On December 16, 2016, President Obama signed into law the Foreign Cultural Exchange Jurisdictional Immunity Clarification Act (FCEJICA).Footnote 1 This act amends the Foreign Sovereign Immunity Act (FSIA) in order to confirm the jurisdictional immunity of foreign states in connection with lending artwork to the United States for temporary exhibit. The FCEJICA contains two exceptions, described below, that introduce some uncertainty about the extent of protection the statute provides to foreign states.
The House Judiciary Committee report explained that the legislation was prompted by the increasingly problematic relationship between the FSIA as recently interpreted by the courts and the Immunity from Seizure Act (IFSA), which was enacted in 1965 and predates the FSIA:
The Immunity from Seizure Act (IFSA) provides the President, or the President's designee, with authority to grant a work of art or other object of cultural significance immunity from seizure by U.S. courts whenever it is determined that its temporary exhibition or display in the United States is within our national interest.Footnote 2 The intent of the IFSA is to encourage the cultural and educational exchange of artwork and other culturally significant objects which, in the absence of the legislation, would not be made available for exchange. In enacting IFSA, Congress recognized that cultural exchange can produce substantial benefits to the United States, both artistically and diplomatically.Footnote 3
However, for artwork and cultural objects owned by foreign governments, the intent of IFSA is being frustrated by the Foreign Sovereign Immunities Act (FSIA). Recent court decisions have interpreted a provision of FSIA in a manner that opens foreign governments up to the jurisdiction of U.S. courts if foreign government-owned artwork is present in the United States in connection with a commercial activity and there is a claim that the artwork was taken in violation of international law.Footnote 4 Courts have determined that the non-profit exhibition or display of the artwork can be considered “present in the United States in connection with commercial activity” even if the artwork has been granted immunity under IFSA.Footnote 5
The House Judiciary Committee had a particular case in mind: Malewicz v. City of Amsterdam. Malewicz concerns a dispute between the City of Amsterdam and the Malewicz family over the ownership of a group of paintings.Footnote 6 The plaintiffs were descendants of Kazimir Malewicz, “a world-renowned Russian artist in the years before World War II.”Footnote 7 Because of unrest in the Soviet Union, Kazimir entrusted some of his paintings to friends in Germany after displaying them at an exhibit in Berlin in 1927.Footnote 8 Nearly three decades later, after Malewicz's death in 1956, the Stedelijk Museum in the City of Amsterdam obtained the paintings.Footnote 9 In 2003, the city loaned the paintings to museums in New York and Houston after obtaining immunity under the IFSA from the State Department.Footnote 10 The plaintiffs filed suit for replevin and monetary damages in federal district court while the paintings were on display in the United States.Footnote 11 The city moved to dismiss for failure to state a claim because the artwork had been granted immunity under the IFSA.Footnote 12 The State Department filed a Statement of Interest cautioning the district court against allowing the suit to continue: “permitting jurisdiction over a foreign state in such cases threatens to undermine significantly the interests that [the IFSA] was designed to foster and to create friction in U.S. relations with other countries.”Footnote 13
Despite the State Department's concerns, the district court ruled that loaning artwork to museums in the United States could subject foreign states to litigation under the commercial activity exception to the FSIA.Footnote 14 Under the FSIA, foreign states are immune from the jurisdiction of U.S. courts unless an enumerated exception applies. The FSIA denies immunity in any case where “rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state.”Footnote 15 The district court ruled that all of the elements of the exception were satisfied, and denied the City of Amsterdam's claim of immunity under the FSIA.Footnote 16 Of particular relevance here, the district court concluded that lending the artworks constituted commercial activity. With respect to the concern about undermining the IFSA's purpose, the district court reasoned that
granting immunity [under the IFSA] and … establishing jurisdiction [under the FSIA] for certain claims against a foreign sovereign are both clear and not inconsistent … [b]ecause the Malewicz Heirs are not seeking judicial seizure of the artworks … . Immunity from seizure is not immunity from suit for a declaration of rights or for damages arising from an alleged conversion if the other terms for FSIA jurisdiction exist.Footnote 17
In short, the district court allowed the claim to proceed because the IFSA immunized only the paintings from seizure; it did not bar claims simply because they related to the paintings. And since all of the elements of the FSIA expropriation exception were met, the city could not rely on the sovereign immunity defense.
This ruling chilled international art lending; the Russian government, for example, suspended all art loans into the United States in the aftermath of Malewicz.Footnote 18 The committee report for the FCEJICA explained the view that decisions like Malewicz undermined the goals of the IFSA:
By allowing the presence in the United States of immunized works to form the basis for depriving foreign states of sovereign immunity, courts have turned IFSA on its head and paved the way for further lawsuits of the very sort Congress intended to prevent. As one scholar has observed, “[a] museum promotion or art loan into the United States is not the best mechanism to trap foreign sovereigns into U.S. courts. It mixes together two separate interests: promoting (by protecting) cross-cultural art and cultural heritage exchanges, and providing a forum for wronged individuals to seek justice for their private claims.”
In enacting IFSA, Congress made the policy decision to promote Americans' exposure to objects of cultural significance over the potential rights of individual claimants. Congress' aim was to ensure that foreign leaders would not be subject to the jurisdiction of U.S. courts when they loaned immunized cultural objects for temporary exhibits in the United States. As Representative Byron Rogers explained during floor debate on IFSA, the bill was designed to assure the foreign lender that it could lend cultural objects to the United States without incurring the risk that the objects would be seized or the lender would become subject to suit … . The ongoing effectiveness of IFSA to encourage foreign governments to lend cultural objects depends upon the ability to provide assurance to foreign lenders that participating in an immunized exhibit will, in fact, protect them from litigation in the United States based on the exhibit.Footnote 19
With these aims in mind, the FCEJICA amended the FSIA by adding section 1605(h)(1).Footnote 20 This new section seeks to clarify the definition of “commercial activity” for purposes of the expropriation exception to the FSIA.Footnote 21 Specifically, the section provides that activities of a foreign state associated with the temporary exhibition or display of artwork shall not be considered to be commercial activity if the following conditions are met:
(A) a work is imported into the United States from any foreign state pursuant to an agreement that provides for the temporary exhibition or display of such work entered into between a foreign state that is the owner or custodian of such work and the United States or one or more cultural or educational institutions within the United States, [and]
(B) the President … has determined … that such work is of cultural significance and the temporary exhibition or display of such work is in the national interest, and
(C) the notice thereof has been published … .Footnote 22
Because the expropriation exception to the FSIA applies only where the property is “present in the United States in connection with a commercial activity carried on in the United States,”Footnote 23 the FCEJICA significantly restricts plaintiffs' access to that exception.
The FCEJICA created two exceptions to the re-extension of sovereign immunity over artwork loans. First, the statute contained a “Nazi-Era Claims” exception denying foreign states immunity in litigation concerning art taken between 1933 and 1945 by a government affiliated with the Nazi regime.Footnote 24 The House Report explains: “This exception is included in the bill because of the systematic looting of artwork by the Nazis in Europe during Hitler's reign—looting that was ‘on a historically unmatched level.’”Footnote 25
A second exception was added later in the legislative process. Pursuant to that second exception, the FCEJICA does not extend immunity to foreign states where a work of art was “taken [after 1900] in connection with the acts of a foreign government as part of a systematic campaign of coercive confiscation or misappropriation of works from members of a targeted and vulnerable group.”Footnote 26 This second exception appears intended to address critics who objected to the act's singling out of Nazi-era claims. In 2012, after Senators Feinstein and Hatch introduced legislation nearly identical to that in the FCEJICA but without the second exception, one international lawyer questioned: “Why are Nazi storm troopers looting art any different from Bolshevik storm troopers?”Footnote 27 Marc Masurovsky, the cofounder of the Holocaust Art Restitution Project, likewise questioned how Congress could “excuse 28 different kinds of plunder and only outlaw one subset of one subset.”Footnote 28 Observing that “the phrase ‘targeted and vulnerable group’ may sweep broadly to include confiscations allegedly based on political opinion, membership in disfavored social groups, or (to borrow from the definition of genocide), in a ‘national, ethnical, racial or religious group,’” some commentators noted that the ambiguity of the scope of the second exception threatened to undermine the asserted goals of the legislation by failing to “provide much certainty for foreign governments worried about loaning art to U.S. institutions.”Footnote 29
