UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA, )
)
Plaintiff, )
- v. - ) 12 Civ. 2600 (GBD)
)
A 10th CENTURY CAMBODIAN SANDSTONE )
SCULPTURE, CURRENTLY LOCATED AT )
SOTHEBY’S IN NEW YORK, NEW YORK, )
)
Defendant in rem.
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MEMORANDUM OF LAW IN SUPPORT OF CLAIMANTS’ MOTION FOR
JUDGMENT ON THE PLEADINGS AND FOR A STAY OF DISCOVERY
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 1 of 38
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TABLE OF CONTENTS
PRELIMINARY STATEMENT .................................................................................................... 1
STATEMENT OF ADDITIONAL FACTS ................................................................................... 4
1. Cambodia Requests That The Statue Be Withdrawn From Auction ................................... 5
2. Constructive Seizure Of The Statue ..................................................................................... 7
3. The U.S. State Department Invents A Legal Theory ........................................................... 8
4. The Government Directs Cambodia Not To Negotiate A Resolution ............................... 10
5. The Government’s Representations To The Court ............................................................ 11
ARGUMENT ................................................................................................................................ 14
I. Claimants’ Expert Declaration Demonstrates that the
Government Has Not Identified Any Law – Let Alone a
Clear and Unambiguous Law – Declaring Cambodia to Be the
Owner of the Statue ........................................................................................................... 16
A. Classification Orders, Including The 16 May 1925 Classification Order,
Do Not Confer Ownership On The Government ........................................................... 19
B. The Remaining Colonial Laws On Which The Government Relies Do Not
Declare The Statue To Be Government Property ........................................................... 22
II. The Government’s “Inherent Right of Kings” Theory Fails as a Matter of Law .............. 25
III. This Court Should Stay Discovery Pending Resolution Of Claimants’
Motion For Judgment On The Pleadings ........................................................................... 29
A. The Court’s Authority To Stay Discovery ..................................................................... 29
B. The Government Has Sought Broad And Burdensome Discovery ................................ 30
C. Staying Discovery Would Not Prejudice The Government ........................................... 32
D. Claimants’ Motion for Judgment On The Pleadings Presents Compelling
Arguments Justifying A Stay ......................................................................................... 32
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 2 of 38
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TABLE OF AUTHORITIES
CASES PAGE(S)
Baker v. Booz Allen Hamilton, Inc.,
358 F. App'x 476 (4th Cir. 2009) .................................................................................22
Bigio v. Coca-Cola Co.,
No. 97 Civ. 2858, 2010 WL 3377503 (S.D.N.Y. Aug. 23, 2010),
aff’d on other grounds, 675 F.3d 163 (2d Cir. 2012) ............................................15, 22
Bridgewater v. Taylor,
745 F. Supp. 2d 355 (S.D.N.Y. 2010) ..........................................................................24
Chavous v. Dist. of Columbia Fin. Responsibility and Mgmt. Assistance Auth.,
201 F.R.D. 1 (D.D.C. 2001) .........................................................................................30
Chesney v. Valley Stream Union Free Sch. Dist. No. 24,
236 F.R.D. 113 (E.D.N.Y. 2006) ...............................................................................30
Contemporary Mission, Inc. v. U.S. Postal Serv.,
648 F.2d 97 (2d Cir. 1981)...........................................................................................25
Figueiredo Ferraz Consultoria E Engenharia de Projeto Ltda v. Republic of
Peru, 655 F. Supp. 2d 361 (S.D.N.Y. 2009),
rev’d and remanded on other grounds, 665 F.3d 384 (2d Cir. 2011)....................15, 16
Gov't of Peru v. Johnson,
720 F. Supp. 810 (C.D. Cal. 1989),
aff'd, 933 F.2d 1013 (9th Cir. 1991) ..................................................................................28
Hawkins v. Barney's Lessee,
30 U.S. 457 (1831) .......................................................................................................27
Hayden v. Paterson,
594 F.3d 150 (2d Cir. 2010).........................................................................................14
Hong Leong Fin. Ltd. v. Pinnacle Performance Ltd.,
No. 12 Civ. 6010, 2013 WL 2247794 (S.D.N.Y. May 22, 2013) ..........................30, 33
Integrated Sys. & Power, Inc. v. Honeywell Int'l, Inc.,
09 Civ. 5874, 2009 WL 2777076 (S.D.N.Y. Sept. 1, 2009) ........................................33
Itar-Tass Russian News Agency v. Russian Kurier, Inc.,
153 F.3d 82 (2d Cir. 1998)...........................................................................................16
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 3 of 38
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L-7 Designs, Inc. v. Old Navy, LLC,
647 F.3d 419 (2d Cir. 2011).........................................................................................14
Landis v. N. Am. Co.,
299 U.S. 248 (1936) .....................................................................................................29
Madanes v. Madanes,
186 F.R.D. 279 (S.D.N.Y. 1999) .................................................................................16
Martinez v. Bloomberg LP,
883 F. Supp. 2d 511 (S.D.N.Y. 2012) ..........................................................................15
Nippon Shosen Kaisha, K.K. v. United States,
238 F. Supp. 55 (N.D. Cal. 1964) ................................................................................27
In re Potash Antitrust Litig.,
686 F. Supp. 2d 816 (N.D. Ill. 2010) ...........................................................................15
Spencer Trask Software and Info. Servs., LLC v. RPost Int'l Ltd.,
206 F.R.D. 367 (S.D.N.Y.2002)) .................................................................................33
Texaco, Inc. v. Short,
454 U.S. 516 (1982) .....................................................................................................27
Toliver v. City of New York,
10 Civ. 3165, 2012 WL 7782720 (S.D.N.Y. Dec. 10, 2012).......................................30
Toliver v. City of New York,
10 Civ. 3165, 2013 WL 1155293 (S.D.N.Y. Mar. 21, 2013) ......................................14
United States v. Davis,
No. 11-2325-cr, 2013 WL 4081396 (2d Cir. August 14, 2013) ..................................28
United States v. McClain,
545 F.2d 988 (5th Cir. 1977) ..............................................................16, 17, 25, 26, 28
United States v. McClain,
593 F.2d 658 (5th Cir. 1979) ............................................................................... passim
United States v. Portrait of Wally,
No. 99 Civ. 9940, 2002 WL 553532 (S.D.N.Y. Apr. 12, 2002) ..................................17
United States v. Schultz,
333 F.3d 393 (2d Cir. 2003).................................................................16, 17, 25, 26, 28
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 4 of 38
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United States v. Turley,
352 U.S. 407 (1957) .....................................................................................................26
Zeevi Holdings Ltd. v. Republic of Bulgaria,
No. 09 Civ. 8856, 2011 WL 1345155 (S.D.N.Y. April 5, 2011) .................................16
STATUTES
Fed. R. Civ. P. 12(c) ..............................................................................................14, 15, 16
Fed. R. Civ. P. 12(h)(2)(B) ................................................................................................14
Fed. R. Civ. P. 44.1 ........................................................................................................2, 15
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PRELIMINARY STATEMENT
The Government is seeking to forfeit a 10th century Cambodian statue (the “Statue”)
owned by claimant Ms. Ruspoli, whose husband purchased the Statue from a reputable London
dealer in 1975. The Statue is currently in the possession of claimant Sotheby’s, Inc., to whom
Ms. Ruspoli consigned it for auction in 2010.
The Government has told the Court, repeatedly, that there are “clear and unambiguous”
laws declaring the Statue belongs to Cambodia, rendering it stolen upon removal from Cambodia
(if without Cambodia’s permission) – and that Sotheby’s, as a prominent auction house, must
surely have known this. See, e.g., Dkt. 29 at 10-11, 26-27, 30; Dkt. 43 at 2, 4-7, 15. What the
Government left out is that prior to this litigation, the Cambodian government itself was either
unaware of these laws or did not share the U.S. government’s interpretation of them.
Documents the Government belatedly produced in late August of this year (more than a
year after they were requested) show that at the outset of this investigation in March of 2011, and
for months thereafter, Cambodia was repeatedly asked to identify a legal basis for its ownership
of the Statue, but failed to do so. The U.S. Government recognized that without such a basis, it
was “unable to do anything.” Ex. 2 at 1463.
1
Undeterred, the U.S. government represented to
Sotheby’s on April 1, 2011 that it already had “probable cause that the item was stolen after
Cambodian cultural patrimony laws were enacted,” and instructed Sotheby’s not to move the
Statue. Ex. 5. This bought the Government time, which it used, among other things, to try to
find the very Cambodian law it claimed already to know made the Statue stolen property, asking
a law professor on April 19, 2011 to “help us find the actual cultural property laws that protect
1
“Ex.” refers to exhibits to the Declaration of Peter G. Neiman in Support of Claimants’ Motion for Judgment on
the Pleadings and for a Stay of Discovery, submitted herewith. Page numbers refer to the final digits of a page’s
Bates number.
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Cambodian antiquities prior to 1975.” Ex. 6. Eventually, the U.S. State Department, eager to be
as “cooperative with the Cambodians as possible, as cultural artifacts is one of those issues
where the two governments have a shared interest,” Ex. 9 at 1413, cobbled together its own
theory of Cambodian ownership based on “segments” of long-defunct French colonial decrees
issued between 1900 and 1925, when Cambodia was a French protectorate. When the
Cambodians persisted in seeking an amicable resolution rather than assert the State Department’s
ownership theory, the U.S. Government insisted that “prior to the Cambodians getting their
hands on it, we should be the vehicle utilized for the return. Not an Auction house,” and
ultimately demanded that Cambodia “stop negotiating with Sotheby’s.” Ex. 8 at 1453; Ex. 10 at
1366.
To make matters worse, the State Department’s theory on which this case is based is
flatly wrong.
Submitted with this motion is an affidavit from Alexandre Deroche, a French law
professor who is expert in the property law that governed French colonies. Professor Deroche
explains that neither the French colonial decrees the Government has cited, nor any of the other
information Professor Deroche reviewed in his thorough primary research, declares Cambodia to
be the owner of the Statue. Pursuant to Rule 44.1, this Court can rely on Professor Deroche’s
explanation of the relevant decrees in considering this motion for judgment on the pleadings, and
that explanation provides ample basis to grant judgment to Ms. Ruspoli and Sotheby’s
(“Claimants”) on the Government’s central theory of the case.
It is little wonder that a legal theory with such roots turns out to be wrong. And it is
deeply unfair for the Government to allege that Sotheby’s or Ms. Ruspoli could possibly have
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known that Cambodia had a viable ownership claim to the Statue, when the legal theory
supporting that claim was apparently unknown to anyone until the State Department invented it.
Perhaps nervous about its primary case, the Government amended its complaint to
articulate a second legal theory. According to the Government, whatever French colonial law
does or does not declare, the modern nation of Cambodia owns the Statue automatically because
it was originally built by a Cambodian king more than a thousand years ago. No American court
has ever forfeited property on such a theory, which conflicts with decades of settled United
States law recognizing broad claims of national ownership of ancient objects only where the
foreign state has clearly and unambiguously declared its ownership in written laws. Because
there is no such declaration here, the Government’s alternative theory fails as a matter of U.S.
law.
The validity of the two theories of Cambodian ownership prior to 1975 pled in the
Amended Complaint are pure legal issues and are ripe for decision now. The U.S. Government
has repeatedly asked the Court not to decide these legal questions until after all discovery is
complete. But that is backwards. Nothing the Government seeks in discovery will address either
(a) whether the French colonial decrees declared Cambodia the owner of the Statue; or (b)
whether U.S. law recognizes property as stolen on the Government’s alternative, inherent-right-
of-kings theory. These are purely legal questions. And the discovery the Government does seek
is burdensome – the Government is demanding production, among other things, of “all
documents concerning Khmer Art from Cambodia sold by Sotheby’s, consigned to Sotheby’s, or
otherwise offered to Sotheby’s for sale at auction” (Gov’t Second Set of Interrogatories and
Document Requests to Sotheby’s Inc. (August 23, 2013)) (a request that would require searching
Sotheby’s archives back to the founding of the company in 1744), and insisting that it needs to
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depose as many as fifteen Sotheby’s employees about what they believed Cambodian law to be.
7/2/13 Hr’g Tr. at 17.
2
The effect of this – and perhaps its motive – is clear. The Statue’s value is the upper
bound of what a rational litigant would spend defending against the Government’s seizure
efforts. The Government no doubt believes that if it can make the cost of litigation exceed that
bound, Claimants will be forced to give up without ever getting to test the Government’s
foundational premise – that Cambodia was the owner of this Statue in the early 1970s, when the
Government alleges it was removed from that country.
3
Nobody should lose their property because it costs more to defeat efforts to seize the
property than the property is worth. The Government’s actions have created a serious risk of that
happening here, and this Court should not allow it. The Court stated that it would consider
staying discovery if Claimants filed a “compelling” motion for dismissal supported by an expert
report on the relevant foreign law. 7/2/13 Hr’g Tr. at 42. We respectfully submit that this
motion, and the expert affidavit and newly discovered documents submitted with it, are
compelling. The Court should stay discovery while this motion for judgment on the pleadings is
pending, grant the motion, and dismiss this case.
STATEMENT OF ADDITIONAL FACTS
The background regarding the Statue and events leading to this forfeiture action are
described at pages three to nine of Claimants’ June 5, 2012 motion to dismiss the original
complaint. Set forth here are certain additional facts related to (1) the Government’s efforts to
induce Sotheby’s to keep the statue in the United States while the Government searched for a
2
On September 4, 2013, the Government issued its first eight deposition notices in this case, including three for
internal Sotheby’s lawyers.
3
Claimants do not concede that the Statue was still in Cambodia in the early 1970s – there is no record of the Statue
in the Parmentier survey of the site published in 1939 – but simply assume the truth of the allegations in the
Amended Complaint for purposes of this motion.
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legal theory to support its case; (2) the Government’s unsuccessful efforts to get Cambodia to
identify a legal basis in its own law to claim ownership of the Statue; (3) the eventual invention
by the U.S. State Department of a legal theory under Cambodian law; and (4) the Government’s
efforts to thwart an amicable resolution of this dispute between Sotheby’s, Ms. Ruspoli, and the
Cambodian government.
1. Cambodia Requests That The Statue Be Withdrawn From Auction
On March 21, 2011, three days before the scheduled auction, UNESCO, a U.N.
organization involved in cultural property preservation, notified Interpol of the impending sale.
It explained that the “legs” of the “statue are still [in their] original place in Cambodia” but that
“further details” were not known; and it observed that the statue had “appeared first” in Europe
in the late 1960s and was bought by a European family in 1975. Ex. 1 at 1397. Interpol asked its
Washington bureau to “examine the possibility to safeguard the sculpture within the frame of
your legal possibilities” and asked its Phnom Penh bureau to “contact your ministry of culture
and urgently provide any additional useful information in order to confirm that the item belongs
to the Cambodian cultural property, and if it was stolen and/or illegally exported from your
country, provid[e] evidence of the crimes[.]” Ex. 1 at 1397.
The matter was referred that day to Brent Easter, a Special Agent with the Department of
Homeland Security and one of the Department’s “top cultural property experts.” Ex. 9 at 1415;
Ex. 1 at 1396.
Easter’s initial reaction was that “[w]ithout a theft report or date showing when the piece
left Cambodia, this will be a hard issue to force.” He explained that Cambodia “created new
cultural property laws in 1993,” and that “if there is provenance dating back to the late 1960s a
return is unlikely.” Ex. 1 at 1396.
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Karl-Heinz Kind, who has handled cultural property matters for Interpol for decades,
advised Easter that “[t]here is no theft report” available to Interpol, only a PowerPoint
presentation prepared by an archaeologist “which shows the place where the statue had been and
the remaining parts still in place.” Ex. 2 at 1463. Easter explained that he had received the
PowerPoint, but was “unable to do anything unless the government claims the property to be
stolen and provides a date of theft prior to their nation’s cultural property retention laws. If the
piece was stolen prior to their laws (or we can’t prove stolen afterwards) we are stuck.” Ex. 2 at
1463. Easter added that he needed a “translated theft report and a translated copy of Cambodia’s
Cultural Property laws prior to the theft report” but that “[b]oth items don’t seem to exist at this
time.” Id.
Unable to provide either item, Kind asked Easter “do you think there is a chance that
Sotheby’s withdraw the item voluntarily from the sale pending clarification of the issue?
Perhaps they may have an interest not to hit the headlines again which could have a negative
impact on their image with possible financial repercussions.” Id.
The next day, Kind forwarded to Easter Cambodia’s official request to Sotheby’s to
withdraw the statue from auction. Ex. 3. Kind acknowledged that this request “lacks almost
everything enabling the restitution, in particular, evidence of the theft, theft report, database
records, applicable legislation in the 1960s and nowadays, etc. Only a good will gesture from
the seller and the auction house seems to be a possible way.” Ex. 3 at 1421.
Despite the facial inadequacy of Cambodia’s request, Sotheby’s and Ms. Ruspoli chose
voluntarily to withdraw the Statue from the auction to pursue an amicable resolution of the
matter with Cambodia. This was an act of good will; Sotheby’s made clear at the time (and
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consistently since) that it did not believe Cambodia had a valid claim of ownership to the piece.
Ex. 4.
2. Constructive Seizure Of The Statue
Following Claimants’ voluntary decision, Easter discussed his “concerns” about the case
on March 31, 2011 with Randall C. Karch, a Program Manager at Homeland Security –
including that the known provenance appeared to pre-date Cambodia’s ratification of the
UNESCO convention, which might “preclude the ability to use the U.S. Cultural Property
Implementation Act as a tool to seize the object.” Ex. 9 at 1415. They discussed as an
alternative “investigating the possibility of using the U.S. National Stolen Property Act . . . as a
means of seizing the object,” recognizing that the “ability to utilize the NSPA will be determined
by Cambodia’s patrimony laws. Specifically, when were Cambodia’s patrimony laws
incorporated and what do they encompass.” Id. They also recognized the need for “strong
evidence from the Cambodian government regarding the theft of the statue,” such as “any
documentation of the statue prior to its theft and any subsequent police reports.” Id.
The next morning, on April 1, 2011 at 8:18 a.m., Easter wrote to Sotheby’s claiming that
based on unspecified developments, he “now ha[d] probable cause that the item was stolen after
Cambodian cultural patrimony laws were enacted” and requesting that Sotheby’s “not move the
piece as it is now being considered stolen property.” Ex. 5 at 1215. Sotheby’s had no practical
choice but to comply so as to avoid the risk of being accused of knowingly transporting stolen
property. Easter’s representation to Sotheby’s thus effected a constructive seizure of the Statue,
preventing Sotheby’s from selling the Statue or returning it to Ms. Ruspoli in Belgium.
Recently produced documents make clear that in fact, on April 1, 2011, Easter had no
probable cause. He had neither of the things that he and Karch had agreed just one day earlier
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were needed to determine whether the Statue was stolen property: “documentation of the statue
prior to its theft” and copies of “Cambodia’s patrimony laws” from prior to the alleged theft.
Indeed, no documentation of the Statue prior to its removal from Cambodia has ever been
produced. The only comprehensive survey of Prasat Chen, published in 1939, describes the very
site where the Statue allegedly stood but makes no mention of it, despite referring to other
statues nearby. And nearly three weeks after his April 1 representation to Sotheby’s that he had
probable cause, Easter was still searching for Cambodia’s patrimony laws, writing on April 19,
2011 to a UCLA law professor: “can you help us find the actual cultural property laws that
protect Cambodian antiquities prior to 1975?” Ex. 6 at 1174.
Easter’s search was plainly still ongoing on May 10, 2011, when he received from
Interpol’s Kind an undated excerpt from the “relevant Cambodian law.” That excerpt – which
does not appear to correspond to any of the decrees identified in this litigation – contained an
article 20 reciting that “[a]ny classified cultural property of public ownership or belonging to
public legal entities is inalienable.” Kind also conveyed a comment, apparently sourced to
UNESCO’s Phnom Penh bureau, acknowledging the decree’s deficiency: “the criteria which
define the goods belonging to the state are not determined.” Ex. 8 at 1454, 1455.
3. The U.S. State Department Invents A Legal Theory
At 9:46 a.m. on April 1, 2011 (almost 90 minutes after Easter claimed to Sotheby’s that
he already had probable cause) Loren Moe, a colleague of Randall Karch’s at Homeland
Security, referred Karch to Adam Davis, the desk officer for Cambodia at the State Department.
Ex. 9 at 1414. Davis was eager to be of assistance, later explaining to Karch and Moe that
“[w]e’d like to be as cooperative with the Cambodians as possible, as cultural artifacts is one of
those issues where the two governments have a shared interest.” Ex. 9 at 1413.
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By May 13, 2011, another State Department employee, Andrew Cohen, had located
“segments” of some unidentified Cambodian law which Easter thought might form “our legal
basis” if it could be “firmed up.” Ex. 9 at 1410. But Easter still did not know “[w]ho is currently
claiming the piece” or “[o]n what basis are they making the claim.” Ex. 9 at 1410. Accordingly,
on May 13, 2011 Easter asked the State Department to pass on those two questions to
Cambodian authorities.
By late June of 2011, the Cambodians apparently had still not answered Easter’s
questions. On June 29, 2011, Easter wrote directly to Hab Touch, a senior official in
Cambodia’s culture ministry.
4
Easter advised Touch that the “U.S. State Department” had
identified “segments” of Cambodian laws “that we believe would cover the item from well
before until well after the approximated time of theft,” offered to “provide” those segments to
Touch, and asked him to “confirm the legal framework that would support the Cambodian
Government’s claim over the piece.” Ex. 10 at 1366. The Government has not produced any
response from Touch to this request.
The Cambodian government’s apparent inability to identify any legal theory of state
ownership more than three months after the Statue was withdrawn from auction – despite
repeated requests that it do so – is powerful evidence that prior to this case, Cambodia did not
believe it had legal title (under the French colonial decrees or otherwise) to objects removed
from Cambodian ruins prior to the passage of its modern cultural property laws in 1993. That
perhaps explains why the Cambodian government never made a claim to the Statue’s twin,
4
Sotheby’s had notified Touch of the intended sale of the Statue in November 2010. In prior filings, the
Government criticized Sotheby’s notification of Touch because it was sent to his “yahoo.com” email address. See
Mem. of Law in Support of Government’s Opposition, Dkt. 29, at 28-29 (Aug. 20, 2012) (“Sotheby’s chose to …
send an unsolicited email regarding the sale to [Touch’s] yahoo.com email account. … This is not the behavior of a
company genuinely trying to determine if an artwork is stolen.”) That criticism was spurious, as the recently
produced documents reveal. That is the same email address that the case agent himself used to correspond with
Touch. Ex. 10 at 1366-67.
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which has been displayed at a prominent museum in Los Angeles for decades with the full
knowledge of the Cambodian government, and the Cambodian government’s admission, in a
March 2011 letter to Sotheby’s, that the twin “belongs to” the Los Angeles museum. Dkt. 17, at
8.
4. The Government Directs Cambodia Not To Negotiate A Resolution
On March 30, 2011, Sotheby’s wrote to UNESCO’s representative in Cambodia,
explaining that Sotheby’s did not believe the “Cambodian government has a valid legal claim to
ownership” of the Statue. Ex. 4 at 91. In particular, the letter explained that Sotheby’s due
diligence “substantiates” that the Statue “left Cambodia prior to the date of all relevant laws,”
including the UNESCO convention of 1970, the 1983 implementing legislation in the United
States, the 1999 bilateral agreement with Cambodia, and “Cambodia’s modern cultural
preservation law,” which Sotheby’s understood “is dated 1993.” Ex. 4 at 91-92. The letter also
noted that Sotheby’s decision to accept the Statue “on consignment was . . . heavily influenced
by our knowledge that a ‘twin’ sculpture is owned by and has been on public display at a
prominent museum in California since the 1980’s, without any claim or request having been
lodged for repatriation.” Id. In the “spirit of international cooperation,” Sotheby’s nonetheless
proposed various “way[s] forward,” including that a “private citizen acting for the benefit of the
Cambodian people . . . purchase the [Statue] . . . for purposes of repatriating it to Koh Ker.” Ex.
9 at 92-93. Sotheby’s asked UNESCO to “convey these proposals to the Cambodian
[A]uthorities.” Ex. 9 at 93.
On May 5, 2011, Cambodia’s Minister of Culture wrote in reply. The Minister
“thank[ed]” Sotheby’s for having “postpone[d] the auction” of the Statue. Ex. 7 at 1540. The
Minister noted that “[a]fter discussion at the highest level, the Royal Government of Cambodia”
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wished to pursue the possibility of a “private and generous citizen to purchase the sculpture in a
private sale for purposes of repatriating it to Cambodia.” Ex. 7 at 1540.
The U.S. Government was not pleased with this development, which threatened to leave
it with no credit were the Statue returned. On May 10, Easter requested that “Interpol HQ” be
contacted “on our behalf” to convey his message: “We are involved and they can come to
whatever agreement they want, but at the end of the day, the piece cannot leave Sotheby’s
without us. I believe that is the AUSA’s position as well. Everyone supports an amicable
surrender of the piece, but prior to the Cambodians getting their hands on it, we should be the
vehicle utilized for the return. Not an Auction house.” Ex. 8 at 1453.
Three days later, Homeland Security’s Randall Karch wrote to the State Department
complaining that direct negotiations between Cambodia and Sotheby’s threatened “our
relationship with the United States Attorney’s Office,” which had already invested resources in
the matter. Ex. 9 at 1412.
5
Karch argued that “if the Cambodian government . . . wish[es] to
pursue a settlement at this time, they should have initiated the process prior to contacting law
enforcement.” Ex. 9 at 1412.
Messages through intermediaries appear not to have had the desired effect. On June 29,
2011, in his first direct communication with Cambodian authorities reflected in the documents,
Easter was even blunter: “I would like to request two things from you and your government. The
first is the simplest. Please stop negotiating with Sotheby’s . . .” Ex. 10 at 1366.
5. The Government’s Representations To The Court
The filing of this forfeiture complaint on April 4, 2012 took Sotheby’s completely by
surprise. As a letter on that date to the Court explained, “Sotheby’s has for months – with the
5
More than one U.S. Attorney’s Office has been involved in this matter, and it is unclear to which office exhibits 8
and 9 refer.
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full support of the Cambodian government – been attempting to arrange a sale to a buyer who
would donate the statue to the nation of Cambodia.” 4/4/12 Ltr. at 2.
At the initial conference in this matter on April 11, 2012, the Court asked the prosecutor:
“I would like to know whether or not – is there some genuine dispute as to what the Cambodian
government’s position is with regard to the ownership and/or disposition of this statue.
Sotheby’s says . . . they have been in discussions with some Cambodian officials . . .[a]nd that
the actions that they have taken are totally consistent with . . . how the Cambodian government
wanted to proceed.” 4/11/12 Hr’g Tr. at 8.
In response, the Government did not advise the Court (a) that Cambodia had failed for
months either to assert ownership of the Statue or identify a basis to do so, despite repeated
requests; (b) that ultimately the State Department had invented a theory of Cambodian
ownership, which the government then asked Cambodia to confirm; (c) that Cambodia instead
pursued an amicable resolution with Sotheby’s that was inconsistent with that ownership theory;
and (d) that any Cambodian support for this action came only after the U.S. government had
directed it to “stop negotiating with Sotheby’s.”
Instead, the Government simply assured the Court that “this action was filed at the
request of the Cambodian government.” 4/11/12 Hr’g Tr. at 9.
On June 5, 2012, claimants moved to dismiss the Complaint, arguing, among other things
(a) that the French colonial decrees did not clearly and unambiguously declare Cambodia the
owner of the Statue, as due process requires; (b) that the Complaint did not sufficiently allege
that Cambodia had ever enforced the French colonial decrees as declarations of ownership; and
(c) that there were no facts alleged from which one could infer that Sotheby’s or Ms. Ruspoli
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 17 of 38
13
knew the statue was stolen (i.e., that it was removed from Cambodia after Cambodia made an
appropriately clear declaration of national ownership).
In response, the Government acknowledged the due process requirement that the foreign
declaration of ownership be clear and unambiguous, but presented an affidavit from an
Australian lawyer paraphrasing various colonial decrees, and then argued in its brief that the
laws were sufficiently clear to meet the due process test. Dkt. 29. As to enforcement, the
government told the Court “it can be inferred from the Complaint’s allegations that since the
Cambodian laws were instituted, the laws have also been enforced.” Dkt. 29 at 17. The
Government did not reveal either the Cambodian government’s apparent lack of familiarity with
these French colonial decrees, or the U.S. origin of its legal theories, even when the Court at oral
argument specifically pressed the Government on whether Cambodia had previously asserted
ownership based on these decrees. 9/27/12 Tr. at 51 (asserting Cambodia “may have made that
argument”); Tr. at 58 (“this will be developed in discovery. It is something we’re pursuing . . . it
certainly is something we expect to present to the Court”). These facts cast substantial doubt on
whether these decrees could possibly have provided the fair notice required by due process, even
if (contrary to fact) they had declared Cambodia’s ownership clearly and unambiguously.
Similarly, these facts make entirely implausible the government’s assertion that Cambodia’s
prior enforcement of the laws can be “inferred” from their existence.
As to mens rea, the Government told the Court that the bare facts about the Statue
allegedly known to Sotheby’s before importation – that the Statue came from the Koh Ker
region, that its feet were missing, and that its first known sale was in 1975 – were somehow
enough to put Sotheby’s on notice that the Statue was stolen property that could not lawfully be
sold. Dkt. 29 at 27. But the documents described above show just the opposite. The documents
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14
show the Government’s case agent knew all of these things in March of 2011 – for they are all
reflected in the initial notice from Interpol about the Statue and Cambodia’s request for the
Statue’s return. And both Interpol and Special Agent Easter agreed at the time that the
submissions reflecting only these facts lacked “almost everything” needed to establish that the
Statue was stolen property, and that law enforcement could not “do anything” absent proof of
when the Statue was removed from Cambodia, and what Cambodian law provided at that time.
6
Rather than acknowledging these inconvenient admissions, which cast serious doubt on its case,
the Government withheld the documents until after the motion to dismiss was decided.
ARGUMENT
Claimants move this Court for an order pursuant to Fed. R. Civ. P. 12(c) for judgment on
the pleadings, and for a stay of discovery during the pendency of this motion.
7
Judgment on the
pleadings is warranted because even assuming the truth of all the allegations in the
Government’s Amended Complaint, and drawing all reasonable inferences in the Government’s
favor, the Government has failed to state a claim on which relief may be granted.
8
In Section I, we explain that the Government’s primary theory – its claim that a series of
colonial-era orders declare Cambodia to be the owner of the Statue – fails for the reasons set out
in the accompanying declaration of Professor Alexandre Deroche, an expert in French colonial
6
Similarly, the June 2010 email in which the Art Historian mistakenly opined that the Statue was “definitely stolen”
(Amended Complaint at par. 14), also lacked “almost everything” needed to actually establish that – such as when
the Statue was removed, and what the law provided at the time, which may explain why the Art Historian almost
immediately recanted.
7
Claimants moved to dismiss the original Complaint under Rule 12(b)(6), but have not previously filed a motion to
dismiss the Amended Complaint. Even if they had, there would be no barrier to the present motion. Rule 12(h)(2)
provides that “[f]ailure to state a claim upon which relief can be granted … may be raised (A) in any pleading …;
(B) by a motion under Rule 12(c); or (C) at trial” (emphasis added). See generally Toliver v. City of New York, 10
Civ. 3165, 2013 WL 1155293, at *1 (S.D.N.Y. Mar. 21, 2013) (rejecting argument that prior unsuccessful Rule
12(b)(6) motion precludes filing of subsequent 12(c) motion, in light of Rule 12(h)(2)(B)).
8
“In deciding a Rule 12(c) motion, we ‘employ[ ] the same ... standard applicable to dismissals pursuant to [Rule]
12(b)(6). Thus, we will accept all factual allegations in the [C]omplaint as true and draw all reasonable inferences in
[Plaintiff's] favor.’” L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 429 (2d Cir. 2011) (citation omitted);
Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010) (“To survive a Rule 12(c) motion, [plaintiffs’] complaint
must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.”
(citations and internal quotation marks omitted)).
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15
laws applicable to Cambodia. Professor Deroche explains that the Government’s reading of the
decrees is wrong.
This Court may rely on Professor Deroche’s affidavit in ruling on this motion.
Interpretation of foreign law is an issue of law, to be determined by the Court. See Fed. R. Civ.
P. 44.1; Martinez v. Bloomberg LP, 883 F. Supp. 2d 511, 517 (S.D.N.Y. 2012) (“Under Rule
44.1…, determination of the content and effect of foreign law presents a question of law for the
Court.”). It is settled that a Court may consider a declaration on foreign law on a motion to
dismiss (or motion for judgment on the pleadings), without converting it into a motion for
summary judgment. See, e.g., Bigio v. Coca-Cola Co., No. 97 Civ. 2858, 2010 WL 3377503, at
*3-5 (S.D.N.Y. Aug. 23, 2010) (granting motion to dismiss under 12(b)(6) after determining
content of Egyptian trespass law, pursuant to Rule 44.1, on the basis of competing expert
declarations), aff’d on other grounds, 675 F.3d 163 (2d Cir. 2012); Figueiredo Ferraz
Consultoria E Engenharia de Projeto Ltda v. Republic of Peru, 655 F. Supp. 2d 361, 367-69
(S.D.N.Y. 2009) (determining, pursuant to Rule 44.1 and on the basis of competing declarations
by Peruvian law experts, that signatory to arbitration agreement was a political organ of Republic
of Peru as a matter of Peruvian law, in considering Rule 12(b)(6) portion of motion to dismiss
petition to confirm foreign arbitral award), rev’d and remanded on other grounds, 665 F.3d 384
(2d Cir. 2011); In re Potash Antitrust Litig., 686 F. Supp. 2d 816, 825 & n.14 (N.D. Ill. 2010)
(considering defendant’s submission regarding the application of foreign law on 12(b)(6) motion,
and observing that “[t]he Court can consider [defendant’s] submission regarding the application
of foreign law without converting the Rule 12(b)(6) motion into a motion for summary judgment
because the determination of foreign law is treated as a ruling on a question of law.”). Nor is
there any requirement that the Court hear oral testimony before ruling on a matter of foreign law.
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 20 of 38
16
The Second Circuit has explained that “[the] opportunity to assess the witnesses demeanor” is of
little value in this circumstance, for “it is not the credibility of the experts that is at issue, it is the
persuasive force of the opinions they expressed.” Itar-Tass Russian News Agency v. Russian
Kurier, Inc., 153 F.3d 82, 92 (2d Cir. 1998). Indeed, courts routinely decide issues of foreign
law on the papers, without taking testimony even when there are competing expert views. See,
e.g., Figueiredo Ferraz, 655 F. Supp. 2d at 368-69; Bigio, 2010 WL 3377503, at *3-5; Zeevi
Holdings Ltd. v. Republic of Bulgaria, No. 09 Civ. 8856, 2011 WL 1345155, at *4-6 (S.D.N.Y.
April 5, 2011) (deciding issues of Bulgarian law based on evaluation of relative merits of
competing declarations); Madanes v. Madanes, 186 F.R.D. 279, 283 (S.D.N.Y. 1999) (deciding
issue of Argentine law based on “text of the relevant provisions of the Argentine Constitution,
the opinions of experts on Argentine law, excerpts from learned treatises, and published opinions
from Argentine courts.”) However, if the Court wishes to hear from Professor Deroche directly,
we can of course make him available.
In Section II, we explain that the Government’s remaining basis for the forfeiture claim –
its “inherent right of kings” argument – fails as a matter of U.S. law under the due process
principles articulated in McClain and Schultz. In Section III, we set out the basis for Claimants’
motion for a stay of discovery during the pendency of this Rule 12(c) motion.
I. Claimants’ Expert Declaration Demonstrates that the Government Has Not
Identified Any Law – Let Alone a Clear and Unambiguous Law – Declaring
Cambodia to Be the Owner of the Statue
The Statue cannot be forfeited unless the Government proves that it belongs to
Cambodia, and not to Ms. Ruspoli. See, e.g., United States v. Portrait of Wally, No. 99 Civ.
9940, 2002 WL 553532, at *19 (S.D.N.Y. Apr. 12, 2002) (“[I]n order for property to be
considered ‘stolen,’ the property must rightfully belong to someone other than the person who
has it.”). When the putative owner is a foreign state, ownership cannot be shown through the
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17
assertion of regulatory authority over an antiquity – such as restrictions on export or transfer –
because such restrictions “do not create ‘ownership’ in the state.” United States v. McClain, 545
F.2d 988, 1002 (5th Cir. 1977) (McClain I). Rather, “[t]he state comes to own property only
when it acquires such property in the general manner by which private persons come to own
property, or when it declares itself the owner.” Id. Such a declaration must be “clear and
unequivocal in claiming ownership.” United States v. McClain, 593 F.2d 658, 670-71 (5th Cir.
1979) (McClain II) (“[T]he National Stolen Property Act … cannot properly be applied to items
deemed stolen only on the basis of unclear pronouncements by a foreign legislature.”); see also
United States v. Schultz, 333 F.3d 393, 402-04 (2d Cir. 2003).
The Government originally rested its case on the theory that Cambodia had declared itself
to be the owner of the Statue before it was removed from Cambodia, at some point prior to 1975.
It alleged in the complaint that four rulings and orders – a 1884 ruling by a French Governor
(Compl. ¶38), and colonial decrees dated 9 March 1900 (Compl. ¶37), 16 May 1925 (Compl.
¶38), and July 1925 (id.) – supplied the required declaration. In response to a motion to dismiss
questioning this interpretation of the relevant decrees, the Government offered a Declaration by
Matthew Rendall, which dropped reliance on the 1884 ruling, and – in addition to the other three
legal sources cited in the Complaint – relied also on an order dated 30 April 1925.
9
See Rendall
Decl. ¶¶17-35.
10
9
Mr. Rendall refers to its date as 6 May 1925, but that is the date of its publication, not promulgation. See Deroche
Decl. ¶31.
10
Mr. Rendall’s discussion of property law in the period following independence (from approximately 1950 until
1975, the year Ms. Ruspoli’s husband purchased the Statue), does not identify any purported declaration of
government ownership. Instead, it describes the transfer of authority from the French to Cambodian governments
(¶¶36-37); recounts a dispute between Thailand and Cambodia regarding whether a different temple, Preah Vihear,
“was situated in territory under the sovereignty of Cambodia” (¶38); describes a 1968 law as “regulating the act of
looting of national cultural property” (¶39); and mentions the 1970 coup d’état, subsequent civil war, ratification of
the UNESCO convention, and certain of the Government’s allegations regarding the Statue (¶¶40-45).
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18
In ruling on Claimants’ motion to dismiss, this Court said that it needed expert evidence
on the proper interpretation of those orders: “Here, where the subject law is in a foreign
language and the parties argue that its literal translation is subject to more than one
interpretation, further evidence is necessary to determine whether the law at issue unequivocally
vests ownership in the Cambodian State. At this stage, assuming all of the Government’s facts
as true, and drawing the reasonable inferences in the Government’s favor, including that ‘of’ as
translated from the [16 May 1925] decree in French connot[es] ‘ownership,’ the Government has
demonstrated a reasonable basis to believe that it will be able to [prevail].” Op. at 14-15.
The accompanying Declaration of Professor Alexandre Deroche provides the expert
evidence the Court sought, and it establishes that the Government’s case is wrong. Professor
Deroche is an expert in the very area of law on which the Government based its case: French
colonial property law in Indochina. Deroche Decl. ¶1.
11
He has published a monograph titled
France Coloniale et Droit de Propriété: Les Concessions en Indochine (“Colonial France and
Property Law: The Concessions in Indochina”). In preparing the Declaration, he conducted
extensive primary research in six libraries and archives in three French cities (Paris, Aix-en-
Provence, and Grenoble). Deroche Decl. ¶4 & Annex ¶¶6-8. He summarizes his opinion as
follows:
In this Declaration I have been asked to opine as to whether any law applicable to
Cambodia in the French colonial period declared that the government owned the Statue.
I have found no such law, and I respectfully disagree with the U.S. Government and Mr.
Rendall that any of the French colonial laws they cite have this effect. Furthermore, I
have been informed that the standard in U.S. court is that a foreign law must clearly and
unambiguously declare the government to be the owner. It follows from my principal
conclusion that this standard is not satisfied.
Deroche Decl. ¶6.
11
By contrast, the Government’s witness, Mr. Rendall, is an Australian lawyer whose experience appears to be
limited to present-day Cambodian law. See Rendall Decl. ¶¶1-4.
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 23 of 38
19
Professor Deroche then considers in turn each of the categories of pre-colonial laws on
which Mr. Rendall relies, and explains why they do not establish government ownership.
A. Classification Orders, Including The 16 May 1925 Classification Order, Do
Not Confer Ownership On The Government
Mr. Rendall cites extensively to classification orders, such as the 9 March 1900 “Order of
the Governor General of Indochina on preservation of monuments and objects of historical or
artistic interest.” See, e.g., Rendall Decl. ¶¶17-21. Such classification orders, however, do not
transfer ownership. As Professor Deroche explains, “[c]lassification … is an administrative
protection, and it may be applied to either publicly-owned or privately-owned property.
Classification may grant some limited administrative authority over an item, directed to the
item’s preservation, but it absolutely does not entail any transfer of ownership in favor of the
State or of another public entity.” Deroche Decl. ¶8. The classification orders establish this in
their own text. First, they apply by their terms to both private and public property. Deroche
Decl. ¶10. Second, they provide that classified property may, if certain stringent conditions are
met (including the payment of compensation) – and not as a matter of course – be expropriated
in favor of the state. Deroche Decl. ¶¶11, 13. Obviously, if the classification itself rendered a
piece of property state-owned, “then there would be no need for an expropriation.” Deroche
Decl. ¶13. Third, Professor Deroche explains that the declarations ordered private owners to
undertake “safeguarding and conservation” of their classified property, thus demonstrating
awareness and intent that the property remain privately-owned after classification. Deroche
Decl. ¶14.
Professor Deroche then moves on to discuss the centerpiece of the Government’s case:
the 16 May 1925 order. This was the only decree to which this Court specifically referred in
ruling that the Government’s legal case survived the motion to dismiss: “drawing the reasonable
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20
inferences in the Government’s favor, including that ‘of’ as translated from the [16 May 1925]
decree in French connot[es] ‘ownership,’ the Government has demonstrated a reasonable basis
to believe that it will be able to [prevail].” Op. 14-15 (emphasis added). Professor Deroche’s
declaration now establishes conclusively that “of” in that order does not connote ownership. He
provides a translation of Article 1
12
and explains:
First, the 16 May order is a classification order, and thus its purpose is to provide the
basis for the protection of designated monuments and historic objects – not to transfer ownership
of those monuments and objects (Deroche Decl. ¶19).
Second, the order does not provide for the procedural protections required by the 1884
Decision before the state may expropriate property, and so, if it did operate to cause monuments
to become government property, it would be null and void (Deroche Decl. ¶19).
Third, the key word “de,” literally translated as “of,” draws its meaning from context. In
the key phrase in the 16 May order – “monuments and historic objects of French Indochina” – it
means “located in,” not “belonging to.” Professor Deroche explains that this meaning is
mandated both by the purpose of the order (see Deroche Decl. ¶20) and by grammatical and
interpretive principles. Specifically, where “de” is followed by a place or geographic entity (as
opposed to a person or political entity), it “will mean ‘of’ in the sense of ‘located in.’” Deroche
Decl. ¶21. “French Indochina” (“l’Indochine française”) in the 16 May order is a geographic
entity; the authors of the order made this clear by elsewhere using the phrase for the political
12
“The real estate and tangible moveable items located within the territorial limits of the Indochinese Union, as they
are listed in the tables attached to this order, are classified among the monuments and historic objects of French
Indochina.” Deroche Decl. ¶16. The final clause of the article corresponds to the French text “sont classés parmi les
monuments et objets historiques de l’Indochine française.” Koh Ker and “Pr. Chen” appear in the attached tables.
Id. ¶17.
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entity, “Indochinese Union.” Id. ¶22.
13
Thus, “‘classés parmi les monuments et objets
historiques de l’Indochine française’ is properly translated and understood as ‘classified among
the monuments and historic objects located in French Indochina.’” Id.
Fourth, Professor Deroche explains that this is further confirmed by similar provisions in
other French colonial laws. First, Article 1 of a 15 April 1925 order states that certain listed
“immovable and movable properties belonging to the French State … are classified among the
historical monuments of Indochina.” Here, the similar phrase “of Indochina” must again have
the connotation “located in Indochina,” because the property in question “belong[s] to the French
State.” Deroche Decl. ¶23(a). Second, a 15 August 1934 order, which applies by its terms to
property owned by the French State and private owners, is titled “Protection of natural
monuments and sites, of an artistic, historical, scientific, legendary or picturesque character of
[de] Martinique.” Again, given its facial application to French-owned and privately-owned
property, “of Martinique” must have the connotation “located in Martinique.” Id. ¶23(b).
In sum, Professor Deroche’s declaration demonstrates beyond doubt that the 16 May
1925 order did not declare any monuments or historic objects to be property “belonging to”
Cambodia. Instead, it simply designated certain monuments and objects located in French
Indochina as classified.
There is no dispute between the experts on this question. While the Government has
asserted in prior briefing that “of” means “belonging to” in the May 16, 1925 decree (Dkt. 29 at
14; Dkt. 43 at 5), the Government’s expert offered no such opinion, saying instead (Dkt. 29-1, at
¶ 30) only that the decree “provided that both the immovable and moveable objects situated
within the limits of the territorial union of Indochina that are listed and enumerated in the tables
13
French law follows the familiar principle that where different phrases are used in the same passage they must be
understood to have different meanings. Id. ¶22.
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 26 of 38
22
annexed to that [decree], are classified as the historical monuments and objects of French
Indochina.” That statement takes no position on whether “of” does, or does not, mean
“belonging to.” The dispute on that question is between the expert opinion of Mr. Deroche, and
the unsupported assertion of the Government’s briefs. This Court does not need to hold a
hearing on foreign law to resolve that kind of dispute: the Government, as the party relying on
foreign law, bears the burden of proof, and its unsupported assertions are insufficient to meet that
burden. See Baker v. Booz Allen Hamilton, Inc., 358 F. App’x 476, 481 (4th Cir. 2009) (“[T]he
party claiming foreign law applies carries both the burden of raising the issue that foreign law
may apply in an action and the burden of proving foreign law to enable the district court to apply
it in a particular case.” (emphasis added)); Bigio, 2010 WL 3377503, at *4 (quoting Baker).
B. The Remaining Colonial Laws On Which The Government Relies Do Not
Declare The Statue To Be Government Property
The Government has relied on orders of 9 March 1900, 30 April 1925, and 11 July 1925,
which contain provisions concerning antiquities found on “national domain” land, “colonial,
local or municipal estate” land, or “sovereign domain” land. Deroche Decl. ¶¶26, 31, 36.
Professor Deroche explains that each has the effect that antiquities found on such land after these
decrees were issued generally belong to the “domain” or “estate” that owns the land, id. at ¶¶26-
28, 31-32, or in the case of the July 1925 order, to the domain that granted the land to another, id.
at ¶¶36-37.
14
The Government’s account, however, has a fatal omission: it has not identified
any law declaring that Koh Ker or Prasat Chen was “part of the national domain” or “included in
the colonial, local, or municipal estate” or “granted by the domain of the sovereign or the
14
The 9 March 1900 and 30 April 1925 orders also provide that antiquities found on land granted by the government
or public authorities to private individuals remain property of the “national domain” or “colonial estate,”
respectively. Deroche Decl. ¶¶ 30-32. These provisions apply only prospectively: if an individual had previously
been granted land by the government and had found antiquities on it, those antiquities would remain the individual’s
property. See id. These provisions do not alter the analysis set out above. See infra note 15.
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 27 of 38
23
protected state” at the relevant times. See id. at ¶¶28, 32, 41.
15
Without that second piece, all the
Government has done is to find laws standing principally for the unremarkable proposition that
landowners own antiquities found on their land.
Such a law neither establishes that Cambodia had a legal claim to the Statue, nor provides
the notice due process requires before treating the Statue as stolen. Establishing Cambodia’s
ownership in accordance with due-process notice requirements would require a clear and
unambiguous law declaring the land in question to be part of the relevant domain at the relevant
time, see McClain II, 593 F.2d at 670-71, but the Government has identified no such law.
16
In a final attempt to salvage its Cambodian-law theories, the Government has argued that
a rejection of its legal position should lead not to a dismissal but to discovery. It has urged that
rejection of those theories would simply open the door to factual discovery aimed at developing
other bases to argue that the Prasat Chen ruin was part of the national or colonial domain. See
Government’s Objection to Claimants’ Letter Dated May 10, 2013, Dkt. 50 (May 21, 2013), at 5
(hereafter “Gov’t Submission, Dkt. 50”). But the status of the Prasat Chen ruin is a legal
question – as the Government itself recognized when it posited that the 16 May 1925 order
answered the question. It does not magically turn into a factual question if the Government is
15
Nor has the Government identified any law declaring that Koh Ker or Prasat Chen was granted by the government
or public authorities to private individuals.
16
The 1924 penal code, mentioned in passing by Mr. Rendall, provides no better support to the Government’s case.
According to Mr. Rendall, “[t]he Code specifically provided that the monuments and classified historical or
archaeological pieces were considered to be part of the heritage (and hence, property) of the State.” Rendall Decl.
¶33 (emphasis added). He gives no support for his inference that heritage (or “patrimony,” as Professor Deroche
translates it, Deroche Decl. ¶43) entails ownership. It does not, for multiple reasons. First, the provision to which
Mr. Rendall refers, Article 394, extends protections that apply to government-owned property (set out in Article
393) to items that are not government-owned but are “considered as” if they were – a “legal fiction” that does not
“imply[] any transfer of ownership in favor of the state.” Id. ¶45(a). Second, the prohibition in Article 394 “would
have been superfluous,” contrary to basic principles of statutory interpretation, “if the article also functioned to
transfer ownership of all monuments … to the state,” since Article 393 “already prohibits damaging state-owned
property.” Id. ¶45(b). Third, on Mr. Rendall’s interpretation, Article 394 “would operate an implicit expropriation”
of property “without any of the required protections” established in the 1884 Decision, which is “impossible.” Id.
¶45(c). Fourth, later laws recognize the existence of privately-owned classified historical properties – which would
likewise be impossible if the 1924 penal code really had transferred all historical monuments and artifacts to
government ownership. Id. ¶46.
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 28 of 38
24
mistaken in its interpretation of that decree. There either is a decree establishing that the Prasat
Chen ruin is part of the national or colonial domain, or there is not.
The Government has not explained why fact discovery is necessary on this legal question,
what discovery it would seek, from whom, why it has a good faith basis to believe that such
discovery would be fruitful, or why (given its representation that it is bringing this case on behalf
of the Cambodian government, which surely is in the best position to identify such evidence if it
exists) it has not already obtained the material in the two years it has been conducting its
investigation. Nor has it explained how some newly-discovered theory could possibly comport
with due process, the fundamental premise of which is prior notice to ordinary American
citizens. See McClain II, 593 F.2d at 670-71.
The pleading standard in forfeiture cases requires the Government – before pursuing
discovery – to identify a sufficient basis to believe it is reasonably likely to meet its burden of
proof at trial. See Mem., Dkt. 17, at 9. If the bases pled in the Amended Complaint are rejected,
then the appropriate course would be to grant judgment on the pleadings to Claimants, not permit
the Government to keep the case alive in the hope that discovery – or one more rummage in its
legal grab-bag – will lead it to some new, previously unidentified legal theory. See Bridgewater
v. Taylor, 745 F. Supp. 2d 355, 358 (S.D.N.Y. 2010) (“Discovery is unwarranted where it would
function as a fishing expedition for evidence in search of a theory that has yet to be asserted.”
(internal quotation marks omitted)); Contemporary Mission, Inc. v. U.S. Postal Serv., 648 F.2d
97, 107 (2d Cir. 1981) (“speculation about what discovery might uncover” and “mere hope that
further evidence may develop prior to trial” cannot defeat summary judgment motion). In two
years, the Government has failed to identify any law that declares Cambodia to be the owner of
the Statue – let alone one that does so clearly and unambiguously. Under McClain and Schultz,
Case 1:12-cv-02600-GBD Document 59 Filed 09/09/13 Page 29 of 38
25
and in light of Professor Deroche’s expert evidence on the meaning of the laws on which the
Government has based its case, this Court should order judgment for Claimants on the pleadings.
II. The Government’s “Inherent Right of Kings” Theory Fails as a Matter of Law
Perhaps aware that its Cambodian-law case was ultimately unsupportable, the
Government came up with a new ground for its forfeiture claim. In amending the complaint, it
added the allegation that Koh Ker was “built by the Cambodian state under Jayavarman IV and
w[as] the property of the Cambodian state.” Am. Compl. ¶7. According to the Government, this
new allegation enables it to argue that Cambodia owns the Statue not because it has “‘declar[ed]
itself the owner’” through a national ownership law, but because it “‘acquir[ed] [the Statue] in
the general manner by which private persons come to own property.’” Gov’t Submission, Dkt.
50, at 3 (quoting McClain, 545 F.2d at 1002). Under this “inherent right of kings” theory,
because an ancient king built Koh Ker a thousand years ago, the modern Cambodian state owns
it today.
The Court did not mention this theory in ruling that the Government’s amended
complaint stated a claim. Op. 14-15. That implicit rejection should now be made explicit,
because the Government’s theory flouts the due process protections established by McClain and
Schultz, and thus fails as a matter of law.
To be stolen within the meaning of the federal laws at issue in this case, property must be
taken from an owner, without the owner’s permission. See United States v. Turley, 352 U.S. 407,
408-09 (1957); Schultz, 333 F.3d at 399. McClain stated that a modern state may be the “owner”
of an antiquity either by making a declaration of national ownership, or by acquiring the
antiquity in the “general manner by which private persons come to own property.” United States
v. McClain, 545 F.2d 988, 1002 (5th Cir. 1977) (McClain I). An item in “a museum or a private
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collection,” Schultz, 333 F.3d at 399, would be owned in the general manner.
17
Schultz and McClain protect those seeking to buy and sell ancient objects by imposing a
due process test: where a country claims ownership of an object on some theory other than that it
acquired ownership “in the general manner,” due process requires that the ownership claim be
based on “clear” and “unambiguous” law. Schultz and McClain do not address whether a similar
due process test applies to claims of ownership of objects obtained in the “general manner.”
The Government does not contend that there is a “clear” or “unambiguous” law
supporting its “inherent right of kings” theory. Instead, it claims this theory fits within the
“general manner” that private persons obtain property, and argues that it should therefore be
exempt from the due process test.
No court has ever accepted such an argument. No court has ever found that a foreign
state acquires an antiquity in the “general manner by which private persons come to own
property” when it does not take the antiquity into its possession, and then, long after the antiquity
has left the country, asserts a broad claim of ownership over all antiquities commissioned by an
ancient sovereign within its territory.
Such a means of acquisition is in fact the antithesis of the “general manner” by which
private persons come to own property. Private persons come to own property though some law-
based means of gaining possession or the right of possession. Private persons do not own any
object that they claim their ancestor owned fifty generations ago, unless they can identify some
law supporting that entitlement. Conversely, distant ancestors who have left objects in the jungle
17
In Schultz, the defendant sought to distinguish between an object possessed in violation of a national patrimony
law and an object “‘stolen’ in the commonly used sense of the word, for instance, where an object is taken from a
museum or a private collection.” 333 F.3d at 399. The Government appears to argue from this that the manner in
which an item is alleged to be taken from its place of origin could be enough to make it “stolen” for purposes of
federal law. See Gov’t submission, Dkt. 50, at 3-4 (reciting allegations that Statue was taken by “organized looting
network,” and that head was transported separately from body). But that is not so – an object is only “stolen” if it is
taken without the permission of the owner. See Turley, 352 U.S. at 408-09; Schultz, 333 F.3d at 399.
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for periods far shorter than a thousand years are typically thought to have lost any property
interest in the object. See, e.g., Hawkins v. Barney’s Lessee, 30 U.S. 457, 467 (1831) (“The right
to appropriate a derelict is one of universal law, well known to the civil law, the common law,
and to all law; it existed in a state of nature, and is only modified by society, according to the
discretion of each community.”); Texaco, Inc. v. Short, 454 U.S. 516, 530 (1982) (“[A]fter
abandonment, the former owner retains no interest for which he may claim compensation. It is
the owner’s failure to make any use of the property – and not the actions of the State – that
causes the lapse of the property right; there is no ‘taking’ that requires compensation.”). There is
no general practice of private persons obtaining ownership of an object on the theory that it was
commissioned a thousand years ago by a long-dead relative who then left it in the jungle. That is
particularly so where (as here) they have never possessed the property, and their ownership claim
is first advanced decades after the property was sold to another in a public, arms-length sale. See
Nippon Shosen Kaisha, K.K. v. United States, 238 F. Supp. 55, 59 (N.D. Cal. 1964) (“Once
abandoned property has been appropriated by another, the former owner who relinquished such
property cannot reclaim it.”).
Nor would it make any sense to exempt this kind of ownership claim from the due
process test established in Schultz and McClain. Those cases both subjected to careful scrutiny
ownership claims based on written, broadly disseminated legislation duly enacted by a modern
state’s elected leaders. It is hard to see why there would be less due process scrutiny for claims
based neither on written laws nor on traditional, easily understood and verified standards like
actual possession, but instead on unwritten principles purportedly vesting the modern Cambodian
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state with all objects commissioned for long-dead kings.
18
Immunizing such ownership claims from due process scrutiny would not just be
unprecedented; it would be destabilizing. Most ancient objects were at one time owned by
someone, in many cases by an ancient king or queen, as the Court noted during oral argument on
the motion to dismiss. See 9/27/12 Tr., Dkt. 34 at 87. Accepting those antiquated ownership
claims automatically without any due process scrutiny or any basis in modern law would brand
as stolen countless antiquities acquired in good faith and long held openly by museums and
collectors. If Schultz and McClain stand for anything, it is that if a foreign state wishes
American courts to recognize it as the owner of an object lost to the jungle for a thousand years,
it must have declared its ownership clearly and unambiguously before the object was removed
from its territory.
19
Exempting from this settled due process test all objects commissioned by ancient rulers is
unsupported by precedent or common sense. If the Government wishes to forfeit the Statue as
stolen on the theory that the modern Cambodian state owns whatever the ancient kings left
behind, it must identify clear and unambiguous law declaring each constituent piece of that
ownership theory. For the reasons set out in Section I, supra, it has failed to do so. Judgment for
the Claimants is therefore warranted.
18
The Government has suggested that Cambodia owns this Statue in the same way that the United States owns the
Moynihan Courthouse. Gov’t Reply Br., Dkt. 43, at 5. But that analogy fails for multiple reasons. First, the Statue
was not built by the modern state of Cambodia – a country that won independence from France only in 1949 – but
by an individual king who ruled over some of the same territory a thousand years ago. See Am. Compl., Dkt. 47, ¶6.
Second, the Statue has not been in continuous use since its creation, but instead was abandoned to the jungle within
a few years of construction. See Am. Compl. ¶ 5. Third, the territory now denominated Cambodia has, at various
times in the last thousand years, been controlled by Thailand, France, and Japan. See, e.g., Rendall Decl., Dkt. 29-1,
at ¶¶ 35-36; Neiman Decl., Dkts. 42-6, 42-7, 42-8, at Ex. 5. Fourth, the United States’ ownership of the facilities in
which its operations occur is not a truism accepted on faith, but rather something that must be proved in particular
cases through presentation of appropriate legal documents. See United States v. Davis, No. 11-2325-cr, 2013 WL
4081396 (2d Cir. August 14, 2013) (describing 1918 deed establishing Government’s purchase of land in Brooklyn
where Metropolitan Detention Center now stands).
19
In addition, the Government would need to show that Cambodia has actually enforced its claimed title to
everything ever commissioned by ancient kings. See Gov’t of Peru v. Johnson, 720 F. Supp. 810, 814 (C.D. Cal.
1989), aff’d, 933 F.2d 1013 (9th Cir. 1991).
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III. This Court should stay discovery pending resolution of Claimants’ motion for
judgment on the pleadings
At the conference on July 2, 2013, the Court set a schedule for discovery, but also
indicated that if claimants “have an expert report and a full motion that you want to file, that
standing alone is so compelling that it would warrant a serious response immediately that the
government should be prepared to give,” then the court would “give serious consideration . . . as
to whether or not we should suspend or slow down the schedule.” 7/2/13 Hr’g Tr. at 42. We
respectfully submit that this motion is sufficiently compelling to warrant a prompt response from
the Government, and a suspension of discovery while the motion is pending.
20
A. The Court’s Authority To Stay Discovery
Courts have wide discretion to stay discovery. “[T]he power to stay proceedings is
incidental to the power inherent in every court to control the disposition of the causes on its
docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N.
Am. Co., 299 U.S. 248, 254 (1936). “A stay of discovery pending the determination of a
dispositive motion is an eminently logical means to prevent wasting the time and effort of all
concerned, and to make the most efficient use of judicial resources.” Chavous v. Dist. of
Columbia Fin. Responsibility and Mgmt. Assistance Auth., 201 F.R.D. 1, 2 (D.D.C. 2001).
Rule 26(c) gives a court discretion, upon motion, “for good cause shown” and where
“justice requires,” to issue a protective order staying discovery if, among other reasons, that
discovery would cause a party “undue burden or expense.” Id.; see also Hong Leong Fin. Ltd. v.
Pinnacle Performance Ltd., No. 12 Civ. 6010, 2013 WL 2247794, at *3 (S.D.N.Y. May 22,
2013). A pending motion to dismiss “may constitute ‘good cause’ for a protective order staying
20
Pursuant to Rule 26, we conferred in good faith with the Government prior to requesting this stay, but were unable
to reach agreement.
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discovery.” Id.; see also Chesney v. Valley Stream Union Free Sch. Dist. No. 24, 236 F.R.D.
113, 116 (E.D.N.Y. 2006) (staying discovery pursuant to Rule 26(c) pending outcome of a Rule
12(c) motion); Toliver v. City of New York, 10 Civ. 3165, 2012 WL 7782720, at *3 (S.D.N.Y.
Dec. 10, 2012) (same). In making that determination, courts will consider “(1) [the] breadth of
discovery sought, (2) any prejudice that would result, and (3) the strength of the motion.” Hong
Leong Fin., 2013 WL 2247794, at *3. Each of these factors cuts compellingly in this case in
favor of a stay.
B. The Government Has Sought Broad And Burdensome Discovery
At the conference on July 2, the Government stated that it has “some limited additional
discovery that we want to take from Sotheby’s in terms of documents.” 7/2/13 Hr’g Tr. 15.
Seven weeks later, after the close of business on Friday, August 23, 2013, counsel for the
Government emailed a set of interrogatories and discovery requests to Claimants’ counsel.
There is nothing “limited” about these requests. For example, the Government sought in Request
No. 5 “[a]ll documents concerning Khmer Art from Cambodia sold by Sotheby’s, consigned to
Sotheby’s, or otherwise offered to Sotheby’s for sale at auction, including but not limited to
documents reflecting Sotheby’s efforts, if any, to determine the legality of Sotheby’s
importation, offer for sale, sale, receipt, transfer or possession of the Khmer Art.” As already
observed, this extraordinary request would require Sotheby’s to search for records of sales and
consignments of Khmer art at any time in the company’s history – a history that extends back to
1744 (during the vast majority of which time, of course, records were not electronically kept).
Moreover, the Government has not limited its request to items that Sotheby’s accepted for sale
(“sold by” or “consigned to”), but also to those that potential consignors offered to Sotheby’s –
again vastly expanding the reach of the request and the burden of searching for responsive
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documents. In Request No. 4, the Government sought “[a]ll documents comprising or
concerning Sotheby’s communications with Emma Bunker” – without in any way limiting that
request to the subject-matter of this dispute (communications with Bunker related to this Statue
are covered by earlier requests to which Sotheby’s has already responded.) And in Request No.
7, the Government sought “All documents concerning the sale by Sotheby’s in 2013 of a work
by J.J. Schoonhoven alleged to be stolen by the Art Loss Register.” Leaving aside the gross
irrelevance of this demand,
21
seeking “all documents” concerning any sale would demand a
stupendous undertaking on Sotheby’s part—locating, for example, every piece of
correspondence with the consignor, with internal and external appraisers, insurance and shipping
companies, solicitations and advertisements to potential buyers, and so on.
There is no reason for discovery so disconnected from the real issues in this case to go
forward at all; there is certainly no reason to permit the Government to force Claimants to incur
substantial costs responding to these and its other requests while a dispositive motion on the core
legal issue is pending.
The Government served deposition notices on Wednesday, September 4, 2013. Several
of the noticed witnesses are overseas. Three are members of Sotheby’s legal and compliance
departments, presumably in an effort to discover whether Sotheby’s somehow intuited a theory
of Cambodian ownership based on defunct French colonial decrees, even though the newly
produced documents show the theory was invented by the State Department and was previously
unknown even to the Cambodian government itself. There is no rational prospect of that, but
21
The piece in question – offered for sale by Sotheby’s in London – is a modern work of art by an artist known to
have created multiple similar copies of his work. The piece had been altered to appear not to be the same as the one
listed as stolen in the Art Loss Register; once Sotheby’s discovered the deception, it immediately notified Dutch
police. See expatica.com/nl/news/dutch-news/How-stolen-Dutch-art-fooled-even-Sothebys-expert-
eyes_272417.html. That the Government views this episode as within the proper scope of discovery in this case
speaks volumes.
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these depositions will no doubt raise complex privilege issues that may well need to be litigated
before the depositions can be completed. The Court should not permit the Government to
impose on Sotheby’s the burden of defending depositions while the motion is pending.
C. Staying Discovery Would Not Prejudice The Government
Staying discovery during the pendency of the motion for judgment on the pleadings
would not prejudice the Government. This case is, of course, already subject to a litigation hold,
so there is no danger that documents presently available will become unavailable. As for
witnesses, the Government stated in a prior filing that it considered delay to be “particularly
harmful” because two potential witnesses “are over 80 years old.” Gov’t Submission, Dkt. 50, at
6 (referring to individuals as “the Collector” and “the Scholar,” respectively). But despite this
supposed urgency, to Claimants’ knowledge the Government has not seen fit to notice the
deposition of either witness – something it could have done at any time in the more than two
months since the last conference. Moreover, the fact that the Government took more than seven
weeks after that hearing to serve its discovery requests and more than nine weeks to serve its
deposition notices belies any assertion it may now try to make that discovery needs to be
completed urgently.
Nor could anything sought in the pending discovery conceivably affect the outcome of
this motion. This motion argues that the Government’s case fails as a matter of Cambodian and
U.S. law. No document in Sotheby’s possession, and no belief in the mind of any Sotheby’s
employee, can possibly change the content of U.S. and Cambodian law.
D. Claimants’ Motion For Judgment On The Pleadings Presents Compelling
Arguments Justifying A Stay
Courts have addressed the “strength of the underlying motion” factor under various
articulations, from asking only that the motion “appear[] not to be unfounded in the law,”
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Integrated Sys. & Power, Inc. v. Honeywell Int’l, Inc., 09 Civ. 5874, 2009 WL 2777076, at *1
(S.D.N.Y. Sept. 1, 2009), to inquiring whether the motion is “supported by ‘substantial
arguments for dismissal.’” Hong Leong Fin. Ltd. v. Pinnacle Performance Ltd., 2013 WL
2247794, at *4 (quoting Spencer Trask Software and Info. Servs., LLC v. RPost Int’l Ltd., 206
F.R.D. 367, 368 (S.D.N.Y.2002)). Claimants’ motion for judgment on the pleadings plainly
meets even the more stringent of these standards. Through the sworn declaration of Professor
Deroche, it resolves the only issue this Court identified as a potential ground on which the
Government’s claim could succeed. It explains that the Government’s principal theory is
mistaken under Cambodian law, and that its backup theory cannot succeed under the due-process
demands of U.S. law. Those are, at the very least, “substantial arguments for dismissal.”
Dated: New York, New York
September 9, 2013
Respectfully submitted,
/s/ Peter G. Neiman
Peter G. Neiman
Janet R. Carter
Pablo Kapusta
WILMER CUTLER PICKERING HALE AND
DORR LLP
7 World Trade Center, 250 Greenwich Street
New York, NY 10007
Telephone: (212) 230-8800
Facsimile: (212) 230-8888
Counsel for Claimants Sotheby’s, Inc. and Ms.
Ruspoli di Poggio Suasa
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