Republic of Turkey v. Christie's Inc.

Background

The court addressed several motions filed before the scheduled April 5, 2021 bench trial. The principal dispute concerned whether the Republic of Turkey could introduce evidence of other acts by Michael Steinhardt. Turkey offered that evidence for two purposes: to argue that Steinhardt could not rely on the equitable defense of laches because he had unclean hands, and to rebut a laches defense. The defendants sought to exclude at least some of that evidence.

Unclean Hands and the Earlier Good-Faith Finding

The court explained that the unclean-hands doctrine can prevent a party from obtaining equitable relief when that party engaged in related bad-faith or unconscionable conduct. The court had previously determined that Steinhardt was a good-faith possessor of the Stargazer Idol, in part because Turkey had conceded that he was a good-faith purchaser and had not acted in bad faith when he bought and possessed the Idol.

The court applied the law-of-the-case doctrine, which generally prevents a court and the parties from reopening an issue already decided in the same case absent a sufficient reason. It held that Turkey’s prior concessions and the court’s earlier good-faith finding prevented Turkey from trying to prove that Steinhardt had unclean hands in connection with the 1993 purchase.

The court also rejected Turkey’s argument that Steinhardt could be treated as a good-faith purchaser while still being considered legally obligated to investigate the Idol’s provenance and having violated that obligation. The court reasoned that, if a heightened duty applied to him as a merchant or art dealer, that duty would be part of the good-faith inquiry. Turkey’s concession that Steinhardt acted in good faith therefore foreclosed the proposed unclean-hands theory. The court excluded the other-acts evidence offered to support that theory.

Other-Acts Evidence Offered Against Laches

The court did not decide whether the earlier finding of no bad faith independently barred Turkey from using the evidence to rebut laches. Instead, it held that the evidence was excluded under Rules 404(b) and 403 of the Federal Rules of Evidence.

Rule 404(b) generally bars using other crimes, wrongs, or acts to show that a person acted in accordance with a supposedly bad character, although such evidence may sometimes be admitted for another purpose. The court found that Turkey’s proposed use—to show Steinhardt’s state of mind, attitude toward provenance and foreign-patrimony laws, or consistent approach to buying antiquities—was effectively an attempt to show propensity. The court also found that Turkey had not shown the unusual, signature-like similarities required to use the evidence to establish a distinctive method.

Even assuming the evidence could otherwise be admitted under Rule 404(b), the court held that Rule 403 required exclusion. The evidence would be cumulative and would create multiple side trials about the circumstances of the other acts, including testimony from government officials, authentication, cross-examination, and rebuttal. The resulting delay and wasted time substantially outweighed the evidence’s value.

Other Motions and Disposition

Turkey also asked the court to prevent the defendants from asserting laches. The court denied that request because a motion in limine was not the proper setting to decide whether the defendants could assert that defense; the court said the issue should have been raised at summary judgment. As to Steinhardt, the court gave the additional reason that the law of the case barred Turkey from arguing that he had unclean hands when he purchased the Idol.

The court denied Turkey’s motion in limine in its entirety. It granted the defendants’ motion in limine to exclude evidence unrelated to Steinhardt’s 1993 purchase or Christie’s 2017 auction only as to the other-acts evidence, and reserved judgment on the motion’s other parts. It also denied as moot the defendants’ motion to exclude entire deposition transcripts and reserved judgment on their motions concerning a missing-witness inference, reputation evidence, and sealing.