Gerda Dorothea Deweerth v. Edith Marks Baldinger, Defendant-Third-Party-Plaintiff-Appellant, Wildenstein & Co., Inc., Third-Party-Defendant-Appellant

it, requisite finding, makes the and answers affirmatively,

the first it is then DeWEERTH, Dorothea Gerda obliged to award the defendant standard Plaintiff-Appellee, responsibil- acceptance two-level credit for juncture, ity. place At that the court should justice pose obstruction of to one side and BALDINGER, Edith Marks Defendant- question, inquiring

the second whether the Third-Party-Plaintiff-Appellant, qualifies defendant for an additional one-level reduction based the timeliness his ac- words, ceptance responsibility.10 In other Co., Inc., Wildenstein & Third- inquiry once the initial has been resolved in Party-Defendant-Appellant. favor, explicit defendant’s with or 83,127, 93-7144, Nos. Docket 93-7146. implicit finding his ease “extraordi- nary,” inquiry relevant that remains Appeals, United States “(1) timely

is whether the defendant either: Second Circuit. provid[ed] complete gov- information to the concerning ernment his own involvement in Argued Nov. 1993. (2) offense; timely or authori- notified] plea guilty, ties of his intention to enter a May Decided 1994. thereby permitting government to avoid preparing permitting for trial and the court Opinion Amended Filed After Petition efficiently.” allocate its resources Rehearing for Oct. 3El.l(b). § U.S.S.G.

Here, the court in effect conflated these course, inquiries. following

two And, moreover,

court erred. its error re-

quires appellant be resentenced. After

all, findings the court made no whatever 3El.l(b)

concerning the section criteria.

Furthermore, suggest the record does not excluding appellant

obvious basis for from (b). Consequently,

the benefits of subsection appellant’s

we must vacate sentence to allow opportunity

the district court a fresh to con-

sider, light opinion, of our appel- whether is, not,

lant or is entitled to the additional 3El.l(b).

one-level reduction under section

IV. CONCLUSION go

We need no further. For the reasons herein,

discussed appellant’s we affirm con-

viction, but vacate his sentence and remand resentencing.

It is so ordered. course, particular 10. Of in some cases during act of obstructive conduct can be considered may directly upon obstruction bear the criteria stage inquiry. second Given the absence 3El.l(b). specified example, in section For ob- case, however, findings dn this we take no view might structive conduct render information fur- (if all) possibility might toas how at affect government incomplete, nished to the even in an proceedings on remand. situation, "extraordinary” case. In such a Becker,

Joseph Becker, D. Glynn, Me- (John Muffly, City lamed & New York R. Horan, Horan, counsel), Fox & plain- for tiff-appellee. Paul, Fagen, Weiss, Rifkind,

Leslie Gordon Garrison, Wharton & City, New York for defendant-third-party-plaintiff-appellant. Jeremy Epstein, G. Sterling, Shearman & City, New York third-party-defendant- for appellant. WALKER,

Before: ALTIMARI and Judges, OWEN, Circuit Judge.* District WALKER, Judge: Circuit appeal This episode is the latest in a dec- ade-long dispute over ownership of an oil painting “Champs entitled de Blé á Yétheuil” Claude Monet. The work the celebrat- ed Impressionist French previously was by plaintiff owned Gerda Dorothea DeW- eerth, a German citizen. It was discovered missing family from DeWeerth’s castle after ^[*] Honorable Richard Judge for the Southern District of New Owen, United States District York, sitting by designation. it from a art dealer. acquired Swiss subsequently pur & Co. II, War World purchased paint- Baldinger subsequently Baldinger, Marks Edith by defendant chased undisputed resident, ing from Wildenstein third-party-defen from York a New good art a New York faith. & dant Wildenstein & Co. Baldinger and Wildenstein gallery. discovered that Bal- “defendants”) ap (referred collectively as dinger possession of the Monet in the United judgment entered from a peal Baldinger re- its return. When demanded Dis the Southern District Court States fused, a di- promptly commenced Broderick, (Vincent L. of New York trict Baldinger in versity to recover it. action pur motion granted DeWeerth’s Judge) that against brought third-party action turn 60(b) from for relief to Fed.R.Civ.P. suant subsequently & Co. which was Wildenstein in favor of defen judgment entered final the 42(b). In pursuant to Fed.R.Civ.P. severed in with our decision in accordance dants trial, 1987, Judge Broder- after a bench April (2d Baldinger, 836 F.2d 103 v. DeWeerth a had ick found that DeWeerth established 1056, denied, Cir.1987), 108 486 U.S. cert. and superior right possession to of the Monet (1988), 2823, en 924 and 100 L.Ed.2d S.Ct. F.Supp. 688 ruling in her favor. 658 issued plaintiffs favor. in judgment a new tered (S.D.N.Y.1987). specifical- court The district court that the district contend Defendants Baldinger’s principal defenses ly rejected two considering DeWeerth’s from precluded was court and laches. The district of limitations principles and jurisdictional both motion three-year statute of limi- the concluded that case; that the of the law the doctrine the action, see N.Y.Civ. applicable tations to order its discretion in court district abused 214(3) 1990), (McKinney § did Prae.L. R.& 60(b)(5) (6); to Rule and ing pursuant relief Baldinger begin to run until refused not wrongly court the district entered and that painting. demand for the DeWeerth’s on the based judgment in favor of DeWeerth laches, Baldinger’s the assertion answer not that her claim was conclusions erroneous had district determined that court pos right that her and barred laches pursuit in of the reasonably diligent been superior to Bal- painting was session Baldinger had not 1945 and Monet after that the court dinger’s. district We conclude delay by any in the demand prejudiced been considering not barred DeWeerth’s from district court painting’s return. The for the motion, in it abused its but that discretion painting Baldinger to deliver ordered judgment final based ordering relief from the DeWeerth. 60(b). on Rule 1987, panel of this another In December BACKGROUND judgment court’s the district court reversed fully explicated were The facts of case limitations law that New York ground on the opin- initial DeWeerth in the district court’s in diligence showing of reasonable required a (S.D.N.Y.1987), only ion, and 658 688 property and that DeWeerth locating stolen provided of them will be a brief recitation showing. 836 make such a had failed to here. (2d Cir.1987). unnecessary We found argu- Baldinger’s alternative pur- to consider that her father DeWeerth claims laches guilty ments that DeWeerth gallery in from a Berlin chased the Monet prove superior failed to that she had painting after inherited the and that she 5, 1988, we denied February title. On in 1922. She had her father’s death when, rehearing, and on petition for a DeWeerth’s possession until 1943 painting in her 19, directing 1988, February our mandate to her sister’s castle she transferred it DeWeerth be in favor of during judgment safekeeping Germany for southern court. On in the was filed district reversed sister II. discovered World War DeWeerth’s 1988, 13, Supreme denied 1945, missing in after June painting was that the of certiorari. petition for writ had DeWeerth’s soldiers who departure American 2823, L.Ed.2d The Monet her home. quartered in been time at which Wildenstein resurfaced 2, 1991, May brought proceeding On a mo- mandate before in the district prior tion before us to recall the mandate and court. The Court reasoned that the district light judge flouting vacate the of Solomon R. existing would not be man- Lubell, by acting Foundation v. date appel- on the motion since the only late decision related N.Y.2d N.Y.S.2d 569 N.E.2d “to the record and (1991), court, issues then decision the New York Court before the [did] purport Appeals possible that held that York to deal "with New later events.” applicable statute of limitations to this action U.S. S.Ct. at 32. require showing did of reasonable dili- Defendants counter that our decision in gence locating property. stolen We de- Metco, (2d Inc., Corp. Eutectic 597 F.2d 32 opinion May nied the motion without Cir.1979) curiam), (per propo established the appellant argues sition that “where an appellate mistake, only made a 27, 1991, September On DeWeerth moved appellate jurisdiction court has to correct pursuant the district court for relief that mistake.” Br. (6) Defs. at 17-18. This Fed.R.Civ.P. on the same holding statement mischaracterizes the ground forth in set her motion to recall the Eutectic, which decided that a district By mandate. Memorandum Order dated Oc- jurisdiction court does not have 16, 1992, to alter an Judge granted tober Broderick appellate ruling appellate where the court again DeWeerth’s motion and once ordered already rejected has considered and the basis Baldinger to surrender the Monet to 60(b) for the movant’s Rule motion. (S.D.N.Y.1992). Eutectic DeWeerth. 804 did not discuss the rule established in Judgment 2, 1993, Stan February on was entered dard that a may Oil district court consider a appeal and this followed. 60(b) Rule motion when “later events” arise previously that were not considered the DISCUSSION appellate Despite court. Eutectic’s silence I. Was the Distnct Court Precluded from Oil, regarding Standard our court subse 60(b) Considering DeWeerth’s Rule quently recognized authority the of Standard Motion? inOil Fine v. Underwriters Insur Bellefonte (2d Cir.), denied, ance 758 F.2d 50 cert. argue Defendants that the district court 474 U.S. 106 S.Ct. 88 L.Ed.2d 70 jurisdiction lacked to act DeWeerth’s (1985). There, upheld 60(b) we the district court’s and, furthermore, Rule motion any that 60(b) refusal to consider a Rule motion since ruling in precluded DeWeerth’s favor was a Standard Oil situation pre had not been the Second Circuit’s denial of DeWeerth’s sented. We stated: motion for recall of reject its mandate. We previous ruling Our both contentions. was the law of the case, judge and the district correctly found jurisdiction A. it had no Jurisdiction to review an appellate court’s Judge decision. Sweet Defendants contend that the district correctly noted that appellants the cite no improperly considered DeWeerth’s change material of newly circumstances or 60(b) Rule motion because the Second bring discovered evidence so as to the Circuit could alter or set aside its mandate. aegis matter under the of Standard Oil Co. taking jurisdiction over post- DeWeerth’s v. United States. judgment application, prop the district court (citations omitted); Id. at 52 see also Seese v. erly relied on Standard Oil Co. v. United A.G., (3d Volkswagenwerk, 679 F.2d States, 50 L.Ed.2d Cir.1982) curiam) (Rule 60(b) (per movant (1976) curiam). (per case, In that the did not fit within Standard because Oil basis Supreme party Court made that a .clear wish already for its motion was considered the 60(b) ing pursue a Rule reopen motion to Court). appeals court of Supreme and the case that appeal had been reviewed on was required to obtain leave of appellate the Based on DeWeerth’s assertion that court or a appellate withdrawal of the Guggenheim court’s the decision constitutes Guggenheim arguments regarding the not con- deci- in circumstances” was “change contrary, court, On the sion on the merits. appellate we conclude by the sidered panel court inferred that the denied district that, post-Guggenheim refusal our unless procedural binding for the con- DeWeerth’s motion reason mandate constitutes recall the requested claim, granting the relief was unnec- district plaintiff’s sideration essary light Oil’s authoriza- motion Standard jurisdiction to review her court had 60(b). move in the first instance Part- tion to See LSLJ under Rule for relief 60(b) Inc., Rule where circum- court under Frito-Lay, 920 F.2d district nership v. Cir.1990) (district changed. (7th stances have jurisdiction court has 60(b) alleged based upon motion to hear Rule argument that she Given DeWeerth’s arising appellate court in law after change seeking from the based relief effect, mandate). any, if now turn to the We arising change in circumstances from refusal recall post-Guggenheim of our decision, she was re mandate. quired to move for a recall of the court pursue appeals’ in order to a Rule mandate Law the Case B. The 60(b) court, motion in the district ap- argue that still Eutectic Defendants easily recall motion could as denial her the basis plies in this case because ground on this as on the have been based 60(b) presented motion DeWeerth’s Thus, the recall denial cannot be merits. course of rejected by this court to and presumed serve as a substantive decision ar- motion. Defendants’ recall DeWeerth’s barring seeking further relief in her from that this court’s denial gument presumes Indeed, presumption such a district court. as a should be construed motion recall Supreme in would contravene Court’s of ev- rejection on the merits comprehensive court, trial Oil that the struction Standard “ of the support ery presented argument appeals, in a opposed the court of ‘is as to true presumption holds motion. While this pass upon the issues to position much better petitions for re- arguments presented for pursuant to presented in a motion Rule ” 53, Fine, 758 F.2d at defendants hearing, see 60(b).’ 19, (quot 97 S.Ct. at 32 429 U.S. any author- brought to our attention have not 165, Corp., 405 F.2d ing v. Sunbeam Wilkin presumption same where ity applies the (10th Cir.1968)). applica Post-judgment 166 presented in a argument judgment ground for a modify a tions to appellate court’s mandate. to recall an motion 60(b) frequently are by better covered Rule opposed to the circuit made in the district any authority of In the absence alleged true even where court. This is turn to the well-established point, this we exclusively legal, is change of circumstances of law of the the doctrine principle reopen an action under a decision to since that have decid “applies to issues been case 60(b) necessarily require fact-inten Rule will implica by necessary expressly or ed either particular in a equities weighing sive Dep’t City York Social tion.” Doe v. New of case, in the first undertaken a task best (2d Cir.) (internal 782, Servs., 788 709 courts. by district instance denied, 864, omitted), U.S. quotation cert. 464 circumstances, the these-procedural 195, (1983); see Given L.Ed.2d 171 78 S.Ct. properly determined that Processes, district court S.A. v. Serv. also Cities Panama 60(b) had Cir.1986) (“While motion (2d Rule 991, it basis for DeWeerth’s 789 F.2d by nec- explicitly or either disposed not been decided of that issues considered is true court, it by and that essary implication this appeal cannot there appellate court on application on the court, free to rule may was therefore district altered after be Thus, court in fit. the district implicitly as it saw explicitly matters not or consider omitted). consider DeWeerth’s decided.”) (citations jurisdiction to ease had In the ab judgment and from the motion for relief by the circuit of reasons sence a statement it based on granting not barred from recall of DeWeerth’s panel for the denial her motion recall previous denial of court’s motion, that the court determined the district reject our mandate. necessarily DeWeerth’s panel did II. Did District Court Abuse its Dis- statute limitations does not start Granting purchaser

cretion in DeWeerth’s Rule run until a bona refuses an fide 60(b) Motion? owner’s demand for return of a stolen art object, and that the Second Circuit should granted district not have modified imposing this rule motion for relief from the final DeWeerth’s duty diligence. of reasonable 77 N.Y.2d at 60(b)(6) and, judgment under Rule alterna 318, 623, 567 N.Y.S.2d 569 N.E.2d 426. It 60(b)(5). tively, A under Rule “district reasoned that the Second Circuit’s decision grant court’s or denial of relief under Rule long-standing policy contravened New York’s 60(b), law, may in an error unless rooted favoring purchasers owners over bona fide only for be reversed abuse discretion.” so that New York would not become a haven Columbia, Twelve John Does v. District of 319, 623, for stolen art. Id. at 567 N.Y.S.2d (D.C.Cir.1988); 841 F.2d see also 569 N.E.2d 426. (2d LeFevre, Matarese v. 801 F.2d Cir.1986), denied, cert. Appeals’ U.S. Based on the New York Court of opinion, S.Ct. L.Ed.2d the district court determined that prevailed DeWeerth would have in this case A. The Rule Determination originally brought had she her suit in the New York state courts. It then held that 60(b) provides that the district court Tompkins, Erie Railroad v.Co. may party party’s legal repre- reheve a or a (1938), 82 L.Ed. 1188 and its order, judgment, a final sentative from or progeny plaintiff entitled to a modification of proceeding in five enumerated circumstances the final in this case to avoid this and, according subpart, “any the.sixth inconsistency. It determined that the coun- justifying opera- other reason relief from the tervailing parties interest of both the and the 60(b)(6). judgment.” tion of the Fed.R.Civ.P. finality litigation courts in the was out- (6) subpart “properly We have held that weighed by prevent working the need “to extraordinary invoked where there are cir- hardship of an extreme and undue judgment may cumstances or where the plaintiff, accomplish justice substantial hardship.” work an extreme and undue Ma- appropriate regard to act with princi- for the tarese, (internal quotations 801 F.2d at 106 ples of federalism which underlie our dual omitted). and citations judicial system.” at 550. Judge Broderick Gug- determined that the decision, genheim import and its carefully for this have We considered the case, “extraordinary constituted an analyzed by circum- circumstances the district court 60(b)(6). justifying stance” relief under they Rule and conclude that do not warrant relief DeWeerth, 60(b)(6). Guggenheim Like involved a suit under Rule acknowledging While allegedly the object owner of an stolen art Judge engaged that Broderick in scholarly a against subsequent good the purchaser thorough issues, faith discussion of the we for return of the stolen item. In inappropriately the first think that his decision dis DeWeerth, appeal in we held that New York’s turbed a final in a ease that had applicable required statute of limitations fully litigated the been long and was since closed. previous view, owner to demonstrate that In simply she had our Erie does not stand for acted diligence attempting with reasonable in proposition plaintiff the that a is entitled to object, to locate reopen the stolen and that absent a federal court case that has been showing, such a timely years the owner’s otherwise gain closed for several in order to the suit would be newly-announced barred. 836 F.2d at 108. In benefit of a decision of a Guggenheim, Ap- the New York Court of holding state court. The limited of Erie is peals rule, applied contrary a sitting diversity but that federal courts are expressly conception also that any stated of bound to follow state law on matter of years New York law that “governed by we reached three substantive law not the Feder wrong. earlier DeWeerth was In Congress.” a unani- al Constitution or Acts of 304 decision, 78, mous Appeals However, the Court of that held U.S. at 58 S.Ct. at 822. clearly New York had a established rule that fact that federal courts must follow state law mean how the state courts would decide the issue. diversity ease does not deciding a when Co., subsequent change in the law of Harvester a v. International that Stafford (2d Cir.1981). under provide grounds 142, 148 relief will comprehen state The 60(b)(6). Equip. Brown v. Clark See opinion by Judge sive now Chief Jon O. (“mere (D.Me.1982) Co., F.R.D. accordingly surveyed Newman in DeWeerth constitute change in law does not decisional York caselaw and determined that a New ” under Rule ‘extraordinary circumstance’ upon York court called to New decide 60(b)(6), “[p]laintiffs elected especially where likely impose require a issue would be forum, thereby proceed the federal diligence. ment of due The decision was op voluntarily depriving themselves of part plaintiff’s argu on the fact that based attempt persuade [state portunity to incongruity ment would create an in the Inc., court]”); F.R.D. Equifax, Atwell purchasers treatment of bona fide (D.Md.1980) (change in the state York, three-year thieves. New stat court appellate which decisional law running against ute of limitations starts warrant held “insufficient to based decision thieves once the owner discovers that the art principle reopening judgment”). a final This stolen, object plaintiffs has been while under where the applies in federal eases Su also theory, running against it would not start changed applicable rule preme has good purchaser faith until he refused Drilling Marine law. See Picco v. Global request object. owner’s to return the art (5th Cir.1990); Travel 900 F.2d The court determined DeWeerth that this Sarkisian, 794 F.2d ers Indem. Co. v. policy inherent in rule conflicted with cer denied, (2d Cir.), cert. protecting tain York cases of bona New fide L.Ed.2d 253 S.Ct. objects purchasers of from stale claims stolen argues case is that this by alleged owners. 836 F.2d at 108-09. did distinguishable the state court because incongruity, policy New York’s Based on law,” “change in the but not announce a settings, discouraging stale claims in other York law is—and rather clarified that New fact that in most other states the and the always contrary to what the federal was— begins good run period limitations when agree that held it to be. While we acquires property purchaser faith stolen “change in the Guggenheim did not involve diligence part thereby prompting due on the adopted a rule in the sense that law” owner, previous that we determined existed, previously we different from one diligence adopt courts a due New York would agree stated do attempting to requirement for locate owners panel question decided the DeWeerth property. stolen long New York. had been settled only that New Guggenheim court stated panel’s It out that the DeWeerth turned rule was well York’s demand and refusal However, by bringing wrong. prediction was established; it did not state that the suit, exposed herself to the diligence requirement of whether a due argue would possibility that her adversaries clearly should added to this rule was be change applicable in rules of law. for a the fact, In York case settled. no earlier New in By filing her state law claim a federal had addressed this issue. The earlier forum, any open question of she knew that panel question noted that this DeWeerth by a federal as state law would be decided one; open although it could have certified an opposed to a New York state court. Ap the to the New York Court Guggenheim subsequent of the deci- outcome since peals, it chose to decide the issue itself integrity of the impugn not the sion does with not think the issue would “recur it did or the fairness of DeWeerth decision frequency use of the sufficient to warrant DeWeerth. The process that was accorded at 108 n. procedure.” 836 F.2d certification if be no different in this case would result in court had filed her claim state DeWeerth the action to Baldinger had removed confronted with an unsettled When diversity very nature of law, court. The sitting in federal a federal court issue of state possibility that a jurisdiction open the predict leaves diversity must make its best effort to (2d Cir.1994). likely disagree It is thus subsequently with state court will interpretation prior panel of state law. federal court’s DeWeerth deemed However, justice sys- aspect key of our dual component to have waived a DeWeerth diversity judg- mean that all argument ultimately tem does not of the that was success- subject once a state ments are to revision Appeals. ful before the New York Court of litigated issues. court later addresses prior pan- conclude that the DeWeerth We holding to a rule be tantamount Such would conscientiously duty predict el satisfied its to finality apply to does the doctrine York courts would how New decide the due theory diversity that has no judgments, diligence question, and that Erie and its progeny. its basis Erie or progeny require no more than fact this. The prior We believe that Appeals that the New York Court of subse- ruling on the due panel made a reasonable contrary quently reached a conclusion in given pre information diligence question Guggenheim does not constitute an “extraor- fact, key it. In reason for the sented to dinary justify circumstance” that would re- contrary Guggenheim conclusion was court’s opening order to achieve a simi- case panel as presented not even to the DeWeerth nothing in lar result. There is Erie that original briefing. part parties’ de suggests consistency must be achieved diligence require ciding adopt a due expense finality, at the or that federal ment, placed Guggenheim decision con finally disposed cases of must be revisited weight fact that siderable on the efforts anytime an unrelated state case clarifies the modify refusal rule the demand and applicable Attempting rules of law. to obtain Legislature York were unsuccess New State 60(b)(6) through simply such a result Rule is July Specifically, ful. 1986 Governor Mar improvident encourage an course that would passed by io Cuomo vetoed a bill both houses judgments long on countless attacks federal Legislature that would have of the State since closed. While our conclusion relies in limitations to start run caused the statute of part prior our belief that the ning art from the time an owner discovered fully comported decision with Erie and did reasonably have discovered or should not, suggests, plaintiff mistakenly apply as bringing art whereabouts of a work of when clearly wrong settled state law and reach a against not-for-profit suit certain institutions. result, we note that even if those were the part message, As of his veto Governor Cuo circumstances, finality the doctrine of would law, if mo stated that the bill became would pose reopening still a considerable hurdle have caused York to become “a haven New Whether, the final this case. property for cultural stolen abroad.” See circumstances, such the result would be dif- Guggenheim, 77 N.Y.2d at 567 N.Y.S.2d if ferent the issue were raised within one 569 N.E.2d 426. The court year pursuant to Rule we issue history concluded that of this “[t]he bill need not decide. expressed by the the concerns Governor The caselaw relied on district it, vetoing together when considered with the support distinguishable for its decision is spelling abundant case law out the demand present from the case. In Pierce v. Cook & rule, and refusal convince us that that rule (10th Cir.1975), 518 F.2d 720 cert. de remains the law in New York and that there nied, 47 L.Ed.2d straight-forward is no reason obscure its (1976), granted Tenth Circuit protection by creating duty of true owners 60(b)(6) relief based on an Oklahoma Su diligence.” of reasonable Id. The existence preme decision that undermined the Court of this bill was not discussed in the DeWeerth three-year-old for the Tenth basis Circuit’s opinion brought and was to the attention However, plaintiffs action. a dismissal petition of the court until filed a DeWeerth major factor in the Pierce was that rehearing. decision for It is well established change the in state law would have caused arguments circuit that for raised the first arising petition rehearing federal and state tort actions out of time on a for are deemed injustice involving abandoned unless manifest would the same accident and the same Branen, parties opposite otherwise result. Anderson v. to have results. See id. at rationale, attempted to this circuit has never Since the merits of Whatever 723. “prospective application” term define the it cannot express opinion, no we as to which 60(b)(5), in Rule we turn to a decision utilized in this decision justify district court’s the District of Columbia on this issue the Guggenheim do and case since DeWeerth Does, Appeals. In the Twelve John Court facts. the same arise out of analyzed Supreme the two Court cases court Institute v. & Steel In American Iron prospec promulgation to the that led (3d Cir.1977), cert. de 560 F.2d 589 EPA clause, application States v. tive United Swift nied, L.Ed.2d 98 S.Ct. U.S. Co., L.Ed. & 52 S.Ct. (1978), its Third Circuit recalled the (1932), Pennsylvania Wheeling and & subsequent Supreme a mandate because (18 How.) Bridge Belmont U.S. reasoning into the case called Court (1856), concluded that the 15 L.Ed. 435 one decision issued the Third Circuit’s applied determining “in standard to be However, the earlier. year and four months judgment prospec an order or has whether was that the mandate expressly stated application meaning the of Rule tive within original panel the part because recalled 60(b)(5) ‘executory’ it or in is whether is “continuing” placed on the defendant decision supervision changing volves ‘the conduct now validity of which was obligations the conditions,’ meaning or within the of Wheel more at 599. As discussed suspect. See id. ing 1139. In 841 F.2d at Wheel Swift.” below, was fully judgment DeWeerth the part ing, the Court determined that the of its ongoing have in nature and did not finite former decree that directed the abatement parties involved. The consequences for the bridge spanning of a construction have by the district court other cases cited “executory” in nature since it Ohio River to the instant case factual similarities fewer bridge, required not the removal of the authority persuasive provide even less enjoined against any defendants recon but holding. and, continuance, its as a “continu struction or decree,” light ing modified in of a could be abused that the district court We believe congressional declaring subsequent act important ruling that its discretion Swift, bridge at 431. In lawful. U.S. judgment in this finality of the interest in the modify rejected request previ at ease, years four old which was more than injunction light changed ously-issued ruling, outweighed time of that circumstances, but nonetheless observed injustice believes she has suf- any “continuing injunction directed to decree of in the federal as by litigating her case fered come,” supervi which involves “the events Accordingly, we opposed to the state forum. conditions,” changing or is sion of conduct granting the district court’s decision reverse may always subject adaptation “to as events 60(b)(6). under Rule her motion at shape the need.” 286 U.S. 60(b)(5) Determination B. The Rule terms, these stan practical may provides that a court involving injunc judgments mean that dards judgment where party from a final relieve application,” while “prospective tions have satisfied, released, judgment has been “the judgments Twelve John money do not. See prior judgment discharged, Does, or a or district court F.2d at 1139. The or other- which it is based has been reversed dichotomy and determined recognized this vacated, longer equitable no judgment wise or in this ease was more final appli- judgment prospective money judg have injunction should than a similar to an 60(b)(5). The district cation.” Fed.R.Civ.P. It reasoned that the relief ment. require sought bringing was entitled this suit would court ruled that DeWeerth application physi act of prospective Baldinger perform the future relief under judg returning contend that the Monet and that cally Rule. Defendants clause of this continuing ef have a in this ease does not have ment rendered would the final painting. It custody of the fect on future application and therefore is prospective judgment that the final concluded this clause. therefore subject being reopened under “prospective application” un- which stated that a dismissal would bar “[i]f in this case had 60(b)(5). F.Supp. independent at 551. and action der Rule new between parties ... same based on the same claims as think this conclusion was erroneous We ‘prospective application’ then it would have judgment nature of the a matter of law. The continuing effect of the virtue bar.” sought rights in ease was a declaration of position 714 F.2d at 43. This has been called property. The regarding personal title to Sarkisian, circuit, see into doubt our physical transfer of the Monet fact that expressly F.2d at 757 n. and was criticized comport required to with would have been Does, by the in Twelve D.C.Circuit John prevailed judgment if had Indeed, Kirksey appears F.2d 1139-40. judgment “executory.” does not render repudiated by have Fifth been Circuit required of assets is also A similar transfer itself, judgment which has since held that a is court, money judgment. where the enters 60(b)(5) prospective under Rule where its in Even if the district court this case were “only arguably prospective effect ... is that transfer, enforcing in an its involved ordered precludes relitigation of the issues decid- “supervi- would not constitute involvement Picco, Accordingly, ed.” 900 F.2d at 851. changing sion of conduct or conditions.” judgment we conclude that the final in this argument declaratory DeWeerth’s prospective application case did not have as judgments may prospective application have 60(b)(5) this term is utilized Rule and that unpersuasive. types is also The of declarato- holding contrary the district court’s to the DeWeerth, ry judgments referred to or- requiring an was error of law reversal. judgments and which ders disbarment property, inap- form a lien on affect events that Because of our decision that it was future, propriate grant happen in the and thus are distin- for the district court to relief 60(b)(6) 60(b)(5), judgment guishable from the final under either Rule or it is case, simply parties’ unnecessary which resolved the for us to consider defendants’ past rights dispute. arguments based on a further DeWeerth’s the district court wrongly reliance on Moore’s Federal Practice for this decided the merits their laches point misplaced clearly superior since the treatise defense and the title. recognizes the distinction between declarato- come, ry judgments directed at events to CONCLUSION may qualify for which relief under Rule reasons, foregoing For the we reverse the 60(b)(5) though they continuing were in- judgment of the district court.

junctions, declaratory judgments accrued, rights fully which are which do not OWEN, Judge. District purview fall under of the Rule. See 7 Lucas, Moore & Moore’s Federal Practice respectfully I dissent. ¶ 60.26[4], at 60-262 n. 36 majority recognizes dismissing The that in such, only prospective As effect Mrs. DeWeerth’s action on New York statute grounds, prior of the court’s is its bar to future of limitations “DeWeerth relitigation custody painting. panel’s prediction wrong.” wrong to the It was Kirksey City adding district court relied on to New York’s well-established de- (5th Jackson, Cir.1983), diligence for the mand and refusal rule a due re- judicata proposition quirement, panel that the res effect of a which the then found had Nevertheless, judgment may justify majority relief under Rule not been met.1 change first, subsequent standing, asserting where there is a leaves the dismissal prior panel law. 804 at 551 n. 11. The that the was confronted with “an dicta, law,” second, language Kirksey relied unsettled issue of state follows, prior panel property jurisdictions, 1. The stated as 836 F.2d at in other we hold that law, obligation 109-10: under New York an owner’s delay light favoring make a demand without unreasonable policy of New York’s obligation diligence good purchaser discouraging to use due faith stale includes approach property. claims and the to actions to recover locate stolen

1277 law, New York as I finality judgments out- This well-established of of the doctrine it, prior injustice she view was further confirmed to our “any DeWeerth believes weighs by opinion in 1987 the fact that in by litigating her case has suffered passed legislature 1986 a bill the New York to the state forum.” opposed as federal “discovery pro- proposing to institute a rule” con- accept either of these I am unable viding not-for-profit that as to certain institu- majority’s that the to the view clusions. As tions, the statute of limitations would run “unset- New York law was pre-DeWeerth notice, gave from the time those institutions tled”, limita- York statute of prior no New bill, specified they as in the were in pre- a ruling any suggestion of tions had possession particular object. The of bill diligence requirement, or that demand due by major- was vetoed Governor Cuomo. The raised, could have was ever or even the issue fact, I, ity recognizes the as do that the fate The New York Court been considered.2 wholly of this consistent with the com- bill Roberts, N.Y. 28 in Appeals in v. 57 Gillet plete any gre-Guggenheim au- absence 1874, at 34: stated any requirement. Gug- such As thorities one, just The rule is a reasonable observes, 319, genheim 79 at itself N.Y.2d purchaser personal that an innocent 623, 567 N.Y.S.2d 569 N.E.2d 426. wrongdoer first be property from a shall history of this bill and the concerns title, and have informed of the defect his it, expressed by vetoing the Governor property to opportunity to deliver the together when considered with the abun- owner, he shall be made the true before spelling dant case law out the demand and wrongful for a con- liable as a tort feasor rule, refusal convince us that rule version. remains the law in New York and that v. This followed such cases Cohen straight- no its there is reason obscure Inc., Keizer, 277, App.Div. 285 M. 246 N.Y.S. protection of true owners cre- forward (1st 1936), Dep’t. 488 at 489: 285 N.Y.S. duty diligence. ating a of reasonable However, possession hav- [defendant’s] Thereafter, opinion the first DeWeerth not tortious in the first ing been lawful and denied instance, having issued 1987 with certiorari upon him and his re- a demand 1988, Appeals York in June the New possession before the fusal to surrender 1991, February two and one-half necessary. some commencement of the suit was v. years Guggenheim later Foundation List, 647, Thereafter, 22 A.D.2d Menzel v. 623, Lubell, 311, 77 N.Y.2d 567 N.Y.S.2d (1st 43, 1964), Dep’t. 253 N.Y.S.2d 426, specifically ques- N.E.2d focused on remand, 300, 49 Misc.2d 267 N.Y.S.2d Law, stating tion reaffirmed New York on other (Sup.Ct.N.Y.Co.1966), modified 317-18, 623, 569 567 N.Y.S.2d at 77 N.Y.2d 516, grounds, A.D.2d 279 N.Y.S.2d 608 426: N.E.2d rev’d, (1st 1967), Dep’t. modification long protected York case law has N.E.2d 742 New N.Y.2d 298 N.Y.S.2d property has (1969), right of the owner whose “a again held that demand substantive, property, even than a been stolen to recover rightful owner is a rather good-faith possession if it is in the prerequisite bringing to the of an procedural, (see, owner[,]” v. purchaser for value Saltus & Saltus by the action for conversion 282). Everett, There is therefore, 20 Wend of limitations did not “the statute Limitations for re- three-year Statute of and refusal.” Id. begin to run until demand (CPLR 214[3]). The covery of a chattel at 44.3 22 A.D.2d at 253 N.Y.S.2d Elicofon, so, Kunstsammlungen Zu appear Weimar because the cause of 2. This would 829, 848-49, (E.D.N.Y.1981), under does not even come into existence action and there New York law until a demand is made of New Court for the Eastern District District authorities, See, a refusal. New York is New York law to thoroughly York infra. reviewed the New York in 1981 course, does, give consideration foregoing. and confirmed the authorities diligence in the of reasonable defense. Foun- context of laches Lubell, 77 N.Y.2d 311 at dation v. N.E.2d 426 N.Y.S.2d 1278 942, 384, (1949)), is that a cause of action 69 93 L.Ed. 266

rule in this State S.Ct. denied, 1014, 730, against good-faith pur- cert. 434 U.S. 98 S.Ct. 54 replevin (1978); “grand it constitutes a a stolen chattel accrues when the L.Ed.2d 758 chaser of justice equitable power of to do demand for return of reservoir true owner makes ease,” particular Norwegian in a Radack v. person possession of the chattel and the Inc., 538, (see, Agency, America Line 318 F.2d e.g., refuses to return it. the chattel (2d Cir.1963) Wertheimer, 149, 153; (quoting 542 7 Moore’s Fed v. 99 N.Y. Goodwin ¶ 60-295). Practice, Keizer, Inc., 60.27[2] eral at It is v. 246 404] N.E. Cohen [1 277) 488]). “properly invoked where there are ex App.Div. N.Y.S. Until [285 refused, traordinary circumstances, Ackermann v. possession of demand is made and States, 199, 193, 340 71 good-faith pur- United U.S. S.Ct. property stolen 209, 212, (1950); 95 L.Ed. 207 wrongful see United chaser for value is not considered (2d Cirami, Roberts, [26, (see, 28, v. 563 F.2d 32 States e.g., Gillet v. 57 N.Y. 30- Cir.1977) ]; 31; List, 300, 304-05, judgment may or where the Menzel v. 49 Misc.2d 804], hardship, work an extreme and undue see damages N.Y.S.2d mod as to 28 [267 Karahalias, 331, 516, 608], v. United States 205 F.2d A.D.2d rev’d as to [279 N.Y.S.2d (2d Cir.1953); 91, Emergency 24 333 In re Bear modification N.Y.2d 298 N.Y.S.2d (2d 742). 754, Cir.1981), Corp., con 666 F.2d 759 246 N.E.2d liberally and “should be construed when Having pronounced, thus went justice substantial will thus be served.” state, on to 77 N.Y.2d at 567 N.Y.S.2d Norwegian Agen Radack v. America Line 623, 569 .2d 426: N.E Inc., 542; cy, Dunlop 318 F.2d see also We have reexamined the relevant New Inc., Airways, v. Pan American World 672 and we York case law conclude (2d Cir.1982); 1051 United should [in DeWeerth] Second Circuit Cirami, States v. 563 F.2d at 32. imposed duty have reasonable dili 60(b)(6) applicability The clear of Rule to this gence on the owners of the stolen art by Judge case was well-stated Broderick be- purposes work for of the Statute of low, at 547: Limitations.[4] range policy of fundamental view, Accordingly, my this case is a constitutional considerations which have compelling one for most relief under Fed. Erie[5] fully informed the doctrine are evi provides pertinent R.Civ.P. which present dent case. Failure to act on part as follows: present deny Rule 60 motion would motion such On terms as are right Mrs. recover her just, may party the court reheve a ... property solely initially because she (6) any ... from a final for ... brought this action in federal rather than justifying reason op- other relief from the brought state court. Had Mrs. DeWeerth judgment. eration of the court, suit in state her claim would have (6) Rule, Subpart timely of the said as stated been deemed commenced under the LeFevre, applicable our Court Matarese v. 801 F.2d statute limitations. (2d Cir.1986) at 106: inconsistency exactly type Such “confers broad discretion on trial result Erie was enacted to avoid. As noted, grant ‘appropriate court to relief when Justice Frankfurter “[t]he nub of justice,’” accomplish policy International Con- that underlies Erie R. Co. v. Vesco, Corp. Tompkins trols v. 556 F.2d 668 n. 2 is that for the same transaction (2d Cir.1977) (quoting Klapprott v. of a United the accident suit non-resident States, 601, 615, 384, 390, litigant in a U.S. S.Ct. federal court instead of Black, (plurality opinion away 93 L.Ed. 266 a block State Court should lead J.), grounds, substantially on other to a different result.” Guar- U.S. modified majority acknowledges Tompkins, 4. The here that "... no 5. Erie R.R. Co. v. 304 U.S. 58 S.Ct. (1938). earlier New York case had this is- addressed L.Ed. sue[.]” York, Company New York anty Trust 1464, 1470, 99, 109, & FERTILIZER INTERNATIONAL ORE CORP., Plaintiff-Appellee-Cross- L.Ed. Appellant, course, am, unhesitatingly one with I [prior] majority “integrity of the as to the ... the fairness of [and] decision INC., SERVICES, SGS CONTROL process that was accorded DeWeerth.” Defendant-Appellant-Cross- However, majority’s acknowledge- given the Appellee, panel’s pre- [prior] ment “that and accept I wrong[,]” cannot diction was DeWeerth, sought that Mrs. who result here Updike, Esq. B. and Charles Scott diversity jurisdiction, now must our federal Riemer, Esq., Appellants- M. consequences said suffer the Cross-Appellees. today’s prediction, but also soon-corrected Nos. Dockets majority by the that for us to determination 93-9046, 93-9332 94-7084. would have the grant her Rule relief “simply improvident an embark Court Appeals, United States Court of encourage countless at- course that would Second Circuit. judgments long since on federal tacks than two and one-half closed.”6 Little more Argued April 1994. years elapsed from the denial of certiorari Decided Oct. Guggenheim’s appeal, the first DeWeerth pronouncement.7 Rule 60 ex- authoritative extraordinary remedy in an case to

ists as a LeFevre,

accomplish justice, see Matarese v.

supra. I see as such a case. Should This be impact of rather

not the us, notwithstanding integ-

shouldered doctrine of

rity of our error? While the impor-

finality judgments does address interest, from

tant it should not deter us today justice

using to do because we

may have to deal hereafter with the Rule’s unworthy cases.

invocation contrary majority, I

Accordingly, to the no abuse of discretion the District

see scholarly and and would affirm on the opinion Judge Broderick below.

thorough acknowledges majority some stating that under majority expressly view 7. The 6. The reaches this passage where time the district court abused its discretion of some that it circumstances the mere weighed "any injustice she DeWeerth believes appropriate correction. would not bar by litigating case the federal has suffered her heavily opposed than to the state forum” more finality judg- important "the interest in case[.]” ment in this

Case Details

Case Name: Gerda Dorothea Deweerth v. Edith Marks Baldinger, Defendant-Third-Party-Plaintiff-Appellant, Wildenstein & Co., Inc., Third-Party-Defendant-Appellant

Court Name: Court of Appeals for the Second Circuit

Date Published: Oct 27, 1994

Citation: 38 F.3d 1266

Docket Number: 83,127, Docket 93-7144, 93-7146

Court Abbreviation: 2d Cir.