Tell me again about the public trust (these paintings have their own lives to live edition)

The Roerich Museum is selling two works previously held in the public trust to be accessible to present and future generations.  But then they sprinkled the magic Not Held In The Public Trust dust over them and that made everything okay.  You don't have to be so touchy about it.

Series vs. Edition

I'm quoted in this Huffington Post post by Daniel Grant.

"Tax Break Used by Investors in Flipping Art Faces Scrutiny" (UPDATED)

Excellent piece by Graham Bowley in the NYT this morning on 1031 exchanges.

I had some thoughts on this subject a few years ago.  Good summary of the legal issues involved here.

UPDATE:  Bloomberg's Katya Kazakina has a story out today on the same subject.  Something's definitely in the air about this.

"I took for granted and betrayed someone who will forever have great meaning in my life."

Eighteen months for Jasper Johns's former studio assistant.  Background here.

"Essential Issues in Artist's Estate and Foundation Planning"

A panel, tomorrow night, at Herrick, Feinstein.  The Art Newspaper's Charlotte Burns is moderating.

A different kind of authentication dispute ...

... involving Salvador Dali.

"Both bills have been proposed repeatedly in recent years, but have never successfully passed into law."

The bills are Jerrod Nadler's resale royalty bill and the oft-introduced fair-market-deduction-for-artists bill. Julia Halperin has the story in The Art Newspaper.

Speaking of bills with no realistic chance of passing, the House voted this week to repeal the estate tax.

"The charges have prompted art world figures outside of Cuba to call for a boycott of the Havana biennial"

The Art Newspaper has an interview with Tania Bruguera.

Tell me again about the public trust (will most likely lead to the museum’s dissolution edition) (UPDATED)

This one is almost too rich.

The Art Newspaper's Julia Halperin reports (the story's dated March 1 but it either just went online or I've been asleep at the switch) that the Detroit Institute is selling a Van Gogh.

Let me repeat that:  the Detroit Institute is selling a Van Gogh.

Wait a minute.  Didn't the Michigan Attorney General tell us the works in the museum's collection were held in charitable trust for the people of Michigan?  I believe that he did.

And didn't Graham Beal, the director of the museum, say that that "any sale of art will most likely lead to the museum’s dissolution"?  Any sale of art.  I believe that he did.

Now we are told (by Beal) that "[d]eaccessioning is not controversial—US museums do it all the time."  The museum had put its deaccessioning program on hold during the city’s bankruptcy proceedings. "We couldn’t sell any works [during the bankruptcy]," says Beal, "because it would have caused such confusion."

Yes, I can imagine people being confused about why they were being told that the sale of any art would most likely lead to the museum's dissolution.  People can be so funny that way.

UPDATE:  Nicholas O'Donnell has some thoughts.

"In this case, we are constrained to concur with the views expressed in Altbach, Hoepker, and Nussenzweig's concurrence: ..." (UPDATED)

"... works of art fall outside the prohibitions of the privacy statute."

The First Department has affirmed a lower court ruling in favor of photographer Arne Svenson, who "surreptitiously" photographed people in their apartments, in the building across from his.  The decision is here.  The New York Law Journal put it on their front page.  Julia Halperin in The Art Newspaper is here. Artnet news is here, and Photo District News here.

It's a straightforward application of the relevant precedents and, as the court notes at the end of the decision, if there is a problem here it's one for the legislature to solve ("Needless to say, as illustrated by the troubling facts here, in these times of heightened threats to privacy posed by new and ever more invasive technologies, we call upon the Legislature to revisit this important issue, as we are constrained to apply the law as it exists").

UPDATE:  Some thoughts from Amy Landers at PrawfsBlawg.

"After destroying his piece, Raimondi claims opera officials sold off the pieces of bronze to a scrapyard for profit."

A VARA claim in Florida.

"But it also has broader implications, offering a glimpse into the hefty markups in the private art market and prompting the latest effort by wealthy collectors for more disclosure."

Robert Frank in today's NYT Business section on the Bouvier case.

Certificate Insurance

A new kind of insurance from Crystal & Company.

3D Printing Meets the Arts: Reproduction and Authenticity

The fantastic NYU Law Art Law Society is putting on a panel this Monday evening.  Details here.

"However, according to the complaint, the 2013 will was drafted 'negligently and carelessly,' resulting in a trust that did not qualify for the federal estate tax charitable deduction."

Artnet's Rozalia Jovanovic reports on a lawsuit by the estate of legendary collector Robert Ellsworth, “against attorney George L. Bischof and his firm for negligence in creating a charitable trust in Ellsworth's will that has resulted in $25 million in taxes for Ellsworth's estate.”

It’s a little hard to tell from the report what exactly happened, but it seems like the trust was not a so-called “qualified charitable remainder trust” -- meaning the non-charitable interest (the part that went to Hashiguchi) was neither an annuity nor a unitrust interest.  Instead, it was cast as a discretionary trust,  for which no charitable deduction is allowed.

On the other hand … it’s possible that there was no error here.  The taxes on the 2010 will, where everything passed to Hashiguchi, and the 2013 will, where the assets pass to the non-qualified charitable remainder trust, would be the same.  Perhaps Ellsworth still wanted the entire corpus to be available to Hashiguchi during Hashiguchi’s lifetime, which would not be the case with a charitable remainder trust, and simply wanted to designate the charities which would receive any corpus not consumed by Hashiguchi during his lifetime.  It’s true that $25 million is a stiff price to pay to ensure that the entire trust corpus could be made available to Hashiguchi should he need it, but the result is no different than under the 2010 will, where Hashiguchi gets everything outright in the first instance.

Will be interesting to see how this one develops.

"French Court Orders Picasso’s Electrician to Return Nearly 300 Artworks"

New York Times story here.  Background here.  The Daily Show dubs him the "Picasso of Electricians Who Steal Paintings from Picasso."

"Artist Sues NYPD for Falsely Arresting Him as Banksy"

Story here.

While I'm out here highly recommending things ...

... let me also direct your attention to the third volume in the Handbook for Academic Museums series, which includes a phenomenal essay by Peter Dean and Bradley Bateman on the Randolph College deaccessioning controversy.  I hope to say more about the essay at some point, but for now, this will give you the flavor:

"Sometimes the AAMD has justified its 'ethical' stance against the use of sale proceeds for purposes other than acquiring new items by claiming that such use of proceeds might make donors less willing to donate a work of art, or contribute toward the purchase of a specific work of art, on the grounds that such use would devalue their original philanthropy. This is also an inconsistent argument. The AAMD evidently has no problem with the sale of a work of art, whether donated or purchased with a donor’s funds (unless the work was accepted subject to an express condition prohibiting sale). It has no edict against the sale of any individual piece of art; its rules are restricted to the use of proceeds .... If a donor bequeaths a Picasso to a museum which later sells the painting in order to purchase a Damien Hirst sculpture, the AAMD assumes that the donor (or other future donors) will not be upset and that this will have no effect on future philanthropy. But if the museum sells the Picasso to help build a new wing to house a collection of contemporary art, then the AAMD believes that this creates a risk that the donor (or other future donors) will abandon their philanthropy to art museums. Where is the evidence for this distinction?"

"If you open this discussion with museum people, as I have done, you find out very quickly that you have walked into a hornet’s nest called the 'deaccessioning debate.'" (UPDATED)

I highly recommend this piece, by UC Berkeley's Michael O'Hare, in the new issue of the policy journal Democracy.

The thesis:

"Think about a world in which our great paintings and sculpture are mostly on view instead of where they actually are, which is mostly locked up in the basements and warehouses of a handful of our largest museums. In which you didn’t have to go to one of a half-dozen big cities to see them, and didn’t rush through an enormous museum for a whole day because you paid so much to get in. ... That world is actually within reach, and the main reason we don’t have it is that the people to whom we have entrusted our visual arts patrimony have nailed each other’s feet to the floor so they can’t move toward it, and done so with the tacit approval and even collaboration of government. Big museums have long refused to recognize their unexhibited collections of duplicates and minor works as a financial resource. As a consequence, they are wasting value by keeping these works hidden. If they were redistributed to smaller institutions, and even to private collectors and businesses, they would fund an explosion of the value for which we have museums in the first place: people looking at art and getting more out of it when they do."

But wouldn't that be a violation of the museum directors' code of ethics?  Sure, but:

"this code was not brought down a mountain by Moses; the directors themselves made it up. A code of ethics is a good thing, but it isn’t a law of God or nature. Once upon a time, the lawyers’ code of ethics forbade them to advertise. Now it doesn’t; the republic and the bar endure."

Read the whole, excellent thing.  And for more from O'Hare, see here, here, and here.

UPDATE:  UCLA's Mark Kleiman tweets:  "Curators and art critics have convinced the world that 'deaccessioning' is scandalous. That is the real scandal."

On that Haring Decision

I finally had a chance to read the decision I mentioned last week that dismissed authentication-related claims against the Haring Foundation.  You can read it here.  If you don't have time to wade through the whole thing, Rebecca Tushnet has a good summary here.  Nicholas O'Donnell has his usual valuable commentary here.  It's in some ways an odd decision, which I'll explain further below.  But the important point, I think, is that if you're an artist foundation looking for a signal that it's safe to get back into the authentication business, this case isn't it.  If anything, as O'Donnell points out at the end of his post, it might have the opposite effect.  Here's why that might be the case:

1.  First off, this was the third motion to dismiss the case.  The plaintiffs were allowed to amend their complaint in response to the first two.  So even here, where the outcome was as favorable to the foundation as can be imagined, it didn't come cheap.

2.  In dismissing the antitrust conspiracy claim, the court distinguishes Warhol/Simon-Whelan (where a similar claim survived a motion to dismiss) in part on the grounds that "the defendants here ceased their authentication activities in 2012 and [therefore] could not be plausibly alleged to control authentication of Haring's work."  That's obviously an argument for foundations not getting into the authentication business (or getting out of it if they're currently in it).

3.  Similarly, in dismissing the antitrust monopolization claim, the court emphasizes that the authentication committee "was dissolved in 2012 and no longer offers authentication services."

4.  The state law defamation claim was dismissed based on the quirky facts of this case, which were that the foundation directed its statements towards an exhibition which included the plaintiffs' works (rather than at the plaintiffs directly):  "the plaintiffs have failed to allege sufficient facts that would allow a reasonable jury to conclude that the [foundation-issued] Press Release concerns them."  That's not going to be the typical situation in which these cases arise.

5.   On the other hand, the court does say that the defamation claim would have failed anyway because you can't base a defamation claim on a statement that "only relates to [the plaintiff's] property," which -- if true -- would be a help to potential defendants in these cases.

6.   Another holding that, if it were right, would also be extremely helpful to authentication-minded foundations (and others) had to do with the trade libel (or "product disparagement") claim, which is really the heart of any authentication-related dispute.  The court says that, to prevail on such claim, you have to show "special damages" -- i.e., specific, named purchasers that you lost as a result of the defendant's statements.  One of the plaintiffs alleged that he lost a sale to a London museum -- but even that wasn't enough because he didn't "name the museum or the sale price."  That would, as I say, be a difference-maker ... but is it right?  I am minding my own business with what I think is a $50 million painting by Artist X hanging on my wall.  Out of nowhere, the Artist X Foundation (or some other well-respected authority on Artist X's work) announces to the world that my painting is not an authentic work by Artist X (and is therefore now worthless) ... and there's nothing I can do about it because I can't point to a specific sale that I lost?  I'm curious to see whether other courts will line up behind that reasoning.