Art Law Gallery : Art Law Lawyer & Attorney : Sheppard Mullin Law Firm : Intellectual Property, Licensing Law : Art Law Gallery Legal Blog

By Christine Steiner and Valentina Shenderovich

The long-ago Russian Revolution has been fought anew in the Federal courts in New York. The case is Konowaloff v. Metropololitan Museum of Art, and it involves a lawsuit seeking to recover a Cezanne painting seized in the aftermath of the Russian Revolution. In December, the United States Court of Appeals for the Second Circuit affirmed the dismissal of the case, holding that the act of state doctrine barred plaintiff’s action. The Konowaloff case is interesting because it may be seen as an attempt to extend to Bolshevik-loot claimants the steps that U.S. museums have taken to address art expropriation in Nazi-loot cases. The Konowaloff decision makes clear that plaintiffs seeking recovery of, or compensatory damages for, art seized by decree during the Bolshevik/Soviet regime will not succeed under the act of state doctrine – at least not in New York.

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Auction houses typically do not disclose the identity of the seller on their sales contracts. A recent New York trial court decision may drastically change that longstanding practice.

The auction trade is supply-driven. As such, it heavily depends on sellers - and those sellers usually want to remain anonymous. Consignors have various motives for keeping their identity anonymous. They may want to avoid having relatives or creditors know they sold family valuables, or do not want the public knowing what is "none of their business". Dealers may not want the public to know they are selling stock. There may also be unsavory motives at play, though reputable auction houses carefully vet both the seller and the goods.

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By Christine Steiner

In the same era Gerald Ford advised his fellow Americans that “our long national nightmare is over,” as he succeeded Richard Nixon as president, the California Legislation enacted the sloppily-drafted California Resale Royalty Act, Civil Code Section 986. The act was not exactly a nightmare, in truth it slumbered for most of its thirty-plus lifetime. It seemed more honored in the breach than the observance. Recent awareness of the resale royalty obligation, though, has caused confusion and consternation for California sellers, for California artists and for the art trade nationwide. Some have, in fact, described it as a nightmare. As of late last week, the nightmare may be over.

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By Sarah Pavlock and Christine Steiner

The appeal in the case of Cariou v. Prince is shaping up to be the biggest visual arts copyright case in many years. It will likely result in guidance on what qualifies as a transformative use for appropriation art under the doctrine of fair use. Appropriation art "borrows" pre-existing works or images of the creative work of another artist in order to create something new and original. While this alone may seemed packed with copyright issues, it is generally not an appropriation artist's intent to "rip off" another artist's work. Usually, the success of the new work depends on the viewer's recognition of the underlying work; the "aha" moment is the connection between the old and the new as the viewer recognizes the original work or that another work has been taken, and differentiates the creative changes that have been made in the new work.

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By Lano Williams and Christine Steiner

The past year was packed with litigation that ranged from broad constitutional questions to the ever present scourge of forgeries. Art Law Gallery presents highlights of some of the most important cases:
 

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By Tyler Baker and Christine Steiner

The success of the art market depends largely on confidence in the authenticity of artists’ works. Traditionally, a work in an artist’s “catalogue raisonné” has been key to confirming the authenticity, and thus value. To that point, a recent lawsuit filed in the U.S. District Court for the Southern District of New York (“S.D.N.Y.”) regarding a purported Jackson Pollock work underscores the importance of the catalogue raisonné in pre-purchase due diligence, and shows that omission from the catalogue could be potentially disastrous to the value of a work. See Lagrange v. Knoedler Gallery, LLC, 11-cv-8757 (S.D.N.Y.) (filed Dec. 1, 2011). 

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By Lano Williams and Christine Steiner

The recent news that the Andy Warhol Art Authentication Board, Inc. will dissolve in early 2012 brings the role of authentication boards in the art world to the fore once again. The Board, which has been charged with authenticating the works of Andy Warhol since 1996, has been the subject of controversy, probably owing more to the nature of Andy Warhol's art-making process and his fame rather than anything the Board may have done. Warhol was famous for industrializing the art-making process, frequently directing others to execute works on his behalf. The question of what makes a Warhol is subjective and is open to changing interpretation as scholarship develops, as it involves current thinking on what steps of the art-making process the artist must control in order for a piece to be considered attributable to that artist. The Warhol market is also gargantuan. ArtTactic reports that his art accounted for 17% of contemporary art sales at auction in 2010 and 12% of the total contemporary art sold in the first decade of this century.

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By Tyler Baker and Christine Steiner

On October 17, a proposed class of artists filed three federal lawsuits against auction houses Christie’s, Inc., and Sotheby’s, Inc., and internet auctioneer eBay, Inc., alleging that the defendants sold their artwork at California auctions and on behalf of California sellers, but failed to withhold royalties due. The complaints seek class-action status to represent many other artists and allege that the auctioneers engaged in a ongoing pattern of concealing the identities and residencies of sellers who live in California, thereby avoiding the five percent royalty due as agents for the sellers. All three complaints, filed in the U.S. District Court for the Central District of California, allege violations of California’s Resale Royalties Act as well as California’s Unfair Competition Law.

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In March 2007, the exhibition "Forbidden Art-2006" opened at the Sakharov Museum in Moscow, featuring twenty-three provocative works previously banned throughout Russia. Andrei Erofeev, known as Russia's most provocative curator, organized the exhibition and Yuri Samodurov, former director of the Sakharov Museum, provided the exhibit's venue. Both have been found guilty under Russia's Criminal Code for using the exhibit to incite religious and ethnic hatred.
 

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In July, sculptor David Ascalon filed suit with the U.S. district court in Pennsylvania, against the Jewish Federation of Greater Harrisburg ("Federation") for violation of the Visual Artists Rights Act of 1990 ("VARA"). With true artistic flair, Ascalon alleges the Federation turned his Holocaust memorial sculpture into a "mutilation and bastardization of the artwork and its purpose."
 

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In August, 2009, the Ninth Circuit decided en banc by 9-2 that a California resident Claude Cassirer can sue Spain to recover his grandmother's oil painting "Rue Saint-Honore, apres-midi, effet de pluie," painted by the French impressionist Camille Pissarro and taken by the Nazi government. (Cassirer v. Kingdom of Spain, 2010 U.S. App. 2010 WL 3169570 (9th Cir. 2010).)  The court rejected Spain's defense, holding that the defendants cannot claim a sovereign immunity from suit in the U.S. under the Foreign Sovereign Immunities Act ("FSIA").
 

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Beware of "fortune cookies" for advice, even when it's not the kind you crack, read, and eat. Just ask Najung Seung, who claims that Mary Dinaburg, a partner at gallery Fortune Cookie Projects, duped her into buying a Julian Schnabel painting entitled Chinkzee for a price three times its market value.  Initially, Seung paid Dinaburg $118,000 for a John Wesley painting entitled Bulls and Bed, only to discover that Dinaburg had sold the painting to someone else.  Rather than returning the payment, Dinaburg offered Seung a $200,000 credit towards the purchase of Chinkzee at the "gallery" price of $380,000, and further represented the painting was worth at least $500,000.  But Seung soon learned that Chinkzee had been sold months earlier at an auction for $156,000 based on an estimate price range of only $60,000 to $80,000, and that the market value was no more than $110,000.  As a result, Seung filed suit against Fortune Cookie Projects, seeking the return of her money based on fraud, negligent misrepresentation, promissory estoppel, and unjust enrichment.
 

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For over 200 years, $500 million in gold and silver cargo sat undisturbed on a seabed off the coast of Portugal. Then, in May of 2007, Florida-based Odyssey Marine Exploration announced the discovery of a vast treasure at an undisclosed location it called "the Black Swan." Within weeks, Spanish officials identified the Swan as the Spanish colonial-era galleon "Nuestra Señora de las Mercedes," declared her treasure to be the rightful property of the Spanish people, and demanded that Odyssey reveal its secret location. Now, two centuries after British cannon fire left the Mercedes "breaking like an egg, dumping her yolk into the deep," the Spanish warship has found herself at the center of another battle—exposing the fragile relationship between maritime law and cultural heritage protections.
 

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Last year's Presidential election was historic on many accounts. Both campaigns saw an unprecedented turnout, as Americans from all walks of life came out in record numbers in support to their candidate of choice. Controversial artist Shepard Fairey, whose work includes "street art, commercial art and design, as well as fine art seen in galleries and museums all over the world,” was one of these Americans. (Complaint, Fairey v. The Associated Press, 09-cv-01123, U.S. District Court, Southern District of New York, at ¶ 9).  Fairey's "Hope" and "Progress" posters depicting President Barack Obama became symbols of the Obama campaign and its grassroots support. The image became a familiar sight on the morning commute, adorning cars' bumpers and back windows. A special version of the poster was created for President Obama's inauguration and another version of Fairey's Obama work now hangs in the Smithsonian Institution's National Portrait Gallery in Washington DC.
 

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Indiana Jones, quite possibly the most famous treasure-plundering, antiquity-hoarding fictional archeologist of our time, has a way of making the process of art reclamation or, depending on one's perspective, appropriation, look grand.  Indy, usually covered with grime, soot, debris and a perfect layer of five-o-clock shadow, dodges boulders, bullets and brutes armed with bows and arrows as he swashbuckles through exotic locales in search of his next great treasure.  Of course, real life is never as grand and, despite the ongoing presence of evildoers, intrepid seekers are usually stopped dead in their tracks by much less ominous forces than bullets or giant rocks.

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