On June 9, 2020, the Second Circuit effectively terminated Sotheby’s efforts to bring suit against a foreign nation for interference with one of its auctions, reversing and remanding Barnet v. Ministry of Culture and Sports of the Hellenic Republic to the Southern District of New York with instructions to dismiss for lack of subject matter jurisdiction. Barnet turned on whether the “commercial activity” exception to the general bar to suits against foreign states provided by the Foreign Sovereign Immunities Act (the “FSIA”) allows for suit where the foreign state at issue has sent a demand letter to an auction house asserting an ownership claim to an item up for sale. A unanimous three-judge panel held that the exception did not apply, because Greece’s assertion of ownership was “in connection with Greece’s enactment and enforcement of patrimony laws that declare the figurine to be the property of Greece[,] and  these are sovereign rather than commercial activities.” The decision provides ample protection from suit for foreign states asserting ownership claims over ancient items believed to have been illicitly removed from their sovereign territory.
The case arose from a dispute over the ownership of a 14-inch-tall bronze statue of a horse from 8th Century B.C.E. Greece. The statue, an example of the kind common in the Geometric Period, was sold at public auction in Switzerland in 1967. It was later acquired by the antiquities dealer Robin Symes, who sold the statue to Howard and Saretta Barnet in 1973. The Barnets then displayed the statue in their private collection for the next several decades.
Both the Barnet and Symes names have been connected to looted items before. In 2006, a kylix (drinking cup) donated to the Metropolitan Museum of Art by Howard Barnet was discovered to have been stolen, and the Met eventually repatriated the item to Italy. For his part, Symes became notorious in the early 2000s for working with his partner Christo Michaelides to traffic in millions of dollars’ worth of stolen antiquities. The partners’ criminality came to light following Michaelides’ accidental death in 1999, and in April 2006 Greek officials raided a villa owned by Symes and confiscated a set of nearly 2,200 photos, now known as the “Symes-Michaelides archive,” believed to document objects trafficked by the partners. Greek officials have since used these photos to compare against items offered for sale or included in public collections, in an attempt to recover any items that they believe rightfully belong to Greece under Greek patrimony laws—an effort that has led to the repatriation of items from the likes of the Museum of Fine Arts, Boston and the J. Paul Getty Museum in Los Angeles. Here too, Greek officials used the photo archive to flag the bronze horse when it appeared in Sotheby’s auction catalog.
In July 2017, after the deaths of both Howard Barnet in 1992 and Saretta Barnet in March 2017, Ms. Barnet’s estate consigned many of the couple’s artifacts, including the bronze horse, to Sotheby’s for sale at auction. Sotheby’s intended to sell the statue as part of a March 14, 2018 dedicated auction entitled “The Shape of Beauty: Sculpture from the Collection of Howard and Saretta Barnet.” Three days before the auction, however, Greek officials sent a letter to Sotheby’s demanding the statue’s return. Sotheby’s removed the statue from the auction, denied that the statue belonged to Greece, and responded with a letter inviting Greece to provide evidence of its claim, but Greece did not reply. On June 5, 2018, Sotheby’s and the Barnet estate (“Plaintiffs”) sued Greece in the Southern District of New York, seeking a declaratory judgment that the statue was theirs to sell. Greece moved to dismiss under Fed. R. Civ. P. 12(b)(1), asserting that the FSIA barred suit and stripped the district court of subject matter jurisdiction.
The district court denied Greece’s motion, agreeing with Plaintiffs that the commercial-activity exception to the FSIA’s general bar to suits against foreign states applied. Specifically, the district court agreed that the third prong of that exception, the “direct-effect clause,” abrogated Greece’s sovereign immunity. That exception authorizes suit when a foreign state acts “outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.” Quoting the Supreme Court’s unanimous decision in Republic of Argentina v. Weltover, Inc., the district court noted that “the issue is whether the government’s particular actions (whatever the motive behind them) are the type of actions by which a private party engages in commerce.” The district court found that the act at issue here, the sending of a demand letter, “is clearly the type of activity that private persons can, and often do, engage in,” and thus concluded that the FSIA granted jurisdiction over Greece. Otherwise, the district court reasoned, “a foreign sovereign’s activity ‘would almost inevitably be characterized as sovereign in nature, rather than commercial.’” Greece filed an interlocutory appeal, and the district court stayed the proceedings pending appeal.
The Second Circuit agreed that the act at issue was Greece’s sending of a demand letter, but ruled that the lower court erred by “treating Greece’s act of sending the letter as both the predicate ‘act’ and the related ‘commercial activity’ required by § 1605(a)(2).” The court explained that “[t]he direct-effect clause applies when a suit seeks relief for an ‘act’ that a foreign state undertakes ‘in connection with a commercial activity,’ 28 U.S.C. § 1605(a)(2), and a single act cannot be undertaken in connection with itself.” Instead, the court continued, “the activity in connection with which the letter was sent, as the statute requires, reveals its sovereign nature: Greece has claimed ownership over the figurine by adopting legislation that nationalizes historical artifacts and by enforcing those patrimony laws.” Finding this activity quintessentially sovereign in nature, the Second Circuit reasoned that to hold in Plaintiffs’ favor “and look only to the fact of a mere claim of ownership for purposes of our ‘commercial activity’ analysis,” regardless of the sovereign nature of the context of that ownership claim, “would allow the exception to swallow the rule of presumptive sovereign immunity codified in the FSIA.”
Plaintiffs asserted two more arguments that the Court of Appeals addressed in its opinion’s final paragraphs. First, Plaintiffs objected that Greece’s patrimony laws may not even apply because the figurine may have left Greece before those laws were enacted. Second, Plaintiffs offered that due process may render the patrimony laws unenforceable because enforcement would improperly involve the application of foreign law to property located in the United States. The panel found that these arguments worked against Plaintiffs, because they “confirm[ed] that the issue in the case—ownership of the figurine—is inextricably bound up with sovereign activity,” and because a district court presented with such claims would be required to review “the validity, scope, and application of Greece’s patrimony law,” which is exactly what the FSIA seeks to prevent.
The Second Circuit’s Barnet decision puts auction houses and other sellers of antiquities potentially subject to cultural patrimony claims at a distinct disadvantage, as they now must either negotiate a resolution with a sovereign claimant—from a position of weakness, no longer able to wield the “stick” of threatened litigation—or sell under inauspicious circumstances and run the risk of subjecting themselves to a post-sale suit. It will be interesting to see whether future litigants attempt to reframe similar disputes by seeking to identify and articulate a different activity, commercial in nature, to which the at-issue sovereign act relates.
 961 F.3d 193 (2d Cir. 2020). The Second Circuit’s mandate issued on July 16, 2020, and Judge Failla of the Southern District of New York dismissed the case the following day. Barnet v. Ministry of Culture and Sports of the Hellenic Republic, No. 18-cv-4963 (KPF) (S.D.N.Y. July 17, 2020) (ECF No. 37).
 Barnet, 961 F.3d at 195.
 See, e.g., Elisabetta Povoledo, Hundreds of Looted Ancient Artifacts Are Returned to Italy, N.Y. Times (Mar. 22, 2016).
 Complaint for Declaratory Judgment, Barnet v. Ministry of Culture and Sports of the Hellenic Republic, No. 18-cv-4963 (KPF) (S.D.N.Y. June 5, 2018) (ECF No. 1).
 Memorandum of Law in Support of Defendant’s Motion to Dismiss at 6–21, Barnet v. Ministry of Culture and Sports of the Hellenic Republic, No. 18-cv-4963 (KPF) (S.D.N.Y. Nov. 5, 2018) (ECF No. 20). Plaintiffs also argued that Sotheby’s lacked standing because Sotheby’s had not suffered an injury-in-fact. Id. at 21–23.
 Barnet v. Ministry of Culture and Sports of the Hellenic Republic, 391 F. Supp. 3d 291, 393 (S.D.N.Y. 2019). The Southern District also rejected Greece’s argument that Plaintiffs lacked standing, finding that (1) Sotheby’s had “a particularized economic interest in being able to sell the Bronze Horse”; (2) Greece’s arguments that Sotheby’s withdrew the statute for reasons unrelated to Greece’s actions were flatly contradicted by the factual allegations in the complaint, which must be taken as true on a facial challenge to plaintiff’s standing; (3) Greece’s argument that Sotheby’s voluntarily caused its own injury by publicizing the dispute lacks merit because Sotheby’s was otherwise obligated to inform potential buyers of the contested ownership; and, in any event, (4) the threat of legal action that Greece made in its demand letter was a separate and independent basis for standing. Id. at 17–18.
 504 U.S. 607 (1992).
 Barnet, 391 F. Supp. 3d at 299 (quoting Weltover, 504 U.S. at 607) (emphasis in Weltover).
 Barnet, 961 F.3d at 200 (emphasis in original).
 Id. at 200–01.
 Id. at 202 (internal quotation marks omitted). By contrast, just one day prior to its Barnet decision, the Second Circuit held in Pablo Star Ltd. v. Welsh Gov’t that the FSIA did not bar suit against Wales for distributing copyrighted photos as a part of a tourism campaign. 961 F.3d 555 (2d Cir. 2020). That decision turned on the court’s determination that the nature of the relevant “activity” at issue there—i.e., “advertis[ing] or promot[ing] travel and tourism to a particular location”—had “nothing quintessentially governmental about [it].” Id. at 564.
 Barnet, 961 F.3d at 202–03.