(CNN) The Supreme Court sided with a family seeking the return of a painting confiscated by Nazis during the Holocaust in a case concerning whether a California law or a foreign country's law should apply in a key point in the litigation.
The Supreme Court okayed the approach put forward by lawyers for the descendants of the Jewish Holocaust survivors, whose great grandmother was forced to give up the painting to the Nazis in 1939 before fleeing Germany, for how federal courts should decide whether to apply state or foreign law.
Under the law in California, where the family brought the lawsuit seeking the painting's return, the burden on victims of art theft is lower for proving the painting is rightfully theirs, than under the law in Spain, where the museum that currently owns the painting is located.
A unanimous Supreme Court opinion sanctioned an approach that would lead lower courts to rely on California law.
The painting that is at the heart of the case is a 1897 French Impressionist work by the famed painter Camille Pissarro titled "Rue Saint Honoré, Afternoon, Rain Effect."
It was owned by the Cassirer family until Lilly Cassirer Neubauer was forced to hand it over to the Nazis in order to obtain an exit visa she needed to flee Germany. A Nazi art dealer confiscated the painting in exchange for $360 that was put in an account that Neubauer could not access. In the following decades, a series of sales and trades took the painting to California, then to a gallery in New York, from which it was purchased by a Swiss collector who eventually sold it to the Thyssen-Bornemisza Collection, which the collector set up with the Spanish government.
The central dispute before the Supreme Court was how federal courts should decide -- under the Foreign Sovereign Immunities Act, which sets limits on when a foreign entity is immune to litigation -- whether to apply a state law or the law of the foreign country.
"Judicial creation of federal common law to displace state-created rules must be 'necessary to protect uniquely federal interests,'" Justice Elena Kagan wrote. "Foreign relations is of course an interest of that kind. But even the Federal Government, participating here in support of the Cassirers' position, disclaims any necessity for a federal choice-of-law rule in FSIA suits raising non-federal claims."
The litigation over the painting will continue in lower courts, but the Supreme Court decision has wider implications.
"Beyond this specific dispute, today's ruling also makes it more likely going forward that, in suits against foreign sovereigns, US courts will apply state-law rules rather than foreign-law rules in contexts in which Congress hasn't provided otherwise," said Steve Vladeck, CNN Supreme Court analyst and professor at the University of Texas School of Law.
"That ends up benefiting the family trying to recover its stolen art in this case, but it will also make it harder going forward for federal courts to decide for themselves which rules should apply in this context, for better or worse," Vladeck said.
The Cassirer family claims that, under California law, they're the rightful owners of the painting because of how the artwork was obtained. But the lower courts had instead used legal tests that have led them to apply a Spanish law where the burden is higher on victims to prove that the foundation should have known the painting had been stolen.
The US Solicitor General's office also participated in the case, making friend-of-the-court arguments supporting the Cassirer family.