The 9th U.S. Circuit Court of Appeals ruled that 88-year-old Claude Cassirer's case against the Thyssen-Bornemisza Museum in Madrid and the Spanish government can go forward.
Cassirer claimed his grandmother was forced to sell the 1897 painting by French impressionist Camille Pissarro for what was then $360 to get a visa to escape from Nazi Germany in 1939. He filed suit in California's Central District in Los Angeles in 2005, and the defendants appealed in June 2006.
The painting, "Rue St.-Honore, Apres-Midi, Effet de Pluie," depicts a Parisian boulevard lined with dark carriages, a few bare trees and a scattering of people braving the weather. Its value is estimated at $20 million.
The painting apparently changed hands several times after World War II, and its whereabouts were a mystery to the Cassirer family until a friend spotted it in the Madrid museum in 2000.
The Spanish government bought the painting as part of the Baron Hans-Heinrich Thyssen-Bornemisza's collection, which was worth $327 million. It has been on display at the famous government-owned museum since 1993.
Baron Thyssen bought the painting from a New York art dealer in 1976. Cassirer tried to negotiate its return through Spain's Ministry of Culture, but his request was denied.
Tuesday's opinion was written by Judge N. Randy Smith with a partial dissent by Judge Sandra Ikuta.
The ruling means the district court will have to determine whether Cassirer has exhausted all other legal options outside U.S. courts, said his attorney, Stuart Dunwoody.
"We're confident we can do that, but it's another step which slows things down, and a point upon which they can appeal," Dunwoody said. "He hopes to see justice in his lifetime. He's 88 years old, so we need to keep things moving along."
Thyssen-Bornemisza officials could not immediately be reached for comment. However, the managing director of the Thyssen Foundation has said that the museum possesses documents that prove Baron Thyssen was the legitimate buyer in 1976.
"It is ours until proven otherwise," Carlos Fernandez de Henestrosa has said.
In 2004, the U.S. Supreme Court ruled to allow Los Angeles resident Maria Altmann, 88, to sue the government of Austria to retrieve $150 million worth of Gustav Klimt paintings stolen by the Nazis. The five Klimts were handed over by Austria in January to Altmann and other family members following a seven-year legal battle.
An estimated 600,000 works of art were looted by the Nazis during Adolf Hitler's rule in Germany.