Another Circuit – this time the Ninth — Cuts Back on Sovereign Immunity Defense: Cassirer v. Kingdom of Spain, et al.

In an en banc decision in the transnational litigation context by the Ninth Circuit, in Cassirer v. Kingdom of Spain, et al., No. 06-56325, 06-56406 (9th Cir. 8/12/10) (link here), the Court of Appeals addressed several issues concerning the applicability of a sovereign immunity defense.  It ruled in favor of permitting suit against a non-U.S. sovereign in instances that will broaden access to federal court by litigants in the U.S. in the future.  

The story is the familiar one of the family of a Jew, having had its property seized by the Nazis, seeking to recover the property, not against the German government, but against a purchaser or transferee of the German government. The property here is the Pissarro masterpiece, Rue Saint-Honoré, après-midi, effet de pluie. The slight twist on the typical story is that in this case the holder of the painting is the instrumentality of another sovereign state, here Spain and an instrumentality of Spain.

The Ninth Circuit, en banc, analyzed a number of issues relevant to International Practice generally.

  • First, the Court determined, as have all others to our knowledge since the statute is clear, that the non-U.S. sovereign defendant or its instrumentality had the right to take an interlocutory appeal from the denial of their motion to dismiss on FSIA grounds.  This is a rare occurrence in federal practice in U.S. courts.  As to other grounds for the decision below, relating to whether personal jurisdiction existed and whether a justiciable case or controversy existed, the Court determined that it lacked appellate jurisdiction on an interlocutory appeal to review those rulings of the district court.
  • Second, the Court found that the exception necessary to permit suit against the sovereign or its instrumentality – here the “expropriation” exception, which requires showing that rights in property were taken in violation of international law and that the instrumentality owning the property is engaged in “commercial activity” in the U.S. – could be satisfied by two different sovereign states – i.e., Germany could have taken the property in violation of international law, but the commercial activity prong of the exception could be satisfied, not by Germany, but by the current holder of the object, here the instrumentality of Spain.
  •  Finally, the Court of Appeals held that it was unwilling to consider whether the “prudential exhaustion” principle should apply to this case – again the Court believed it was without jurisdiction to review that issue, given the limited and interlocutory nature of the appeal to it.

Cassirer is the third Circuit court decision in under a month to rule against application of a sovereign immunity defense (see our posting of 8/13/10 for a discussion of the other two).

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One Response to Another Circuit – this time the Ninth — Cuts Back on Sovereign Immunity Defense: Cassirer v. Kingdom of Spain, et al.

  1. Pingback: Second Circuit Again Rejects FSIA Defense and Upholds Attachment of Assets and Other Provisional Remedies, Applying New York Choice of Law and Substantive Law To Disregard “Trust” | Cadwalader International Practice Law Blog

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