Case Information
*1 FOR PUBLICATION
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT DAVID CASSIRER; THE ESTATE No. 19-55616 OF AVA CASSIRER; UNITED JEWISH FEDERATION OF SAN D.C. No. DIEGO COUNTY, a California non- 2:05-cv-03459- profit corporation, JFW-E
Plaintiffs-Appellants, ORDER v. CERTIFYING
QUESTION TO THYSSEN-BORNEMISZA THE CALIFORNIA COLLECTION FOUNDATION, SUPREME
Defendant-Appellee. COURT Appeal from the United States District Court for the Central District of California John F. Walter, District Judge, Presiding Argued and Submitted December 12, 2022 Pasadena, California Filed May 22, 2023 Before: Consuelo M. Callahan, Carlos T. Bea, and Sandra
S. Ikuta, Circuit Judges.
Order; Dissent by Judge Bea SUMMARY [*]
Certification of Question to State Supreme Court *2 In an action brought by the Cassirer family under the Foreign Sovereign Immunities Act, seeking the return of a Pissarro painting stolen by the Nazis and now in the possession of Thyssen-Bornemisza Collection Foundation (TBC), an entity created and controlled by the Kingdom of Spain, the panel certified to the California Supreme Court the following question concerning the third step in California’s governmental interest choice -of-law test:
Whether, under a comparative impairment analysis, California’s or Spain’s interest is more impaired if California’s rule that a person may not acquire title to a stolen item of personal property (because a thief cannot pass good title, and California has not adopted the doctrine of adverse possession for personal property), were subordinated to Spain’s rule that a person may obtain title to stolen property by adverse possession.
Applying the first step of California’s governmental interest test, the panel concluded that the issue in question was a question of personal property law: whether TBC or the Cassirers own the painting; and the relevant law of the two jurisdictions of Spain and California was different. Applying the second step of the test, the panel concluded that a true conflict existed between Spanish and California law, meaning that each jurisdiction had a *3 thorny and substantial, given that stolen property cases may involve two innocent claimants to a specific piece of valued property which must be awarded to one claimant or the other. Further, in the spirit of comity and federalism, the panel recognized that the California legislature has expressed a particular policy interest in stolen art.
Dissenting from the certification order, Judge Bea wrote that, in his view, application of California’s three -step choice-of-law test to the facts of this case was straightforward, and Spanish law applied. Judge Bea wrote that improper certification harms state courts, strains the comity between federal and state courts, harms federal courts by encouraging forum shopping bids, and harms litigants through delays.
COUNSEL
David Boies (argued), Boies Schiller Flexner LLP, Armonk, New York; Stephen N. Zack, Andrew S. Brenner, Rossana Baeza, Boies Schiller Flexner LLP, Miami, Florida; Scott E. Gant, Boies Schiller Flexner LLP, Washington, D.C.; David A. Barrett, Boies Schiller Flexner LLP, New York, New York; Laura W. Brill and Nicholas Daum, Kendall Brill & Kelly LLP, Los Angeles, California; Samuel J. Dubbin, Dubbin & Kravetz LLP, Coral Gables, Florida; Devin Freedman, Freedmand Normand Friedland LLP, Miami, Florida; for Plaintiffs-Appellants.
Thaddeus J. Stauber (argued), Sarah Erickson André, Aaron M. Brian, and Irene Scholl-Tatevosyan, Nixon Peabody LLP, Los Angeles, California, for Defendant-Appellee. Bernard M. Cremades Román and Patrick T. Byrne, B. Cremades & Asociados, Madrid, Spain, for Amici Curiae Comunidad Judía de Madrid and Federacíon de Comunidades Judías de España.
Amelia L.B. Sargent and Kirby Hsu, Willenken LLP, Los Angeles, California, for Amicus Curiae the Kingdom of Spain.
Catherine Z. Ysrael and Ben Conway, Deputy Attorneys General; Srividya Panchalam, Supervising Deputy Attorney General; Michael L. Newman, Senior Assistant Attorney General; Rob Bonta, Attorney General of California; Office of the California Attorney General; Los Angeles, California; for Amicus Curiae the States of California.
ORDER
We ask the California Supreme Court to resolve a
question of state law: how the comparative impairment
analysis, the third step in California’s choice-of-law test,
applies in a situation where, under the laws of California, a
person may not acquire title to a stolen item of personal
property (because a thief cannot pass good title, and
California has not adopted the doctrine of adverse possession
for personal property), while under the conflicting laws of
Spain, a person may acquire title to a stolen item of personal
property by means of adverse possession. This question
requires the application of the “choice of law considerations
most relevant to property cases.”
Cassirer v. Thyssen-
Bornemisza Collection Found.
,
While California has applied the comparative impairment analysis in many cases involving California residents who were physically injured by the conduct of out- of-state defendants, we have found no California precedent applying this analysis in a case involving the allocation of title to stolen personal property, and the factors identified in other choice-of-law cases are not readily applicable.
“We invoke the certification process only after careful
consideration and do not do so lightly.”
Kremen v. Cohen
,
Therefore, after considering these factors, we exercise our discretion to certify this question to the California Supreme Court. Pursuant to Rule 8.548 of the California Rules of Court, we provide the following information.
I
We first summarize the material facts and procedural
history.
[1]
At issue in this case is the ownership of Camille
Pissarro’s Rue Saint-Honoré in the Afternoon, Effect of Rain
(the Painting). Paul Cassirer, a member of a prominent
German Jewish family, purchased the Painting in 1900.
Cassirer V
,
Before entering into the acquisition agreement with the
Baron, the Spanish government investigated title to the
work.
Cassirer III
, 862 F.3d at 957. As part of the
acquisition agreement, the Baron represented to TBC that an
entity he controlled was the legal owner of the artworks in
*7
2010, we held en banc that TBC was not immune from suit
under the FSIA, and the lawsuit could go forward.
Id
. at
1022. Claude Cassirer passed away shortly after our en banc
ruling, and his heirs (the Cassirers) were substituted as
plaintiffs.
Cassirer V
,
On remand, the Cassirers moved for an order declaring
that the law of California, not the law of Spain, governed the
merits of their action. The district court recognized that
before making this determination, it first had to determine
whether it should apply California or federal common law
choice-of-law rules.
Cassirer v. Thyssen-Bornemisza
Collection Found
.,
On appeal, we agreed that federal choice-of-law rules applied, and declined to consider how California choice-of- law rules would apply to this case. Cassirer III , 862 F.3d at 961–62. Under the federal choice-of-law rules, we recognized that California and Spain “have chosen different rules for movable property.” Id. at 964. After resolving the conflict between California’s rule (that “thieves cannot pass good title to anyone,” id . at 960) and Spain’s rule (that title to chattels may pass through extended possession), we C ASSIRER V TBC decided that Spanish law applied. Id . at 963. Applying Spanish law, we considered whether TBC had fulfilled the requirements for ownership of the Painting set forth in Articles 1955 and 1956 of the Spanish Civil Code. Id . at 964. As we explained, Article 1955 provides that “[o]wnership of movable property prescribes by three years of uninterrupted possession in good faith,” while “[o]wnership of movable property also prescribes by six years of uninterrupted possession, without any other condition.” Id . at 965 (quoting Ministerio de Justicia, Spain Civil Code 220 (2009) (English translation)). But we determined that acquisitive prescription under Article 1955 is modified by Article 1956, which states: “Movable property purloined or stolen may not prescribe in the possession of those who purloined or stole it, or their accomplices or accessories [ encubridores ], until the crime or misdemeanor or its sentence, and the action to claim civil liability arising therefrom, should have become barred by the statute of limitations.” Id. at 966 (quoting Ministerio de Justicia, Spain Civil Code 220 (2009) (English translation)). This meant that, “as to any principals, accomplices, or accessories ( encubridores ) to a robbery or theft, Article 1956 extends the period of possession necessary to vest title to the time prescribed by Article 1955 plus the statute of limitations on the original crime and the action to claim civil liability.” Id. “An encubridor within the meaning of Article 1956 can include someone who, with knowledge that the goods had been stolen from the rightful owner, received stolen goods for his personal benefit.” Id. at 981. We concluded that “there is a genuine dispute of material fact whether TBC knew the Painting had been stolen when TBC acquired the Painting from the Baron,” and therefore there was a genuine issue of material fact as to whether TBC was *9 an encubridor , as that term was used in Article 1956. Id . If TBC were an encubridor , it would not have acquired title to the Painting through acquisitive prescription until 2019, and so the period for acquisitive prescription had not yet run when the Cassirers brought their action against TBC. Id. at 966. Therefore, we reversed the district court and remanded the action for further proceedings. Id . at 981.
On remand, the district court conducted an extensive
bench trial and concluded that TBC was not an
encubridor
because it did not have actual knowledge that the Painting
was stolen when it purchased the Painting from the Baron in
1993.
Cassirer v. Thyssen-Bornemisza Collection Found
.,
The Cassirers petitioned for certiorari on the question whether a federal court hearing state-law claims brought under the FSIA may apply federal common law to determine what substantive law governs the claims at issue. Cassirer V , 142 S. Ct. at 1507. The Supreme Court granted the petition, and held that the FSIA “requires the use of California’s choice-of-law rule—because that is the rule a court would use in comparable private litigation.” Id . at 1508–09. Because we had applied the federal common law rule, the Supreme Court vacated our judgment and remanded for application of California’s “standard rule.” Id . at 1508, 1510.
On remand from the Supreme Court, we must apply California’s choice-of-law rule to determine whether Spanish or California law applies to this action.
II
The California Supreme Court has indicated that the
governmental interest test is “the appropriate general
methodology for resolving choice-of-law questions” in
California.
McCann v. Foster Wheeler LLC
,
A
Applying the first step of this test, “the particular issue in question” is a question of personal property law: whether TBC or the Cassirers own the Painting, which was forcibly taken from the Cassirers by the Nazis, but which has been held in a Spanish museum by TBC since 1993 without actual knowledge that the Painting was stolen when purchased.
The relevant Spanish law is set forth in Article 1955 of
the Spanish Civil Code, which provides that ownership in
personal property vests after three years of uninterrupted
good faith possession of that property or six years of
uninterrupted possession, even absent good faith.
Cassirer
III
,
By contrast, “[u]nder California law, thieves cannot pass good title to anyone, including a good faith purchaser.” Id . at 960. The California Supreme Court has stated that:
the seller of ordinary property can transfer to the buyer no better title than he has himself, and that if such property has been lost by the true owner, or stolen from him, one who buys from the finder or from the thief, though he pays full value and buys in good faith, without notice, obtains no title as against the true owner.
Crocker Nat’l Bank of S.F. v. Byrne & McDonnell
, 178 Cal.
329, 332 (1918);
see also Suburban Motors, Inc. v. State
Farm Mut. Auto Ins. Co.
, 218 Cal. App. 3d 1354, 1359
*12
C ASSIRER V . TBC 15 prescription . . . should be applied to personal property,”
S.F.
Credit Clearing House v. Wells
,
As we previously determined, the rules adopted by Spain
and California on title to stolen property are in conflict.
See
Cassirer III
, 862 F.3d at 960.
We noted that,
notwithstanding a Spanish Civil Code provision indicating
that a person can claim stolen personal property from its
possessor, “the Spanish Civil Code must be read in its
entirety, including those articles which provide that title to
chattels may pass through qualified, extended possession,
such as Article 1955.”
Id
. at 961 n.8. Because the Spanish
rules, taken as a whole, conflicted with California’s rule, we
*13
conclusion. In
Cassirer V
, the Court recognized that “the
substantive law differed” when, in one jurisdiction, “the
plaintiff would recover the art, and in the other not.” 142 S.
Ct. at 1508. Faced with the question “whose property law
(Spain’s? California’s?) should govern the suit, and thus
determine the [P]ainting’s rightful owner,” the Court found
it necessary to identify and apply the correct choice-of-law
rule.
Id.
at 1507. And other courts have repeatedly applied
choice-of-law principles to resolve a conflict between a
jurisdiction that applies adverse possession principles to
chattels and a competing jurisdiction that adheres to the rule
that a
thief cannot pass good
title.
See, e.g.,
Kunstsammlungen Zu Weimar v. Elicofon
,
never been applied to adverse possession of personal property, Dissent 38, moving to a California court of appeal case indicating that the question whether the doctrine of adverse possession applies to personal property has not been settled, Dissent 39, 47 n.8, 49 (citing Soc’y of Cal. Pioneers , 43 Cal. App. 4th at 785 n.13), and then attempting to distinguish another California court of appeal case stating that “[s]tolen property remains stolen property, no matter how many years have transpired from the date of the theft.” Dissent 45–48 & 45 n.7, 47 n.8 (citing Naftzger , 42 Cal. App. 4th 421). The dissent’s attenuated analysis and argumentation only underscore that this is an undecided area of California law, and principles of comity and federalism render it more appropriate to ask the California Supreme Court to weigh in rather than for federal judges to engage in competing interpretations of state law. See L.A. All. For Survival v. City of Los Angeles , 22 Cal. 4th 352, 360–61 (2000) (stating that “the benefits of certification” include “allow[ing] federal courts to avoid mischaracterizing state law” and “strengthen[ing] the primacy of the state supreme *15 doctrine of reverse veil piercing was inconsistent with any other Kansas doctrine, whereas here there is a conflict between California and Spanish law regarding title to stolen property, and only the dissent asserts otherwise.
court in interpreting state law by giving it the first opportunity to conclusively decide an issue”).
For purposes of this order, we do not address the question whether California courts would apply the principles of adverse possession to personal property in some future case. Nor, contrary to the dissent, do we assert that “California law vests theft victims with eternal, supercharged title that trumps any and all future civil law claims to title.” Dissent 47. Rather, we simply follow the Supreme Court in noting that, under California law as it currently stands, “the plaintiff would recover the art” while under Spanish law, the plaintiff would not. Cassirer V , 142 S. Ct. at 1508. The Supreme Court recognized that this difference created a conflict that required the application of the correct choice-of-law rule. Id. at 1507. We therefore also recognize the conflict, and explain why we need the California Supreme Court’s help to resolve it.
B
The second question is whether a true conflict exists
between Spanish and California law. A true conflict exists
when each jurisdiction has “a legitimate interest in the
application of its law and policy.”
Hurtado v. Superior Ct.
,
We have previously recognized that both Spain and
California have an interest in upholding their basic policies
underlying property law. In
Cassirer III
, we explained that
“[t]he property laws of both Spain and California seek to
create certainty of title, discourage theft, and encourage
owners of stolen property to seek return of their property in
C ASSIRER V TBC a timely fashion,” and noted that, “[a]lthough these states
have chosen different rules for movable property, both sets
of rules further the basic polices underlying property law.”
The California Supreme Court has recognized “that a
jurisdiction ordinarily has the predominant interest in
regulating conduct that occurs within its borders,”
McCann
,
Spain has an interest in regulating conduct that occurs
within its borders, including applying its long-standing rule
governing acquisitive prescription of personal property,
which assures Spanish residents that their title to personal
property is protected after they have possessed the property
in good faith for a set period of time. The Kingdom of Spain
argues in an amicus brief that “[t]he hypothetical
enforcement of the laws of another state to determine the
validity of the title of ownership of a property purchased by
a Spanish person under a contract of sale entered in Spain,
on a property located in Spain, . . . would unduly infringe on
the interest of the Kingdom of Spain in legislating on the
ownership of property located in its territory.” In this case,
for instance, Spain relied on the principle of acquisitive
prescription in requiring a security pledge from the Baron
that extended only for the three-year acquisitive prescription
period set forth in Article 1955 of the Spanish Civil Code.
Cassirer IV
,
California also has a legitimate interest in the application
of its law and policy in this case. Generally, California
residents have an expectation that a bona fide purchaser for
value of movable property under a “chain of title traceable
to the thief,”
Suburban Motors
,
Because both Spain and California have legitimate interests in the application of their laws, we are faced with a true conflict.
“Because the applicable laws of [Spain] and California
differ and each state has an interest in having its law applied
under the circumstances of the present case, we are faced
*18
with a ‘true conflict,’” and therefore, “the so-called
‘comparative
impairment’ approach”
is applicable.
McCann
,
C ASSIRER V TBC the Conflict of Laws’s “specialized rule for a claim of
acquisition by adverse possession or prescription of an
interest in chattel,” which looked to the “local law of the
state where the chattel was at the time the transfer is claimed
to have taken place.”
Id.
(quoting Second Restatement §
246). Continuing this distinction between personal property
and tort law, we rejected the Cassirers’ objections to
application of Spain’s law of the situs rule because the cases
on which they relied were “cases in which courts have
abolished the law of the situs rule for
tort actions
,” as distinct
from the property dispute that was before us.
Id
. at 964
(emphasis in original). The Supreme Court subsequently
confirmed that this case involves “a property-law dispute.”
Cassirer V
,
While federal common law provided guidance on how
its choice-of-law rules should be applied to property cases in
Cassirer III
,
Our review of the comparative impairment cases in the tort context shows they do not provide the “choice of law considerations most relevant to property cases.” Cassirer III , 862 F.3d at 962. In evaluating which state’s interest *20 would be more impaired in this context, California courts have considered factors that are generally more applicable to allocating liability in tort cases as opposed to in property cases, including: (1) where the injurious conduct occurred; (2) who exposed themselves to risk in the foreign jurisdiction; (3) whether a law imposing liability for injury is antique or progressive; and (4) whether the conflicting interests of the jurisdictions in imposing liability can be accommodated.
The most important factor in the tort context is the situs where the tortious conduct and physical injury occurred. In most cases, both occur in the same location. In McCann , the California Supreme Court considered a choice-of-law issue raised by a lawsuit filed in California by a worker injured due to his exposure to asbestos-containing material in Oklahoma. 48 Cal. 4th at 74. Applying the comparative impairment analysis, the California Supreme Court determined that because the defendant’s conduct occurred in Oklahoma, and the plaintiff’s exposure to asbestos and injury occurred in Oklahoma, Oklahoma’s interest would be more impaired if its laws were not applied. Id . at 97. The California Supreme Court reached this conclusion even though the plaintiff “was a California resident when he was first diagnosed with an asbestos-related disease and when he incurred medical expenses in this state as a result of the disease.” Id . at 101.
In the rare cases where the tortious conduct occurred outside of California, but the physical injury to the California resident occurred in California, California courts have looked to the law of the place where the injury occurred. For instance, when a California resident was injured on a California highway by a driver who had become drunk while drinking at a Nevada tavern, the California Supreme Court determined that California law, which imposed civil liability on tavern keepers, was applicable. Bernhard v. Harrah’s Club , 16 Cal. 3d 313, 319–20, 322–23 (1976). Although “each of the states involved ha[d] a legitimate but conflicting interest in applying its own law in respect to the civil liability of tavern keepers,” the California Supreme Court held that California’s interest—“to prevent tavern keepers from selling alcoholic beverages to obviously intoxicated persons who are likely to act in California”—would be more impaired if its policy were subordinated to Nevada’s. Id. at 320, 322.
California courts also consider whether an injured party
*21
took the risk of exposure to another jurisdiction’s rules. In a
case involving a California resident who was injured in
Alabama, a California court of appeal held that Alabama’s
law applied, because “Alabama’s interest in allocating
liability and deterring negligent driving within its borders
would be more impaired by the application of California’s
permissive user statute than would California’s interests if
Alabama law is applied.”
Castro
,
In considering which jurisdiction’s interest in imposing liability for tortious conduct is more impaired by the application of the other jurisdiction’s laws, California courts also evaluate whether a law imposing liability for injury is archaic and rarely enforced. For example, in Offshore Rental Co. v. Cont’l Oil Co. , a California statute gave an employer a cause of action for negligent injury to a “key” employee. 22 Cal. 3d 157, 160 (1978). A California employer relied on that statute to sue a Louisiana company for negligently injuring its employee on the defendant’s premises in Louisiana. Id . In addition to noting that the location of the employee’s injury was in Louisiana, the California Supreme Court also considered that California’s interests would not be significantly impaired, because the California statute at issue was “antique.” Id . at 166. Offshore Rental then explained that an antique statute “may be infrequently enforced or interpreted even within its own jurisdiction, and, as an anachronism in that sense, should have a limited application in a conflicts case.” Id. Applying this principle, the California Supreme Court stated that “California has itself exhibited little concern in applying [the law at issue] to the employer-employee relationship: despite the provisions of the antique statute, no California court has heretofore squarely held that California law provides an action for harm to business employees, and no California court has recently considered the issue at all.” Id. at 167. Accordingly, Offshore Rental concluded that a law that is “archaic and isolated . . . may not unreasonably have to yield to []a more prevalent and progressive law.” Id. at 165.
Finally, the California Supreme Court has made efforts to accommodate the conflicting interests of the jurisdictions in protecting their respective residents from liability for a *22 personal injury. For instance, in Kearney , California plaintiffs brought suit against a Georgia-based company that secretly recorded their telephone calls. 39 Cal. 4th at 99. The plaintiffs alleged that the recording caused an injury by violating their rights under a California privacy statute. Id . at 106–08. The California Supreme Court, conducting a comparative impairment analysis, stated that the failure to apply California law would impair California’s interest more severely, because it would not affect any Georgia privacy interest, and Georgia companies could readily comply with California requirements. Id . at 126–28. Nevertheless, in order “to maximize each affected state’s interest to the extent feasible in the present context,” the California Supreme Court decided “to restrain the application of California law with regard to the imposition of liability for acts that have occurred in the past, in order to accommodate Georgia’s interest in protecting persons who acted in Georgia in reasonable reliance on Georgia law from being subjected to liability on the basis of such action.” Id. at 128. Therefore, the California plaintiff could seek only “injunctive relief to require [the Georgia company] to comply with California law in the future,” while Georgia law would apply with respect to the Georgia company’s “potential monetary liability for its past conduct.” Id . at 130.
The comparative impairment factors considered in these
cases involving physical injuries to California residents are
not readily applicable to cases involving disputes over who
holds title to stolen property. First, the primary factors in
California’s comparative impairment analysis in tort cases
involving an injured plaintiff—the situs where the tortious
conduct occurred and the situs where the physical injury
occurred—provide little guidance in a case like this one. If
TBC is entitled to “a claim of acquisition by adverse
possession or prescription of an interest in chattel,”
Cassirer
III
,
C ASSIRER V TBC regarding whether the parties exposed themselves to the
risks of the foreign jurisdiction, which make sense in a
physical injury case, are not applicable here: the Cassirers
did not expose themselves to the risk of having stolen
property in Spain, and Spain did not expose itself to the risk
that a person victimized by the theft of that property would
reside in California.
Cf. McCann
,
And even though the question whether the law at issue is
antique or progressive may be applicable in the property
context, this factor is not helpful here. The Cassirers argue
that Spain’s acquisitive prescription statute should yield to
Section 338(c)(3)(A), which was enacted in 2010 and was
specifically aimed at assisting in the recovery of art stolen
by the Nazis. But the California law relevant to the
comparative
impairment analysis
is not Section
338(c)(3)(A), which merely extends the time in which a
victim of theft can bring a lawsuit, but rather the rule that
thieves cannot pass good title, and that even an innocent
purchaser who acquired a chattel under a “chain of title
traceable to the thief” does not have title to that property.
Suburban Motors
,
Finally, there is no obvious way to accommodate the conflicting interests of the jurisdictions in this context, because California’s interest in protecting its residents whose property was stolen is irreconcilable with Spain’s interest in protecting its residents who acquire title to property via acquisitive prescription. For instance, the decision to apply California’s law prospectively only, the choice-of-law solution adopted by the California Supreme Court in Kearney , 39 Cal. 4th at 130, is not viable here: regardless which law applies, one party with an ownership interest in property will be deprived of that interest, under any scenario.
D
In short, the existing California caselaw applying the comparative impairment analysis to tortious, and typically physical, injuries does not provide guidance in the context of property law, where it is necessary to determine which jurisdiction’s interests will be more impaired when the issue is one of allocating title to stolen personal property. [10] *25 accommodate the interests of both jurisdictions.
Although California has codified a choice-of-law
provision relating to personal property,
see
Cal. Civ. Code
§ 946, this likewise sheds no light on the dispute before us. Section 946 of the California Civil Code states that, “[i]f
disputes, but have not addressed the comparative impairment analysis.
See, e.g., CRS Recovery
, 600 F.3d at 1142–43 (concluding, in case
involving an action for theft and conversion of internet domain names,
that there was no conflict between California and Virginia law as to
whether domain names are intangible property subject to conversion
claims);
Love v. Associated Newspapers, Ltd.
,
III
In light of the foregoing discussion, and because the answer to this question “could determine the outcome of a matter pending in [this] court,” Cal. R. Ct. 8.548(a), we respectfully certify to the California Supreme Court the following question:
Whether, under a comparative impairment analysis, California’s or Spain’s interest is more impaired if California’s rule that a person may not acquire title to a stolen item of personal property (because a thief cannot pass good title, and California has not adopted the doctrine of adverse possession for personal property), were subordinated to *26 Spain’s rule that a person may obtain title to stolen property by adverse possession.
We do not intend our framing of this question to restrict
the California Supreme Court’s consideration of any issues
that it determines are relevant. If the California Supreme
Court decides to consider the certified question, it may in its
discretion reformulate the question.
Broad v. Mannesmann
Anlagenbau AG
,
We are perplexed by the dissent’s repeated accusations
that certifying a question to the California Supreme Court is
“improper,” Dissent 52, 63, would “deplete our reservoir of
comity,” Dissent 64, and encourage forum shopping.
Dissent 65. We recognize, as we must, that the United States
Supreme Court has directed us to apply California’s choice-
of-law rule, and has stated that doing so might “lead to the
application of California property law.”
Cassirer V
, 142 S.
Ct. at 1509. We are thus bound to apply California’s choice-
of-law rule, and for the reasons explained above, we are
uncertain as to what rule of decision that application would
produce in this context. Under such circumstances,
considerations of comity and federalism compel us not to
substitute our judgment for that of the state’s highest court
on an unsettled issue of state law, but rather to “seek
guidance from the California Supreme Court, which remains
the primary expositor of California law.”
Allied Premier Ins.
v. United Fin. Cas. Co.
,
If the California Supreme Court accepts review of the certified question, we designate Appellants David Cassirer, the Estate of Ava Cassirer, and the United Jewish Federation of San Diego County as the petitioners pursuant to California Rule of Court 8.548(b)(1).
The clerk of our court is hereby ordered to transmit forthwith to the California Supreme Court, under official seal of the United States Court of Appeals for the Ninth Circuit, a copy of this order and all relevant briefs and excerpts of record, along with a certificate of service on the parties. Cal. R. Ct. 8.548(c), (d).
Further proceedings in our court are stayed pending the California Supreme Court’s decision on whether it will accept review, and if so, receipt of the answer to the certified question. This case is withdrawn from submission until further order from this court. The Clerk is directed to administratively close this docket, pending further order.
The panel will resume control and jurisdiction on the certified question upon receiving an answer to the certified question or upon the California Supreme Court’s decision to decline to answer the certified question. Within 14 days after the California Supreme Court decides whether or not to accept the certified question, each party shall file a report informing this court of the decision. If the California Supreme Court accepts the certified question, each party shall file a status report every six months after the date of the acceptance, or more frequently if circumstances warrant.
It is so ORDERED . BEA, Circuit Judge, dissenting:
In 1939, the Nazis stole the Rue St. Honoré, après midi, effet de pluie (“Painting”) from the Cassirer family. Through a series of transactions, the Painting wound up in the possession of Baron Hans Heinrich Thyssen-Bornemisza (“Baron”). The Baron, in turn, sold the Painting to the Thyssen-Bornemisza Collection Foundation (“TBC”) in 1993. TBC publicly displayed the Painting in its museum in Madrid, Spain, where it remains today. The Cassirers learned of the Painting’s location in 2000, filed an unsuccessful petition for its return in Spain in 2001, and filed the instant suit against TBC in the United States District Court for the Central District of California in 2005.
Twelve years later, consistent with our Circuit’s
precedent, we applied federal choice of law principles to
conclude that Spanish property law governs this dispute.
Cassirer v. Thyssen-Bornemisza Collection Found.
(Cassirer III)
, 862 F.3d 951 (9th Cir. 2017). After we
remanded for a bench trial, the district court found that the
Baron did not possess the Painting in good faith and thus did
not
pass
title to TBC.
Cassirer v. Thyssen-Bornemisza
Collection Found
., No. CV-05-3459,
Recently, the Supreme Court remanded this case for us
to apply California, rather than Federal, choice of law
principles.
Cassirer v. Thyssen-Bornemisza Collection
Foundation (Cassirer V)
, 142 S. Ct. 1502 (2022).
California’s choice of law test, sometimes called the
“governmental interest analysis,” proceeds in three steps.
Kearney v. Salomon Smith Barney, Inc.
,
First, the court determines whether the relevant law of each of the potentially affected jurisdictions with regard to the particular issue in question is the same or *29 different. Second, if there is a difference, the court examines each jurisdiction’s interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists. Third, if the court finds that there is a true conflict, it carefully evaluates and compares the nature and strength of the interest of each C ASSIRER V . TBC possession in good faith. Ownership of movable property also prescribes by six years of uninterrupted possession, without any other condition.” Id. (citation omitted). As we previously held in Cassirer III and Cassirer IV , application of Article 1955 to the facts found by the district court clearly results in TBC being vested with title to the Painting.
But whether California law would produce a similar result has been an open question for the past century. Adopted in 1872, the California Civil Code provides five means by which title to real or personal property may be acquired: (1) occupancy; (2) accession; (3) transfer; (4) will; and (5) succession. Cal. Civ. Code § 1000. The word “occupancy” is a term of art that means “by prescription.” See Hansen v. Sandridge Partners, L.P. , 232 Cal. Rptr. 3d 247, 255–56 (2018) (“When title is acquired by occupancy, it is called title by ‘prescription.’” (citing Cal. Civ. Code, § 1007)). The word “occupancy” is not limited to the “occupancy” of real property; it also refers to possession of personal property. See 51 Cal. Jur. 3d Property § 32 (explaining that title to personal property, as in “property, generally, may be acquired by occupancy, accession, transfer, will, or succession.”). This is important because California Civil Code § 1007 provides: “Occupancy for the period prescribed by the Code of Civil Procedure as sufficient to bar any action for the recovery of the property confers a title thereto , denominated a title by prescription, which is sufficient against all . . . .” (emphasis added).
By their plain terms, these provisions “would seem to
establish the right to acquire title to personal property by
adverse possession . . .” 13 C. Witkin, Summary of
California Law, Personal Property § 133 (11th ed. 2022). But
beginning in 1925, California cases began to “cast some
doubt upon this conclusion.”
Id.
In
San Francisco Credit
*31
Clearing House v. Wells (Wells)
, the California Supreme
Court was asked to determine whether section 1007 applies
to personal property.
Where one jurisdiction (Spain) has taken a clear stance
on the applicability of a doctrine—here, acquisition of
prescriptive
title
to personal property by adverse
possession—but the other has not (California), there is a
“false conflict.”
See Blizzard Energy, Inc. v. Schaefers
, 286
Cal. Rptr. 3d 658 (Cal. Ct. App. 2021),
rev. denied
(Feb. 16,
2022). False conflicts are easy to resolve. “When one of two
states related to a case has a legitimate interest in the
application of its law and policy and the other has none, there
is no real problem; clearly the law of the interested state
should be applied.”
Hurtado v. Superior Ct.,
For instance, in
Blizzard Energy
, a judgment was entered
against Bernd Schaefers in his individual capacity in a
Kansas court.
So too here. Spain expressly recognizes that adverse
possession creates and vests title to personal property under
Article 1955,
Cassirer III
,
California law” that supposedly requires us “to ask the California Supreme Court to weigh in . .” Order at 18. The careful reader will notice that the majority tries to get it both ways: California law regarding adverse possession of personal property is clear when the majority is defining the scope of the conflict (so that the majority can reach a true conflict under the governmental interest test), but that same area of California law is suddenly “undecided” when the majority is pressed on its reasoning (so that the majority can further justify its certification order). The majority cannot have it both ways. Either California does or does not have a clearly stated policy interest regarding the creation of prescriptive title to personal property through adverse possession.
The majority sub silentio concludes that it does. Contrary to the majority’s acknowledgment that this an “undecided area of California law,” Order at 18, and contrary to its self- proclaimed reticence to “substitute [its] independent judgment for that of the state’s highest court,” Order at 33, the majority takes upon itself to resolve this century-old question on California’s behalf. It argues that the doctrine of adverse possession is fundamentally inconsistent with California’s rule that thieves “obtain[] no title as against the true owner,” Order at 13 (citation omitted), which I shall call the “no-title-passes-through-theft rule.” That won’t work.
The no-title-passes-through-theft rule simply means that
“good title cannot pass from a thief,”
Suburban Motors, Inc.
*34
C ASSIRER V . TBC
v. State Farm Mut. Auto. Ins. Co.
,
Indeed, Spain has a similar rule to California’s “no-title-
passes-through theft” rule. Spain allows “any person who
has lost movable property or has been deprived of it illegally
[to] claim it from its possessor.”
Cassirer III
,
Moreover, under either Spanish or California law, the
fact that thieves cannot
pass
title says nothing about whether
new
prescriptive title can be
created by operation of law
through
the mechanism of adverse possession.
Notwithstanding Spain’s rule precluding thieves from
passing title, we held that TBC’s satisfaction of the elements
listed in Article 1955 could create new prescriptive title in a
mere possessor by operation of Spanish law.
Cassirer III
,
The fact that stolen property retains its character as stolen property for the purpose of criminal prosecutions says nothing about whether title to that property, for the purposes of civil actions, may be created and vested by it being adversely possessed. Naftzger stated just that: The court noted the incongruence between California’s ability to prosecute criminal acts regarding stolen property and the victim’s ability to recover that property in civil actions. Id. at 792. It expressly declined to resolve that incongruence, noting that there were “numerous troubling questions inherent in the possible myriad circumstances surrounding the recovery of stolen property,” including the question whether “a thief’s void title [is] placed beyond the reach of the owner’s civil lawsuit” in situations where the owner fails timely to sue but where the possessor remains subject to criminal penalties. Id. Clearly, then, Naftzger does not support the majority’s theory that California law vests theft victims with eternal, supercharged title that trumps any and all future civil law claims to title, such as that created and vested by operation of law through adverse possession.
In addition to being unsupported by caselaw, the majority’s theory is simply illogical. To illustrate why that is so, consider two hypotheticals.
*38 48 C ASSIRER V . TBC First, what happens when a victim fails to file an action to recover the personal property or damages for its conversion within the period allowed by the statute of limitations? Naftzger itself suggests an answer. It cites with approval New York law, which “acknowledges that the effect of the expiration of the statute of limitations is to vest title in the possessor.” 42 Cal. Rptr. 2d at 792 (citation omitted). How can one read Naftzger as stating that victims are vested with eternal, supercharged title, exempt from title passing through prescription, when Naftzger itself states that title is vested in the possessor upon expiration of the statute of limitations?
Second, consider eminent domain. Assume that a chattel is stolen and resold. Then, a California governmental entity exercises its eminent domain powers to take ownership of the chattel from the purchaser. Certainly, the theft-victim might obtain some form of equitable restitution from the purchaser. But would he still have title to the chattel notwithstanding the sovereign’s exercise of eminent domain? The majority would be forced to answer “yes” because its theory is that California’s no-title-passes- through-theft rule precludes title from ever vesting in anyone else under any circumstances after an act of theft. Order at 5, 22 n.8, 32. That is a rather novel and bizarre theory of property rights, and it finds no support in California precedent. Certainly, the majority cites none.
Because the majority’s assumption about the extent of the no-title-passes-through-theft rule is illogical and *39 is that Spain recognizes the creation and vesting of title to personal property through adverse possession, but California might not.
B.
With the majority’s error on the first step of the
governmental interest analysis revealed, the rest of its
analysis falls apart. Obviously, California cannot have a
legitimate interest in applying its absence of law regarding
adverse possession of personal property.
See Blizzard
Energy
,
*40
could provide a defense on the merits.
Id.
at 965. In 2020, the Cassirers
asked us to revisit these conclusions. We declined, explaining that
Cassirer III
was the “law of the case and binding precedent that we must
follow.”
Cassirer IV
,
Because HEAR does not conflict with Article 1955, neither can
section 338(c)(3). The Cassirers concede that section 338(c)(3) simply
“parallel[s]” HEAR. Dkt. No. 87 at 8
.
Contrary to the majority’s
suggestion, then, section 338(c)(3) cannot be considered conflicting law
as a matter of binding precedent and the law of the case doctrine. The
California Supreme Court will be similarly bound by these principles.
When a case ends up in California state court after a federal appellate
ruling has been issued, California courts recognize that the federal ruling
is binding under the law of the case doctrine.
See Adams v. Pac. Bell
Directory
,
Spain has a legitimate interest in applying its “
absence
of a law” that
mirrors the dicta in
Naftzger
.
See
Order at 22 n.8 (citing 49 Cal. Rptr. 2d
at 791). But Spain’s interest is clearly in applying Article 1955 to the
Painting, not its alleged “
absence
of” a criminal statute of limitations for
concealing, withholding, or reselling stolen property. Moreover, Spain
does
have a criminal statute of limitations for property theft.
See Cassirer
III
,
We thus should not reach the comparative impairment analysis of the third step. By certifying a question that requires that analysis, the majority asks the California Supreme Court a question that is purely hypothetical, for it is based on a false premise: that California has an expressed interest in precluding the acquisition of prescriptive title to chattels through possession. But even were a true conflict somehow to exist, the majority’s certification order would still be improper.
decision that TBC is not an
encubridor
(an accessory after the fact),
Cassirer IV
,
Cassirer V demand the conclusion that a true conflict exists. Order at 15– 16, 16 n.5.
In Cassirer III , we did not decide whether there was a true conflict under California choice of law principles. We merely concluded that there was a conflict under Second Restatement principles . See 862 F.3d at 960–64. That simply means that the laws of California and Spain are different , which I do not dispute. Spain has a system of prescriptive ownership of personal property, but California lacks any decisional law on the subject. That’s a difference , but not a conflict . See Blizzard Energy, 286 Cal. Rptr at 677 .
In
Cassirer V
, the Supreme Court concluded that the choice-of-law
principles of the forum state must be applied in suits brought under the
Foreign Sovereign Immunities Act, in part because of 28 U.S.C. § 1606,
which states that “the foreign state shall be liable in the same manner and
to the same extent as a private individual under like circumstances . . .”
*42
Consider two suits seeking recovery of a painting— one suit against a foreign-state-controlled museum (as here), the other against a private museum. If the choice-of-law rules in the two suits differed, so might the substantive law in fact chosen. And if the substantive law differed, so might the suits’ outcomes. In one case, say, the plaintiff would recover the art, and in the other not . Contrary to Section 1606, the two museums would not be “liable in the same manner and to the same extent.”
Id. (emphasis added) (quoting 28 U.S.C. § 1606).
The majority quotes one third of the sentence emphasized above to
argue that the Supreme Court has already held that “under California law
as it currently stands, ‘the plaintiff would recover the art’ while under
Spanish law, the plaintiff would not.” Order at 16, 19 (quoting
Cassirer
V
,
C.
Even were the majority correct that this case presented a true conflict, it would have an obligation at least to attempt to apply the comparative impairment analysis. Cf. Erie R.R. Co. v. Tompkins , 304 U.S. 64 (1938). Alas, the majority avoids that obligation because it worries that there is a distinction between “issues raised by tort law and those raised by property law,” Order at 23–24, pointing out that we *43 Supreme Court has already recognized there is a true conflict of laws in this case.
Also puzzling to me is the majority’s decision to bolster its argument
with citations to cases “appl[ying] choice-of-law principles” in this
situation. Order at 16–17. That is what I am doing. The majority
apparently fails to understand that,
under California’s choice of law
principles,
a mere difference in law does not create a true conflict.
See,
e.g.
,
Reich
,
Finally, the majority is wrong to suggest that we must consider the
interests of Spain and California in applying their bodies of law, “taken
as a whole . . .” Order at 15–16. Even if we previously concluded,
applying Federal choice of law considerations, that the Second
Restatement test required such a “taken as a whole” approach in
Cassirer
III
, California’s test expressly says otherwise. Again, California choice
of law principles require us to examine “the
relevant law
of each of the
potentially affected jurisdictions with regard to the
particular
issue in
question,” and to “examine[] each jurisdiction’s interest in the
application of its own law
under the circumstances of the particular case
to determine whether a true conflict exists.”
Kearney
,
placed importance on that distinction in Cassirer III , 862 F.3d at 963.
But we drew that distinction only because the Second Restatement provides different rules for physical injury cases and personal property cases. Id. at 962–63 (“[T]he commentary to § 222 clarifies that in contrast to torts, protection of the justified expectations of the parties is of considerable importance in the field of property.” (cleaned up)). Specifically, we put near-determinative weight on the Second Restatement’s “specialized rule for a claim of acquisition by adverse possession or prescription of an interest in chattel.” Id. at 963. Clearly, the precise nature of the claim is critical to a Second Restatement choice of law analysis.
*44
Unlike the Second Restatement, however, California
applies its general three-step governmental interest test to all
cases unless specifically displaced by statute.
McCann
, 225
P.3d at 526–27. Neither party argues that a statue applies
here. Thus, there is no question that California would apply
its “generally applicable choice-of-law principles” to this
personal property dispute.
Id.
The majority’s quibble is that
the California Supreme Court has not yet applied those
[13]
The majority suggests that Section 946 of the California Civil Code
does not apply, even though the parties failed to address this issue in their
briefing. Order at 31–32. On that much, at least, we can agree. That
statute reads: “If there is no law to the contrary, in the place where
personal property is situated, it is deemed to follow the person of its
owner, and is governed by the law of his domicile.” Cal. Civ. Code §
946. Because the Painting is situated in Spain, and because Spain rejects
“the law of the domicile” rule,
Cassirer III
,
56 . principles to the precise facts of this case. That is not a proper basis for certification. [14]
True, California’s comparative impairment analysis
might be difficult to apply as a general matter. That is true
for all applications of that test.
See Arno v. Club Med Inc.
,
Here, current California Supreme Court precedent sufficiently illuminates a path for our analysis, allowing us to predict the correct answer. It explains that we must “carefully evaluate[] and compare[] the nature and strength of the interest of each jurisdiction in the application of its own law to determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state, and then ultimately applies the law of the state whose interest would be the more impaired if its law were not applied.” Kearney , 137 P.2d at 922 (cleaned up). In particular, the California Supreme Court has articulated two considerations that provide substantial guidance here.
1.
First, we must determine whether application of one law
results in the “maximum attainment of underlying purpose
by all governmental entities.”
Offshore Rental v. Continental
Oil
,
Applying Article 1955, California would still have
attained its interest in providing a friendly forum in
California to litigate this dispute. As explained
supra
note
10, we previously held that the Cassirers’ claims were
subject to, and timely made under, the statute of limitations
in HEAR.
Cassirer III
,
Also consider California’s no-title-passes-through-theft
rule. Again, this rule does not conflict with Article 1955.
See
supra
pages 9–16. But even were it relevant here, whatever
interest California has in applying that rule has been
protected. Nobody was allowed to claim passage of title
through a thief. Moreover, Spanish law makes it more
difficult for title to vest in an “
encubridor
,” which means one
who covers over, “an accessory after the fact,”
see
Oxford
Spanish Dictionary 323 (3d ed. 2003), or as we have
previously explained, someone who “knowingly receives
and benefits from stolen property.”
Cassirer III
, 862 F.3d at
968. If the possessor is proven to be an
encubridor
, Spanish
law extends the period of time in which the property need be
possessed before new prescriptive title is created.
Id.
But
after “an extensive bench trial,” Order at 11, the district court
concluded that TBC was
not
an
encubridor
because it did
not have actual knowledge that the Painting was stolen.
Cassirer
,
*47 majority strives to avoid is that declining to apply Article 1955 would result solely in the protection of California’s interests, even though California’s factual connection to the Painting is indisputably more attenuated than is Spain’s. Applying Article 1955 reflects the maximum attainment of purpose of both California and Spain. And it is disappointing that the majority does not attempt this analysis.
2.
Second, California precedent requires us to examine the
reliance interests the parties could have placed on the laws
of the respective jurisdictions, starting from the premise that
a jurisdiction has the “predominant interest in regulating
conduct that occurs within its borders.”
McCann
, 225 P.3d
at 534;
see also Offshore Rental
,
In Reich , the court noted that “Missouri is concerned with conduct within her borders and as to such conduct she has the predominant interest of the states involved.” 432 P.2d at 730. But Reich went on to explain that Missouri’s interest was diminished under the facts of that case because the law to be applied was merely a damages limitation that did nothing to change the way people “behave” within Missouri’s borders. Id. at 731.
In Offshore Rental , the court noted that Louisiana had a “vital interest in promoting freedom of investment and enterprise [w]ithin Louisiana’s borders, among investors incorporated both in Louisiana and elsewhere.” 583 P.2d at 728 (holding that Louisiana law governed a negligence action by a California corporation against a Louisiana corporation, alleging loss caused by injury to plaintiff’s employee, a loss that is cognizable under California law but not under Louisiana law). Offshore Rental considered whether that interest could “easily be satisfied by some means other than enforcement of the statute itself”—such as by purchasing insurance. Id. at 726. But it explained that the Louisiana defendant reasonably relied on the law of its own jurisdiction to conclude that insurance was unnecessary; instead, the court placed the insurance obligation on the California plaintiff who made deliberate contacts with Louisiana. Id.
In McCann , the court echoed Offshore Rentals ’ emphasis on the importance of a state law that creates incentives for businesses to operate in its borders. 225 P.3d *48 at 530–34. It further echoed Reich ’s admonition that a C ASSIRER V TBC jurisdiction has the “predominant interest in regulating conduct that occurs within its borders.” Id. at 534.
Here, neither the majority nor the parties claim that either the Cassirers or TBC relied on California’s absence of precedent regarding whether adverse possession can create and vest prescriptive title to personal property. Prior to its purchase of the Painting, TBC did not learn that the Painting had ever passed through California and thus was not on notice as to the potential application of California law to the Painting. Order at 28–29; see also Cassirer , 2019 WL 13240413, at *7–10.
Conversely, the majority concedes, as it must, that TBC
relied on Spanish law. TBC specifically relied on Article
1955 by requiring the Baron to provide a three-year
prenda
for certain paintings. Order at 8, 20.
Prenda
means “security,
surety,” or “pledge” in Spanish. Oxford Spanish Dictionary
661 (3d ed. 2003). The $10 million
prenda
operated as a
security device for the Baron’s performance under the terms
of his agreement with TBC.
Cassirer
,
reasonably “have anticipated a need for” a pledge or insurance coverage extending beyond a three-year period. Offshore Rental , 583 P.2d at 729. Thus, only Spanish law has been relied upon here.
D.
In sum, even assuming the existence of a true conflict in
*50
step two of the conflict of laws analysis, the comparative
impairment analysis in step three clearly favors the choice of
Spanish law. Spain “has the predominant interest in
regulating conduct that occurs within its borders.”
McCann
,
III.
The above analysis is clearly mapped out by decades of
California Supreme Court precedent. There is nothing novel
about this case that obfuscates this result. Yet the majority
does not attempt to apply this analysis; instead, it ignores the
relevance of California caselaw and then complains that that
*51
courts. Comity must play a special role in our decision to
certify because certification is intended to denote “respect
for the place of the States in our federal system.”
Arizonans
for Off. Eng. v. Arizona
, 520 U.S. 43, 75 (1997);
see also
Lehman Bros. v. Schein
, 416 U.S. 386, 393–94 (1974)
[19]
See Town of Castle Rock, Colo. v. Gonzales
,
[20] The majority claims to be “perplexed” by these observations. Order at 33. I doubt it. The majority would likely agree that it is improper to ask the California Supreme Court what is its favorite color. The question certified by the majority is equally hypothetical.
(Rehnquist, J., concurring). In this context, comity must be drawn upon with care because certification goes only one way. See Jason A. Cantone & Carly Giffin, Certified Questions of State Law: An Empirical Examination of Use in Three U.S. Courts of Appeals, 53 U. Tol. L. Rev. 1, 20 (2021). While federal courts may burden state courts with questions of state law, no comparable process exists for state courts similarly to burden federal courts. And “burden” is the right word. When we certify non-determinative, non- novel questions like the majority does today, we deplete our reservoir of comity by wasting the California Supreme Court’s time and resources. That is contrary to the entire purpose of certification.
The California Supreme Court is not the only victim of
today’s order. Ill-considered certification harms federal
courts as well because it encourages forum shopping bids.
See
Rebecca A. Cochran,
Federal Court Certification of
Questions of State Law to State Courts: A Theoretical and
Empirical Study
, 29 J. Legislation 157, 204–07 (2013);
Metz
,
66 C ASSIRER V TBC surprise that the Cassirers’ counsel candidly told us, as
earlier noted: “We want you to certify because we are pretty
confident [about] what the California Supreme Court is
going to do.” Oral Arg. at 20:10. Allowing this forum-
shopping undermines our legitimacy and hinders the
administration of justice.
Cf. Org. for Advancement of
Minorities with Disabilities v. Brick Oven Rest
., 406 F. Supp.
2d 1120, 1131 (S.D. Cal. 2005) (“[D]iscouraging forum-
shopping is a legitimate goal for the federal courts.”). Other
circuits take this factor into account when considering
whether to certify.
See Metz
,
Finally, improper certification harms litigants through delays. On average, roughly 500 days elapse between certification from our court and a corresponding decision from the state court. The impact of such a delay is palpable *53 in this case. If this case were a person, it would be almost old enough to vote. This delay is needless. The answer is obvious; California choice-of-law principles require application of Spanish law.
I respectfully dissent from the majority’s order. more likely to certify a question than the Third or Sixth Circuit.” Id. at 6, 44.
These data suggest that we have grown increasingly reliant on certification, and they further suggest that we are outpacing other Circuits in doing so. Our overreliance on certification creates unnecessary delay in what is already the one of the slowest circuit courts in the country. See U.S. Court of Appeals, Judicial Caseload Profile, Ninth Circuit (2022), available at https://www.uscourts.gov/sites/default /files/fcms_na_appprofile0630.2022_0.pdf (last visited May 15, 2023) (providing the median times that elapse between an appellant’s filing of a notice of appeal and the disposition of the appeal). These data caution us to revisit our certification practices. Currently, four circuits have formal rules regarding certification. Ripple & Gallagher, supra at 1932 n.35. Our Circuit is not one of them. Perhaps it is time for us to promulgate a formal rule that cabins the excesses of panel-by-panel discretion.
Notes
[*] This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. legitimate interest in the application of its law and policy. The third step of the test required application of the law of the jurisdiction whose interest would be the more impaired if its law were not applied. The panel concluded that it needed the California Supreme Court’s guidance on how to apply the third step because the existing California caselaw applying the comparative impairment analysis to tortious, and typically physical, injuries did not provide guidance in the context of property law, where it was necessary to determine which jurisdiction’s interests would be more impaired when the issue was one of allocating title to stolen property. The panel wrote that, in deciding to exercise its discretion to invoke the certification process, it considered that the case raised important, unresolved public policy ramifications of broad application regarding the ownership of stolen property, and that the issues were particularly
[1] The facts are more fully set forth in four Ninth Circuit opinions,
Cassirer v. Kingdom of Spain
,
[2] After the Painting was confiscated, it was sold at a Nazi government auction in Dusseldorf and then sold again at a second auction in Berlin. Id. at 956. In 1951, a Beverly Hills art gallery arranged to move the Painting to California. Id . From there, it was sold first to a California art collector, and
[2] Although Lilly Cassirer later accepted a settlement agreement, we
previously concluded that as a matter of German law, she “did not waive
her right to physical restitution of the Painting” by doing so.
Cassirer
III
,
[3] Article 1956 of the Spanish Civil Code, which extends the period for
acquisitive prescription, is not applicable here.
See supra
8–9
(1990) (reaffirming and applying “the common law rule that
good title cannot pass from a thief”). In light of this
principle, California law “imposes a continuing affirmative
duty to restore stolen property to its rightful owner,” and
dictates that “[s]tolen property remains stolen property, no
matter how many years have transpired from the date of the
theft.”
Naftzger v. Am. Numismatic Soc’y
, 42 Cal. App. 4th
421, 432 (1996),
as modified on denial of reh’g
(Mar. 4,
1996);
People v. Hernandez
, 172 Cal. App. 4th 715, 722
(2009) (stating that because “a thief cannot pass title to
stolen property[,] . . . the true owner can reclaim the property
from whoever has possession”). This common law rule is
consistent with the California Commercial Code (the version
of the Uniform Commercial Code enacted in California),
which states that a purchaser can acquire only the “title
which his transferor had or had power to transfer,” and a
thief lacks any transferable title.
Suburban Motors
, 218 Cal.
App. 3d at 1359 (citing Cal. Com. Code § 2403(1));
see also
CRS Recovery, Inc. v. Laxton
,
[4] Although California allows adverse possession of real property, Dissent
43–44 & 44 n.5, n.6, those laws are not relevant here, because real
property is fundamentally different from personal property,
see Real Est.
Analytics, LLC v. Vallas
, 160 Cal. App. 4th 463, 476 (2008), and the
considerations underlying the adverse possession of land are generally
inapplicable to chattels,
see O’Keeffe v. Snyder
,
[5] The Supreme Court subsequently confirmed our
[5] The dissent’s argument that there is only a “false conflict” between the laws of California and Spain regarding the ownership of stolen property, Dissent 39–40, 52 n.12, is therefore contrary to the law of the case. law” to achieve “the resolution of an ownership dispute in the Drawing”) (emphasis omitted).
[6]
Because Spanish law expressly recognizes “that title to
chattels may pass through qualified, extended possession,”
Cassirer III
,
[7] In making this argument, the dissent also relies on
Blizzard Energy, Inc.
v. Schaefers
, which held that there was no conflict between California
and Kansas law where California applied the doctrine of “reverse veil
piercing” (
i.e
., allowing a plaintiff injured by an individual to sue the
individual’s alter ego corporate entity) and Kansas had not addressed that
doctrine. Dissent 39–41 & 40 n.2, 41 n.3 (citing
[8] Because California adheres to the rule that one who acquires personal
property under a “chain of title traceable to [a] thief” does not take good
title to that property,
Suburban Motors
,
[9] California “asserted its strong interest in seeking justice for art theft victims,” while the Kingdom of Spain has also expressed a germane policy “interest . . . in legislating on the ownership of property located in its territory.”
[10] Our decisions applying California law are likewise silent on this issue. We have applied California’s governmental interest test to property Neither the parties nor we have found any California Supreme Court or state court of appeal case applying the governmental interest test to disputes involving the ownership of stolen personal property or the application of adverse possession law to determine ownership. There is no controlling precedent explaining how a court should determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state regarding the ownership of stolen property. The factors previously considered by California courts provide insufficient guidance in determining whether California’s interest in protecting the right of California residents to obtain the return of property that has been stolen, or Spain’s interest in protecting the expectations of its residents that they obtain title by adverse possession after sufficient time has passed, would be more impaired by the application of the other jurisdiction’s law. Nor is there any obvious way to
[1] TBC repeatedly concedes that “Spain does not have an interest in
protecting receivers of stolen property” in its briefing. Dkt. No. 88 at 2,
10. jurisdiction in the application of its own law
to determine which state's interest would be
more impaired if its policy were subordinated
to the policy of the other state, and then
ultimately applies the law of the state whose
interest would be the more impaired if its law
were not applied.
Id.
(emphasis added) (cleaned up). Rather than apply this analysis itself, the majority asks
the California Supreme Court to do so. I must respectfully
dissent from the majority’s certification order because, in my
view, application of this legal test to the facts of this case is
straightforward. I first explain why that is so and then turn
to the majority’s errors in reaching a contrary conclusion.
I.
We must analyze only the “relevant law” of each
jurisdiction “under the circumstances of the particular case
to determine whether a true conflict exists.”
Kearney
, 137
P.3d at 922
.
Here, we have already affirmed the district
court’s finding that TBC did not obtain title to the Painting
through its 1993 purchase from the Baron. Our task is
therefore quite simple: We must apply the governmental
interest analysis to determine whether the laws of Spain or
California regarding the creation and vesting of prescriptive
title through adverse possession of personal property govern
this dispute. Spanish law regarding acquisition of title through
adverse possession of personal property is easy to discern.
See Cassirer III
,
[2] Unlike the traditional veil-piercing doctrine (which allows a plaintiff to
recover from an
individual
owner of a defendant
legal entity
), the
“outside reverse veil piercing” doctrine allows a plaintiff to recover from
a
legal entity
of which an
individual
defendant is an insider.
Blizzard
Energy
,
[3] II. The majority makes a number of unfounded and puzzling assumptions to evade this commonsense conclusion. A. On step one, the majority obfuscates what or which California “law” it believes conflicts with Article 1955. It begins by claiming that California has clear law in this area: “[U]nder the laws of California, a person may not acquire title to a stolen item of personal property . .” Order at 5 (emphasis added). Yet when confronted with California’s noncommittal caselaw as to prescriptive acquisition of title to chattels through adverse possession,
[4] The majority justifies its assumptions about California law by citing policy concerns articulated in a New Jersey case and in law review articles. Order at 15 n.4. But the weighing of various policy concerns regarding property rights is the province of the California Legislature and California state courts, not a federal court.
[5] See, e.g. , City & Cnty. of San Francisco v. Fulde , 37 Cal. 349, 352 (1869) (“[A]dverse possession is the means by which the former title is extinguished, and a new one created.”); Marriage v. Keener , 31 Cal. Rptr. 2d 511, 514 (Cal. Ct. App. 1994) (“Fee simple title vests in the adverse possessor by operation of law at the moment the requisite conditions for adverse possession have been established for the statutory period.” (emphasis added) (citation omitted).
[6] More specifically, California recognizes adverse possession “under
either color of title or claim of right.”
Dimmick v. Dimmick
, 374 P.2d
824, 826 (Cal. 1962) (In Bank). “There is no good faith requirement for
adverse possession based on a claim of right.”
Aguayo v. Amaro
, 153
Cal. Rptr. 3d 52, 59 (Cal. Ct. App. 2013). Under claim of right theory,
occupancy can be satisfied through “deliberate trespass,”
id.
which
means that a “usurper” can create and vest prescriptive title in himself
“by bow and spear without color of title.”
Kimball v. Lohmas
, 31 Cal.
154, 159 (1866). “The title conferred by occupancy is not factually
inconsistent with the crime of trespass” because “an adverse possessor is
merely a trespasser, i.e., a person who enters on the land of another with
the specific intent of injuring, interfering with or obstructing that other
person’s property rights.”
People v. Lapchesk
,
[7] In
Naftzger
, a thief stole coins from a museum sometime before 1970,
swapping them with fakes.
[8] Even if
Naftzger
could be read for such a creative proposition, the
majority omits the fact that another panel expressly disagreed with
Naftzger
’s analysis.
See Baker
,
[9]
See City of Oakland v. Oakland Raiders
,
[10] The majority is correct to find section 338(c)(3) irrelevant. This statute
does not conflict with Article 1955 as a matter of the law of the case and
binding precedent. The Cassirers urged us to consider section 338(c)(3)
. and the Holocaust Expropriated Art Recovery Act (“HEAR”),
see
Pub.
L. 114–308, 130 Stat. 1524, as relevant California law that we must
compare to Article 1955. Section 338(c)(3)(A) creates an exception for
California’s general three-year statute of limitations for commencement
of actions seeking recovery of personal property. Cal. Civ. Proc. Code §
338(c)(3). It applies a six-year statute of limitations for actions seeking
recovery of works of fine art against museums, galleries, auctioneers,
and dealers.
Id.
at § 338(c)(3)(A), rather than the general three-year
period which applies to other possessors of chattels. HEAR states
something similar. Subject to some nuances not relevant here, it provides
that, “[n]otwithstanding . . . any defense at law relating to the passage of
time,” claimants may commence an action to recover Nazi-looted art
within six years of actual discovery of the location of the art. Pub. L.
114–308, 130 Stat. 1524. In 2017, we held that HEAR and Article 1955 do not conflict.
“HEAR addresses
when
a suit may be commenced and creates a statute
of limitations. . However, TBC’s Article 1955 defense is a defense
on
the merits
: that TBC has acquired title to the Painting based on Spain’s
property laws.”
Cassirer III
,
[14] The majority contends that this case is also distinguishable from prior
California Supreme Court cases because most of those cases involved
situations where “the
tortious conduct and physical
injury
occurred . . in the same location.” Order at 25. But this situation is far
from unique and has repeatedly been addressed in California Supreme
Court cases.
See, e.g.
,
Kearney
,
[15] This is precisely the spoken hope of the Cassirers here. Their counsel told us: “We want you to certify because we are pretty confident [about] what the California Supreme Court is going to do.” Oral Arg. at 20:10.
[16] Again, the majority agrees that § 338(c)(3) is irrelevant. Order at 29. The majority balks at this conclusion, claiming that
“there is no obvious way to accommodate the conflicting
interests of the jurisdictions in this context[] because
California’s interest in protecting its residents whose
property was stolen is irreconcilable with Spain’s interest in
protecting its residents who acquire title to property via
acquisitive prescription.” Order at 30. Notably, the majority
cites no California law that protects California residents’
“property [that] was stolen” under
the particular
circumstances of this case. As already explained, for
purposes of its choice-of-law rules, California cannot assert
some free-floating hypothetical interest in generally
protecting its residents’ property against theft. That interest
must be tied to the application of some
actual law
that
conflicts with Spanish
law under
these
particular
circumstances.
Bernhard
,
[17] In McCann , plaintiff California resident sued defendant corporation (organized in Delaware, located in New York), alleging exposure to . asbestos that occurred in Oklahoma. 225 P.3d at 520. The exposure occurred when plaintiff was an Oklahoma resident, but he developed symptoms only after moving to California. Id. Oklahoma’s statute of repose would have barred plaintiff’s suit, but California’s statute would not. Id. at 527–29. McCann found a “true conflict.” Id. at 533. Oklahoma was interested in applying its statute of repose in favor of the non- Oklahoma defendant for two reasons: First, it had “a legitimate interest in attracting out-of-state companies to do business within its state, both to obtain tax and other revenue . . and to advance the opportunity of state residents to obtain employment and the products and services offered by out-of-state companies.” Id. at 530. In support, McCann relied on Offshore Rental ’s observation that a state has a legitimate interest in attracting “investors incorporated both [in-state] and elsewhere.” Id. (cleaned up). But California also had a legitimate interest because it had a specific statute extending the time to bring suit for “an action for injury or illness based upon exposure to asbestos.” Id. McCann clarified “that California has a legitimate interest in having a statutory provision that affords a remedy for or a benefit to an injured person or business applied when, as here, the injured person or business is a California business or resident, even when the injury-producing conduct occurs outside California.” Id. To resolve the conflict, McCann leaned heavily on the premise that, although California no longer applied the law of the place of the wrong, “California choice-of-law cases nonetheless continue to recognize that a jurisdiction ordinarily has ‘the predominant interest’ in regulating conduct that occurs within its borders . . and in being able to assure individuals and commercial entities operating within its territory that applicable limitations on liability set forth in the jurisdictions law will be available.” Id. at 534. Although it concluded that plaintiff did not engage in “forum shopping,” McCann found crucial that, if defendant were subjected to liability, Oklahoma’s interest would be subordinated to that of California’s “solely” because “plaintiff happened to move to a jurisdiction whose law provides more favorable treatment” “ after defendant engaged in the allegedly tortious conduct in Oklahoma.” Id. And even though California would be unable to “extend its liberal statute of limitations” to this case, its interest was less significantly impaired because California takes “a restrained view of the scope or reach of
[18] The majority correctly rejects the Cassirers’ argument that Article
1955 is more “antique” than California law. Order at 29. This argument
is simply a subjective attack on the social worthiness of Spain’s policy,
which attacks are not considered by California Courts in the comparative
impairment analysis.
Kearny
,
[19] to certification imposes significant costs to state courts, federal courts, and litigants.
[20] Improper certification harms state courts for obvious reasons. Even if the California Supreme Court declines the certified question (which it should), it will do so only after investing precious judicial resources into evaluating the majority’s request. Imagine the hours the California Supreme Court (and its staff) will spend familiarizing itself with the facts of this case in particular. The Cassirers filed their complaint almost two decades ago. In that time, there have been numerous important district court rulings, four Ninth Circuit decisions and one Supreme Court opinion. The excerpts of record for this appeal alone are over 2000 pages long. And all that effort will be for naught. The certified question clearly does not merit review. The majority’s unnecessary certification order strains the comity that we strive to maintain with our colleagues in state
[21] Although the Cassirers did receive a favorable decision in Cassirer III , where we held that their claims were timely under HEAR. 862 F.3d at
[22] Between 1998 and 2002, an average of 602 days elapsed between
certification orders from our Circuit the corresponding state-court
decisions.
Kremen
,