sotheby's motion for judgement

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 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 Cambodia Requests That The Statue Be Withdrawn From Auction ................................... 5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


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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


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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


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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. SeeMem. 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


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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


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)).


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.


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


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).


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.


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


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 112

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.


21

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.


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.


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.


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,


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


26

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.


27

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


31

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.


32

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,”


33

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


sotheby's motion for judgement

Documents

government property

stay of discovery case

resolution of claimants

burdensome discovery

support of claimants

unambiguous law

matter of law

gbd document