"As this court previously observed, the market place is the appropriate place to resolve authentication disputes"

In another significant recent ruling, the First Department affirmed the dismissal of a failure-to-authenticate claim against the Warhol Foundation.  The (short) decision is here.  Background here (with an accurate prediction from Josh Baer).  You can keep winning these suits, but you can't stop people from bringing them.  Which is one reason the Warhol Foundation (and others) have gotten out of the authentication business altogether.

"When an art gallery has access to information regarding a painting's authenticity, but fails to pursue the information, it cannot reasonably rely on defendant's representations or omissions regarding the painting."

Been extra-busy with the day job (not to mention the really fun stuff), so I've fallen a little behind on some art law news.  I see that, last week in the Southern District, Judge Cederbaum granted summary judgment for the defendant (representing himself pro se) in a case involving a fake Milton Avery painting.  ACA Galleries bought the painting from Joseph Kinney for $200,000 and, "shortly after" the sale was completed, took it to the Avery Foundation, who told them the work was a fake.  The most interesting part of the decision is the holding that even if Kinney knew it was a fake -- even if, that is, he committed fraud -- the case should still be dismissed because ACA didn't do its own investigation.  "The very fact that ACA felt the need to seek authentication by the Avery Foundation after the purchase indicates that it knew how to do so prior to the purchase. ACA's decision to wait is not protected under New York law."

Here's a Strange Twist in the Knoedler Situation (UPDATED)

Now someone is suing claiming the works are real "and that he lost out on millions of dollars in profits when Knoedler failed to sell them."  Patricia Cohen has the story in the NYT here.

UPDATE:  Felix Salmon has some thoughts.

"A step that draws the city ever closer to emergency oversight by a state-assigned financial manager"

Detroit inches closer to bankruptcy.

Remember that the Detroit Institute of Arts raised nearly $70 million for itself through the imposition of a special tax this summer.

"Surely one of the great bonuses of the commodification of art is that the artists can and are making a huge difference in the lives of future generation of less commercialized artists."

Paul Schimmel:  "With the hundreds of artists foundations already existing in the U.S. and many more to be formed by the wealthiest generation of artists ever, their legacies will become among the most important not-for-profit institutions to directly support the arts."

"Charities beseech Congress to preserve donations tax break"

Reuters reports on the beseeching here.

Related:  Barron's:  A Smarter Charitable Deduction.

"Art & Cruise Ships Still Don’t Mix"

The Art Market Monitor has the latest.

"The charitable deduction is in congressional crosshairs again ..."

". . . as Rep. Dave Camp (R-MI) called for a hearing on the topic on Feb. 14."

"I often wonder who these do-gooder reporters are purporting to protect. Is it those little old ladies who walk into the sales rooms raising their paddles to bid millions of dollars in total naïveté like blind fools?"

Adam Lindemann on that front-page NYT story on chandelier bidding and other concerns:

"The other phenomenon I find strange at the moment is the art world’s, and the media’s, obsession with the alleged manipulation of the auction market. Did you read that recent front-page article in The New York Times in which reporters Robin Pogrebin and Kevin Flynn broke the news that 'at major auctions the first bids announced for a piece are typically fictional—numbers pulled from the air by the auctioneer to jump-start bidding'? Haven’t we known this for years? Chandelier phone bids are just a little theater to make it all sound exciting; every auction veteran knows the real bidding doesn’t start until we approach the low estimate."

"Lawyers Fight to Keep Auction Sellers Anonymous"

The Jenack auction house decision made its way into the New York Times this week.  The story does a good job giving equal time to the competing interpretations of the decision (which is now on appeal to the Court of Appeals).  On the one hand, "many art-law experts say the decision, if upheld, could significantly change the way the auction business is conducted in New York State"; one lawyer involved in the case is quoted as saying the ruling represented "a wholesale invitation to have people renege."  On the other hand, Sotheby's Jonathan Olsoff gets a chance to make his case (also made here) that the decision was "narrow and technical" and that its impact was being greatly overstated.  He says it "deals only with the evidence that is required if an auction purchaser defaults in paying and is sued by the auction house."

Here's the case for Olsoff's minimalist interpretation.  The relevant statute (General Obligations Law § 5-701(a)(6)) says that if "the auctioneer at the time of the sale, enters in a sale book, a memorandum" specifying, among other things, the name of the buyer and the name of the seller, then the statute of frauds is satisfied and a binding contract is thereby created.  In Jenack, the "sale book" indicated that the work at issue was "consigned by '#428' and purchased by bidder '#305'" -- in other words, neither party was identified by name.  In the case of the buyer, the court looked to another document -- the buyer's "absentee bid form," which "contained both [his] name [and] his bidder number" -- and said that other document could be considered in conjunction with the sale book to satisfy the statute as to the buyer.  So, by the same logic, all the auction house had to do to satisfy the statute as to the seller was produce a similar, "other" document identifying him by name.  Somehow they failed to do that:  "the record establishes that the plaintiff failed to produce any writing identifying [the seller] by name, either in response to the defendant's discovery demands or in opposition to the defendant's motion for summary judgment."  They relied instead entirely on the argument that "the requirement of the statute that the memorandum contain 'the name of the person on whose account the sale was made' was satisfied solely by inclusion of the consignor's assigned number [in the sale book]."  But again, the implication seems plainly to be that, if they had just produced, in the litigation (perhaps even confidentially), the same kind of external written evidence of the seller's name (and they must have some record of that somewhere) as they did for the buyer, then the case would have come out differently.  On this view (which, as I've said before, I find convincing), the decision is, as Olsoff maintains, indeed much ado about nothing.

"How do you adhere to a donor’s wishes when they seem to interfere with the best interests of the institution?"

Patricia Cohen had a piece in the Times a few days ago on how museums are starting to notice that the issue of donor intent isn't always so simple.

The unspoken backdrop is that the Donor Intent Police are, as I've said before, generally just the Deaccession Police in disguise.  When there's a sale they don't like, they use any weapon to hand, and sometimes that means appealing to donor intent (which they always interpret in the most literal way possible).  They pretend to care about donor intent, but what they really mean is stop the sale.  But now that the Brooklyn Museum wants to sell off some works no one cares about (works which are "not of museum quality, were misattributed or, in a few cases, were fakes"), suddenly we start hearing that hey, you know, this is a very complicated issue, forever is a long time.  Interesting.

"In several important ways, copyright fails to function properly when art is involved, both in terms of basic fairness and intended economic incentives."

I cannot recommend highly enough this piece by Alfred Steiner, who is a practicing attorney at Morrison & Foerster and also an artist.  Thanks to Sergio for the pointer.

What happens to your art if you don't pay the storage bill?

Daniel Grant explains.

"The complaint ... asks the judge to appoint a custodian to break an ongoing deadlock among the Foundation’s divided, four-person board of directors"

The Foundation in question is the Cy Twombly Foundation.

Tell me again about the public trust (20 times the presale estimate edition)

One of the 16 works that, having fallen under the aegis of the Met, were held in the public trust, to be accessible to present and future generations, until the museum decided they were no longer held in the public trust, to be accessible to present and future generations, fared pretty well at auction this week.

Isn't it great how museums get to decide when a work is no longer held in the public trust.  It's so convenient!

Art Cops

A new TV series.