In 1939, Lilly Neubauer escaped the Nazis by fleeing to England. She was not allowed to take an 1897 painting by the French Impressionist painter Camille Pissarro, which she had received as a gift from her husband in 1900, with her. She was forced to sell Rue Saint Honoré, dans après midi. Effet de pluie, to an art dealer who worked for the Nazis. He promised to pay her but never did. The Nazis undisputedly stole her painting.

She unsuccessfully filed a claim for the painting in 1948. In 1954, the United States Court of Restitution Appeals published a decision confirming that Lilly owned the Pissarro, but it was never returned to her. The German government, under a law that authorized claims for Nazi-looted property, agreed settle to her claim in 1956 for 120,000 Deutschmarks, which equals about $250,000 in today’s inflation-adjusted dollars.

But where was the painting? After changing hands several times, in 1993, the Thyssen-Bornemisza Collection (TBC) obtained it and displayed it at the Museo Nacional Thyssen-Bornemisza in Madrid, Spain, an affiliate of the Spanish government. David Cassier, Neubauer’s great-grandson, learned of the painting’s location in 2010 and filed a lawsuit on behalf of himself, the estate of his daughter Ava and the United Jewish Federation of San Diego County. Now, after a two-decade-long unsuccessful lawsuit, the painting will remain in Spain.

The case ultimately pitted California law against the laws of Spain. It went to the U.S. Supreme Court which ruled in 2022 that the Ninth Circuit had misapplied the rules that govern multiple jurisdictions. It was remanded to the Ninth Circuit, where Circuit Judge Carlos T. Bea, authored a unanimous opinion, with a separate concurrence by Judge Consuelo M. Callahan on January 9.

The Supreme Court ordered the Ninth Circuit to apply California’s choice-of-law rules rather than Spanish law since the plaintiffs reside in California. The painting was originally purchased by Lilly’s husband Paul in 1900. It is now estimated to be worth “more than $30 million.”

Cassier’s suit was brought under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1330(a), which limits the federal government’s role in civil suits against foreign states and their instrumentalities, which describes the relationship between the Museum and the Government of Spain. It says, “The district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state…as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity…”

In summary, Bea wrote, “Under California law as it currently stands, the plaintiff would recover the art while under Spanish law, the plaintiff would not.”

To settle the matter, Bea applied California’s choice-of-law test—the three-step “governmental interest analysis”—to determine whether Spanish law or California law governs.” The key issue, he said, was “whose governmental interests would be the more impaired were its law not applied.” He concluded that Spain’s governmental interest would be more impaired than California’s governmental interests. Thus, he wrote, Spanish law must apply.” This is termed an “impairment analysis.”

Judge Bea went on to explain what he called the “government interest test.” In step one, the court had to determine “whether the relevant law of each of the potentially affected jurisdictions is the same or different.” Step two would then “examine each jurisdiction’s interest in the application of its own law under the circumstances…to determine whether a true conflict exists.” Step three then would “carefully evaluate and compare the nature and strength of the interest of each jurisdiction… to determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state.” After this analysis, Bea explained, the court “ultimately applies the law of the state whose interest would be the more impaired if its law were not applied.”

The Ninth Circuit then found that the laws of Spain and California were different. Primarily, Spanish law allows the possessor of stolen property to “acquire prescriptive title that is superior to the original owner’s title.” They also found that a true conflict existed. Then, after examining the critical third step, they concluded that under the comparative impairment analysis, the governmental interests of Spain would be “more impaired by the application of California law than would California’s interests be impaired by the application of Spanish law.”

This determination was made in part because Spain is “the place where the relevant conduct occurred,” and that factor is “crucial in measuring the jurisdictions’ relative interests under the comparative interest analysis.” Bea also said, “Because no relevant conduct with respect to the Painting occurred in California, the impairment of California’s interest that would result from applying Spanish law would be minimal.” He said that California law, however, would significantly impair Spain’s interest in trying to apply its own law.

Justice Callahan, who concurred, nevertheless found the decision difficult as it “was at odds with our moral compass.” She said that despite the law, she “wished it was otherwise” and explained that “Spain, having reaffirmed its commitment to the Washington Principles on Nazi-Confiscate Art when it signed the Terezin Declaration on Holocaust Era Assets and Related Issues, should have voluntarily relinquished the Painting. However, as we previously held, “we cannot order compliance with the

Washington Principles or the Terezin Declaration.””

Attorneys for the Cassier family told the San Diego Union-Tribune that they believed the Ninth Circuit’s three-judge panel was incorrect and that they “will definitely seek en banc review” by a larger panel.