Grossman LLP | Trial Judge Refuses to Reconsider Massive Award For Graffiti Artists in VARA Case Regarding Destruction of 5Pointz Works
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  • Trial Judge Refuses to Reconsider Massive Award For Graffiti Artists in VARA Case Regarding Destruction of 5Pointz Works
    06/19/2018
    We’ve followed the 5Pointz case since the beginning, through an interim summary judgment, a trial, and an advisory jury verdict for the graffiti artists.  Earlier this year, federal district judge Frederic Block issued an opinion ordering the defendants to pay significant damages for their violations of the Visual Artists Rights Act, 17 U.S.C. § 106A (also known as VARA).  Now, Judge Block has denied the defendants’ request to reconsider his ruling, instead reaffirming and bolstering that earlier decision in advance of the defendants’ appeal to the Second Circuit.  

    Case History

    Our previous posts contain more detail, but to recap, the case involves a property in Queens known as 5Pointz, which at one time served as a remarkable repository of a huge amount of graffiti art.  Beginning in the early 1990s, the owner, real estate developer Gerald Wolkoff, allowed artists to adorn the site’s old industrial buildings with graffiti; over the years, 5Pointz became an internationally-renowned graffiti collection that attracted tourists and fans, enhanced property values, and housed a vibrant art community, complete with a volunteer “curator” and meaningful selection criteria and community standards.   

    But in 2013, the owners (Wolkoff and related entities) announced that the 5Pointz buildings would be demolished to make way for a residential complex.  In response, the curator and a group of graffiti artists who had created works on the site filed a lawsuit in federal court, seeking to prevent the destruction of the artworks, invoking VARA, which provides, among other things, that artists have a right, under certain circumstances, to prevent the destruction of “work[s] of recognized stature.”  

    At the outset, Judge Block refused to issue a preliminary injunction to preserve the works while the lawsuit proceeded, concluding that the artists had not shown “irreparable harm” as required to warrant injunctive relief.  In November 2013, just days after the initial ruling, Wolkoff ordered the site whitewashed.  In his subsequent opinion at that early phase of the case, Judge Block indicated that, while he would not interfere with the owners’ ability to develop the property, the owners might nevertheless face money damages.  See Cohen v. G & M Realty L.P., 988 F. Supp. 2d 212, 214 (E.D.N.Y. 2013).  From then on, the artist plaintiffs, having failed to stop the works’ destruction, instead sought compensation under VARA, in part based on allegations that, among other things, the whitewashing was “gratuitous and unnecessary” and had denied them the chance to remove, preserve, or document their work.  (The buildings themselves were not demolished until around August 2014.)  On summary judgment, the court ruled that the case should proceed to trial on the plaintiffs’ VARA claims.  See Cohen v. G & M Realty L.P., Case Nos. 13-CV-05612 & 15-CV-3230, 2017 WL 1208416 (E.D.N.Y. Mar. 31, 2017).    

    Last year, after a three-week trial, a jury found that the artists’ rights under VARA had been violated as to 36 of the 49 works of art at issue; that Wolkoff had acted wilfully; and that the artists should be compensated accordingly.  And while the jury’s decision was only advisory and not binding on the court, Judge Block agreed with the jury.   In a February 2018 ruling, he held that Wolkoff had willfully violated plaintiffs’ VARA rights with respect to the 36 paintings, and further concluded that “liability and willfulness should attach to an additional nine works.”  Due to what he called Wolkoff’s “willful conduct,” he awarded the artists of the 45 works “the maximum statutory damages under VARA”— a total of $6.75 million.

    Last Week’s Ruling

    At the time, Wolkoff indicated his intent to appeal the decision to the Second Circuit Court of Appeals.  But first, his lawyers asked the trial court for a new trial, arguing that the works were not of “recognized stature” and that the judge’s finding of willfulness and its damages award were unwarranted.  

    Last week, in a lengthy written decision, Judge Block rebuffed those arguments.

    “Recognized Stature”

    On the subject of “recognized stature,” the court clarified that the art at issue, first, must be viewed as “meritorious,” and second, its stature must be recognized “by art experts, other members of the artistic community, or by some cross-section of society.”  The court issued an exhaustive 50+-page Appendix in which it explained, work by work, the basis for its conclusion that the 45 works had such stature.  The appendix reviews documents and testimony from witnesses and experts, outlines each artist’s credentials and career recognition, and cites evidence of the recognition of each work’s stature by experts, the art community, and society.  He further explained that, although an artwork at least “arguably” has to be recognized prior to destruction in order to be protected by VARA, that does not preclude an expert from analyzing the works’ merit after their destruction, as a way to explain why the works achieved the recognition they did.  The court also took notice of the types of evidence that plaintiffs’ expert had relied upon in opining that each work had achieved recognized stature; such evidence included “online videos, documentary footage, social media coverage, letters from art professors around the country, letters and e-mails from visitors to 5Pointz, and course syllabi.” 

    The court also emphasized that the work of 5Pointz’s longtime, Wolkoff-appointed curator provided further evidence of all of the 45 works’ recognized stature; this was not a mere “allocation of wall space,” as defendants argued, but a selection of the most important works at the site by one of the world’s top aerosol artists, someone “uniquely qualified” to judge the stature of the works of art at issue.  This is interesting because it’s one more way way in which Wolkoff seems to have, in the court’s view, hoisted himself by his own petard, as the saying goes; his selection of an accomplished artist to curate the site inadvertently strengthened the artists’ claims of recognized stature.  (Further, the court clearly found the curator, who was also one of the artist-plaintiffs, to be highly credible at trial.)  Relatedly, the court rejected defendants’ contention that the works on the interior walls of 5Pointz could not have been of recognized stature because they were not open to the public; the court cited evidence at trial that the site’s curator received and granted many requests for tours of these spaces, including from scholars and teachers.  The court was also unconvinced by the defendants’ argument that some of the works had enjoyed longevity and visibility simply because they were at very high places on the walls, not because of their quality; but the court was swayed by evidence that “height and merit were fundamentally intertwined at 5Pointz,” with the curator purposely choosing higher locations for longstanding, high-quality works by the best artists.

    Willfulness

    The bulk of the opinion itself, however, focuses on willfulness, and emphasizes Judge Block’s conviction that Wolkoff’s willfulness was demonstrated by his whitewashing of the works as soon as the preliminary injunction was denied, instead of destroying the works only when the buildings were actually demolished.  The judge noted that Wolkoff’s counsel should have explained to him that preliminary injunction decisions are, by nature, provisional and not a final ruling on the merits of the case, and a court’s legal conclusions may evolve as the case continues.  The possibility of money damages was always present in the case, and Wolkoff’s precipitous actions warranted the hefty award.

    But equally important to Judge Block’s decision—what really “stuck in my craw,” in his words—was his conclusion that Wolkoff had “misled” the court at the preliminary injunction hearing.  Specifically, Wolkoff had represented that the entire development project would be jeopardized if demolition work could not begin imminently; but in reality, he had not even applied for a demolition permit at that time.  Last week’s decision cites extensively to the preliminary injunction hearing and the parties’ submissions from the fall of 2013, noting that at the time, the defendants told the court that demolition efforts at 5Pointz had to begin by December 2013 or else defendants might lose hundreds of millions of dollars in tax credits and benefits—and that loss might in fact doom the entire project.  Yet, at the trial, Wolkoff admitted that he had not even obtained a demolition permit at the time and did not do so until March 2014.  In last week’s ruling, Judge Block goes so far as to say that he was “appalled at this conscious material misrepresentation” and that, had he known the truth, he would have granted the injunction until the buildings were demolished.  The court also took Wolkoff to task for his “incredible” trial testimony that he whitewashed the art without warning (notwithstanding that, as Wolkoff was aware, VARA provided that the artists should have a 90-day notice period to give them a chance to preserve their work) because he feared the artists might take extreme measures and get arrested, and because he believed it would be better for the artists.  Rather, Judge Block reiterated his post-trial conclusion that Wolkoff’s hurried whitewashing of the art was a willful “act of pure pique and revenge.”

    The court also rejected the argument that Wolkoff could not have acted willfully unless he violated “clearly established law,” which could not have been true here, given this case’s novel legal questions under VARA.  The court held that that is not the standard for willfulness by a copyright defendant.  Rather, it was sufficient that Wolkoff acted with “careless disregard” for the plaintiffs’ VARA rights.   

    What’s Next

    The case will now likely head for the Second Circuit, where the Wolkoff defendants will seek to have Judge Block’s decision overturned.  We’ll follow the appeal, of course, but in the meantime, the case continues to make waves.

    Some aspects of the case are unlikely to repeat themselves in future litigation; for example, the evidence regarding the elaborate curation of the site is probably unique to the unusual creature that was 5Pointz.  But Judge Block’s latest decision, if upheld, may provide some additional helpful guidance to future courts facing questions about “recognized stature” of an artwork—any artwork, not just graffiti—in the context of VARA, including how a court should analyze the question and the types of evidence that might be relevant.  

    Other aspects of the case simply stand as a warning to litigants in copyright disputes generally, or indeed to parties in any legal dispute.  Not least among the factors that informed Judge Block’s ruling are: his assessments of the parties’ credibility (or lack thereof); his frustration that the defendants had achieved their early victory at the preliminary injunction phase by presenting a misleading version of the situation; and his conclusion that they then rushed to whitewash the works without further regard for the plaintiffs’ rights, even though the case was far from over.  The decision is a reminder that, even when zealously litigating its side of a case, a party still needs to be impeccable about how it presents itself, its facts, and its respect for the court and its counterparties—or else the consequences can be very expensive.

    Finally, as we noted in our last post, it has been suggested that the 5Pointz case may actually hurt graffiti artists, by causing property owners to be leery of allowing such art projects on their premises for fear of liability.  Judge Block continues to disagree with this “doomsday” argument, observing that rather, the ruling “simply encourages future parties to negotiate VARA rights in advance, or, at minimum, abide by the scriptures of 17 U.S.C. § 113(d) [providing, in certain situations, for notice to artists whose works are to be destroyed or modified].”  Indeed, he cites as proof a recent deal involving graffiti artists whose work will be featured at a major development site in Manhattan.  At the inception of the 5Pointz graffiti repository, VARA was in its infancy and graffiti had not yet become a respected art form.  But now, parties armed with a clearer understanding of both the legal landscape and the artistic importance of graffiti can enter into collaborations governed by proactive contracts that balance their rights and interests—and can perhaps avoid the kind of contentious litigation that arose out of 5Pointz.  
    ATTORNEY: Kate Lucas
    CATEGORIES: 5 PointzCopyrightGraffitiStreet ArtVARA