Student Note Examining Bakalar v. Vavra and choice of law in New York

Egon Schiele, Seated Woman With Bent Left Leg (Torso)

The June issue of the Columbia Law Review has an interesting student note by Laurie Frey, Bakalar v. Vavra and the Art of Conflicts Analysis in New York: Framing a Choice of Law Approach for Moveable Property, 112 Colum. L. Rev. 1055 (2012). The case involves this 1917 gouache and crayon work which passed through an Austirian shipping company during the holocaust era.

From the introduction:

The facts of Bakalar v. Vavra presented a familiar scenario in Holocaust-era art cases. A good faith purchaser, who thought he had bought clear title to a drawing, went to sell the drawing at auction in New York and found himself confronted by the claims of alleged heirs, who asserted that the painting was taken from their ancestor by the Nazis. Typical of art cases, the drawing had passed through a number of jurisdictions before arriving in New York, and the court in Bakalar faced the difficult question of what jurisdiction's laws to apply to determine which of the parties had title to the drawing. This Note examines the particular importance of choosing the law to apply in disputes between good faith purchasers of artworks and the artworks' original owners, or their heirs—disputes in which the law chosen may lead to dramatically different results. The Note then reviews the evolution of the analysis for choice of law generally and in New York particularly. Prior to Bakalar, the law in New York appeared to be a combination of an interest analysis and the more traditional lex situs approach, which focused on the location where a particular transaction took place. This Note argues that the Second Circuit misconstrued prior New York case law in its application of the interest analysis without regard to the lex situs. The Second Circuit's analysis created uncertainty and unpredictability in New York choice of law rules, and New York needs a revised choice of law rule for property conflicts that gives both predictability and nuance to the law post-Bakalar. This Note proposes a return to an interest analysis that places particular emphasis on the location of the property transfer at issue in the case. Such a rule would lead to more predictable results, since the law of the transaction location would typically apply, but it would also give judges discretion to weigh other relevant factors.