"MoMA has decided to auction off to the highest bidder a work in the museum's collection for over a half-century, a painting by an artist who may have produced more 'masterpieces' than any artist in Western art history"

Jerry Saltz is not happy with MoMA's imminent sale of a Monet that, until a minute ago, was held in the public trust.  Then, MoMA sprinkled the magic fairy dust on it and ... tada!  No longer held in the public trust.  So long public, hello billionaire's living room.  It's so easy!

He points out that the painting "was donated to MoMA in 1951 by New York collectors William and Evelyn Jaffe" -- but don't worry, no one will ask, "Why should I give this to you?  What guarantee do I have that you're not going to sell tomorrow?"

He expects MoMA's reaction to any criticism to be "blithe, platitudinous, one-size-fits-all dismissal" -- and now I have a great new way to describe the AAMD/Deaccession Police approach to the issue:

Because the proceeds from this sale will go into bank account A ("acquisitions fund"), earning interest, it's totally fine, nothing to be concerned about at all.  But if they went into bank account B ("operating expenses"), earning interest ... hoo boy, now we've got a massive problem on our hands, a BREACH OF THE PUBLIC TRUST, get the New York Times on the phone, call out the sanctions, THIS CANNOT STAND.

That's called "ethical reasoning," if you weren't aware.

Saltz ends up endorsing a kind of Ellis Rule -- "I believe that once a work of art enters a museum collection, it should be out of play for private collections. A work in a museum collection should only be sold or go to another museum collection, where it can remain in public view and circulation" -- though he doesn't say whether he believes that, if that condition is satisfied, the proceeds must also be used only to buy more art.

One quibble in connection with this last point:  Saltz thinks "it's doubtful that this little painting will ever be seen again in public."  But as he himself notes earlier in the piece, it was once owned by the Art Institute of Chicago ... then it was owned by the Jaffes ... and then it went to MoMA.  The tax laws in this country (as well as a host of social and psychological facts) have a way of bringing these works back into the public sphere.  It's possible, of course, that we've seen the last of it, but by no means guaranteed.

Back to square one

For the artist resale royalty.

On that big story on the tax benefits of private museums

Patricia Cohen had a long and interesting story on the front page of the Business section of Sunday’s New York Times on the increasing number of private museums – where, as she puts it, the "founders can deduct the full market value of any art, cash and stocks they donate, even when the museums are just a quick stroll from their living rooms."

My general take on this is that, while there are certainly valid concerns here, one way to look at these arrangements is as part of the deal we make in order to get broader access to these (amazing) collections eventually.  As the article notes, in the past personal collections like these have “germinated into cherished institutions like the Barnes Foundation, now in downtown Philadelphia; the Frick Collection in New York; and the Phillips Collection in Washington, all of which started in private residences that showcased the masterpieces acquired by wealthy art aficionados.”  (Like some of the places mentioned in the article, the Barnes originally had limited admission by appointment only; it took a lawsuit by the Attorney General to get them to open things up.)  So think of Glenstone as a future Barnes.  Some day we will cherish the collection the way people cherish the Barnes.  If part of the price we have to pay to get there is to allow the founders to keep the collection close to their hearts (and living rooms) in the early years, that doesn’t seem like too bad a deal.  Life is short, art is long.

Tell me again about the public trust (ravishing Monet edition)

MoMA is selling a Monet at Sotheby's in February.  Held in the public trust ... until they're not.

Guaranteed

The New York Times reported this week that Christie's and Sotheby's are "back in the business of guaranteeing prices on works that they sell."  The Art Market Monitor says its a "thoroughly self-evident story."  I agree; I'm not sure why the press is so obsessed with this issue.  Carol Vogel had a similar story in the Times less than a year ago, focusing that time on the increase in third party guarantees (as opposed to in-house guarantees). Guarantees reduce the risk to the seller, and therefore attract more business to the auction houses.  What's the big deal?  For an interesting recent paper on the economics of auction house guarantees, see here.

"The year after opening its new building, annual attendance at the Barnes grew from 60,000 per year to more than 300,000."

"Last year, 285,000 people visited."

Mentioned in Randy Kennedy's NYT story on Thomas Collins becoming the new director of the Barnes.  (Collins says "To me [the Barnes's move to Philadelphis] seems like an unqualified success. I have no reservations now about it at all,  and I wouldn’t be going there if I did.")

Is it time to bring back the Projansky contract?

A terrific piece by Kibum Kim at Hyperallergic.

So Grand

Detroit Free Press:  Detroit faces the same challenges after bankruptcy.  I thought the Grand Bargain grandly took care of all of that?

In a series of tweets, Kristi Culpepper explains the problem:

"Simple explanation of why Detroit will be back in bankruptcy in the short-term:  Their bankruptcy plan assumes that the city will pick up $841 million from new revenue and cost savings. City's revenues now are at $972 million.  And somehow they actually had experts testify that those assumptions were reasonable."

(To which Matt Fabian adds:  "[Freep] article fails to mention how there is less room for error now,  Detroit having sold the art.")

For West Coast Readers

An interesting-sounding panel, organized by Sergio Muñoz Sarmiento, on the role of the artist in the art market.

"This is not what I expected and it's certainly not satisfactory."

More trouble for former Salander director Leigh Morse.

"For six years, the mystery surrounding one of the largest art heists in Los Angeles history baffled police."

"Then, a shadowy figure by the name of 'Darko' surfaced in Europe."

Nine stolen paintings recovered by the FBI.

"We're now in the thank-you business." (UPDATED)

Mark Stryker reports that the DIA has reached its grand bargain fundraising commitment of $100 million -- of the $816-million (and 39 cents) total.

UPDATE:  More from Randy Kennedy in the Times:  "The plan to save the collection from sale was put together after foundations, private donors and the State of Michigan raised $800 million last year, essentially to ransom the museum from city ownership."

"The fall of SOG presents, in microcosm, almost every possible way in which a secured transaction, consignment or entrustment of art or cultural property can go awry."

Good piece in the National Law Review:  The Risks of Art Consignment.

Related post here.

Court victory for Christo's Arkansas River project

Denver Post story here.  As Kriston Capps has said, Christo's medium "isn't fabric and nature, it's community hearings and Environmental Impact Statements" ... and lawsuits.

Lawsuit Over Fake Rockwell (UPDATED)

Courthouse News Service has the details.  The sale took place in 1994.

UPDATE:  Nicholas O'Donnell comments:  "The most obvious challenge to this case is the passage of time.  ...  If the painting is not a Rockwell, then a threshold question will be when the plaintiffs could have determined that, and whether it was within the statute of limitations.  The 2013 appraisal quoted by the Complaint could cut both ways; if the Rockwell signature was as obviously a forgery as that appraisal believes, then the question will be why the plaintiff did not discover it sooner."

"Bruguera's detention sparked outrage in the international art community."

artnet news:  "The three successive arrests of Cuban performance artist Tania Bruguera, who was most recently released on Friday, have marred efforts by US President Obama and Cuban President Castro to normalize US–Cuba diplomatic relations."

"As a professor specializing in art crime, I’ve studied the cases of dozens of forgers whose careers span thousands of years, and I can conclude that Re is the first to have used his ill-gotten gains to buy a submarine."

Noah Charney in The Atlantic:  Why So Many Art Forgers Want to Get Caught.  Re Re (the submarine buyer), see here.

"It marks the second time in two weeks that the American artist has been called out for copyright infringement for a work related to the Pompidou exhibition."

Koons again.  Mike Madison wondered if Koons is "using the copyright system itself as a canvas," though it's worth noting that the works at issue in these latest cases are nearly 30 years old.

"What the AAMD did, it does affect our students. ... Why they want to hurt our students is unclear to me."

The Lynchburg News & Advance:  Ten months after 'Men of the Docks' sale, Randolph College says benefits outweigh costs.

The AAMD's answer to the question why they had to hurt Randolph's students is that the sale "erode[d]" the "trust" the public puts in museums.

Why this sale eroded that trust when (to pick one of dozens of examples I've cited here at the blog over the last few years) a sale by the Georgia O'Keeffe Museum of a classic O'Keeffe flower painting for $44 million does not, is one of life's great mysteries.

"Cuba’s Art Scene Awaits a Travel Boom"

From today's New York Times.

This can't be serious

National Post:  Art historian questions whether artist Tracey Emin actually slept in her $5-million piece, "My Bed."

"Bums had been sleeping inside the sculpture, and it reeked of feces. Tempest had been transformed into a shit storm."

More on the disgraceful treatment of Brian Tolle's public artwork in Miami Beach.  Background here.

Another Koons copyright dispute

New York Times story here.  Hyperallergic here.

How will the policy shift on Cuba affect the arts? (UPDATED)

Nicholas O'Donnell takes a look.

UPDATE:  Much more on this subject.  Kelly Crow in the WSJ:  Art Collectors Predict "Stampede" to Cuba.  David Ebony:  Is Cuba the Next Art-World Hot Spot?  New York Times:  For Cuban Artists, Bigger World Awaits After Restoration of Ties.

Because they said so?

My friend Peter Dean emails:

“I am sure you have seen this story by Mark Stryker on the $100M sale of a Cezanne by the Edsel and Eleanor Ford House by now.

“I await someone’s lucid explanation of why this is OK, but Randolph College’s sale of Men of the Docks in order to raise funds for the college’s endowment puts us in Dante’s Ninth Circle of Hell.  Could we have a full explanation of the hierarchy of permissible and impermissible deaccessions?  I think we should be told.”

Update on the California Resale Royalty Lawsuit

The en banc hearing in the California resale royalty case took place yesterday.  Story here.  You can watch the argument here.  With the usual caveat that it's dangerous to read too much into these things, I came away with the strong impression that the commerce clause aspect of the decision (i.e., that California can't regulate sales that take place in New York) would be affirmed, but the severability aspect would not (i.e., that, unlike the lower court, the Court would leave the statute in place as it pertains to sales within California).  That would remain a big win for the auction houses.  (I'm not even sure why they're bothering to fight so hard on severability.)

Maybe they were just implementing the Kinsley Plan

The Guardian:  Uzbek museum sold off artworks over 15 years and replaced them with copies.

(On Kinsley's modest proposal for Detroit, see here.)

"Interestingly, a significantly more expensive Picasso ceramic valued at $365,000 was hung below the stolen Picasso silver plate and was not touched."

A theft at Art Miami.

More Monkey Business

Interesting exchange of emails regarding the famous "monkey selfie."

If this is a viable claim, a lot of contemporary artists are in big trouble

The New York Post has a report on a lawsuit filed against artist Peter Max that includes the following:

"[The plaintiffs] also helped sell Max's famous 'Statue of Liberty' painting to a collector for $500,000 -- but when she learned the artist had not 'painted in year's she was infuriated . . . . [One of the plaintiffs] learn[ed] from [Max's representative] that Max has a team of 'ghost-painters' who work near his W. 65th Street studio, the suit says.  Max merely signs 'his name on the artwork when it's completed,' the court papers allege."

It's a scandal!

“Why the City would allow this to happen to a work of art is beyond comprehension …”

The Art Newspaper had a story last week on the mistreatment of my client Brian Tolle (best known in New York for his Irish Hunger Memorial downtown) by the Miami Beach public art authorities.  Long story short, first they were unable to maintain the work, letting it be used as an outdoor toilet (see photo here), and then they decided the best way to deal with the problem was to just remove the work and stick it in storage, where it remains today.

The Art Market Monitor sums it up:  Miami Removes $400k Work Without Consulting Artist.

And Sergio Muñoz Sarmiento has lots more here, including the following excellent series of questions:

“Did the City not seek out recommendations for the care and maintenance of Tolle’s art work? Did City officials really think that removing (and possibly damaging or destroying) Tolle’s art work without Tolle’s consent would be cheaper than cleaning and maintaining the art work? In essence what we’re asking is, did the City just think that it could do as it pleased with a legally protected work of art, and with complete disregard to the artist’s wishes?”

And, in the comments to his post:  “Hopefully the City of Miami will find a … way to not only respect Brian Tolle’s work, but to reinstall it the way that the taxpayers have paid for it.”

Let’s hope.

A Couple of Takes on Perelman-Gagosian

Shane Ferro:  Don't Sue Your Art Dealer, Because You Won't Win.

Nicholas O'Donnell:  "Buyer beware remains good advice."

"Obviously, creative ownership of art works is not a concept we have clearly defined ..."

"... We thought we had, but our old definitions are disintegrating with every cellphone photo and every screen grab."

Six years for damaging a Monet

Happened at the National Gallery of Ireland.

"The appeals court, however, agreed with King’s argument that ... because of the gallery’s expertise, she wasn’t negligent in relying on their assurances about authenticity."

A Park West lawsuit is reinstated.  These have been going on for a long time.

Perelman’s Lawsuit Against Gagosian Dismissed

New York Times story here.  First Department decision here.  The case had been on life support for some time (although not everyone noticed):  everything but the fraud claim had been thrown out earlier this year, and this decision got rid of that claim too, on the grounds that (a) Perelman, a "sophisticated" plaintiff, could not demonstrate reasonable reliance on the alleged fraud, because he "conducted no due diligence" of his own, and (b) statements about the value of art (which is what the fraud claim was about in this case) "constitute non-actionable opinion."  Felix Salmon nailed this one from the start.

Some Graffiti Litigation Updates

From Nicholas O'Donnell.

"Seller of Art Fakes Pleads Guilty to Wire Fraud" (UPDATED)

"Prosecutors said the man, John Re, 54, claimed the pieces were by Jackson Pollock and Willem de Kooning, and caused about $2.5 million in losses to victims."  He faces up to 20 years in prison.

UPDATE:  Press release from the U.S. Attorney's office here.

"For better or worse, fine art is now firmly planted alongside equities, bonds, commodities and real estate as an asset class."

James Stewart in the NYT on the state of the art market.

Felix Salmon can't even.

Related:  Is anyone really creating art loan CDOs?

There ought to be a law

Michael Rushton notices something missing in Lee Rosenbaum's latest call for "legislation or government regulations" to enforce the AAMD position on deaccessioning.

"[M]ore likely, the Supreme Court will eventually choose to take this question on directly to clarify the line between fair use and the derivative work right ..."

"... a line which, for now at least, appears precariously subject to the whims of whichever court is tasked to draw it."

Speaking of appropriation and fair use, Steven Schindler and Katherine Wilson-Milne had a piece in the New York Law Journal last week on the Kienitz decision.

"If a visual artist can appropriate for whatever reason, under the guise that any form of appropriation is, per se, fair use, why can’t a corporation do the same?"

Sergio Muñoz Sarmiento has some more thoughts on appropriation and fair use -- and it's always great when he and Alfred Steiner get into it in the comments.  I think the real value in Sergio's shoe-on-the-other-foot examples is that they point up a problem with the emphasis on "different purpose" in the fair use analysis.  That is, imagine a corporation uses an artist's work in a major ad campaign to sell their widgets.  Couldn't they argue that their use had a completely different purpose (selling widgets) than the artist's ... and thus was transformative ... and thus fair use?

I wonder if they understand it means their collections now belong to the "public trust"

The New York Times:  A New Status Symbol for Billionaires:  Art Museum.

(Related post on a puzzle these museums present here.)

Because it's the coin of the realm?

Or maybe it's just common sense.

BBC arts editor Will Gompertz wonders:  Why is the Georgia O'Keeffe Museum selling her work?

It's a good question, for which the Deaccession Police will give their usual answer (i.e., shut up).

But this sale really is a good example of why it's silly to think of what the AAMD does as anything resembling "ethical" reasoning.  They have no way of grappling with a sale like this, no standpoint from which to evaluate it.  They just ask a simple question:  are you using the sales proceeds to buy more art?  If the answer is yes, there ends the "ethical" inquiry.

Tell me again about the public trust ($44.4 million edition)

The Georgia O'Keeffe Museum sold one of O'Keeffe's "classic flower paintings" for $44.4 million at Sotheby's this morning.

The painting had of course been Held In The Public Trust but, when reached for comment, a spokesperson for the Deaccession Police said:  Nothing to see here, move along.

I covered the particular absurdity of this example, with an assist from Peter Dean, here.

"Why does it matter if a painting or an object is the 'real' thing?"

Polly Toynbee in the Guardian:  Why do we only worship "real" works of art?

"If Artists Need to Know About VARA, So do Judges"

Daniel Grant on a "baffling" decision in the Southern District.

"The quality of the supply to me suggests that 'finance' thinks trouble may be on the horizon."

"That said, finance is not always right, least of all about itself."

An economist visits Christie's.

Related:  Sotheby’s Guarantees to Consignors Total a Whopping $392.6 million as of Oct. 16.

How copyright law could get you killed

Timothy Lee explains at Vox.

"All eyes on Detroit for bankruptcy ruling" (UPDATED 2X)

1 p.m. today.  Approval "widely expected."

UPDATE:  Approved.

UPDATE 2:  Tons of coverage of the news, including:  Mark Stryker: DIA supporters elated by bankruptcy decision.  Wall Street Journal: Art Was Key to the Deal. Randy Kennedy: "Grand Bargain" Saves the Detroit Institute of Arts. (And more from the Times.)  Jillian Steinhauer at Hyperallergic.  The museum applauds.  Slate's Jordan Weissmann: "So Detroit gets to keep its art collection. Pensioners get to keep a little more of their income. And the museum never has to worry about municipal finances ever again. A nice bargain all around."  Nathan Bomey: "With one sentence -- 'The market value of the art, therefore, is irrelevant in this case' -- Rhodes squashed 16 months of debate."  Kriston Capps: "One way to think about Detroit's art collection: Love for it inspired foundations to help rescue pensions."

What the heck is going on in the Ninth Circuit on the resale royalty case?

I'm the first to admit I'm not a commerce clause expert (dormant or otherwise), but it has always seemed to me that the resale royalty case was pretty simple and straightforward.  That's certainly how it seemed in the recent oral argument on the appeal.  Now, however, it seems the Ninth Circuit has ordered an en banc review, on account of "a potential conflict in circuit precedent on Commerce Clause applicability to state actions."  Nicholas O'Donnell has some thoughts here.

Rauschenberg Trust Fees Explained

Here.  Background here.

"An Illustrated Guide to Artist Resale Royalties"

At Hyperallergic.

The Foundation "alleged in a civil complaint that former bodyguard Agusto Bugarin is a 'patient thief' who stole the work in 1984" (UPDATED)

Warhol Foundation sues to recover a Liz painting.

UPDATE:  The Art Market Monitor:  Why Would Warhol’s Former Bodyguard Try to Sell an Early Liz Portrait Through a Gallery that Specializes in Prints and Multiples?

More on my deaccessioning puzzle

Michael Rushton offers up a speculative, tentative, cautious, possible answer to the deaccessioning puzzle I presented last week.

It's basically a "capture" theory -- that, as with all large, complex nonprofit organizations, the general direction of major art museums is determined by their "knowledge workers" (i.e., the curatorial staff), and the deaccession policy that we see is the one they prefer.  Like anything Rushton writes, it's worth thinking about, and I will do so, but in the meantime, let me offer two quick reactions:  (1) I'm not sure it's true.  I've linked before to a number of curator-types who have publicly questioned the wisdom of the standard view on deaccessioning; I've heard many others do the same in private conversations.  And (2) even if true, all this would do is explain where the rule came from; it wouldn't tell us whether we ought to give it any weight.  So curators want more and more art.  Big surprise.  Why is that the end of the discussion?

But more importantly, notice how nuanced ... subtle ... creative Rushton's answer is.  This is in stark contrast to the way the AAMD and its accomplices among the Deaccession Police talk about it.  For them, it's a simple, black and white issue.  There is no puzzle, there is nothing to be explained or defended.  It's a simple matter of "common sense."  It's the "coin of the realm."

In fact, the Deaccession Police don't have an answer at all.  What they do, instead, is pretend the question doesn't exist.

Ain't it grand!

The Atlantic: One-Fifth of Detroit's Population Could Lose Their Homes.

Inching Closer

The hedge funds are on board in Detroit.

"Detroit could make $25M selling copper from old streetlights"

Are streetlights held in the public trust?

If not, why not?

Is everything valuable a city owns held in the public trust and therefore not permitted to be sold?  If not, why not?  What makes art different?  When does the magic fairy dust get sprinkled on?

"The Feud That’s Shaking Gallery Walls"

Robert Frank had a piece in the Times this weekend on the Perelman-Gagosian lawsuit.

The story leaves out that the bulk of the case was thrown out earlier this year.

Felix Salmon boils it down:  "I really don't understand what the Perelman beef is here.  Larry set a price, Ron voluntarily paid it."

"He was taken into custody by police after he struggled with the museum’s security guards."

New York Times:  Vandal Strikes Koons Exhibit.

Breaking non-news: Banksy has not been arrested

Artnet doesn't have the news.

A Deaccessioning Puzzle

Reading about Mitch Rales's Glenstone collection in Carol Vogel's column today got me thinking about how museums come to be bound by the "ethical" rules regarding deaccessioning.  I mean in the most literal sense:  how does it happen?

Imagine a wealthy collector -- Rales, Stevie Cohen, somebody like that -- decides to buy a building in Chelsea and open his collection up to public view.  I don't think anyone would say that, having done so, he forfeits his right to sell works from his collection.  It's his property.  If he wants to sell his Film Stills, he can sell his Film Stills.  And I think we would all also agree that, if he does so, he should be able to use the sales proceeds however he wants.  He can use them to buy more art, or help pay for the building he's using to make his amazing collection available to all of us, or to pay the curators and guards he's employing to further enhance our experience.  Since we are lovers of art, we may think the best thing he can do with the sales proceeds is plow them into buying more art, but certainly he's under no ethical or other obligation to do so.  Again, it's his property, he's doing us a great favor by sharing it with us, he can do anything he wants with the money, including using it to put his kids through college.  Right?

Next, imagine the same scenario except now the collector decides to take the formal legal step of becoming a "museum."   It's still his collection, he's still doing us the amazing favor of giving us access to it.  Has it now become "unethical" (repulsive etc.) to use sales proceeds for anything but the purchase of more art?  How did that happen?  Really:  how?

One answer some might be tempted to give is that becoming a museum carries with it certain tax benefits, which in turn brings the ethics rules into play.  But that seems odd to me.  I can understand the argument that those tax benefits carry with them certain obligations -- the museum must be generally open to the public, everything it does must be for the public benefit (so using sales proceeds to pay for the founder's kids to go to college would no longer be possible), and so on.  But how do you get from there to a commitment to the deaccesioning-to-buy-more-art-good, deaccessioning-for-any-other-reason-bad museum "ethics" rules.  Those rules are the rules of a private organization (the AAMD) that seems to think they make sense for some reason.  They don't flow naturally from the fact that an institution is tax-exempt.  (Tax-exempt artist foundations like the Warhol Foundation, for example, sell work and use the proceeds to fund their operations all the time, and no one thinks there's anything wrong with that, nor should they.)  So how is it that calling yourself a museum automatically brings them into play?  I've never seen a good answer to that question.

30 months

Prison time for foundry owner who sold Jasper Johns fakes.

Family Squabble

NYT:   Charges of Looting as Heirs Dispute C.C. Wang Collection.

"With the advances in 3D scanning and other digital technologies, I suspect it is easier than ever to duplicate work and create copies."

Daniel Grant:  "An epidemic of sculpture knock-offs is plaguing the art world."

"Are copyright laws too strict?"

Louis Menand in The New Yorker.  Interesting throughout.

"Deal Is Said to Be Close in Detroit’s Bankruptcy" (UPDATED)

New York Times story here.

In other DIA news, "a pair of Oakland County politicians are poised to take action against the Detroit Institute of Arts after it was revealed last week that the taxpayer-supported museum handed out double-digit raises to DIA leaders in 2012."

UPDATE:  Judith Dobrzynski on the raises issue:  "Optics matter in cases like this. It’s going to be sticky no matter what happens, but I think the DIA board should reconsider–and either make its case publicly or find another solution."

"In a ruling handed down late last week by the United States Tax Court and seen by many as an important victory for artists ..."

The New York Times had a story yesterday on a recent Tax Court decision regarding the deductibility of art-related expenses.  Sam Brunson puts the story in proper perspective.  (Summary:  not a big deal.)

A note on Elkins (UPDATED 2X)

Michael Rushton has a post on the Elkins decision which closes with the following:  "If art was previously being treated inequitably in the tax code, and the inequity was rectified, great. But if the result is to give special privileges to collectors not available to others, it needs a close and critical look."

Without addressing the larger point he raises, let me just say:  Art was previously being treated inequitably in the tax code, and the inequity was rectified.

In a nutshell, the issue is as follows.  Suppose I have a $10 million Picasso and I want to sell you a 40% ownership share.  What is that 40% share worth?  You might say $4 million (40% of the $10 million total value), but if you think about it, that isn't right because then you'd be stuck co-owning the piece with me, so there would be all sorts of hassles and complications involved (who gets to hang it on their wall and for how long, shipping and insurance issues, etc.) and, most important of all, you might not be able to sell it when you want or need to (because I might not agree).  So while you would certainly pay something for that 40% interest, you wouldn't pay $4 million.  You would demand a ("fractional interest") discount.  There's nothing controversial about that, it's well-established with other sorts of assets (e.g., real estate).  But for some reason the IRS insisted on treating art differently.  That inequity has now been rectified.

UPDATE:  Rushton responds here.  He's troubled by the tax avoidance motive behind the transaction, which is fair enough (though as Learned Hand said:  "Any one may so arrange his affairs that is taxes shall be as low as possible; ... there is [no] patriotic duty to increase one's taxes").  But if that's a problem, it's a problem across the board for fractional discounts.  There was no reason for the IRS to single out fractional discounts for art for different treatment.

UPDATE 2:  Rushton once more.

Does fair use doctrine favor the rich? (UPDATED)

Sergio seems to think so.  I'm not sure about that, but I do agree completely with this, from my co-teacher Amy Adler:

"One of the worries that I think we should all have about the extremely chaotic and uncertain area of fair use law is it will force artists to steer clear of engaging in work they should otherwise be able to do for fear of getting sued, and that applies to all artists rich or poor."

UPDATE:  Sergio responds here.  I'm still not convinced.  What we haven't seen, I think, is a "reverse Cariou" -- that is, a case where a "rich" artist sues a "poor" appropriation artist and, unlike Cariou, wins.  I agree with Sergio that what we have now is a clusterfuck.  I just don't think it has much to do with the relative financial standing of the artists.

"The temptation to view art as another capital asset has been especially intense this year across the country."

Another article on deaccessioning that neglects to mention that museums sell art (i.e., "treat it as a capital asset") all the time.  What was the Art Institute of Chicago doing, to take just one recent example, when it sold 117 works from its photo collection last month, if not viewing them as capital assets?

"This is the first Circuit court to expressly reject transformative use, and it has done so rather emphatically."

Barry Werbin, at NYSBA's Entertainment, Arts and Sports Law Blog, on Kientiz v. Sconnie Nation, discussed earlier here.

"Chapter 9 is not a privilege; it is a political failure"

Kristi Culpepper, excellent on Detroit.

And on the Grand Bargain in particular:  "One of the concerns I have expressed about the so-called grand bargain that emerged from mediation is how biased and path-dependent the case became after it was announced. It effectively cut off the court’s ability (or desire?) to entertain any alternative proposal from creditors or other stakeholders. It also promoted a toxic 'us versus them' mentality, where anyone who suggested an alternative was construed as working contrary to the court itself and could not defend themselves publicly."

"A Potential Game Changer for Estate Taxes on Art"

The Elkins decision I mentioned last week makes it to the New York Times.

"After Merger, Corcoran Gallery of Art Faces Uncertain Future"

Blair Murphy at Hyperallergic.

They used the forbidden word again.

"Judge Steven Rhodes today pressed Detroit emergency manager Kevyn Orr to provide a better explanation for why he chose not to sell Detroit Institute of Arts property."

That was from Friday, and I assume, based on everything we've heard about Judge Rhodes and the art, that the point of the questioning was less to challenge the conclusion than to build a better record in the bankruptcy case.

The Art Market Monitor summarizes Orr's responses as "reveal[ing] that he put DIA in play enough to see what the museum might be able to come up with.  The resulting 'Grand Bargain' was effectively found money to Orr."  Nicholas O'Donnell agrees:  "We may indeed look back on this as pulling a rabbit out of a hat, when all is said and done."

And people say we monkey around

Nicholas O'Donnell is with me on the pressing issue of monkeys and copyright.

We shall fight in the courtrooms

The New York Post:  Winston Churchill's artist granddaughter sues gallery.

2015 National Cultural Heritage Law Moot Court Competition

February in Chicago.  Details here.

Reminder from Detroit: the fight over DIA's art isn't over

Mark Stryker summarizes the state of play.

Meanwhile, Detroit Free Press columnist Rochelle Riley asks:  Where's the grand bargain for Detroit's kids?

"How should we subsidize charitable giving to the arts?"

Some thoughts from IU's Michael Rushton.

Copyright and Graffiti (UPDATED)

The Atlantic asks whether graffiti can by copyrighted.  The answer given seems to be "why not?"

This post, from a couple years back, drills a little deeper into the question.

UPDATE:  Sergio Muñoz Sarmiento:  "The more interesting question, to me, is whether the same graffiti (not commissioned murals) also garners moral rights protection."

Idea vs. Expression

Artist's copyright infringement suit against Avatar director James Cameron thrown out, on a motion to dismiss (rather than summary judgment).  Story here.  Opinion here.

"It’s a huge affirmation that opens the door to help art owners reduce their estates." (UPDATED)

Was distracted this week, including by thinking about who shall be deaccessioned and who shall not in the coming year, and still catching up.  For my money the most important art law story of the week was the Fifth Circuit's decision in the Estate of James Elkins affirming the use of fractional interest discounts for works of art.  Forbes has a story here.  The decision is here.

UPDATE:  Eileen Kinsella has more here.

"What’s the difference between a Warhol silk-screen and a Landis copy?"

"It's not out of the realm of possibility that forgeries could one day become the next big thing in art."

The New York Times reviews a new documentary about art forger Mark Landis.

"Testimony from a high-end art evaluator will resume Thursday ..."

". . . as Detroit's bankruptcy trial moves toward a focus on the city's art at the Detroit Institute of Arts."

Judge Easterbrook Is Not A Fan Of The Prince-Cariou Decision Either (UPDATED 2X)

An interesting fair use decision in the Seventh Circuit, with echoes of Prince-Cariou and, even more so, the Shepard Fairey "Hope" poster case.  The defendants used a photo of the Mayor of Madison, Wisconsin on some t-shirts and tank tops; the photographer sued.

Judge Easterbrook begins by declining to follow the Second Circuit's approach in Prince-Cariou:

"We’re skeptical of Cariou’s approach, because asking exclusively whether something is 'transformative' not only replaces the list in §107 but also could override 17 U.S.C. §106(2), which protects derivative works. To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under §106(2).  Cariou and its predecessors in the Second Circuit do not explain how every 'transformative use' can be 'fair use' without extinguishing the author’s rights under §106(2)."

Later, he provides a very clear statement of the Cariou, get-your-hands-off-my-work position:

"[D]efendants did not need to use the copyrighted work. ... There’s no good reason why defendants should be allowed to appropriate someone else’s copyrighted efforts as the starting point in their [work], when so many non-­copyrighted alternatives (including snapshots they could have taken themselves) were available. The fair-­use privilege under §107 is not designed to protect lazy appropriators. Its goal instead is to facilitate a class of uses that would not be possible if users always had to negotiate with copyright proprietors. (Many copyright owners would block all parodies, for example, and the administrative costs of finding and obtaining consent from copyright holders would frustrate many academic uses.)"

Having said that, however, he concludes that it's "not enough to offset the fact that, by the time defendants were done, almost none of the copyrighted work remained," and therefore affirms the district court's ruling of fair use.

UPDATE:  Copyright guru Bob Clarida emails:  "The Seventh Circuit continues to pretend that transformative use is some sort of Second Circuit aberration that merely got a 'mention' in Campbell."

UPDATE 2:  Fierce Prince-Cariou critic Sergio Muñoz Sarmiento responds here.  Nicholas O'Donnell says "it is hard to see yet how long a shadow this case will case relative to Prince."

"Detroit reaches bankruptcy deal with fiercest creditor"

Story here.

Nicholas O'Donnell:  "This does not completely put an end to discussion about the role of the DIA collection, but for all intents and purposes it will likely be the last of any proposal to collateralize or sell the artwork."

More animal copyright

Remember my hypothetical about the artist who intentionally leaves a camera out for a monkey to use?

Well, Agnieszka Kurant's show up at Tanya Bonakdar Gallery includes the following work:

"The sculptural installation A.A.I. (whose title references the concept of 'artificial artificial intelligence') is the product of the collective intelligence of termites to which Kurant outsourced her art production. ... Working with entomologists in laboratories at the University of Florida, Kurant employed an entirely unaware worker society of millions of termite specimens to produce sculptural mounds. The artist supplied the termites with alternative building materials such as vividly colored sands, gold, and glitter resulting in the creation of hybrid forms hovering between nature and culture."

Does anyone doubt that Kurant holds (and deserves) the copyright in the work?

"No case in recent history more clearly illustrates the subjective nature of pricing art than the disparate expert opinions of value of the Detroit Institute of Art collection." (UPDATED)

Appraiser Cindy Charleston-Rosenberg:  Warning For Collectors.

UPDATE:  Related thoughts from Jay Grimm.

Tell me again about the public trust (one of O’Keeffe’s best-known paintings edition) (UPDATED)

The Georgia O’Keeffe Museum is selling three paintings, including "Jimson Weed (White Flower No. 1)" from 1932, which is estimated at $10 million to $15 million.

Three paintings which, having fallen under the aegis of a museum, are held in the public trust, to be accessible to present and future generations.

Three paintings whose sale will certainly cause potential future donors to ask, Why should I give this to you? What guarantee do I have that you're not going to sell it?

UPDATE:  My friend Peter Dean emails:

"I understand that the museum police have a self-created exception to their self-created rules about de-accessioning, but it does seem a bit odd for an O’Keeffe museum to sell O’Keeffe paintings with the proceeds to be placed in the museum’s acquisitions fund, which will be used to purchase  . . what? More O’Keeffe paintings?  To fill gaps?  We are going in circles.

"Even if one tries to follow the logic of allowing sales to 'refine' a collection, in this case one of the three paintings seems to have especial provenance (display in the White House), value and merit.  How does that fit with 'refinement'?"

Put a bird on it (UPDATED)

Willamette Week has a story up about how some people are bothered by the fact that the artist who created the Portlandia sculpture retains the copyright to it.  It starts off sort of suggesting that this is something out of the ordinary, though later in the story it concedes that "actually, it's not that uncommon" (I would say it's not uncommon period).  Cities can negotiate for the copyright to public art pieces if they want, but then that's going to severely limit the pool of artists interested in working with them.

UPDATE:  Michael Rushton argues that it makes more sense for the city to acquire the copyright upfront. He says that "greatly reduces the transaction and other costs of anyone wishing to create an image that includes the statue having to negotiate individually with the artist."  I'm not sure I agree.  First, it only reduces the transaction costs if the city agrees to put the copyrights in the public domain (which I've never seen happen) -- otherwise instead of having to negotiate individually with the artist, anyone wishing to use the work will have to negotiate individually with the city.  Six of one, half dozen of the other.  In addition, suppose it would cost the city $100 to get the work without the copyright, and $150 if the copyright is included.  Why should "we all" (that is, the general citizenry of the city) pay that extra $50, rather than letting people who want to sell posters and other tchotchkes depicting the work pay for it directly?  Last, as I mentioned in my initial post, as a general matter, the best artists won't even consider such an arrangement. Rushton says "if the artist under consideration won't take such a deal, find another artist who will" -- but I think he understates the severity of that aspect of the problem.

The strange, self-defeating breach of confidentiality lawsuit brought by Marguerite Hoffman took another turn last week (UPDATED)

The background is here.  A news story on the latest developments is here.  The judge threw out the jury verdict against the buyer of the work (David Martinez) on the grounds that the gallery was not his agent when it entered into the contract that contained the confidentiality clause.  (So the court viewed the sale as a two-step transaction -- Hoffman to the gallery to Martinez -- rather than a sale from Hoffman to Martinez through the gallery.)  The $500,000 verdict against the gallery remains, and that's another strange aspect of the case:  the theory is that that's the amount Hoffman gave up by selling the work privately (with a confidentiality clause) rather than at auction, as if sales at auction always do better than private sales.  One wonders why anyone would ever sell anything privately if that's the case.

UPDATE:  Art and Artifice:  "Four year of litigation and no additional millions to show for it....distressing."

Tell me again about the public trust (collection of over 30 Tiffany objects edition)

The Museum of Fine Arts, Boston is selling.

Remember, having fallen under the aegis of a museum, those objects are held in the public trust, to be accessible to present and future generations.

And potential future donors will certainly being asking, Why should I give this to you? What guarantee do I have that you're not going to sell it, just like you sold off those 30+ Tiffany objects?

That's the coin of the realm folks.  Use your common sense.

"Detroit Clears Crucial Hurdle on Bankruptcy"

A settlement with bond insurer Syncora.  Nicholas O'Donnell tweets:  "Huge. Would resolve biggest opponent to Grand Bargain."

An important decision under the Massachusetts consignment statute

Nicholas O'Donnell has all the details.

Moral rights for monkeys?

Philosopher Mike LaBossiere considers the question.

"None of these guys have legal copyright. What they’re doing is breaking federal law.”

The NYT's Randy Kennedy reports on a lawsuit over the work of Vivian Maier.

I've wondered about this from the moment I heard they were making prints from the found negatives.

"They are arguing [the] grand bargain is a de facto asset sale, that it is mispricing the asset, and that it should not benefit only one creditor."

That's Kristi Culpepper's summary of the argument so far, and it's exactly what I predicted would happen back in June:

"The grand bargain, you'll recall, 'brings together the equivalent of $816 million from national and local foundations, the DIA and the state of Michigan to spare the museum’s collection from a possible sale.'  In essence, it's a sale of the museum's collection to a new, independent nonprofit for $816 million.  But what makes that the right number?  We know that the collection is actually worth a great deal more than that.  Doesn't the existence of the grand bargain make it easier for the creditors to come in and say, "Look, everyone -- even the museum itself -- acknowledges that the art isn't really held in any sort of legally cognizable trust, it cannot simply be removed from the bankruptcy process, there has to be a price to the removal ... and this price is too low.  There are people out there who will pay twice that amount and the bankruptcy trustees have an obligation to explore those higher offers."

"Detroit is far short of the $1.7 billion it needs over the next 10 years to remove abandoned buildings, replace outdated technology and increase public safety to stem the exodus from the city."

Reuters:  Doubts over whether Detroit bankruptcy plan gets job done.

Kristi Culpepper says it's "finally starting to dawn on the press that Detroit's bankruptcy plan is not feasible."