The Art Law Report

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

“Flea Market Renoir” Possibly Taken from Baltimore Museum Heads to Court

By Nicholas O'Donnell on Posted in Civil Forfeiture, Museums

The 1879 Pierre-Auguste Renoir painting entitled “Paysage Bords de Seine” that was discovered at a Virgina flea market, but which may also have been stolen from the Baltimore Museum of Art more than sixty years ago, is now the subject of a federal court case in Alexandria, Virginia.  The United States has seized the painting and filed an action, known as “interpleader,” to sort out the proper ownership of the work.

As discussed in September, 2012, the painting became a sensation when a Virginia woman purchased a small painting in a golden frame with “RENOIR” engraved onto its frame.  Assuming it was a copy, she paid $7 and brought it to the Potomack Company.  An auction was scheduled, with estimates ranging as high as six figures.  Shortly thereafter, a Washington Post reporter examined the library at the Baltimore Museum of Art and found a provenance card that seemed to be for the very same painting, originally part of a gift from Sadie A. May.  The card notes that the painting, on a linen napkin, was painted for Renoir’s mistress, apparently at a restaurant on the Seine.  More importantly, the card concludes with the entry “STOLEN FROM THE GALLERY, Nov. 17, 1951.” 

The Baltimore Museum and its director, Doreen Bulger, immediately stated its interest in receiving the painting back.  The FBI seized the painting on October 2, 2012 pursuant to a civil seizure warrant, and it is presently in the FBI field office in Manassas, Virginia.  To impose some order on the confusion, the United States has now filed what is called an “interpleader” action.  Under Rule 22 of the Federal Rules of Civil Procedure and 28 U.S.C. § 1335, interpleader is simply another word for a dispute in which a holder of property (most often a bank), faces claims from multiple parties for ownership.  Rather than make a decision and face legal action from the disappointed parties, the holder files an interpleader action in which the claimants make their arguments and the court ultimately decides.

Here, the United State has identified six potential claimants, including for the first time the identity of the woman laying claim to the painting as a good faith purchaser at the flea market.  Her name is Marcia “Martha” Fuqua, and she is a resident of Lovettsville Virginia.  Her detailed letter requesting the return of the painting is an exhibit to the Complaint.  The other claims are summarized in the Complaint as follows:

  • The Baltimore Museum of Art;
  • Fireman’s Fund Insurance, which apparently paid a claim on the loss to the Museum in 1952;
  • Amalie Adler Ascher, great niece of Sadie May, as Sadie’s heir to any paintings that the Baltimore Museum chose not to accept;
  • Heirs of Herbert L. May (ex-husband of Sadie), who actually purchased the Renoir from a Paris dealer in 1925; and
  • The Potomack Company, the gallery from which the painting was seized. 

Interestingly, whereas initial reports (and the scheduled sale) valued the work at more than $100,000, the Complaint sets the value at approximately $22,000, relying on an attached appraisal of Ted Cooper, Director of Adams Davidson Galleries.  The dispute will bear close watching.

New Sullivan & Worcester Advisory: Supreme Court Responds to Museums’ Concerns in Kirtsaeng v. John Wiley & Sons, Inc.

By Nicholas O'Donnell on Posted in Copyright

The Sullivan & Worcester LLP Art and Museum Law Group has issued a new client advisory about the Supreme Court’s decision in Kirtsaeng v. John Wiley & Sons, Inc.  As analyzed in the advisory, the Court has extended the “first sale” doctrine of the U.S. Copyright Act to copies of protected works that were lawfully manufactured and first sold abroad and later re-sold in the United States, in a result strongly advocated by United States museums.  The decision abrogates the earlier view that the “first sale” doctrine applied to copies manufactured outside the United States only if an authorized first sale occurred within the United States.  The implications are significant for museums and anyone engaged in visual arts commerce who otherwise might have had to search for permission to import or display works made overseas.

 

Second Lawsuit Against Metropolitan Museum of Art About Admissions Policy

By Nicholas O'Donnell on Posted in Museums, Uncategorized

For the second time in less than four months, a complaint has been filed against the Metropolitan Museum of Art over its admissions fee policy.  Whereas the November, 2012 action seeks injunctive relief to compel the Met to change its practices, the newest case has been filed as a class action and seeks money damages as well.  The Museum has responded forcefully in a statement by Director Thomas P. Campbell challenging the new case.

In November, two plaintiffs (Theodore Grunewald and Patricia Nicholson) alleged that the Met’s voluntary admissions policy was both a fraud and a violation of the various laws and agreements between the Met and New York City that underlie the museum’s location in Central Park (which provide that the museum may stay rent-free so long as it is open to the public free of charge on multiple days each week), as well as of General Obligations Law § 349, New York’s prohibition against unfair and deceptive practices.  The plaintiffs claimed not only that the Met’s signs suggest a mandatory (rather than optional) admission fee, but that the Met has intentionally misled the public to that effect. 

The newest case is structured similarly, now on behalf of Filip Saska, Tomáš Nadrchal, and Stephen Michelman as putative representatives of a class (and represented by the same attorney as Grunewald and Nicholson).   The first complaint was clearly designed to draw maximum publicity, but the Met chose a muted response.  Clearly it has decided that a more public approach is now due.  Thomas P. Campbell, the Met’s Director and CEO, issued a statement that makes a few critical points:

  • The Met has never imposed an admissions fee;
  • The recommended admissions policy was agreed to by the City of New York (undermining the plaintiffs’ arguments that the agreements with the city have been breached);
  • The policy is clearly posted and explained.

As we noted here in November, the most obvious hurdle for the Grunewald/Nicholson plaintiffs was that it is hard to construe the signage about which the plaintiffs claim as being factually untrue, and a threshold question of a fraud claim is the falsity of the statement.  Specifically, is a sign that says “Admissions Recommended” a false statement of fact, or rather a request?  And even then, the plaintiffs’ reliance on the statements of fact that they allege are false also has to be reasonable.  The cases’ arguments that as members of the public they are intended beneficiaries of the Met’s agreements with the City also seem to be somewhat tenuous, particular if the city agreed to them (a third-party beneficiary cannot prevail if the parties to the contract of which it is a beneficiary have performed the agreement).

As predicted in November, this issue seems unlikely to go away quickly.

ALI-CLE Legal Issues in Museum Administration Next Week in Chicago

By Nicholas O'Donnell on Posted in Events

I’m still working on my writeup of last week’s terrific Art and Heritage Disputes conference in Maastricht, but with no rest for the weary I’m looking ahead to ALI-CLE’s annual Legal Issues in Museum Administration conference next week in Chicago.  As usual, the program and faculty are world-class.  Hope to see you there.

The schedule as posted includes:

  • Cultural Property Roundtable: Updates and Case Studies
  • Recent Issues in Authentication
  • Original, Digital, and Exhibition Copies – Rights and Responsibilities?
  • Foreign Lenders and Risk Management; Immunities
  • International Disputes and Arbitration
  • Safeguarding Living Treasures: Children in the Museum
  • eBooks and Digital Publications
  • Tax and Legislative Update
  • Social Media and Technology Updates
  • Litigation Update
  • Ask the Lawyer (Almost) Anything
  • Look Who’s Talking: Freedom of Expression and the 1st Amendment at Public Libraries and Museums 
  • General Liability Insurance: Terminology and Coverage
  • The Ins and Outs of In-kind Gifts
  • Ask the Intellectual Property Lawyer
  • Customs
  • International Fundraising and Friends Groups
  • Employee Handbooks: Key Tips for Revisions and Updates
  • Advanced Topics – Contracts (with Emphasis on Construction)
  • From the Ground Up: Construction Issues – Environmental and Historic Preservation Issues, Architect Selection, AE and Construction Contracts
  • Risky Business: High Risk Activities and Projects Involving Your Museum Building

 

FBI Claims to Know Identity of Gardner Thieves, Timing Deserves Scrutiny

By Nicholas O'Donnell on Posted in Museums, Uncategorized

The FBI issued a press release today in which it states that with a “high degree” of confidence, it has identified the thieves responsible for the 1990 theft from the Isabella Stewart Gardner Museum in Boston.  This development is remarkable for what it says, and what it does not, and deserving of a skeptical view given its timing.  The FBI release adds sufficient details to rise above the rumor mill, but it raises as many questions as it answers. 

Remarkably now nearly a quarter century ago, in 1990 two thieves dressed as Boston police offices gained access to the Gardner museum, and made away with, among other items:

The Concert by Vermeer

A Lady and Gentleman in Black by Rembrandt

The Storm on the Sea of Galilee by Rembrandt

A Self-Portrait by Rembrandt

Landscape with Obelisk by Govaert Flinck

Chez Tortoni by Edouard Manet

Five drawings by Edgar Degas: La Sortie de Pesage; Cortege aux Environs de Florence; Program for an artistic soiree 1 & 2; and Three Mounted Jockeys

The robbery has never been solved.  Claiming to have unearthed a link to the theft has become, in the 23 years since, a bit of a sport in Boston, with little in the way of verifiable detail (to wit, within days of James “Whitey” Bulger’s arrest, speculation was already rampant that he might know something about the crime).  By contrast, Tom Mashberg and Anthony Amore’s 2011 book Stealing Rembrandts addresses the less-glamorous but more realistic aspects of art crime (including this one) with far more nuanced reporting.

The bottom line, however, is that the crime remains unsolved.  The FBI’s press release today does provide, for the first time in many years, additional detail about what the FBI believes happened to the art.  From the FBI: “The FBI believes with a high degree of confidence that in the years after the theft, the art was transported to Connecticut and the Philadelphia region, and some of the art was taken to Philadelphia, where it was offered for sale by those responsible for the theft,” according to Richard DesLauriers, Special Agent in Charge of the Boston office.  In addition, DeLauriers stated that, “With that same confidence, we have identified the thieves, who are members of a criminal organization with a base in the Mid-Atlantic states and New England.”  After the attempted sale, which took place approximately a decade ago, the FBI claims that its knowledge of the art’s whereabouts is limited.

The new information begs the question of “who,” naturally, but no information has been released on that question yet.  And, unfortunately, the most glaring aspect of the release is today’s date, i.e., the 23rd anniversary of the theft.  It has become a regular, if not annual, press event to speculate this time of year what may have become of the stolen artworks.  If, as the FBI says, it knows “with a high degree of confidence” who the thieves were—but not where the artwork is now, what does that say about the FBI’s degree of certainty?  Or, conversely, if the FBI has known of the path of the art, why is it revealing the information only now?  The anniversary timing deserves at least a small dose of skepticism. 

This time may be different, but the FBI has been “appealing to the public” for 23 years.  Whatever it now believes happened 15 years ago may be true, but the crime frankly appears no closer to being solved than it was yesterday.  In that respect today’s development may be less “stunning” than it is somewhat predictable.

Art and Heritage Disputes at the University of Maastricht

By Nicholas O'Donnell on Posted in Cultural Property, Restitution, Uncategorized

On March 24-25, 2013, I will be attending the Art and Heritage Disputes at the University of Maastricht.  The seminar website is here:

On March 25, I will speak on the topic “American Wartime Art Restitution in the 1990s and Beyond-Has it All Been Worth It?”  The program highlights many other experts I look forward to hearing.  The schedule includes the following speakers and topics:

Michail Risvas (University of Oxford): The Protection of Underwater Cultural Heritage: Multilateral v. Bilateral Approaches

Yannick Radi (Leiden University): Identifying Culture and Shaping Expectations in International Investment Law

Anne-Marie Carstens (University of Oxford): The Protection of World Heritage Sites during Armed Conflict

Sebastian A. Green Martinez (University of Buenos Aires): Dispute Settlement Mechanisms: Standing before the International Court of Justice

Eleni Polymenopoulou (Brunel University): Cultural Rights in the Jurisprudence of the International Court of Justice

Alessandro Chechi (University of Geneva): Cultural Heritage Protection through International Adjudication

Jos Van Beurden (Free University of Amsterdam): The Future of Colonial Acquisitions and Conflict Studies

Anne Laure Bandle (University of Geneva): Fakes, Fears, and Findings – Disputes over the Authenticity of Artworks

Jan Hladik (Chief of the UNESCO Cultural Heritage Protection Treaties Section): The UNESCO Draft Declaration of Principles Relating to Cultural Objects Displaced in Connection with the Second World War

Nicholas O’Donnell (Sullivan & Worcester LLP-Boston): American Wartime Art Restitution Litigation in the 1990s and Beyond- Has it All Been Worth It?

Andrzej Jakubowski (Polish Academy of Science, Warsaw): Restitution or Re-purchase? Critical Remarks on Recent Polish Art-Recovery Practice

Sabrina Urbinati (University of Milan Bicocca): Improving the Principle of Cooperation against Illegal Movements of Cultural Objects: Two Cases of Archaeological Objects Restitution from Italy to Bulgaria

Asoid Garcia-Marquez, (Lawyer at the UNESCO Office of International Standards and Legal Affairs), and Athina Papaefstratiou Fouchard, (Associate at the International Arbitration Group of Freshfields Bruckhaus Deringer LLP, Paris): The Role of UNESCO in the Resolution of Disputes Regarding the Recovery of Stolen or Illicitly Exported Cultural Property

Bruno S. Frey (Warwick Business School, Zeppelin University, Center for Research in Economics, Management and the Arts, Switzerland and University of Zurich): Alternatives to “Legitimate Ownership” of Heritage

Craig Forrest (T.C. Beirne School of Law): Art and Heritage on Loan: The Role of Immunity in Dispute Resolution

S. I. Strong (University of Missouri): Rubin Redux: Rights Balancing in Cultural Heritage Litigation

Christa Roodt and David Carey Miller (University of Aberdeen): Stolen Cultural Property: The Implications of Vitium Reale in Private Law and Private International Law

Christian Armbruester (Free University Berlin): Private Law as an Instrument for the Protection of Cultural Property

MFA and Harvard To Keep Iranian Antiquities, FSIA/Seizure Questions for Museums Left Unanswered

By Nicholas O'Donnell on Posted in Antiquities, Cultural Property, Foreign Sovereign Immunities, Museums, Restitution

The First Circuit Court of Appeals has affirmed a win for the Museum of Fine Arts Boston and Harvard University concerning possession of a number of Iranian antiquities.  The ruling left open, however, some interesting questions about the Foreign Sovereign Immunities Act (FSIA).  In particular, the First Circuit did not have to rule on whether antiquities in a museum are “property” of a source country that could be used to satisfy an unrelated judgment, or whether a museum displaying an object from a foreign country makes the object “used in commercial activity” such that it is no longer immune from seizure under the FSIA. 

The case in the First Circuit, Rubin et al. v. Islamic Republic of Iran, et al., is not actually a restitution case, it is a terrorism case.  The Rubin plaintiffs are U.S. citizens injured in a 1997 terrorist attack in Jerusalem orchestrated by Hamas.  The plaintiffs filed suit in the District Court for the District of Columbia, alleging that Iran had provided material support to Hamas in carrying out the attack.  Iran put up no defense, and the plaintiffs were awarded a default judgment in 2003.

As the Chabad case covered extensively here has shown however, a default judgment is only the start of the process to collecting money.  The plaintiffs filed an action to attach almost 2,000 antiquities in the possession of the MFA and Harvard, arguing that the antiquities were the property of Iran, and thus available to satisfy the judgment.  Put another way, the plaintiffs argued that given the judgment debt Iran had to them, the plaintiffs were entitled to attach the antiquities to sell or otherwise dispose of to satisfy the judgment.  This is the same process any judgment creditor would follow, the assets in question just happened to be a large number of cultural artifacts.

The museums defended on two principle grounds: first, that the objects do not belong to Iran and are therefore not properly attachable to satisfy a judgment; and second, that the FSIA exempts property of a foreign sovereign from execution.  In response, the plaintiffs disputed the museums’ standing to assert sovereign immunity and/or could not satisfy its elements, and even if the museums had that standing, that Terrorism Risk Insurance Act of 2002 (TRIA), Pub. L. No. 107-297, § 201 (a), 116 Stat. 2322, 2337 (2002) (codified as 28 U.S.C. § 1610) allowed the plaintiffs to attach the antiquities as “blocked assets” under the TRIA.

On appeal to the First Circuit, the two critical issues were (1) the FSIA immunity from seizure, and (2) the TRIA’s applicability.  FSIA immunity from seizure is quite different from the cultural loan immunity from seizure provided by 22 U.S.C. § 2259 (the Immunity from Seizure Act) discussed here previously; the Immunity from Seizure Act protects prospectively those objects loaned into the United States after they are given immunity from seizure by the State Department.  It does not affect the immunity from seizure of objects owned by foreign states already in the country (cultural or otherwise), that is governed by the FSIA.  FSIA immunity from seizure is also distinct from FSIA immunity from suit, which removes jurisdiction over the claims against the foreign country in the first instance.  That is also not at issue in the Rubin case. 

The FSIA, for its part, makes “the property in the United States of a foreign state” immune from seizure or execution unless the property is “used for commercial activity within the United States.”  The plaintiffs argued that the FSIA does not require Iran to use the objects for commercial activity, only that someone must.  This reading is credible in view of other aspects of the FSIA; for example, in considering whether an object was taken in violation of international law, the Ninth Circuit has held that the object need not have been taken by the defendant, only that it be held by a foreign sovereign at the time of suit (and thus Spain could be sued over objects allegedly taken by Nazi Germany).

Nonetheless, the District Court ruled against the plaintiffs on that point, and the plaintiffs did not challenge it on appeal.  Instead, the plaintiffs relied on a different part of the FSIA, the National Defense Authorization Act of 2008 (NDAA).  That statute postdates the underlying judgment, however, and the First Circuit held that the plaintiff’s failure to explain why the later amendment applied to the earlier judgment forbid them from making the argument.  So, to what extent that statute, § 1610(a)(7) of the FSIA might apply—which allows execution by a judgment creditor “against any property interest” whatsoever of a foreign state—remains an open question. 

The dispositive question, therefore, was the TRIA’s effect.  That statute permits attachment of property otherwise immune from execution that are “the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party).”  TRIA, § 201(a).  A “blocked asset” is “any asset seized or frozen by the United States” under laws passed as sanctions for terrorist acts; the simplest example in this context would be bank accounts owned by Iran seized in response to the 1979 hostage crisis.  To proceed along these lines, the plaintiff must obtain a license from the Office of Foreign Asset Control (OFAC). 

In contrast, antiquities in the MFA and at Harvard for decades cannot be considered blocked assets, in no small part because Iran has not laid claim to them recently (or, as far as the First Circuit could tell, ever).  And OFAC entered the case on appeal to argue that these were not blocked assets, to which the First Circuit accorded substantial deference. 

The First Circuit therefore upheld the lower result based on the TRIA.  Left unresolved in this case, and as precedent for the future, however, was to what extent a judgment creditor could argue for seizure of antiquities as “property” of the source country, or to what extent the museums’ (and not the source country accused of terrorism) display of the objects constitutes “commercial use” sufficient to strip the objects of immunity from seizure.  It is not difficult to imagine other cases either from Iran itself, or from other source countries, raising these very same questions.  For now, at least, we will have to wait for a circuit-court level answer.

President Putin Vows to Keep Chabad Library in Russia

By Nicholas O'Donnell on Posted in Foreign Sovereign Immunities, Restitution

Backing off some of the more belligerent comments made recently by the Foreign Ministry, Russian President Vladimir Putin has nonetheless signalled that Russia has no plans to return the Chabad library to comply with a 2010 judgment or the more recent sanctions order.  Both Reuters and the Art Newspaper reported that Putin proposed to store the Schneerson library in the newly built Jewish Museum in Moscow.  Putin stated “The Schneerson Collection belongs to Russia. . . .If we now open a Pandora’s box and start satisfying similar requests, there will be no end to these claims. Maybe one day we will be able to do this, but now we are absolutely not ready for this. This is impossible,” Putin said.”  That statement simply begs the question of what the Pandora’s box is that Putin fears.  Russia has, for example, refused for years even to discuss cultural artifacts taken to the Soviet Union as the German army retreated in World War II.  The more conciliatory tone is a marked change from recent threats to try to find the United States in default in retalation for the recent sanctions order, although it does little to address the fundamental dispute.

Russia Threatens Lawsuit Against U.S. Library of Congress in Further Retaliation for Chabad Sanctions Order

By Nicholas O'Donnell on Posted in Foreign Sovereign Immunities, Litigation

In a story that gets more unusual with every new development, the Russian Foreign Ministry has reportedly recommended filing a lawsuit, in Russia, against the United States Library of Congress in response to last month’s contempt sanctions order by the U.S. District Court of the District of Columbia arising out of Russia’s refusal to obey a judgment to return the Chabad Lubavitch library of Menachem Schneerson. 

The Russian Foreign Ministry was quickly and harshly vocal in response to the January sanctions order, promptly issuing on Twitter, of all places, a series of veiled and explicit threats.  Russia has already refused to loan cultural artifacts to the United States for more than two years because of the 2010 Chabad judgment.

The latest threat claims that the Library of Congress facilitated a 1994 interlibrary loan to Chabad of some books that were never returned to Russia.  According to the Art Newspaper, the Kremlin-funded English-language news channel Russia Today reported that “The Russian State Library’s actions are expected to be symmetrical to the actions of the American side. They are expected to file a lawsuit with a Moscow court. If it finds the Library of Congress guilty of purloining the books and the financial claim is not settled, that will be a basis for Russia to demand the seizure of the non-immune American property abroad.”  In addition, Sergey Lavrov has said, “We will seek to make a reciprocal move. This [situation] should not be left without reaction.”

Even accepting what is alleged about the 1994 loan as true, one has absolutely nothing to do with other.  In any principled forum, threatening a blatantly pretextual lawsuit in retaliation for a valid judgment elsewhere should not survive dismissal—or sanctions.  Moreover, if there were a legitimate grievance, one would expect it to have been raised sometime in the 18 years since the 1994 loan. 

These threats instead underscore the fundamental misunderstanding at issue here that seems to be driving so many of the Russian responses: the apparently sincere belief by Russian officials that the D.C. court that issued the sanctions is somehow acting at the whim of the executive branch.  There seems to be no convincing Russia otherwise, even though the Department of Justice publicly voiced its disagreement with the court’s approach.  Hatching a scheme to hold the United States in contempt of a Russian court—to punish the United States for the acts of an independent court makes—as little sense as refusing to loan objects that cannot be seized because of the Immunity from Seizure Act, 22 U.S.C. § 2459, but that approach shows no sign of dissipating, either. 

One might expect the United States actually to participate in Russia in defense of the Library of Congress (in contrast to Russia’s approach here), but given the attendant circumstances it is very difficult to gauge the likely course of the proceedings beyond that.

New York Times Analyzes Jenack Appeal, Art Law Report Quoted

By Nicholas O'Donnell on Posted in Auctions, Collections

The New York Times has stepped into the fray in reviewing the New York Court of Appeals’s decision to review the Rabizadeh/Jenack appeal concerning the application of New York’s Statute of Frauds to compel disclosure of a consignment seller at auction.  The article zeroes in on the potential impacts to the ways in which auction houses do business.    I am quoted in the article and the Art Law Report is referenced on the topic of mandatory disclosure. 

Something I did not focus on as much when the Appellate Division’s decision came out last fall is that not only would the decision come into play if a winning bidder won’t pay, but also when the bidder will.  As a matter of contract formation, once a bidder wins an auction there is a contract, which neither the auction house nor the seller can avoid.  A binding agreement is just that: it binds both parties.  At that point, a willing buyer is also of concern to anyone hoping to keep the seller a secret: that buyer could sue to enforce the contract she has with the auction house, part of which includes the seller’s name.

One very interesting thing to watch in advance of the parties’ briefing will be to see who tries to weigh in as an amicus.  We will be watching.