The Art Law Report

Providing timely updates and commentary on legal issues in the museum and visual arts communities

“The Mattress Performance” Spawns Lawsuit That Raises Some Eyebrows About Pleading Style

Posted in First Amendment, Litigation, Performance Art

Columbia University has been at the center of the growing conversation about campus life and sexual assault in the past year, and now is the target of a new lawsuit by a student accused of misconduct.  The case spotlights the collision between free expression and disparagement and the often uneasy balance between them.  It also raises some questions about the level of intimate detail included in the documents in a case that is not actually about that conduct, but rather about an educational atmosphere.  Nothing in the following article  should be read as an adoption of any particular version of events.

In 2013, a Columbia student named Emma Sulkowicz accused a fellow student of sexual assault in 2012.  The matter was reported to the university disciplinary board, and was resolved in in favor of the accused (who vehemently denied any wrongdoing and characterized the encounter as consensual) insofar as he was found “not responsible.”  Sulkowicz then made her accusations public to the extent they had not been.  In addition, Sulkowicz began in 2014 what she called Mattress Performance/Carry That Weight—stating her intention to carry a twin-sized mattress around the Columbia campus her senior year until the accused was expelled (which he was not).  Sulkowicz and several other students also filed a Title IX complaint with the U.S. Department of Education’s Office of Civil Rights, alleging that the school botched the disciplinary process in violation of its Title IX obligations.

In an interview,  Sulkowicz described Mattress Performance as follows:

The idea of carrying a mattress got stuck in my head the way a song gets stuck in your head, and I unpacked why carrying a mattress is an important visual for me. . . .  Also the mattress as a burden, because of what has happened there, that has turned my own relationship with my bed into something fraught.

Recently, Paul Nungesser (the man whom Sulkowicz accused) filed a lawsuit arising out of Mattress Performance.  In overview, Nungesser alleges that the performance was a defamatory stunt because, he says, he did nothing wrong.  Most surprisingly, however, he did not sue Sulkowicz—he sued Columbia, its president, and one of its professors, alleging his own Title IX violations.

There are a few noteworthy legal aspects that immediately come to mind in the realm of art law (in addition to consideration of campus disciplinary processes, and the growing trend of lawsuits filed by those accused of sexual assault against the universities that disciplined them, extremely fraught topics that we won’t unpack here).  For our purposes, the topics relate to the nature of free speech, art, and defamation law.

The First Amendment, despite what it says, has never been held to immunize all speech.  False statements of fact that create certain reputational injuries are actionable, and few more so than statements alleging the commission of a horrific crime.  So, if Mr. X says, “Mr. Z is a pedophile” and it’s not true, Mr. Z can sue—even if otherwise contained in work of art or literature.  On the other hand, the First Amendment protects very broadly creative expression.  So any kind of creative work of fiction about gender dynamics, sexual assault, or campus social life in a more abstract way will enjoy almost limitless protection.  If the defamation plaintiff is what is called a “public figure,” the plaintiff must prove that the defendant acted with “actual malice”—actual knowledge that the statements are untrue and intent to harm the defendant’s reputation—if not, merely that he or she was negligent as to the truth of her statements.

Important protections also exist for statements made in the course of litigation, which are absolutely privileged and cannot be the basis for a claim, or for fair reporting of judicial proceedings, which are conditionally privileged.  Murkier are comments made about allegations that form the basis of a judicial proceeding but which are made outside the process—like statements on campus or to a university adjudicatory body.  The Mattress Performance itself, by all descriptions, makes no actual statements of fact or statements about Nungesser specifically, it is simply the act of carrying a mattress.  Certainly, however, Sulkowicz’s accusations of rape, if untrue, would border on being per se defamatory, of which the accused would have to convince a court by the preponderance of the evidence.
As noted above, however, Nungesser did not sue Sulkowicz.  The crux of the new lawsuit is that Columbia violated the law by allowing Mattress Performance to continue to his educational detriment.  He also sued art professor Jon Kessler for encouraging the project.  That raises very series free speech problems particularly with respect to Kessler, who is himself an artist.

Another noteworthy aspect of this lawsuit concerns the intersection of that defamation law and the boundaries of the Federal Rules of Civil Procedure with regard to the allegations necessary to sustain a lawsuit.  Distilled to its essence, Nungesser alleges that his life on campus became intolerable because the school allowed and encouraged Mattress Performance.  If he is telling the truth, that theory is easy enough to understand.  Yet the Complaint devotes considerable attention to detailing Sulkowicz’s supposed sexual history with both Nungesser and with other men, and suggestions about her contracting venereal disease.  As noted above, nothing written in the Complaint can be defamatory, since it is part of the legal proceedings.  But just like the accusations against him, if Nungesser republished the contents of the Complaint in a way that asserts its allegations as fact (as distinct from reporting that fact that the allegations were made), they would not enjoy that privilege.  As bar exam takers will recall, statements that a person has what is euphemistically referred to as a “loathsome disease” are generally per se defamatory in their own right.  Thus, he could open himself up to a claim from Sulkowicz (who as far as we know has not brought any civil claims to date against him) regardless of whether he prevails against the university defendants.

Even assuming Nungesser had done nothing wrong, however, or even assuming that his allegations about Sulkowicz were true, what do those prurient details have to do with the atmosphere of hostility he alleges the university created?  The Rules of Civil Procedure have something to say about this.  On the one hand, requirements have tightened in recent years to require more specific pleadings of fact to sustain a lawsuit.  On the other hand, Fed. R. Civ. P. 12(f) states: “The court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.”  Details of sexual conduct are frequent targets of this rule and courts frequently strike intimate allegations of this sort—among the relatively few motions to strike that tend to be allowed, particularly if the court thinks that the evidence would never be admissible for the trial on the claim as they are.  In an unrelated case in the same court where this case is now pending, one judge confirmed the striking of extraneous sexual details by saying that the order to strike reflects “the Court’s views as to the inappropriateness of the irrelevant and personally intrusive comments in plaintiff’s submissions. These observations and rulings have now put plaintiff squarely on notice, and the Court trusts that he will conduct himself properly in this case going forward.”

So would text messages of a non-party about sexual encounters with other non-parties be admissible in a case about the subsequent educational climate?  It seems unlikely, and could draw the ire of the court.

This story is most assuredly not going to be over any time soon.

Art Crime and Cultural Heritage Symposium at NYU June 4-6, 2015

Posted in Events, Restitution

I am pleased to be taking part in the upcoming Art Crime and Cultural Heritage symposium at NYU next month.  I will be on a panel discussing the Gurlitt case moderated by Mel Urbach, along with Chris Marinello and Wesley Fisher.  I’m very much looking forward to learning from my co-panelists and the other participants.  Registration is available here.

From the symposium website, the description and participants are as follows.  Hope to see you there!

Art Crime and Cultural Heritage: Fakes, Forgeries, and Looted and Stolen Art

The U.S. Department of Justice (DOJ) currently ranks art crime as the third-largest criminal enterprise in the world. The increase in international art transactions has incubated a booming market for stolen and fraudulent art, and major U.S. arts institutions still grapple with repatriation of stolen or looted objects in their collections. Co-organized by Jane C.H. Jacob, art historian and provenance research expert, Jacob Fine Art, Inc., Chris Marinello, director and founder, Art Recovery Group, and Alice Farren-Bradley, Museum Security Network, the symposium brings together experts from major museums and auction houses, the NYU School of Law, the U.S. Department of Homeland Security, and the President’s Cultural Property Advisory Committee, as well as independent scholars and authors, art crime victims, art crime attorneys, forensic scientists, and other major players working to address art crime worldwide. Join us and learn about the legal, forensic, governmental, and political strategies being employed to address the enormity of this global phenomenon. Topics include the history of fakes and forgeries, insurance fraud, art theft and art scams, scientific and forensic approaches, provenance research, cultural repatriation, issues facing auction houses and purchasers, and current case studies.

Participants

  • Amy Adler, Emily Kempin Professor of Law, NYU School of Law
  • Amr Al Azm, Associate Professor, Middle East History and Anthropology, Shawnee State University; former Director, Scientific and Conservation Laboratories, General Department of Antiquities and Museums, Syria
  • W. Graham Arader, III, Founder & Owner, Arader Galleries; specializes in antique works on paper, paintings, and rare books
  • Jordan Arnold, Managing Director and Head of Art Risk Advisory at K2 Intelligence; former art crime prosecutor at the Manhattan District Attorney’s Office
  • Doreen Bolger, Director, Baltimore Museum of Art; oversaw the return of the stolen Renoir painting Paysage bords de Seine to the museum’s collection in 2014
  • James Butterwick, Founder & Owner, Butterwick Gallery LLC; specializes in Russian avant-garde
  • John Cahill, Attorney, Cahill Partners LLP; formerly General Counsel, Phillips de Pury & Co.; Chair, New York City Bar Association, Art Law Committee
  • Tim Carpenter, Special Agent, Federal Bureau of Investigation (FBI); involved in the largest restitution case of Native American artifacts in the United States, recovering 5,000 objects to date
  • William L Charron, Partner and Co-Chair of Art Law Practice, Pryor Cashman LLP; Counsel, ARIS Title Insurance Corporation (ARIS)
  • Pierre Ciric, Founder, Ciric Law Firm PLLC; Co-Founder, Holocaust Art Restitution Project (HARP)
  • MaryKate Cleary, Collections Specialist, Painting and Sculpture, Museum of Modern Art
  • Sandra Cobden, Senior Vice President and General Counsel, Christie’s Inc.
  • Michael Danti, Assistant Professor of Archaeology, Boston University; Co-Director, ASOR Syrian Heritage Initiative
  • Marla Diaz, General Counsel, Baltimore Museum of Art; lead attorney in the negotiation for the return of Paysage bords de Seine to the Baltimore Museum of Art
  • T/4 Sgt. Harry Ettlinger, served in the Monuments, Fine Arts, and Archives (MFAA) program in World War II, better known as the Monuments Men; author of Ein Amerikaner: Anecdotes from the Life of Harry Ettlinger
  • Alice Farren-Bradley, Director of Claims & Recoveries, Art Recovery Group Ltd; Co-Founder, Art Crime Conference; Moderator, Museum Security Network
  • Wesley Fisher, Director of Research, Conference on Jewish Material Claims Against Germany; Executive Director, Victim List Project of the Swiss Banks Settlement
  • Sharon Flescher, Executive Director, International Foundation for Art Research (IFAR); Editor-in-Chief, IFAR Journal
  • Megan Fontanella, Associate Curator, Collections and Provenance, Guggenheim Museum
  • Karl Geercken, Partner, Alston & Bird LLP; counsel for Leopold Museum, Vienna, in the Schiele Portrait of Walley case
  • David Goldstein, Attorney, Rabinowitz, Boudin, Standard, Krinsky & Lieberman PC; litigator in disputes over artworks, trade secret misappropriation, and copyright infringement; co-author of Creating an Equitable Balance Between the Rights of Former Owners and Good Faith Purchasers of Stolen Art
  • Patricia J. Graham, Founder, Asian Art Research & Appraisals; Research Associate, Center for East Asian Studies, University of Kansas; author, Japanese Design: Art, Aesthetics, & Culture
  • Judd Grossman, Founder and Managing Partner, Grossman LLP
  • Peter Herdrich, Founding Partner, The Heritas Group; formerly CEO, Archaeological Institute of America (AIA)
  • Simon Hornby, President, Art Services, Crozier Fine Arts Inc.
  • Jonathan Illari, Vice President and General Counsel, Auctionata; former Counsel, Bonhams
  • Jane C.H. Jacob, President, Jacob Fine Art, Inc.; Co-Founder, Art Crime Conference
  • Mari-Claudia Jiménez, Partner, Herrick Feinstein LLP; partner in the Art Law practice group
  • Holly Keris, Chief Curator, Cummer Museum of Art & Gardens
  • Jo Backer Laird, Counsel, Art Dealers Association of America; formerly Senior Vice President and General Counsel, Christie’s Inc.
  • Jane Levine, Worldwide Director of Compliance, Sotheby’s
  • Betty Little, New York State Senator, 45th District; sponsor of amendment to the New York Arts & Cultural Affairs Law enhancing protections for art authenticators
  • Bonnie Magness-Gardiner, Program Manager, Art Theft Program (National Stolen Art File and Art Crime Team), Federal Bureau of Investigation (FBI)
  • Christopher A. Marinello, CEO & Founder, Art Recovery Group Ltd; Co-Founder, Art Crime Conference
  • James Martin, Principal, Orion Analytical LLC, a materials analysis and consulting firm specializing in art, cultural property, and collectables
  • Eleonora Nagy, Conservator, Modern and Contemporary Sculpture; Director, Modern Sculpture Conservation LLC, New York; Conservator, three-dimensional works of art, Whitney Museum of American Art; Advisory Committee for Conservation and Restoration (ACCR) and Judd Foundation
  • Megan Noh, Assistant General Counsel, Bonhams; supports all U.S. specialist and business departments, with a particular emphasis on the day-to-day needs of the New York office, including claims, transactional and compliance work
  • Francis O’Connor, Jackson Pollock scholar and lead author of Jackson Pollock’s catalogue raisonné
  • Nicholas O’Donnell, Litigation Partner, Sullivan & Worcester LLP; Editor, Art Law Report
  • Judith Pearson, President and Director, ARIS Title Insurance Corporation (ARIS)
  • Ken Perenyi, Renowned art forger whose works have passed through major auction houses and galleries in New York and London as original works; author of Caveat Emptor
  • Kevin Ray, Counsel, Art and Cultural Heritage Law, Business Reorganization & Financial Restructuring, Greenberg Traurig LLP
  • Christopher Robinson, Partner, Davis Wright Tremaine LLP; practices intellectual property and art law
  • Laurie Rush, Army Archaeologist, Fort Drum, NY; Board Member, US Committee of the Blue Shield
  • Meridith Savona, Special Agent, Art Theft Program (National Stolen Art File and Art Crime Team), Federal Bureau of Investigation (FBI)
  • Steven R. Schindler, Founder and Partner, Schindler Cohen & Hochman LLP; Art Business faculty, Sotheby’s Institute of Art, New York
  • Colleen St Onge, Cultural Repatriation Assistant, Sault Ste. Marie Tribe of Chippewa Indians, MI
  • Spencer Tomkins, President, Spencer Tomkins Fine Art Inc.; art consultant with over 25 years of experience in the international art market working with private and corporate collectors; specializes in American and European post-war and contemporary art
  • Mel Urbach, Esq., Klein & Solomon, LLP, New York, NY; represents the heirs of Alfred Flechtheim and is a pioneer in art restitution; negotiated return of Kokoschka painting and other work

UPDATE: Left Shark Not Free to Roam the Oceans of Intellectual Property Just Yet

Posted in Copyright, Intellectual Property, Trademark

UPDATE: The battle over Left Shark is not over yet!  Upon closer examination, last week’s trademark-related denial involved only one of six classes (Class 41 for “live musical and dance performances”) covered in Katy Perry’s application to register a front view of the Left Shark.  The Patent and Trademark Office rejected the specimen she submitted to prove use of the image as a service mark.  The specimen in question was a photograph taken from the Super Bowl performance.  Despite this initial rejection all of Perry’s applications are still very much in play.

Generally domestic applicants can file trademark applications based on either actual use of a mark or bona fide intent to use (ITU).  An ITU application is examined in the same manner as a use-based application, but instead of obtaining a registration the applicant receives a “Notice of Allowance.”  Before a registration will issue the applicant must use the mark in commerce in association with the good/services covered therein, and then submit the date of first use and a specimen showing proper trademark use to the PTO.

Here, all that happened was that Perry’s submission related to a claimed actual use in connection with live musical and dance performances was deemed insufficient as merely a photograph of the halftime show.  Ms. Perry can respond to the office action by submitting an appropriate specimen of use.  The office action does not affect the other classes covered in the application or her applications to register a side view of the shark, the word mark LEFT SHARK, or applications to register BASKING SHARK, DRUNK SHARK, or RIGHT SHARK.

So. the idea that Left Shark is fair game (fish?) is not yet a reality, and no one should order any Halloween costumes quite yet.  There will no doubt be further developments.

Gurlitt Cousin Appeals Dismissal of Will Contest

Posted in Gurlitt Collection, Restitution, World War II

Uta Werner has appealed the adverse decision of the Munich court last month with respect to her challenge to Cornelius Gurlitt’s will.  Werner, the cousin of Cornelius Gurlitt, argued that the will written by Gurlitt that named the Kunstmuseum Bern as his heir (and thus to his art collection).  The Munich court previously upheld the will, making the Bern museum the sole heir to Gurlitt in all respects, including not only the trove found in Munich but some 200 (arguably more significant) works found in his Salzburg, Austria home.

Werner has now appealed the decision, to the court that made it in the first instance. That court may also refer the matter to an appeals court.

Needless to say the prospect that someone other than the Swiss museum would be the owner is destabilizing.  But while it has provided a pretext to delay restitution of those objects that the Gurlitt Task Force has identified as Nazi-looted art, it should not.  Werner has already agreed to restitute these objects if she prevails.

Like-Kind Exchanges—Art and Collectibles’ Tax Deferral in the Crosshairs

Posted in Tax

There has been considerable coverage in the last week about so-called “like-kind” exchanges of art, and federal tax.  This has been driven by two factors: President Obama’s 2016 proposed budget, which would eliminate the tax deferral on these “1031 exchanges” for art and collectibles, and a recent New York Times article entitled “Tax Break Used by Investors in Flipping Art Faces Scrutiny.”  The prospect of actual change is dubious, but there is no question that the prospect of the elimination of this tax deferral means anyone who is considering such an exchange for their art and collectible collection should be paying attention.

First, the basics.  Absolutely no one is better versed in 1031 exchanges and collectibles than my tax partner Jay Darby, who gives a concise explanation on his Tax and Sports Update blog:

The 1031 Basics

The basic rules for a 1031 exchange are well known, but it is always good to “remind ourselves” about what we “already know.”

An LKE must involve an exchange of “like kind” property. In addition, the property exchanged in both directions must be held for productive use in a trade or business or for investment. In the real estate industry, the “like kind” requirement is easy: all real estate is likekind with all other real estate. However, this “simple” rule is complicated by the fact that “real estate” has been interpreted in interesting and inventive ways. Real estate includes not only land and the improvements thereon, but also includes air rights, certain kinds of building rights and permits, riparian (water) rights, and even operating leases in oil and gas drilling ventures.

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In a simple transaction (these are never really simple), the taxpayer sells the “relinquished” property, and the proceeds are delivered to the [qualified intermediary] to be held in a qualified escrow or trust account. The taxpayer then designates up to 3 replacement properties (or an unlimited number of properties representing up to 200% of the value of the relinquished property) within 45 days of the sale transaction. After that, the taxpayer has up to 180 days to close on the acquisition of one or more of the identified properties. If the taxpayer does not identify any properties within 45 days, or if the taxpayer identifies timely but does not close within 180 days, the exchange is “blown” and the original sale transaction becomes fully taxable.

The importance of this is the deferral of tax.  If you sell a property, or a painting, you will pay capital gains tax on the increase in value over what you paid for it (the basis), for the most part.  But capital gains tax on collectibles is 28 percent, so if you can defer that gain by exchanging it for like-kind property, you realize a financial benefit (it being better to pay the same sum in the future rather than now, since you will enjoy the time value of your money in the meantime).  As always, the devil is in the details, and making a like-kind exchange of art requires careful respect for the requirements.

So what is the big deal?  The Times characterizes this issue thusly:

The exchanges have become prevalent enough, and the cost to the government significant enough, that the Obama administration is seeking to eliminate them, a prospect causing no shortage of alarm in sectors of the art world.

There is much more to this story, however, than the critics in the article suggest.  Tax deferral is not tax avoidance; they are simply different.  If the reason for the statutory exchange provision is to stimulate the productive use of property, there is really no principled basis to target one kind of property (particularly the kind that is taxed at one of the highest rates already).

And while opponents characterize the exchanges in dire terms, the exchanges stimulate economic activity that would fall in their absence.  An Ernst & Young study cited in the Times article suggests that “eliminating 1031 exchanges could, under some conditions, shrink gross domestic product by about $8 billion annually.”

Bottom line?  Every year brings significant proposed changes to the tax code, most of which progress no further than that stage.  But anyone hoping to defer that tax rate and make productive use of their assets in the meantime would do well not to take it for granted and to consider acting sooner rather than later.

Go Forth, Left Shark, and Prosper? USPTO Trims Katy Perry’s Request to Trademark Super Bowl Meme

Posted in Copyright, Trademark

In the afterglow of the spectacle of this year’s confusing yet captivating Super Bowl halftime show (Go Pats!), we mused about the art law ramifications of the unexpected birth of the visual Left Shark phenomenon, the costumed dancer who was famous within seconds for a certain lack of enthusiasm.  The initial discussion focused on whether the dancer’s costume design within the show itself allowed Perry to control its use as a matter of copyright.  The recipient of one cease and desist letter disagreed, both humorously and persuasively, principally based on precedents about costume designs, and on the nature of the use itself.  Left unresolved were any arguments about fair use, but those seemed clear to us as well: a T-shirt, Twitter post, internet meme, SportsCenter commercial, etc., that evokes some level of post-modern world-weariness in contrast to Perry’s boisterous beach-party theme should be transformative enough even for the strictest of copyright constructionists.  It is not clear on the public record though how much of a fight there has been over that point.

Left_Shark_3 Left_Shark_4

Now the other shoe has dropped on the very day that the Patriots visited the White House to honor their victory.  Katy Perry’s application to trademark has been turned away in part by the U.S. Patent and Trademark Office.  Even if Perry didn’t own a copyright in Left Shark, it’s possible that she could own a protectable trademark or assert enforceable trade dress in it.  As my Sullivan & Worcester LLP colleagues over at Trending Trademarks have explained eloquently in the past, “A ‘trademarked look’ is not just a popular saying. Developing and consistently using a distinctive look and lay-out for products and services” is the touchstone.  As for trade dress, the fame and associations related to Left Shark’s appearance have developed not with respect to Perry’s music or the halftime show choreography, but as an independent and largely inexplicable phenomenon.

By this token, Perry’s odds seem very long.  “Left Shark” is an entirely satirical, silly Internet fad.  No one could seriously claim that until that dancer got out of sync with the other shark, that the designers of the show actually meant to create an ironic meme.

4/30/15 UPDATE:

The battle over Left Shark is not over yet!  Last week’s denial involved only one of six classes (Class 41 for “live musical and dance performances”) covered in Perry’s application to register a front view of the Left Shark.  The Patent and Trademark Office rejected the specimen she submitted to prove use of the image as a service mark.  The specimen in question was a photograph taken from the Super Bowl performance.  Despite this initial rejection all of Perry’s applications are still very much in play.

Generally domestic applicants can file trademark applications based on either actual use of a mark or bona fide intent to use (ITU).  An ITU application is examined in the same manner as a use-based application, but instead of obtaining a registration the applicant receives a “Notice of Allowance.”  Before a registration will issue the applicant must use the mark in commerce in association with the good/services covered therein, and then submit the date of first use and a specimen showing proper trademark use to the PTO.

Here, all that happened was that Perry’s submission related to a claimed actual use in connection with live musical and dance performances was deemed insufficient as merely a photograph of the halftime show.  Ms. Perry can respond to the office action by submitting an appropriate specimen of use.  The office action does not affect the other classes covered in the application or her applications to register a side view of the shark, the word mark LEFT SHARK, or applications to register BASKING SHARK, DRUNK SHARK, or RIGHT SHARK.

So. the idea that Left Shark is fair game is not yet a reality, and no one should order any Halloween costumes quite yet.  There will no doubt be further developments.

Third Time a Charm? New Resale Royalty Bill Filed in Congress

Posted in Copyright, Resale Royalties

Twice in the last four years, a bill has been filed to adopt what is known as droit de suite, or resale royalty, in which an artist would be entitled under certain circumstances to a royalty on sales after the initial one.  The most common justifications for these bills relate to fairness and uniformity.  As to the first, many artists’ works do not become valuable until later in their careers, long after the works had been sold first.  These artists, the argument goes, should share in the benefit of their increased regard.  The uniformity argument has to do with droit de suite in other countries, though that is hardly a clear picture and many residents of those countries object to what they say is the effect on their local markets.

in both cases, the Congressional session expired before the bills became law (or were even passed by either house of Congress), and there remain no provisions in U.S. law for resale royalties.  At the state level, the California Resale Royalties Act was declared unconstitutional in 2012 as a violation of the Dormant Commerce Clause by the U.S. District Court for the Central District of California, in lawsuit brought by Chuck Close and others against Christie’s, eBay, and Sotheby’s.  That decision is on appeal in the Ninth Circuit).

This week proponents tried again.  Senators Tammy Baldwin (D-WI) and Ed Markey (D-MA) and the Rep. Jerrold Nadler (D-NY) introduced the American Royalties Too (ART) Act of 2015 on April 16, 2015.  Nadler and Baldwin led the charge last year.  As with the 2014 version (but not the 2011 bill, the subject of the inaugural Art Law Report article), the ART would grant a 5% royalty on works sold for $5,000 or more, up to a total of $35,000 in total royalty payments.

It is difficult to see this becoming law, whatever its merits (even with the endorsement by the Copyright Office law year in favor of some sort of royalty system).  The bigger problem is legislative inertia.  Similar bills have fallen far short before (with many sponsors last year), and the 16 months immediately prior to a Presidential election is rarely a period of great compromise and legislative efficiency.  I don’t even see this as a particularly partisan issue on which either party would have a default position.

This bill has been introduced earlier in the legislative cycle than the last two (last year’s was barely six months before the Congress ended, and only a few months before all Representatives stood for election, and the 2011 bill was just over a year before the election), so perhaps that will make a difference.  As always, developments will bear watching.

Sorting Through this Week’s Gardner Heist Developments: Old News is No News

Posted in Museums

In a rare development not manufactured to coincide with the anniversary of the March 18, 1990 theft of thirteen paintings from the Isabella Stewart Gardner Museum, a man was arrested this week who has been identified previously by the FBI as a “person of interest” in the theft.  So has there been a break in the case?  Not really, but the details bear scrutiny.  If, as a judge was told by the prosecution, Robert Gentile had been recorded offering to sell the paintings for $500,000, it would be a major breakthrough (and remarkable, given that a $5 million reward is available).  But the recording has not been made public, and the FBI has greatly overstated the certainty of various players’ involvement before, so the view here is skeptical until further evidence.

As most are familiar, two men dressed as either policemen or security officers robbed the Gardner in 1990, and the paintings have not been seen since.  Reputed sightings and supposed links have been floated repeatedly, but nothing has actually led to the paintings.

The center of this week’s news is a Connecticut man named Robert Gentile, whose name has come up before in connection with the Gardner theft.  Gentile has consistently denied any knowledge of or involvement in the theft or possession of the paintings.

The FBI has said that they believe that Gentile received some or all of the paintings from a man named Robert Guarente, who is now deceased.  Guarente’s widow has supposedly told the FBI that she saw her late husband give a disputed number of paintings to Gentile.

It was Gentile whose home was searched in 2012 in the last real development in the case, such as it was.  That search did not yield the paintings, but did yield certain weapons with whose illegal possession Gentile was then charged.  As detailed brilliantly in the new book Master Thieves: the Boston Gangsters who Pulled off the World’s Greatest Art Heist by Stephen Kurkjian (just published and an absolute must-read), the police then leaned heavily on Gentile, making clear that unless he cooperated and helped find the paintings, they would seek the heaviest possible sentence against him, almost ensuring that he would spend the rest of his life in jail.  He flatly denied any knowledge, and over the prosecution’s objections, was sentenced to a term that eventually allowed his release.  But critically, while incarcerated, his daughter fell ill and died.  Had he provided the information that the police thought he had, he would have been able to be with her.

This week Gentile was arrested again, and his attorney called out the latest charge as a set-up.  According to the Associated Press:

Gentile’s attorney, A. Ryan McGuigan, said his client began working with the FBI 3 1/2 years ago to help find the stolen artwork. But because the FBI believes Gentile has not been forthcoming with everything he knows about the heist, McGuigan said, the agency has set up his client for arrests twice in the last three years.

“It’s my argument that a crime isn’t committed if it’s not orchestrated by the FBI,” said McGuigan, who said his client is not withholding any information.

This is a compelling point.  Gentile was arrested on weapons charges that have nothing whatsoever to do with the Gardner.  He has never been charged with anything to do with the Gardner.  So the prosecution bringing that up at a totally unrelated hearing lends great credence to the theory that the latest charge is a pretext to pressure him without any actual evidence of the supposed prior bad acts.  Here is the problem: Gentile has already been in a situation where, if he had information, he could have improved his own fate immeasurably, and not learned about his daughter’s death only behind bars.  Moreover, the statute of limitations on the crime ran out years ago, and the museum has been very clear that anyone who leads it to the paintings will enjoy the reward regardless of their prior role.  Thus, if Gentile had any information, he literally has nothing to lose and everything to gain by revealing it.  What do the police suppose will be different this time?  The simplest explanation may in fact be that he in fact does not know anything.  As noted above, the prosecutor this week claimed that Gentile had offered the paintings for sale to an undercover FBI agent, so we will see if there is anything to that.  Even in that event, however, it cannot be ignored that offering a connection to someone who has information is like Danny Ocean at the end of Ocean’s 11:I know a guy.  We were in the joint together. Anybody pulls a job in the western US, he knows about it. Give me 72 hours. I’ll find out who took your money.”  To which Terry Benedict replies with disgust, “You know a guy,” and calls the police.

The FBI has also intimated that it believes a man named David Turner actually committed the robbery.  Problematically for the FBI, it had Turner over a similar barrel before when he was facing decades in prison—and he went to prison denying any knowledge whatsoever.  Fool me once….

Kurkjian’s book, by the way, offers a fascinating theory about who actually robbed the museum.  He suggests that it was a man named Bobby Donati, and argues that his motive was to create a bargaining chip to spare Donati’s then-boss Vinnie Ferrara from prison.  Donati was brutally murdered in 1991, however, so if he did commit the crime, he took that secret to the grave.  Kurkjian writes that he reported this theory to the FBI, who declined to follow up on it.  He is also critical, as we have been, of the 2013 press conference in which the FBI asserted definitively to know who committed the crime and what happened afterwards, pointing out the many fatal flaws in the theory the FBI presented.  Lastly, Kurkjian tells a chilling what-if tale from shortly before the robbery: a security guard at the Museum of Fine Arts who got a knock on the door from men claiming to be police.

One idea Kurkjian persuasively sets out is the missing motive for the crime.  As he writes, portable valuables were something that by the early 1990s were seen as a currency to trade for leniency in sentencing.  For experienced criminals, that would make much more sense than actually hoping to fence unique works of art, and the idea that the paintings were stolen at the behest of some reclusive billionaire long ago ceased to deserve any serious consideration.

The only other recent “news” was a Breitbart.com story last week offering a different theory and claiming “FBI Solves Decades-Old Art Heist, Suspect Had Been Represented By John Kerry.”  According the story, a man named George Reissfelder committed the crime.  Why can we dismiss that out of hand?  First, Kurkjian actually considers the possibility in the book (well before the Internet post), and debunks it.  The other reason?  The Breitbart story was a transparent political hit job.  Reissfelder was once represented by John Kerry, later U.S. Senator and now Secretary of State.  Breitbart’s antipathy towards Kerry is little secret, and the fact that Kerry’s photograph, not Reissfelder’s, leads the article speaks volumes about its motivation.  The article quoted “sources” at the Boston FBI, but that’s about all that is worth.

Based on all this, it is hard to see this week’s news as actually leading any closer to the paintings.  This remains a great tragedy.

Postwar Export Permit Apparently At the Center of Shift in Tate Restitution Dispute

Posted in Museums, Restitution, World War II

We reported recently on the possible change in the anticipated restitution of a John Constable painting in the Tate Gallery, London.  After the United Kingdom Spoliation Advisory Panel recommended that Beaching a Boat, Brighton be returned to the heirs of Baron Ferenc Hatvany, the Tate issued a statement that it had received new information and was reviewing the recommendation.

The Daily Mail reported yesterday what that new information might be: a 1946 export permit from Budapest to Zürich:

 

1946 hatvany kivitel.jpg
Why does this matter?  It has to do with the timeline.  No one, apparently, disputes that the painting was looted from Baron Hatvany.  What was in dispute was how the painting came to be in Great Britain.  The Daily Mail reports that the heirs had argued that after looting the painting, the Nazis had smuggled it out of the country.  With the export permit, the Tate could argue that the painting was in Hungary until after the war, and not disposed of in the manner that the family had argued (or even perhaps that Hatvany himself had received the painting back and then sold it in the ordinary course after the war).

If the painting was looted, however, then the most important additional data would not be when it left Hungary, but who exported it and with what understanding about its provenance.  That is to say, if it were exported in 1946 by a subsequent possessor who knew it was stolen, then under both Continental and common law, the Hatvany family would prevail (as the true owner under UK law, and because the subsequent purchaser was not a good faith holder).  If the exporter were unaware of the circumstances, then the choice of law would be outcome-determinative.  A good faith purchaser could convey clear title under Continental law, and the owners subsequent to that (even if they themselves learned it had once been stolen) would be the legal owners.  But if UK law controlled the Tate’s claim to ownership, then even if the export permit proved the claimants’ timeline wrong, it should not matter and the family would still be the legal owners, today.  Of course, if it had been returned to Hatvany and he had sold it in 1946 voluntarily, then the subsequent owners could likely prevail.  But just because the time of export differed from the family’s understanding hardly means that Hatvany got the painting back.  The permit sheds little decisive light on this; it is signed by a dealer named Karola Fabri (one behalf of whom, it does not say), and identifies a painting called “Fishing Boat,” which could be, but is not necessarily, the one in the Tate.

None of these addresses the ethical dimensions either, which are hardly insubstantial.  Indeed, in its recommendation, the Advisory Panel scolded the Tate about its provenance research.  One can expect sharp objections if the museum elects to keep the painting by relying on a document if the museum did not have that document when it acquired the painting.

There is also some irony in that the document was apparently retrieved from the Budapest Museum of Fine Arts.  That museum, and a handful of others, is itself embroiled in a restitution litigation in Washington, DC  over the Baron von Herzog collection that was targeted by the Nazis after they assumed control of Hungary in 1944.

Interestingly, the Daily Mail quoted an unnamed source at the museum as citing a duty to protect any assets owned by the British public, saying “No one disputes that the picture was at one stage looted by the Nazis, what is in dispute is what happened after it was returned to its owner.”  That may be, but it seems well in doubt that the painting is owned by the British public, or that it ought to.  The permit certainly justifies taking into consideration, but without more it does not seem to warrant actually rejecting the recommendation for restitution.

As always, stay tuned.