2024 was another exceptional year for Grossman LLP, as we advanced our decade-plus legacy of trailblazing work in the field of art law, successfully representing our clients in a variety of complex litigation and transactional matters.

On December 3, 2024, a Texas federal court ordered the government to temporarily cease enforcement of the Corporate Transparency Act (CTA) and its reporting regulations, requiring companies to disclose details about their principals.  

In a special segment of The Baer Faxt Live from Art Basel Miami Beach, Judd Grossman recorded live with Josh Baer from the Miami Beach Convention Center on the fair's VIP opening day.

Last month, a New York court dismissed a lawsuit by the former president of the board of directors of the Helen Frankenthaler Foundation, in a case focused on allegations of misconduct and self-dealing by the Foundation’s board members.  The court did not substantively analyze the merits of the plaintiff’s claims, but the case highlights the importance of clear and thoughtful governance procedures and standards for art-related not-for-profit organizations.

A recent dispute over a one-of-a-kind Wu-Tang Clan album highlights some of the potential challenges inherent in ownership of digital art.  The suit was initiated by PleasrDAO, an international entity that collects important works of digital media, against disgraced former American pharmaceutical executive Martin Shkreli.

In a move that may cause ripples in the competitive art world, the Federal Trade Commission recently issued a final rule that, if it goes into effect as planned later this year, will ban most forms of non-compete agreements between employers and employees. 

 

This past year was an exciting one for Grossman LLP, as we continue to build on more than a decade of groundbreaking litigation in the art-law arena.

Grossman LLP associate Maria Angela Brusco recently spoke on a panel at the Art Law Institute of the New York County Lawyers’ Association (NYCLA), focusing on the legal implications of collectors’ promises to make gifts of artworks in the future.  Below, she summarizes some key insights from the event.

In June of 2022, on the shore of Lake Michigan, a fire destroyed the lake house of hedge fund founder Matthew Halbower and his wife Julie.  Now, in a lawsuit pending in federal court, the family’s trust seeks an insurance payout for several valuable artworks destroyed in the fire, including four Monet paintings.  The case highlights the complexity of insurance disputes involving fine art.

The evolution and rapid advancement of artificial intelligence (“AI”) is transforming many industries, but courts are just starting to examine how AI interacts with existing copyright law governing artistic works.  In a groundbreaking new case handed down this summer, a federal court has now ruled that an artwork wholly generated by AI is ineligible for copyright protection.

Two copyright lawsuits against appropriation artist Richard Prince arising out of his controversial “New Portraits” artworks have cleared a major hurdle—summary judgment—and appear to be headed for trial.  In a decision issued in May (just days before the Supreme Court issued its Warhol ruling), a federal judge rejected Prince’s fair use defense.

Earlier this year, we wrote about some of the NFT-related litigation working its way through courts around the country.  Recently, one of those cases culminated in a substantial win for Yuga Labs, creator of the famous “Bored Ape Yacht Club” NFT collection. 

The Second Circuit recently affirmed the dismissal of a fraud claim by a buyer who bought an artwork in 1985 and had it appraised on several occasions beginning in 2007, but did not sue until after the work was deemed inauthentic in 2018.  The case focused on the work’s exclusion from the artist’s catalogue raisonné; the appraisals all expressly noted that the work’s authenticity was only “assumed” because the painting was not in the artist’s catalogue.  The court reasoned that in light of such a disclaimer, a reasonable person should have further investigated its authenticity, and therefore the fraud claim’s two-year statute of limitations began to run at that time. 

For years now, we’ve been following the legal fallout resulting from a rancorous dispute between Russian billionaire Dmitry Rybolovlev and his onetime art dealer, Swiss businessman Yves Bouvier.  The feud has resulted in legal proceedings in multiple countries, and other art world players have become entangled in the fray as well.  In one of those spinoff disputes, Rybolovlev has sued auction house Sotheby’s, alleging that it aided Bouvier’s machinations.  Earlier this month, a federal court rejected a number of those claims, but other claims will proceed to trial unless the parties can reach a settlement in an upcoming mediation.

On February 8, just two days after we published our last post, the jury in the MetaBirkins case reached a verdict, awarding Hermès $133,000 in damages in connection with the fashion house’s claims of trademark infringement, dilution, and cybersquatting. 

Almost two years ago, we shared some thoughts about the NFT market, how it might interact with the traditional art market, and what questions and issues it might raise as it develops.  Now, we are watching with interest as an early wave of NFT-related litigation begins to make its way through the courts.  In this update, we explore some of the legal disputes that are applying established law to this new context, and raising novel questions for courts to decide.

In the last few years, aided by the rise of non-fungible tokens (“NFTs”), digital art has become an increasingly important part of the art market.  Now a new frontier seems to be opening up: art that is created at least in part using artificial intelligence (“AI”) technology.  Indeed, just as NFTs have crossed into the traditional art market, artists who are creating using AI are likewise being welcomed onto the art scene (for example, by gaining gallery representation).  As this trend unfolds, we art lawyers find ourselves wondering how AI art will interact with our current copyright system. 

Art is increasingly viewed as an investment asset, and in some ways, it behaves like one.  But any investment in art also has to take into account the real risk of physical damage and the legal headaches that can arise out of such damage—as one recent lawsuit reminds us.

Last week, the Supreme Court heard oral argument in the major copyright case of Warhol Foundation v. Goldsmith, which could provide a significant opinion about the "fair use" defense to copyright infringement, with wide-ranging potential implications for the art world—especially appropriation art, photography, and copyright licensing and management.  The oral arguments, however, underscore both the magnitude of the questions posed, and the odd aspects of the case’s path to the Supreme Court, which arguably complicate the Court’s ability to grapple with the already-complex issues it presents. 

Last month, the Grossman team prevailed in defending a prominent art dealer’s complaint against a gallery’s motion to dismiss.