United States District Court, S.D. New York
December 23, 2005.
SOTHEBY'S, INC., Plaintiff,
ROD SHENE, STAATSGALERIE STUTTGART, and THE STATE OF BADEN-WÜRTTEMBERG, GERMANY, by itself and as agent for STAATSGALERIE STUTTGART, and THE BADEN-WÜRTTEMBERG MINISTRY OF SCIENCE, RESEARCH AND THE ARTS, Defendants.
The opinion of the court was delivered by: THOMAS GRIESA, Senior District Judge
Sotheby's brings this interpleader action to resolve a dispute
over title to German artworks in its possession. The dispute is
between defendant Rod Shene and a German museum.
Defendants Staatsgalerie Stuttgart (the "Museum"), State of
Baden-Württemberg, Germany (the "State"), and Baden-Württemberg
Ministry of Science, Research and the Arts (the "Ministry," and,
collectively, the "German Parties") move to dismiss Sotheby's
from the action. Defendant Shene consents subject to certain
conditions. The State also moves to dismiss the Museum and the
Ministry from the action. Defendant Shene moves to dismiss Sotheby's
from the action to the United States District Court for the
Eastern District of Missouri. Sotheby's moves for costs and
attorney's fees. The motion to dismiss Sotheby's is granted. The motion to
dismiss the Museum and the Ministry is granted. The motion to
transfer is denied. The motion to award Sotheby's costs and fees
is granted, subject to determination of the amount following
This case concerns the title to in the Augsburger
Geschlecterbuch, a volume that contains a collection of 16th
Century drawings and engravings (the "Property"). In or about
March 2004, Shene delivered the Property to Sotheby's for
auction. Sotheby's contacted the Museum in April 2004 regarding
the provenance of the Property.
In July 2004, the German Consulate General's office informed
Sotheby's that the Museum believed the Property had been stolen
from the Museum during World War II. In August 2004, the Ministry
wrote to Sotheby's and asserted that the State, as owner of the
gallery collections of the Museum, is the owner of the Property.
After negotiations between Sotheby's, Shene, and the German
Parties failed, Shene filed suit in this court in November 2004,
seeking, inter alia, a declaratory judgment regarding title to
the Property. Shene v. Staatsgalerie Stuttgart, et al. (04 Civ.
8640). That action was voluntarily dismissed without prejudice on
December 16, 2004. Sotheby's filed this interpleader action on January 12, 2005 to
settle the ownership of the Property. Sotheby's makes no claim to
ownership, but rather seeks direction from the Court on how to
deal with the property. Shene and the German Parties subsequently
filed answers and interpleader claims against each other in which
both claim ownership of the Property. The Court has jurisdiction
over these matters pursuant to 28 U.S.C. § 1330 (actions against
The State's Motion to Dismiss Sotheby's
The State moves for an order dismissing Sotheby's from the
action and discharging it of further liability; directing
Sotheby's to retain possession of the Property on the Court's
behalf; directing Sotheby's make the Property available to the
parties for inspection on order of the Court; and providing that
Sotheby's will retain possession of the Property until the matter
is finally resolved. Shene consents to dismissing Sotheby's from
the action but otherwise objects to any relief that requires
Sotheby's to maintain possession of the Property or that requires
either party to obtain a court order before examining the
While Shene recognizes that Sotheby's "would certainly be an
excellent custodian of the Property," he argues that the choice
of Sotheby's might prejudice his motion to transfer venue. As
discussed below, Shene's motion to transfer venue is denied, and
as such this point is moot. In any event, the Court agrees that Sotheby's is the appropriate custodian. It
would appear that Sotheby's consents to this.
Shene next argues that there is no need for a party to seek a
court order every time it wishes to examine the Property. The
State responds that it does not seek such a restrictive
condition, but rather an order from the Court setting ground
rules for examination of the Property.
The Property is a 500 year-old volume and should be treated
with the utmost care. Nonetheless, the parties must be able to
examine the Property as this litigation progresses. As such, the
parties are directed to submit a joint stipulation for the
Court's signature setting forth terms by which the parties will
be permitted to inspect and examine the Property. This
stipulation should encompass, inter alia, notice, handling, and
The motion to dismiss Sotheby's on the conditions described is
granted, and the State is directed to submit an appropriate
pleading with a new caption.
Shene's Motion to Transfer Venue
Shene moves to transfer this action to the Eastern District of
Missouri pursuant to 28 U.S.C. § 1404(a). Under § 1404(a),
For the convenience of the parties and witnesses, in
the interest of justice, a district court may
transfer any civil action to any other district or
division where it might have been brought.
A threshold question in a § 1404 motion is whether the case
could have been brought in the proposed destination venue.
Section 1404(a) allows a court to transfer a case "to any other district or division where
it might have been brought." Because a foreign state is involved,
jurisdiction and venue in this matter are governed by the Foreign
Sovereign Immunities Act ("FSIA"). Under FSIA, unless an action
falls within certain exceptions, a foreign state has immunity
from suit in the federal courts. See 28 U.S.C. §§ 1330,
1603-1605. The only potentially applicable exception in this case
would be waiver. 28 U.S.C. § 1605(a)(1).
Here, the State has agreed to waive its immunity to suit in New
York. It has not waived and will not waive its immunity to a
suit filed in Missouri. Thus this action could not have been
filed in Missouri. Shene's motion to transfer venue is denied.
German Parties' Motion to Dismiss the Museum and Ministry
The German Parties have also moved to dismiss Shene's claims
against the Museum and the Ministry pursuant to Federal Rules of
Civil Procedure 12(b)(1) and 12(b)(6). The German Parties claim
that the Ministry and Museum are not distinct legal entities
under the law of Baden-Württemberg and do not have the capacity
to sue or be sued. In support of this contention the State
submits a declaration from Joachim Uhlmann, a lawyer at the
Mr. Uhlmann's declaration demonstrates that the Ministry does
not have a legal existence separate from Baden-Württemberg. It
cannot be named as a party in a lawsuit under Baden-Württemberg law, nor can it file
suit on its own behalf. The declaration also shows that the
Museum lacks the capacity to sue or be sued, and that it does not
have a legal existence separate from Baden-Württemberg.
Baden-Württemberg owns all the Museum's collections, as well as
its building and grounds, and the assets used by the Museum in
Shene is not prejudiced by the dismissal of the Ministry and
the Museum. This suit will proceed with both the State and Shene
making claim to the Property. Ultimately, the matter will be
resolved, and Sotheby's will deliver the Property to either Shene
or the State. That the State would ultimately pass the Property
to the Museum, which houses the State's collections, has no
bearing on Shene's case.
The State's motion to dismiss the Museum and the Ministry
pursuant to Fed.R.Civ.P. 12(b)(6) is granted.
Sotheby's Costs and Fees
The one remaining matter before the Court is Sotheby's request
that it be paid its costs and disbursements, including its
reasonable attorneys' fees, in accordance with Fed.R.Civ.P.
A court will typically exercise its discretion to grant
reasonable fees and costs to the interpleader plaintiff. 4-22
Moore's Federal Practice Civil § 22.06; see also
Septembertide Publ'g, B.V. v. Stein & Day, Inc., 884 F.2d 675,
683 (2d Cir. 1989) (citing Moore's). The court believes that this should
be done in this case. However, Sotheby's needs to apply for the
specific amounts it seeks. In connection with this application it
should provide an estimate of the value of the Property.
Sotheby's can apply at an appropriate time to be compensated for
future services that it renders in this case.
For the aforementioned reasons, Sotheby's motion to be
dismissed and discharged of liability in this matter is granted.
Shene's motion to transfer venue is denied. The State's motion to
dismiss the Museum and the Ministry is granted. Sotheby's motion
for reasonable attorneys' fees and costs is granted, subject to a
more specific application to the court under Rule 54.
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