Monday, October 20, 2014

"The Feud That’s Shaking Gallery Walls"

Robert Frank had a piece in the Times this weekend on the Perelman-Gagosian lawsuit.

The story leaves out that the bulk of the case was thrown out earlier this year.

Felix Salmon boils it down:  "I really don't understand what the Perelman beef is here.  Larry set a price, Ron voluntarily paid it."

"He was taken into custody by police after he struggled with the museum’s security guards."

New York Times:  Vandal Strikes Koons Exhibit.

Breaking non-news: Banksy has not been arrested

Artnet doesn't have the news.

Friday, October 17, 2014

A Deaccessioning Puzzle

Reading about Mitch Rales's Glenstone collection in Carol Vogel's column today got me thinking about how museums come to be bound by the "ethical" rules regarding deaccessioning.  I mean in the most literal sense:  how does it happen?

Imagine a wealthy collector -- Rales, Stevie Cohen, somebody like that -- decides to buy a building in Chelsea and open his collection up to public view.  I don't think anyone would say that, having done so, he forfeits his right to sell works from his collection.  It's his property.  If he wants to sell his Film Stills, he can sell his Film Stills.  And I think we would all also agree that, if he does so, he should be able to use the sales proceeds however he wants.  He can use them to buy more art, or help pay for the building he's using to make his amazing collection available to all of us, or to pay the curators and guards he's employing to further enhance our experience.  Since we are lovers of art, we may think the best thing he can do with the sales proceeds is plow them into buying more art, but certainly he's under no ethical or other obligation to do so.  Again, it's his property, he's doing us a great favor by sharing it with us, he can do anything he wants with the money, including using it to put his kids through college.  Right?

Next, imagine the same scenario except now the collector decides to take the formal legal step of becoming a "museum."   It's still his collection, he's still doing us the amazing favor of giving us access to it.  Has it now become "unethical" (repulsive etc.) to use sales proceeds for anything but the purchase of more art?  How did that happen?  Really:  how?

One answer some might be tempted to give is that becoming a museum carries with it certain tax benefits, which in turn brings the ethics rules into play.  But that seems odd to me.  I can understand the argument that those tax benefits carry with them certain obligations -- the museum must be generally open to the public, everything it does must be for the public benefit (so using sales proceeds to pay for the founder's kids to go to college would no longer be possible), and so on.  But how do you get from there to a commitment to the deaccesioning-to-buy-more-art-good, deaccessioning-for-any-other-reason-bad museum "ethics" rules.  Those rules are the rules of a private organization (the AAMD) that seems to think they make sense for some reason.  They don't flow naturally from the fact that an institution is tax-exempt.  (Tax-exempt artist foundations like the Warhol Foundation, for example, sell work and use the proceeds to fund their operations all the time, and no one thinks there's anything wrong with that, nor should they.)  So how is it that calling yourself a museum automatically brings them into play?  I've never seen a good answer to that question.

30 months

Prison time for foundry owner who sold Jasper Johns fakes.

Family Squabble

NYT:   Charges of Looting as Heirs Dispute C.C. Wang Collection.

Wednesday, October 15, 2014

"With the advances in 3D scanning and other digital technologies, I suspect it is easier than ever to duplicate work and create copies."

Daniel Grant:  "An epidemic of sculpture knock-offs is plaguing the art world."

"Are copyright laws too strict?"

Louis Menand in The New Yorker.  Interesting throughout.

"Deal Is Said to Be Close in Detroit’s Bankruptcy" (UPDATED)

New York Times story here.

In other DIA news, "a pair of Oakland County politicians are poised to take action against the Detroit Institute of Arts after it was revealed last week that the taxpayer-supported museum handed out double-digit raises to DIA leaders in 2012."

UPDATE:  Judith Dobrzynski on the raises issue:  "Optics matter in cases like this. It’s going to be sticky no matter what happens, but I think the DIA board should reconsider–and either make its case publicly or find another solution."

Wednesday, October 08, 2014

"In a ruling handed down late last week by the United States Tax Court and seen by many as an important victory for artists ..."

The New York Times had a story yesterday on a recent Tax Court decision regarding the deductibility of art-related expenses.  Sam Brunson puts the story in proper perspective.  (Summary:  not a big deal.)

A note on Elkins (UPDATED 2X)

Michael Rushton has a post on the Elkins decision which closes with the following:  "If art was previously being treated inequitably in the tax code, and the inequity was rectified, great. But if the result is to give special privileges to collectors not available to others, it needs a close and critical look."

Without addressing the larger point he raises, let me just say:  Art was previously being treated inequitably in the tax code, and the inequity was rectified.

In a nutshell, the issue is as follows.  Suppose I have a $10 million Picasso and I want to sell you a 40% ownership share.  What is that 40% share worth?  You might say $4 million (40% of the $10 million total value), but if you think about it, that isn't right because then you'd be stuck co-owning the piece with me, so there would be all sorts of hassles and complications involved (who gets to hang it on their wall and for how long, shipping and insurance issues, etc.) and, most important of all, you might not be able to sell it when you want or need to (because I might not agree).  So while you would certainly pay something for that 40% interest, you wouldn't pay $4 million.  You would demand a ("fractional interest") discount.  There's nothing controversial about that, it's well-established with other sorts of assets (e.g., real estate).  But for some reason the IRS insisted on treating art differently.  That inequity has now been rectified.

UPDATE:  Rushton responds here.  He's troubled by the tax avoidance motive behind the transaction, which is fair enough (though as Learned Hand said:  "Any one may so arrange his affairs that is taxes shall be as low as possible; ... there is [no] patriotic duty to increase one's taxes").  But if that's a problem, it's a problem across the board for fractional discounts.  There was no reason for the IRS to single out fractional discounts for art for different treatment.

UPDATE 2:  Rushton once more.

Does fair use doctrine favor the rich? (UPDATED)

Sergio seems to think so.  I'm not sure about that, but I do agree completely with this, from my co-teacher Amy Adler:

"One of the worries that I think we should all have about the extremely chaotic and uncertain area of fair use law is it will force artists to steer clear of engaging in work they should otherwise be able to do for fear of getting sued, and that applies to all artists rich or poor."

UPDATE:  Sergio responds here.  I'm still not convinced.  What we haven't seen, I think, is a "reverse Cariou" -- that is, a case where a "rich" artist sues a "poor" appropriation artist and, unlike Cariou, wins.  I agree with Sergio that what we have now is a clusterfuck.  I just don't think it has much to do with the relative financial standing of the artists.

"The temptation to view art as another capital asset has been especially intense this year across the country."

Another article on deaccessioning that neglects to mention that museums sell art (i.e., "treat it as a capital asset") all the time.  What was the Art Institute of Chicago doing, to take just one recent example, when it sold 117 works from its photo collection last month, if not viewing them as capital assets?

Monday, October 06, 2014

"This is the first Circuit court to expressly reject transformative use, and it has done so rather emphatically."

Barry Werbin, at NYSBA's Entertainment, Arts and Sports Law Blog, on Kientiz v. Sconnie Nation, discussed earlier here.

Sunday, October 05, 2014

"Chapter 9 is not a privilege; it is a political failure"

Kristi Culpepper, excellent on Detroit.

And on the Grand Bargain in particular:  "One of the concerns I have expressed about the so-called grand bargain that emerged from mediation is how biased and path-dependent the case became after it was announced. It effectively cut off the court’s ability (or desire?) to entertain any alternative proposal from creditors or other stakeholders. It also promoted a toxic 'us versus them' mentality, where anyone who suggested an alternative was construed as working contrary to the court itself and could not defend themselves publicly."

"A Potential Game Changer for Estate Taxes on Art"

The Elkins decision I mentioned last week makes it to the New York Times.

"After Merger, Corcoran Gallery of Art Faces Uncertain Future"

Blair Murphy at Hyperallergic.

They used the forbidden word again.

"Judge Steven Rhodes today pressed Detroit emergency manager Kevyn Orr to provide a better explanation for why he chose not to sell Detroit Institute of Arts property."

That was from Friday, and I assume, based on everything we've heard about Judge Rhodes and the art, that the point of the questioning was less to challenge the conclusion than to build a better record in the bankruptcy case.

The Art Market Monitor summarizes Orr's responses as "reveal[ing] that he put DIA in play enough to see what the museum might be able to come up with.  The resulting 'Grand Bargain' was effectively found money to Orr."  Nicholas O'Donnell agrees:  "We may indeed look back on this as pulling a rabbit out of a hat, when all is said and done."

Saturday, September 27, 2014

And people say we monkey around

Nicholas O'Donnell is with me on the pressing issue of monkeys and copyright.

We shall fight in the courtrooms

The New York Post:  Winston Churchill's artist granddaughter sues gallery.

2015 National Cultural Heritage Law Moot Court Competition

February in Chicago.  Details here.

Reminder from Detroit: the fight over DIA's art isn't over

Mark Stryker summarizes the state of play.

Meanwhile, Detroit Free Press columnist Rochelle Riley asks:  Where's the grand bargain for Detroit's kids?

"How should we subsidize charitable giving to the arts?"

Some thoughts from IU's Michael Rushton.

Copyright and Graffiti (UPDATED)

The Atlantic asks whether graffiti can by copyrighted.  The answer given seems to be "why not?"

This post, from a couple years back, drills a little deeper into the question.

UPDATE:  Sergio Muñoz Sarmiento:  "The more interesting question, to me, is whether the same graffiti (not commissioned murals) also garners moral rights protection."

Idea vs. Expression

Artist's copyright infringement suit against Avatar director James Cameron thrown out, on a motion to dismiss (rather than summary judgment).  Story here.  Opinion here.

"It’s a huge affirmation that opens the door to help art owners reduce their estates." (UPDATED)

Was distracted this week, including by thinking about who shall be deaccessioned and who shall not in the coming year, and still catching up.  For my money the most important art law story of the week was the Fifth Circuit's decision in the Estate of James Elkins affirming the use of fractional interest discounts for works of art.  Forbes has a story here.  The decision is here.

UPDATE:  Eileen Kinsella has more here.