Grossman LLP | <strong >Further Relief For Art Authenticators: </strong ><strong >New York State Court Dismisses Second Complaint </strong ><strong >Against Agnes Martin’s Catalogue Raisonné</strong >
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  • Further Relief For Art Authenticators: New York State Court Dismisses Second Complaint Against Agnes Martin’s Catalogue Raisonné
    09/06/2019
    This summer, a New York Supreme Court judge threw out another complaint filed in a long-running legal battle between London art dealer James Mayor’s gallery and members of the Agnes Martin catalogue raisonné committee, providing further comfort for art authenticators who may face litigation in retaliation for their opinions. 

    Background and Last Year’s Dismissal

    As we explained in our last post about this case, the Agnes Martin Catalogue Raisonné LLC (the Catalogue) is a non-profit entity formed in 2012 for the purpose of compiling the catalogue raisonné of Martin’s work.  A catalogue raisonné is a definitive published compilation identifying the known works in existence by a specific artist. 

    To recap, the claims here are based on 13 different works that Mayor sold to various collectors in the years before the Catalogue existed.  Once the Catalogue was formed, the collectors each submitted their purchased pieces for inclusion in the Catalogue—but after examining the submissions, the Catalogue declined to include them.  The collectors sought redress from the Mayor Gallery, which then sued the Catalogue, seeking more than $7 million in damages as well as an injunction requiring the defendants, among other things, to provide detailed reasons for their rulings on the works.  Additional defendants include Arnold Glimcher, who is the managing member of the AMCR’s authentication committee; the director of the Agnes Martin Foundation; the owner of Pace Gallery, which represents the Martin estate; other members of the authentication committee; and the catalogue’s editor, Tiffany Bell. 
    The claims included:  (1) product disparagement; (2) tortious interference with contract; (3) tortious interference with prospective business relations; (4) negligent misrepresentation; (5) gross negligence and breach of contract; (6) breach of implied duty of good faith and fair dealing (solely with respect to plaintiff’s resubmission of one particular work, Day and Night); and (7) violation of New York’s General Business Law § 349.  In broad strokes, the plaintiff’s theory was that the defendants’ refusal to include the works in the Catalogue amounted to a declaration that they were fake, which effectively destroyed their market value. 

    And Now, Another Dismissal

    Last year, a state court dismissed all the claims (on a variety of grounds, including standing), but gave the plaintiffs an opportunity to amend their complaint.  They did so, and the parties briefed a new motion to dismiss.  Now, the court has dismissed that amended iteration of the complaint.  In her decision, Judge Andrea Masley emphasized the autonomy afforded to the Catalogue, especially in light of the submission agreement that governed the submission of these works. 

    In the Second Amended Complaint, the plaintiff narrowed its focus, dropping claims against the individual committee members and leaving as defendants only the Catalogue itself, Bell, Arnold Glimcher, and Glimcher’s son Marc (also a member of the committee and the president of Pace Gallery).  The new complaint sought to clarify certain aspects of the refunds the Gallery granted to the various collectors (which was an important issue for purposes of establishing the plaintiff’s standing to bring some of the claims).  The revisions to the complaint also sought to paint the Glimchers as suffering from alleged conflicts of interest, by alleging that they own and deal in Martin works, and have an interest in maintaining scarcity on the market, so they have benefited from the Catalogue’s exclusion of the works at issue here.

    As an initial matter, the Court summarily dismissed all claims against Bell, noting that the plaintiff had not added anything meaningful to its earlier allegations against her, which had already been rejected. 

    Moving on to the remaining claims against the Catalogue and the Glimchers, the court first dismissed the product disparagement
    claim, holding that, even assuming the plaintiffs had standing and the artworks were authentic, the simple reality is that “whether any catalogue raisonné’s inclusion or non-inclusion of an artwork has any bearing on a work’s value” is only a function of the marketplace; and it is not the court’s role “to determine what the art market should or should not credit as reliable.”  The Court also ruled that the allegations in the complaint were insufficient as to “malice,” which is an element of the claim. 
    Importantly, the plaintiff had argued that the Committee failed to consider certain information, but the Court rejected that argument, pointing out that the Catalogue’s submission contracts created no obligation to give any particular importance to any given documents submitted, nor was the Catalogue under any obligation to explain the rationale or methodology of its decisionmaking.  The Court also dismissed as speculative the plaintiffs’ allegations that the committee “ignored” certain evidence or failed to hire a handwriting expert with regard to the works’ signatures. 

    As to the allegations regarding the Glimchers’ personal financial motivations and control over the Catalogue, the Court held them to be “vague” and “speculative” because they identified no specific financial benefit tied to these exclusions.
    The tortious interference claims were likewise dismissed, with the Court noting that there were no allegations that the defendants knew that rejection of these works would force the Mayor Gallery to refund its buyers’ money or damage the Mayor Gallery’s ongoing relationships with any of its customers.

    The negligent misrepresentation claim was rejected on the grounds that a necessary element of that claim is a “special or privity-like relationship” that imposes on the defendants a duty to give plaintiff correct information.  Here, the Court ruled, there was no such relationship; for most of the works, there was no contractual relationship at all between the Mayor Gallery and the Catalogue (because the collectors, not the Gallery, had submitted the works for consideration).  And as to the one work that had been submitted by the Gallery itself, the Court held that was an arms-length commercial transaction; the Catalogue does not take on a privity-like relationship with submitters simply by virtue of its expertise on Agnes Martin artworks. 

    The Court denied the plaintiff’s request for pre-answer discovery, and referred the case to a special referee who will determine whether the plaintiff should be required to pay the defendants’ legal fees, based on the terms of the submission agreements.

    The Trend Toward Deference

    Litigation involving artists’ estates, authentication committees, and catalogues raisonné has been a hot topic in the courts and in the market in recent years.  For example, a federal court tackled similar issues in 2015 in a lawsuit against the Keith Haring Foundation.  That lawsuit alleged that the Foundation improperly denied authentication of dozens of works owned by a group of plaintiffs, thereby damaging the value of their holdings.  The District Court granted the defendants’ motion to dismiss all claims and a unanimous appellate panel subsequently upheld the trial court’s dismissal.  (In another remarkable case, a collector sued the artist himself, claiming that the artist was lying when he denied creating the work at issue; that case, too, ended in ultimate vindication for the artist, but only after a full bench trial.)  These cases come at a time when several prominent artists’ foundations have disbanded their authentication boards, in part as a result of the expensive litigation that sometimes follows their decisions.  Concerned about the potential chilling effect of such litigation and the market’s need for confident authentication opinions, the New York legislature has considered various legislative proposals that would provide authenticators with some protections against this type of lawsuit, but has not officially enacted legislation in this area. 

    This most recent ruling in favor of the Agnes Martin Catalogue Raisonné adds strength to an ongoing legal trend toward deference to the art market in decisions about authentication.  But it’s important to note that the decision here, by a single trial-level state court, does not represent a blanket ruling that these types of claims can never be meritorious.  And, importantly, the Catalogue here had to do its part to protect itself preemptively; several of the claims were dismissed at least in part on the basis of protections enshrined in the Catalogue’s submission agreement, which gave the Catalogue sole discretion to review artworks submitted for inclusion to the Catalogue as it deems appropriate.  Further, the form agreement permitted the Catalogue to issue decisions without any accompanying explanation and without providing the submitting party any opportunity to supplement their submissions or rebut the Catalogue’s decision.  Relatedly, the Catalogue may be able to recoup its legal expenses incurred in defending itself—but only because of the submission agreement’s fee-shifting provisions.  Parties interested in art authentication issues should not underestimate the importance of the “fine print” on these form agreements, which can have a significant impact on parties’ rights down the road if a dispute arises.
     
    We note that this may not be the final word on the Mayor Gallery’s claims; a notice of appeal was filed in early August.  We’ll be following the appeal with interest—but in the meantime, the case provides some important insight into the long-running and crucial debate about art authenticator liability.