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.

Did Marion True Ever Catch a Looter or Dealer?

One of the stolen Mosaics at issue in the case

Some folks on the internet are not too pleased about the letter I collaborated on with Noah Charney re-examining Hugh Eakin's review of Chasing Aphrodite. A pointed response by David Gill here, and another critic wonders "whether anything done by Marion True herself actually led to the capture and conviction of a single looter of archaeological sites, or advanced any "Research into Crimes against Art"?

Yes, she certainly did, according to the Seventh Circuit Court of Appeals. As anyone should know who claims to study looting of archaeology and heritage, Marion True was the hero of one of the most prominent antiquities cases of the last thirty years, AUTOCEPHALOUS GREEK-ORTHODOX CHURCH OF CYPRUS vs.GOLDBERG, 917 F. 2d 278 (7th Cir., 1990) (available here). The case involved an antiquities dealer, Peg Goldberg, as well as Michel van Rijn. A helpful summary of the case is available here from IFAR.  I discuss the case at some length in  an article where I argue the nation of origin's law should be applied more often in cross-border trafficking in pieces of cultural heritage.

But with respect to Marion True, she is the unabashed hero of the case. From the opinion by Chief Judge Alex Bauer:

Peg Goldberg’s efforts soon turned to just that: the resale of these valuable mosaics. She worked up sales brochures about them, and contacted several other dealers to help her find a buyer. Two of these dealers’ searches led them both to Dr. Marion True of the Getty Museum in California. When told of these mosaics and their likely origin, the aptly-named Dr. True explained to the dealers that she had a working relationship with the Republic of Cyprus and that she was duty-bound to contact Cypriot officials about them. Dr. True called Dr. Vassos Karageorghis, the Director of the Republic’s Department of Antiquities and one of the primary Cypriot officials involved in the worldwide search for the mosaics. Dr. Karageorghis verified that the Republic was in fact hunting for the mosaics that had been described to Dr. True, and he set in motion the investigative and legal machinery that ultimately resulted in the Republic learning that they were in Goldberg’s possession in Indianapolis.

(emphasis added)

The opinion is also widely cited because of a concurring opinion by Judge Cudahy embedding the 1954 Hague Convention and the 1970 UNESCO Convention into cultural heritage law, a precedent which has had a number of important effects.

Marion True is no saint, nobody would argue she is, but her story is more complicated than merely painting her as the endpoint for looted antiquities. She did so much more, as Jason Felch and Ralph Frammolino explain in their book. Italian officials will tell you if asked that the case was brought against her because they had the evidence, not necessarily because she was the worst offender. And yes, she was instrumental in returning at least one looted object.  group of looted objects.

My Article on Conflict of Laws and Cultural Property

I have posted on SSRN the final version of my paper titled How Adopting the Lex Originis Rule Can Impede the Flow of Illicit Cultural Property, 32 Columbia Journal of Law and the Arts 111.

Pictured here is a Byzantine mosaic from the Hagia Sophia in Istanbul, similar to the mosaics taken from Northern Cyprus which gave rise to the Goldberg suit. The Seventh Circuit Federal Court of Appeals upheld the default—and problematic for cultural property disputes—lex situs rule in holding “Indiana law and rules govern every aspect of this action, from the statute of limitations issues through the application of the substantive law of replevin.” The trial court had noted that although Switzerland was the location of the wrongful activity, it bore little connection to the cause of action. None of the parties or important actors was Swiss; the mosaics had never been in the stream of commerce in Switzerland; and they had only been on Swiss soil for four days. The jurisdiction with the closest connection to the objects was Cyprus, not Indiana. After all, the mosaics had been firmly fixed to the church for over 1400 years. Although it would therefore make sense to give concessions in the law to jurisdictions such as Cyprus, courts have shown a hesitancy to apply the law of the source nation, or lex originis.

Here is the abstract:

The International trade and transfer of art and antiquities faces problems because nations have erected very different rules with respect to movable property. All nations forbid theft, however most cultural property disputes involve an original owner and a subsequent good faith possessor. Different jurisdictions have chosen to allocate rights and responsibilities between these two relative innocents in very different ways. Disharmony in the law is seldom a good thing, but in the realm of cultural property it can be particularly damaging to the interests of nations, museums, individuals, and our collective cultural heritage. The lack of harmony ensures no overarching policy choices will be furthered, which prevents parties from anticipating legal outcomes and giving substance to policies.

This article explores the default conflict of law rules which are applied to cultural property, and shows how the lex situs rule exploits the various legal rules which apply to art and antiquities. It challenges the lofty position enjoyed by the lex situs rule and proposes a radical reform of the default choice of law analysis. By employing the law of the Nation of Origin or lex originis courts can ensure the jurisdiction with the most tangible connection to an object enjoys the benefit of applying its legal rules to a given dispute. This will not only ensure the security of art and antiquities transactions, but impart much-needed transparency into the cultural property trade, and finally will decrease the theft and illegal excavation of art and antiquities.

The article begins by presenting some examples of recent disputes, and the problems they present for the law and cultural heritage policy. Section II describes the fundamental difficulty of adjudicating claims between two relative innocents, and the disharmony which has resulted as different jurisdictions have resolved this conundrum in very different ways. Section III lays out the ways in which private international law impacts art and antiquities disputes. Section IV analyzes the 1995 UNIDROIT Convention, the most recent attempt to harmonize the law affecting cultural property. Section V proposes a radical reform of the choice of law enquiry taken by courts.

Keywords: art, antiquities, private international law, conflict of laws, international law, lex originis, lex situs, renvoi, art theft, antiquities, cultural heritage, cultural property

I'd be delighted to hear any reactions to the work at derek.fincham "at" gmail.com.

Private International Law and Nations of Origin

I have posted on SSRN a working version of my forthcoming paper titled How Adopting the Lex Originis Rule Can Impede the Flow of Illicit Cultural Property, to be published some time next Spring in the Columbia Journal of Law and the Arts. Here is the abstract:

The International trade and transfer of art and antiquities faces problems because nations have erected very different rules with respect to movable property. All nations forbid theft, however most cultural property disputes involve an original owner and a subsequent good faith possessor. Different jurisdictions have chosen to allocate rights and responsibilities between these two relative innocents in very different ways. Disharmony in the law is seldom a good thing, but in the realm of cultural property it can be particularly damaging to the interests of nations, museums, individuals, and our collective cultural heritage. The lack of harmony ensures no overarching policy choices will be furthered, which prevents parties from anticipating legal outcomes and giving substance to policies.

This article explores the default conflict of law rules which are applied to cultural property, and shows how the lex situs rule exploits the various legal rules which apply to art and antiquities. It challenges the lofty position enjoyed by the lex situs rule and proposes a radical reform of the default choice of law analysis. By employing the law of the Nation of Origin or lex originis courts can ensure the jurisdiction with the most tangible connection to an object enjoys the benefit of applying its legal rules to a given dispute. This will not only ensure the security of art and antiquities transactions, but impart much-needed transparency into the cultural property trade, and finally will decrease the theft and illegal excavation of art and antiquities.

The article begins by presenting some examples of recent disputes, and the problems they present for the law and cultural heritage policy. Section II describes the fundamental difficulty of adjudicating claims between two relative innocents, and the disharmony which has resulted as different jurisdictions have resolved this conundrum in very different ways. Section III lays out the ways in which private international law impacts art and antiquities disputes. Section IV analyzes the 1995 UNIDROIT Convention, the most recent attempt to harmonize the law affecting cultural property. Section V proposes a radical reform of the choice of law enquiry taken by courts.

I'd be delighted to hear any reactions to the work at derek.fincham "at" gmail.com.

No renvoi in Iran v. Berend (UPDATE)

The opinion in Iran v. Berend [2007] EWHC 132 (QB) has been released.

The dispute involved a fragment of an Achaemenid limestone relief from the city of Persepolis. This image, which I took from an organization called Cultural Heritage News, compares Berend's limestone, with the site in Persepolis. It makes for pretty damning evidence. The Cultural Heritage News agency is operated out of Iran, and I'm not sure where they get their funding, and their articles on this dispute strike me as a bit one-sided. Nevertheless, they did provide a good background to the dispute.

Denyse Berend purchased the limestone fragment in 1974. As the opinion states, "It was sold to her through an agent at a New York auction in October 1974." The object has been on display in Berend's Paris apartment since the purchase. Iran brought suit against Berend when she tried to sell it at an auction at Christie's London in 2005.

The dispute ultimately came down to which nation's law should apply to the dispute, France or Iran. Under Iranian law, the object would be returned, but under French law, the 30 year statute of limitations period had elapsed, and Berend would have clear title. Two conflicting private international law principles were at play here. First, is the lex situs doctrine which holds that the law of the location of the object at the time of the transaction should apply. Under that rule, French law would apply.

Iran wanted Justice Eady to apply the rule of renvoi, which would have dictated that Iranian law would apply. The renvoi choice of law principle occurs whenever a court is called upon to interpret the law of another nation. It has been applied to wills and some family law, though never to movable objects.

No English court has applied renvoi to movables, and it seams Justice Eady was reluctant to do the same in this case. According to Wikipedia, a recent Australian High court decision applied the rule in Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54 (29 September 2005). In that case, the Australian High Court applied the rule in a tort case. The plaintiff injured herself in an apartment in China. The apartment was overseen by her husband's employer, an Australian company. The court applied the law of Australia, because both parties to the suit were Australian. Applying the Australian court's logic to this case, it doesn't seem likely that the principle of renvoi would be applicable, and even in the Australian case, there seems to be a great deal of criticism of the decision.

Eady was understandably reluctant to go out on a limb and apply the principle in this case. As he said, "English law has held for many years, in order partly to achieve consistency and certainty, that where movble property is concerned title should be determined by the lex situs of the property at the time when the disputed title is said to have been acquired."

I wonder if Iran may choose to appeal the decision. In any event, though the limestone relief seems to have clearly come from Persepolis, Iran has no legal right to the object under English law. On a side note, there may be damages stemming from the grant of the original injunction against Berend's attempted auction of the object at Christies in London. One wonders why Iran did not pursue its claims in 1974, when the object was first sold. I wonder as well whether the 2005 auction had taken place in Christie's New York, rather than London, if the more generous statute of limitations provision would have allowed for a much different result.

UPDATE:

Over at the Journal of Private International Law's blog, conflictoflaws.net, Martin George has gone into some more detail on the choice of law implications at play in the decision. He rightly points out that an English court adopting a renvoi rule for movable property would have caused a lot of headaches. However, he misses the cultural policy implications: the limestone relief was almost certainly taken from Persepolis. The relief came from what is essentially the Persian Acropolis. In the event the ruling stands (which seems most likely) look for Iran to press for the return of the relief based on ethical principles. In any event, the potential sum the relief may bring at an auction seem quite diminished. I wonder if Berend and Iran may try to work out some kind of a settlement. It seems likely that quite a few potential purchasers have been scared away by the Iranian claims.

Postscript:

I have noticed a lot of folks are still interested in this case. For a much better and complex account of the decision you can download my case note published by the International Journal of Cultural Property here.