In late December, a New York state court granted summary judgment in a dispute over an art deal that fell apart.  The decision is likely to be of interest to many dealers and collectors, as it addresses important contract and agency law issues, against a backdrop of dynamics that are not uncommon in art transactions. 

On January 1, a new cache of literature, music and art became part of the public domain as another year of copyright protection expired.  Until 1998, most works created before 1978 were protected under U.S. copyright law for 75 years after creation.  But in 1998, with the passage of the Sonny Bono Copyright Extension Act, copyright protection of these older works was extended an additional 20 years, meaning that no additional works would again join the public domain until 2019.  Now, at the start of each year, creative works produced more than 95 years prior become available for public use and enjoyment.

As the new year begins, we write with some brief updates on two significant stories we’ve been following for some time.  One involves the ongoing issues arising out of the discovery of several forged Old Master works on the European art market.  The other involves a bitter, globe-spanning feud between a mega-collector and his onetime dealer.  And both of these complex situations will continue to reverberate throughout the art ecosystem.

The statue, titled Fearless Girl, created a sensation when it was first unveiled on International Women’s Day in 2017 in New York City.  It depicts a small girl standing defiantly, hands on hips; her placement at Bowling Green in lower Manhattan created the appearance that she was staring down the famous Wall Street charging bull statue.  The city originally permitted the statue to be installed at Bowling Green for a month, but then allowed the statue to be moved to a longer-term location outside the New York Stock Exchange.  State Street Global Advisors, a financial asset management company, says it commissioned and owns the statue, and has made her a prominent symbol of what State Street says is its ongoing commitment to ensuring gender diversity on corporate boards.  But State Street is now embroiled in litigation with the artist who created the statue, Kristen Visbal.  The legal questions involved in the case serve as a case study about the complex issues that can arise with commissioned and public art projects.

This fall has seen developments in two cases we’ve been following.  Each case raises unique substantive legal issues, but the recent developments also serve to highlight the costs and complexity of litigating art disputes in court.

​The scandal surrounding troubled art dealer Inigo Philbrick is heating up. A British judge has issued an order to freeze millions of dollars worth of his assets in the wake of several lawsuits alleging that he is improperly holding or has sold major artworks that don’t belong to him.

The artwork at the center of a lawsuit against dealer Inigo Philbrick now has new claims that complicate a story that includes accusations of a fake auction guarantee. In a lawsuit filed last week with the Supreme Court of New York, Guzzini Properties, Ltd., a company that collects art, claimed ownership of the work against competing claims from Aleksandar Pesko, whose company is Satfinance Investment Ltd. and Germany’s Fine Art Partners. 

A trial is now imminent in a years-long, trans-Atlantic dispute over who is the rightful owner of a massive diamond.  The case, Angiolillo v. Christie’s et al. (Case No. 650871/2015, N.Y. Co.) is of interest to the art world because it implicates some of the same themes that often crop up in art title cases—questions ranging from whether a claimant has unreasonably delayed in asserting its rights, to how much an auction house is required to do to verify the title of an item it plans to auction.

A legal battle that has spanned decades and continents has finally been resolved in a California federal court.  Last month, the Northern District of California granted partial summary judgment in favor of Alan Wofsy on copyright-infringement claims stemming from his use of certain copyrighted photographs in his comprehensive reference catalogue of Picasso’s work, holding that Wofsy’s project constitutes “fair use.”

We’ve written before about the ongoing conversation—not just in the art world, but in the courts—regarding how American copyright law should apply to the unique art form of graffiti.  In this post, we review some recent developments that may add to that conversation.
 

We wrote last year about a suit filed in New York state court (see No. 651889/2018, N.Y. Co.) by a disgruntled art collector seeking redress for the problems he has allegedly encountered in trying to purchase three sculptures by famed artist Jeff Koons.  Last month, a court ruled that the collector’s claims can proceed to the next phase of litigation.

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.

An arbitrator recently ordered a sister company of auction giant Christie’s to pay nearly $1.8 million in damages to another auction house, Heritage Auctions, based on Heritage’s claims related to alleged theft of its auction data.  The case serves as a reminder that art businesses depend on information, and may need to consider how they should collect, protect, and appropriately use valuable confidential data.

More than a year has passed since New York dealer Ezra Chowaiki pled guilty to federal charges related to his misconduct in cheating numerous clients in fraudulent art deals.  But the legal fallout continues.  Many of his victims and business associates have asserted claims (for money or art) in connection with the bankruptcy of his gallery, Chowaiki & Co., as well as in federal forfeiture proceedings that allow claimants to assert their rights to artworks ordered forfeited to the government as part of Chowaiki’s guilty plea.

Earlier this month, a federal judge in New York dismissed a photographer’s copyright infringement claims against the Andy Warhol Foundation, after determining that a series of Warhol artworks based on an image taken by the photographer are protected as fair use. The ruling represents another entry in the ever-growing log of court decisions grappling with the sometimes-slippery concept of transformativeness in copyright law.

For years now, we have followed the bitter dispute between Dmitry Rybolovlev, a Russian billionaire, and his onetime art dealer, Swiss businessman Yves Bouvier.   Now, a new ruling permits Rybolovlev-affiliated entities to move forward with claims that auction house Sotheby’s facilitated Bouvier’s purported fraud.  (The news comes on the heels of last month’s announcement that Sotheby’s is being acquired by French-Israeli businessman Patrick Drahi, in a deal that will take the auction house off the publicly-traded stock market and put it back in private hands.)

A three-judge panel for the Second Circuit Court of Appeals has agreed with the lower court’s decision that the Metropolitan Museum of Art may keep a “rose period” Picasso painting despite claims that it was sold by a German-Jewish family to escape Nazi persecution in Italy during World War II.  See Zuckerman v. The Metropolitan Museum of Art, Case No. 18‐634, -- F.3d – (2d Cir., June 26, 2019).

Last week, an artist sued a Manhattan café and gallery in connection with a dispute over the treatment of and sales of her artworks.  The lawsuit highlights some specific aspects of New York law that may provide artists with legal protections tailored to the unique, and sometimes difficult, relationship between artists and the galleries who sell their work. 
 

This blog has for years followed the Knoedler scandal, in which a venerable New York gallery closed in disgrace in 2011 following revelations that it had sold dozens of artworks—about $60 million worth of paintings purported to be by Rothko, Pollock, Motherwell, and other major Abstract Expressionists—that turned out to be forgeries.  And the fallout from Knoedler’s implosion is ongoing even now; just this month, a federal judge issued a decision with important implications for the upcoming trials in two Knoedler cases.  The ruling also is of general interest to anyone in the art business because it emphasizes the importance of clear business procedures, corporate oversight and legal formalities when it comes to closely held business entities.