The Art Law Report

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

Pure Love of Art versus Mere Investment in London March 26-27, 2015

Posted in Art Finance, Events

The Art, Cultural Institutions and Heritage Committee of the International Bar Association (of which I am a member) will be sponsoring an event March 26-27, 2015 at Sotheby’s in London.  The IBA Individual Tax and Private Client Committee is also a co-sponsor, in connection with the IBA European Regional Forum.  Sotheby’s is located at 34-35 New Bond Street in London.

The program is now available for registration here.  The schedule and speakers are below, but this is clearly an event not to be missed.  Regrettably it overlaps with the annual Legal Issues in Museum Administration Conference in Washington, DC (more on that soon), so if anyone has figured out how to be in two places at the same time, suggestions are welcome.

THURSDAY MARCH 26, 2015

Keynote address

Collecting, investing or speculating?

Adrian George, Deputy Director, UK Government Art Collection London

Keynote address

Old and new players of today’s art markets

Mark Cornell, Managing Partner Europe, Sotheby’s, London

Art market players and their interests

This session will focus on the various players in the art market, their respective interests and how they shape today’s art market.

Moderator

Karen Sanig, Head of Art Law, Mishcon de Reya, London

Panelists

George Bailey, Chairman, Dreweatts & Bloomsbury Auctions, London

Fabrizio Moretti, TEFAF Maastricht, Maastricht

Helly Nahmad, Owner, Helly Nahmed Gallery, London

Andrew Renton, Professor of Curating, Goldsmiths London University and Director, Marlborough Contemporary, London

Art as an alternative investment class for institutional investors – art funds and other forms of art investment and certain related legal issues

This session will focus on duties of care imposed on institutional investors in art as an alternative investment class, and regulatory compliance. It will also address risks related to art investments, opportunities of investment through art funds, financing art creation, providing guarantees for auction sales, lending against art, other art investment formats, and relating legal issues.

Introduction

Philip Hoffman, Chief Executive, The Fine Art Fund Group, London

Moderator

Massimo Sterpi, Studio Legale Jacobacci & Associati, Rome; ICOM Liaison Officer, IBA Art, Cultural Institutions and Heritage Law Committee

Panelists

Stephen D Brodie, Herrick, New York

Luke Dugdale, Partner, Cadell & Co, London

Philip Hoffman, Chief Executive, The Fine Art Fund Group, London

Daniel Tunkel, Howard Kennedy, London

Diana Wierbicki, Head of Art Law, Withers, New York

Some selected legal issues when buying and holding art; ancillary cost of collecting

This session will focus on the sometimes underestimated ancillary costs and risks of collecting art. These include provenance, restitution risks, art theft, insurance, transport and restoration. Attempts to regulate the art market, sometimes described as the largest legal unregulated market, will also be addressed.

Keynote Speaker

Viola Reikhel-Bolot, Co-Founder, 1858 Ltd Art Advisory, London

Moderator

Adrian Parkhouse, Farrer & Co, London

Panelists

Dick Ellis, Ex Head of Art Squad, Scotland Yard, London

Melanie Gerlis, Art Market Editor, The Art Newspaper, London

Viola Reikhel-Bolot, Co-Founder, 1858 Ltd Art Advisory, London

Lucian Simmons, Senior Vice-President, Provenance and Restitution, Sotheby’s, London

Steven Thomas, Adjunct Professor, UCLA School of Law, Los Angeles

The public collections: their changing role in a changing market

This session will focus on the changing role of public collections in times of budget constraints of public institutions; the blurring of public and private collections; interest of art market players in public collections; temporary and permanent loans; deaccessioning of public collections and evident public interest in the context of bankrupt public entities.

Keynote speaker

Jasper Sharp, Adjunct Curator, Kunsthistorisches Museum, Vienna

Moderator

Jasper Sharp, Adjunct Curator, Kunsthistorisches Museum, Vienna

Panelists

Johann Kräftner, Director, LIECHTENSTEIN.The Princely Collections, Vaduz/Vienna

Rina Pantalony, Director of Copyright Advisory Office, Columbia University, New York

Alfredo Perez Weil, Gotshal & Manges, Houston Francesca von Habsburg Thyssen-Bornemisza Art Contemporary, Vienna (invited)

Plenary session and conclusion of the day

Conference dinner

FRIDAY MARCH 27, 2015

Advisors and their role in the art market

This section will focus on art, legal, tax and other advisors around the art markets and how their influence shapes art and art markets; increased transparency of markets, public databases and their impact on the art markets shall be reviewed.

Keynote speaker

Mary Romano, Bloomberg, New York (invited)

Moderator

Mark Stephens, CBE Howard Kennedy, London; Chair, IBA Art, Cultural Institutions and Heritage Law Committee

Panelists

David Arendt, Managing Director, Le Freeport, Luxembourg

Jean-Francois, Canat UGGC Avocats, Paris

Sherri North Cohen, Chief Underwriting Counsel, ARIS Title

Insurance Corporation, New York

Mary Romano

Elizabeth von Habsburg, Winston Art Group, New York

How and where to structure an art collection?

How best to pass a collection down through the generations? This session will focus on the best entities and jurisdictions in which to hold an art collection for successive generations. This will include a review of the key taxes, including capital gains and inheritance tax and the opportunities to be exempt from tax or to pay tax in kind.

Keynote speaker

Guy Simonius, Managing Director Wealth and Tax Planning Advisory, International Julius Baer, Zurich

Moderator

Daniel Simon, Collyer Bristow, London; Vice-Chair, IBA Individual Tax and Private Client Committee

Panelists

Sandrine Giroud, Lalive, Geneva; Publications Officer, IBA Litigation Committee

Wendy Philips, Senior Director, Head of Tax and Heritage, Sotheby’s, London

Randall Willette, Founder and Managing Director, Fine Art Wealth Management, London

Summary and conclusion by Conference Co-Chairs

Raul-Angelo Papotti

Peter Polak

Supreme Court Declines to Hear Norton Simon Intermediate Appeal, Von Saher Claim Returns to Trial Court

Posted in Legislation, Restitution, World War II

The Norton Simon Museum in Pasadena’s efforts to bring an end to the claim by Marei von Saher to Lucas Cranach the Elder’s Adam and Eve failed yesterday, as the United States Supreme Court declined to hear the museum’s appeal from the decision last year by the Ninth Circuit Court of Appeals that restored the claims.  The Supreme Court denied what is called a writ of certiorari, which is a discretionary appeal from a lower court.  The high Court can accept cases on appeal from final judgments (as would be the case had the museum prevailed) or, as here, what are called interlocutory appeals—appeals of matters still in process.  The Ninth Circuit decision revived Von Saher’s case and sent them back to the District Court for litigation, and the Norton Simon’s petition asked the Supreme Court to intervene and put an end to it.  The overwhelming proportion of certiorari petitions are denied, interlocutory appeals even more so (courts favor hearing appeals of final judgments to avoid piecemeal adjudications).  This is the second certiorari petition in the case: in 2011, Von Saher was on the losing end of a petition when her case had been dismissed under an earlier version of California’s statute of limitations. 

This follows last year’s landmark ruling by the Ninth Circuit, which we analyzed at the time.  To recap:

Marei Von Saher is the daughter-in-law and sole heir of Jacques Goudstikker, a well-known Dutch art dealer during the interwar period.  Goudstikker purchased two paintings by Lucas Cranach the Elder, Adam and Eve from the Soviet Union in 1931.  Goudstikker fled the Netherlands in 1940 following the German occupation.  His extensive collection was forcibly sold in two events; the first an auction by the German bank Alois Miedl who purchased Goudstikker’s art dealership and some his property; the second the expropriation by Hermann Göring of virtually the entire Goudstikker fine art collection, including the two Cranachs.  The U.S. Army recovered the Cranachs and they were returned to the Dutch government in 1946. 

Goudstikker’s widow filed timely claims with the Dutch government for her family’s property, and reached a settlement in 1952.  Under that settlement, she received most of the property obtained by Miedl, but the settlement did not cover the art collection taken by Göring.  The Dutch deadline for claims lapsed.  The paintings were then the subject of a claim concerning Goudstikker’s initial acquisition from the Soviet Union.  George Stroganoff-Scherbatoff successfully petitioned the Dutch government to return the paintings to him on the grounds that the Soviet Union had illegally taken the works before Goudstikker bought them.  Stroganoff-Scherbatoff eventually sold the Cranachs to the Norton Simon Art Foundation around 1971, and they have been exhibited by the Norton Simon Museum roughly since then.

In 2007 Von Saher sued the Norton Simon.  The District Court dismissed the case on preemption grounds, concluding that the then-recent California law abolishing the statute of limitations for wartime artwork claims (California § 354.3 of Code of Civil Procedure) “intrudes on the federal government’s exclusive power to make and resolve war, including the procedure for resolving war claims.” 

On appeal in 2010, the Ninth Circuit upheld the dismissal, because “the power to legislate restitution and reparation claims[] is one that has been exclusively reserved to the national government by the Constitution.”  After thus striking down the abolition of the statute of limitations, the court remanded for further proceedings to determine when Von Saher “discovered” her claim to the painting to enable the District Court to rule on whether the claim was timely under a more recently amended law that extended the statute of limitations for all art claims, not just World War II restitution cases.  In lieu of the old, universally-applicable three year statute of limitations, California enacted a six year statute of limitations, triggered only by the “actual discovery” of the whereabouts of a work of fine art, applicable to all claims then pending or filed before 2017, so long as the artwork had been taken in the 100 years prior.

In 2012, the Norton Simon’s second motion to dismiss was granted by the District Court, not on a finding of timeliness, but rather on the notion that complaints about the Dutch restitution claims process were preempted by the Executive Branch’s foreign affairs domain.  That is to say, the idea that Von Saher’s claim necessarily implicated a judgment about the propriety of the Dutch restitution proceedings—including in both the settlement with Von Saher and the rulings with regard to George Stroganoff-Scherbatoff—a judgment that conflicted with the foreign affairs objectives of the United States.

In last year’s opinion, the 9th Circuit posed the question like this: do Von Saher’s claims conflict with the foreign policy of the United States with regard to restitution?  (The Ninth Circuit had already found the revised law in § 338(c) was constitutional in the Cassirer case over Camille Pissarro’s Rue Saint-Honoré après-midi effet de pluie in 2013).  In answering its own question “no,” the Ninth  Circuit shifted its analysis from its earlier decisions in the same case about whether the revised statute of limitations was itself a restitution mechanism (also answered in the negative by Cassirer), to whether claims either revived by the California law generally, or Von Saher’s case specifically, conflict with the actual, current, foreign policy of the United States.  For the first time in the holding of a U.S. decision, the Ninth Circuit invoked the Washington Conference Principles on Nazi Stolen Art as the policy of the United States, and found the claims consistent with that policy. 

So, the unsuccessful certiorari petition was an effort to have the Supreme Court reverse this result and dismiss the case now (from which there could have been no appeal).  Denials of certiorari are rarely accompanied by any explanation or opinion, and so it was here.  The docket simply notes that the petition has been denied.

Challenges remain for the case, but being back in the District Court is precisely where a plaintiff like this wants to be.  For example, in its instructions on remand to the District Court last year, the Ninth Circuit identified one theory that might yet defeat the claims: the act of state doctrine.  This legal doctrine holds that notwithstanding a U.S. court’s jurisdiction to hear claims, it should avoid as a matter of prudence any case that concerns the act of a sovereign nation against one of its subjects.  The Ninth Circuit posited that the act of returning the paintings to Stroganoff-Scherbatoff might itself constitute an act of state beyond review.  In effect, the argument would go, even if returning the Cranachs to Stroganoff-Scherbatoff deprived Goudstikker’s widow of what was otherwise her property, that deprivation was an act by the Dutch government to the detriment of a Dutch citizen, and thus beyond review.

Expect pronounced calls for the museum to return the painting without further litigation to follow from many corners, as the case proceeds. 

Books of Note: Visual Arts and the Law by Judith Prowda

Posted in Art Finance, Auctions, Authentication, Books, Copyright, Fair Use, Galleries, Moral Rights, Restitution

Periodically I like to make note of books about art law that I find exceptional.  Art law is many things to many people, and one of the interesting things in surveying the literature is seeing what selection various authors make in terms of their subject matter.  I reviewed the excellent Art Collecting Legal Handbook by Massimo Sterpi and Bruno Boesch recently, and the strength of that book was their choice to take a set of questions recurring in art collecting in particular to experts around the world.  It’s a fantastic resource for collectors and lawyers.

Another of the best such books in recent years is Visual Arts and the Law: a Handbook for Professionals by Judith Prowda.  Prowda is a professor at the Sotheby’s Institute in New York, and counsel to the innovative art law collective Stropheus.  The launch party for her book at the Sotheby’s Institute was the occasion for just about the most thought-provoking exchange about fair use that I can remember.  The book enjoys a refreshingly straightforward organizational scheme, with three primary sections: Artists’ Rights, Artists’ Relationships, and Commercial Aspects of Art.

Prowda has renowned expertise in copyright and moral rights, and she begins her book with these themes.  One aspects of my own arts education that I valued most was the focus on the object as the starting point: what is it?  What color is it?  What shape, texture is it?  Prowda shrewdly begins her examination of visual arts and the law by discussing what the law defines as art.  Those definitions are what give rise (or don’t) to the rights that then have to be negotiated and enforced.  And this discussion is masterful, surveying the elements of copyright and moral rights arising out of visual art.  Particularly helpful is her review of resale rights; with the Berne Convention many other aspects of copyright have been standardized among treaty nations, but droite de suite remains an exception about which there is little agreement.  Anyone struggling with the right approach to this question will at the best least have an informed opinion after reading this section

Probably the briefest section of the book is the one dealing with commercial relationships.  Don’t be deceived: for practicing lawyers this may well be the section you consult most.  A contract is a relationship, as this section underscores.  In thirty-odd concise pages, Prowda reviews the elements of agreements (including, again, the starting questions of what gives rise to rights in the first place), parties’ duties to each other, and goes over example after example of common and recurring provisions.  Like an evidence treatise to be pulled out each time you’re trying to articulate a hearsay objection or response, this portion of my copy of the book is the most dog-eared. 

Lastly, the book treats commercial relationships.  Auctions, dealers, expert opinions, and stolen art all get to-the-point treatment.

What I love about this book is that I wish I could have read it as an undergrad and a young museum professional.  I wish I could have read it in law school or as a new lawyer.  Its writing is so clear and precise that its usefulness extends well beyond non-lawyers, but equally useful for practitioners in the field.  Indeed, its subtitle is so apt for this reason.  It is not for legal professionals only, or museum professionals only, or academic professionals only.  It is for anyone engaged professionally in the arts.  If you are an art history student, a lawyer considering expanding your practice in art law, or an expert, you should read this book.  And then the next time you’re wondering about something, read it again. 


 

Sponsor Plans to Reintroduce Resale Royalty Rights, Old Contract Idea Resurfaces as Alternate Solution

Posted in Copyright, Moral Rights, Resale Royalties

After word got around that the American Royalties Too Act of 2014 had expired, (covered by Whitney Kimball at ArtFCity, Coline Milliard at ArtNet here, and Jillian Steinhauer at Hyperallergic here), the natural question of course remains, “what’s next.”  Steinhauser spoke to John Doty, director of Jerrold Nadler’s office.  Doty said, “Congressman Nadler does plan to reintroduce the bill this Congress. An exact date and exact bill language have not yet been decided.

I confess that at this point I see the prospects for passage as dim.  Having not even gotten to a floor vote twice, a year and half before a Presidential election, one expects relatively few acts of bipartisanship between now and then.

Interestingly, however, the death of the ART coincided with a great piece by Kibum Kim (also at Hyperallergic) about the “Artist’s Reserved Rights Transfer and Sale Agreement” from a show called “The Contract,” used by artist Seth Sieglaub and lawyer Robert Projanksy in the 1970s.  As Kim puts it:

Introduced in 1971, the contract attempted to address power imbalances in the art world and stake out claims for artists in the post-sale lives of their works. Notably, the contract required future collectors to pay 15% of the upside to the artist upon resale of the work and reserved for the artist certain exhibition-related rights — such as the right to be consulted about the work’s inclusion in public exhibitions and a right to borrow it (at no cost to the collector) for exhibitions. All sales from The Contract require collectors to sign the agreement.   

This would require bilateral agreement of course going forward.  But what is interesting about the proposal is the idea of making it more or less an industry standard.  There are plenty of provisions in consignment or purchase agreements that are not required by law, but which have become standard.  It would be interesting too see if this idea gained any traction.

Reminder: “Art Finance and Law” in Geneva Monday January 26, 2015

Posted in Events, Uncategorized

A reminder of this month’s marquee event in Geneva, the second in a two part series “Art Finance and Law” organized by the Art Law Foundation at the University of Geneva (the first, in London last November, is recapped here).  My ticket is booked, so I hope to see you there (registration is open).  If you’ll be in attendance, drop me a line so we can connect either at the conference or in Genveva.  Bon voyage!

The schedule is as follows:

Accueil | Introduction 

Pierre Gabus, président de la Fondation pour le droit de l’art; Sandrine Giroud, directrice de la Fondation pour le droit de l’art

L’art: une classe d’actifs comme les autres?  Works of art: a common asset class?

Présidence | Chair: Prof. Luc Thévenoz, Université de Genève

Cette session examinera les spécificités des fonds d’investissement en matière d’art, la titrisation et autres produits financiers concernant des œuvres d’art, ainsi que les facilités de crédit garanties par des œuvres d’art.

This session will focus on the specificities of art funds, the securitization of works of art and their use as an asset class as well as credit facilities secured by works of art.

Table ronde | Round table

Frédéric Dawance, Banque Lombard Odier & Cie SA; Philipp Fischer, Abels Avocats; Jan Prasens, Sotheby’s; Philip Hoffman, The Fine Art Fund

Art finance: aspects fiscaux  Art finance: tax aspects

James Carleton, Farrer & Co LLP; Prof. Xavier Oberson, Université de Genève

Art finance: risques & opportunités  Art finance: risks & opportunities

Présidence | Chair: Myret Zaki, Bilan

Nos experts examinerons les questions de compliance dans le marché de l’art: compliance bancaire, provenance et authentification. Faut-il une règlementation accrue? Quel  futur pour le marché de l’art?

Our experts will look at issues of compliance in the art market: banking compliance, provenance, authentication. A need for more regulation?  What future for the art mart market?

Table ronde | Round table

Yan Walther, Fine Arts Expert Institute; Fabian Bocart, Tutela Capital; Yves Bouvier, Natural Le Coultre; Manuela de Kerchove, Schroders; Alexandre Quiquerez, Université Lyon

Closing

Cocktail

First Ripples in Greece from Parthenon Marble Loan to Russia

Posted in Cultural Property, Events, Litigation, Restitution

Last month it was revealed that the British Museum had loaned a sculpture from the Parthenon, a/k/a Elgin, Marbles to  the State Hermitage Museum in St. Petersburg.  Reaction ranged from puzzlement to fury.  Lee Rosenbaum pondered whether the loan was in fact a trial balloon to prepare for litigation, specifically, to rebut Greece’s claim that the sculptures are a single unified work that should be returned with an argument that the collection of individual objects is more complicated.  My reaction really boiled down to the “law” of unintended consequences: once the UK put any of the objects outside its territorial control—let alone in Russia, which has shown little interest in the niceties of international loans and restitution—the British Museum may find itself in a Portrait of Wally situation.

The story will not be over for a long time (ever?), but the predictable unhappiness in Greece has raised the first possible related skirmish.  From The Art Newspaper:

A British Museum spokeswoman confirmed that “we have requested to borrow” an important work from the Museum of Cycladic Art in Athens for the show, “Defining Beauty: the Body in ancient Greek Art” (6 March-5 July). She says the Greek museum has not yet decided on the loan request.

The British Museum currently has 24 items on loan to the Museum of Cycladic Art, and curatorial relations between them are friendly. The fact that the loan has not been formally agreed is because of tensions with the Greek government after one of the Parthenon Marbles, the headless figure of the river god Ilissos, was sent to the State Hermitage Museum in St Petersburg in December. Antonis Samaras, the Greek prime minister, described the loan, the first time one of the sculptures has left Britain since they were controversially taken from the Parthenon by Lord Elgin in the early 19th century, as “an affront to the Greek people”.

As if that weren’t enough, TAN also reports that the British Museum is considering other loan requests. 

As with the Russian loan embargo, all these developments underscore the delicate balance of exhibition, particularly international, loans.  One assumes Britain cannot be surprised that the Greece reaction would be somewhere between insult and rage, which just further begs the question of what the motivation for the loan to Russia was.  Expect more complications.

 

New Lawsuit Over Norman Rockwell Authenticity Spotlights Timely Issues

Posted in Authentication, Galleries

A lawsuit has been filed in New Jersey about the authenticity of a painting sold more than 20 years ago that the gallery allegedly represented was a Norman Rockwell (himself a client of my firm long before my time), but which the plaintiff now alleges was not by the American legend.  The case underscores the precarious position of authenticators, and the upside of the bill that has been pending in New York for almost a year now.

According to the lawsuit, Barry and Isabel Knispel are art collectors and residents of New Jersey.  They allege that Gallery 63 Antiques in New York “offered to sell” to them one or more works of art in 1994.  On October 8, 1994, the Knispels say that they entered into an agreement to buy an original Norman Rockwell Painting, “Mending his Ways,” for $347,437. 

In connection with the sale, the Knispels allege that Laurence Casper (since deceased, but his firm is also a defendant) issued a written appraisal, that stated “In my opinion, [the Painting] is an original by Norman Rockwell with all the humor and artistic quality that Rockwell created in all his works.” 

As part of an insurance valuation, the lawsuit alleges that the Knispels had the painting appraised again in early 2013, but the newer appraisal determined that the work was not by Rockwell, but a Mobil Oil advertisement by Harold Anderson, entitled “Patching Pants.” As a result, allege the Knispels, the painting that they had been insuring for an expected value of $1,750,000 is worth approximately only $20,000.

The most obvious challenge to this case is the passage of time.  Whether under the U.C.C. or the bill of sale itself, covenants of authenticity are not forward-looking.  If the painting is not a Rockwell, then a threshold question will be when the plaintiffs could have determined that, and whether it was within the statute of limitations.  The 2013 appraisal quoted by the Complaint could cut both ways; if the Rockwell signature was as obviously a forgery as that appraisal believes, then the question will be why the plaintiff did not discover it sooner.

The other issue this lawsuit reiterates is the position of authenticators.  Casper clearly gave an opinion about the work, and short of fraud, the plaintiffs will have to prove that Casper has some duty to the buyers that he breached (since he was not a party to the contract).

This case is precisely the sort that the pending bill in New York was intended to address.  Although the lawsuit was filed in New Jersey and seeks the protection of the New Jersey consumer protection act, I think it more likely that New York law will ultimately apply to a transaction that was consummated in Manhattan.  It raises the question of when, if ever, there will be movement on the bill.

With New Congress, Resale Royalties Bill and Foreign Cultural Exchange Jurisdictional Immunity Clarification Act Are Dead (Again)

Posted in Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, Foreign Sovereign Immunities, Immunity from Seizure Act, Legislation, Moral Rights, Resale Royalties

A quirk of parliamentary procedure is that any bill in Congress exists only for so long as that particular Congress is in session.  This week, the 114th Congress took its seats, meaning that any bill not passed by both the House of Representatives and the Senate, and signed by the President, is a dead letter.  This is the fate of many, many bills—indeed most.

As readers know, we have followed two proposed laws for the better part of four years now, each of which have been introduced in some form or other in successive Congresses, only to lapse when a new Congress stepped in.

The first is the effort by Rep. Jerrold Nadler (D-NY) to enact a resale royalty for visual art.  Known as droit de suite, the resale royalty compensates artists for secondary sales of their works.  In the case currently on appeal to the Ninth Circuit, for example, concerning California’s statute, the artists (led by Chuck Close) note that they are often the last person to benefit when their work appreciates in value later.

Nadler introduced a resale royalty bill in 2011, but it failed to become law.  Last year, on the heels of a Copyright Office recommendation to enact resale royalty legislation, Nadler introduced the Resale Royalties Too Act of 2014.  He gave an impassioned defense of the idea at the Appraisers Association of America’s Art Law Day at NYU in November, and it briefly appeared headed for a vote, but with the turn of the calendar page this version too is now void.  Will he, or others, try again? 

As for the Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, that too has been the subject of much commentary here.  The bill was first introduced in 2012, to address an unintended gap between the Foreign Sovereign Immunities Act 28 U.S. § 1605 (FSIA) and the Immunity from Seizure Act, 22 U.S.C. § 2459 (IFSA).  The FSIA is an important law that provides U.S. federal court jurisdiction over cases against foreign sovereigns and their subdivisions and instrumentalities under certain limited circumstances.  In Nazi-looted art cases, that circumstance is often the “expropriation exception,” which allows for jurisdiction when the case concerns rights in property taken in violation of international law (i.e., Nazi theft), and the sovereign defendant is engaged in commercial activity in the U.S. (including, importantly, lending paintings to temporary exhibitions).  The U.S. also has another important law to encourage international loans‑IFSA.  IFSA immunizes an object, not a defendant, from seizure, if it has been pre-cleared by the State Department.  But what if the object has been immunized, but is otherwise the only commercial activity by the defendant?  This happened, and a lawsuit proceeded on that basis against the City of Amsterdam.

The proposed bill would have closed that gap, though not for Nazi-looted claims.  Given that it would have foreclosed claims over objects that, thanks to IFSA, would never be returned, we have always regarded it as a sensible idea, if only a half-measure.  Many disagreed.  And the fact is that the foregoing circumstance has still only happened once, so far as we know, so it is not exactly a burning issue.  But the larger point is that it has now fallen short twice, despite passing the House both times.  And now, neither are even just bills sitting on Capitol Hill anymore. 

Will the short session before a Presidential election provide the political climate for a different outcome on these laws this time?  Don’t hold your breath.   

10, 9, 8…the Biggest Art Law Report Stories of 2014 and a Look Ahead

Posted in Art Fairs, Authentication, Bankruptcy, Blogs, Charitable Foundations, Civil Forfeiture, Copyright, Cy Pres, Deaccession, Detroit Bankruptcy, Fair Use, Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, Gurlitt Collection, Knoedler, Moral Rights, Museums, Preemption, Restitution, VARA, World War II

As the ball teeters above Times Square, and the Glühwein begins to mull on the Art Law Report stove (don’t forget the cinnamon!), a gimmicky but apropos act of reflection is to look back at the biggest stories of 2014, both in art law generally and for yours truly and Sullivan & Worcester LLP.  In highly subjective, unverifiable, and immediately criticizeable order, here they are.  Thanks  as always for reading, and best wishes for in interesting, prosperous New Year.  If you agree, disagree, or otherwise, please continue to stay in touch and carry the conversation forward. 

10.     Restitution Rights Continue on the Upswing.         

Never a straight line, restitution claimants saw a big victory this year when Marei von Saher’s claims against the Norton Simon were reinstated by the Ninth Circuit Court of Appeals.  Holding for the first time that the Washington Principles and restitution are consistent with the foreign policy of the U.S., the court swept away prudential defenses that only a couple years ago seemed to be gaining. 

9.       Dumb Starbucks      

In the end it was a Comedy Central gag, but the curious case of the “Dumb Starbucks” was a clever and illustrative case study in what constitutes parody and fair use

8.       Authenticity   

Whether the ongoing fallout from the Knoedler fraud or efforts to protect authenticators legislatively, the question of authenticity is probably the most consistently recurring theme in art law right now. 

7.       Graffiti Art and Protection

Most would agree that graffiti is as independently copyrightable as anything else, but when you factor in the often-illicit nature of the medium itself (i.e., the medium is often someone else’s property), the results continue to get interesting, with 5Pointz providing the year’s most captivating example.  This topic is most certainly not going away.

6.       Someone is Reading the Blog!

Thanks to you, traffic here surged geometrically this year, nearly tripling over the year before.  Quite by accident, this was noticed by the good folks over at Above the Law, and we were famous for a day.

5.       Artmentum Prevails

When Asher Edelman sued my client Artmentum GmbH in January, it was reported with great publicity.  Less reported outside the Art Law Report was the complete dismissal of the case in November in response to our motion to dismiss.  The appeal period has since passed, and the judgment is final. 

4.       Mask of Ka Nefer Nefer Stays in St. Louis

Our best-read post of the year, 2014 brought an end of the saga of the U.S. government’s failed attempt to seize the ancient Egyptian mask by arguing that it was stolen property when it entered the U.S.  Blown deadlines and failed pleading requirements characterized this case, which is over unless the nation of Egypt itself tries to pursue civil action in the States.

3.       The Corcoran          

After years of financial difficulty, the Corcoran Gallery and the Corcoran College of Art + Design applied to the Superior Court in Washington, DC for cy pres—to modify the trust of William Corcoran on the argument that merging with George Washington University and the National Gallery of Art would accomplish Corcoran’s intent “as nearly as possible.”  A pitched battle ensued, but in the end the court allowed the modification and the merger went through

2.       Cornelius Gurlitt       

In 2014, Gurlitt fought back, reached an agreement, passed away—and then things got complicated.  When 2014 dawned, Bavaria was proposing a new law to revise the statute of limitations possibly to allow claims for the 1,280 works of art found in Cornelius Gurlitt’s Schwabing apartment and revealed in November, 2013.  Yet there was little real sense of what was going to happen.  In April Gurlitt took steps to get his art back, then reached an agreement for the review and possible restitution of Nazi-looted objects. Shortly thereafter, he passed away.  To the surprise of everyone, he named the Kunstmuseum Bern in Switzerland as his sole heir.  The museum waited until November to accept the appointment and announce an agreement with Germany to review the provenance and oversee restitution, but Gurlitt’s competence even to make that bequest is still being litigated.  This is likely to remain one of 2015’s biggest stories, too. 

1.       Detroit Bankruptcy and the Insitute of Arts 

Edging out the ongoing Gurlitt story, it’s hard to argue that the back and forth over the potential sale or collateralization of the collection of the Detroit Institute of Arts was the biggest story of the year.  Tying together questions of title, trust law, bankruptcy, and the ethics and law of deaccessioning, the perils of Detroit and DIA forced the question of what art is worth, both as an asset and as the foundation of a community.  In the end the Grand Bargain held.

Upcoming Event in Maastricht—Assembling Value: The changing roles of experts and expertise in art and heritage worlds

Posted in Events

In 2013 I had the privilege of speaking at the Maastricht University’s Art and Heritage Disputes conference.  It was a well-organized session that I enjoyed tremendously, and I met many terrific scholars and practitioners.  On top of that, Maastricht is an absolute delight. 

I’ve just received word of next year’s edition.  Entitled Assembling Value: The changing roles of experts and expertise in art and heritage worlds, the conference will be held March 22-23, 2015, at the conclusion of The European Fine Art Fair (TEFAF).  As the organizers describe it:

The conference coincides with the launch of the Maastricht Centre for Arts and Culture, Conservation and Heritage (MACCH). MACCH is a joint initiative between the Faculty of Arts and Social Sciences, the Faculty of Law, the School of Business and Economics, and the Faculty of Humanities and Sciences of Maastricht University, and the Stichting Restauratie Atelier Limburg. This interdisciplinary research platform brings together scholars and professionals working on the intersecting fields of arts, culture and heritage, the national and international legal framework concerning these areas and the financial developments of a globalizing art market.

The preliminary panel titles are as follows:

Panel I – Changing Constituency: User Participation in Art and Heritage Presentation and Conservation

Convenors: Prof. dr. Renée van de Vall and Dr. Vivian van Saaze (FASoS)

Panel II – Art Market Valuation – Experts and Empirical Evidence

Convenor: Prof. dr. Rachel Pownall (SBE)

Panel III – Concerning Authenticity – Legal Expertise and the Authentication of Artworks

Convenor: Prof. dr. Hildegard Schneider (FL)

Panel IV – ‘Authorized Heritage Discourses’ – Cultural Heritage and the Changing Roles of Experts

Convenor: Dr. Joop de Jong (FASoS)

Panel V – Experts in Nature Conservation

Convenor: Dr. Raf de Bont (FASoS)

If you may be in the vicinity, it looks well worth the trip.