Painting’s transfer;
(2) whether the Painting was stolen in the Foundation’s chain
of title; (3) whether the Foundation’s possession of the
Painting was uninterrupted for adverse possession purposes;
and (4) whether the Foundation’s possession of the Painting
was open for adverse possession purposes. None of these
factual disputes are resolved in the Foundation’s favor by the
facts pleaded in the complaint.
We disagree with the Cassirers, however, that the
Foundation’s due process claim may be resolved conclusively
in the Cassirers’ favor at this juncture. The Cassirers claim
that the constitutional analysis utilized in Campbell and
Chase is outdated and that the modern approach is to evaluate
whether § 338(c)(3) passes rational basis review. But the
Cassirers do not proffer any authority that involves whether
the statute at issue harmed a defendant’s interest in a vested
property right. Instead, they rely on inapposite cases. See,
e.g., Campanelli v. Allstate Life Ins. Co., 322 F.3d 1086, 1100
(9th Cir. 2003) (stating “retrospective economic legislation
CASSIRER V. THYSSEN-BORNEMISZA 15
must only pass rational basis review” (quoting Gen. Motors
Corp. v. Romein, 503 U.S. 181, 191 (1992) (emphasis
added))); Lyon v. Agusta S.P.A., 252 F.3d 1078, 1086 (9th
Cir. 2001) (“[T]he Supreme Court has not blanched when
settled economic expectations were upset, as long as the
legislature was pursuing a rational policy.” (emphasis
added)). The Cassirers have not shown that § 338(c)(3) need
only pass rational basis review if, in fact, the Foundation had
a vested interest in the Painting. We conclude that the district
court correctly held that the Foundation’s due process
challenge cannot be resolved on the Foundation’s motion to
dismiss.
D. Whether § 338(c)(3) Violates the Foundation’s First
Amendment Rights
The Foundation argues that § 338(c)(3) violates its First
Amendment rights because § 338(c)(3) targets museums and
art galleries “for unfavorable treatment.” We disagree.
The district court correctly reasoned that § 338(c)(3)
“does not ‘burden’ expression in any manner cognizable
under the Supreme Court’s First Amendment jurisprudence.”
The Foundation relies solely on cases in which the statutes at
issue imposed a tax on certain entities engaged in free speech
activities. See Minneapolis Star & Tribune Co. v. Minn.
Com’r of Revenue, 460 U.S. 575, 592–93 (1983) (holding that
a state’s “special tax on the press [which] limit[ed] its effect
to only a few newspapers” was subject to strict scrutiny and
was unconstitutional); Festival Enters., Inc. v. City of
Pleasant Hill, 182 Cal. App. 3d 960, 962 (1986) (holding
“that the city’s ‘admissions tax,’ as applied to plaintiff theater
owners, impose[d] an impermissible burden on protected
speech”). Section 338(c)(3) does not impose a tax on the
16 CASSIRER V. THYSSEN-BORNEMISZA
Foundation. Further, 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.
We therefore conclude that the Foundation failed to
demonstrate that § 338(c)(3) burdens its right to free speech.
It follows that § 338(c)(3) is not subject to strict scrutiny.
Section 338(c)(3) passes rational basis review because it is
rationally related to the goals of extending and clarifying the
statute of limitations period. The Legislature could rationally
choose to extend the statute of limitations period to six years
for actions against certain entities that it deemed
“sophisticated.” Sen. Comm. on the Judiciary, June 21, 2010,
at 5. The Legislature believed that museums, galleries,
auctioneers, and dealers have access to methods of tracing
title to their artifacts and are on notice that often “lost
artifacts have a break in the chain of title.” Id.2 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.
2
The Foundation contends that the California Legislature improperly
declined to incorporate California’s borrowing statute into § 338(c)(3).
California’s borrowing statute provides that when a cause of action arises
in another state or foreign country and would be barred in that state or
country, “the action cannot be brought in California.” Cal. Civ. Proc.
Code § 361. The Legislature’s decision not to apply the borrowing statute
is rationally related to the goal of providing additional time to recover
stolen artwork because of the complex legal problems involved with such
claims. Further, the Foundation incorrectly argues that museums and
galleries will never be able to escape a claim that is barred in another
jurisdiction. Even absent § 361, California law follows choice of law
rules in the event “the conflict concerns a statute of limitations.” Deutsch,
324 F.3d at 716. Thus, another jurisdiction’s statute of limitations period
may apply to plaintiff’s claim under a choice of law analysis. Id.
CASSIRER V. THYSSEN-BORNEMISZA 17
CONCLUSION
We AFFIRM in part and REVERSE in part the district
court’s order dismissing the Cassirers’ complaint. We
REVERSE the district court’s finding that § 338(c)(3) is
preempted on the basis of field preemption. We AFFIRM the
district court’s rulings that the Foundation’s due process
challenge is not viable on a motion to dismiss and that
§ 338(c)(3) does not violate the Foundation’s First
Amendment rights. We REMAND for further proceedings
consistent with this opinion. Each party shall bear its own
costs on appeal.
AFFIRMED in part, REVERSED in part, and
REMANDED.