Grossman LLP Wins Preliminary Skirmish In Federal Case Against NBCUniversal Executive
This week, Grossman LLP notched an initial victory on behalf of its client, art advisor Susan Seidel, who is in litigation with art collector and Universal Studios executive Ronald Meyer over a 2001 art deal. The Manhattan-based team, aided by its California local counsel, persuaded a federal judge that the lawsuit should proceed in New York, not in Meyer’s chosen forum of California. The ruling is a reminder that the question of where an art dispute should be litigated can be an important one, and that a plaintiff’s preference may not always prevail.
Meyer’s claims against Ms. Seidel, a longtime Manhattan-based art advisor, arise out of a 2001 transaction in which Meyer acquired an artwork believed to be by famed artist Mark Rothko. He alleges that he learned through another art advisor, Jaime Frankfurt, that Ms. Seidel could connect Meyer with a Rothko work being offered for sale. He subsequently bought the artwork for nearly $1 million. He kept it for years until, in early 2019, he learned—ostensibly for the first time—that the artwork was in fact created by the same artist involved in the massive Knoedler forgery scandal (see here, here, here, here, and here for background). That scandal involved paintings that managed to fool dozens of collectors and experts before the New York-based forgery ring was uncovered and the once-venerable Knoedler Gallery (which sold most, but not all, of the fake works) closed in disgrace. The works purported to be by a handful of master abstract expressionists, including Robert Motherwell, Jackson Pollock—and Mark Rothko.
Meyer, a Los Angeles resident, initially sued Ms. Seidel in California state court in late 2019. He also named Mr. Frankfurt as a defendant. He claims, among other things, that Ms. Seidel and Mr. Frankfurt should have known in 2001 that the work was fake.
Grossman LLP removed the case to federal court and then filed a motion on behalf of Ms. Seidel, asking the court to transfer the case to the Southern District of New York, where Ms. Seidel resides and works. Judge Dolly M. Gee agreed that the case should proceed in New York, not California, for several reasons. First, she observed that the 2001 deal at the center of this case had been negotiated in part in an in-person viewing and meeting in New York, and then finalized via correspondence and telephone, and that Ms. Seidel has minimal contact with California as a general matter. The dispute also has other important connections to New York, including that the previous owner of the artwork, from whom Ms. Seidel obtained information about the work, was in New York and those dealings took place here; that the forgery ring linked to the work was based in New York; and that in fact, Meyer admittedly had, as recently as 2019, sought to auction the work in New York. Further, she concluded that Seidel and Frankfurt, as small-business owners based in New York, would incur a significant burden if forced to litigate this case across the country in California, while Meyer is an executive at a multinational corporation headquartered in New York and admitted he would not incur severe hardship if he had to litigate the case in New York. The court also placed weight on the fact that there are other witnesses with relevant and material evidence who are based in or near New York and could be subpoenaed for a trial there, but likely could not be compelled to testify in California. Finally, the judge also noted that, because the Southern District of New York has already been the forum for nearly a dozen cases related to the same forgery ring implicated in this artwork, that court has a stronger public interest in adjudicating this dispute as well.
The Grossman LLP team is pleased that our client will be able to litigate this case in the forum that makes the most sense, not only logistically for her and others involved in the suit, but also based on New York’s clear connection to the facts underlying the dispute. We also hope that the ruling will provide helpful guidance to other litigants seeking an understanding of the many factors that may be relevant to a request to transfer a case, including questions regarding where key events occurred, where the parties and witnesses are located, and why a transfer might better serve the interests of justice.
Art Law Blog