Shareholders filed a class-action suit against online marketplace Etsy last week for allegedly failing to disclose in its initial public offering documents that millions of items for sale on the site were either counterfeit or potentially infringing trademarks and copyrights.  Etsy is a peer-to-peer e-commence website that allows artists to create their own stores and sell their creations for a small listing fee and a percentage of their sales revenue.  It provides an important platform for artisans without the following or the means to market and sell their works independently.

Earlier this year, this blog covered a case examining the constitutionality of California Civil Code § 986, known as the California Resale Royalties Act (CRRA).  This week, an en banc panel of the Ninth Circuit Court of Appeals struck down part of the CRRA as unconstitutional but severed the objectionable portions from the rest of the statutory regime.  The ruling has potentially complex legal and economic implications for those who buy, sell, and trade in high-end art—and places the spotlight on current efforts in Congress to enact a nationwide resale royalty law.

Beginning in the 1990s, art collector Richard McKenzie, Jr. frequently turned to Manhattan’s Forum Gallery and its director Robert Fishko for assistance in purchasing artwork, both for McKenzie’s own collection and for the Seven Bridges Foundation, which McKenzie founded to support emerging artists.  But when McKenzie’s and Fishko’s longstanding relationship went sour and accusations began flying, the result was years of public acrimony and protracted litigation in two different states.  The basic message to have emerged from this bitter legal battle is that clear contracting at the outset any art-related course of dealing often will head off problems before they arise.

For much of the last decade, the art world has been riveted by the story of infamous art dealer Larry Salander.  Around 2007, civil suits and allegations of fraud began to dog the prominent dealer, ultimately leading to Salander’s bankruptcy and the shuttering of the once-great Salander-O’Reilly Galleries.  By 2009, a lengthy criminal investigation revealed that Salander had been bilking customers, artists, and investors for years.  Today, Salander assets are still being sold off to satisfy creditors, and Salander himself is in prison after pleading guilty to charges including grand larceny.  But those who did business with him are still trying to sort out the tangled mess he left behind.   This month, an appeals court has weighed in on one of the cases that arose out of Salander’s complex double-dealing—or in this case, triple-dealing.  This case is yet another example of a recent trend of courts closely scrutinizing buyers’ pre-sale due diligence.

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.

Last week, the Trustees of the Sothern Trust, an entity tasked with administering the estate of Hollywood legend Elizabeth Taylor, sued auction giant Christie’s, Inc., bringing a series of claims that delve into the important, complex—and sometimes even conflicting—duties owed by an auction house to its consignors and customers.

A recent proposal by President Obama regarding a section of the tax code may have important consequences for art investors.

Last week, an en banc panel of the Ninth Circuit Court of Appeals heard oral arguments in a case examining the constitutionality of California Civil Code § 986, known as the California Resale Royalties Act.  The case has potentially important implications for those collecting or dealing in fine art.

In the fall of 2012, the MacAndrews & Forbes Group, LLC and MAFG Art Fund, LLC, two holding companies controlled by business mogul Ronald Perelman sued legendary art dealer Larry Gagosian and his Gagosian Gallery over a complex series of transactions involving works by, among others, Cy Twombly and Jeff Koons.  Last week, the case ended with a defeat for Perelman—and a reminder to art buyers that courts are increasingly scrutinizing their pre-sale diligence almost as closely at times as the dealer’s alleged wrongdoing.

This blog has previously covered the strange ongoing saga of the “Gurlitt Collection”—a spectacular trove of well over 1,000 artworks amassed by German art dealer, Hildebrand Gurlitt, during the Nazi era.  Gurlitt was one of only a few dealers authorized by Nazi leaders to trade in “degenerate” works of art that had been confiscated or looted by the Nazis.  After World War II, the Gurlitt family claimed that their artworks had been destroyed during the bombing of the German city of Dresden.

During the first week of November, two works by Egon Schiele sold at auction—one at Christie’s and one at Sotheby’s. This blog post examines the troubled stories behind these works, the way the two sales unfolded, and what they can teach us about the current state of art restitution efforts.

In mid-September, the U.S. Court of Appeals for the Fifth Circuit issued a decision with important tax and estate-planning ramifications for art collectors.  This case is being hailed as a “victory” for collectors in that it supports the general availability of fractional-ownership discounts as a viable tool in the arsenal when it comes to tax and estate planning regarding art assets.

In the last few months, three different lawsuits have been filed that highlight some of the legal complications involved in seeking, offering, or relying upon authentication of works of art.  We intend to follow closely each of these cases, and other important legal developments concerning art authentication.

Italy is threatening legal action after the British government refused to return 700 ancient artifacts that were seized from disgraced London art dealer Robin Symes. Maurizio Fiorilli, the Italian state legal counsel overseeing the case, claims that the disputed objects, largely Etruscan sculptures, jewelry, and vases, were excavated illegally and then sold illicitly.

Earlier this week, the New York Court of Appeals (the state’s highest court) issued a much-anticipated decision upholding the auction industry’s longstanding practice of allowing sellers to remain anonymous. Given the importance of auction houses to the art market, and the importance of consignor anonymity to that market, this decision will likely be greeted with relief by many in the art world.

On October 16, California-based artist and illustrator Lisa Congdon posted an entry on her blog entitled “My Art Was Stolen For Profit (and How You Can Help).”  In it, she laid out her claim that wholesale company Cody Foster & Co., which sells ornaments and other home-décor items to retailers around the world, had copied some of her artwork to make a set of holiday ornaments, and then marketed the ornaments for sale—without permission by or compensation to Congdon.  This matter highlights critical issues for copyright holders, would-be copyright infringers, and merchants who sell potentially infringing works.

On July 18, the city of Detroit, Michigan filed for bankruptcy.  Since the mid-1950s, only about 60 municipalities have filed under Chapter 9, the bankruptcy proceeding used by municipalities—and of those, Detroit’s is by far the largest municipal bankruptcy filing (in terms of debt) in American history.  The exact amount the city owes is unclear, but estimates range from $18 billion to $20 billion.  The bankruptcy process will be rife with complex issues, including whether the city is truly eligible for bankruptcy, whether public employees and retirees will need to accept a reduction in their expected employment and retirement benefits, and how best to move Detroit forward in a way that will stimulate growth and long-term stability.

The Southern District of New York recently dismissed a lawsuit by plaintiff Jonathan Sobel concerning his collection of eight photographs by William Eggleston.  Sobel v. Eggleston et al., 12-CV-02551 (S.D.N.Y.).  The case raises a cautionary flag for art collectors who are interested in purchasing photographs and other works that can be produced in “multiples.”

In mid-March, the Mexican government demanded that Sotheby’s withdraw fifty-one Pre-Columbian Mexican artifacts from an upcoming sale, stating that they are protected historical pieces that constitute Mexican national property.  Peru, Guatemala, and Costa Rica also voiced their objections to the sale, bringing the total number of contested lots to roughly one third of the total 313 lots.