In Cassirer v. Kingdom of Spain, found here the Ninth Circuit dealt with a case of first impression. Where Germany stole an artwork, and Spain bought the stolen artwork, does the Foreign Sovereign Immunity Act (FSIA) make Spain immune from suit in a US federal court? The case arose from a Nazi taking a Pissarro from Claude Cassirer's mother in Nazi Germany in 1939.
The legal question presented was whether the expropriation exception to sovereign immunity in Section 1605(a)(3) of the FSIA applied to a sovereign entity that was not alleged to have taken property in violation of international law.
Spain bought a collection from a Swiss-based Baron Thyssen-Bornemisza and started a museum based on the collection.
This is similar to the arrangement Austria has with the Leopold Museum. The Leopold's collection is now being researched at the insistence of the Jewish Community of Vienna, which held protests and roped off the entire Leopold Museum in yellow "crime scene" tape.
When you buy from the Swiss the type of art that Nazis liked to loot, you really ought to check the provenance. Shame on Spain. Let's hope they set up a commission to publicly investigate the collection and give back the things that have been stolen from murdered Jews.
In Mandarin Trading Ltd. v. Wildenstein, --- N.Y.S.2d ---, 2009 WL 2497306 (1st Dept. August 18, 2009) New York's Appellate Division first department struggled with the question of whether a purchaser of a painting may rely on an expert appraisal commissioned by an intermediary in an art transaction. The plaintiff Mandarin purchased Gauguin's Paysage aux trois arbres. According to the complaint, the defendant Wildenstein had ownership interests in the painting, yet issued an expert appraisal with an inflated value, knowing that Mandarin would rely on it. The Supreme Court judge (in New York this is the trial level judge) tossed the case out on a pre-answer motion, finding that there was no privity between Wildenstein and Mandarin and that the appraisal contained non-actionable opinion.
Two dissenters (Justice Tom and Justice Nardelli) balked. Tom believed that the complaint stated a claim in equity for unjust enrichment. In a very well-reasoned dissent, Justice Nardelli found that the majority had made numerous factual findings unsupported by the record, which on a pre-answer motion is to be construed in favor of the plaintiff. Also Justice Nardelli found that fraudulent misrepresentation, negligent misrepresentation, third-party beneficiary (contract), and unjust enrichment were all well-pleaded claims.
When there are two dissenters at the Appellate Division, one may take an appeal to the New York Court of Appeals "as of right".
If art dealers can write bogus "appraisals" for works in which they have an ownership interest, it really taints the market and encourages fraud. Many art transactions are concluded through intermediaries for perfectly legitimate reasons. Justice Nardelli's dissent is compelling and appears to be a correct statement of the law.
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