Sweet and Sour

Ed Winkleman has an interesting piece in The Art Newspaper calling for the adoption in New York of a droit de suite regime, which would entitle artists to claim royalties on resales of their work by initial (or subsequent) purchasers. He argues that this would reduce "resentment over extraordinary profits" by collectors, which in turn would lead to fewer "unnecessary secrets" in the art market.

The standard economic argument against droit de suite is that, in a world where the artist retains it, presumably the initial purchaser will pay less for the work -- by something like the present value of the expected future resale royalty. So the artist is trading some guaranteed money today for a chance at a possible additional payment at some point in the future -- a bad deal. It also functions as what's been called a "negative insurance" policy: it pays off for the artist if she becomes more successful over time (as reflected in higher prices for her work); but if she is less successful, the droit de suite doesn't do her any good.

"There are all kinds of ways the state can support the art world. This doesn't strike me as a very good one"

Michael Rushton makes a convincing case against Mexico's policy of letting (certain) artists pay their taxes with artwork.

Linkage

• Roman sculptures pulled from auction.
• Jersey City Museum on the brink.
• NYCLU opposes proposed rules limiting art sales in City parks.
• Guilty plea in fake Picasso case.
• Leading art fabricator Carlson & Co. is closing.
• "The 'fair use economy' is enormous, growing, and endangered by the relatively tiny entertainment industry."
• Culture of corruption at Drouot auction house.

"We're helping out artists while building a cultural inheritance for the country"

In Mexico, artists can pay their income taxes with artwork.

Pole Dancing Is Not Art

N.Y. Tax Appeals Panel Rules.

Linkage

• "Art Finance Partners demands $300,000, plus punitive damages, from Wally Findlay Galleries International, claiming it sold the consigned painting ... but didn't deliver the money."
• Inquest begins in public art tragedy.
• Why are nonprofits exempt from the property tax?
• 20-25% of charities to lose their tax-exempt status on May 15.
• Museums and salaries.
• Five cleared in U.K. extortion case involving a stolen Leonardo masterpiece. Art Theft Central comments here.

"A park without art is like eating spaghetti without spaghetti sauce"

The New York Times has a report on yesterday's public hearing on the proposal to limit the number of art-sellers in City parks.

"By most accounts Mr. Young never paid much attention to his finances . . ."

" . . . and in his last years he became involved in a tangled legal battle with a former manager, Martin Siskind, whom Mr. Young sued for mismanaging funds. Mr. Siskind successfully petitioned a judge to have Mr. Young declared mentally incompetent, and his affairs were placed in the control of legal guardians. Several of Mr. Young’s friends say that he was in no way incompetent, and that the arrangement had left him destitute."

That's from Bruce Weber's obituary in today's New York Times for outsider artist Purvis Young. I mentioned the Siskind lawsuit back in 2007 here.

" . . . providing merely an equitable basis to permit some copying of the owner’s expression that are not harmful to the copyright owner"

Raymond Nimmer: Has the worm turned on transformative use?

Park West Loss

After a six-week trial, a jury found in favor of the Fine Art Registry in its lawsuit against Park West Galleries. They rejected Park West's defamation claims, and awarded Fine Art Registry $500,000 on a Lanham Act claim stemming from "Park West's use of a Fine Art Registry trademark in sponsored links on search engines, to drive Internet user queries to a Park West reputation management page online." Park West still faces "eight other state and federal lawsuits seeking more than $22 million in damages; most of those cases were consolidated a few months ago into a multi-district federal lawsuit that heads to trial next year in Seattle."

"Institutions have to change in order to survive"

The Atlantic: Are Fine Art Museums the Next Starbucks?

Twist in the Stolen Rockwell Case

Tom Flynn reports that Art Loss Register, which acted on behalf of Jack Solomon in his dispute with Judy Cutler over a stolen Rockwell painting, plans to sue Solomon. ALR wouldn't comment further, but Flynn says "it would appear to be because Solomon failed to apprise them of the full details of the case."

Linkage

• What are the optimal jurisdictional arrangements for arts policy?
• What is Justice Stevens's IP legacy?
• On quantifying the stolen art business. (And here.)
• Protest planned against proposed rules limiting art vendors in City parks.
• An exhibition of fakes.

Polaroid Collection Update

The Art Newspaper has the latest on "the last-gasp campaign to stop the sale of works from the Polaroid Collection." Apparently 56 artists have signed on to be plaintiffs in a motion for a rehearing "which campaigners hope to file" in Minnesota bankruptcy court. The campaigner-in-chief is former US magistrate judge Sam Joyner, who says he is "trying to find pro-bono legal representation."

Joyner says that "according to the photographers, some of the works were placed in the collection with promises of no commercial use, and perpetual access to the image by the photographers."

The Art Market Monitor counters: "The courts have already made it clear that they have altered the terms of the contract between the artists and the Polaroid Corporation. Whether that is 'morally' right is less important than the fact that it is legally correct. Bankruptcy courts change contracts and ownership rights. That’s what they do."

The usual comprehensive round-up from A.D. Coleman here.

Met-Adams Settlement

The Fresno Bee reports that the lawsuit by Ansel Adams's son against "the former" Fresno Metropolitan Museum has been settled:

"The museum will return to [Adams] photographs that were not intended to be sold to private collectors, according to Michael Wilhelm, an attorney representing the museum. In exchange, [Adams] will give the museum other Ansel Adams photographs of equal value from [his] collection. Those photos will be included in the museum's upcoming art auction to raise money to pay its creditors."

"It was an honest mistake"

Mike Boehm points out that, on the version of the facts accepted by the trial judge, Stephen Spielberg should never have had to give up his "stolen" Rockwell.

"I’m not sure I ever saw what was so controversial"

Dealer Gavin Brown on the New Museum "controversy": "I don’t see the problem—are people upset about the works in the exhibitions? Do they not want to see that work? The ones who do see a problem are small-minded people keeping score in their small-minded game."

Linkage

• The California AG's report on MOCA mismanagement. (Background here.)
• "We're short of cops to begin with and we don't have enough cops to waste answering calls of statues committing suicide."
  
• Conviction upheld. (Background here.)
• Is Michelangelo overrated?
• Tom Flynn on the stolen Rockwell decision. (Background here.)
• "The details of the disagreement have provided a rare view into a normally very private world of high-end art selling in which membership rules, responsibilities, rewards and reprisals can be so complex and changeable that even art world veterans say they sometimes struggle to decode them." (More here.)
  
• NYT on the proposal to limit number of art vendors in city parks. (Mentioned earlier here.)

"Slick, happily one-sided"

Colin Dabkowski of the Buffalo News on "The Art of the Steal": "We don’t get nearly enough face time from those in favor of the move, which seems attributable as much to the filmmaker’s bias as it is to those who refused to be interviewed for the project. Some of the finer nuances in the battle between Barnes’ rigid and nigh pig-headed intentions and the laudable desire for more people to draw wonder from the art he collected go unexplored in favor of grandiose polemics."

How Not to Deaccession

The Blanden Memorial Art Museum comes in for some harsh criticism from the AAM for its "Art is for Everyone" sale. Background here and here.

Decision in the Spielberg Stolen Rockwell Case

In a 2008 post on the the battle over a stolen Rockwell painting that got a lot of press because it had ended up in Steven Spielberg's collection, I said I thought "the issue ... is going to be whether Solomon, the theft victim, reasonably should have discovered that the painting had been found back in 1989 (in which case he would lose on statute of limitations grounds)." Well, there was a trial in the case last month, and Solomon did lose, because not only did the evidence show he should have known the painting was being sold at auction in 1989, it was clear that he actually did know about it: in fact, he had entered into an agreement to share in the sales proceeds!

More here, including a copy of the court's decision, from the Riverfront Times.

Friede Fight Finally Finished

The San Francisco Chronicle reports that "a deal has been signed ending [the Friede family] inheritance dispute." It sounds like the same "tentative" deal that was announced in December. And it's as confusing as ever. The Chronicle says:

"The bottom line for the public is that 29 pieces that had been among the 398 on display at the city-owned de Young museum after being donated by New York philanthropists John and Marcia Friede have been removed for sale."

But a couple paragraphs later, we read:

"Under legal settlements the city attorney's office recently released to The Chronicle, the de Young gets clear title to 274 of 398 pieces at the museum."

So 29 have been removed for sale. And 274 stay with the museum. What happened to the other 95?

Fisk News

The AP: "Fisk University has filed a motion seeking a trial date in its quest to sell some of the artwork from its Stieglitz collection."

For background, start here.

"Gehry said no money was involved in the settlement"

The MIT-Frank Gehry lawsuit has settled. Story here.

Linkage

• Salander furniture to be auctioned. "Proceeds will benefit creditors in the bankruptcy."
• Are museums hampered by copyright laws?
• Judd Tully on the "recently cast" Degas bronzes. (Mentioned earlier here.)
• Should all charities be equal?
  

Lopsided Leaflet

Jonathan Kiefer on "The Art of the Steal":

"[Barnes's] Last Will and Testament specified his axe should be ground against the presumed philistinism of Philadelphia’s power elite in perpetuity. That hasn’t happened, and Barnes’ acolytes are pissed, so one of them hired Don Argott to make lopsided leaflet of a documentary about it. If only Argott had the courage of a little critical distance. ... One justification for this being a film and not a long-form magazine article is the chance to really look at all that great art, but no such luck: Argott’s too busy with the awkward problem of making a case against more people having more access to a trove of masterpieces. He can’t seem to see how his attempt to curry anti-establishment favor actually endorses elitism, and so his film is vain, unbalanced, illogical, overstated and damn compelling."

"Casting this story as a battle between the elites and the philistines mischaracterizes the situation"

Peter Rainer on "The Art of the Steal": "Imagine if there was a collection of works by Shakespeare, or symphonies by Mozart, that could be experienced only in a single location after an interminable wait, if at all? ... By making the art publicly available in the downtown location (which will recreate the way the art was displayed in the foundation), ... these glories will be seen by generations otherwise unable to do so. Is that so horrible?"

Linkage

• Gardner Heist gets a shout-out . . . on "The Simpsons."
• Happy birthday copyright!
• Meant to mention this one before the weekend: visual artist class action against Google. "The suit in federal court in New York was filed after a judge in Manhattan last year rejected the artists’ request to be part of a proposed $125 million settlement that Google reached with authors in connection with its plan to make digital copies of books in libraries."

"Estate Tax Law Uncertainty Affecting Donations to Museums"

Daniel Grant at the Huffington Post.

Related post here.

Linkage

• Seven-year sentence in TV art scam.
• Berry-Hill artwork seized.
• Josh Baer reports that Phillips de Pury won a court battle to sell works from Halsey Minor's collection.
• The Barnes move is a result of "the ever-apparent short gain philosophy revealed in company takeovers and the sub-prime mortgage debacle" or something.

"Officials say the museum may have to close in thirty days"

The Owensboro Museum of Fine Arts in Kentucky is on the verge of closing its doors.

Minor News

Lee Rosenbaum has some thoughts on the recent summary judgment decision Sotheby's got against collector Halsey Minor. She also gets this quote from Minor:

"I will be appealing. This is not a financial issue. ... It's an issue I feel very strongly about. It's an issue about disclosure and the integrity of the auction process."

"That’s a rate of something over $10 million per year on the initial loan, or 44%"

Felix Salmon says Art Capital made $16 million on its loan to Annie Leibovitz.

Linkage

• Shepard Fairey update.
• Did bureaucratic infighting sabotage the Gardner investigation?
• Lawsuit over Eames archive.

Linkage

• Another Leibovitz loan lawsuit.
• Park West jury trial underway in federal court in Detroit.
• Proposed regs governing sales of art in NYC parks.
• Updates on the Cleveland Museum and Fisk stories.
  

"But in many cases, experts say, contracts are unspecific and collectors do not fully understand the legal risks"

NYT "Wealth Matters" columnist Paul Sullivan: "Protect Your Art With More Than a Handshake."

"If there is one thing we can be sure of when it comes to fair use [it's] that there is nothing we can be sure of when it comes to fair use"

Sergio Muñoz Sarmiento responds to a just-released study by The Center for Social Media at American University on the impact of copyright and fair use on communication scholars.

Linkage (wow-there's-a-lot-going-on edition)

• Pace and Wildenstein have split up. Carol Vogel has the story in the NYT: "Although the financial details are being kept confidential, hundreds of millions of dollars are said to have changed hands. Pace bought out Wildenstein’s portion of the inventory they jointly owned .... It also bought out Wildenstein’s 49 percent share of PaceWildenstein."
• Collector sues gallery. Ed Winkleman comments.
• "Fake Wine, Thomas Jefferson, Christie's and the Law." Related story here.
• Is Canada the best place to unload stolen art? Mark Durney comments.
  
• Art fair legal dispute?
  
• Art Institute of Chicago cuts gallery hours.
• Not guilty pleas in Clementine Hunter fakes case.
  
• A conference on the 20th anniversary of the Gardner theft.
• Plus ca change.
• "Hundreds of artworks in Turkish museum stolen and replaced with fakes."
  

Minor Dismissal

Total victory for Sotheby's in its breach of contract lawsuit against Halsey Minor. Story here. He owes them $4.4 million -- "plus interest, late charges, and legal fees."

Minor's claim was that he didn't have to pay because "Sotheby's had significant economic interests in the artworks at issue, which it failed to disclose." The Court found that "none of Minor's arguments have merit" and granted summary judgment to the auction house. First, it adopted the reasoning of the Magistrate Judge in an earlier ruling in the case that:

1. Minor didn't properly allege the existence of a fiduciary duty;
2. He didn't plead injury with particularity as required by Rule 9(b); and
3. He failed to identify "how Sotheby's failure to disclose its interests is material."

The Court also rejected the argument that Sotheby's failure to use its "triangle symbol" -- for lots in which it has an "economic interest equivalent to an ownership interest" -- in the auction catalogue was misleading. "It is clear that Sotheby's had only a security interest" in the works," which is "not equivalent to ownership interests."

Sotheby's Conditions of Sale provide that they can impose a "late charge" of "Prime + 6% of the total purchase price," and also that the buyer will pay its "legal fees and expenses" in a collection action, so, all told, Minor will owe significantly more than the $4.4 million (which represents the difference between what he agreed to pay and what Sotheby's was able to resell the works for during the pendency of the suit).

Here is some background on the suit. Here is an email Minor sent me saying "I am going to bet that when they have to finally cough up the documents and stop spouting nonsense they will have served in the dual role of auctioneer and secret undisclosed owner [a]nd all else will have been long forgotten." Here is another in which he said "Sotheby’s has subjected themselves and their shareholders ... to massive liability all because they could not admit they were wrong and discuss a solution like gentlemen." Here is some info on a separate Minor suit against Christie's.