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The Art Law Report

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

Just Kidding? Celebrity Hacked Photograph Exhibition Scuttled

By Nicholas O'Donnell on Posted in Copyright, Fair Use

Having presumably gotten all of us to take the bait, appropriation artist XVALA has backed off and announced that he will not include versions of hacked photographs of Jennifer Lawrence, Kate Upton, and others, in a show entitled “No Delete.”  The show will instead include, apparently, “the artist’s self-shot, life-size, nude images.”  So, there’s that. 

With that said, a few points came to mind after first considering the issue on Tuesday.  First, it is important to remember that the copyright protection that the celebrities/authors could claim in their photographs is not limited to this exhibition.  Anyone circulating the pictures would be an infringer.  The possibility of an art exhibition raised the prospect that XVALA might claim fair use, but garden variety peddlers of such things could not plausibly do so.

The other is to clarify a point we made about injunctive relief.  To be clear, no one holding a copyright in the photographs needs a court order to begin protecting herself.  Under the Digital Millenium Copyright Act, any Internet Service Provider that receives a takedown notice can spare itself from infringement liability by complying with that notice.  In a case as publicized as this, it is hard to imagine any ISP not doing so as quickly as possible.  An injunction would simply strengthen the celebrity plaintiff’s hand.

So perhaps we were just trolled on this one, but it will be interesting to see if there are any further uses of copyright. 

Glass Half Full or Half Empty? Detailed Report Published on Worldwide Efforts to Restitute Nazi-Looted Art Since the 1998 Washington Conference

By Nicholas O'Donnell on Posted in Restitution, World War II

After the 1998 Washington Conference on Holocaust Era Assets and the eponymous Washington Conference Principles on Nazi-Stolen Art that came out of it, it is hardly surprising that a recurring theme has been to assess the progress of those nations that participated and signed on.  Equally unsurprisingly, those assessments are usually more anecdotal than empirical, and usually arise out of a particular case or cases in the context of that country’s response.

As part of the International Council of Museums (ICOM) Museum and Politics Conference currently taking place in St. Petersburg, two writers have aimed to change that, and have issued a remarkably detailed yet broad report on the progress of the forty-four countries that endorsed the Washington Conference Principles, and the forty-seven that endorsed the 2009 Terezin Declaration after that conference on the tenth anniversary of the Washington Conference.  Dr. Wesley A. Fisher and Dr. Ruth Weinberger, on behalf of the World Jewish Restitution Organization (WJRO) and the Conference on Jewish Material Claims Against Germany (Claims Conference) give an overview of recent history, and then address each country one by one.  It is a most impressive piece of work. What does it all mean?  Most are unimpressed with the results (not the report), Graham Bowkley’s headline in the New York Times reads “Nations Called Lax in Returning Art Looted From Jews.”

The report begins with a definition:

“Looted art,” as defined for the purposes of this paper, consists of artworks, including paintings, prints and sculptures, as well as other cultural property plundered from Jews by the Nazis, their allies and collaborators.

Notably, this does not include “flight goods,” and it is not clear whether it is meant to include forced sales or inherently coercive sales under duress (I, sham transactions well below market value).  The latter forms a critical part of the universe of Nazi-looted art, given the bizarre propensity for papering these illegitimate sales with receipts and “paying” their victims for their art.

In any event, the report takes a high level view at what progress has been made.  Just to review, the Washington Conference Principles, while deliberately non-specific in many regards, have an overarching theme: that countries should take a variety of steps (archival openness, fair processes, internal review) to improve what had been the state of restitution and provenance research.  Thanks to the sea-change in attitudes, at least, it is almost easy to forget that in 1998 the problem was almost unaddressed, and barely acknowledged.  The Terezin Declaration took stock of some progress, and recommitted the participants to the effort. 

The Washington Conference Principles are of greatest relevance to those countries both with significant state collections, and where the events of the war or occupation took place.  This is for several reasons: while private museums and foundations (particularly in the United States) can be encouraged to undertake certain steps (as the Association of Art Museum Directors and American Alliance of Museums do), those institutions hold private property of which the U.S. government cannot dictate a transfer.  California’s revision of its statute of limitations is a notable exception.  But in the museums of Europe, most are owned by their respective states, so assuming a will to act, the outcome is within reach.  And, of course, simple geography means that so much of the art that changed hands during the war went somewhere, but still in Europe. 

How one views the report from there really is a matter of outlook.  At first blush, this quote is terribly depressing:

Of the 50 countries for which summaries are appended to this report, only 4 may be said to have made major progress towards implementing the Washington Conference principles and the Terezin Declaration, while an additional 11 have made substantial progress in this regard.

Yet two of the countries lauded for significant progress are Germany and Austria, which are of unique importance for obvious reasons.  The Netherlands and the Czech Republic, two countries whose significant Jewish populations and collections were decimated, round out the circle of honor.  So in a certain sense, if you had to pick a short list of countries where progress is essential, these would be on it.  Austria is clearly the gold standard, and perhaps the greatest reason for optimism for one simple reason: at the time of the first Washington Conference, Austria was at the other end of the spectrum, known for foot-dragging and hiding behind its post-war restitution laws that facially returned Jewish property but forbade its export.  In 1998, however, Austria passed its revised restitution law that has created a formal arbitration process and led to the restitution of dozens, if not hundreds, of works.  Change is clearly possible. 

Germany is a harder case to assess.  The report lauds the creation of the German Advisory Commission for the Return of Cultural Property Seized as a Result of Nazi Persecution, Especially Jewish Property (Beratende Kommission im Zusammenhang mit der Rückgabe NS-verfolgungsbedingt entzogoner Kulturgüter, insbesondere aus jüdischem Besitz).  That commission, better known from presiding member Jutta Limbach, has indeed recommended some restitution.  But the number of cases it has handled is low, and it has recently put its foot in it twice in a row. 

The report was complimentary of the information made available in Germany, but noted that most research is still conducted by the museums themselves.  That makes any progress necessarily slow.  The proposed national research center (which German Minister of Culture Monika Grütters was quoted yesterday in Die Welt as possibly opening this year) is also cited favorably.  The report discusses the Gurlitt case, but more as a matter of reporting, and mentions the assertions of Gurlitt’s representatives somewhat uncritically. 

Lastly, the so-called “Lex Gurlitt” to extend the statute of limitations is discussed.  This is timely, because after almost eight months languishing in the Bundesrat, Bavarian Minister of Culture Winfried Bausbeck has renewed his push to get the law passed, but the results are uncertain and the effect of the proposed law is debatable (from the standpoint of both efficacy and, apparently, constitutionality). 

The Netherlands is rightfully treated as a success story.  Like Austria, while all the people can’t be pleased all the time, most regard the national claims system there as fair and comprehensive. 

That’s the glass is half full view.

France gets the designation of “substantial progress” with Belgium, Luxembourg, Norway and Slovakia.  I think France failing to make the top category has to be regarded as a disappointment, however, because of its importance.  The targeting of French Jews, whether in Vichy territory or under German occupation, was among the most organized and ruthless aspects of Nazi art looting.  And the French national museums’ seemingly annual announcement that they are about to get serious on the issue is best tuned out at this point.  France’s 2,000 “heirless” objects have been a known commodity for two decades, with little change.  To be fair, France does have a 1999-created Commission for the Compensation of Victims of Spoliations. 

That’s as good as it gets, however.  From there, the only question in report is just how bad the offenders are.  Progress in nearly all of eastern Europe is regarded as non-existent (in addition to those discussed specifically below: Belarus, Bosnia, Bulgaria, Estonia, Latvia, Macedonia, Poland, Romania, Serbia, Slovenia, and Ukraine).

Italy is singled out for particular criticism, and fairly so, frankly.  Italy has pursued antiquities, museums, even curators, to the ends of the earth (even objects found in international waters), so one might expect a comparable effort with regard to Nazi-looted art closer to home (Italy’s established Jewish community fared well by comparison until late in the war and Mussolini’s collapse, after which the Nazis took over the persecution in earnest).  Not so, regrettably.  The report states succinctly:

It does not appear that provenance research is taking place in Italy, nor is there a legislative background that would allow for the restitution of cultural and religious property.

Hungary also gets worked over in the report:

About 90-92 % of the artworks taken out of the country were returned between 1945 and 1948, with approximately 20% remaining in Hungary’s cultural institutions – including artworks looted from Hungarian Jews. The National Gallery and the Museum of Fine Arts are known to hold looted art. Despite numerous legal attempts, the heirs to the Herzog collection, the Hungarian banker Baron Mor Lipot Herzog, who had collected between 1,500 and 2,500 artworks, have been denied any restitution. In 2010, the heirs to the Herzog collection filed a lawsuit in the United States against Hungary. The Herzog collection is not the only collection of Jewish artworks kept by Hungarian cultural institutions. According to experts in the field, Hungarian museums still store several hundred works of art obtained under questionable circumstances.

Hungary has never set up a historical commission to investigate Hungary’s role and participation in the financial and physical annihilation of its Jews, and it has not initiated any provenance research by its cultural institutions. While a few restitutions have taken place, important works of art have consistently been kept from being restituted to their rightful owners.

Many other countries are criticized for giving lip service to the Washington Principles but little else. 

In the end, there is no question that the state of affairs now relative to 1997 is night and day.  That should be acknowledged and celebrated.  But there is clearly more to be done. 

Registration Open for 2015 National Cultural Heritage Law Moot Court Competition at Depaul Center for Art, Museum & Cultural Heritage Law

By Nicholas O'Donnell on Posted in Copyright, Moral Rights

For students following the various issues we cover here, there is an exciting opportunity next winter.  Registration is now open for DePaul University College of Law’s 2015 National Cultural Heritage Law Moot Court Competition in Chicago on February 27-28, 2015.  The competition is open to twenty-six two- and three-member student teams from ABA-accredited or provisionally accredited law schools.  Schools may register up to two teams. 

The 2015 Competition will focus on constitutional challenges to the Visual Artists Rights Act of 1990 (VARA), 17 U.S.C. § 106A, which protects visual artists’ moral rights of attribution and integrity. The problem will address both a First Amendment and a Fifth Amendment challenge to VARA.

The Center for Art, Museum & Cultural Heritage Law is a national leader for cultural property issues and the law (headed by the renowned Patty Gerstenblith, Morag Kersel, and Lubna El-Gendi), and its events are invariably fascinating and well-run.  Moreover, VARA is a fascinating topic that is not as well-known or interpreted as other aspects of copyright law, particularly insofar as its moral rights components are slightly at odds with many other aspects of copyright law.  Any students interested in these issues should consider joining the competition. 

Visit the competition website at go.depaul.edu/chmoot to register, or contact the Competition Board at chmoot@gmail.com with questions.

Massachusetts High Court Clarifies: Written Agreement Not Required to Create Consignment of Fine Art and its Resulting Trust Duties

By Nicholas O'Donnell on Posted in Bankruptcy, Consignment, Legislation

The Supreme Judicial Court, the high court of the Commonwealth of Massachusetts, has answered a certified question from the Bankruptcy Court about the interpretation of Massachusetts’s fine art consignment law, G.L. c. 104A.  The case, Eve Plumb et al. v. Debra Casey, SJC-11519, originated with an art dealer’s bankruptcy and the claim by the trustee in that bankruptcy that the artwork in the dealer’s possession belonged to that bankrupt dealer, not the artists.  The SJC has interpreted the 2006 amendments to the law for the first time and clarified the roles of everyone involved.  In full disclosure, I did some work for two of the artists (Dylan Stark and Robert Stark) at an early phase of the Bankruptcy Court proceedings.  Eve Plumb, now an artist but also well known as the actress who played Jan Brady on The Brady Bunch, was another of the artist-claimants.  In sum, once an artist delivers a work of art for sale for the purpose of exhibition or sale, it is a consignment, and the seller/consignee holds it in trust for the artist, regardless of the consignee’s own circumstances.

Kenneth Wynne III and Allyson Wynne owned a gallery called Wynne Fine Art, Inc. in Chatham.  While in possession of a large number of artworks that had been delivered for consignment by various artists, the Wynnes, and the gallery itself, all filed for bankruptcy.  The gallery filed a Chapter 7 petition, meaning that the corporation intended to liquidate itself, rather than reorganize and emerge to try again.  As is typical in that scenario, a bankruptcy trustee is appointed to oversee the liquidation.

In a nutshell, when the gallery went out of business and the artists who had put their works there for consignment requested them back, that trustee (Debora Casey) took the position that the paintings were the property of the estate, and moved for permission to sell the art.  The downside to the artists was enormous: rather than receive the actual artwork back, which they could sell or treat however they want, the art would have been sold and the sales proceeds added to the overall bankruptcy estate, against which the artists would have claims as unsecured creditors (i.e., not secured by any specific collateral or priority), certain to get back pennies on the dollar of the art’s value, if that.

The trustee’s position was based on the interplay between the Uniform Commercial Code (the U.C.C.) and G.L. c. 104A.  In a general context, unless a consigner “perfects” its interest under the U.C.C. by filing a U.C.C.-1 financing statement (UCC-1), anything in the actual possession of a debtor becomes property of the bankruptcy estate when the petition is filed.  Casey argued that since none of the artists had filed UCC-1s before the bankruptcy, all of the artwork was estate property.  She rejected the artists’ claims that the delivery was a consignment because of her interpretation of G.L. c. 104A, § 2(b), which states:

(b) A consignor who delivers a work of fine art hereunder shall, upon delivery of the work of fine art, furnish to the consignee a separate written statement of delivery of the work of fine art, which shall include at a minimum the following information:—

(1) the artist’s name and the name of the owner of the work of fine art;

(2) the title, if any, of the work of fine art;

(3) the medium and dimensions of the work of fine art;

(4) the date of completion of the work of fine art;

(5) the date of delivery of the work of fine art; and

(6) the anticipated fair market value of the work of fine art.

Thus, Casey argued, any of the artists who had delivered paintings to the Wynnes without such a written statement were not consignors, but rather unsecured creditors under the U.C.C.

Not surprisingly, the artists disagreed, citing Section 2(a) immediately prior, which provides:

(a)  Notwithstanding any custom, practice or usage of the trade to the contrary, or any other language herein, whenever a consignor delivers or causes to be delivered a work of fine art to a consignee in the commonwealth for the purpose of exhibition or sale, or both, on a commission, fee or other basis of compensation, the delivery to and acceptance of the work of fine art by the consignee shall constitute a consignment, unless the delivery to the consignee is pursuant to an outright sale for which the deliverer of the work of fine art receives or has received compensation for the work of fine art upon delivery.

The legislative history of the 2006 amendment (in which Arts and Business Council Executive Director Jim Grace, who testified on behalf of the artists at an early hearing in the Bankruptcy Court, had an important role in drafting) is central to this argument. The fine art consignment statute was originally enacted in 1978 as St. 1978, c. 286, and was amended in 2006, (St. 2006, c. 353, at 10).  The 2006 amendments were enacted in the wake of the insolvency of two large art galleries in Boston that generated wide-spread public concern about the difficulties faced by artists seeking to reclaim their art work. Initially, the 2006 proposal did not include the phrase “any other language herein” after the term “[n]otwithstanding” in the first paragraph above.  The Legislature did not adopt this version, however, but instead adopted a revised bill that added both the provision in § 2 (b) requiring that a consignor furnish a written statement of delivery, and the qualification that ( 2 (a) is to apply “[n]otwithstanding . . . any other language herein.”

For the purposes of both of these provisions, “consignment” and “consignor” are defined in G.L. c. 104A, § 1 as “a delivery of a work of fine art under which no title to, estate in, or right to possession of, the work of fine art superior to that of the consignor shall vest in the consignee, notwithstanding the consignee’s power or authority to transfer and convey to a third person all of the right, title and interest of the consignor in and to the work of fine art,” and “a person who consigns a work of fine art to a consignee, including but not limited to an artist who creates works of fine art, an artist’s heirs or legatees, or an owner of a work of fine art who holds title to the work of fine art,” respectively.

This distinction is critical, because G.L. c. 104A, § 3(b) dictates that if art is lent on consignment, then it becomes property held in trust for the benefit of the consignor.  Property held in trust creates fiduciary obligations on behalf of the consignee, chief among them in this case that he cannot use the property for his own benefit.  So, if the artwork was consigned, then it was trust property and the Wynne’s insolvency would be irrelevant.  The artists would be entitled simply to get the art back without waiting in line as bankruptcy claimants.  The stakes were obviously high.

As noted above, the trustee moved to sell the art, after which the artists responded with a number of procedural actions, including the filing of an adversary proceeding.  At that point, some federal-state structural quirks came into play.  In the federal system of the United States, federal courts (including bankruptcy courts) are often called on to apply laws of the fifty states, the District of Columbia, and the territories.  There are any number of federal court cases that will then be cited thereafter (by both federal and state courts) for their analysis.  Ultimately, the interpretation of a state’s laws rests with that state’s highest court.  So, to take the extreme, even if a case is before the United States Supreme Court, the Supreme Court has to look to the particular state high court for that statutory interpretation (unless the law conflicts with the U.S. Constitution, in which case the Supreme Court gets the final word again).

Sometimes, however, a federal court will be presented with a question that it cannot answer from researching state caselaw.  So it was here, because the 2006 amendments to G.L. c. 104A had not yet been interpreted by the SJC.  To get to the bottom of this state law’s meaning, the Bankruptcy Court “certified the question” to the SJC, which just means that it asked the SJC to tell it what the law means on this question.  The Bankruptcy Court framed the question this way:

Under Mass. Gen. Laws. c. 104A, the Massachusetts fine art consignment statute (‘Chapter 104A’), must a consignor transmit a written ‘statement of delivery’ to a consignee as a necessary prerequisite to the formation of a ‘consignment’; or, alternatively, under Chapter 104A does a consignment arise upon the delivery by a consignor, and acceptance by a consignee, of a work of fine art for sale on consignment, regardless of whether a written ‘statement of delivery’ is sent by the consignor?

The unanimous SJC determined that the statue does not require a written agreement to create a consignment.  The court looked at the passages of the statute quoted above, and started from the traditional interpretive concept that a statute cannot be read in such a way as to make part of it nonsensical.  The trustee’s view, the court said, would render meaningless the description of how a consignment comes into being.  The written agreement required is to protect the artists, not lay a trap for them.  That is, artists are supposed to accompany their consignment with a written agreement and thus create a recording system for fine art.  If they fall short, they will have problems of proof (potentially he said/she said about what was delivered), but they still have a consignment.  In this case, the trustee did not really dispute the circumstance of the delivery, so the result flowed from there.  The Court stated:

The Legislature thus intended the requirement of a written statement of delivery in G. L. c. 104A, § 2 (b), to facilitate a recording system that enhances protections for consignors of art work, and not to create a barrier to such protection.

[]

By delivering a written statement that is then kept on record by the consignee, the consignor reduces the risk that art work will be misidentified, become untraceable, or, in the worst case, be forfeited. . . .   A consignor who does not furnish a written statement of delivery thus jeopardizes the consignor’s own interest in the art work, but nevertheless effects a valid consignment under G. L. c. 104A, § 2 (a), so long as there is delivery of the art work and acceptance for the purpose of exhibition or sale on commission.

The SJC got this one right, and frankly it should never have come to this.  But the upshot is a bolstering of artists’ rights, and a strong encouragement for all sides to get the consignment agreement in place.  A prospective agreement protects everyone, by making the parties’ rights and obligations clear so there is nothing to argue about later.  Anyone on either side of such a transaction will do well to pay close attention and seek counsel about what it should include.

Can Copyright Aid Kate Upton, Jennifer Lawrence, and Other Victims of Celebrity Photo Hack?

By Nicholas O'Donnell on Posted in Copyright, Fair Use

As anyone with a computer now knows, the story broke last week of a supposed cache of hundreds of intimate photographs of numerous celebrities, including Kate Upton and Jennifer Lawrence, and Detroit Tigers pitcher Justin Verlander.  Over the course of the week, rumors circulated about who, exactly, had them, and whether or where they would be leaked online.  The story also raised important questions about privacy, security, and default cloud storage of which many people were simply unaware.

We will leave those questions to experts better versed on the topics.  But relevant to our purposes, an appropriation artist “XVALA” (whose real name is Jeff Hamilton) announced plans to exploit the situation in a show entitled “No Delete.”  The show will supposedly take place under the auspices of Cory Allen Contemporary Art and The Showroom, located in the Warehouse Arts District in Saint Petersburg, Florida.

The plans apparently are to include life size images of Upton and Lawrence from among those leaked, unaltered, printed on canvas.  The larger concept for the show is described by Cory Allen as “the artist’s 7 year collection of images found on Google of celebrities in their most vulnerable and private moments, that were comprised by either hackers or the paparazzi.  ‘We share our secrets with technology,” said XVALA.  “And when we do, our privacy becomes accessible to others.’”  The artist went on, “An individual’s privacy has become everyone else’s business…It has become cash for cache.”

What, if anything, will the law say about all this?  Hamilton and Cory Allen have rights of expression, and the mere fact of interest in exploiting someone else’s embarrassment will usually enjoy strong First Amendment protection.  Likewise, while many states (Florida included) have rights of publicity laws, they are often related to the commercial exploitation of another person’s name or likeness.  Art is obviously also commercial, but in the application these laws tend to be strictest with respect to perceived endorsement or unrelated commercial products.  This is not to say that one shouldn’t expect Upton, Lawrence, and anyone else victimized to avail themselves of these laws, but is there anything else they can do?

From here, the strongest potential lies in copyright law.  For this discussion, assume that some significant proportion of the leaked images were taken by the victims themselves (providing the segue for the Art Law Report’s very first use of the word “selfie”).  That photograph, as soon as it was taken, enjoys copyright protection: it is a work of expression fixed in a tangible medium.  Remember, copyright’s minimal thresshold will not inquire into the wisdom or quality of such images, just whether they fit the bill.  These should. 

As a result, the photographer-celebrity would have the right to control (i.e., prohibit) the reproduction or distribution of any copy of that image.  Anyone making a copy has infringed the copyright.  It is also important to remember that copyright formalities are no longer required.  One need not write “© Jennifer Lawrence 2014” or register the photo with the U.S. Copyright Office.  Registration and formalities help an artist establish that he or she is in fact the author or get statutory damages, but there won’t be much question about who took a selfie in a mirror, or even with an arm extended to the camera. 

This brings us squarely back into what seemed to be the ubiquitous topic of 2013: Fair Use.  Indeed, Richard Prince’s Canal Zone was comprised entirely of the use of otherwise copyrighted photographs.  So as the playing field has slanted in favor of fair use, could XVALA or someone like him simply claim fair use?

My opinion is that a court would likely find infringement.  Any fair use analysis is tied to the use in question.  Accepting that “transformativeness” has become the overriding factor (we shouldn’t expect a drawn-out consideration of whether the infringement hurts the celebrities’ market for their own private photographs, for example), would a full sized print on canvas of a private photograph be transformative?  The proposed use apparently adopts the entire image, unaltered (unlike Prince’s use, for example).  And here, perhaps the absence of a transformative intent that actually helped Richard Prince (he expressed indifference as to any particular meaning) will hurt anyone using the celebrity images.  Put another way, if Prince saying he doesn’t care what the images means is less important than what he actually did to the Patrick Cariou Yes, Rasta images, then an artist using an image unaltered but declaring that it has a new meaning just because he says so may fail.  The medium has changed (print on canvas, not photographic paper or digital screen), but it is hard to envision even the Second Circuit panel that decided Prince as sympathetic to the idea that this would be a transformation.  The exhibition, as described, seeks to draw meaning from the fact of the photographs’ availability, not the subsequent act of the copying artist. 

This does not answer all the use questions raised by this story, and photographs taken by another person would be a more complicated question.  But it could be the shortest route to injunctive relief, in particular—meaning the ability to start to remove the images from public view.  The threat of money damages may motivate some potential defendants, but more important to the victims will be such a court order that can be applied to third-party hosts as well as infringers to get them down.  Though, perhaps, many affected by the scandal will decide that the best strategy is simply to ignore it and hope that the attention dies down.  

Kunstmuseum Bern Still Undecided About Gurlitt Inheritance as Regional Politics Loom

By Nicholas O'Donnell on Posted in Gurlitt Collection, Museums

Almost none of the legal issues flowing from the seizure of some 1,280 works of art from Cornelius Gurlitt’s apartment in 2012, his agreement with the Bavarian prosecutor, and the ongoing review of the collection for connections to Nazi looting can be resolved until his named heir—the Kunstmuseum Bern—decides whether or not to accept that appointment. When the one-year review deadline passes (with only two public recommendations made so far), it is entirely unclear who will stand for Gurlitt’s “rights” over what is left.

 

It is hardly surprising that the question is a difficult one, but nearly six months after Gurlitt’s death, the museum has not tipped its hand. An article today in the Berner Zeitung reports on a brewing political debate over whether to spend public funds to accommodate the collection. “No tax millions for the Gurlitt collection,” said Samuel Leuenberger (from Trubschachen) in the Grosser Rat, Bern’s regional (Canton) senior legislative council. Bern is already considering additional expenditures for the Paul Klee center, and the Gurlitt prospect has apparently struck a nerve with many.

On the other side of the debate, delegates urged consideration of the tourist and economic possibilities. Beat Giauque (from Ittigen) argued “This is a chance for Bern! Why rule it out before the details are known?”

One has to wonder if the museum is waiting to see how this breaks down. Putting all other factors in the decision aside for a moment, accommodating the size of a collection of that quality would clearly require substantial investment, and whether the canton foots the bill may have more of an effect than we had previously considered.

All Sides Show Their Cards on Detroit Institute of Arts Collection as Bankruptcy Trial Begins

By Nicholas O'Donnell on Posted in Deaccession, Detroit Bankruptcy

Opening statements concluded in the Detroit Bankruptcy trial yesterday, and as expected, the role of the art at the Detroit Institute of Arts played a central role. Although opening statements constitute nothing of evidentiary value, they obviously show the road map that the various sides intend to follow. Thanks to courtroom reporting, we have a number of clues about the themes that the lawyers intend to develop.

Not surprisingly, Detroit’s lawyer stressed the value of the Grand Bargain. This fits well with the coordinated strategy of the city and the museum itself to argue, in effect, that the Grand Bargain is a windfall that would otherwise be unavailable, because the art is either held in trust, restricted property, or encumbered in some other way. And, regardless of the technical constraints, that as the city emerges from bankruptcy, its people have a “right to t and culture.”

Creditor Syncora Capital took the lead in attacking the plan of adjustment and the Grand Bargain’s inclusion in it. Most importantly, it argued that the Grand Bargain was the only option that the city ever considered, which is not enough for approval. More inflammatorily, according to reporter Kate Wells, Syncora argued that even if Detroit can’t be forced to sell the art, it should. Even more controversially, Syncora apparently claimed that the collection is so valuable, the city should sell it and just defend whatever litigation followed over the property restrictions.

This last claim obviously got lots of attention, but from here it is a not terribly surprisingly tactic to make the first argument seem more reasonable. Lest anyone dismiss it out of hand, this has been the large creditors’ approach with the DIA collection for some time: to throw out there a possible use of the collection in service of their real point, which is that the plan of adjustment is inadequate and should be redone.

Expect this to get very interesting in the weeks ahead.

Are “Flight Goods” Different than Looted Art? Questions About Fair Value and Duress in Wartime Resonate After Recent Limbach Commission Decision

By Nicholas O'Donnell on Posted in Auctions, Restitution, World War II

A conference was held last week at the Oskar Reinhart Museum in Winterthur, Switzerland, entitled “Fluchtgut: Geschichte, Recht und Moral” (Flight Goods: History, Law and Morality).  The objective conference was described in its program as follows (my translation):

As a result of the Nazi policies of persecution, expropriation, and plundering, Switzerland has played a significant role as a destination and transit country of flight goods. . . .  “Flight Goods” are considered cultural goods that were brought to safety into exile by their owners to protect them from governmental access or destruction.  Unlike looted goods, flight goods were and are often disposed of by the owners and their successors in neutral countries.  But difficult questions remain with flight goods, of how to evaluate such a sale against the backdrop of a possible economic hardship, which may have been caused by the changed balance of power in the owners’ home.

While I was not able to attend, Florian Weiland at the Südkurier has written an excellent summary of what sounds like a fascinating day.  The conference and its question are timely after the recent decision by the Limbach Commission in Germany (German Advisory Commission for the Return of Cultural Property Seized as a Result of Nazi Persecution, Especially Jewish Property, or Beratende Kommission to recommend against the restitution of Lovis Corinth’s Drei Grazien (Three Graces) held by the Bavarian State Painting Collections (Bayerische Staatsgemäldesammlungen).  If the Corinth is not “looted art” in the classic sense (though this point remains fiercely disputed), it would certainly qualify as “flight goods” at the very least.  That is to say, even if the occupying Nazi authorities did not seize the painting before it left Luxembourg (in which case no one would dispute that it was looted art), it was most certainly disposed of as a result of the persecution at home in Berlin and in Luxembourg of Clara Levy and her family.  More on that below.  The conference also spotlighted hard questions about defining fair transactions in retrospect in times of persecution and war. 

Weiland’s overview of the conference in Winterthur (in German) begins with a similar premise: even if there is consensus about what should be done with looted art, what if the sale of objects was of necessity rather than compulsion?  Is there a moral obligation to return the works?  He notes that “at least from a Swiss perspective, the answer seems clearly to be ‘no’.” 

The Washington Principles here come into focus.  Monika Tatzkow, an art historian and co-author with Melissa Müller of the seminal Lost Lives, Lost Art: Jewish Collectors, Nazi Art Theft, and the Quest for Justice, is cited as saying at the conference that there is no reason to approach flight goods any differently than looted art in this respect.  By contrast, Weiland reports, Swiss historian Esther Tisa Francini fears an “anarchy of restitution” and argued that flight goods should not be considered to be looted. 

Oskar Reinhart was cited as telling example.  He never acquired stolen art, and it is generally accepted that he paid fair market prices that did not exploit the circumstances of sellers.  But there is no way around the fact that the amount and quality of works available in Switzerland during the Nazi regime was unprecedented.  By a simple matter of supply and demand, that calls into question the starting presumption about fair market prices. 

Quite interestingly, Jutta Limbach herself gave a presentation at the Winterthur conference about “insight into the Commission’s activities, which positions itself repeatedly by deciding against the views of the Swiss lawyers,” presumably meant to accept the possibility of flight goods as looted art. 

The last aspect of the conference that Weiland describes is a discourse about Hans Posse.  Posse is a well-known figure in German speaking circles.  Posse was the director of the Dresden museum in the Nazi period, and his relative complicity in acquiring works of former Jewish ownership is a matter of debate.  Posse acquired four works from the Freund collection at a Swiss auction at Hitler’s instruction.  The Limbach Commission decided in favor of restitution of those works.  Swiss authorities, by contrast, have seen no reason to discuss restitution of objects from that same auction. 

Lest anyone think that Switzerland is an outlier on the point, however, the Three Graces case cannot be ignored or, frankly, reconciled with the Freund decision alluded to by Limbach.  To return to the question posted in the program’s conference: what about sales out of necessity?  Is there a qualitative difference between the Levy family, surrounded on all sides by Nazi occupation, but for which they had no plans to sell their art, and a Jewish collector in Germany proper?  Is the threat any different, or the coercive need to dispose of a valuable object any less real?  From here, to parse those categories is to lose the forest for the trees, particularly if guided by the Washington Principles’ directive to achieve fair and just resolutions.  To distinguish the presumption that has been applied since the Allied Collecting Points after the war—that a sale by a Jewish collector in Germany or in an occupied area was presumptively coercive—from the export by the very same Jewish collector to a market abroad, seems forced. 

It is also important to remember what is a matter of presumption and what is a matter of proof.  If one rules out flight goods as a category for restitution, then the conversation is over.  Even if one allows for further exploration, however, there is still the matter of what happened in a particular case.  It may be that in a given case, whatever the initial motivation, the sellers were able to achieve a fair market value.  But that is far too complicated a question to answer with sweeping assertions. 

For one, as noted above, the very concept of the market was distorted by the Nazis’ activities.  They were perfectly happy to get less than full value for “degenerate art” that they had seized; why should we suppose now that dumping a trove of hitherto unavailable works—particularly Old Masters—would have had any less of a downward effect on prices?  And it so, then isn’t there further analysis to be performed about what the owners received at the time?  That is to say, Curt Valentin’s gallery more or less created a market in works of a certain kind in large numbers, so it seems entirely fair to ask whether, even if Clara Levy’s daughter did receive the painting and did sell it at an auction, whether circumstances necessarily deflated the price that she received. 

There is precedent for viewing “market prices” skeptically—particularly the earlier decision of the Limbach Commission itself when it recommended the return of two paintings by renowned Expressionist Karl Schmidt-Rotluff: a 1920 self-portrait and a 1910 landscape entitled “Farm in Dangast” that once belonged to Robert Graetz, a businessman from Berlin who was deported to Poland in 1942.  The Commission’s recommendation (adopted by the government of Berlin) noted the downward pressure on the price by virtue of the circumstances. 

Nor, as we discussed in reaction to the initial decision, is the fact of sale or transfer to New York at all clear.  Noted art lawyer and lecturer Lucas Elmenhorst wrote an article in the Handelsblatt on August 28, 2014 entitled, appropriately, “There are Still Doubts.”  Elmenhorst quotes the claimants’ attorney, Imke Gielen, as saying “Much of what they [the Commission] regard as undisputed or uncontested is not.”  “None of Clara Levy’s children could confirm that the picture actually arrived in New York,” she went on.  Nor, as Gielen noted, is there any corroboration whatsoever for the assertion that the painting was sold at a public auction; there is no record of a sale or catalogue in which the painting can be found.  Relying on a letter from a man who later sold it (and who therefore had every interest in asserting a clean title) is a bit thin. 

Gielen pointed to Valentin’s role in acquiring works at the infamous Galerie Fischer auction in Lucerne in 1939.  With a little more thought, the role of Valentin is one of the lingering problems with the Limbach decision.  Many regard Valentin as an opportunist, and some even as a collaborator.  But whatever one thinks, the presence of a painting in the Buchholz Gallery is hardly a sanitizing factor on its chain of title.  Yet that is how the Limbach Commission seemed to regard it. 

In any event, the Winterthur conference was clearly a timely event, and one hopes that its collected papers will be published at some point. 

Limbach Commission Rules Against Claimants to Restitution of “Three Graces” by Lovis Corinth in Unpersuasive Opinion

By Nicholas O'Donnell on Posted in Foreign Sovereign Immunities, Museums, Restitution, World War II

The German Advisory Commission for the Return of Cultural Property Seized as a Result of Nazi Persecution, Especially Jewish Property (Beratende Kommission) has issued its latest decision concerning allegedly Nazi-looted art in German museums.  For the second case in a row after the widely (and wisely) derided opinion not to restitute the Welfenschatz or Guelph Treasure at the Stiftung Preussischer Kulturbesitz in Berlin, the commission (known for its presiding member, former German Supreme Constitutional Court judge Jutta Limbach) has recommended against restitution, this time over the claim by heirs of Clara Levy to The Three Graces (Drei Grazien) by Lovis Corinth (1902/1904).  The decision (available only in German) is riddled with poor logic and basic historical errors.   In short, while it may be that the painting was indeed delivered to Clara Levy’s daughter in the United States at Clark’s express instruction, that is far less clear than the commission states, and its decision further makes a number of assumptions about the circumstances of Jews in occupied or about-to-be occupied territories that undermine its credibility considerably. 

Clara Levy was a textile manufacturer who was persecuted by the Nazis.  The painting was in the collection of Ludwig Levy, Clara’s husband, who bequeathed it to her on his death in 1921.  Clara lived in Berlin, and emigrated to Schleifmühle, Luxembourg in 1939, where her son Fritz managed a factory.  The Corinth painting went with her.  Clara died there in 1940. 

According to a declaration given by Paula Levy (Fritz’s former girlfriend and later wife and heir), a part of Clara’s household effects were shipped to New York.  It is on the circumstances of this shipment that the case turns.  A bill of lading produced by Paula supposedly states: “Lovis Corinth, The Three Graces.”  The bill of lading is also stamped “New York, Dec. 5/41 19..the property entered by this Bill of Lading manifested on Steamer San Francisco arrived at New York June 3/40 Compagnie Generale Transatlantique Hol Lesquette.”  The remainder of Clara’s effects remained in Luxembourg until the invasion of German troops in May of 1940, and thereafter seized by the German Reich.  

Between sometime between 1940 and 1941, the Corinth painting was located in the Buchholz Gallery operated by Curt Valentin.  If that name sounds familiar to readers, it is because Valentin and Kurt Buchholz were a primary destination for much of the “degenerate art” seized by the Nazis and sold for hard currency abroad.  Art dealer Sigfried Rosengart in Lucerne later wrote in a 1951 letter that he had heard reports from New York that Valentin “had acquired [the painting] about ten years ago at a Public Auction Sale.”  Rosengart sold the painting in 1949 on commission for the Buchholz Gallery to Prof. Dr. Max Huggler, director of the Kunstmuseum Bern (the same museum currently pondering its appointment as Cornelius Gurlitt’s heir) and brought it to Bern.  The Bavarian State Painting Collections (Bayerische Staatsgemäldesammlungen) acquired the painting from Huggler in 1950.

In 1959 Paula Levy, represented by attorney Henry Zacharias, brought a restitution claim for money damages against the Federal Republic of Germany as Fritz Levy’s widow and heir.  The claim listed the belongings allegedly seized by the German authorities, including seventeen unspecified pictures:eight out of the “office,” and nine out of the “hall.”  The commission found that the Corinth could not have been among the eight in the office because it was not shown in the factory, and it could not have been in the hall because Rita Hubbard, one of Clara’s granddaughters, later recalled that it had hung in the dining room.  The 1959 claim was apparently denied on the finding that no transfer of property from abroad to the German Reich could be detected, a dubious result to be sure. 

In 2002, Clara Levy’s heirs made an application for the return of the Corinth painting, arguing that it was confiscated from Clara’s effects before the 1940 shipment left Luxembourg and that the painting never reached the family members in New York who were its intended recipients.  The authenticity of the signature of Clara’s daughter else Bergmann on the supposed receipt was also challenged. 

The Bavarian State Painting Collections rejected the claim on the theory that it could perceive neither an outright misappropriation, nor a sale under duress.  From the transfer to Clara’s daughter Else Bergmann, Bavaria inferred a free-willed transfer, confirmed (in Bavaria’s view) by Else’s signature and the receipt stamp by Valentin’s gallery.  Bavaria placed great reliance on the letter from Rosengart that (supposedly) describes the public auction of the painting in the United States.  In the words of the Limbach Commission (presumably paraphrasing Bavaria’s initial rejection of the claim, translation mine):

There are no known instances if Valentin using works seized from the persecuted in Germany or areas occupied by German troops.  There would be no clue that Valentin had received the painting from German troops in the second half of 1941

In going on to reject the request that the Bavarian museums restitute the painting now, the Limbach Commission starts from the premise that the undisputed fact that Clara Levy and her heirs were persecuted as Jews, and/or had to flee and conceal themselves, does not necessarily lead to the conclusion that the Corinth painting is itself the object of Nazi looting.  That is a relatively facile assertion however; no claimant can or should win restitution merely by alleging status or persecution.  Of course there must be some further link.  But the straw man has been hoisted, so the Commission proceeds to knock it down.

The Commission relies principally on two offers of proof, one potentially persuasive, but one almost useless.  The appearance of the painting’s name on the bill of lading is clearly a problem for the claimants.  A reasonable person could conclude (assuming it looks as the Commission describes) that the painting did indeed arrive in New York, shipped by Clara Levy to her daughter, who from there sold the work at auction.  More on that in a moment.  The Commission concluded, not unreasonably, that the fact that Paula Levy later came to have the bill of lading likely means that the shipment did indeed arrive to the family.

But the Commission’s citation to Paula Levy’s description in the (seemingly speciously denied) 1959 claim gives the game away a bit.  Why would it matter what Paula—who would not necessarily have had knowledge of where Clara had hung the painting at a time when Paula’s relationship to Fritz is not explained—said about where the paintings were? 

Reviewing all this, the Commission concluded that it was “extremely unlikely” that the painting would have been sent to New York by the Nazis after seizing it, particularly because it was not of the style labeled “degenerate” by the Nazis (implying that stylistically favored paintings would have been retained).

This too, does not withstand logical scrutiny.  Most directly it gets the dates wrong, finding implausible that the Nazis would have shipped art to New York in late 1941 with the war underway.  If the painting arrived in New York as the Commission believes, however, it was in early 1940, not late 1941.  And, the United States and Germany were not at war in either 1940 or 1941 (at least until December).  While conditions were obviously tense, non-intervention was a major political movement in the United States, and paintings removed from German museums as “degenerate” were absolutely flowing to America—and Valentin’s gallery—throughout that interval.  The conclusion that  the re-sale back to Europe in 1949 or 1950 proves good title as of 1941 just does not follow.

The Commission’s reliance on Valentin’s own Jewish background as insulation from suspicion over the painting’s title also falls short.  First off, whether or not one believes it was justified under the circumstances, there is no question that art seized in Germany (particularly museums) flowed through Valentin to the American market.  Many believe that Germany’s own conduct justifies that, but it certainly happened.  Second, for anyone to contend in 2014 that the mere fact of Jewish ancestry lays to rest any further inquiry simply hasn’t paid attention to the Gurlitt story. 

None of this answers another unanswered but important question, however: the significance of why the painting was shipped to America, even if the sequence was exactly as the Commission says.  To put his in perspective, consider the circumstance of Clara Levy and her family in 1940.  They had fled their own country, accused of responsibility for all the world’s ills.  They had found refuge and economic stability in a neutral country that, like Switzerland (but not Belgium) had been spared the brunt of the German army’s mischief in the First World War.  Then in 1940 the German Army sweeps west, absolutely unstoppable.  Did Clara Levy have a choice about what to do with her property?  What was not sent, sure enough, was promptly seized.  To perceive free will in any part of that chain of events is to not understand the situation at all.

The opinion waives this away without actually addressing it, stating that there can be “no doubt” that if there was an auction in New York, then the heirs received a fair market price for it at the time.  But why is that so clear? 

This is the second case in a row in which the Limbach Commission has brushed away a claim, which is itself of note.  Also of note is that it is the second case this year involving the Bavarian State Collections’ post-war acquisition of potentially looted art.  The Mendelssohn-Bartholdy heirs claiming title to Picasso’s Madame Soler in the Pinakothek der Moderne—who intially asked Bavaria to submit to the Limbach Commission but were refused—were unable to persuade the U.S. District Court in New York to permit its case to proceed because the judge concluded that the post-war sale had taken place in Europe, rather than New York.  While their intentions are unknown, the Levy heirs could plausibly make out an expropriation exception claim in U.S. court against Germany over the Corinth painting, a jurisdictional theory distinct from the Picasso claim now on appeal. 

This story is likely not over yet. 

Sullivan & Worcester LLP Pleased To Become a Friend of the Appraisers Association of America Art Law Day on November 7, 2014

By Nicholas O'Donnell on Posted in Authentication, Detroit Bankruptcy, Events, Restitution

I’m pleased to announce that Sullivan & Worcester LLP has signed on as a Friend of Art Law Day at the annual conference of the Appraisers Association of America.  The schedule has recently been released and registration is now available.  Held once against at New York University Kimmel Center, this year’s event will be held on Friday November 7, 2014.  The schedule is below and promises to be a fascinating day. Hope to see you there!

Welcome—Betty Krulik, AAA President, Betty Krulik Fine Art Limited; Terry Shtob, Director Liberal Arts and Writing Programs, NYU SCPS

Keynote Address: New Legislation for Authentication Experts—Judith Bresler, counsel, Withers Bergman LLP

The Changing Laws for the Sale of Endangered Species—Craig Hoover, Chief, Wildlife Trade and Conservation Branch, U.S. Fish & Wildlife Service; Lark Mason (moderator), President, iGavel Auctions/Lark Mason Associates; Michael McCullough, partner, Pearlstein & McCullough LLP; and Monica Kreshik, Associate Attorney, Department of Environmental Conservation.

Restitution—Christopher Marinello (moderator), Director & Founder Art Recovery International Ltd.; Monica Dugot, International Director of Restitution, Christie’s; Marianne Rosenberg, attorney and granddaughter of Paul Rosenberg; and Ulf Biscof, partner, Biscof & Paetow Rechtsanwälte.

IRS/Tax Free Exchange—Suzanne Goldstein Baker, Executive Vice President & General Counsel, Investment Property Exchange Services; Randi Schuster, principal, Baker Tilly Virchow Krause, LLP; Elizabeth von Habsburg (moderator), managing director, Winston Art Group; and Diane Wierbicki, partner, Withers Bergman LLP.

Bankruptcy and the Detroit Institute of Arts—Ford W. Bell, President & CEO, American Alliance of Museums; Amy Goldrich (moderator), of counsel, Cahill Partners LLP; Richard Levin, partner, Cravath Swaine & Moore LLP; and Samuel Sachs II, Pollock-Krasner Foundation, Director Emeritus, the Frick Collection, former Director, Detroit Institute of Arts.