Art Law Report

Planned gifts can lead to hard feelings without careful planning and managed expectations

Posted by Nicholas O'Donnell on January 2, 2019 at 4:09 PM

The following is an article that appears in the January issue of Apollo magazine.

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Topics: Christie's, Edward Hopper, Apollo Magazine, Chop Suey, Barney A. Ebsworth, Planned gifts, Seattle Art Museum, promissory estoppel, detrimental reliance

Au Revoir, Droit de Suite—9th Circuit Narrows California Resale Royalty Act to a Single Year’s Sales

Posted by Nicholas O'Donnell on July 9, 2018 at 10:33 AM

The idea of moral rights continues to be a notable difference between European and American intellectual property rights with respect to visual arts. Last week’s decision by the U.S. Court of Appeals for the 9th Circuit in a case brought by artist Chuck Close and others addressing the California Resale Royalty Act (the CRRA) underscores those distinctions. In holding that the CRRA is mostly preempted by federal copyright law and thus can be applied to entitle artists to secondary royalties only for sales of art in a single calendar year—1977—the 9th Circuit affirmed the skepticism with which American law continues to regard anything other than classic copyright. Given the failure of efforts to pass national legislation to provide for resale royalties, this decision is probably the end of the line for the foreseeable future in the U.S. for droit de suite, the term of art used to describe the concept.

There is, for better or worse, clearly no political constituency for resale royalties in the U.S. As I told Law360, and as we’ve opined before about the Visual Artists Rights Act of 1990 (VARA), property rights are in many ways a quintessential American policy. We all reflected on the Declaration of Independence last week, and its proclamation of the primacy of Life, Liberty, and the Pursuit of Happiness—which revised John Locke’s famous statement that governments are instituted to secure “life, liberty, and property.” Copyright is and always will be a limitation on absolute ownership, but Americans guard those limitations jealously. There is little sign that will soon change.

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Topics: American Royalties Too Act, Chuck Close, Commerce Clause, Visual Artists Rights Act of 1990, Christie's, Cal. Civ. Code § 986(a), VARA, Rep. Jerrold Nadler (D-NY), Dormant Commerce Clause, Preemption, droit de suite, California Resale Royalty Act, U.S. Constitution, Sotheby's, eBay, CRRA, Declaration of Independence, Copyright Act of 1976, Morseburg v. Baylon, John Locke, Supremacy Clause, 1909 Copyright Act

What About Margarethe Mauthner? Van Gogh Once Owned by Elizabeth Taylor Heads to Auction Again with Scant Mention of its Persecuted Former Owner

Posted by Nicholas O'Donnell on March 26, 2018 at 9:19 AM

Since the passage in 2016 of the Holocaust Expropriated Art Recovery (HEAR) Act, many commenters (here included) have grappled with what the implications of the law will be on the scope and frequency of future claims.  Even as litigants are faced with policy arguments about whether individual claims belong in U.S. courts—arguments that the HEAR Act should have put to rest—it is occasionally worthwhile to consider how prior cases would have been affected.  Such analysis can draw into relief why the law was such a significant step forward.  This week, news that a painting by Vincent Van Gogh once owned by Elizabeth Taylor will go to auction again provides one such example.  A beautiful painting in the collection of the biggest movie star in the world makes for a great sales pitch, but missing in the coverage is any mention of Margarethe Mauthner, a German Jew who owned the painting before fleeing the Nazi regime.  The exact circumstances under which she lost possession of the painting are unclear, but those circumstances might have had the chance to be determined had the HEAR Act been passed earlier.  The importance of that opportunity is worth considering as the law is assessed going forward. 

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Topics: Margarethe Mauthner, Nazi-looted art, Van Gogh, Christie's, Holocaust Victims Redress Act, Sotheby's, Holocaust Expropriated Art Recovery Act, HEAR Act, A Tragic Fate, Vue de l'asile et de la Chapelle de Saint-Rémy, Alfred Wolf, Elizabeth Taylor, Paul Cassirer

When Will We Get There?  The World Gathers in London to Consider the State of Restitution of Nazi-Looted Art.

Posted by Nicholas O'Donnell on September 15, 2017 at 5:13 PM

The National Gallery London hosted on September 12, 2017 the much-anticipated conference “70 Years and Counting: the Final Opportunity?” organized by the United Kingdom Department for Digital, Culture Media & Sport (DCCS), and the Commission for Looted Art in Europe (CLAE). Delegates from numerous countries gathered to consider the state of progress on the efforts to identify and return works of art lost during the Nazi era.  While the event had a truly international flair, the discussion centered primarily on the five countries that have created some sort of process to consider assertions of looted art in response to the Washington Principles on Nazi-Confiscated Art: England, France, Austria, the Netherlands, and Germany. 

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Topics: Victoria and Albert Museum, Kunstrückgabebeirat, Zentralinstitut für Kunstgeschichte, National Gallery London, Constantine Cannon LLP, Commission for Looted Art in Europe, Washington Principles on Nazi-Confiscated Art, Christie's, Advisory Commission, Johannes Nathan, Monica Dugot, Imke Gielen, Sotheby's, Neumeister Auction House, Richard Aronowitz-Mercer, Tony Baumgartner, Clyde & Co., John Glen, UK Spoliation Advisory Panel, The Orpheus Clock, Art Restitution Advisory Board, Margreet Soeting, H. Blairman & Sons Ltd., Katrin Stoll, Department for Digital Culture Media & Sport, DCCS, CLAE, 70 Years and Counting: the Final Opportunity?, Gabriele Finaldi, David Lewis, Minister for the Arts Heritage and Tourism, Sir Paul Jenkins, Dr. Antonia Boström, von Trott zu Solz Lammek, Simon Goodman, Sir Donnell Deeny, Jan Bank, Restitutions Committee of the Netherlands, Dr. Reinhard Binder-Krieglstein, Professor Dr. Reinhard Rürup, Jean-Pierre Bady, Commission pour l’indemnisation des victimes, CVIS, Dr. Christian Fuhrmeister, British Library, Nathan Fine Art, Stedelijk Museum, Pierre Valentine, Martin Levy

California Resale Royalty Act Ruled Unconstitutional as to Out of State Sales, What Effect on the Market?

Posted by Nicholas O'Donnell on May 6, 2015 at 6:53 AM

In a decision long awaited by artists and auction houses in particular, the Ninth Circuit Court of Appeals has ruled that the California Resale Royalty Act of 1976 (CRA)—America’s only droit de suite—is unconstitutional top regulate any sales of art outside of California. The court concluded, however, that that portion of the law is severable from the rest, and let the regulation of in-California sales stand for further interpretation by a subsidiary panel of the appeals court. There are two likely aftereffects of this decision. Galleries and auction houses can put any concerns to rest about sales in New York in particular, but one has to wonder about the effect it will have on putting items for sale in California, which will effectively have a premium not present in other states. It also raises the possibility that the resulting piecemeal framework will motivate movement on the pending federal bill (the American Royalties Too (ART) Act of 2015) concerning resale royalties. Could this be the development that prompts movement in Congress?

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Topics: Legislation, Resale Royalties, Chuck Close, Supreme Court, Christie's, Cal. Civ. Code § 986(a), Dormant Commerce Clause, droit de suite, sales tax, Cal. Redev. Ass’n v. Matosantos, use tax, American Royalties Too (ART) Act of 2015, California Resale Royalty Act, Copyright, Ninth Circuit Court of Appeals, Sotheby's, eBay

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

Posted by Nicholas O'Donnell on April 23, 2015 at 9:27 AM

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

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Topics: Equity for Visual Artists Act of 2011, Resale Royalties, Ed Markey, American Royalties Too Act, Chuck Close, Resale Royalty, Jerrold Nadler, Christie's, Tammy Baldwin, California Resale Royalties Act, Copyright, United States Copyright Office, Sotheby's, eBay, Art Law Report

Detroit Bankruptcy Debrief—Judge Rhodes Speaks on the Grand Bargain and the Detroit Institute of Arts

Posted by Nicholas O'Donnell on February 20, 2015 at 6:58 AM

Last year’s biggest art law story was, in our view the Detroit bankruptcy. Nathan Bomey, who along with Mark Stryker formed the essential reporter team on up-to-the-minute updates on the proceedings, interviewed Bankruptcy Judge Steven Rhodes in the Detroit Free Press. The interview speaks for itself, but the highlights to me were:

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Topics: Judge Rosen, Mark Stryker, Chapter 9, Syncora Capital, Financial Guaranty Insurance Co., Judge Rhodes, Christie's, valuation, Detroit, Detroit Institute of Arts, Bankruptcy, Nathan Bomey, Detroit Free Press, Museums, Detroit Bankruptcy, grand bargain

Full Ninth Circuit to Review California Resale Royalty Act En Banc

Posted by Nicholas O'Donnell on October 31, 2014 at 7:48 AM

Several weeks ago, the parties to the appeal over the constitutionality of the California Resale Royalty Act (CRRA) briefed the question about whether the Ninth Circuit Court of Appeals should hear the case, rather than a three-judge panel that would otherwise be assigned to the case. The Ninth Circuit granted the petition yesterday, meaning the appeal will now go before the full court.

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Topics: Legislation, Foie Gras, 538 U.S. 644, N. Randy Smith, 729 F.3d 937, Auction Houses, California Health & Safety Code § 25982, Chuck Close, 730 F.3d 1070, Moral Rights, Commerce Clause, Affordable Care Act, Ass’n des Eleveurs de Canards et d’Oies du Quebec, Judge Jacqueline H. Nguyen, Jerrold Nadler, Christie's, Research & Mfrs. of Am. v. Walsh, California Resale Royalties Act, Ethanol, Dormant Commerce Clause, 491 U.S. 324, U.S. Constitution, Copyright, royalties, Garcia, Ninth Circuit, Cal. Code Regs. tit. 17 §§ 95480–90, Sotheby's, Rocky Mountain Farmers Union v. Corey, Healy v. Beer Inst., Ferdinand F. Fernandez, eBay, Google, Mary H. Murguia

REMINDER—Art Law Day Next Friday, November 7, 2014

Posted by Nicholas O'Donnell on October 29, 2014 at 9:40 AM

Art Law Day at the Appraisers Association of America’s annual conference is next Friday, November 7, 2014 at NYU's Kimmel Center. Sullivan & Worcester LLP will be sponsoring the event as a Friend of Art Law Day this year, about which we are very excited.

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Topics: The Changing Laws for the Sale of Endangered Speci, Monica Kreshik, NYU SCPS, International Director of Restitution, The Frick Collection, miGavel Auctions/Lark Mason Associates, Resale Royalties, Pollock-Krasner Foundation, Betty Krulik Fine Art Limited, American Royalties Too Act, Michael McCullough, Pearlstein & McCullough LLP, authentication, IRS/Tax Free Exchange, Richard Levin, New York University, American Alliance of Museums, Suzanne Goldstein Baker, U.S. Fish & Wildlife Service, Cravath Swaine & Moore LLP, Art Law Day, Department of Environmental Conservation, Ulf Biscof, New Legislation for Authentication Experts, Baker Tilly Virchow Krause LLP, Jerrold Nadler, Christie's, Appraisal, Detroit Institute of Arts, Amy Goldrich, Betty Krulik, Restitution, Randi Schuster, Events, Christopher Marinello Art Recovery International L, Cahill Partners LLP, Elizabeth von Habsburg Winston Art Group, Monica Dugot, Copyright, Appraisers Association of America, Marianne Rosenberg, Terry Shtob, Antiquities, Ford W. Bell, Craig Hoover, Bankruptcy and the Detroit Institute of Arts, Lark Mason, Kimmel Center, Wildlife Trade and Conservation Branch, Detroit Bankruptcy, Diane Wierbicki, Investment Property Exchange Services, Samuel Sachs II, Biscof & Paetow Rechtsanwälte, Withers Bergman LLP, Judith Bresler, Paul Rosenberg

"Saving Africa’s Elephants Changing the Art Scene" last Tuesday with VLA New York

Posted by Nicholas O'Donnell on October 17, 2014 at 1:07 PM

I enjoyed a terrific panel discussion organized by Volunteer Lawyers for the Arts in New York Tuesday evening at Herrick, Feinstein LLP. Entitled "Saving Africa’s Elephants Changing the Art Scene," the panel addressed the ramifications of this year’s Director’s Order that banned the import of African Elephant ivory for any commercial use, and restricted even further non-commercial use.

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Topics: David Freudenthal, Pearlstein and McCullough, Volunteer Lawyers for the Arts, iGavel, Michael McCullough, Saving Africa’s Elephants Changing the Art Scene, Frank Lord, US Fish and Wildlife Service, Christie's, Hartley Waltman, Carnegie Hall, Events, ivory ban, Herrick Feinstein LLP, Craig Hoover, Lark Mason, Customs, New York

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About the Blog

The Art Law Report provides timely updates and commentary on legal issues in the museum and visual arts communities. It is authored by Nicholas M. O'Donnell, partner in our Art & Museum Law Practice.

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

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