Malewicz v. City of Amsterdam
517 F. Supp. 2d 322, 2007 U.S. Dist. LEXIS 46312, 2007 WL 1847851 (2007)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
The Foreign Sovereign Immunities Act's (FSIA) expropriation exception applies to allow jurisdiction over a foreign state when its commercial activity has "substantial contact" with the United States, and exhaustion of domestic remedies in the foreign state is not required if those remedies are time-barred and thus inadequate.
Facts:
- Kazimir Malewicz, a Russian artist, entrusted a large number of his paintings to friends in Germany for safekeeping due to the political situation in the Soviet Union.
- In 1956, after Malewicz’s death and the end of World War II, the City of Amsterdam’s Stedelijk Museum acquired some of these paintings from Hugo Haring, one of the individuals Malewicz had entrusted them to.
- In 1958, the City exercised an option in the loan agreement and purchased the Malewicz artwork for DM120,000.
- In June 2002, the Guggenheim Museum in New York and the Menil Collection in Houston, Texas (American Museums), solicited a loan of the Malewicz paintings from the Stedelijk Museum.
- In August 2002, the Stedelijk agreed to loan 14 Malewicz artworks to the American Museums and Deutsche Guggenheim Berlin, outlining specific terms and conditions in a letter and three loan-agreement forms.
- The loan agreement required the American Museums to pay insurance costs, obtain immunity from seizure, cover crating/shipping costs, and pay an administrative fee of $300 per painting, along with charges for transparencies, totaling nearly €25,000.
- The Stedelijk insisted that expert artwork handlers accompany the paintings while in transit and oversee their unpacking, display, and repackaging in the American Museums, which led to Stedelijk employees, including its Chief Curator, spending a collective 34 days in the United States for this purpose.
- In 2003, the Stedelijk loaned the 14 artworks from its Malewicz Collection to the American Museums as part of a temporary art exhibition.
Procedural Posture:
- In 2003, two days before the end of the temporary exhibition in the United States, surviving heirs of Kazimir Malewicz (Plaintiffs) filed a lawsuit against the City of Amsterdam (City) in the U.S. District Court for the District of Columbia, seeking damages and injunctive relief, alleging that the Stedelijk’s 1956 acquisition of the paintings was unlawful.
- The City moved to dismiss the lawsuit for lack of jurisdiction under the Foreign Sovereign Immunities Act (FSIA).
- In March 2005, the U.S. District Court denied the City’s motion to dismiss, finding insufficient information in the record to determine whether the FSIA’s expropriation exception applied, specifically whether the City’s contact with the United States was "substantial."
- The City submitted additional evidence to support its position of immunity under the FSIA and renewed its motion to dismiss, also asking the court to reconsider its prior holding regarding the exhaustion of remedies and to dismiss the complaint based on the statute of limitations, the "act of state" doctrine, and forum non conveniens.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the Foreign Sovereign Immunities Act's (FSIA) expropriation exception apply to allow suit against the City of Amsterdam when the city loaned artwork to U.S. museums for a fee, sent its employees to the U.S. to oversee the art, and the plaintiffs' claims would be time-barred in the foreign country?
Opinions:
Majority - Rosemary M. Collyer
Yes, the Foreign Sovereign Immunities Act's (FSIA) expropriation exception applies, allowing suit against the City of Amsterdam, because the City had substantial contact with the United States through its commercial activity of loaning art, and the plaintiffs' claims would be time-barred in the Netherlands, making domestic remedies inadequate. The court found that the City's commercial activity had "substantial contact" with the United States, a prerequisite for the FSIA's expropriation exception. The City entered a contract with American Museums to display artworks in the U.S., received nearly €25,000 in consideration, and critically, insisted upon sending its own employees (including the Chief Curator) to the U.S. for a collective 34 days to oversee the paintings. This active participation in a major portion of the contract's performance in the U.S., with the assistance of Stedelijk employees, constituted substantial contact, exceeding the contacts found insufficient in prior D.C. Circuit cases. Furthermore, the court reaffirmed its prior holding that plaintiffs are not required to exhaust domestic remedies if those remedies are "inadequate." Based on expert declarations regarding Dutch civil law doctrines of liberative and acquisitive prescription, the court concluded that any claims by the plaintiffs for damages or return of the paintings would be time-barred in the Netherlands, having expired no later than 1988. Therefore, the remedies in the Netherlands were non-existent and inadequate, excusing the exhaustion requirement. The court also rejected the City's other arguments. It found the statute of limitations defense inappropriate for a motion to dismiss due to the need for extensive factual development. The act of state doctrine was deemed inapplicable because the City’s acquisition of the paintings was a commercial act, not a truly sovereign act (jure imperii), and did not take place within its own territory. Finally, the forum non conveniens argument failed because the inadequacy of Dutch remedies meant there was no adequate alternative forum.
Analysis:
This case significantly clarifies the parameters of the Foreign Sovereign Immunities Act's (FSIA) expropriation exception, particularly regarding the "substantial contact" requirement for commercial activity. It establishes that active, physical participation by a foreign state's employees in the United States during a contractual performance, coupled with monetary consideration, can suffice for jurisdiction, even if negotiations occurred abroad. The ruling also reinforces the principle that the exhaustion of domestic remedies is excused if foreign statutes of limitations render those remedies unavailable, emphasizing a practical rather than merely theoretical availability of justice. Additionally, the decision narrows the application of the act of state doctrine, distinguishing between routine commercial transactions by state entities and truly sovereign, governmental acts (jure imperii). This precedent is crucial for future cases involving cultural property disputes or other commercial activities by foreign governmental entities in the U.S., providing clearer guidance on when U.S. courts can exercise jurisdiction.
