Case: 09-30717 Document: 00511210919 Page: 1 Date Filed: 08/20/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 20, 2010
No. 09-30717
Lyle W. Cayce
Clerk
SARAH BLODGETT DUNBAR,
Plaintiff - Appellee
v.
CLAUDIA SEGER-THOMSCHITZ, Doctor,
Defendant - Appellant
Appeal from the United States District Court
for the Eastern District of Louisiana
Before JONES, Chief Judge, and KING and HAYNES, Circuit Judges.
EDITH H. JONES, Chief Judge:
A painting by Oskar Kokoschka entitled Portrait of Youth (Hans
Reichel)(1910) (“the painting”) is currently in the physical possession of the
Appellee, Sarah Dunbar, in New Orleans, Louisiana. Appellant, Dr. Claudia
Seger-Thomschitz, claims title to the painting, asserting that it was “confiscated”
by the Nazis from her deceased husband’s family. Dunbar sued to quiet title to
the painting based on her ownership by acquisitive prescription under Louisiana
law and the fact that Seger-Thomschitz’s claims were barred by Louisiana’s
prescriptive laws. The district court granted summary judgment in favor of
Dunbar. Segar-Thomschitz now appeals, asserting that this court should invoke
"federal common law authority" to displace Louisiana law and Louisiana law is
Case: 09-30717 Document: 00511210919 Page: 2 Date Filed: 08/20/2010
No. 09-30717
preempted by the foreign policy of the Executive Branch. We reject these
arguments and affirm the judgment of the district court.
I.
Dr. Seger-Thomschitz, the sole heir of Raimund Reichel’s estate, alleges
that the painting was confiscated by the Nazis from Reichel’s father through a
“forced sale” in Vienna, Austria, in 1939. According to Seger-Thomschitz,
Reichel’s father, who was facing increasing Nazi persecution, transferred
ownership of the painting and four other paintings to a Jewish art dealer named
Kallir, an alleged collaborator with the Nazis. When Dunbar’s mother
purchased the painting from Kallir in 1946 in New York, she knew the Reichel
family had owned the painting and knew or should have known that the
painting may have been stolen. Dunbar’s mother, according to the appellant,
had a duty to investigate the painting’s ownership. Dunbar inherited the
painting from her mother in 1973.
After receiving a demand letter from appellant, Dunbar filed suit to quiet
title to the painting. Seger-Thomschitz counterclaimed based on quasi-contract
and unjust enrichment. The district court granted summary judgment in favor
of Dunbar, because Dunbar had obtained title by acquisitive prescription under
Louisiana state law and Seger-Thomschitz’s counterclaims were time-barred by
the applicable Louisiana prescriptive periods. The district court rejected Seger-
Thomschitz’s argument that the Louisiana prescription laws should be
supplanted with “federal common law” to ensure the goals of the federal
Holocaust Victims Redress Act (“HVRA”), Pub. L. No. 105-158, § 202, 112 Stat.
15, 17-18 (1998). The district court noted, inter alia, that the HVRA did not
create a federal common law cause of action or a private right of action. The
district court also found no material factual dispute over Dunbar’s ownership of
the painting, which had been open and continuous for well over ten years,
fulfilling the requirements to establish ownership by acquisitive prescription
2
Case: 09-30717 Document: 00511210919 Page: 3 Date Filed: 08/20/2010
No. 09-30717
under Louisiana law. Undisputed evidence also established that the Reichel
family sought post-Nazi compensation for other works of art and property, but
not for this painting. The family twice loaned this painting to Kallir for exhibit
and possible sale prior to the Nazi occupation of Austria. Significantly, those
members of the Reichel family with direct knowledge of the painting’s sale never
sought its return.
On appeal, Appellant no longer relies on the HVRA, nor does she question
that Louisiana prescriptive laws were correctly applied. Instead, she argues
that Louisiana law should not be applied at all. Appellant contends that the
court should invoke its “federal common law authority” to displace Louisiana
law, and Louisiana law is preempted by the “Terezin Declaration,” a non-binding
document promulgated at the Prague Holocaust Assets Conference of June 30,
2009.
II.
We review the district court’s grant of summary judgment de novo.
Bridgmon v. Array Sys. Corp., 325 F.3d 572, 576 (5th Cir. 2003). The court of
appeals will not generally consider evidence or arguments that were not
presented to the district court. Nissho-Iwai Am. Corp. v. Kline, 845 F.2d 1300,
1307 (5th Cir. 1988). Plaintiffs may not advance on appeal new theories or raise
new issues not properly before the district court to obtain reversal of the
summary judgment. Little v. Liquid Air Corp., 37 F.3d 1069, 1071 (5th Cir.
1994)(en banc). The court of appeals will not consider an issue that a party fails
to raise in the district court, absent extraordinary circumstances. North Alamo
Water Supply Corp. v. City of San Juan, Tex., 90 F.3d 910, 916 (5th Cir. 1996).
Extraordinary circumstances exist when the issue involved is a pure question of
law and a miscarriage of justice would result from our failure to consider it. Id.
3
Case: 09-30717 Document: 00511210919 Page: 4 Date Filed: 08/20/2010
No. 09-30717
III.
A.
Appellant argues, as she did in the district court, that “federal common
law authority” should displace Louisiana law’s prescriptive periods with federal
doctrines of laches and unclean hands to enable claims to recover Nazi-
confiscated artworks to be decided on their substantive merits. Appellant
asserts that “federal courts displace otherwise applicable state law whenever it
conflicts with or frustrates important federal interests or policies.” No court has
ever adopted what Appellant is urging here—some form of special federal
limitations period governing all claims involving Nazi-confiscated artwork. In
such cases, courts have consistently applied state statutes of limitations. See,
e.g., Orkin v. Taylor, 487 F.3d 734, 741-42 (9th Cir. 2007); Von Saher v. Norton
Simon Mus. of Art at Pasadena, 578 F.3d 1016, 1029-30 (9th Cir. 2009); Detroit
Institute of Art v. Ullin, 2007 WL 1016996, *2 (E.D.Mich. 2007); Toledo Museum
of Art v. Ullin, 477 F. Supp. 2d. 802, 806 (D. Ohio 2006). Further, as this case
is brought under federal diversity jurisdiction, the application of state statutory
limitations periods is controlled by Erie. Erie R.R. v. Tompkins, 304 U.S. 64, 78
(1938); Guaranty Trust Co. v. York, 326 U.S. 99, 108-09 (1945).
With regard to fashioning federal common law, the Supreme Court has
held:
The vesting of jurisdiction in the federal courts does not in and of
itself give rise to authority to formulate federal common law, nor
does the existence of congressional authority under Art. I mean that
federal courts are free to develop a common law to govern those
areas until Congress acts. Rather, absent some congressional
authorization to formulate substantive rules of decision, federal
common law exists only in such narrow areas as those concerned
with the rights and obligations of the United States, interstate and
international disputes implicating the conflicting rights of States or
our relations with foreign nations, and admiralty cases. In these
instances, our federal system does not permit the controversy to be
resolved under state law, either because the authority and duties of
4
Case: 09-30717 Document: 00511210919 Page: 5 Date Filed: 08/20/2010
No. 09-30717
the United States as sovereign are intimately involved or because
the interstate or international nature of the controversy makes it
inappropriate for state law to control.
Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 640-41, 101 S. Ct.
2061, 2067 (1981). Here, no Act of Congress has articulated “rights and
obligations of the United States” in regard to these claims; even the HVRA
creates no individual cause of action. Orkin, 487 F.3d at 739. Where Congress
has not acted, federal courts’ power to displace state law with federal common
law is severely constrained. Further, no interstate or international disputes are
implicated in this controversy that require creation of a uniform federal rule of
law. There is in sum no basis to lay out any federal common law to replace
Louisiana’s prescriptive periods.
B.
For the first time on appeal, Seger-Thomschitz contends that the
application of Louisiana’s prescriptive laws conflicts with and must be
preempted by U.S. foreign policy, most recently articulated in the Terezin
Declaration.1 The preemption theory she now raises is unrelated to the
argument for invoking federal common law. Although federal preemption is a
legal issue, Appellant has not met the burden of establishing extraordinary
circumstances to justify consideration of a new legal theory for the first time on
appeal. See North Alamo Water, supra.
Appellant argues that she could not have cited the Terezin Declaration to
the district court because it was issued just a few days before the district court’s
ruling. That the Terezin Declaration was promulgated contemporaneously with
1
The Terezin Declaration is a “legally non-binding” document promulgated on June 30,
2009, at the Prague Holocaust Era Assets Conference organized by the Czech Republic. Forty-
six states, including the United States, approved of the document. The Terezin Declaration
recommends that participating countries implement national programs to address real
property confiscated by Nazis, Fascists, and their collaborators and the development of “non-
binding guidelines and best practices for restitution and compensation of wrongfully seized
immovable property.”
5
Case: 09-30717 Document: 00511210919 Page: 6 Date Filed: 08/20/2010
No. 09-30717
the district court’s order would not have prevented Appellant from citing the
Declaration to the court after it ruled. But more important, the Terezin
Declaration is not crucial to the Appellant’s preemption argument. It is a
“nonbinding executive agreement” that is representative of what Appellant
argues to be the preemptive scope of longstanding U.S. foreign policy. Appellant
thus could have easily raised the preemption theory to the district court based
upon the historical antecedents of the Terezin Declaration, which she avers date
back to 1998.2 Appellant offered no compelling reason why she failed to present
this theory to the district court nor does it appear that a miscarriage of justice
will result from our failure to address it. We are unpersuaded that this novel
theory should be explored for the first time on appeal.
C.
Even if we were to consider Appellant’s preemption theory, it is untenable.
Appellant relies principally on American Insurance Association v. Garamendi,
539 U.S. 396, 123 S. Ct. 2374 (2003), to support the argument that the Terezin
Declaration should preempt the Louisiana prescriptive periods. In Garamendi,
California enacted the Holocaust Victim Insurance Relief Act, which required
any insurer that did business in California and that sold insurance policies to
Europe during the Holocaust era to disclose certain information about those
policies to the California State Insurance Commissioner or risk losing its license.
The Supreme Court held the California law was preempted by the implied
dormant foreign affairs power of the President. Id. at 423-24, 123 S. Ct. at 2391-
92. The opinion noted that “resolving Holocaust-era insurance claims that may
be held by residents of this country is a matter well within the Executive’s
responsibility for foreign affairs.” Id. at 420, 123 S. Ct. at 2390. Federal
2
Appellant’s own evidence on appeal notes that the “Terezin Declaration reinforces the
Washington Principles.” The Washington Conference Principles on Nazi-Confiscated Art were
promulgated in 1998 as part of the Washington Conference on Holocaust-Era Assets. Forty-
four nations, including the United States, approved these “non-binding principles.”
6
Case: 09-30717 Document: 00511210919 Page: 7 Date Filed: 08/20/2010
No. 09-30717
preemption prevented the state from pursuing a more aggressive policy than the
President’s foreign policy, as expressed by executive agreements with other
nations and statements by high-level executive officials. Id. at 421-22, 427,
123 S. Ct. at 2390, 2393 (“California seeks to use an iron fist where the President
has consistently chosen kid gloves.”). Significantly, Garamendi found
preemption while acknowledging the absence of either an express federal
preemption clause or a direct conflict between California and federal law.
Garamendi noted, however, that where a state has acted within “its traditional
competence, but in a way that affects foreign relations, it might make good sense
to require a conflict, of a clarity or substantiality that would vary with the
strength or traditional importance of the state concern asserted.” Id. at 420
n.11, 123 S. Ct. at 2390.
Seger-Thomschitz argues that to apply Louisiana’s prescriptive laws would
unconstitutionally intrude on the President’s authority to conduct foreign affairs.
The policy represented by the Terezin Declaration should preempt Louisiana
prescription periods because it expresses a preference to adjudicate claims for
recovery of Nazi-confiscated artworks on their facts and merits. As additional
support, Appellant cites statements by various executive branch officials
expressing concern that such claims were not being adjudicated on the merits
but were barred by statutes of limitations and other defenses.
There are key distinctions between this case and Garamendi. In
Garamendi, California was essentially pursuing independent policy objectives
in favor of Holocaust victims. The existence of its law limited the President’s
ability to exercise his preeminent foreign affairs authority. In this case,
Louisiana has not pursued any policy specific to Holocaust victims or Nazi-
confiscated artwork. The state’s prescription periods apply generally to any
challenge of ownership to movable property. La. Civ. Code art. 3544 (1870);
La. Civ. Code art. 3506 (1870). Louisiana’s laws are well within the realm of
7
Case: 09-30717 Document: 00511210919 Page: 8 Date Filed: 08/20/2010
No. 09-30717
traditional state responsibilities. In exercising its strong interest in regulating
the ownership of property within the state through these prescriptive laws,
Louisiana has not infringed on any exclusive federal powers. Indeed, the
Terezin Declaration itself contains language noting that “different legal
traditions” should be taken into account. Appellant presents no proof that U.S.
policy on behalf of Holocaust victims is committed to overriding generally
applicable state property law. The type of preemption established by Garamendi
is thus inapplicable; Louisiana’s prescriptive laws are not preempted by the
Terezin Declaration, U.S. foreign policy, or the President’s foreign affairs
powers.
IV.
For these reasons, we affirm the judgment of the district court is
AFFIRMED.
8