We’ve been following the 5Pointz case since its inception, through summary judgment, a trial, an advisory jury verdict for the plaintiffs, and a decision by federal district judge Frederic Block, who issued an award of $6.75 million (and later declined to reconsider that award).  Now, three federal appellate judges from the Second Circuit have weighed in, unanimously upholding Judge Block’s award and his reasoning in this groundbreaking case regarding graffiti art.
 
Background
 
Our previous posts contain more detail, but to summarize, the plaintiffs here are a group of graffiti artists whose works were destroyed by defendants, real estate developer Gerald Wolkoff and various Wolkoff-owned entities.  Defendants own a property in Queens known as 5Pointz.  Beginning in the early 1990s, Wolkoff allowed artists to create works on the old industrial buildings on the site; over the years, the site (led by an artist who acted as a volunteer “curator”) became a storied repository of graffiti art, attracting top graffiti artists from around the world, as well as visitors who came to admire the art.    
 
In 2013, the owners announced the 5Pointz buildings would be demolished to make way for a residential development.  Several artists (led by the site’s volunteer curator, artist Jonathan Cohen) sued to prevent the destruction of the artworks, invoking the Visual Artists Rights Act, 17 U.S.C. § 106A (also known as VARA), which provides, among other things, that artists have a right, under certain circumstances, to prevent the destruction of “work[s] of recognized stature.”  At the preliminary injunction stage, Judge Block ruled that the plaintiffs had not met the high standard needed to preserve the works while the lawsuit proceeded, but the court did not rule out the possibility that the plaintiffs’ claims might have merit.  A few days after that early ruling, the owners, without warning, whitewashed the site.  Shortly thereafter, Judge Block warned that, although he had declined to interfere with the owners’ ability to develop the property, the owners could still face money damages.  See Cohen v. G & M Realty L.P., 988 F. Supp. 2d 212, 214 (E.D.N.Y. 2013).
 
Although the art was gone, the artists pressed on with their claims, seeking damages under VARA, in part based on the precipitous whitewashing, which robbed plaintiffs of any chance they might have had to preserve or document their work before the demolition.  On summary judgment, the court ruled that the case should proceed to trial.  See Cohen v. G & M Realty L.P., Case Nos. 13-CV-05612 & 15-CV-3230, 2017 WL 1208416 (E.D.N.Y. Mar. 31, 2017). 
 
In late 2017, after a three-week trial, an advisory jury found that the artists’ rights under VARA had been violated as to most of the works of art at issue and that Wolkoff had acted willfully.  And in early 2018, Judge Block awarded $6.75 million to the plaintiffs, which represented the maximum statutory damages available.  Cohen v. G&M Realty L.P., 2018 WL 851374, at *2 (E.D.N.Y. Feb. 12, 2018).  The defendants asked him to reconsider, but in June 2018, he denied that motion for reconsideration, reiterating pointedly his conclusions that Wolkoff had acted willfully, including by whitewashing the works immediately after the court’s preliminary injunction ruling, months before the buildings were actually torn down; by misleading the court about the timing of the planned demolition; and by offering what the Court found to be less-than-credible testimony at trial.  Cohen v. G&M Realty L.P., No. 13-CV-05612(FB)(RLM), 2018 WL 2973385, at *2 (E.D.N.Y. June 13, 2018).  The Court also took care to defend his conclusion that the works at issue were of “recognized stature” for purposes of VARA.
 
Wolkoff’s Appeal to the Second Circuit
 
Wolkoff appealed Block’s decision to the Second Circuit Court of Appeals, which held oral argument in late August 2019.  Wolkoff argued, among other things, that VARA should not protect temporary works like those at 5Pointz, where community norms among the artists included a constant process (overseen by the curator) of old works being painted over by new ones.  Wolkoff also argued that, to be protected under VARA, a work must have achieved “recognized stature” before its destruction, and all the plaintiffs’ proffered evidence on that point were retrospective assessments made after the works were gone.  Along these same lines, defendants also argued that it was improper for the court to rely, in examining a work’s stature, on testimony about the 5Pointz site as a whole, or on curator Cohen’s allocation of wall space to certain works.  Finally, defendants sought to undermine the district court’s finding of willfulness, emphasizing that Wolkoff—given the sparse and unsettled state of case law on VARA at the time— reasonably thought his whitewashing decision was lawful, and disputing the district court’s conclusion that Wolkoff had misled the Court at the preliminary injunction phase of the case. 
 
Now, the Second Circuit has issued its ruling, upholding the district court’s decision.
 
The appellate panel first held that the district court was correct that the artworks were protected by VARA.  In the process, the court provided some guidance on the crucial but slippery concept of “recognized stature,” opining that a work is of recognized stature when it is “one of high quality, status, or caliber” (that’s the “stature”) and the work “has been acknowledged as such by a relevant community” (that’s the “recognized” part).  The court noted that artistic quality will often be the most important component of stature, and that a relevant community will generally include art historians, critics, museum curators, gallerists, other artists, and other experts.  The court further noted that, in all but the most unusual cases, this inquiry will generally require expert testimony, since courts should not be the final word on artistic merit. 
 
And here, the court concluded that Judge Block had not “clearly erred” (a fairly deferential standard) in concluding that most of the plaintiffs’ works were of recognized stature.  In a ruling that will be important in other street artist cases, the court rejected the idea that because many of the works were temporary, they could not be of recognized stature; the court said there was “nothing in VARA that excludes temporary artwork from attaining recognized stature.”  As examples, the court cited Christo’s 2005 “The Gates” installation in Central Park, and Banksy’s Girl With a Balloon, which self-destructed in 2018 after selling at Sotheby’s.  The decision also includes a reminder that VARA itself dictates that an owner can obtain a written instrument from the artist acknowledging that a work might be destroyed and waiving VARA rights; but Wolkoff took no such steps here.  The court was also unpersuaded by Wolkoff’s argument that the district court improperly evaluated the works’ recognition as of the trial date, instead of the date of the whitewashing.  The court held that the quality of the work, as assessed by an expert after its destruction, can of course be probative of its quality pre-destruction.  The court also saw no problem with Judge Block’s use of Cohen’s testimony about his 5Pointz curation process as evidence of stature; Cohen, himself a respected artists, would review an artist’s portfolio and a plan for a proposed work before allowing it to be painted, and the court held that this process was relevant to the question of stature.  Likewise, while Wolkoff argued it was inappropriate for the court to focus on the prominence of 5Pointz overall, versus evaluating each work individually, the appeals court held that the site of a work is “relevant to its recognition and stature and may, in certain cases, render the recognition and stature of a work beyond question.”  A work’s appearance in a prominent venue represents a recognition that it has been deemed meritorious by a respected curator, and its display there may enhance its recognition by the art community.
 
The Second Circuit also agreed that Wolkoff’s violation of VARA was willful.  The court noted that VARA has provisions where an owner can give an artist 90 days to remove a work of art before destroying it, and Wolkoff had not done that here.  The court also said it was “troubled” that there was no real, credible reason to whitewash the art before the buildings were demolished. 
 
Finally, the appeals court affirmed that Judge Block’s damages award was not an abuse of discretion.  On questions like this, appeals courts are fairly deferential to trial courts, and this case was no exception.  The court took particular note of the fact that Wolkoff had whitewashed the works in a “sloppy, half-hearted” way that left the works partially visible under “cheap” white paint, and these “mutilated” works stood for months between the whitewashing and the buildings’ eventual demolition.  The court also noted that, although the artists’ loss was difficult to quantify, that did not mean there was no loss, given the artists’ testimony about the value of 5Pointz to the artists’ careers.  The court also affirmed Judge Block’s opinion that the statutory damages here might have a deterrent effect on Wolkoff (who had testified he would make the same decision again) and might also encourage other building owners to negotiate in good faith with artists, using tools contemplated by VARA such as written waivers or the 90-day removal provisions.  And finally, the court noted Judge Block’s findings that Wolkoff had made misrepresentations to the lower court at the preliminary injunction stage, by telling the court that he stood to lose various credits and might jeopardize the whole project if he could not demolish the buildings within a certain timeframe, when in fact, it later emerged, he had not even applied for demolition permits at that time.  The artists, in contrast, sought to work within the law. 
 
The End of the Story?
 
It’s possible that Wolkoff may try to continue his legal battle, perhaps by seeking a rehearing from the same panel.  He might also seek a rehearing en banc, in which a larger group of the active judges on the circuit would reconsider the case.  However, the Second Circuit grants en banc rehearings only rarely.  Wolkoff might also be weighing a petition to the Supreme Court, but that would also be a long shot, as the Supreme Court only hears a small percentage of the litigants who petition it.   
 
Assuming that this is the end of this particular road for Wolkoff, what does the case mean for the art community?  First, the Second Circuit has unequivocally held that nothing in VARA precludes the statute from applying to “temporary” works of art.  This is important for temporary installations (like “The Gates”) and of course, to street art. 
 
Second, the ruling gives VARA some power in terms of money damages.  At least one commentator has focused on the importance of the court’s damages ruling, noting that it is significant to see the Second Circuit authorize this very large statutory damages award even where actual damages could not be proven.  Valuation of art—especially graffiti art—can be notoriously challenging, but this ruling ensures that real damages are at least possible.
 
Finally, some commentators fear that this verdict places onerous limits on what property owners can do with their own property.  But, as we’ve said before, it’s important to understand that this award represents two federal courts’ reaction to what they viewed as fairly egregious litigation conduct, including making misrepresentations to the court and acting precipitously and arguably vindictively toward the artists in whitewashing the artwork long before there was any real business need to do so.  The outcome of this case seems to have been heavily shaped by one litigant’s conduct and approach, which seems to have been, in these courts’ eyes, uniquely and particularly disrespectful to both the judicial process and the artists.  If anything, this case is simply a reminder that negotiating in good faith and treating art and artists with respect can go a long way toward mitigating VARA exposure.