​After more than four years of litigation, a federal judge has delivered our team a total victory, ruling that our client holds full title to the multimillion-dollar Basquiat painting at the center of disgraced art dealer Inigo Philbrick’s massive fraud.  

In a move that may cause ripples in the competitive art world, the Federal Trade Commission recently issued a final rule that, if it goes into effect as planned later this year, will ban most forms of non-compete agreements between employers and employees. 

A years-long dispute over an alleged “Rothko” forgery has culminated in a total victory for our client, a distinguished New York art dealer.

Grossman LLP associate Maria Angela Brusco recently spoke on a panel at the Art Law Institute of the New York County Lawyers’ Association (NYCLA), focusing on the legal implications of collectors’ promises to make gifts of artworks in the future.  Below, she summarizes some key insights from the event.

The Grossman team has won a total victory dismissing all counterclaims in our suit on behalf of a prominent art collector against an art gallery for refusing to rescind a sale of paintings that turned out to be forgeries.

Two copyright lawsuits against appropriation artist Richard Prince arising out of his controversial “New Portraits” artworks have cleared a major hurdle—summary judgment—and appear to be headed for trial.  In a decision issued in May (just days before the Supreme Court issued its Warhol ruling), a federal judge rejected Prince’s fair use defense.

The Second Circuit recently affirmed the dismissal of a fraud claim by a buyer who bought an artwork in 1985 and had it appraised on several occasions beginning in 2007, but did not sue until after the work was deemed inauthentic in 2018.  The case focused on the work’s exclusion from the artist’s catalogue raisonné; the appraisals all expressly noted that the work’s authenticity was only “assumed” because the painting was not in the artist’s catalogue.  The court reasoned that in light of such a disclaimer, a reasonable person should have further investigated its authenticity, and therefore the fraud claim’s two-year statute of limitations began to run at that time. 

In late 2020, after two-plus years of litigation in multiple jurisdictions and a three-day bench trial in the Southern District of New York, Grossman LLP obtained a win in a title dispute over a painting that was stolen from a major corporate art collection decades ago and replaced with a skilled forgery.  Today, the Second Circuit Court of Appeals affirmed that victory. 

In the last few years, aided by the rise of non-fungible tokens (“NFTs”), digital art has become an increasingly important part of the art market.  Now a new frontier seems to be opening up: art that is created at least in part using artificial intelligence (“AI”) technology.  Indeed, just as NFTs have crossed into the traditional art market, artists who are creating using AI are likewise being welcomed onto the art scene (for example, by gaining gallery representation).  As this trend unfolds, we art lawyers find ourselves wondering how AI art will interact with our current copyright system. 

Last month, the Grossman team prevailed in defending a prominent art dealer’s complaint against a gallery’s motion to dismiss.

An infringement case pending in a California federal court raises some interesting questions about how copyright law applies in the context of interactive art installations—an important topic in an art market that is increasingly exploring these innovative forms and mediums.

In a major win, Grossman LLP has obtained summary judgment for our client in a long-running title dispute involving a Marc Chagall painting that was part of the fraudulent schemes of disgraced art dealer Ezra Chowaiki.

The team at Grossman LLP has just recovered $3 million in satisfaction of a judgment that the firm obtained for an art collector defrauded by an art dealer in connection with the sale of a Pablo Picasso painting. 

Since the outbreak of COVID-19 and the ensuing restrictions on businesses, there has been much discussion about whether, when, and how commercial tenants can break their leases or be relieved from rent-payment obligations when they are unable to conduct business on leased premises.  Last week, a Manhattan art gallery sued its landlord for declaring a default under the lease when the gallery failed to make its April rent payment, arguing that the lease was lawfully terminated on April 1 in light of the executive orders that restrict the operation of New York’s non-essential businesses.  

This fall has seen developments in two cases we’ve been following.  Each case raises unique substantive legal issues, but the recent developments also serve to highlight the costs and complexity of litigating art disputes in court.

We wrote last year about a suit filed in New York state court (see No. 651889/2018, N.Y. Co.) by a disgruntled art collector seeking redress for the problems he has allegedly encountered in trying to purchase three sculptures by famed artist Jeff Koons.  Last month, a court ruled that the collector’s claims can proceed to the next phase of litigation.

More than a year has passed since New York dealer Ezra Chowaiki pled guilty to federal charges related to his misconduct in cheating numerous clients in fraudulent art deals.  But the legal fallout continues.  Many of his victims and business associates have asserted claims (for money or art) in connection with the bankruptcy of his gallery, Chowaiki & Co., as well as in federal forfeiture proceedings that allow claimants to assert their rights to artworks ordered forfeited to the government as part of Chowaiki’s guilty plea.

Last week, an artist sued a Manhattan café and gallery in connection with a dispute over the treatment of and sales of her artworks.  The lawsuit highlights some specific aspects of New York law that may provide artists with legal protections tailored to the unique, and sometimes difficult, relationship between artists and the galleries who sell their work. 
 

This blog has for years followed the Knoedler scandal, in which a venerable New York gallery closed in disgrace in 2011 following revelations that it had sold dozens of artworks—about $60 million worth of paintings purported to be by Rothko, Pollock, Motherwell, and other major Abstract Expressionists—that turned out to be forgeries.  And the fallout from Knoedler’s implosion is ongoing even now; just this month, a federal judge issued a decision with important implications for the upcoming trials in two Knoedler cases.  The ruling also is of general interest to anyone in the art business because it emphasizes the importance of clear business procedures, corporate oversight and legal formalities when it comes to closely held business entities.