This blog has covered several stories about authentication disputes, including a post about the case of Bilinski v. Keith Haring Foundation, Inc., a federal lawsuit filed last year.  The plaintiffs there, collectors of works they believe to be by famed artist Keith Haring, sued the artist’s foundation for improperly denying authentication.  A federal judge last week dismissed the plaintiffs’ claims, in a decision that explores some aspects of the complex role played by artist foundations and authentication boards.

The Claims Against the Haring Foundation

To recap, the Haring Foundation was founded by the artist before his death in 1990 with the mission of fostering an understanding of Haring’s art.  Upon his death, the artist bequeathed to the Foundation many works, including all copyrights and trademarks. Plaintiffs are collectors who owned works they believed to be genuine Haring pieces, with provenance traceable back to the artist’s close friends. According to the complaint, while the Foundation has not published an official catalogue raisonné of Haring’s works, the Foundation’s Authentication Committee would accept applications for review of artworks, and would issue an opinion on whether a given work was authentic.  The complaint alleges that the Committee “made its decisions in secret, with little or no explanation, and often without ever physically inspecting the works.”  The Haring Foundation dissolved its Authentication Committee in September 2012, a move the plaintiffs painted as an attempt to evade liability for “improper denials of authentic Haring artworks.”

In 2007 the plaintiffs submitted their works to the Committee, which denied authentication.  The plaintiffs subsequently provided additional provenance information, but to no avail.  In 2013, many of the plaintiffs’ works were included in an art show called “Haring Miami,” prompting the Foundation to sue the show’s organizers for an injunction and issue a press release publicly declaring the pieces to be fakes. In February 2014, the plaintiffs sued the Foundation, its individual members, and Haring’s estate.  They argued that Haring works are, as a practical matter, unsaleable at auction without the Foundation’s stamp of approval, and that the value of their works has been drastically diminished by the Foundation’s actions.  They also claimed that the Committee’s actions effectively improperly inflate the market value of Haring works that have been authenticated by the Committee, including those owned by the Foundation.

The Court’s Opinion

After more than a year of litigation (see Docket No. 14-cv-1085 (S.D.N.Y.)), during which the plaintiffs were joined by another group of plaintiffs with similar claims, and after multiple amendments to the complaint, Judge Cote of the Southern District of New York granted the defendants’ motion to dismiss all pending claims.

The court, however, held that the antitrust allegations, claiming that the defendants and their “allies” in the art market had essentially created a boycott excluding plaintiffs from the market, and inflating the prices of authenticated Haring works, were too broad.  The court also opined that the plaintiffs had not sufficiently explained what benefit auction houses and dealers might gain from participating in a boycott of works they believe to be authentic.  The court further ruled that the Foundation did not possess monopoly power over the market for Haring art, particularly given that the Foundation has now stopped offering authentications.  The court then summarily dismissed the plaintiffs’ Lanham Act false-advertising claim, which was based on the Foundation’s press release and lawsuit following the Miami show; the court held that those statements were not commercial in nature, because there was insufficient connection between the statements and any proposed commercial transaction.

Also arising out of the Miami show was a claim for tortious interference with a business relationship; specifically, one plaintiff alleged that the Foundation’s press release had caused a potential buyer to cancel a contemplated purchase of the plaintiff’s Haring piece.  The court dismissed the claim since there was no suggestion that the Foundation knew of the plaintiff’s business relationship with the prospective buyer, where such knowledge is a necessary element of the claim.  Finally, the court ruled that the plaintiffs’ claims of unjust enrichment were too indirect, noting that although the complaint alleges that defendants’ actions increased the value of their own works, this was only indirectly at plaintiffs’ expense.

Ongoing Legal Issues with Authentication

This suit highlights the complexity of the legal issues and relationships involved in authenticating artworks.  The plaintiffs in this case allege that they provided thorough evidence of the authenticity of their works, including sworn statements regarding provenance, opinions from experts, and even forensic analysis.  Yet plaintiffs reported that representatives from prominent institutions such as the Gagosian Gallery and auction houses Sotheby’s and Guernsey’s believed the works were authentic but nevertheless were reluctant to handle them, given the Foundation’s decision.

The public and the art market arguably benefit when experts can opine on the authenticity of a work without fear that they will face litigation or liability based on their decisions.  Several prominent artists’ foundations have, like the Haring Foundation, disbanded their authentication boards, largely to avoid expensive disputes over their decisions; this state of affairs leaves some buyers and sellers with nowhere to turn for a definitive answer about a work’s authenticity.  New York state legislators have considered various legislative options for providing authenticators with some protections, but no perfect solution has emerged to balance the competing interests at stake.  In the wake of plaintiffs’ defeat, collectors should be aware that in many cases, their best option for avoiding authentication problems is understanding what avenues exist for seeking an authentication opinion about a given work, and consulting appropriate authorities before consummating a sale.  Parties in art transactions may also wish to seek legal advice on how to proactively manage the risk of authentication issues, for example by negotiating a sale contract with appropriate representations and warranties about the work’s provenance and authenticity.