Last month, this blog wrote about several forfeiture complaints recently filed by the United States Department of Justice seeking to recover the illicit proceeds of the 1MDB scandal.  The complaints sought, among other things, the recovery of several high value works of art that had allegedly been used to launder the misappropriated 1MDB funds.  We noted that “[t]hese forfeiture complaints serve as a reminder that high-end art transactions are often viewed by white collar criminals as an effective method of money laundering.”  And now, a recently-released Senate report shows that Congress is taking these concerns very seriously and may soon take up legislation cracking down on money laundering in the art world. 

A recently filed lawsuit by the artist Pat Lipsky highlights an often-overlooked risk for New York galleries and auction houses exhibiting works online:  running afoul of New York’s Artist’s Authorship Rights Act (“AARA”).  That law—a precursor to the federal Visual Artists Rights Act (“VARA”) of 1990—gives artists in New York the legal right to claim or disclaim authorship of a work of art, and object to its display, publication or reproduction in an altered, defaced, mutilated, or modified form that could damage the artist’s reputation.  Unlike VARA, AARA protects not just the artist’s interests in the work itself, but also any reproductions of the work, even if no physical change has been made to the original work.

An ongoing challenge for art dealers, galleries, and auction houses, is guarding against the use of art transactions as a means of laundering the proceeds of criminal activity.  Money laundering is a federal crime that involves disguising the proceeds of a crime by integrating those proceeds into the legitimate financial system, often through a series of complex and confusing transactions designed to conceal the origin, source and ownership of the funds.  When money laundering is successful, it becomes difficult to distinguish illicit proceeds from legitimate financial resources, thus permitting funds to be used by criminals without detection.  Purchasing art is one way to conceal the source of illicit funds.  Several recently filed civil forfeiture complaints from the U.S. Department of Justice highlight the ongoing need to remain vigilant about money laundering in the context of art transactions.

This blog has written before about acclaimed conceptual artist Cady Noland, who has a reputation for being particular about how her works are installed, maintained, exhibited, and sold.  As our previous posts explain, she has even, on more than one occasion, disavowed an artwork she created, prompting litigation.  Now, a federal judge has issued a ruling in Noland’s most recent legal skirmish, dismissing her attempt to bring copyright infringement claims related to the restoration of one of her artworks.

Since the outbreak of COVID-19 and the ensuing restrictions on businesses, there has been much discussion about whether, when, and how commercial tenants can break their leases or be relieved from rent-payment obligations when they are unable to conduct business on leased premises.  Last week, a Manhattan art gallery sued its landlord for declaring a default under the lease when the gallery failed to make its April rent payment, arguing that the lease was lawfully terminated on April 1 in light of the executive orders that restrict the operation of New York’s non-essential businesses.  

Abstract artist Howardena Pindell has sued several individuals and entities related to the G.R. N’Namdi Galleries, which, beginning in the late 1980s, represented her work in spaces located in Detroit, Chicago, New York, and Miami.  The case raises a host of legal issues that are, unfortunately, all too common in the realm of artist-gallery relationships.

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.

A recent trademark decision in the Southern District of New York has extended First Amendment protections generally reserved for works of art to the popular video game  “Call of Duty.”  Analyzing video games as expressive works for purposes of federal trademark claims has widespread legal implications for video game manufacturers and distributors, allowing them an important shield against allegations of trademark infringement.

Amidst the social and economic fallout of the COVID-19 pandemic, the Association of Art Museum Directors (AAMD) has temporarily revised the guidelines it imposes on its members.  Recognizing that museums (like many other art-related businesses) are struggling to stay afloat, the AAMD is easing certain restrictions on the use of trusts, donations, and gains from endowment investments, and on the use of proceeds from deaccessioning artworks.  

Netflix’s “Tiger King” has become one of the streaming service’s most popular series in the last few weeks, documenting the years-long fight between Joe Exotic (né Schreibvogel), the self-proclaimed “Tiger King,” and Carole Baskin, founder and CEO of Big Cat Rescue Corp. (“Big Cat Rescue”).  The feud led to three separate intellectual-property lawsuits that bankrupted Exotic and serve as a cautionary tale as to how competitive antics can have severe legal consequences.

A recent federal court decision provides some insight into how U.S. copyright law might apply to the unique medium of tattoo art.  

Last week, in response to the COVID-19 pandemic, the Internet Archive launched the National Emergency Library, a digital collection of 1.4 million books that can be accessed by unlimited users for free.  However, despite the decidedly noble mission, some authors and their advocates are bemoaning the potential negative consequences such a project may have on struggling authors who rely on copyright protection.  We, like many in the art world, will be paying attention to how this tension plays out, because copyright issues—regardless of genre—often have important implications for all art mediums.

​In the few short weeks since our last post in this space, the world has changed in staggering ways.  The COVID-19 pandemic has wreaked havoc on governments, businesses, economies, markets, communities, and most importantly, countless families and lives. 
 
The current crisis has also profoundly impacted the larger art world.  We do not claim to have any special powers to predict the future of the art market, particularly in the face of this unprecedented crisis. But as seasoned litigators with years of experience in art law, here are a few thoughts about what we may see in the coming months in the realm of art disputes, as the ramifications of this pandemic continue to unfold.

We’ve been following the 5Pointz case since its inception, through summary judgment, a trial, an advisory jury verdict for the plaintiffs, and a decision by federal district judge Frederic Block, who issued an award of $6.75 million (and later declined to reconsider that award).  Now, three federal appellate judges from the Second Circuit have weighed in, unanimously upholding Judge Block’s award and his reasoning in this groundbreaking case regarding graffiti art.

Last summer, Grossman LLP was pleased to announce a major victory in an important lawsuit arising out of the massive Chowaiki scandal.  And today, just several weeks after Judd Grossman argued the appeal in the First Department Appellate Division, that ruling has been upheld, paving the way for efforts to recover the Chagall painting.

This week, a federal court handed a decisive victory to the Helwaser Gallery and its owner, Antoine Helwaser, in a long-running dispute over a sculpture by famed artist Alexander Calder.  The summary judgment decision, penned by Judge P. Kevin Castel of the Southern District of New York, overwhelmingly accepted the arguments advanced by Grossman LLP on behalf of Helwaser. 

In late 2019, the House of Representatives passed, with a rare show of bipartisan support, a bill that seeks to create what some have described as a small-claims court for copyright litigants.  The bill has now been sent to the Senate; if approved by the Senate and signed by the President, it would create an alternative forum for some types of copyright claims.

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.