Barnet v. Ministry of Culture & Sports of the Hellenic Republic
volume_reporter_page_placeholder (2020)
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Rule of Law:
Under the Foreign Sovereign Immunities Act (FSIA), a foreign state's assertion of ownership over artifacts, coupled with the enactment and enforcement of its national patrimony laws to regulate such property, constitutes a sovereign activity, not a commercial one, thereby preserving the state's immunity from suit in U.S. courts.
Facts:
- In 1932, Greece enacted the Antiquities Act, declaring all antiquities found in Greece to be state property and requiring owners to declare possession within 15 days.
- In 2002, Greece enacted the Protection of Antiquities and Cultural Heritage in General Act, which stated that movable ancient monuments up to 1453 A.D. belong to the state, are 'imprescriptible and extra commercium' (outside of commerce), and imposed criminal penalties for illegal transfers.
- A bronze horse figurine, described as of Corinthian type from the Geometric Period, was sold at a public auction in Switzerland in 1967, and subsequently acquired by antiquities dealer Robin Symes, who sold it to Howard and Saretta Barnet in 1973.
- In 2012, the figurine was transferred to the 2012 Saretta Barnet Revocable Trust, and after Saretta Barnet's passing in 2017, the Trust consigned the figurine to Sotheby’s for auction.
- Sotheby’s published an online auction catalogue on April 25, 2018, advertising the figurine for auction on May 14, 2018, in New York City, with an estimated price of $150,000 to $250,000.
- On May 11, 2018, the Greek Ministry of Culture emailed a letter to Sotheby’s demanding the immediate withdrawal of the figurine from auction, asserting Greece's ownership under its 1932 and 2002 patrimony laws, citing no export permit, and reserving the right to take legal action.
- Sotheby’s withdrew the figurine from its auction after receiving the letter and invited Greece to provide evidence for its claim, but Greece did not respond.
Procedural Posture:
- Sotheby’s and the trustees of the 2012 Saretta Barnet Revocable Trust (Plaintiffs) sued the Ministry of Culture and Sports of the Hellenic Republic (Greece) in the United States District Court for the Southern District of New York (a trial court/court of first instance), seeking only a 'Declaration of Ownership'.
- Greece filed a motion to dismiss for lack of jurisdiction, arguing that it was immune from suit by reason of sovereign immunity.
- On June 21, 2019, the District Court for the Southern District of New York (Failla, J.) denied Greece's motion, concluding that it had subject-matter jurisdiction pursuant to the FSIA's 'commercial activity' exception.
- Greece, as Defendant-Appellant, filed an interlocutory appeal of the District Court's order to the United States Court of Appeals for the Second Circuit (an intermediate appellate court).
- The District Court stayed proceedings pending the appeal.
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Issue:
Does a foreign state's act of sending a letter asserting ownership over an ancient artifact, based on its national patrimony laws that nationalize such artifacts and regulate their export, constitute an act 'in connection with a commercial activity' within the direct-effect clause of the Foreign Sovereign Immunities Act (FSIA), thereby abrogating the state's sovereign immunity?
Opinions:
Majority - Menashi, Circuit Judge
No, a foreign state's assertion of ownership over an artifact, based on its national patrimony laws that nationalize such artifacts and regulate their export, does not constitute an act 'in connection with a commercial activity' under the FSIA direct-effect clause. The court identified Greece's predicate 'act' as sending the demand letter, but critically distinguished this 'act' from the 'commercial activity' it was connected to. The true 'activity' in connection with which the letter was sent was Greece's enactment and enforcement of its patrimony laws, which declare the figurine to be state property and regulate its ownership and export. The court reasoned that nationalizing property, regulating exports through a permitting process, and exercising police power to enforce such laws are 'archetypal sovereign activities' that can only be performed by a state acting as such, distinguishing them from actions private citizens can undertake. While a private party might send a letter disputing ownership, no private party could nationalize historical artifacts or regulate their export. The court cited Saudi Arabia v. Nelson and Republic of Argentina v. Weltover, Inc. for the principle that the commercial character of an activity is determined by its 'nature' (whether it involves powers peculiar to sovereigns) rather than its 'purpose.' Permitting the suit would require evaluating the validity and scope of Greece’s sovereign patrimony laws, thereby undermining the immunity Congress intended to confer. The court concluded that Greece was not acting as a private antiquities dealer but seeking to enforce a scheme of laws according to which artifacts are 'extra commercium.'
Analysis:
This case significantly clarifies the scope of the Foreign Sovereign Immunities Act's (FSIA) commercial activity exception, particularly the direct-effect clause, by emphasizing the distinction between a foreign state's specific 'act' and the broader 'commercial activity' to which that act is connected. The ruling reinforces that actions intrinsically tied to a state's unique governmental powers, such as the nationalization of cultural property and the enforcement of patrimony laws, are sovereign in nature, even if the communication surrounding them resembles private conduct. This decision establishes a high bar for abrogating sovereign immunity when a foreign state is acting within its legislative and regulatory capacity concerning its national heritage. It limits the ability of private parties to challenge a state’s claims of ownership over cultural artifacts in U.S. courts, thereby protecting foreign states from litigation over core governmental functions.
