"It costs a lot of money to defend against a suit, even if one wins."

Eileen Kinsella reports in ARTnews that "several art-authentication boards and artist-endowed foundations have decided that the risks and potential costs associated with determining authenticity are simply too high."

Resale Royalty Reply

The auction houses filed their reply brief this week in the California resale royalty lawsuit.  I remain most interested in the Commerce Clause argument.  The auction houses argue that "Plaintiffs' argument that the [statute] does not regulate conduct 'outside' California simply because it involves a California resident" "borders on the frivolous."  (I wondered about that argument too.)  They say "courts have consistently rejected state laws that project legislation into another state based on nothing more than the involvement of one of the legislating state's residents," that "the Supreme Court and lower courts have uniformly held that where ... a sales transaction occurs wholly outside the regulating state, the Commerce Clause precludes application of the regulating state's laws to that transaction even if a state resident is involved."

Bob Nickas on Prince-Cariou

Part one, part two.

"Lugo said simply, 'I'm sorry,' as a judge sentenced him to one to three years behind bars in New York ..."

". . . though he could be released in six months if he succeeds in a boot camp-style program."

New Issue of Journal of Art Crime

The Fall 2011 issue of ARCA's Journal of Art Crime is out.  I wrote about de Csepel v. Republic Of Hungary, regarding foreign sovereign immunity.

"Under the bill, 60 percent of the funds would go to State Need Grant program."

I've also been meaning to get to this story, which in some ways is similar to the Detroit story I mentioned yesterday.  A Washington State Senator has introduced a bill to "auction off works from the state art collection every two years," with "a goal of raising a minimum of $5 million each time."  Sixty percent of the sales proceeds would be used "to help the state's lowest-income undergraduate students pursue degrees, refine skills, and retrain for new careers" (boo!) and 40 percent would be used "to conserve, repair and acquire art" (yay!).  The Senator says "the State Need Grant program is terribly underfunded.  There were so many students who were turned away this year, who could not get a dime."

As with Detroit, we're not talking about sales by museums ("The state art collection is made up of artwork acquired through Washington's Art in Public Places program. The art is located at state agencies, public schools, colleges and universities and is bought through the state's capital construction budget").  This is not work held in the "public trust" but directly by the public.  The question this Senator is raising is whether the public would prefer to use a portion of those assets (about $1.5 million a year) to help poor kids go to college.  What the Deaccession Police want to do -- what they always want to do -- is make the very question off limits.  Selling any amount of art to fund scholarships is always repulsive, Stalinesque, beyond the pale.  They want a conversation stopper in favor of their preferred policy outcome.

"None of those repercussions would be automatically compelling to ... a mayor forced to choose between thousands of jobs and a Flemish masterpiece."

I've been meaning to mention this column from a couple of weeks ago raising the possibility of some art being sold to help stave off Detroit's bankruptcy (though it's quick to point out that "the city has no plans to sell art").  The interesting angle here is the city owns the works directly; they don't actually belong to the DIA.

That means two things.  First, there's no issue of donor intent:  "Many of the museum's greatest works were purchased directly by the city during the 1920s, when the city ran the museum as a department, paying staff salaries and budgeting for acquisitions. The city used its own dollars, not those of wealthy patrons who might have specified conditions for sale."

And second, the chief argument against selling in cases of this sort -- that the work is actually held "in trust" for the relevant public -- would seem to have little force here.  As a local museum historian says, "it takes the whole notion of public trust and makes it complicated and interesting."  In this case, the work seems not to be held "in trust" for the public; it's held by the public.  If they -- the public -- decide to sell to avoid bankruptcy, what's the argument against it?  "You, the public, cannot sell this work because it belongs to ... the public"?

Failing that, the Deaccession Police can always fall back on their favorite argument:  If you sell, we will sanction you.  Therefore, in order not to be sanctioned, you should not sell.  Can't beat that logic.

"Fairey pleaded guilty to a single misdemeanor count of criminal contempt and faces as much as six months in jail on the charge."

He "admitted that he fabricated documents and lied during the discovery process in copyright litigation with the Associated Press."  Sentencing is July 16.  Background here.

"Any doubt that the thefts (and recoveries) of other versions increased its value?"

Derek Fincham notes that a version of Munch's "The Scream" is heading for sale at Sotheby’s in New York and "officials there estimate it could bring more than $80 million."

"The government is saying we want $35 million in tax but if you sell it to get the money we’ll put you in jail."

Forbes reports on a fascinating valuation dispute in the Ileana Sonnabend estate.

"Few cases in recent years have roiled the art market as much as this mystery of how an obscure art merchant could have discovered an astonishing number of unknown treasures by the titans of Abstract Expressionism."

The NYT's Patricia Cohen has the latest on the Knoedler mess.

"Three years ago, it mistakenly sold this work, valued at more than a million dollars, for $150 plus tax."

The New York Times on Cal Berkeley's "embarrassing loss."

"It is the very definition of as near as possible." (UPDATED)

Fisk has filed its response to the Tennessee Attorney General's request for permission to appeal.  There's a news story here.  I haven't been able to find a link online, but their brief makes a lot of the same points I've been making here.  For example, I think my absolute favorite part is that there is a whole section headed:  "Arkansas Is In The South."  (That's in response to the AG's bizarre argument that the Crystal Bridges deal "unabashedly eradicates Ms. O'Keeffe's requirements that the Collection ... be used for art education in Nashville and the South.")

In my most recent post on the subject, I asked:  "Wasn't it also part of her intent that Fisk own the works?  After all, she could have given them to anyone, but she chose Fisk.  Why do we assume the no sale part of her intent is more important than the Fisk part of her intent?"  The brief says "the simple fact is O'Keeffe intended for the Collection to be displayed at Fisk" and "O'Keeffe's choice of Fisk to display the Collection was part of her intent.  For Fisk to display the Collection, it must exist" (emphasis added).

They also take on the AG's argument that allowing the Crystal Bridges deal to go through "will chill charitable giving."  First, they point out that the AG's "own expert witness testified that museums do not now accept gifts with no-sale conditions on them"; he apparently testified that "there are two trends in art now," one of which is that "we don't promise ... that something will be kept in perpetuity."  And second, they argue that "if there is anything that would chill charitable giving, it is watching an institution that had been hand-picked by a charitable donor ... stripped of its charitable gift ... so that the gift can be handed off to someone of [the Attorney General's] choosing."

UPDATE:  Here's a link to the brief, courtesy of Lee Rosenbaum.

Authenticating Banksys

It's complicated.

"This seems to have been a carefully prepared swindle, we were all taken in."

"The French police force has opened an investigation into the possible forgery of early photographs."

"The idea has never gotten very far, in part due to strong opposition from charities."

The Chronicle of Philanthropy:  "President Obama on Monday proposed to limit the percentage of income that wealthy donors can write off for gifts to charity."

Twombly Tax Trouble

In Italy.  Story here.

"Exit the Deciders"

Barbara Guggenheim on what happens in a post-authentication committee world.

"Mr. Lugo’s lawyer ... has called him 'more like someone who was in the midst of a psychiatric episode' than a calculating art thief."

Wine steward/art thief Mark Lugo plead guilty to a grand larceny charge in New York this week and faces one to three years in prison when he is sentenced later this month.  His lawyer says he could be released in less than a year.  Turbo Paul calls it a slap on the wrist.

"What Reinharz does not regret is the principle that guided [the] decision."

Former Brandeis President Judah Reinharz is still repulsively defending his (failed) plan to sell some of the school's artwork:

"Reinharz was thinking about the economic security of the university’s staff ... [T]he school was facing the decision to lay off workers, ... employees who make less than $50,000 a year.  Imagine arriving home at the end of the day and saying to your spouse, Reinharz explained, 'I was fired today but it was a good day for Brandeis. Not a single painting was sold.'"

Can you believe that?  The repulsive unethicalness of it all.  What are people's livelihoods compared to the "ethical" guidelines of a voluntary organization of museum directors, Mr. Reinharz?  Don't you know there is no higher moral authority?  If they say it's wrong, it's wrong.  Who are you to question them?  I expect he will be duly sanctioned at the next AAMD meeting.

"My client just decided to settle after doing the math and deciding it was simpler to pay."

Artinfo reports on a settlement in a private California resale royalty suit brought by artist Mark Grotjahn against collector Dean Valentine.  Under the settlement, Valentine agrees "to pay Grotjahn the five percent he owed on the three works he resold, as well as some of the artist’s legal fees."  Artinfo notes that "the outcome of the case could affect the current class-action lawsuit that artists have filed against major auction houses Sotheby's [and] Christie's," but it's not clear from the article to what extent the Commerce Clause issue was implicated in the Grotjahn case.

Latest on the California Resale Royalty Class Action

The plaintiffs have filed their response to the auction houses' motion to dismiss.  No online link yet; background about the case here.

The main question in the case, I've been saying, is whether, as applied outside California, the statute violates the Commerce Clause.  In their motion to dismiss, the auction houses argued that "where State A purports to regulate the sale of goods occurring in State B simply because that sale involves a resident of State A, the regulation is invalid."  In attempting to distinguish some authority cited by the auction houses, the plaintiffs here argue that, in those cases, "the only nexus with the state was that the consumer was from the state."  In this case, by contrast, the ("undeniable") nexus is that the sellers "reside in the state" (p. 11).  "[W]hile part of the transaction may occur outside of California, it cannot be said that the transaction occurs wholly outside of California because the seller is necessarily a state resident" (p. 12).  I'm not a constitutional lawyer, but that doesn't sound especially convincing to me.

"Goldsmith says in the court papers that the dealers assured him of the works’ authenticity and told him they had relationships with the sellers and 'personal connections' with the artists."

"But when he had some of the works evaluated by Basquiat’s and Haring’s estates in 2010, he was told that they were forgeries."

Arnet reports that a New York collector is suing a pair of secondary market dealers over the sale of $950,000 worth of work purportedly by Basquiat, Haring and Warhol.

"The court 'exhibited a lack of intrinsic comprehension of art,' she wrote."

Artnet's Rachel Corbett has a report on Janine Gordon's appellate brief.

"It was undisputed at trial that the subject of the condition precedent, i.e., that funds be received from Galerie G, never occurred."

An interesting decision in the Southern District last week in a breach of contract case involving a "back-to-back transaction" for the sale of a Mondrian.  Edelman Arts sued Anne Faggionato's Art International, but the court ruled that a statement in a fax cover sheet enclosing a signed bill of sale that it was "to be held in escrow until the monies from the buyer have been received" created a condition precedent that was never fulfilled.  (Edelman's position was that that was "only a timing provision.")  Courthouse News story here.  Opinion here.

Lawsuit Filed to Block Christo's Latest Project

In Colorado.  "The lawsuit, filed ... by a group of students at the University of Denver’s Sturm College of Law, argues that land managers did not adequately address the long-term effects of the project on wildlife, especially the bighorn sheep that clamber about on the canyon’s cliffs."   They say that, in approving the project, "federal analysts framed their assessment in ways that excused the impact of the thousands of bore-holes, rock-bolts and anchors that will have a cumulative effect, ... not unlike industrial mining." Ann Althouse says that's "a new twist on the old 'what is art?' question. These law students are arguing about the art/mining distinction."

Mo(o)re on Sports Artists and Trademark

As a follow-up to his New York Times piece earlier this week on the Daniel Moore case, Daniel Grant has a post at the Huffington Post on another sports artist, Rick Rush, "who successfully fought a trademark infringement lawsuit [brought by Tiger Woods] over a period of five-and-a-half years."

I linked to the Rush decision in my very first post about the Moore case, now more than five years ago.

Barnes Sanctions Hearing

Cheryl Alllison of the Main Line Times has a report on this morning's sanctions hearing in the Barnes case.  Judge Ott "closed the hearing after about 45 minutes and said he would take the matter under advisement."

Six days a week, 9:30-to-6:00 ...

... of adversely affected experience in an impossible to predict way.  The Barnes sets its opening hours.

As near as possible

The Tennesse Attorney General has gone ahead and filed for permission to appeal the most recent ruling in the Fisk case.  Here's a brief AP story.  Here's the brief.  And here is donor-intent protector Lee Rosenbaum, coming out of retirement to cheer on Super Cooper's forfeiting of his neutrality.

A few comments on the brief:

1.  It contains as clear a statement of Donor Intent Absolutism as you will ever see:  "[T]he fact that the donee may cease to exist if it is not permitted to change the conditions of a gift ... does not authorize a deviation from the conditions of the gift."   Wow, that's cold.  O'Keeffe said no sales and that means no sales.  If that results in Fisk having to shut its doors, so be it.  But wasn't it also part of her intent that Fisk own the works?  After all, she could have given them to anyone, but she chose Fisk.  Why do we assume the no sale part of her intent is more important than the Fisk part of her intent?  It's not as if she said "here is a bunch of artwork, I don't really care who owns them or what happens to them just as long as, please God, they never ever be sold!"  In other words, do we really think that, given the choice, O'Keeffe would prefer to see Fisk close down and the works sent somewhere else than the collection sharing arrangement on the table now, in which Fisk survives and retains a 50% interest in the works?

2.  Speaking of that retained 50% interest (and the related right to exhibit the works for two out of every four years):  the brief bizarrely reads as if the whole collection is being shipped off to Russia or something, never to be seen again.  It claims the deal that's been approved converts the collection "into nothing more than a source of revenue for Fisk."  It argues that, under the cy pres doctrine, any deviation "must be as close as possible to what the donor intended" and this deal "is far removed from Ms. O'Keeffe's intent and purpose."  What was that intent and purpose that we are far removed from?  According to the AG, it's that the work "be used for art education in Nashville and the South."  O'Keeffe's "primary charitable purpose was to enable the public -- in Nashville and the South -- to have the opportunity to study the Collection in order to promote the general study of art."  Seriously?  That's their argument?  That a collection-sharing arrangement that has the work in Nashville at Fisk half the time and at a brand new museum of American art in Arkansas (which may well "become a place of pilgrimage for art lovers from around the world") half the time is far removed from an intent to enable the public -- in Nashville and the South -- to have the access to the collection?  Really?

3.  Finally, a word about this silly notion that allowing this collection-sharing arrangement to go forward will "chill" future charitable donations.  Look, this case isn't inventing a new way to subvert donor intent; it's applying long-standing doctrine (one that existed at the time O'Keeffe made her gift).  As the AG's brief itself notes, the cy pres doctrine was "first codified in New York in 1893."  Every single charitable gift comes with an implicit asterisk to the effect that, when changed circumstances make compliance with the terms of the gift impracticable, a court may modify those terms.  That was true before the Fisk decision, and remains true after.  Reversing the decision in this case would not make that asterisk go away.  No donor can ever be "certain" that the conditions of her gift will be honored for all eternity.  Fisk happens.

"All this raises the prospect that a decision by the Second Circuit could affirm the lower court judgment without shifting the copyright landscape dramatically."

"That is to say, the appeals court could leave for another day how transformative a work needs to be and say simply that these works fail the test because of what Prince said."

Nicholas O'Donnell reads Cariou's appeal brief.

Related post here.

"Is Prince v. Cariou Already Having a Chilling Effect?"

Julia Halperin at ARTINFO.

Barnes Update

The Main Line Times:  "A court hearing is scheduled for Thursday, Feb. 2, at 9:30 a.m.... at which the Friends of the Barnes Foundation and other petitioners will present their objections to sanctions imposed by Montgomery County Orphans’ Court Judge Stanley R. Ott."