Persepolis Collection: Iranian Artifacts Immune from Execution

This version contains a revision

On February 21, 2018, the Supreme Court of the United States issued a decision,[1] affirming the United States Court of Appeals for the Seventh Circuit’s 2016 decision[2] that held that a collection of ca. 30,000 ancient Persian artifacts[3] that have been on loan to the University of Chicago’s Oriental Institute since 1937 is immune from attachment and execution to satisfy a judgment against the Islamic Republic of Iran. The decision concluded a decades-long effort by the plaintiffs, a group of American citizens seriously injured in a suicide bombing in Jerusalem in 1997.[4] The plaintiffs sued the Islamic Republic of Iran in U.S. District Court for the District of Columbia for Iran’s role in providing material support to the terrorists, and obtained a $71.5 million default judgment (and an additional $300 million in punitive damages). [5]

The Persepolis Collection and Other Persian Artifacts

The plaintiffs initially sought to execute on the judgment against “four collections of ancient Persian artifacts … the Persepolis Collection, the Chogha Mish Collection, and the Oriental Institute Collection, all in the possession of the University of Chicago; and the Herzfeld Collection, split between the University and Chicago’s Field Museum of Natural History.”[6] However, the court only had jurisdiction to consider attachment and execution upon those artifacts that were (1) owned by Iran, and (2) within the territorial jurisdiction of the court. During the pendency of the case, the Chogha Mish Collection was returned to Iran as a matter of cultural diplomacy, and so was not within the court’s territorial jurisdiction. The Oriental Institute Collection and the Herzfeld Collections (at both the University of Chicago and the Field Museum) are not the property of Iran, and so also were not available for attachment and execution. Only the Persepolis Collection met both requirements, being both property of Iran (on long-term loan to the University of Chicago) and located within the court’s territorial jurisdiction.

The Seventh Circuit issued its decision on July 19, 2016, holding that Section 1610(g) of the Foreign Sovereign Immunities Act (“FSIA”)[7] does not provide an independent basis to attach and execute against US-based property of a foreign state to satisfy a 1605A judgment. Rather, Section 1610(g) only operates when the subject property is exempt from immunity under a separate exception set forth in Section 1610. In so holding, the Seventh Circuit split with the Ninth Circuit’s decision in Bennett v. Islamic Republic of Iran,[8] which had held that Section 1610(g) did provide an independent basis to strip immunity from sovereign property located in the U.S. The Supreme Court took up the case to resolve this split, and to clarify the application of Section 1610(g) to questions of execution immunity for sovereign property.

Foreign Sovereign Immunity

The fate of the Persepolis Collection turned on the fairly arcane question of foreign sovereign immunity. As a general rule, foreign states have immunity from the jurisdiction of U.S. courts (jurisdictional immunity)[9] and their property located in the United States is immune from attachment, arrest, and execution (execution immunity).[10] Until the mid-twentieth century, the United States (and most other countries) observed the doctrine of absolute sovereign immunity, and no foreign state could be subject to the jurisdiction of the courts of another state. Early in the Nineteenth Century, the Court addressed the question of the doctrine of absolute sovereign immunity, which the Court stated derives from the “perfect equality and absolute independence of sovereigns.”[11] Foreign sovereign immunity was regarded as “a matter of grace and comity on the part of the United States,”[12] and was a function of the Executive Branch’s foreign affairs power. Under the absolute sovereign immunity doctrine, when a foreign sovereign was sued in a U.S. court, the foreign state would request a “suggestion of immunity” from the U.S. State Department. If the State Department granted the request, the court would surrender jurisdiction and the case would be dismissed.

In 1952, the U.S. abandoned the absolute sovereign immunity doctrine in favor of the restrictive theory of sovereign immunity, which was articulated in what has come to be called the Tate Letter, written by Jack B. Tate, the State Department’s Acting Legal Adviser.[13] Under the restrictive theory, a foreign sovereign remains immune from suit for its public acts, but is not immune with respect to its commercial activities. However, under the restrictive theory, sovereign property remained immune from execution. [14] Congress codified the restrictive theory in 1976 as the FSIA, adding exceptions for execution on foreign sovereign property.

Exceptions to Foreign Sovereign Immunity

Relevant to the Persepolis Collection, the FSIA does three things – (1) it establishes the basic principle that foreign sovereigns and their property are immune from suit and from execution in U.S. courts (including state courts);[15] (2) it provides specific exceptions to jurisdictional immunity so that, in certain circumstances, foreign sovereigns and their agencies and instrumentalities may be sued; and (3) it provides specific exceptions to execution immunity so that, in certain circumstances, sovereign property located in the U.S. may be subject to attachment, arrest, and execution. The plaintiffs were able to sue Iran and obtain their default judgment under the terrorism exception to the FSIA (providing an exception to jurisdictional immunity), which states, in pertinent part, that “[a] foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case not otherwise covered by this chapter in which money damages are sought against a foreign state for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act.”[16]

In order for the plaintiffs to be able to execute on the Persepolis Collection, an exception to execution immunity was required. FSIA Section 1609 governs execution on sovereign property, and provides that “the property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611.”[17] Section 1610(g) provides, in pertinent part, that “the property of a foreign state against which a judgment is entered under section 1605A, and the property of an agency or instrumentality of such a state, including property that is a separate juridical entity or is an interest held directly or indirectly in a separate juridical entity, is subject to attachment in aid of execution, and execution, upon that judgment as provided in this section”[18] (italics added). While Section 1610 generally requires that sovereign property be used by the foreign state in commercial activity in the U.S.,[19] the plaintiffs argued that “§ 1610(g) makes all Iranian assets available for execution without proof of a nexus to commercial activity – that is, without having to satisfy § 1610(a).”[20]

Justice Sotomayor, writing for the Court, agreed with the Seventh Circuit’s analysis of Section 1610(g), noting that that section:

…conspicuously lacks the textual markers, ‘shall not be immune’ or ‘notwithstanding any other provision of law,’ that would have shown that it serves as an independent avenue for abrogation of immunity. In fact, its use of the phrase ‘as provided in this section’ signals the opposite: A judgment holder seeking to take advantage of § 1610(g)(1) must identify a basis under one of § 1610’s express immunity-abrogating provisions to attach and execute against a relevant property.[21]

The Court explained that, rather than providing an independent basis for abrogating immunity, Section 1610(g) instead allows holders of judgments against foreign states under the terrorism exception (Section 1605A) to execute their judgments against property of “government instrumentalities established as juridical entities distinct and independent from their sovereign” without having to satisfy the Bancec factors, which courts developed in response to the Court’s 1983 Bancec decision.[22]

Because the artifacts comprising the Persepolis Collection are on loan to the University of Chicago for “research, translation, and cataloging,”[23] not for commercial activity,[24] the artifacts do not satisfy the requirements of Section 1610(a) and so remain immune from attachment, arrest, and execution. In clarifying the application of FSIA Section 1610(g), the Court has provided important guidance to a broad spectrum of cultural and educational institutions that engage in exchanges with foreign states, and their agencies and instrumentalities, including museums and libraries.

[1] Rubin v. Islamic Republic of Iran, No. 16-534, 2018 U.S. LEXIS 1376 (S.Ct. Feb. 21, 2018).

[2] Rubin v. Islamic Republic of Iran, 830 F.3d 470 (7^th Cir. 2016).

[3] The Persepolis Collection consists of ca. 30,000 clay tablets and fragments “containing some of the oldest writings in the world.” Id. at 474. For more information about the Persepolis Collection, see https://oi.uchicago.edu/collections/highlights/highlights-collection-iran

[4] See “7 Killed in Bomb Blasts in Jerusalem,” CNN, Sept. 4, 1997, available at http://www.cnn.com/WORLD/9709/04/israel.blast.930/

[5] Campuzano v. Islamic Republic of Iran, 281 F.Supp.2d 258 (D.D.C. 2003).

[6] Rubin v. Islamic Republic of Iran, 830 F.3d at 473.

[7] 28 U.S.C. §§ 1602-11.

[8] Bennett v. Islamic Republic of Iran, 825 F.3d 949, 960 (9^th Cir. 2016).

[9] 28 U.S.C. § 1604.

[10] 28 U.S.C. § 1609.

[11] The Schooner Exch. V. McFaddon, 11 U.S. 116 (1812).

[12] Rubin v. Islamic Republic of Iran, 830 F.3d at 476 (quoting Verlinden B.V. v. Cent. Bank of Nigeria, 461, U.S. 480, 486 (1983)).

[13] Letter from Jack B. Tate, Acting Legal Adviser, U.S. Dep’t of State, to Philip B. Perlman, Acting U.S. Attorney General (May 19, 1952), reprinted in 26 Dep’t St. Bull. 984-85 (1952) and Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 711-15 (1976); see also Claire E. Stephens, “Storming the Persian Gates: The Seventh Circuit Denies Attachment to Iranian Antiquities,” 12 Seventh Circuit Rev. 164 (Fall, 2016).

[14] Rubin v. Islamic Republic of Iran, 830 F.3d at 477.

[15] Section 1604 of the FSIA states the basic rule: “Subject to existing international agreements to which the United States is a party at the time of enactment of this Act a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in section 1605 to 1607 of this chapter.” 28 U.S.C, § 1604.

[16] The terrorism exception to the FSIA is codified at 28 U.S.C. § 1605A.

[17] 28 U.S.C. § 1609.

[18] 28 U.S.C. § 1610(g).

[19] See 28 U.S.C. 1610(a), stating, in part, that “[t]he property in the United States of a foreign state, … used for a commercial activity in the United States, shall not be immune from attachment in aid of execution, or from execution, upon a judgment entered by a court of the United States or of a State.”

[20] Rubin v. Islamic Republic of Iran, 830 F.3d at 481.

[21] Rubin v. Islamic Republic of Iran, No. 16-534, 2018 U.S. LEXIS 1376 at *16-17.

[22] First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U.S. 611 (1983).

[23] Rubin v. Islamic Republic of Iran, No. 16-534, 2018 U.S. LEXIS 1376 at *9.

[24] The FSIA defines “commercial activity” as “either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose. 28 U.S.C. § 1603(d). The owner of the property must be the party engaged in the relevant commercial activity and there must be some nexus between the commercial activity and the property at issue. See, e.g., Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 709 (9^th Cir. 1992); Altmann v. Republic of Austria, 317 F.3d 954, 969 (9^th Cir. 2002).

When Artists Disavow Their Work

By Kevin P. Ray on April 3, 2017 Posted in Art Conservation, Art Disavowal, Art Sales, Art Transactions, Authentication

Kevin Ray authored an article for the Spring 2017 issue of Best Lawyers – Business Edition, which discusses artists who have disavowed their work. Click here to read the full article.

The Restitution, Repatriation, and Return of Cultural Objects: The Parthenon Debate (Part II)

By Kevin P. Ray on April 7, 2016 Posted in Art Repatriation, Cultural Plunder

The Debate over the Parthenon Sculptures

Among disputes over removed cultural objects, perhaps few are better known than that concerning what were formerly known as the Elgin Marbles, which even the British Museum now prefers to call the Parthenon sculptures. It is important to note at the outset, however, that even though the Parthenon sculptures were removed during this long age of plunder, were not actually plundered. They were removed with the apparent permission of the government that had ruled the territory for four centuries. The source of the conflict over the sculptures is twofold – (1) Ottoman rule of the territory of modern Greece was in its final decades, and the movement in favor of Greek independence was on the rise (Greece would attain independence in 1832); and (2) the Parthenon, which even at the time had long been recognized as one of the finest examples of classical architecture and sculpture, became an important symbol of Greek independence and nationalism.

It is timely to consider the Parthenon sculptures as one example of how the past is sometimes not even past. This year marks the 200^th anniversary of the British Museum’s acquisition of the sculptures from Lord Elgin. The sculptures comprise roughly 50 percent of the surviving sculptures from the temple, the other half held by the Acropolis Museum in Athens. Additionally, fragments from the Parthenon are held by several other museums, including the Musée du Louvre and the Vatican Museums. Some fragments have been returned to Greece, including those given by the University of Heidelberg and a museum in Palermo, Sicily (the Greek government then loaned this fragment back to Palermo). The Vatican Museums loaned one of its fragments to the Acropolis Museum.

The Parthenon was constructed between 447 and 432 B.C.E., and is regarded as the exemplar of classical art and architecture at the height of Periclean Athens. It was designed and built by the architects Ictinus and Callicrates under the supervision of the sculptor Phidias, and it originally served as a temple to Athena and as a symbol of Athenian civic life. Part of the temple was destroyed by fire in 195 B.C.E., with more destructive fires occurring with the invasion of the Germanic Heralic tribe in A.D. 267 and the Visigoth sack of Athens under Alaric in 396 C.E. In the 5^th century C.E. it was transformed into a Greek Orthodox cathedral (Theotokos Atheniotica), then a Roman Catholic cathedral (Notre Dame d’Athenes) under the Franks in 1204, and, in 1458, under Ottoman rule, it was again transformed into a mosque. In 1687, the Parthenon was being used as a military center. During the bombardment of Athens by Venetian forces, a powder magazine located in the Parthenon suffered a hit, and the resulting explosion destroyed a large part of the structure. At the time of Lord Elgin’s ambassadorship, the Parthenon was still being used by the Ottoman army, and was referred to as the “citadel.” Continue Reading

The Restitution, Repatriation, and Return of Cultural Objects: The Parthenon Debate (Part I)

By Kevin P. Ray on April 6, 2016 Posted in Art Repatriation, Cultural Plunder

This article is the fourth in a five-part series discussing the restitution, repatriation, and return of cultural objects. Each part addresses a different category of return. The first article in the series addressed the restitution of stolen cultural objects. The second article (available here, here, and here) discussed developments in the restitution of cultural objects taken during World War II. The third article discussed the restitution of illicitly excavated and/or illicitly exported cultural objects. This article discusses the return of cultural objects removed during the period before legal norms developed protecting and prohibiting the destruction of cultural property during times of armed conflict, with particular reference to the long-standing dispute concerning the Parthenon sculptures. The remaining article (which will appear in coming weeks) will discuss issues in the repatriation of tribal and indigenous cultural objects.

Cultural Property and Plunder in the Age of Empires

In thinking about some competing claims to cultural property, the well-worn line from William Faulkner rings true: “The past is never dead. It’s not even past.”[1] Many past practices, though commonplace and accepted in their day, are considered improper or unjust today. In the area of cultural property, it was common practice for millennia for invading or occupying powers to take as plunder or tribute the cultural treasures of the vanquished.[2] An international legal norm against these types of takings only began to emerge in the mid-19^th century and even then it was the early 20^th century before those norms crystalized into generally accepted (and enforceable) international legal rules (even so, it applied only to destruction or plunder of cultural property during periods of armed conflict, and said nothing of the protection of cultural property during peacetime). Inevitably, many public and private collections around the world contain objects that were removed – and perhaps more than once – during this long age of plunder.[3] Continue Reading

Object Lessons: De Sole v. Knoedler & Company (Part II)

By Kevin P. Ray on March 7, 2016 Posted in Fakes/Forgeries

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The Forger’s Art

In a case involving the sale of a fake or forged work of art, typically the first order of business is for the plaintiff to establish that the work is, in fact, not authentic, with each side marshaling its experts. In the case of the De Sole Rothko, this step was unnecessary. Before the trial commenced, Rosales entered a plea, admitting guilt, in a criminal action brought by the U.S. government. In a statement read into the record at the time of her plea, Rosales admitted that “I agreed with others to sell works of art claimed to be created by various expressionist artists, including Mark Rothko, Jackson Pollock, and Robert Motherwell, and to make false representations as to the authenticity and provenance of those works…All of the works I sold to [Knoedler Gallery] …were, in fact, fakes.”[1] Rosales’s accomplices – her boyfriend, art dealer Jose Carlos Bergantiños Diaz, his brother, Jesus Angel Bergantiños Diaz, and the actual forger, Pei Shen Qian[2] – were also indicted.[3] All three men fled the United States – the Diaz brothers to Spain and Qian to China. [4]

Object Lessons: De Sole v. Knoedler & Company (Part I)

By Kevin P. Ray on March 4, 2016 Posted in Fakes/Forgeries

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In 2011, the 165-year-old Knoedler & Company (“Knoedler”), one of Manhattan’s most venerable galleries, abruptly closed its doors amid accusations that the gallery had been selling fakes for more than a decade. Ten lawsuits have been filed against the gallery and its former director, Ann Freedman,[1] six of which have ended in settlements. Four suits remain pending. These cases have involved works purporting to be by Robert Motherwell;^[2] Jackson Pollock^[3]; Clyfford Still; [4] Willem de Kooning;^[5] and Mark Rothko.[6] The most recent of these to settle is the suit brought by collectors Domenico and Eleanore De Sole (the “De Soles”) against Knoedler and Freedman. That suit produced two weeks of closely-watched testimony before the parties reached separate agreements on February 7^th (with respect to Freedman) [7] and Februray 10^th (with respect to the gallery).[8]

Since the De Sole case settled, it did not elicit a refined judicial statement on the due diligence required of a sophisticated collector when purchasing a work of art or, conversely, the due diligence required of a leading gallery when investigating a work’s provenance and authenticity, as some commentators had hoped. However, the trial is important because it opened a window into how an artwork’s provenance is investigated, and how a work is authenticated and an attribution established. It is a case study in interpretation, misinterpretation, and misdirection. This case offers lessons not only in due diligence, but in the importance of maintaining a self-protective skepticism in the highly relationship-based environment of art transactions. The question this case asks, for the collector, the gallerist, and the authenticator, is: “What information can and should a person rely on?”[9]

Continue Reading

Art Consignment and the Risk of Fraud

By Greenberg Traurig on December 11, 2015 Posted in Art Consignment, Art Loans, Fakes/Forgeries

Kevin Ray authored an article for the December 2015 issue of The Secured Lender which discusses art consignment fraud. Click here to read the full article.

Cassirer v. Thyssen-Bornemisza Collection Foundation: Application of Spanish Law of Adverse Possession Vests Title to Pissaro Painting in Spanish Museum, Not Original Owner’s Heirs

By Kevin P. Ray on July 9, 2015 Posted in Art Recovery, Stolen Art

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In 1926, Lilly Cassirer Neubauer inherited a painting by Camille Pissaro, Rue St. Honore, apres midi, effet de pluie (1897). As German Jews, Lilly and her husband were subjected to the discriminatory racial laws of the Third Reich. They fled Germany in 1939, but as a condition of their receiving exit visas to leave the country, Lilly was required to “sell” the painting to a Nazi art appraiser for payment of ca. $350, which was deposited in a blocked bank account to which Lilly was not given access.

After the war, the painting was purchased by a Los Angeles collector, then by a St. Louis collector, and, in 1976, by Baron Hans-Heinrich Thyssen-Bornemisza of Lugano, Switzerland (the Baron). The Baron displayed the painting there, as part of the Thyssen-Bornemisza Collection (the Collection). In 1988, the Baron and the Kingdom of Spain entered into an agreement for the Baron to loan the Collection to Spain. Spain established a private, non-profit foundation to “maintain, conserve, publicly exhibit, and promote artwork from the Collection,” of the Thyssen-Bornemisza Collection Foundation (the Foundation), and also restored the Villahermosa Palace in Madrid to house the Collection. Ultimately, in 1993, Spain purchased the Collection from the Foundation.

Lilly’s heirs discovered the painting at the Foundation in 2001, and petitioned Spain and the Foundation to return the painting. Spain’s Minister of Education, Culture and Sports denied that request. Subsequently, five members of the U.S. Congress wrote to the Minister, asking Spain and the Foundation to return the painting to Lilly’s heirs, which request was likewise refused.

New York Senate Passes Bill to Protect Art Authenticators

By Kevin P. Ray on June 29, 2015 Posted in Art Valuation, Authentication

After being subjected for years to ruinous litigation in suits brought by owners of artworks displeased with authentication opinions unfavorable to the owner’s preferred outcome, art authenticators – including artists authentication boards, authors of catalogues raissonne, and scholars – stopped giving authentication opinions. Even when they ultimately prevailed on the suits, the cost of the litigation was prohibitive. I have previously discussed the dilemma facing authenticators here.

In an attempt to provide art authenticators with some measure of protection, on June 15^th, the New York Senate approved a bill entitled “An act to amend the arts and cultural affairs law, in relation to opinions concerning authenticity, attribution and authorship of works of fine art,” S. 1229-A-2015 (the “Bill”). The Bill amends New York’s Art and Cultural Affairs Law to (i) add a definition of “Authenticator,” (ii) heighten the pleading standards for plaintiffs bringing actions against authenticators, (iii) preclude a prevailing plaintiff from receiving legal costs in suits against authenticators, and (iv) authorizes courts to grant prevailing authenticator legal costs, upon a finding of good and just cause.

The Restitution, Repatriation, and Return of Cultural Objects: House Passes Bill to Coordinate U.S. Cultural Property Protection

By Kevin P. Ray on June 26, 2015 Posted in Cultural Property Protection

This article is the third in a five-part series discussing the restitution, repatriation, and return of cultural objects. Each part addresses a different category of return. The first article in the series (available here) addressed the restitution of stolen cultural objects. The second article (available here, here, and here) discussed developments in the restitution of cultural objects taken during World War II. This article discusses the restitution of illicitly excavated and/or illicitly exported cultural objects, which is the subject of the Protect and Preserve International Cultural Property Act, which is discussed in this article. The remaining articles, which will appear in coming weeks discuss (1) the repatriation of tribal and indigenous cultural objects, and (2) the return of cultural objects removed during colonial occupation.

U.S. efforts at protecting and preserving international cultural property, which currently is spread across no fewer than seven federal agencies, may soon be better coordinated. On June 1^st, the U.S. House of Representatives passed the Protect and Preserve International Cultural Property Act (H.R. 1493 or the Act), which would establish a new position within the Department of State – the U.S. Coordinator for International Cultural Property Protection (the Coordinator). The House bill sponsors are: Rep. Eliot L. Engel (D-NY); Rep. Christopher H. Smith (R-NJ); Rep. Edward R. Royce (R-CA); Rep. William R. Keating (D-MA); Rep. Albio Sires (D-NJ); Rep. Ted Poet (R-TX); Rep. Brad Sherman (D-CA); Rep. David N. Cicilline (D-RI); and Rep. Juan Vargas (D-CA). Although no corresponding bill has yet been introduced in the Senate, a corresponding bill is anticipated. The Coordinator would work with federal agencies to coordinate and promote their activities – this would include diplomatic, military, and law enforcement activities. The Act would also create a Coordinating Committee on International Cultural Property Protection, which is to be chaired by the Coordinator, with the committee members comprised of representatives of the Department of State, the Department of Defense, the Department of Homeland Security, the Department of the Interior, the Department of Justice, the U.S. Agency for International Development, the Smithsonian Institution, and such other entities as the chair may deem appropriate.