After a dispute arose over the ownership of the “Stargazer,” a six-thousand-year-old marble statuette, the Republic of Turkey commenced an action in the Southern District of New York seeking the return of Stargazer, alleging claims for conversion and replevin against auction house Christie’s, Inc., as the possessor, and Michael Steinhardt, as the owner. According to Turkey, the figurine was unlawfully excavated and smuggled out of its borders. Following an eight-day bench trial, the district court held that Turkey failed to establish by a preponderance of the evidence that it owned Stargazer, and that, in any event, the defendants established the equitable defense of laches. Turkey appealed.
On March 8, 2023, the Second Circuit affirmed the district court’s judgment in Republic of Turkey v. Christie’s, Inc., et al., ___ F.4th ____, 2023 WL 2395412 (2d Cir. March 8, 2023), on laches grounds, with a warning that “[e]quity favors the vigilant.” As to ownership, the Second Circuit found that the district court applied the wrong burden of proof. The correct standard, the Second Circuit explained, requires Turkey to make a threshold showing of ownership before the burden shifts to defendants to establish by a preponderance of the evidence that Turkey is not the owner; the lower court skipped the initial step and instead placed upon Turkey the obligation to prove its ownership by a preponderance of the evidence. See 2023 WL 2395412, at *4 (stating that upon making such a threshold showing, the burden shifts to defendants to show by a preponderance of the evidence that the idol was not stolen); id. (“[T]he ultimate burden of proof does not rest on the shoulders of the claimant.”) The Court could not, based on the record, determine whether Turkey had made this threshold showing. Id.
Nevertheless, the Second Circuit found that laches precluded Turkey’s claims. Specifically, it found that Turkey should have been aware of its potential claim in the 1990s, because Stargazer was described in published essays and literature and on public display, and that defendants were prejudiced by Turkey’s delayed action because the individuals who possessed and sold Stargazer are now deceased and could not serve as witnesses to explain how they came into possession of the statuette. Because the application of laches also requires a fact-intensive inquiry into the reasonable diligence of both parties, the Court also took note of Steinhardt’s efforts to ascertain the figurine’s provenance prior to his purchase. At bottom, the Court noted that it affirmed the judgment “because Turkey has slept on its rights[.]”
This decision underscores the need for parties to act swiftly when seeking remedies. If you have any questions about conversion, replevin, or the affirmative defense of laches, please feel free to contact Michael Rakower or Melissa Yang.Republic of Turkey