Abbott Laboratories v. Feinberg
- Lorna Schofield
- 1:18-cv-08468
- U.S. District Court · Southern District of New York
- 10
In Abbott Laboratories v. Feinberg, Judge Schofield denied defendants’ motion, applying New York’s statute of limitations to the replevin claim.
Abbott Laboratories and Nancy Feinberg, Hope Feinberg Schroy, and David Feinberg as co-executors of Carol J. Feinberg’s estate; the ruling determines which state’s statute of limitations applies to Abbott’s replevin claim.
What happened
In Abbott Laboratories v. Feinberg, Abbott Laboratories sought to recover an oil painting that it said had been stolen from it. The defendants, acting as co-executors of Carol J. Feinberg’s estate, argued that Illinois’s statute of limitations should govern the claim.
The court rejected that argument. Although the related case was first filed in Illinois and later transferred and consolidated with the New York case, the court applied an interest-based analysis. It concluded that New York had the stronger connection because the painting had been in New York for decades and had passed through New York residents, galleries, and dealers. Under New York’s three-year limitations period, the claim was timely because Abbott demanded the painting’s return and Feinberg refused in 2018.
Judge Lorna G. Schofield denied the defendants’ choice-of-law motion and ruled that New York’s statute of limitations applies to Abbott’s replevin claim.
The detailed version
- Abbott Laboratories v. Feinberg · No. 1:18-cv-08468
- Lorna Schofield
- Aug. 4, 2020
Background
Abbott Laboratories brought a replevin action—a lawsuit seeking the return of specific property—and a related request for a declaration of ownership concerning an oil painting. Abbott alleged that the painting had been stolen from it years earlier. Abbott had purchased the painting in 1960 for its corporate art collection. In 2016, an appraiser concluded that the work Abbott possessed was a deliberate forgery. The original painting was later found in 2018 in Carol Feinberg’s Manhattan apartment.
Abbott asked Feinberg to return the painting, but she refused. According to the defendants, Feinberg had purchased the painting in good faith from a Manhattan art gallery in 1993. Before the parties completed settlement discussions, Feinberg filed a declaratory-judgment action in the Northern District of Illinois. Abbott then filed the current action in the Southern District of New York. The Illinois court transferred its case to New York under 28 U.S.C. § 1404(a), and this Court later consolidated the two cases.
Motion and Governing Law
The defendants asked the Court to apply Illinois’s statute of limitations to Abbott’s replevin claim. They argued that, because the Illinois case was filed first and then transferred, the Court should use Illinois choice-of-law principles and Illinois’s limitations period.
The Court explained that a federal court ordinarily applies the law of the state where it sits when deciding state-law claims in a diversity case. But when a case is transferred under § 1404(a), the receiving court generally applies the law, including choice-of-law rules, that the transferring court would have applied. The Court also noted that the Second Circuit had not directly addressed which state’s limitations period should apply when a first-filed case is transferred and consolidated with a later, nearly identical case.
The Court considered New York and Illinois law. New York provides a three-year limitations period for replevin claims involving a good-faith purchaser of stolen property. Under New York law, the claim accrues when the true owner demands return of the property and the possessor refuses. Because Abbott made its demand and received the refusal in 2018, the claim was timely under New York law.
Illinois provides a five-year limitations period, but Illinois law was unclear about when a replevin claim involving these facts begins to accrue. The Court explained that some Illinois decisions use the date when facts authorized the lawsuit, while others use the date of demand and refusal. The parties also disputed when Abbott knew or reasonably should have known that the original painting had been replaced by a copy. The Court stated that a fact finder could conclude under Illinois law that Abbott should have discovered the alleged theft before 2013, which could make the claim untimely under Illinois law.
Court’s Analysis
Because the two states’ rules could produce different results, the Court adopted an interest-based approach used by the Fifth Circuit in Bott v. American Hydrocarbon Corp. The Court rejected the defendants’ argument that the first-filed rule required application of Illinois law. It explained that the first-filed rule addresses which of two similar federal cases should proceed; it does not determine which state’s law applies after the cases have been consolidated.
The Court concluded that New York had the greater interest in the dispute. The painting had been in New York since 1987, had changed hands multiple times there, had been displayed in a Manhattan gallery, and had been purchased by a longtime New York resident. The Court stated that New York had a strong interest in protecting the legitimacy of its fine-art market and deterring the trafficking of stolen art. By comparison, the Court described Illinois’s interest as protecting the rights of a single victim.
Disposition
The Court held that New York’s statute of limitations governs Abbott’s replevin claim and that the claim is timely under that law. The Court denied the defendants’ choice-of-law motion and directed the Clerk of Court to close the motion at Docket No. 97. The opinion did not decide the ultimate ownership of the painting or whether Abbott would prevail on the replevin claim.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.