U.S. Court of Appeals for the Fourth Circuit, Berg v. Kingdom of the Netherlands, Docket No. 20-1765

Stolen Artworks

 

Suit is Brought in the U.S.

 

Defendants Are Municipal Museums in the Netherlands

 

Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602, et seq.

 

Expropriation Exception

 

Municipal Museums (NL)

 

Lack of Venue?

 

 

 

Appeal from the United States District Court for the District of South Carolina, at Charleston. Bruce H. Hendricks, District Judge. (2:18-cv-03123-BHH)

 

 

Bruce Berg, a resident of South Carolina, brought suit for recovery of paintings and other works of art taken under duress by the Nazis following the German invasion of theNetherlands in 1940. At the time of the German invasion, Berg’s grandfather, Benjamin Katz, was a partner in Firma D. Katz, which owned and operated three art galleries specializing in the sale of paintings by Dutch Old Masters. Following World War II, many of the stolen artworks were returned to the Netherlands by the United States military under Collection Point Agreements in which the Netherlands agreed to hold the art as “custodians pending the determination of the lawful owners thereof.” See, e.g., J.A. 100. Firma D. Katz was liquidated in 1974, and the artworks have not been returned to the heirs of its partners, Benjamin and Nathan Katz.

 

Berg brought suit in the District of South Carolina against the Kingdom of the Netherlands; Ministry of Education, Culture & Science of the Netherlands (“Ministry”); Cultural Heritage Agency of the Netherlands (“RCE”); and several private and public municipal museums in the Netherlands holding the artworks. Claiming ownership of the artworks, Berg brought claims for declaratory judgment, conversion, unjust enrichment, and constructive trust, arising from the alleged taking and retention of the artworks in violation of international law.

 

 

The four public municipal museums are Dordrechts Museum, Museum de Lakenhal, Museum Het Prinsenhof, and Historisch Centrum Het Markiezenhof. The amended complaint seeks restitution for 143 paintings and other artworks, thirteen of which are alleged to be held in the municipal museums. Am. Compl. ¶¶ 37, 38, 48, and 49.

 

 

As such, this appeal concerns only two groups of defendants: (1) the Ministry and RCE, and (2) the four municipal museums. As to the Ministry and RCE, we affirm the district court’s judgment that the Ministry and RCE, as political subdivisions of the Netherlands, are not subject to suit in federal court under the expropriation exception of the FSIA. As to the municipal museums, we affirm their dismissal for lack of venue.

 

 

Under the FSIA, “a federal court has subject matter jurisdiction over a claim against a foreign state only if that claim falls within one of the FSIA’s exceptions to immunity.” Wye Oak Tech., Inc. v. Republic of Iraq, 666 F.3d 205, 206 (4th Cir. 2011). As Berg’s claim does not arise from commercial activity by defendants in the United States, the only applicable exception to sovereign immunity under the FSIA is the expropriation exception found in 28 U.S.C. § 1605(a)(3).

 

 

As to the municipal museums, the district court dismissed the complaint against them for lack of venue. Venue in civil actions against a foreign state is governed by 28 U.S.C. § 1391(f), and the district court found that subsection 1391(f)(3) governed the municipal museums as agencies or instrumentalities of the Netherlands. That subsection permits venue in any judicial district in which an agency or instrumentality “is licensed to
do business or is doing business.” § 1391(f)(3). Though the district court found the municipal museums had engaged in commercial activity in the United States, the venue provision more narrowly focused on whether they did business in the District of South Carolina. So the allegations of nationwide solicitation and sales did little to show that the municipal museums are “doing business” in the District of South Carolina. 2020 WL 2829757, at *16. On appeal, Berg nowhere challenges this ruling.

 

 

(The district court concluded that the municipal museums were agencies or instrumentalities of the Netherlands lacking sovereign immunity pursuant to the second clause of the FSIA’s expropriation exception. That decision is not challenged on appeal and is consistent with the holding in Altmann v. Republic of Austria, 142 F. Supp. 2d 1187, 1204 (C.D. Cal. 2001) (“The paintings are owned by the Republic, but are exhibited by the Gallery. The exhibition of these paintings fulfills the ‘owned or operated by an agency of instrumentality’ requirement. Therefore, Plaintiff’s claim meets the ‘owned or operated’ requirement of the expropriation exception of the FSIA.”))

 

As to the municipal museums, the district court’s ruling was based on the lack of sufficient allegations that the municipal museums did business in South Carolina as required by § 1391(f)(3). In contrast, the district court did base its venue ruling as to the private museums on its finding that personal jurisdiction was lacking as to them.

 

(…) The district court’s dismissal for lack of venue over the municipal museums is forfeited. Nothing in this record suggests that the district court’s venue ruling as to the municipal museums constitutes fundamental error or results in a miscarriage of justice warranting reversal.

 

To be sure, Berg’s claim that the Nazi regime stole art owned by his grandfather’s partnership presents a strong moral claim. However, as the Second Circuit noted in Garb v. Republic of Poland, “strong moral claims are not easily converted into successful legal causes of action.” 440 F.3d at 581 (internal citation omitted). “Despite the severe injuries asserted by Berg, the capacity of United States courts to exercise jurisdiction over plaintiff’s claims hinges on a legal inquiry narrowly circumscribed by statute.” Id. Because the Ministry and RCE are political subdivisions of the Netherlands, the FSIA bars suit against them. While claims against the municipal museums, as agents and instrumentalities of the Netherlands, fall within the expropriation exception to the FSIA, as for venue, it is improper in South Carolina. As Berg did not ask the district court to transfer venue or otherwise appeal the venue ruling as to the municipal museums, the district court’s ruling as to venue compels affirmance of the judgment below. 

 

 

(U.S. Court of Appeals for the Fourth Circuit, Feb. 3, 2022, Berg v. Kingdom of the Netherlands, Docket No. 20-1765, Published)

Skilling v. U.S.

Jury: juror prejudice: fair trial: pretrial publicity and community prejudice did not prevent Skilling from obtaining a fair trial. He did not establish that a presumption of juror prejudice arose or that actual bias infected the jury that tried him; the District Court did not err in denying Skilling’s requests for a venue transfer; although the Sixth Amendment and Art. III, §2, cl. 3, provide for criminal trials in the State and district where the crime was committed, these place-of-trial prescriptions do not impede transfer of a proceeding to a different district if extraordinary local prejudice will prevent a fair trial; those decisions “cannot be made to stand for the proposition that juror exposure to . . . news accounts of the crime . . . alone presumptively deprives the defendant of due process.” Murphy v. Florida, 421 U. S. 794, 798–799. Thus, prominence does not necessarily produce prejudice, and juror impartiality does not require ignorance. See, e.g., Irvin v. Dowd, 366 U. S. 717, 722; important differences separate Skilling’s prosecution from those in which the Court has presumed juror prejudice. First, the Court has emphasized the size and characteristics of the community in which the crime occurred. In contrast to the small-town setting in Rideau, for example, the record shows that Houston is the Nation’s fourth most populous city. Given the large, diverse pool of residents eligible for jury duty, any suggestion that 12 impartial individuals could not be empaneled in Houston is hard to sustain. Second, although news stories about Skilling were not kind, they contained no blatantly prejudicial information such as Rideau’s dramatically staged admission of guilt. Third, unlike Rideau and other cases in which trial swiftly followed a widely reported crime, over four years elapsed between Enron’s bankruptcy and Skilling’s trial. Although reporters covered Enron-related news throughout this period, the decibel level of media attention diminished somewhat in the years following Enron’s collapse. Finally, and of prime significance, Skilling’s jury acquitted him of nine insider-trading counts; the Fifth Circuit presumed juror prejudice based primarily on the magnitude and negative tone of the media attention directed at Enron. But “pretrial publicity—even pervasive, adverse publicity—does not inevitably lead to an unfair trial.” Nebraska Press Assn. v. Stuart, 427 U. S. 539, 554. Here, news stories about Enron did not present the kind of vivid, unforgettable information the Court has recognized as particularly likely to produce prejudice, and Houston’s size and diversity diluted the media’s impact. Nor did Enron’s sheer number of victims trigger a presumption. Although the widespread community impact necessitated careful identification and inspection of prospective jurors’ connections to Enron, the extensive screening questionnaire and follow-up voir dire yielded jurors whose links to Enron were either nonexistent or attenuated; no actual prejudice contaminated Skilling’s jury. The Court rejects Skilling’s assertions that voir dire did not adequately detect and defuse juror prejudice and that several seated jurors were biased (U.S.S.Ct., 24.06.10, Skilling v. U.S., J. Ginsburg).

Jurés avec un parti pris, procès équitable, affaire Enron : si la procédure fait l’objet d’une publicité et que le prévenu suscite la désapprobation, le procès ne sera pas nécessairement inéquitable. En l’espèce, le prévenu n’a pas établi la présomption d’une opinion préétablie du jury. Il n’a pas établi non plus la partialité du jury. La cour de district fédérale a rejeté à juste titre la requête de transfert de for présentée par le prévenu, qui estimait qu’un Tribunal basé à Houston, Texas, ne pouvait équitablement le juger s’agissant de faits découlant de l’affaire Enron. Bien que le Sixième Amendement et l’Art. III, §2, cl. 3 de la Constitution fédérale prévoient que le procès pénal a lieu dans l’état et dans le district où l’infraction a été commise, ces dispositions n’empêchent pas le transfert de la procédure dans un autre district si des circonstances locales extraordinaires peuvent empêcher un procès équitable. Un tel transfert ne saurait être décidé du seul fait que l’exposition du juré aux média qui traitent de l’infraction prive par présomption le prévenu d’un procès équitable. L’impartialité d’un juré n’implique pas son ignorance. D’importantes différences séparent la poursuite pénale du prévenu dans cette affaire de la poursuite pénale de prévenus dans d’autres affaires où la Cour a reconnu l’existence d’un jury partial. Tout d’abord, la Cour a mis en évidence la taille et les caractéristiques de la communauté dans laquelle le crime s’est produit. En contraste avec une petite ville, Houston est la quatrième ville la plus peuplée des Etats-Unis. Considérant l’importance et la diversité de la population remplissant les conditions pour servir dans un jury, il est pour le moins difficile de soutenir l’impossibilité de former un jury de douze personnes impartiales dans cette ville. Ensuite, bien que les comptes rendus médiatiques au sujet du prévenu ne fussent pas particulièrement tendres, ils ne contenaient pas d’informations de manière évidente dommageables, telle par exemple le rapport d’une admission de culpabilité. Par ailleurs, contrairement à d’autres affaires dans lesquelles le procès a rapidement suivi un crime largement rapporté dans les média, plus de quatre ans ont passé entre la faillite d’Enron et le procès du prévenu dans la présente affaire. Enfin, il est très significatif de considérer que le jury ait acquitté le prévenu de neuf préventions liées à des délits d’initié. En l’espèce, le Cinquième circuit fédéral a présumé la partialité du jury en se basant avant tout sur l’ampleur de la couverture médiatique du phénomène Enron et sur sa connotation négative. Mais une couverture médiatique avant procès, même négative, ne conduit pas inévitablement à un procès inéquitable. En l’espèce, les comptes rendus médiatiques au sujet d’Enron ne présentaient pas le type d’informations inoubliables que la Cour a reconnu comme particulièrement susceptible de produire un dommage s’agissant de l’impartialité du jury. En outre, la taille de la population de Houston, et sa diversité, sont de nature à diluer l’impact médiatique. Le nombre de victimes d’Enron n’implique nulle présomption. Il est vrai que l’important impact de cette affaire sur la communauté nécessitait d’identifier les jurés avec soin et nécessitait de prospecter les éventuelles connexions des jurés avec Enron. Le questionnaire extensif adressé aux jurés et la procédure de voir dire qui s’en est ensuivie ont permis le choix de jurés dont les liens avec Enron étaient atténués ou inexistants. Dans la présente affaire, aucun préjudice n’a contaminé le jury dans le procès du prévenu.