Book Review: “Art and Business: Transactions in Art & Cultural Property” (2016)

By Marine Leclinche*

Art and Business coverWith every new publication on the subject of art law we are pleased to note the developments and growth of the field, as well as acknowledge new authors tackling the subject.

In his introduction, to Art and Business Kevin P. Ray, a Chicago-based attorney who specialized in art and cultural heritage and financial services at Greenberg Traurig, LLP, explains that this book is not intended to be exhaustive but rather to “provide an introduction to what people need to know when entering into transactions that involve art”. Indeed, the goal is deftly accomplished by the book that provides a comprehensive and concise presentation of the transactional issues and challenges encountered in the global and developing art market. While the author wishes for his book to be of interest to artists, collectors or attorneys, it can also be added that this book is definitely worth reading for students graduating from law school or art school. Even if art law is now an accepted practice area, and law schools are more and more willing to train students to this field, this textbook is a good reminder of the diversity of the subject. Art law encompass many diverse issues in addition to copyright and infringement.

Ray’s examination of the art law field is divided into ten chapters. Of the ten chapters, the first seven introduce readers to the basics of art transactions where art deals are involved, namely: cultural property, intellectual property, art trade, authenticity or title, but transactions in the art world are not always mere question of copyright infringement, title or authenticity, there can be restrictions on materials, or preemptive rights among countries that can complicate international business relationships for example. Ray uses the last three chapters to synthesize the themes of art finance and art-secured transactions, areas which may be less familiar to some art professionals

The book also contains two Appendices on restrictions applicable to art and cultural property. Appendix A provides information about the type of restrictions (e.g. export or import restriction) applicable to art and cultural property and their legal sources (national laws and regulations), and categories of objects to which these restrictions could apply. The second list categorizes restrictions according to market sectors (e.g. for Impressionist and Post-Impressionist, restrictions could apply on materials, on exports or on imports)

The first chapter “Art and Cultural Property in the Law” is a good introduction to understanding how art has been defined throughout centuries. The role of art in our societies has changed throughout time and discoveries of new techniques or materials and so has its definition. While this chapter is more conceptual at first, the author is able to quickly guide the reader towards legal status of art. For the author, the legal definition of art is essential for at least two areas: customs classification and copyright and intellectual property.

The second chapter is dedicated to intellectual property and copyright laws. The author uses cases in order to illustrate the challenge of ‘copyrightability’ and the purpose of infamous fair use doctrine and moral rights. The last section of this chapter concerns artists’ resale rights and sums up very well the origin of the rejection by U.S. copyright law and the difficulties to create or maintain a bill on resale royalty.

The third chapter explores the question of cultural property, a complex issue that has been first used in the 1954 Convention for the Protection of Cultural Property in the Event of Armed Conflict (the “Hague Convention”). While the Hague Convention includes both movable and immovable cultural property, it applies only during periods of armed conflicts.

In 1970, the UNESCO Convention, eventually addressed the issue of protecting cultural property in peacetime and targeted specifically moveable cultural property which makes it more relevant, according to the author, to art trade and transactions discussed in his book.   As explained by the author, source countries (“countries that were the location of ancient civilizations, many of which are former colonies”) started to advocate for a convention that could regulate the removal of some objects during colonials period by market countries (“important centers of the art and cultural property trade […] which are former colonial powers”). Nevertheless it seems that the effectiveness of the 1970 UNESCO Convention was put into question, those doubts led to the creation of the UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects adopted in 1995. This Conventions applies to international claims for the restitution of stolen cultural object and the return of cultural objects, but it has been ratified by less states than the 1970 UNESCO Convention meaning that “it has limited applicability for most art transaction”.

One of the most famous examples of a continuing dispute over tangible cultural property concerns the Parthenon Sculptures (formerly called the Elgin Marbles). The Parthenon was constructed between 447 and 432 B.C.E and served originally as a temple to Athena. The temple was used for diverse purpose such as: a Greek Orthodox cathedral (5th century C.E, a Roman Catholic cathedral (in 1204), a mosque in 1458 or a military center in 1687. It suffered several destructions by fire and bombardments. Several sections of the book are dedicated to the dispute over the ownership of the Parthenon sculptures off and on since the 1832 Greece independence. Since Greece formally demanded for the Parthenon sculptures return in 1982, England and Greece decided to use cultural diplomacy instead of trial threats. A disagreement still remains concerning Lord Elgin alleged permission to remove the sculptures. In 1799 Lord Elgin was appointed British ambassador to the Ottoman central government in Constantinople, and supervised “a team of artisans and workmen to travel to Athens to make drawings and plaster casts of Greek sculptures and architectural fragments”. The outcome of this venture was that upon the obtention from the Ottoman government of document of permission for access to the Parthenon, part of the sculptures were removed from Athens and later brought to the British Museum in London. The obvious legal issues concern the issuance of the alleged removal permission of the Ottoman government. If the two countries achieve to agree on the return of the sculptures several issues would persist such as the running of statute of limitations and implementation of international laws.

Another interesting reference in the chapter on cultural property concerns Native American cultural heritage and its protection by US domestic laws. The Kennewick Man saga shows how much a legal definition can sometimes be too rigid in an evolving world of historical discoveries. After the discovery of a human skull and bones near Kennewick, Washington, on federal lands, the remains were sent first to an anthropologist for analysis and upon discovery that they were approximately 9,000 years old, further scientific studies were planned. Five tribal groups opposed these further studies and demanded the remains to “be turned over for reburials”. The scientists excavated the Kennewick Man based on the 1979 Archaeological Resources Protection Act (ARPA) and argued that it was not “Native American” remains according to the 1990 Native American Graves Protection and Repatriation Act (NAGPRA) governing among other things the treatment, repatriation and disposition of Native American human remains. A claim was brought in the US District Court for the District of Oregon to avoid restitution. It was held in 2004 that Kennewick Man’s remains were not “Native American” human remains according to the NAGPRA. Last but not least, a publication in the scientific journal Nature determined that according the genetic sequencing of Kennewick Man’s genome, it was “more closely related to modern Native Americans than to any other living population” and especially to the Colville Tribe, who claimed formerly for the restitution of the remains. The Kennewick Man is still currently in the custodial care of the Burke Museum in Seattle.

Chapter five and six respectively called “Questions of Authenticity and Questions of Titles” provide essential definitions that help novice readers not to confuse attribution and authenticity, or provenance and provenience. Authenticity of an artwork has always been subject to suspicion and leads more and more to expensive and largely media-covered litigations where the art authentication experts are left to the anger of purchasers or owners. Just this year, Sotheby’s auction house filed two lawsuits, one in the UK and one in the US to recover funds from the consignor’s of artworks they found to have been forgeries. Ray explains very well in chapter five the strange fascination that art theft and forgery create in the media and among the public, analyzing extensively the story and proceedings of the Knoedler & Company case.

In the chapter concerning art ownership and title, the author decided to tackle the issue of stolen art, first explaining the moral aspect of the question that has been a classic subject of a large number of movies (Gambit in 1966, remade in 2012, or How to Steal a Million also in 1966). As stated by the author, most of the time this subject is romanticized but in reality involves much more complicated issues with the common law principle of nemo dat and problems of statutes of limitation.

The author very appropriately dedicated a fair amount of pages on the issue of Nazi-Looted Art providing a good explanation of the various challenges: emotional, geographical and time-related and the legal basis for past and current cases. That said, a more complete review of art law cases involving Nazi-era looted restitution cases is in order.

The three last chapters are the most technical and also challenging chapters of this book, for non-finance trained professionals. The author addressed art sale transactions from the standpoint of both the U.S. Uniform Commercial Code (UCC) and the UN Convention on Contract for the International Sale of Goods (CISG). This part is very useful as the author makes straightforward comparison between the two legal documents and demonstrates their respective benefits and weakness. Chapter 9 “Secured Transactions” treats art as a “quasi-asset class for investment” and discusses, once again, the lessons from the following cases: Lindholm v. Brant 925 A.2d 2048 (Conn. 2007) and Salander O’Reilly Galleries, LLC bankruptcy cases to illustrate his explanations. The last short chapter deals with international trade in art and especially exports restrictions and preemptive rights. The example of the sale of the 1733 portrait of Ayuba Suleiman Diallo by Hoare of Bath at Christie’s in 2009 is given to show the limitation that a country can impose on the exportation of an artwork that is considered  a national treasure. It was requested from the buyer: the Qatar Museums Authority to submit a request for an export license to which the UK exercised its preemptive rights in order to enable British museums to acquire it. Eventually the National Portrait Gallery and the QMA reached an agreement for a loan of the painting.

The author decision to provide a selection of case decisions and legal materials, helps the readers to put some more abstract concepts back in context or remember famous cases concerning forgeries. Nevertheless the book could become quickly outdated on these points because of new developments in pending cases or evolution of laws.

On the book shelf of the art law publications Art and Business appears an up to date and an informative reference that offers simultaneously to its readers a very good introduction on basic issues rose by art law and the art business, and thanks to the author expertise, more specialized chapters concerning art transactions and sales, that will provides great sources for less experienced lawyers. Ray’s book is clear, and provide numerous and well-researched footnotes to help readers to deal with a particular topic in depth. Published by the American Bar Association (ABA), despite its price ($199.95), this book makes a valuable addition to a reference library for any art professionals.

Disclaimer: This article presents general information and is not intended as legal advice or substitute to reading Art and business.

*Marine Leclinche is a Spring 2017 Legal Intern with Center for Art Law. She is a LL.M candidate at Benjamin N. Cardozo School of Law. She earned a degree in Intellectual Property Law in France, and now focus her studies on art and fashion law. Ms. Leclinche can be reached at

Smaller World

By Kodai Kimura*

During my stay in New York City, one of my favorite pastimes was visiting public works of art and fantastic museums. One day when I was walking along 55th street humming a Beatles song I came across a public piece of artwork, the “LOVE” sculpture by the American artist, Robert Indiana. I knew the work because it was really famous and was also installed as a public piece of artwork at Shinjuku in Tokyo, Japan. After a 40-minute walk, finally I arrived at the Guggenheim Museum. I then realized that I needed some gifts for my wife and was reminded that she likes miniature replicas, so I thought it would be great if there were smaller scaled versions of the LOVE sculpture and the Guggenheim Museum’s Frank Lloyd Wright Building.


Robert Indiana, LOVE Source: Robert Indiana Website

Given the fact that I am a lawyer, I could not avoid considering the laws that affect works of art and architecture from the perspective of intellectual property law. In the U.S., the Copyright Act (17 U.S.C.) section 120(a) states that

the copyright in an architectural work that has been constructed does not include the right to prevent the making, distributing, or public display of pictures, paintings, photographs, or other pictorial representations of the work, if the building in which the work is embodied is located in or ordinarily visible from a public place.

Under this provision, I would be able to photograph the Guggenheim Museum but would not be allowed to produce it as a three-dimensional miniature replica since it does not come under “pictorial representations of the work.” On the other hand, there is no specific exception dealing with the reproduction of an artistic work located in a public place. Therefore, it would be difficult to justify that the sales of photographs or miniatures of the LOVE sculpture, without the artist’s permission, are within Fair Use under section 107 of the Copyright Act.


Frank Lloyd Wright, Guggenheim Museum Source: The Guggenheim Museums and Foundation Website

Let us assume that this is Japan though; of course, both “artistic work” (like the LOVE sculpture) and “architectural work” (like the Guggenheim Museum) are protected by the Japanese Copyright Law. In Japan however, there is also a difference between them, unlike the U.S.

For an artistic work, Copyright Law confers a reproduction right to the copyright holder like an artist. On the other hand, Article 46 of the Copyright Law states that “It is permissible to exploit an artistic work the original copy of which is permanently installed in an outdoor location…or an architectural work, in any way whatsoever…” Therefore, since the LOVE sculpture is permanently installed in an outside space, I can photograph it. The same provision applies to the Guggenheim Museum as an architectural work.

However, it is important to note that there are exceptions to this general rule. Article 46 of the Copyright Law additionally states that:

It is permissible to exploit an artistic work the original copy of which is permanently installed in an outdoor location… or an architectural work, in any way whatsoever except for the following:” and one of four exceptions says that “(iv) reproducing an artistic work solely for the purpose of selling copies of it, or selling such copies.

This means that like the U.S., if I want to create and sell miniature replicas of the LOVE sculpture, I must obtain permission from the artist.

In 2001 there was a Tokyo District Court case (July 25, 2001, Hei 13 (wa) No. 56, 1067 HANTA 297), where a publisher was sued for copyright infringement, by an artist who painted a painting on the surface of a bus, since the publisher used the artist’s work as a book cover illustrating various kinds of cars for children without the artist’s permission. The court found that the bus was “permanently installed in an outdoor location” since the bus runs on a public road which is open to the general public. The plaintiff argued that the bus is not “permanently” installed since the bus is located in a car park during the night. Also, the plaintiff asserted that the bus is not “installed” because the bus moves around. However, the court denied the plaintiff’s argument by reasoning that it would be usual to prohibit entry or viewing during night time for security reasons even for typical works of art. Furthermore, the court observed that “installed” is not limited to being fixed at any real property or a specific location, just as long as the location was outdoors.  


Defendant’s book Source: Response Website

For the application of item (iv) of article 46, the court held that the use of the artwork by the publisher does not fall within “solely for the purpose of selling copies of it, or selling such copies” since readers would understand that the book cover indicates one example of cars which are introduced in the book etc. In conclusion, the court dismissed the artist’s claim. In this way, the application of this provision is not crystal clear.

What happened if the work was an architectural work? Item (ii) of article 46 of the Copyright Law states ”reproducing an architectural work by means of construction, or offering the copies of an architectural work so reproduced to the public by transferring them” as an exception. This means that you need a copyright holder’s permission if you would like to build another Guggenheim Museum. How about item (iv) of article 46? This provision does not include “architectural work.” Therefore, a miniature replica, and not an architectural reproduction of the Guggenheim Museum would not be within the scope of this provision.

Is it clear if a work falls within either “architectural work” or “artistic work”? My answer is unfortunately no. Let us take the “Tower of the Sun” by the deceased Japanese artist Taro Okamoto, which is located at the Expo Commemoration Park, in Suita, Osaka. This work is around 70 meters in length and has an open ceiling space inside (not currently open to the public due to earthquake resistant problems). Legal scholars point out that this work would fall within both “architectural work” and “artistic work.”


Taro Okamoto, Tower of the Sun Source: Osaka Prefectural Government Website

After some legal analysis, I finally stopped looking for a smaller gift to avoid my wife’s misunderstanding that my love for her is in any way small or miniature. Anyhow, I would like to conclude this article saying that if you are intending to start a miniature replica business in Japan, all you need is a legal advisor.

About the Author: Kodai Kimura is an attorney admitted in Japan and New York, and currently works for a private law firm, Yuasa and Hara in Tokyo. During his stay in New York, he received an LL.M in IP from the Benjamin N. Cardozo School of Law, and a Certificate in Art Business from Christie’s Education. He also undertook work experience as a legal intern at Danziger, Danziger & Muro LLP.

Disclaimer: This article is intended as general information, not legal advice, and is no substitute for seeking representation.

WYWH: Art Law Issue Spotting at the “New York Comic Con” (NYC)

By David Honig*

View from above of a small section of the showroom floor

New York Comic Con (“NYCC”) took place earlier this month, October 8-11, 2015 at the Jacob Javits Center. In addition to christening the new 7 train subway stop at 34th street and 11th avenue, which opened on September 13, 2015, NYCC celebrated its tenth anniversary with comics, panels, parties, games and of course cosplay. ”Cosplay” (costume play) is when someone dresses up as a character from a tv show, movie, comic or anime.

NYCC is not simply an opportunity to dress up, brows new publications, and meet the artists and writers behind works such as Saga, Batman, Afterlife with Archie, Daredevil and The Wicked + The Divine. Each year NYCC’s organizers invite producers, publishers, actors and anyone tangentially related to comics to tackle important subjects in the realm of these multi billion dollar industries. In 2015, panelists discussed the new books being put out by both major and independent publishers, diversity in comics and the comics industry ranging from racial diversity to sexual diversity of both characters and creators, legal issues, and the artistic value of comics in the greater cultural context. For example, two panels were dedicated to Will Eisner (1917-2005), who, along with Jack Kirby (1917-1994), is arguably the most important and influential figure in comics. Eisner’s importance is especially true when looking at his impact on transforming the comic book medium into a recognized art form.


Cosplayers dressed as DC Comics characters gather for a group photo outside the Javits Center

The panels, “75 Spirited Years: Will Eisner & the Spirit” and “Will Eisner: Champion of the Graphic Novel,” were hosted by Geppi’s Entertainment Museum (the “Museum”) to coincide with an exhibit hosted in Baltimore celebrating the 75th anniversary of the Spirit, a character created by Eisner. One of the panels discussed the Museum exhibit as well as Eisner’s life and his impact on the industry. Panelists included Karen Green, the graphic novel librarian at Columbia University, as well as Denis Kitchen, founder of the Comic Book Legal Defense Fund [CBLDF].

CBLDF is a non-profit organization established in 1986, dedicated to freedom of speech. Through donations the CBLDF helps pay for attorneys fees for cases related to first amendment issues and comics. In addition to helping comic readers, publishers and authors obtain legal services CBLDF also fights censorship.

CBLDF, had multiple representations at NYCC, in addition to having a booth on the showroom floor where signed copies of books created by famous supporters were sold, CBLDF hosted parties and panels The topics of this year’s CBLDF panels were banned comics and censorship.

Indeed, manifestations of art law, issues involving creative visual output and the law are not rare in the comics realm.  In addition to the predictable copyright, licensing, trademark and First Amendment disputes, other cases that have stemmed from the comics may be related to such unlikely practice areas as patent law. One striking example took place just this year, on June 22, 2015 when the Supreme Court of the United States decided Kimble v. Marvel Entertainment, LLC., a patent law case related to Spider-Man. In 1990 Stephen Kimble was awarded US Patent No. 5,072,856 titled “Toy web-shooting glove.” The abstract of the patent is as follows,

The combination of known components to produce a new toy shooting apparatus. A toy that makes it possible for a player to act like a spider person by shooting webs from the palm of his or her hand. The webbing material consists of string foam delivered from a hidden pressurized container through a valve incorporated into a glove worn by the player. A trigger mechanism enables the player to activate the valve at will by the exercise of pressure with the fingers of the hand wearing the glove.  


Patent drawing of the apparatus

After independently inventing the “Toy web-shooting glove” and obtaining a patent Kimble tried to license or sell his patent to Marvel so it could create a line of toys modeled off of Spider-Man’s web shooters – the device Spider-Man created to shoot webs out of his hands. Marvel declined to license Kimble’s invention but went ahead with creating a line of toys modeled off of Spider-Man’s web shooters which it called the “Web Blaster.”

Kimble sued Marvel claiming its line of “Web Blaster” toys infringed his patent. Marvel and Kimble eventually settled the patent infringement suit and Marvel agreed to purchase the patent from Kimble and pay him a royalty on all future sales. The contract between Kimble and Marvel stated that Marvel would pay a royalty fee to Kimble but there was no specified end date, meaning Marvel would have to pay a royalty to Kimble for every “Web Blaster” sold even after the patent expired and stopped conferring exclusive use on its holder. Unbeknownst to Kimble or Marvel at the time they entered into the contract, a 1964 Supreme Court decision, Brullotte v. Thys Co., held that a patentee, the person who holds or initially obtains a patent, cannot receive royalties for a patent after the patent term expires. The patent term expires after a statutory period, currently 20 years after filing for all patents filed after June 8, 1995, at which point the information in the patent is dedicated to the public and the holder of the patent can no longer claim exclusive use. (From the Editors: more about art and patent law coming soon).

After discovering Brullotte, Marvel sought and received a declaratory judgment stating that it did not have to pay Kimble royalties after the patent term expired, even though the contract between Marvel and Kimble outlined an agreement to the contrary. Kimble appealed this decision all the way up to the Supreme Court. The ultimate issue in the case was whether the Supreme Court should overrule Brullotte in spite of stare decisis – a doctrine that says precedent should be followed and only overturned when absolutely necessary. Not only did the Supreme Court rule in favor of Marvel but it did so in such a way as to invoke one of Marvel’s most famous comics – Amazing Fantasy No. 15.

Amazing Fantasy No. 15, written by Stan Lee with art (or “pencils” in the comics world) by Steve Ditko, was published on August 10, 1962 introducing the world to Peter Parker and his alter ego – the Amazing Spider-Man. The final panel in the 1962 lead story ends on a somber image: Spider-Man’s back as he is walking through a concrete jungle with the moon high in the sky and a caption which includes the now famous phrase: “WITH GREAT POWER THERE MUST ALSO COME — GREAT RESPONSIBILITY!”

Screen shot 2015-10-26 at 1.17.55 PM

© Marvel Comics, 1962

It seems that in the Court’s view, the power to overturn cases and change the law is akin to Peter Parker’s Spider-Man powers; as such in the closing paragraph of the majority opinion Justice Kagen cites the famous phrase above to illustrate why Brullotte should not be overturned. Where Spider-Man has the responsibility to use his powers to save anyone and everyone, the Supreme Court must use its power to overturn cases sparingly and only do so when stare decisis allows.

There must be a comic fan clerking at the Supreme Court, because in addition to quoting Amazing Fantasy 15, the majority opinion in Kimble makes a reference to the 1967 song “Spider-Man,” written by Paul Francis Webster and J. Robert Harris for the animated television series of the same name. The court made this reference while discussing the fact that the contract between Marvel and Kimble contained no end date and that the contract seemed to suggest Marvel would have to pay royalties “for as long as kids want to be like Spider-Man (by doing whatever a spider can).”

The Supreme Courts cite to Amazing Fantasy is just another in a long line of victories in establishing the value of comic books and the transformation of comic books into a recognized art form. What was once thought of as a curiosity for children has slowly evolved and become more accepted into mainstream culture. While visionaries like Will Eisner might have imagined a day that his art was hanging up in museums and being collected by Ivy League universities most of his contemporaries did not.

About the Author: David Honig is a post graduate fellows at the Center for Art Law. He is a member of the Brooklyn Law School class of 2015. While attending law school he focused his studies on intellectual property and was a member of the Brooklyn Law Incubator & Policy (BLIP) Clinic. He is currently pending admission to the New York and New Jersey state bars.  

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Readers should not construe or rely on any comment or statement in this article as legal advise. Instead, readers should seek an attorney.

WYWH: Forgeries and Fakes from “Fakes, Forgeries and Looted and Stolen Art”


Ken Perenyi’s autobiographical keynote. NYUSCE program June 2015. Copyright Center for Art Law.

By Lindsay Dekter*

Following a multi-year investigation between 2011 and 2014, East Hampton art forger John Re was sentenced in May 2015 to five years in prison after nearly a decade of defrauding art collectors. Re passed off more than 60 paintings attributed to artists such as Jackson Pollock and Willem de Kooning, amounting in a combined loss of roughly $2 million by his victims. Shortly after Re’s sentencing, New York University’s School of Professional Studies held its 2nd annual Art Crime and Cultural Heritage Conference in New York, dedicating one of the three days to the issue of art forgery.

One speaker, Meredith Savona, discussed the Re phenomenon and how people fall victim to these con artists. Others speakers addressed current issues regarding expert witness testimony and expert immunity, while New York State Senator, Betty Little, discussed an amendment to the New York Arts and Cultural Affairs Law that aims to strengthen legal protections for authenticators. The NYU program, co-organized by Jane C. H. Jacob of Jacob Fine Art, Inc. and the Art Recovery Group, included a controversial keynote address entitled Art Crime Scene: Forger Talks about Forgery, delivered by Ken Perenyi. Perenyi’s presentation included images of major auction house catalogues containing his forged landscapes, still lives, and period paintings, and was followed by a bemused round of applause. Questions and comments from the audience, particularly art lawyer John Cahill of Cahill Partners LLP, and art expert James Martin of Orion Analytical LLC, expressed outrage with the damage forgeries inflict on the art market and art historical scholarship. Cahill went so far as to offer pro bono services to those with possible and plausible Perenyi claims. Martin indicated that while stylistically Perenyi’s work is very strong, chemical analysis of his materials is an easy way to identify his work as inauthentic.

Although nothing new to the art world, both Re’s case and NYU’s conference highlight the damage art forgery causes, both to commerce and the historical record. Speakers at the NYU conference, like Meredith Savona, the FBI agent who filed the June 2014 complaint against Re, impressed upon the audience the importance of vigilance in preventing and identifying these crimes.

About the Author: Lindsay Dekter, Center for Art Law Intern (Fall 2015), is a graduate student at New York University in the Program in Museum Studies. She holds a BA in Cultural Geography and an MS in Historic Preservation. Her current studies focus on museums and legal issues, cultural heritage policy and preservation, ethics, provenance research, and restitution.

Book Review: “Visual Arts and the Law: A Handbook for Professionals” (2013)

By Irina Tarsis, Esq.*

“I want to do something splendid…

I think I shall write books.”

Louisa May Alcott

Historically, introducing art law to lawyers and artists, not to mention law and non-law students, used to be a challenge. The majority of artists and lawyers were perplexed by the idea of ‘art law,’ now an accepted practice area that touches upon private as well as public law, national and international art business, and art making. Therefore, a handful of attorneys have grappled with the task of composing textbooks, which would serve as suitable introduction to the discipline.

Screen Shot 2015-07-10 at 5.28.23 PMThe 2013 offering from the former chair of the Entertainment, Arts & Sports Law Section of the New York State Bar Association, Judith B. Prowda, who is a Senior Lecturer at Sotheby’s Institute of Art teaching Art Law and Ethics, is an excellent teaching tool to present information about artists’ rights and art market relationships in a clear and engaging tone. Her “Visual Arts and the Law: A Handbook for Professionals” (the “Handbook”) is a comprehensible if not comprehensive primer for the uninitiated. It is part of the Handbooks in International Art Business series. Like an art history work, the Handbook is peppered with the familiar names of Calder, Monet, Schiele, and Serra. Like a law textbook, it is devoid of art reproductions. The only visual decoration that the publisher allowed in this text are the three symbolic images on the cover — Portrait of a Lawyer (1866) by Paul Cezanne, Tilted Arc (1981) by Richard Serra, and Egon Schiele’s Portrait of Wally (1912). The lack of illustrations is regrettable because an art law textbook, unlike other legal publications, stands to benefit from having reproductions of the works that have shaped and given rise to the discipline. The images used for the cover merely scratch the surface of the wealth of imagery that imbues the art law discipline. Luckily, the attorney who authored this Handbook succeeded in penning a clear bird’s-eye view of the discipline.

In the Handbook, Prowda synthesizes information about the basics of copyright and focuses on issues affecting visual arts, such as moral rights, commissions, auctions, expert opinions and title disputes. Consequently, this publication is best suited for artists, students in art and business management, appraisers and gallery employees as well as members of the general public that wish to learn about different aspects of art market as it is affected by the law. The target audience probably excludes those training for legal practice and the active members of the legal bar who already represent artists and galleries as their clients.

As a self-imposed objective, Prowda wished to “give her reader some “context and insights into the most salient legal issues of the day affecting art.” Therefore she organized the materials in the order of what happens with visual artworks from creation to sale in the primary market and again in secondary market. The structure of each section offers historical foundation and recent manifestations of specific legal issues associated with appraisal, authentication, theft, and auctions.

The Handbook is divided into three sections: 1) Artists’ Rights; 2) Artists’ Relationships; and 3) Commercial Aspects of Art, with twelve chapters unevenly split between these topics.  Contemplated as “a tour d’horizon of the complex questions raised in the field of art law,” with some attention given to the law in different countries — U.K., France, Germany as well as the U.S., in her preface Prowda acknowledges that she is covering the material through a U.S.-trained lawyer’s lens as well as looking at limited number of topics. Prowda revisits many classic legal examples: what is art according to Brancusi v. United States (U.S. 1928), and what is copyrightable per Burrow-Giles Lithographic Co. v. Sarony (U.S. 1884). The narrative is easy to follow and it flows well from one example and concept to another. The Handbook tackles the big picture and glosses over nuances and gray areas that emerge in numerous related transactions and disputes.   

First section explores Artist’s Rights, namely freedom of expression, including historical overview of obscenity law, right of privacy and publicity, principles of copyright, including its duration, requirements, exclusive rights, infringements, defenses and spends some time discussing fair use exception, including a brief mention of the recent 2nd Circuit fair use case Cariou v. Prince. Here, Prowda spends considerable time exploring moral rights in Europe, the U.K. and the U.S., dating back to France in the 19th century and moving forward to the 1990 enactment of the Visual Artists Rights Act in the United States, and the case law that emerged subsequently. Repeatedly, the Handbook follows a formula of introducing a concept and explaining its origins, past applications and the current state of applicability. Thus, readers who are interested in limited moral rights in the United States or the variety of fair use cases decided by courts in different jurisdictions would need to go beyond the distilled information offered in the Handbook to learn more about the VARA cases, such as Mass MOCA v. Buchel or the different circuits’ applications of the fair use exception to copyright infringement claims.

Second section of the Handbook is dedicated to the artist’s relationships with dealers, collectors and art commissioners. Here, Prowda focuses on fiduciary duties owed to artists and their heirs; she explains relevant sections of the New York Arts and Cultural Affairs Law that deals with consignment of art for sale. Rarity of written contracts and pitfalls of oral contracts are featured prominently in discussion of disputes related to Georgia O’Keeffe or the Estate of Jean-Michel Basquiat. This section certainly would have benefited from offering guidelines for working with attorneys and advisors as well as grant-giving agencies such as the New York Department for Cultural Affairs, which administer public commission. As is, the section is brief and is best summarized as following: due to fact specific and unique relationships between each artist and her dealer or the art commissioner, each negotiation and partnership needs to be carefully reviewed and monitored throughout the relationship.

Third section moves away from the creative process to explore the commercial side of art disposition through the secondary market, collection development, art theft and issues of authenticity. It explores questions surrounding legal title and includes a discussion of good faith purchases of art works. Author underscores the importance of clear and corroborated provenance, duties of different parties involved in art transactions, obligations and rights of creditors, an array of warranties that may accompany change of ownership and technical defenses to combining ownership of art with legal title.

In her treatment of auction houses, Prowda lists various services and duties auctions have to their clients and then she focuses on the seminal 1986 Cristallina v. Christie’s decision that “resulted in significant changes in auction laws and redefined auction practice in New York.” In that case, the auction house was accused of fraudulent misrepresentation in violation of its fiduciary duty to the consigner by failing to assess market conditions. The third section is also used as a vehicle to discuss the antitrust price-fixing scandal that embroiled both leading auction houses in the early 1990s. Prowda briefly introduces the main players and the circumstances of the Sherman Act violations.

The second-to-last chapter of this section explores briefly the subject of expert opinions as they pertain to art appraisal and authentication. In light of the recent legal actions brought against art experts, this section is of great importance to those engaged in creating catalogue raisonnés and labeling art as fakes or forgeries. Prowda explains fiduciary duties owed by experts and explains risks and legal liabilities that may attach to actions of authenticators and appraiser. This section includes discussion of the main legal cases involving opinions on art and its value, including but not limited to the 1929 Hahn v. Duveen decision, as well as Ravenna v. Christie’s (2001) and Double Denied, an antitrust case against the Andy Warhol Foundation decided in 2009.

Finally, the Handbook tackles the temporally, geographically and emotionally-complicated questions regarding title problems related to stolen art, with emphasis on war plunder and Nazi-era looted art. Given the vast body of cases and alternative dispute resolution mechanisms dedicated to solving issues related to Nazi-era looted art, the treatment of this subject in the Handbook merely scratches the surface of the questions and outcomes related to art restitution claims. Prowda chooses to focus on three cases as main illustrations of related issues, specifically U.S. v. Portrait of Wally which was ultimately settled in 2010 for $19 million, Guggenheim Foundation v. Lubel (NY, 1991) and Bakalar v. Vavra (2nd Cir. 2010). However, other important trends affecting the art displaced during the Nazi-period are excluded. For example, the late 1990s and early 2000s case sequence involving American art museums proactively seeking to quiet title through declaratory judgments aimed at keeping possession of once-looted artworks is omitted entirely, as is the discussion of the numerous foreign advisory commissions that review restitution claims brought against public institutions by heirs in France, England, Germany, Austria and so on.

The Handbook ends with an admission that in the 21st century, there are ongoing and profound changes in the production and consumption of art and thus the legal system is continuously tested. The author admits she wanted her readers “to situate themselves within [law, art and commerce] discourse.” She certainly succeeds in giving a long view on perennial important topics even as case law and legislation continue offering new examples and challenges.

Art law is a growing and developing practice area and by definition textbooks and handbooks tend to become outdated as soon as they are submitted to print because of the subsequent developments. This Handbook is no exception. While Prowda talks about Nazi-era looted art, as well as authentication issues such as the threat of litigation that affect authentication boards and commissions, there is understandably no reference to the Gurlitt art trove which was made public in 2013 nor the infamous demise of the Knoedler Gallery in 2011, formerly the oldest art gallery in the United States that was found out as selling forgeries. The first of almost a dozen claims for breach of warranty and negligent misrepresentation against the gallery, its owners and staff were filed as early as 2011; however, the reverberating effect of the downfall was not fully felt until much later. Other materials missing from the Handbook include laws governing the antiquities trade, and questions dealing with import/export of art containing ivory and other problematic materials.

The Handbook would have been more authoritative and easy to use for the legal community if the references and citations were not relegated to endnotes at the end of the volume but appeared at the bottom of the page as footnotes or at least following each chapter. Nevertheless, the Handbook intends to situate its users or reader within various art law related discourse and it accomplishes that task very well. Whether the book inspires students to become art lawyers and thus dive into the specific issues more deeply remains to be seen.

Prowda supplements her writing with a brief bibliography which reads as a “Who is who in Art and Law.” All the usual suspects are represented: Leonard D. DuBoff, Patty Gerstenblith, John Henry Merryman, David Nimmer, Pierre Leval, Judith Bresler, as well as Michael Bazyler, Lawrence M. Kaye and Ronald D. Spencer. Again, just like the Handbook itself, the bibliography offers a sound but basic set of tools. For non-lawyers, the glossary of legal terms is a non-exhaustive list of terms that may or may not need explanation. It includes Latin phrases (e.g., caveat emptor and lex loci), substantive terms (e.g., subpoena and contract), relationships (e.g., fiduciary and agency), causes of action and rights. The concept of due diligence is explained here but good faith purchase is not.

The writer of this review would argue that the subtitle “ Handbook for Professionals” is a confusing description of the text contained within. Perhaps it is the formula imposed by the publisher, however, unlike the guide for collectors, investors, dealers and artists co-authored by Judith Bresler and Ralph E. Lerner, a two-volume $200+ opus akin to Nimmer on Copyright, or Law, Ethics and the Visual Arts volume by John Henry Merryman et all, Prowda’s textbook is a general introduction/a primer for newcomers. It does not bore those lacking the technical training or stamina to work through legal analysis and exhaustively shepardized citations, rather it is a carefully composed teaching tool that ushers its reader at a comfortable pace through fascinating and varied legal history. Professionals would need to dig deeper into each subject; however, given the paucity of affordable basic textbooks for students learning about art law, this volume is an excellent option for any art law professor seeking to introduce countless areas for study and further exploration. Perhaps it should have been titled “A Handbook for Future Professionals.” The Handbook may be coupled with select case decisions and legislative material for an effective introduction to the fascinating field that concerns art, art history and law.

Prowda’s Handbook is a tool designed to further adoption and acceptance of art law, and given its modest price in comparison with other art law publications, it is a worthy addition to any mentor or art law instructor’s reference library. It is a solid stepping-stone to further popularizing the art law discipline.

Cited Cases:

  • Bakalar v. Vavra, 619 F.3d 136 (2d Cir. 2010).
  • Brancusi v. United States, 54 Treas. Dec. 428 (1928).
  • Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 4 S. Ct. 279, 28 L. Ed. 349 (1884).
  • Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013).
  • Cristallina v. Christie’s, 117 A.D.2d 284, 502 N.Y.S.2d 165 (App. Div. 1986).
  • Guggenheim Found. v. Lubell, 77 N.Y.2d 311, 567 N.Y.S.2d 623, 569 N.E.2d 426 (1991).
  • Hahn v. Duveen, 234 N.Y.S. 185, 133 Misc. 871, 133 Misc. Rep. 871 (1929).
  • Lagrange et al v. Knoedler Gallery, LLC et al, 1:2011cv08757 (S.D.N.Y. Dec. 1, 2011).
  • MA MUSEUM, CONTEMP. ART FOUN. v. Buchel, 593 F.3d 38 (1st Cir. 2010).
  • Ravenna v. Christie’s Inc., 289 A.D.2d 15, 734 N.Y.S.2d 21 (App. Div. 2001).
  • Serra v. US General Services Admin., 847 F.2d 1045 (2d Cir. 1988).
  • Simon-Whelan v. Andy Warhol Found. for the Visual Arts, Inc., 2009 W.L. 1457177 (2009).
  • US v. Portrait of Wally, 105 F. Supp. 2d 288 (S.D.N.Y. 2000).

About the Author: Irina Tarsis, Esq., specializes in art law, provenance research and cultural heritage law. She may be reached at

Disclaimer: This article presents general information and is not intended as legal advice.

Reprinted with permission from: Entertainment, Arts and Sports Law Journal, Spring 2015, Vol. 26, No. 1, published by the New York State Bar Association, Albany, NY.

WYWH: Review of “Murder to Museums: Recent Cases and Ethical Considerations in Nazi Looted Art”

By Debra S. Friedmann*

On June 17, 2015, the New York County Lawyer’s Association (the “NYCLA”) hosted an event entitled “Murder to Museums: Recent Cases and Ethical Considerations in Nazi Looted Art,” with remarks by Raymond Dowd from Dunnington Bartholow & Miller LLP, and introduced by the Honorable Barbara Jaffe, acting justice in the New York State Supreme Court. Dowd is one of the program chairs of the Art Litigation and Dispute Resolution Practice Institute, scheduled to hold its 8th annual conference in November 2015.


“La Bergere rentrant des moutons/Shepherdess Bringing in Sheep” (1886) Camille Pissarro

Dowd, who has represented numerous claimants with title dispute cases in U.S. courts, introduced the topic for the evening with a few examples of ongoing restitution cases, including the recent effort to return Camille Pissarro’s painting, “La Bergère Rentrent des Moutons,” from the University of Oklahoma. The concept of art restitution, Dowd explained, began with the Lieber Code, also known as Executive Order 100, ordered by President Lincoln in 1863 and later included in the Hague conventions in 1899 and 1907. The code sought to protect classical works of art and libraries and banned the sale or donation of art removed from enemy nations.

Recent movies such as “The Monuments Men” (2014) and “Woman in Gold” (2015) brought Nazi art restitution to the forefront of art and legal discussions, begging the question, how did the Nazis take possession of art collections that belonged to Jews? Dowd explained that the Nazi regime demanded regular declarations of property from Jews and systematically transferred ownership of all Jewish assets by forcing Jews to relinquish power of attorney to an assigned “Aryan trustee.” This Nazi system that funded their war efforts appears to abide by the law. Dowd suggested that the legal appearance of these sham transactions with blocked bank accounts has confused historians and judges alike when trying to decide if a piece of art was sold fairly or forcibly.

With so many stolen works scattered in museums around the world, Dowd questioned whether museums are doing enough to investigate their holdings and return the looted work to their rightful owners. Though the U.S. State Department has regularly shown support for Nazi restitution, the U.S. federal court system has nevertheless rejected many of these claims, and in some circumstances, ruled in favor of museums that have sued the Jewish heirs for extortion.

Dowd introduced some of the hurdles, such as laches (the undue delay in obtaining relief), statute of limitations, and the claim that the sales were voluntary, that he has incurred in his own work representing heirs of Holocaust survivors. In Dowd’s case In re Flamenbaum, the rejection of the laches argument to bar the return of a third century golden tablet belonging to the Temple of Ishtar was instrumental as support for other cases that similarly would need to argue against laches. This subject was particularly timely in light of the recent Cassirer v. Spain appellate decision against Claude Cassirer, heir to Lilly Cassirer who was forced to give up Camille Pissarro’s “Rue Saint-Honoré, Après-midi, Effet de Pluie” while fleeing from Nazi Germany. Recognizing national sovereignty, the court ruled that Spanish law rather than California law applied to  the case because, though the plaintiffs had a significant connection to California, the painting did not. According to Spanish law, if one possesses property in an obvious way for a certain period of time, ownership transfers to that individual.  Therefore, since the doctrine of adverse possession applied in this case, it did not matter that the painting in question was looted by the Nazis.

Screen Shot 2015-06-29 at 5.17.41 PM

“Seated Woman With Bent Left Leg” (1917) Egon Schiele

Dowd warned the audience that it is important to look skeptically at provenance research associated with works of art. As an example, Dowd discussed the case Bakalar v. Vavra, where he established that Franz (Fritz) Grunbaum, who owned a sizable collection of Egon Schiele works, was murdered in Dachau. Sotheby’s claimed in the listed provenance for the drawing by Egon Schiele, “Seated Woman With Bent Left Leg” (1917), that it was passed down to the widow and heirs and then sold voluntarily, when in reality no such transactions took place.

Dowd concluded that museums are not doing enough to research their collections and return stolen works, noting that if there is a theft in a transaction, the transactions that follow are irrelevant. Museums such as the Museum of Modern Art, the Toledo Museum of Art, the Detroit Museum of Art, the Museum of Fine Arts in Boston, and the Guggenheim Museum, are still fighting and rejecting charges of looted Nazi art, refusing to return the works.

The CLE lecture, which drew an audience of approximately thirty people, ended with questions on what museums should do in response to claims of looted art and suggestions for what advocates can do to rectify the suppression of Nazi looted art claims.

Select Cases:

  • Bakalar v. Vavra, 619 F.3d 136, 2010 WL 3435375 (2d Cir. Sept 2, 2010)
  • Cassirer v. Kingdom of Spain, 616 F.3d 1019 (9th Cir. August 12, 2010)
  • De Csepel v. Republic of Hungary, 714 F.3d 591 (D.C. Cir. 2013)
  • Grosz v. Museum of Modern Art, 2010 WL 88003 (Jan. 6, 2010), aff’d (2d Cir. Dec. 16, 2010.)
  • Guggenheim v. Lubell, 153 A.D.2d 143, 153, 550 N.Y.S.2d 618, 624 (1st Dep’t 1990), aff’d 77 N.Y.2d 311, 321
  • Schoeps v. State of Bavaria, 2014 WL 2915894 (S.D.N.Y. June 27, 2014)
  • Menzel v. List, 267 N.Y.2d 804, 819 (Sup. Ct. N.Y. Co. 1966), modified 279 N.Y.S.2d 608 (1st Dep’t. 1967), modified and aff’d 24 N.Y.2d 91 (1969)
  • Museum of Fine Arts Boston v. Seger-Thomschitz, 623 F.3d 1 (1st Cir. Oct. 14, 2010)
  • Republic of Austria v. Altmann, 541 U.S. 677 (2004)
  • Toledo Museum of Art v. Ullin, 477 F. Supp.2d 802 (N.D. OH 2006)
  • Vineberg v. Bissonnette, 548 F.3d 50 (1st Cir. 2008)
  • Von Saher v. Norton Simon Museum of Art at Pasadena, 131 S.Ct. 379 (Oct. 4, 2010)

Additional Sources:

  • Dowd, Raymond J., Nazi Looted Art and Cocaine: When Museum Directors Take It, Call The Cops, 14 Rutgers Journal of Law and Religion 529 (2013)
  • Dean, Martin, Robbing The Jews: The Confiscation of Jewish Property in the Holocaust, 1933-1945 (Cambridge U. Press 2008)
  • Petropoulos, Jonathan, Art As Politics in The Third Reich (U. North Carolina Press 1999)
  • Petropoulos, Jonathan, The Faustian Bargain: The Art World In Nazi Germany (Oxford U. Press 2000)

*About the Author: Debra Friedmann is a rising second-year law student at the Georgetown University Law Center. She received a B.A. in History and Studio Art from Brandeis University. She may be reached at

Disclaimer:  This article is for educational purposes only and is not meant to provide legal advice. Readers are not meant to act or rely on the information in this article without attorney consultation.

Gold or Not? Scenery or Forgery? Art Reproductions Created for Film

by Mia Tomijima*

Screen shot 2015-03-24 at 5.07.04 PM“Woman in Gold” (2015) adapts for the big screen the story of Maria Altmann (1916-2011) and her legal battle against the Government of Austria to return five Gustav Klimt masterpieces on display in Vienna’s Belvedere Museum, which were taken from her family by the Nazis during World War II. Austria shipped the paintings to the U.S. in 2006, where they were first put on display in Los Angeles and then sold at auction, with the “Portrait of Adele Bloch-Bauer I” (1907) being purchased by Ronald Lauder to be put on display at the Neue Galerie in New York City.

This and other films featuring priceless works of art begs the question, what does a film company do when it wants to include works of art in movies. In making “Woman in Gold” what did the director, Simon Curtis, have to do recreate scenes of the paintings as they were in Austria? Did he borrow the artworks that were filmed? After all, even if the current location of an artwork is known, it is simply too costly to move a multimillion-dollar work of art around the world just for filming purposes. Its movie magic of course! The art reproduced for this and other films is meant to fool the eyes of millions of moviegoers, and looks so real that, if released into the general public, it could potentially pass as a forgery. While the reproductions in this instance will likely be kept under lock and key in storage after the film wraps, other artists and foundations have gone to greater lengths to protect their copyrights when their works are depicted on film.

As an example, the 1996 film “Basquiat” depicted the work of many famous artists including Picasso and Warhol. Director Julian Schnabel, a painter himself who had close friendships with Jean-Michel Basquiat and Andy Warhol, wanted the art in the film to be as true to life as possible. Unfortunately, the Basquiat estate refused to give reproduction permission, instead demanding an exorbitant fee that would have made the film impossible. As a result, all of the paintings shown in the movie were created “in the style of” Basquiat, with an attorney for the estate verifying each piece as acceptable. Schnabel also convinced Picasso’s estate to allow him to create a reproduction of “Guernica” (1937) for the movie, but in exchange agreed to destroy the work immediately after and send video proof of destruction. The story of the making of the “Basquiat” film shows how artists and estates may protect their interests while still allowing some flexibility for allowing inclusion of art in the medium of film.

The film industry has a long history of creating reproductions of art for set backgrounds. Films featuring fine art have grown more and more prevalent in the past two decades. As this trend has grown, so have increased the copyright lawsuits over artists’ rights and complicated rights clearance processes with staggering monetary demands and unique instructions for the creation and destruction of the art.

Lawsuits over art depicted in two films in the 1990’s caused film companies to change their policies over rights and permissions forever. Artist Frederick E. Hart brought suit against Warner Brothers for showing a sculpture in a final scene of the movie “Devil’s Advocate” (1997), which was strikingly similar to his “Ex Nihilo” (1982), which is displayed at the Washington National Cathedral. The movie not only allegedly infringed his copyright, but also distorted the artist’s intent of portraying God’s beautiful creation of humans, not, as it was in the film, coming to life in a demonic scene of lust. After a federal judge found that Hart was likely to succeed, Warner Brothers reached a settlement, agreeing to cut and change the ending of the film before video release and also add a sticker to the 475,000 unedited versions of the film already released that disclaimed any affiliation to the artist’s sculpture, a likely difficult but necessary end to the case.

Similarly, artist Lebbeus Woods sued Universal Studios, Atlas Entertainment, director Terry Gilliam, and production designer Jeffrey Beecroft, alleging that the film “12 Monkeys” (1995) ripped off his drawing entitled “Neomechanical Tower” (1987). Woods was upset about the violation of his copyright and also the distortion of his artistic intent. In granting a preliminary injunction, the Court asked Universal to pull all copies of the already released film (an enormous expense) but Universal instead agreed to settle for a six figure sum to keep it in. These costly legal battles and settlements changed the way that production companies handle art used in films to be more cautious and to seek permission from copyright holders up front.

These cases, among others, raise issues of how to truthfully depict the past in film while still respecting the rights of artists over their creative works. Media companies, now more than ever, must check with their art departments and ensure that rights clearances are obtained for any concepts or images that may be sourced from outside. Solutions as creative as the art depicted must be sought to permit audience enjoyment on all levels. As for the reproductions in “Woman in Gold,” created by scenic artist Steven Mitchell, under the production design of Jim Clay, no information is available at present as to their fate.

* * *

Screen shot 2015-04-17 at 2.41.44 PMNote from the editors:

On April 13th, Center for Art Law continued its film-viewing series “You’ve Been Served” with “Woman In Gold.” While attendees did comment on the casting choices (unforgettable Helen Mirren as Maria Altmann and debonair Ryan Reynolds as Randol Schoenberg), nobody objected to the quality or mere fact of art reproductions. In addition to the Klimt paintings, the film features many other artworks that were or might have been a part of the Altmann’s family collection, including for example Ferdinand Georg Waldmüller’sPrinzen Esterhazy mit weißem Kaninchen in einer Landschaft” (1827), which was taken from the Bloch-Bauer’s that Hitler intended to hang in his Führermuseum. The film was well received and praised for its ability to explain the value of restitution that transcends the art market value and aims to fix some of the tragic losses suffered by families and nations during under the Nazi rule and World War II.

Select Sources:

*About the Author: Mia Tomijima is a recent graduate of Brooklyn Law School, where she received a certificate in intellectual property and served as Chair of the Art Law Association. She received a bachelor’s degree in art history from UCLA, and has worked with museums, auction houses, and other arts non-profits. Mia is a post-graduate fellow with Center for Art Law.

Disclaimer: This article is intended as general information, not legal advice. Any opinions contained herein are of the author’s alone and are not a substitute for seeking outside legal representation.

Wish You Were Here: Sotheby’s Institute of Art (CA) Conference, January 2015

by Jessica Newman*

On January 30 and 31, the Sotheby’s Institute of Art gathered attorneys and art professionals together in Los Angeles, California for their Art Law Conference entitled “The Practice of Law in the International Art World.” The two-day expansive agenda featured twelve modules and nearly forty speakers, including artist Shepard Fairey giving an inspired keynote speech. The Conference addressed a number of issues at the confluence of art and law, including authenticity, looting, collecting, restitution, investment, public art, the future of art, and the art market. Following is a brief write up of the most memorable topics:

1. Liability v. Leadership: Advising Arts Organizations

Melody Kanschat, Executive Director of the Getty Leadership Institute at Claremont Graduate University, chaired a panel entitled “Liability v. Leadership: Advising Arts Organizations,” which featured Stephen Clark (J. Paul Getty Trust), Fred Goldstein (Los Angeles County Museum of Art), David Galligan (Walker Art Center), and Eva Schieveld (Van Gogh Museum). As multidimensional institutions, museums face a myriad of issues that extend far beyond the world of art. The panel emphasized that general counsel should be a part of all senior management conversations and budget discussions. One common concern was the avoidance of conflicts of interest (both real and apparent), particularly when dealing with a board of trustees.

One question posed to the panel was whether a museum can invest in a company which is run by a member of the museum’s board. As with many legal questions, the answer is, “Yes, but…” Although some museums have a strict zero tolerance policy when it comes to such investments, it is possible to structure transactions in a manner that avoids direct conflicts of interest. In part, the soundness of such a transaction turns on who is making the decision. It is important to ensure that the transaction is done at arm’s length and that no one who will directly benefit is personally involved in the decision whether or not to invest. In addition, transparency and continued management play important roles in preventing conflicts from arising.

2. Restitution Panel

Jonathan Petropoulos moderated the Restitution Panel, which explored the continuing evolution of restitution claims. Although issues of restitution have been around for some time, they remain a major concern for purchasers, heirs, and museums alike. Lucian Simmons of Sotheby’s observed that investigation into potential restitution issues remains a steady part of his work even today. Accordingly, as Simon J.Frankel (Covington) reiterated, research into proper provenance is as important as ever, and several conference speakers strongly advocated title insurance. As for the future of the field, Lawrence M. Kaye (Herrick), identified Russia as the next potential hotspot for restitution claims if access to Russian archives and collections becomes a possibility.

3. Secured Transactions

The second day of the conference began with a panel on Secured Transactions, moderated by Franklin Boyd and featuring John Arena (Bank of America), Stephen D. Brodie (Feinstein), and Karen McManus (Jacqueline Silberman & Assocs. Inc.). Art as an alternative asset has become increasingly popular for wealthy investors looking to diversify their portfolios. Art can also be used as a financial tool without having to sell the works by using the art as collateral. However, this option is only open to a select number of collectors.

The target collector is one with at least $10 million in well-established works (i.e., Old Masters, Modern, etc.) which can be quickly and easily sold were such a sale to become necessary for the lender. These works are appraised and, from a collector’s perspective, title insurance is recommended. Additionally, art must be the “second way out” of the deal. In other words, the borrower must have demonstrated equity in other assets. For those who can meet these criteria, using art to finance loans can be an attractive option. The fact that the United States is the only country where owners can maintain control of their collateralized works makes this option particularly appealing.

4. Art Collecting in the Current Legal Market

“Art Collecting in the Current Legal Market,” panel which was chaired by Mary Rozell (Sotheby’s) and featured Carol Bradford (California Community Foundation), Josh Roth (United Talent Agency, formerly Glaser Weil), and Katie Tolson (Gurr Johns). Although the increasingly global and technology-driven world of art collecting makes it easier than ever to access art, it also poses a number of challenges for the contemporary collector. For instance, documents can now be forged with the push of a button. However, one area in which technology has significantly enhanced the collecting experience is in inventory management. Ensuring proper documentation of one’s inventory is vital and a number of new software options have emerged that can assist a collector in doing just that. These software programs range in price, but at a minimum it should offer the collector a means of inputting photographs, descriptions of the works and details such as collection history, exhibition history, location, and inventory number. Ms. Tolson described her firm’s custom-designed Art Collection Management Software, which offers collectors a sophisticated means of managing their collections.

Roth discussed the increasing use of Section 1031 like-kind exchanges as a tool that can be utilized to expand one’s collection. Section 1031 of the Internal Revenue Code, entitled “Nonrecognition of gain or loss from exchanges solely in like kind,” provides a means for investors to defer taxes on capital gain from the sale of a work of art. In effect, 1031 Exchanges provide a collector with an interest-free loan from the government that can be used to subsidize future acquisitions so long as certain conditions are met. First, this section does not apply to personal property, as it applies only to property used for business or investment purposes. The exact parameters for this requirement are somewhat vague, however a work purchased solely for personal display in one’s home is not likely to qualify. Defining a like-kind property in this context can be equally difficult as there is no definitive guideline as to what type of art would be of like-kind to another. For instance, it is conceivable that the IRS may determine that a sculpture is not of like-kind to a painting.

Lastly, there are strict timing and designation requirements which are intended to distinguish a 1031 Exchange from a taxable transaction in which the purchaser merely uses the proceeds from a previous sale to purchase a new property. There are several ways to structure such an exchange, though the forward, or deferred exchange is most common. Broadly speaking a forward exchange works as follows: upon the sale of a work, the collector can use a 1031 exchange to defer the gain by investing the proceeds in a like-kind replacement property (i.e. another work of art) of equal or greater value. The replacement work must be identified within 45 days of the initial sale, and the collector has 135 days to close the sale upon identification. The appeal of such exchanges is evident, and Roth expects that they will only continue to grow in popularity.

Over the course of the two days, several takeaways emerged. First, many of the traditional issues within the field of art law – looting, restitution, importing/exporting, authenticity – remain at the heart of any art law practice. Secondly, the search for new uses and new means of valuing art has produced a number of creative options for investment and exchange of art. These options, however, are complex and require thorough due diligence by all parties. Lastly, the digital age has brought with it a host of new challenges for collectors, museums, artists, and attorneys alike. At the same time, technological advances also are opening up the art world in exciting ways.

Selected Sources:

About the Author: Jessica Newman is a third year dual-degree student pursuing a Juris Doctor and a Masters in Art History at Duke University. She can be reached at

Restitution, Repatriation and Return: When Objects Go Back; (Part 2 of 5) Restitution of Cultural Objects Taken During World War II

By Kevin P. Ray, first posted on Greenberg Traurig’s art law blog Cultural Assets on March 20, 2015.

This article is thshutterstock_35931382e second in a five-part series discussing the restitution, repatriation, and return of cultural objects. Each part addresses a different category of return. The first article in the series available here, addressed the restitution of stolen cultural objects. This article is the continuation of Part 1 and discusses developments in the restitution of cultural objects taken during World War II. The remaining articles address: (1) the restitution of illicitly excavated and/or illicitly exported cultural objects, (2) repatriation of tribal and indigenous cultural objects, and (3) the return of cultural objects removed during colonial occupation.

Museums’ Use of Technical Defenses: Von Saher and Beyond

The question of museums waiving defenses, as the AAM Standards suggest, has emerged as an important point of conflict in Nazi-era restitution cases. In a few instances, museums have filed quiet title actions against restitution claimants, asking courts to issue declaratory judgments that the museums have good title to the objects and/or the claimants’ rights have been lost due to statutes of limitations or laches. [See, e.g., Toledo Museum of Art v. Ullin, 477 F. Supp. 2d 802 (N.D. Ohio 2006); Detroit Inst. of Arts v. Ullin, No. 06-10333, 2007 WL 1016996, at *1 (E.D. Mich. Mar. 31, 2007); Museum of Fine Arts, Boston v. Seger-Thomschitz, Case No. 08-10097-RWZ, 2009 WL 6506658 (D. Mass. June 12, 2009); Museum of Fine Art v. Schoeps, 549 F.Supp.2d 543 (S.D.N.Y. 2008).] Such cases remain rare, and are controversial. [See, e.g., Grosz v. Museum of Modern Art, 772 F.Supp.2d 473 (S.D.N.Y. 2010); Simon J. Frankel and Ethan Forrest, “Museums’ Initiation of Declaratory Judgment Actions and Assertion of Statutes of Limitations in Response to Nazi-Era Restitution Claims – A Defense,” 23 DePaul J. Art, Tech. & Intell. Prop. L. 279, 281 (2013).] However, museums asserting statutes of limitations and laches defenses – what have become known as “technical defenses” – rather than allowing cases to be decided solely on the merits is not less controversial. [1]

Statute of limitations and laches[2] defenses are commonplace in stolen art litigation. [For a discussion of statutes of limitations and related issues in stolen art cases, see my earlier discussion in “Restitution of Stolen Cultural Objects,” available here.] The propriety of museums’ use of such technical defenses is highlighted in Von Saher v. Norton Simon Museum of Art at Pasadena. [Von Saher v. Norton Simon Museum of Art at Pasadena, 754 F.3d 712 (9th Cir. 2014).] Before the Second World War, Jacques Goudstikker was a preeminent Amsterdam art dealer. [See “Reclaimed: Paintings from the Collection of Jacques Goudstikker,” exhibition March 15 – August 2, 2009, Jewish Museum website, available here.] When the Nazis invaded the Netherlands in 1940, the Goudstikkers, as Jews, were endangered. They fled the country, leaving behind their possessions, including the contents of Jacques’s art gallery, which included more than 1,400 objects, including two life-size 16th-century panels by Lucas Cranach the Elder, titled “Adam and Eve.”  Jacques Goudstikker had purchased the Cranach panels at auction in 1931. The auction was titled “The Stroganoff Collection,” and included objects that had been expropriated by the Soviet government from the Stroganoff family, as well as from other owners within the U.S.S.R. The Cranach panels had not been owned by the Stroganoff family, but had been in the collection of the Ukrainian Academy of Science in Kiev.

After the Nazis occupied Amsterdam, the Goudstikkers’ possessions were confiscated, with Hermann Goering selecting ca. 800 objects for his personal collection. Many of the Goudstikker objects were retrieved by Allied forces at the end of the war and were sent to the Central Collecting Point in Munich for cataloging and processing. Allied policy was to return Nazi-looted objects to the governments of the countries from which they had been taken, reasoning that those countries were in the best position to locate the original owners and return the objects to them or to their heirs. Along with other Goudstikker objects, the Allies restituted the Cranach panels to the government of the Netherlands. However, in 1961, an heir of the Stroganoff family filed a claim against the Cranachs, and Netherlands erroneously restituted the panels to him. The heir sold the Cranach panels to the Norton Simon Museum of Art at Pasadena in the early 1970s.

Von Saher I

With Von Saher the question of whether a statute of limitations defense is appropriate in the case of Nazi-looted objects has been extensively litigated. Concerned that California’s three-year statute of limitations was presenting an unfair burden on claimants with respect to Holocaust and in Nazi-era looting cases, the California legislature extended that statute of limitations, but only for such Holocaust and Nazi-era looting claims. Marei Von Saher, the heir of Jacques Goudstikker, filed a replevin action in California in May 2007 against the museum, and the museum filed a motion to dismiss, arguing that the California statute extending the limitations period unconstitutionally intruded upon the federal government’s “exclusive power to make and resolve war, including the procedure for resolving war claims.” [Von Saher v. Norton Simon Museum of Art at Pasadena, Case No. CV-07-2866-JFW, 2007 WL 4302726 (C.D. Cal. Oct. 18, 2007).] The district court agreed, and dismissed the case. Ms. Von Share appealed the decision to the 9th Circuit Court of Appeals, which issued a decision finding the California extension of its statute of limitations unconstitutional but allowing Ms. Von Saher leave to amend her complaint to allege that her claim was brought within the existing three-year statute of limitations measured by the discovery rule. [Von Saher v. Norton Simon Museum of Art at Pasadena, 578 F.3d 1016 (2009).] That decision was reheard en banc, with the full court again holding the extended limitations period to be unconstitutional, and remanding the case to the district court to allow the plaintiff to amend her complaint. [Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954 (2010).]

Von Saher II

Following the 9th Circuit’s decision, Ms Von Saher filed an amended complaint. The California legislature amended its statute of limitations, this time avoiding the foreign affairs conflict, and providing generally that claims for the recovery of artworks must be brought within six years after “actual discovery” by the plaintiff of the current location and current possessor of the object (provided that the object has been taken within the last 100 years). The constitutionality of this limitations period was challenged in a wholly separate Nazi-confiscated art case, and the statute was upheld. [Cassirer v. Thyssen-Bornemisza Collection Foundation, 737 F.3d 613 (9th Cir. 2013).] However, the district court granted the museum’s second motion to dismiss the case, holding that Ms Von Saher’s claims were preempted by the foreign affairs doctrine. [Von Saher v. Norton Simon Museum at Pasadena, 862 F.Supp.2d 1044 (2012).] Quoting the Solicitor General’s brief with approval, the district court found that “[w]hen a foreign nation, like the Netherlands here, has conducted bona fide post-war internal restitution proceedings following the return of Nazi-confiscated art to that nation under the external restitution policy, the United States has a substantial interest in respecting the outcome of that nation’s proceedings.” [Id. at 1051.]

On appeal, the 9th Circuit reversed that decision, finding that the Dutch post-war internal restitution proceedings that resulted in the Cranachs being given to the Stroganoff heir were not adequate, and were, in fact, criticized and disavowed by the Netherlands in a reassessment in the 1990s.  The court further found that the later Dutch restitution proceedings concerning objects from the Goudstikker collection (which resulted in the return to Ms. Von Saher of several hundred objects) were not internal restitution proceedings with respect to the Cranach panels, since those panels were no longer located within the Netherlands at that time and could not be returned. The 9th Circuit rejected the Solicitor General’s position that U.S. policy supported the finality of countries’ internal restitution decisions, without further considerations. Rather, the court stated:

 “U.S. policy on the restitution of Nazi-looted art includes the following tenets: (1) a commitment to respect the finality of ‘appropriate actions’ taken by foreign nations to facilitate the internal restitution of plundered art; (2) a pledge to identify Nazi-looted art that has not been restituted and to publicize those artworks in order to facilitate the identification of prewar owners and their heirs; (3) the encouragement of prewar owners and their heirs to come forward and claim art that has not been restituted; (4) concerted efforts to achieve expeditious, just and fair outcomes when heirs claim ownership to looted art; (5) the encouragement of everyone, including public and private institutions, to follow the Washington Principles; and (6) a recommendation that every effort be made to remedy the consequences of forced sales.” [Von Saher v. Norton Simon Museum of Art at Pasadena, 754 F.3d at 721.]

While museums and their trustees certainly have a duty to protect and preserve the objects in their collections, as well as an obligation to evaluate claims made against objects that they hold,[3]the Von Saher case has become a touchstone for critics of museums’ use of technical defenses to delay or foreclose resolution of bona fide claims on their merits. In Von Saher, the parties have been in court for seven years and have not yet reached the merits.

Objects Held by Foreign Museums: The Foreign Sovereign Immunities Act

Most U.S. museums are private charitable organizations, but that is not the norm in most other parts of the world, where museums are state-owned or state-affiliated. That means that parties asserting claims for the restitution of objects held in foreign museums frequently involve questions of foreign sovereign immunity.

Generally, a foreign state is immune from the jurisdiction of federal and state courts in the U.S. [See Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486 (1983).] However, the Foreign Sovereign Immunities Act (FSIA) [28 §§ U.S.C. 1602-1611.] allows U.S. courts to exercise jurisdiction over foreign sovereigns and their agencies and instrumentalities, but only within certain statutorily-defined exceptions. Although the FSIA was not enacted until 1976, it applies to all cases filed after its enactment, regardless of when the alleged wrongdoing occurred.[ See Republic of Austria v. Altmann, 541 U.S. 677, 700 (2004)(holding that the FSIA applies to conduct “that occurred prior to 1976 and, for that matter, prior to 1952 when the State Department adopted the restrictive theory of sovereign immunity.”).] Under the FSIA, state-owned or state-affiliated museums are considered agencies or instrumentalities of their foreign sovereigns.[4]

The most commonly applied FSIA exception in cultural property restitution cases is the “expropriation exception.” [See, e.g. Altmann v. Republic of Austria, 317 F.3d 954, (9th Cir. 2002),aff’d, 541 U.S. 677 (2004); Cassirer v. Kingdom of Spain, 580 F.3d 1048, (9th Cir. 2009); Agudas Chasidei Chabad of United States v. Russian Federation, 528 F.3d 934 (D.C. Cir. 2008); Malewicz v. City of Amsterdam, 362 F.Supp.2d 298 (D.D.C. 2005).] Under the expropriation exception, a foreign sovereign (or its agency or instrumentality) is amenable to suit in U.S. courts where property has been taken in violation of international law and either (1) “that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state,” or (2) that property or any property exchanged for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States.” [28 U.S.C. § 1605(a)(3).]

Foreign Sovereign-Owned Property in the U.S.

The first prong of the expropriation exception has typically been applied in cases where objects owned by foreign museums are temporarily located in the U.S. For example, in Malewicz v. City of Amsterdam, [Malewicz v. City of Amsterdam, 362 F.Supp.2d 298 (D.D.C. 2005); Malewicz v. City of Amsterdam, 517 F.Supp.2d 322 (D.D.C. 2007).] the heirs of artist Kazimir Malewicz sought the return of 14 Malewicz paintings from the City of Amsterdam, whose Stedelijk Museum had placed the paintings on temporary loan to the Solomon R. Guggenheim Museum and the Menil Collection. Amsterdam argued that because the paintings on loan were immune from seizure under the U.S. Department of State’s Mutual Educational and Cultural Exchange Program, the court should dismiss the case. The court, however, disagreed, holding that “[i]mmunity from seizure is not immunity from suit for a declaration of rights or for damages arising from an alleged conversion if the other terms for FSIA jurisdiction exist.” [Malewicz v. City of Amsterdam, 362 F.Supp.2d at 312.]

The court found that the requirements for FSIA jurisdiction were satisfied, because (1) the museum’s taking of the paintings violated international law, and (2) the paintings were present in the U.S. in connection with commercial activity. For purposes of determining whether jurisdiction exists under the FSIA, the court “need not decide whether the taking actually violated international law; as long as a claim is substantial and non-frivolous, it provides a sufficient basis for the exercise of [the court’s] jurisdiction.” For purposes of the FSIA, a taking violates international law if it is not for a public purpose, or is discriminatory, or does not provide for just compensation. The City of Amsterdam argued that FSIA takings jurisdiction cannot exist unless the plaintiffs have first exhausted local remedies. The court, however, agreed with the heirs that exhaustion of local remedies was not required because no local remedies were available to the heirs since, under Dutch law, no claim for the return of property (or damages for its taking) can be brought later than 30 years after the date of the taking. Therefore, the heirs had no remedy available to them in Dutch courts. The court found that the museum’s loan of the paintings to the U.S. museums satisfied the commercial activity requirement.

Foreign Sovereign-Owned Property Outside the U.S.

The expropriation exception’s second prong has proven to be an even more powerful tool in cultural property restitution cases, and has provided the basis for U.S. jurisdiction in many of the highest-profile cases of the last decade. They have included the restitution from the Austrian state museum of several Gustav Klimt paintings, the best-known of which is his portrait of “Adele Bloch-Bauer I” (which was then acquired by the Neue Galerie for $135 million), to the heir of the Bloch-Bauers. [Altmann v. Republic of Austria, 142 F.Supp.2d 1187 (C.D. Cal. 2001); Altmann v. Republic of Austria, 317 F.3d 954, (9th Cir. 2002), aff’d, 541 U.S. 677 (2004).] The Altmann case went to the U.S. Supreme Court and established the principle that jurisdiction under the FSIA applies to cases filed after enactment of the FSIA, regardless of when the actions that give rise to the case occurred. In fact, these cases have been instrumental in the development of FSIA jurisprudence. The case has been the subject of numerous articles and books, and is the basis for a forthcoming film, “Woman in Gold,” with Helen Mirren as Maria Altmann.

While the Altmann case was ultimately resolved by settlement, many cases seeking restitution of cultural objects held by foreign state museums or entities are on-going. These include actions by (i) heirs seeking return of a Nazi-confiscated painting currently owned by a Spanish state-affiliated museum [Cassirer v. Kingdom of Spain, 461 F.Supp.2d 1157, 1163-64 (C.D. Cal. 2006); Cassirer v. Kingdom of Spain, 616 F.3d 1019, 1032 (9th Cir. 2010); Cassirer v. Thyssen-Bornemisza Collection Foundation, No. CV 05–03459 GAF, 2014 WL 5510996, *5 (C.D. Cal. Oct. 31, 2014).] (which established the principle that the foreign state against whom suit is brought need not be the same foreign sovereign responsible for taking the property); (ii) heirs for the return of a collection of paintings, including works by Lucas Cranach the Elder, El Greco, Francisco de Zurbaran and Gustave Courbet, from the Hungarian National Gallery (which relies upon the breach of a post-war bailment agreement between the family and the museum); [de Csepel v. Republic of Hungary, 714 F.3d 591, (D.C. Cir. 2013).] (iii) a religious organization for return of a religious library and archive from the Russian State Library and Russian State Military Archive, which objects were first confiscated by the Nazis and later seized by Soviet troops and taken back to the Soviet Union (where the organization brought suit in the U.S. after Russia frustrated litigation there. The organization obtained a default judgment against Russia, and has imposed sanctions of $50,000 per day for Russia’s failure to comply with the court’s order directing it to return the objects); [Agudas Chasidei Chabad v. Russian Federation, 466 F.Supp.2d 6, 16 (D.D.C. 2006); Agudas Chasidei Chabad of U.S. v. Russian Fed’n, 528 F.3d 934, 948 (D.C. Cir. 2008).] and (iv) the Welfenschatz described earlier in this article.

The Washington Conference Principles, the museum ethics guidelines and standards, and the succession of court decisions (particularly those brought under the FSIA) have significantly transformed not only the law in the area of cultural property restitution, but perhaps more importantly, they have transformed awareness and behavior. These developments have the potential to affect a normative shift that extends beyond the historical specifics of World War II, and to change the way we think of rights and ownership of cultural property in a wide range of contexts. They are, and will continue to be, touchstones in a broader and continuing discussion.

[1] See, e.g., Jessica Schubert, “Prisoners of War: Nazi-Era Looted Art and the Need for Reform in the United States,” 30 Touro L. Rev. 675 (2014); Jessica Mullery, “Fulfilling the Washington Principles: A Proposal for Arbitration Panels to Resolve Holocaust-Era Art Claims,” 11 Cardozo J. Conflict Resol. 643 (2010); Benjamin E. Pollock, “Out of the Night and Fog: Permitting Litigation to Prompt an International Resolution to Nazi-Looted Art Claims,” 43 Hous. L. Rev. 193 (2006); Rachel Durbin, “Museums and Self-Regulation: Assessing the Impact of Newly Promulgated Guidelines on the Litigation of Cultural Property,” 18 U. Miami Bus. L. Rev. 101 (2010); Emily A. Graefe, “The Conflicting Obligations of Museums Possessing Nazi-Looted Art,” 51 B.C. L. Rev. 473 (2010); Jennifer Anglim Kreder, “Guarding the Historical Record from the Nazi-Era Art Litigation Tumbling Toward the Supreme Court,” 159 U. Pa. L. Rev. 253 (2011); Katherine N. Skinner, “Restituting Nazi-Looted Art: Domestic, Legislative, and Binding Intervention to Balance the Interests of Victims and Museums,” 15 Vand. J. Ent. & Tech. L. 673 (2013). up

[2] Laches is an equitable defense “designed to promote diligence and prevent enforcement of stale claims” by those who have “‘slumber[ed] on their rights.’” Gull Airborne Instruments, Inc. v. Weinberger, 694 F.2d 838, 843 (D.C.Cir.1982).  To invoke the defense of laches to bar a claim, a defendant must demonstrate that (1) “the plaintiff has unreasonably delayed” in asserting its claim, and (2) “there was ‘undue prejudice’ to the defendant as a result of the delay.” Jeanblanc v. Oliver Carr Co., No. 94–7118, 1995 WL 418667, at *4 (D.C. Cir. June 21, 1995). up

[3] See, e.g., Patty Gerstenblith, “Acquisition and Deacquisition of Museum Collections and the Fiduciary Obligations of Museums to the Public,” 11 Cardozo J. Int’l & Comp. L. 409 (2003)(noting that “Use of either the laches defense or the discovery rule will necessitate a lengthy trial that would consume museum resources.  It will lead to losses in terms of finances, efforts of staff, and, in many cases, negative publicity.  It is thus reasonable for a board of trustees to determine that its chances of retaining an art work through litigation and use of these affirmative defenses are not likely to succeed and thus to seek settlement, while saving the expense of litigation.”). up

[4] See Cassirer v. Kingdom of Spain, 461 F.Supp.2d 1157, 1163-64 (C.D. Cal. 2006) (holding that the Thyssen-Bornemisza Collection Foundation is an agency or instrumentality of the Kingdom of Spain, because it arranged and was a party to the original loan of the artworks, contributed toward the purchase price paid for the artworks, provided a facility to house the artworks, paid the cost of refurbishing that facility, and Spain’s governmental ministers were required to form part of the Collection’s directors); de Csepel v. Republic of Hungary, 714 F.3d 591, (D.C. Cir. 2013) (the Hungarian National Gallery); Agudas Chasidei Chabad of United States v. Russian Federation, 528 F.3d 934 (D.C. Cir. 2008) (Russian State Library and Russian State Military Archive); and Altmann v. Republic of Austria, 142 F.Supp.2d 1187 (C.D. Cal. 2001) (Austrian Gallery which was formerly an agency or instrumentality of Austria and was subsequently privatized). up

Case Review: Frank Kolodny v. James Meyer, Fred Dorfman, and Dorfman Projects LLC (May 2014)

By Jill A. Ellman*

2014-07-07A complaint filed in the Southern District of New York by Frank Kolodny on May 8, 2014, contains allegations for violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and fraud in connection with the sale of artwork stolen from the studio of artist Jasper Johns, a major twentieth-century painter and sculptor.  As alleged in the complaint, the works were sold by Fred Dorfman and Dorfman Projects LLC; Kolodny purchased one of these sculpture in 2009.

In the past three decades, Johns has achieved great standing in the art marketplace. His work has been sold to private collectors and institutions in the high millions, with private sales valued at over 100 million USD.
The plaintiff, Frank Kolodny brought the lawsuit against defendants James Meyer, the former studio assistant of Jasper Johns, as well as Fred Dorfman, a well-known specialist in twentieth century art, and his gallery, Dorfman Projects LLC (collectively, the “Dorfman Defendants”).  Kolodny claims that the defendants falsely represented to prospective buyers, including Kolodny himself, that Meyer received twenty-two individual pieces created by Jasper Johns as a gift and produced accompanying fraudulent documents.

The complaint alleges that Meyer and the Dorfman Defendants engaged in an enterprise affecting interstate and foreign commerce, thus violating  RICO.  Specifically, from September 2006 to February 2012, the plaintiff contends that the defendants participated in a pattern of racketeering with the common goal to profit from the stolen artwork and used similar methods in order to perpetrate their fraud upon prospective buyers.  If successful with his RICO claim, Kolodny may be awarded  triple damages in the form of civil penalties.

In addition to the RICO and conspiracy to commit RICO violations and common law fraud, Kolodny also asserts causes of action for aiding and abetting fraud (against the Dorfman Defendants),  and breach of warranty concerning title and provenance of the artwork sold by the Dorfman Defendants to Kolodny under N.Y. U.C.C. § 2-313(1) and §13.01 of the New York Arts and Cultural Affairs Law. Kolodny seeks compensatory damages, punitive damages and attorneys’ fees.  By way of background, the complaint describes that from 1985 to 2012, Johns employed Meyer as his assistant to support him in creating his art and aiding Johns with record keeping in his studio.  Meyer had complete access to inventory numbers for each of Johns’ completed works.  In 2012, Johns learned that Meyer was stealing from him and selling incomplete artworks without authorization. (See “James Mayer Arrested and Indicted in Jasper Johns Art Theft.”)  The Dorfman gallery sold the stolen works for $6.5 million, and Meyer collected a commission of $3.4 million.  Meyer was later indicted on criminal charges, including the interstate transportation of stolen goods and wire fraud.  The Dorfman Defendants were not named in the criminal action.  The indictment against Meyer was unsealed to the public in August 2013.

Kolodny asserts that the Dorfman Defendants could not have possibly believed Johns generously gifted artwork valued at $6.5 million.  Thus, he contends that the Dorfman Defendants ignored significant red flags in agreeing to sell Meyer consignments: not only did the artwork lack an exhibition history, but Meyer insisted that the sale of any artwork remain confidential and prohibited the buyer from selling, loaning or exhibiting the artwork for an eight-year period.  Instead of conducting proper due diligence regarding the provenance of the stolen artwork, Kolodny asserts that the Dorfman Defendants  understood the risk they faced and demanded an exorbitant commission in the form of 50% of the sale proceeds, exceeding the standard amount of commission paid to dealers for consigning artwork from private collections.  Moreover, the Dorfman Defendants purportedly assisted in perpetrating the fraud by fabricating documents attesting that the stolen artwork was indeed gifted to Meyer.

Apparently in April 2009, the Dorfman Defendants contacted art dealer Francis M. Naumann to discuss an available Jasper Johns drawing. Naumann on behalf of his client, Kolodny, decided to purchase the drawing for the value of $400,000 after being reassured by the Dorfman Defendants that very few similar works existed and would appear on the market. When Kolodny purchased the drawing, he agreed to keep it in his collection, neither selling nor loaning it for an eight-year period, because Meyer, as an employee of Johns, represented that Johns would be offended if he learned that his employee sold his “gift.”
According to Kolodny, in connection with the sale, the Dorfman Defendants and Meyer sent Kolodny an affidavit attesting to the authenticity of the artwork.  The affidavit also represented that Meyer owned the drawing and had the authority to sell it.  In addition, the Dorfman Defendants represented that the drawing would appear in an upcoming Jasper Johns catalogue raisonné, attesting to the drawing’s authenticity.  As requested by Kolodny, thedefendants forwarded an image purporting to be a page from Johns’ studio ledger indicating that the drawing was in Johns’ archive.  Because the drawing was stolen and will not appear in an upcoming Jasper Johns catalogue raisonné as represented, Kolodny claims that his drawing is unsaleable and valueless.

Kolodny is an unfortunate, potential example of a bona fide purchaser who believes that he has taken the extra-precautionary steps and exercised due diligence in securing an artwork, but who may have been duped in the process regardless of any appropriate safeguards that he took.  By bringing a RICO claim, Kolodny hopes to materially increase his potential damage award.  This case may be compared to lawsuits brought by plaintiffs who were allegedly defrauded in connection with the sale of works sold by the Knoedler Gallery and its agents.  See, e.g.,  De Sole v. Knoedler Gallery, LLC  et al., Case No. 12 cv 2313 (S.D.N.Y. Sept. 30, 2013).  Unlike here, the De Sole plaintiffs were sold a fake, unauthentic work (the De Sole plaintiffs believed they were purchasing a work created by the artist Rothko).  Similar to this case, the De Sole plaintiffs also brought claims under RICO and common law fraud, which were upheld by the Southern District in September 2013.  In particular, the Southern District found that the plaintiffs’ RICO and fraud claims to sell fake artworks were adequately pleaded because the plaintiffs showed evidence that the Knoedler defendants were aware of the misrepresentations regarding the provenance and authenticity of the purchased artworks.

Kolodny’s RICO and fraud claims may likewise survive a motion to dismiss if the Southern District finds that his allegations establish that the Dorfman Defendants engaged in a scheme to defraud potential buyers.  For example, the fact that the Dorfman Defendants went out of their way to represent that the Johns work would appear in an upcoming catalogue raisonné, sought affidavits attesting to the fact that Meyer owned and had the right to sell the work, and produced a page from Johns’ studio ledger indicating that the drawing was in Johns’ archive, may all be indicators that the Dorfman Defendants were aware of their misrepresentations to establish a sufficiently pleaded RICO or fraud claim, rather than mere negligence.

Kolodny is represented by Judd B. Grossman, Esq. of Grossman LLP.  Adam D. Mitzner, Esq. of Pavia & Harcourt LLP has made an appearance on behalf of the Dorfman Defendants.


About the Author: Jill A. Ellman, Esq. is an associate at Tressler LLP focusing in the area of professional liability insurance coverage.  She maintains an active interest in art law.

Disclaimer: This article is intended as general information, not legal advice, and is no substitute for seeking representation.