Malewicz v. City of Amsterdam
2005 U.S. Dist. LEXIS 5414, 2005 WL 724591, 362 F. Supp. 2d 298 (2005)
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Rule of Law:
A foreign state may be subject to U.S. federal court jurisdiction under the Foreign Sovereign Immunities Act's commercial activity exception if property allegedly taken in violation of international law is present in the U.S. in connection with a "commercial activity" carried on by the foreign state, even if the property is immune from seizure under the Immunity from Seizure Act. The commercial nature of an activity is determined by its nature, not its purpose, and the court may need to conduct factual discovery to determine if there was "substantial contact" with the U.S.
Facts:
- In 1927, world-renowned Russian artist Kazimir Malewicz brought over 100 of his artworks to Berlin for exhibition.
- Malewicz unexpectedly returned to Russia and entrusted his art pieces to four friends in Germany, including Dr. Alexander Dorner, who stored them in the basement of the Landesmuseum in Hannover because they could not safely be returned to Russia due to "Stalinist condemnation of abstract art."
- After Malewicz died in May 1935 and Dr. Dorner fled Nazi Germany in 1937, Dr. Dorner sent the crates of paintings and drawings to Mr. Hugo Haring, who safeguarded them in Berlin until 1943, then moved them to Biberach.
- Between 1951 and 1956, Dr. W.J.H.B. Sandberg, director of the Stedelijk Museum in Amsterdam, attempted to persuade Mr. Haring to send the Malewicz Collection to the Stedelijk, but Mr. Haring repeatedly stated he was only a custodian and had no right to convey ownership.
- In February 1956, while recovering from illnesses, Mr. Haring agreed to lend the works to the Stedelijk, and Mr. Sandberg prepared a loan proposal.
- In response to Sandberg's inquiry about purchasing the collection, a letter dated June 23, 1956, signed "on behalf of" Mr. Haring (but not by him), falsely claimed that ownership had passed to Haring in 1955 via a purported gift causa mortis from Malewicz.
- Based on these communications, the City of Amsterdam, through Mr. Sandberg, entered into a loan contract with Mr. Haring in November 1956 that included an option to purchase the Malewicz Collection, which the City purported to exercise in 1958 despite its awareness of Haring's consistent denial of authority to convey title.
- In 2003, fourteen of the eighty-four pieces in the Malewicz Collection were temporarily exhibited at the Solomon R. Guggenheim Museum in New York City and the Menil Collection in Houston under the U.S. Department of State's Mutual Educational and Cultural Exchange Program, which granted them immunity from legal process.
Procedural Posture:
- The Malewicz Heirs (plaintiffs) filed this action seeking the return of artwork and damages from the City of Amsterdam.
- The City of Amsterdam (defendant) filed a motion to dismiss the complaint on April 30, 2004, on jurisdictional grounds in the United States District Court for the District of Columbia.
- The United States filed a Notice of Possible Interest on November 15, 2004, and a Statement of Interest on December 22, 2004, followed by a Supplemental Statement of Interest on March 17, 2005.
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Issue:
Does a U.S. federal court have subject matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA) over a foreign city for artwork allegedly expropriated in violation of international law, where the artwork was temporarily present in the United States under immunity from seizure for cultural exhibition and the city's contacts with the U.S. related to the loan are yet to be determined as "substantial"?
Opinions:
Majority - Collyer, District Judge
No, the court cannot determine on this record whether the City of Amsterdam's contacts with the United States were "substantial" within the meaning of the Foreign Sovereign Immunities Act to support jurisdiction, therefore the motion to dismiss is denied, and further discovery is required. The court first addressed the City's argument that the Malewicz Heirs failed to exhaust remedies in The Netherlands. It recognized that expropriation without compensation violates international law and typically requires exhausting domestic remedies. However, it noted that if the Dutch statute of limitations would bar the plaintiffs' claims, then Dutch courts would not provide an adequate alternative forum, and the U.S. court could not compel the plaintiffs to sue there. The court found the record insufficient to determine when the Dutch statute of limitations began to run. It also rejected the Malewicz Heirs' argument that the City's "denial of responsibility" excused exhaustion, clarifying that the City denied the illegality of its actions, not its involvement. Next, the court concluded that the "present in the United States" factor of FSIA § 1605(a)(3) was met because the Malewicz Heirs filed the complaint while the artworks were physically present in the U.S. It explicitly rejected the City's argument that FSIA actions are in rem and require seizure, noting that FSIA intentionally overrides common-law in rem jurisdiction requirements for in personam jurisdiction. The court clarified that the Immunity from Seizure Act (22 U.S.C. § 2459) protects cultural objects from seizure or interference with custody but does not grant immunity from suit for a declaration of rights or damages if other FSIA jurisdictional terms exist. Regarding "commercial activity," the court applied the standard from Republic of Argentina v. Weltover, Inc., stating that the commercial character of an activity is determined by its nature, not its purpose. The court reasoned that lending art pieces is a type of activity in which a private person or entity could engage, and thus is "commercial" (i.e., not sovereign), even if the purpose is purely educational or cultural. However, the court found the existing record factually insufficient to ascertain the "substantiality of the City’s contacts or activities with or in the United States" in connection with the loan, which is required by 28 U.S.C. § 1603(e) for "commercial activity carried on in the United States." Therefore, the motion to dismiss was denied, and the court indicated it would convene a status conference for jurisdictional discovery on this point.
Analysis:
This case offers critical guidance on the intersection of the Foreign Sovereign Immunities Act (FSIA), cultural heritage claims, and the Immunity from Seizure Act. It clarifies that immunity from seizure for cultural objects does not grant blanket immunity from suit under FSIA, thereby creating a potential "jurisdictional hook" for claimants of expropriated art. The court's reaffirmation that the 'nature' rather than the 'purpose' of an activity determines its 'commercial' character broadens the scope of FSIA's commercial activity exception, potentially subjecting foreign states to U.S. jurisdiction for activities traditionally viewed as purely cultural or educational. However, the ruling also underscores that plaintiffs must still demonstrate "substantial contact" between the foreign state's commercial activity and the United States, indicating that the mere presence of objects is not enough without further factual development of the foreign state's direct engagement.
