Price v. U.S.

• Decision Date: 20 November 1995
• Docket Number: No. 93-2564,93-2564
• Parties: Billy F. PRICE, et al., Plaintiffs-Appellees Cross-Appellants, v. UNITED STATES of America, Defendant-Appellant Cross-Appellee. In re the Petition of Billy F. PRICE and Henriette von Schirach, geb. Hoffman to Perpetuate the Testimony of Henriette von Schirach, geb. Hoffman, et al. UNITED STATES of America, Appellant-Cross-Appellee, v. Billy F. PRICE, et al., Appellees-Cross-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

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69 F.3d 46

Billy F. PRICE, et al., Plaintiffs-Appellees Cross-Appellants, v. UNITED STATES of America, Defendant-Appellant Cross-Appellee.

In re the Petition of Billy F. PRICE and Henriette von

Schirach, geb. Hoffman to Perpetuate the Testimony

of Henriette von Schirach, geb. Hoffman, et al.

UNITED STATES of America, Appellant-Cross-Appellee, v. Billy F. PRICE, et al., Appellees-Cross-Appellants.

No. 93-2564.

United States Court of Appeals, Fifth Circuit.

Nov. 20, 1995.

Howard S. Scher, William Kanter, Deputy Dir., Dept. of Justice, Civil Div., Appellate Staff, Washington DC, for appellants.

Robert I. White, Larry A. Campagna, Chamberlain, Hrdlicka, White, Williams & Martin, Houston, TX, for appellees.

Appeals from the United States District Court for the Southern District of Texas.

Before WOOD, JR. ^* , JOLLY and DeMOSS, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

This appeal requires us to decide whether a federal court can award damages against the United States in connection with its refusal to turn over pieces of art and historical photographs that were removed from Germany during the allied occupation after World War II. Billy Price, a Texas businessman, obtained a nearly $8 million judgment against the United States after it refused his demands for four watercolor paintings that were painted by Adolf Hitler and photographic archives that were compiled by Hitler's personal photographer, Heinrich Hoffman, and Hoffman's son. In the early 1980s--almost four decades after these paintings and archives were discovered in various locations in Germany and shipped to the United States--Price, who is described on the jacket of his self-published book as the "owner of one of the largest collections of Hitler art and an internationally acknowledged expert on the subject," purchased the rights in the paintings and archives from Hoffman's heirs. Price then demanded that the United States deliver them to him and, after the United States refused, he filed this suit alleging that the refusal constituted a tortious act of conversion.

The United States argues broadly on appeal that the judgment of the district court cannot be sustained. We agree. For the reasons that follow, we hold that the district court was without subject matter jurisdiction over the case. Accordingly, we reverse the judgment of the district court and remand with instructions to dismiss.

I

Putting to one side the historical, military, and foreign policy aspects of the case, this lawsuit is simply a claim for damages resulting from the tortious conversion of chattels. The claim is made against the United States, however, and the chattels consist of items taken from Germany during the post-World War II occupation: specifically, four watercolor paintings by Adolf Hitler and photographic archives that were compiled by Heinrich Hoffman and his son, Heinrich Hoffman, Jr.

Hoffman obtained the watercolors by purchase and by gift from Hitler. One pair, titled "Old Vienna Ratzenstadl" and "Munich 1914 Alterhof," depict urban landscapes and were painted when Hitler lived in those cities before he entered the German army in World War I. The other pair, titled "On the Railroad Line of Biache" and "Beclaire 1917," were painted during World War I and depict a railway embankment and a war-devastated village, respectively. ¹

The photographic archives that were compiled by the Hoffmans consist of several hundred thousand prints and glass-plate negatives that depict images of political, historical, and cultural significance in Europe from the 1860s through the rise and fall of Hitler's regime. The archives are in two parts. The larger of the two parts has been in the possession of the United States since it was found in Germany by the United States Army. It is stored at the National Archives in Washington, D.C., and thus will be referred to as the "Washington archive." The smaller of the two parts came into the possession of the United States in the early 1980s, when Time-Life Inc. gave it to the U.S. Military History Institute in Carlisle, Pennsylvania--hence, we will refer to it as the "Carlisle archive." Employees of Time had removed it from Germany in the 1940s.

Price's involvement began in the early 1980s when, while visiting Germany to research a book on Hitler's career as an artist, he learned that Hoffman had been the owner of the four watercolors. ² He paid a small sum to the heirs of Hoffman, who are citizens and residents of Germany, in exchange for their rights in the watercolors and archives. He also promised to seek their return and to give Hoffman's heirs a portion of whatever he might obtain from the United States. He then made demand upon the United States for the return of the watercolors and archives and filed his first complaint in this lawsuit on August 9, 1983.

In February 1989, the district court denied a motion by the United States to dismiss pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure and entered a partial summary judgment on the issue of liability in Price's favor. Price v. U.S., 707 F.Supp. 1465 (S.D.Tex.1989). The district court appears to have determined that the United States became a bailee when it took possession of the watercolors and photographic archives in Germany, and that the bailment continued until it was breached in the United States in the early 1980s when the United States refused Price's demands. Observing that "[i]n the five years that this suit has pended, the government has not controverted any of the plaintiffs' summary judgment evidence, except to call it self-serving," id. at 1469, the district court chastised the United States for its defense strategy. "Instead of property law arguments, the government relies on political denigration of the artist and the archivist. Equal justice under law protects people without exceptions for those people whose father's politics were wrong." Id. at 1473. "After five years of litigation," the opinion concluded, "the United States has been unable to contest factually the title of the Hoffmans or the nature of the government's acquisition of their property." Id. The district court found that Price held title to the watercolors and archives and was entitled to possession.

Although the United States did not introduce any evidence to create a factual dispute while the case was pending, after the partial summary judgment was entered, the United States came forward in short order with additional jurisdictional and other defenses, as well as evidence to support its arguments, and urged the district court to reconsider its decision. The district court refused and instead proceeded to a trial on damages. The court determined that damages from the United States' conversion of the watercolors and archives, including the loss of use from 1983, the time of conversion, amounted to $7,949,907.69, and entered judgment accordingly. Both sides appeal, the United States contending for numerous reasons that the judgment cannot stand, and Price ³ contending that the judgment awarded is insufficient because he is entitled to $41 million in damages.

II

At its foundation, this case presents questions that implicate the sovereign immunity of the United States. We are guided by two well-settled principles: one, the United States is immune from suit unless it has waived its immunity and consented to suit; and two, such waivers of sovereign immunity are to be construed narrowly. E.g., Gregory v. Mitchell, 634 F.2d 199, 203 (5th Cir.1981); Loomis v. Priest, 274 F.2d 513, 518 (5th Cir.1960), cert. denied, 365 U.S. 862, 81 S.Ct. 828, 5 L.Ed.2d 824 (1961).

"Because the question whether the [United States] has waived its sovereign immunity against suits for damages is, in the first instance, one of subject matter jurisdiction, every federal appellate court has a special obligation to satisfy itself not only of its own jurisdiction, but also that of the lower court in a cause under review." Mocklin v. Orleans Levee Dist., 877 F.2d 427, 428 n. 3 (5th Cir.1989). The starting point for our inquiry, then, is whether federal subject matter jurisdiction exists over this case. This question is, needless to say, subject to de novo review. We specifically held open the question of subject matter jurisdiction when this case was before us on an earlier appeal. See In Re Petition of Price, 723 F.2d 1193, 1195 (5th Cir.1984).

Although Price pressed several theories of recovery in his original complaint, his position before us is that the United States converted the watercolors and archives when they refused his demands for their return in the early 1980s. Price's claims are tort claims. If the district court's jurisdiction is to be sustained, therefore, this suit must fall within the waiver of sovereign immunity contained in the Federal Tort Claims Act.

The parties are in agreement that only 28 U.S.C. Sec. 1346(b) could have provided a basis for subject matter jurisdiction in this case. It provides:

Subject to the provisions of [28 U.S.C. Sec. 2671-2680], the district courts ... shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, accruing on and after January 1, 1945, for injury or loss of property ... caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.

28 U.S.C. Sec. 1346(b) (1988). It bears emphasis that Sec. 1346(b) conditions the existence of subject matter jurisdiction upon other provisions of the Federal Tort Claims Act. For this reason, we cannot simply assume that subject matter jurisdiction exists and treat a jurisdiction-centered challenge as a challenge on the merits. Compare Sierra Club v. Shell Oil Co., 817 F.2d 1169, 1172 (5th...