2018 Art Law Litigation Stories


This month Katie and Steve talk about a few important art law cases from 2018 ranging from Nazi looting, to Italian fisherman discovering an ancient Greek statue, to the risks catalogue raisonné committees face when offering even indirect opinions on authenticity.  The specific cases discussed are Von Saher v. Norton Simon Museum of Art at Pasadena, No. 16-56308 (9thCir. 2018); the Getty Bronze case decided by the Italian Court of Cassation; and Mayor Gallery Ltd. v. The Agnes Martin Catalogue Raisonné LLC, No. 655489/2016, 2018 WL 1638810 (N.Y. Sup. Ct. Apr. 5, 2018).

Resources:

https://cases.justia.com/federal/appellate-courts/ca9/16-56308/16-56308-2018-07-30.pdf?ts=1532970120

https://www.scotusblog.com/case-files/cases/von-saher-v-norton-simon-museum-of-art-at-pasadena/

https://www.theartnewspaper.com/news/cranach-norton-simon

https://www.nytimes.com/2018/12/04/arts/design/getty-bronze-italy-ruling.html

https://www.theartnewspaper.com/news/italian-court-says-getty-museum-must-surrender-a-prized-bronze

https://news.artnet.com/art-world/judge-dismisses-lawsuit-agnes-martin-committee-1260539

http://www.artnews.com/2018/04/06/dismissing-suit-agnes-martin-catalogue-raisonne-committee-judge-bolsters-embattled-art-authentication-field/

2018.04.05 Order Granting Martin Motion to Dismiss


Episode Transcription

Steve Schindler:  Hi, I’m Steve Schindler.

Katie Wilson-Milne:  I’m Katie Wilson-Milne.

Steve Schindler:  Welcome to the Art Law Podcast, a monthly podcast exploring the places where art intersects with and interferes with the law.

Katie Wilson-Milne:  And vice versa.  The Art Law Podcast is sponsored by the law firm of Schindler Cohen & Hochman LLP.  A premier litigation and art law boutique in New York City.

Steve Schindler:  So, what are we doing today?

Katie Wilson-Milne:  So, we are going to start by doing a roundup of some interesting art litigation that occurred in 2018, and many of these cases relate to issues we’ve talked about on the podcast so far. So, we are going to start with a very significant and large litigation that has been going on in California federal courts for over a decade, which is the case Marei von Saher versus the Norton Simon Museum of Art.  And after we talk about that in some length, we are going to talk more briefly about a couple of other cases that have happened this year.  All right, so von Saher versus Norton Simon Museum of Art.  So, the case involves claims by Marei von Saher to recover two Renaissance paintings by Lucas Cranach the Elder, called Adam and Eve, respectively.  These paintings are currently owned and on display at the Norton Simon Museum in Pasadena, California, and we know that these paintings were taken from von Saher’s father-in-law as part of a forced sale by the Nazis during the Nazi occupation of the Netherlands in the 1940s.  So, after a decade of litigation, the Ninth Circuit recently in 2018 dismissed this case, von Saher’s claims for restitution of these paintings, and the case really deals with very complicated issues of Soviet-Nazi looting.  The ultimate decision was based on a doctrine little used, but known, called the act-of-state doctrine, which we will explain.

Steve Schindler:  Harkening back to law school.

Katie Wilson-Milne:  Yes.  All right, so let’s start with the story.  So, these Renaissance paintings date from about 1530 and fast forward to 1931, a famous and successful Dutch Jewish art dealer named Jacques Goudstikker purchased the paintings from the Soviet Union in an auction in Berlin.  Now, Goudstikker’s dealership then owned the paintings, but in the 1940s when the Nazis invaded the Netherlands, as they did elsewhere, they began to appropriate real and personal property in the areas that they had invaded.  Goudstikker and his family fled early on to South America leaving behind the art dealership business that they owned as well as well over a thousand works of fine art.  In a sad twist of fate, Goudstikker died on the journey to South America.  He died on the ship, but his wife Desi and their son made to South America where they waded out the rest of the war.

Steve Schindler:  Well talk about the black notebook.

Katie Wilson-Milne:  Yes.  So, Desi Goudstikker, smart lady that she was, kept a black notebook that listed all of the paintings, all the art objects that the dealership had owned which obviously were no longer in their possession once they have fled to South America. So, she had a record book with her that was you know not subject to destruction back in the Netherlands.  Alright so Goudstikker dies, Desi and her son are in South America, and at that time, the Nazis then, through the Nazi official, Hermann Göring, who I think people are familiar with and an associate of his, whose name is Miedl ended up going after the Goudstikker company and all of their assets through a series of written, but forced agreements with the employees that were left at the Goudstikker dealership in the Netherlands.  So, basically, Göring and his associate, Miedl had all these contracts drafted that basically gave them the rights to the company and all the company’s assets and also personal assets of the Goudstikker family.  So, they did this in different iterations.  Miedl acquired the Goudstikker company, the shares of the company, some of the art and the family villa and castle as they are described in the Ninth Circuit decision.  Göring purchased the vast majority of the fine artworks though, including the two Cranach’s that are at issue and that are at the Norton Simon museum today.  Göring purchased these artworks, and we say purchased because there was an amount of money exchanged, as our listeners may remember from our discussion with Nicholas O’Donnell about Nazi-looted art.  This was one way the Nazis sort of perversely tried to make their looting okay, which was by papering these transactions as if they were legitimate and the people on the other side had a choice and they would often pay compensation, though it was usually far below the market value for what they were taking.  So, that is what happened in this case with the Göring, artworks which included the Cranach’s.  They paid the equivalent of what today would be about 20 million US dollars for those artworks.  Alright so, after the war, we know Germany loses.  The allies do recover most of the Goudstikker property that was taken by Miedl and Göring and returns it to the Netherlands in 1946.  So, so far, things are looking up.  The Dutch government, like other European nations, had developed procedures right after the war for returning Nazi-stolen or forced-sale property after the war to the original owners, and this involved allowing original Dutch owners to petition the Dutch government for restoration of rights in the personal property that had been taken.  So, they set up what was called the Council for Restitution of Rights and this council had the exclusive power to hear these claims and to restore rights to original Dutch owners.  And, although the council was not a traditional court, the decisions of the council were final and non-appealable and treated like a court judgment.  So, importantly, the Netherlands had a deadline for claimants to file claims of July 1, 1951, after which, the Netherlands was still free to return property, but it was not going to be required to return property and there was no longer a legal entitlement that claimants had to restitution.  So, in order to reclaim property, these original Dutch owners just like the Goudstikkers were required not only to file a claim, but to repay to the Dutch government any amounts they had paid in forced sales for the property that had been taken from them.  So, there was an intervening period of time here that Goudstikkers, for example, left their businesses behind, went to South America, you know, likely needed that money to survive, get back to the Netherlands, to get their property back, they would have had to pay the Dutch government what they had received from Göring and Miedl for that property previously.  That was what the law was at that time.  So, once that deadline ran out in July of 1951, any property with unknown ownership would become the property of the Netherlands, the Dutch state, which could then sell the property and, in fact, was expected to sell the property because under Dutch law at that time, the property was seen as enemy property.  Basically, it was property of the Nazis that had been returned to the Netherlands and that the Netherlands could now use, sell to make up for the losses they had incurred during the war.  So, Goudstikker’s wife Desi returns to the Netherlands after the war and she starts the process of reclaiming the Goudstikker company and some of its property.  It looks like from the record that, at least the Ninth Circuit and the court below considered that Desi consulted with a number of lawyers and advisors of some sophistication and decided not to pursue a restitution claim for the Göring sale, which was the sale of the artwork that included the Cranach’s, but she did seek a restitution of the real property and the personal property that was taken by Miedl, which was the shares of the company and some of the family’s houses.  She filed that claim before the Dutch council prior to the 1951 deadline and that was ultimately settled.  Now in 1949, the Goudstikker firm’s company’s attorney, who is a man named Max Meyer, wrote to the Dutch government stating that his clients, the Goudstikkers, waived their rights to file restitution claims for the property acquired by Hermann Göring.  Now, this is hard to understand, but one likely explanation for why this happened was that Desi did not have the money to repay, to pay for the first time the Dutch government for this property and so it wasn’t really an option for her to retake it.  Also, her husband had passed away who had been the head of this art dealership and so acquiring this huge inventory of art, when she wasn’t really an art dealer, was probably not what she wanted to deal with after coming back to the Netherlands after the war was over.  But, we can’t really know—we just know that she did waive her claim through her attorney.  Later in the 1960s, the Netherlands now took the position that these works belong to the Dutch state.  A man of Russian origin, whose name is George Stroganoff-Scherbatoff.

Steve Schindler:  Can you say that again?

Katie Wilson-Milne:  Which is just an amazing name.  George —

Steve Schindler:  Mr. Stroganoff to you.

Katie Wilson-Milne:  George Stroganoff-Scherbatoff, who we will call Stroganoff, not to be confused with the dish, filed his own claim in 1966 with the Dutch government for return of these two Cranach paintings, Adam and Eve, on the basis that not the Nazis, but the Soviet government had stolen them from his family prior to the Soviet sale to the Goudstikkers in 1931.  Now, we don’t know if the Soviet government stole these works from the Stroganoff family, if they stole them from someone else, or if they weren’t stolen, but we do know that the Soviet government appropriated a large amount of personal property after came into power.  So, this would not be an unusual claim.  Ultimately, Stroganoff and the Dutch government reached an agreement by which Stroganoff actually bought back the works and then waived his claims to restitution, so they settled that claim.  And in 1971, Stroganoff sold the paintings to the Norton Simon museum for $800,000, which brings us to the litigation.

Steve Schindler:  Prior to the litigation in California, we still have an another chapter to go through in the Netherlands, which is sometime in the late 1990s.  Marei von Saher who is the one and only living heir of Jacques Goudstikker began anew to seek restitution in the Netherlands for some of the works that were sold to Göring, including the Cranach works, and she filed a proceeding in the court of appeals, which was a court that was set up to hear these claims.  And, after hearing her claim, the court denied her petition and concluded basically that in the late 1940s, Desi had in fact made a decision to refrain from seeking restitution, and had through council, formally waived her rights, as Katie said.  This decision of the court of appeals in the Netherlands was then revisited in 2001 when the Netherlands had formed a new restitution committee to review some of these Nazi claims, and having reviewed von Saher’s claims, this committee determined that in fact the claims to the Göring artworks were in fact settled in the 1950s and through the 1999 court of appeals of the Netherlands decision.  Nevertheless, it was kind of interesting that the Dutch government decided to give back to von Saher any of the Göring works that were still in its possession, but as Katie mentioned, the works that we are talking about here, Adam and Eve were in fact transferred to Mr. Stroganoff in the 1960s.

Katie Wilson-Milne:  And I guess it’s worth adding that this sort of revisit that the Netherlands does and actually when they end up giving von Saher back all this art was part of a big policy shift in the Netherlands around that time.  So, since the war through the 1990s, the Netherlands had taken a legal approach examining title if sale was forced or not and was not particularly interested and didn’t have the capacity to evaluate moral claims even if ownership had passed legally. So, they shift gears in early 2000s and kind of do away with that technical approach to try to take a more holistic moral approach, so that’s sort of the context in which Marei re-petitioned.

Steve Schindler:  Right, and this was happening in the context of various worldwide conventions and meetings and enhanced understandings about the sort of hypertechnicality that followed the restitution process after the war and kind of a worldwide resolution amongst stakeholders that entities holding works of art should look a little bit more to the merits of the underlying cases rather than relying on technicalities and this culminated in something called the Washington Principles, which we have talked about before and which we will talk about again.  But, in 2000, von Saher contacted the Norton Simon Museum, where the works were hanging, and she demanded that the works be returned.  That then resulted in a number of years of negotiations which were seemingly unsuccessful because in 2007, she brought her claim against the Norton Simon in California District Court.  Now—we are now in 2019, and so, in fact, we’ve had roughly 11 or 12 years of this litigation, which is really just something to think about and to think about how extensive and costly this litigation has been, which as, we’ll talk about, has really never gotten to the merits of the case at all. So, the first several years of litigation really sort of centered around California’s then unique statute of limitations that they passed in order to try to preference some of these Nazi-type claims and the case went all the way up to the Ninth Circuit.  Eventually, it was held that this special statute that the California legislature had passed was unconstitutional and was preempted by US policy in this area, and so California, they went back, established a new statute of limitations.  That was litigated.  The Ninth Circuit found that that statute of limitations was constitutional, and in fact, von Saher’s claims were timely under that statute.  So, then the case was left to proceed, which takes us sort of to the third round of these lawsuits.  The museum argued that the claims for restitution of von Saher conflicted with US Foreign Policy.  This was also litigated up to the Ninth Circuit, eventually decided in von Saher’s favor, but the Ninth Circuit ultimately remanded the case back to the district court with instructions to look at the so-called act-of-state doctrine, and to see whether or not the act-of-state doctrine barred von Saher from proceeding with her claims in this case.  Now the act-of-state doctrine requires that the acts of sovereign states taken within their own jurisdictions be accepted as valid, and there are some exceptions to this doctrine, but…

Katie Wilson-Milne:  …generally US courts don’t want to interfere with the laws of foreign governments.

Steve Schindler:  Right—that’s right.  So, in deciding that the act-of-state doctrine barred von Saher’s claims, the Ninth Circuit considered that there were three Dutch governmental actions that barred them from questioning the Dutch government’s actions and the first was Dutch government’s conveyance of the paintings to Stroganoff in the 1960s, the second was the 1999 court of appeals decision not to restore von Saher’s rights in the Cranach’s.  And then, its later decision that von Saher’s claims to the Cranach’s had been settled.  So, after this decision came down in July of 2018 by a panel of the Ninth Circuit court of appeals, we know that Ms. von Saher through her lawyers petitioned the Ninth Circuit for rehearing en banc, which is to say a hearing before the entire court of the Ninth Circuit as opposed to three-judge panel which normally hears appeals.  That request was denied and she now has, until February, to petition Supreme Court for review of her case, which seems probably unlikely that Supreme Court will take given their heavy docket.

Katie Wilson-Milne:  Yeah, she had petitioned for a cert previously on the issue of the foreign affairs doctrine and that cert of petition had been denied on the previous appeal.  So, it’s a long shot but she has been very persistent in these many decades, so.

Steve Schindler:  She has and she has a good set of lawyers, as does Norton Simon.  I guess, you know what you think of all this at the end of 12 years of litigation and —

Katie Wilson-Milne:  11 years.

Steve Schindler:  You know I just like to make it twelve, and probably millions of dollars spent in legal fees and not having considered the merits at all.  And in fact, no one disputes the fact that these works were seized unlawfully by the Nazis and that they were seized from Jacques Goudstikker and that Marei von Saher is his lawful heir.  Instead, what we have seen is years of litigation over statutes of limitations and somewhat obscure policies.

Katie Wilson-Milne:  Yeah.  So—I mean von Saher’s argument before the Ninth Circuit was you can’t apply the act-of-state doctrine here because one of the exceptions is at play – this is one of her main arguments – which is the commercial activity exception, which is the Netherlands was acting like a private party when it sold these two paintings to Stroganoff and so why is it being treated as this official sovereign act when they were just like anybody selling a painting for cash and cash did change hands?  And so that exception which is called the commercial activity exception says that only official sovereign acts are protected if they are taken by a government.  If the government is acting like a private party and not acting as a government, then that’s not protected by the act-of-state doctrine, so that was an issue and I don’t think that’s a terrible argument.  I think the problem that argument, you know, which the museum pointed out was that that conveyance, that sale, started with a restitution claim.

Steve Schindler:  Right.  It was really a settlement..

Katie Wilson-Milne:  By Stroganoff.

Steve Schindler:  ..settlement of a restitution claim, which is certainly a sovereign act.

Katie Wilson-Milne:  Right, so that’s the problem—I mean, people we know have taken issue with this decision and with..

Steve Schindler:  Many people.

Katie Wilson-Milne:  ..many people taking issue with this in the Ninth Circuit through moral and legal grounds.   I mean Steve, you are right, no one has ever disputed these works were essentially stolen by the Nazis you know in a forced sale that was not-clearly not voluntary after the Goudstikkers fled.  And, one of the arguments is not legal at all, which is that this is just the right thing to do, why is the Norton Simon even fighting this? Why are we even get to legal arguments? Put that aside, fine you have a legal right to these paintings, but why do you want them when you know the history of these paintings?  And that, I think, is one of the most interesting questions.  It’s not a legal question, but the Norton Simon has defended this case heavily and, you know, put a lot of resources into it and it may be because this is precedent-setting, that there are many other paintings that they and museums all over the country have that could be somewhat to similar claims like this.  So, I don’t know, I mean these paintings are also worth north of $40 dollars now.  So, whatever millions of dollars they spent on litigation may be a small percentage of what the value of these paintings is to the museum, but it is an interesting question.

Steve Schindler:  And the one thing we don’t know as we are sitting here because we weren’t there is that there were some years of negotiation between Ms. von Saher and the museum, which did not result in a settlement, but one could imagine a scenario in this case where there could be some kind of compromise and…

Katie Wilson-Milne:  It seems like there should have been a compromise.

Steve Schindler:  …And you know certainly, the museum could have given something up and probably Ms. von Saher could have given something up as well and then you would have avoided years and years of this kind of litigation over the most technical, you know, aspects of this case.

Katie Wilson-Milne:  Right.  In fact, you know one of the really deeply unsatisfying thing about this 11 years of litigation is that it was ultimately potentially, pending cert petition, you know it was ultimately concluded with a threshold issue, which is the act-of-state doctrine.  The court doesn’t even look you know to the actual claims that were in the complaint.  They just say, “We can’t even get there.  We are just going to decide this on this threshold issue.”

Steve Schindler:  Right and that’s the thing that we were talking about a little bit earlier, which is why couldn’t that issue had been decided at the outset?  It seems like a pretty obvious one.  You know, the statute of limitations is usually the first, the reflex kind of place to go if you are trying to contest a very old claim, but the act-of-state doctrine was sort of sitting in plain view and it really didn’t get litigated until 11 years after the outset of the case.

Katie Wilson-Milne:  I think this is one of the hardest examples of litigation about the Nazi’s appropriation of art.  There are some really easy cases where the Nazis just steal something and it’s not given back.  The part of this case that makes it really hard is this you know voluntary waiver of rights in 1949 by Desi Goudstikker where you know her attorney advises her you know try to get restitution for this property and not for this property, and they actually filed this written waiver with the Dutch government at the same time that they filed restitution for other property showing they knew how to do it, and that’s really hard.  So, I think that in addition to the fact that the Dutch government had passed laws that made it clear that works that they had not restituted by a certain date were going to become state property and then the state was going to get to sell that, treat it as enemy property, as German property and get to sell that.  Now, one of the criticisms — you know, there are few good criticisms of how the assumptions that the Ninth Circuit makes on this case, and one of them is that that categorization of enemy property by the Dutch government is correct.  So the Dutch government has the statute that says we’re going to treat all objects returned to us after World War II as enemy property, which means that we can sell it and keep the money after this restitution process is over, but are the paintings at issue here even enemy property?  Because they were taken by the Nazis, but their real owners were Dutch citizens, so it doesn’t make any sense to treat that as enemy property, I mean, that’s one good criticism.  Another one is that this was a private transaction, in which the Dutch government sold this work to Stroganoff for some money and that the act-of-state doctrine can apply to that as we’ve already discussed, and there are other restitution cases in which this has been litigated and courts have found that no, the act-of-state doctrine does not apply if just, you know, an employee of a government sells a work like anyone could sell a work of art.  So, that, I think, different courts could find differently about that issue.  And then, the final criticism which I think von Saher raised is that the Cranach’s themselves were never specifically the subject of the “Dutch government acts” that the act-of-state doctrine relied on, that is in itself an extremely technical argument that von Saher makes.

Steve Schindler:  That’s a good one though I think.

Katie Wilson-Milne:  It’s a clever one — I mean, the idea is that a waiver of a claim does not lead to an act by the Dutch government.  So, Desi Goudstikker never made a claim for these two paintings, she waived her rights.  That’s not an act of the Dutch government.  And then, later when von Saher in the 90s approached the Dutch government to get other works back, it was under the auspices of a scheme in which the Dutch government was going to return paintings currently in its possession, which the Cranach’s were not.  So, she never made a claim to the Cranach’s then.  They weren’t in the possession of the Netherlands, so they couldn’t even part of that you know 1990s to 2006 situation that was going on in the Netherlands, and therefore, they really weren’t part of any of this.

Steve Schindler:  Right.  So, there never was a sovereign act of the Netherlands.

Katie Wilson-Milne:  Yeah.  I mean what the court says to that in response to that is that the Dutch government set up a procedure by which you could make claims and Desi Goudstikker made a blanket waiver to a group of artworks that explicitly included these two paintings.  That decision was later held by the Dutch government to be settled and to include all Göring works.  So, I mean these are hard issues.

Steve Schindler:  Yeah.  And, you know, unfortunately I think this decision could also have the impact of chilling other potential claimants you know—

Katie Wilson-Milne:  Yeah, and that could be good depending on if you think this was a lawsuit that didn’t have as much merit as other World War II era claims.  I mean, like you said, it’s extremely costly for museums, who are theoretically nonprofits, to defend these actions for years and years and years, and of course, these works are on display to the public.  So, in a sense, they are public goods like this is costly for everyone, so some clarity around the law here is certainly needed.

Steve Schindler:  Right, but if you are someone trying to recover a work — I mean this is exactly what the Washington Principles were trying to prevent.  If you are someone trying to recover a work, the idea that a funded museum can put up years of litigation between you and having your work restituted is a real disincentive for most people to persist.  Ms. von Saher was very determined as you observe, but many people would have given up a long time ago.

Katie Wilson-Milne:  I don’t know that I agree that I think this case is going to easily be extrapolated.  I mean I think the facts of this case are different and they are very particular.  So, I don’t — I am not familiar with that many other cases that have this exact fact pattern and the facts were important here, so, I don’t know.  You know, I guess if there are other cases in which there were explicit and seemingly completely voluntary waivers made you know in the 1950s to claims for restitution, then yes, I think this would be applicable in the Ninth Circuit.

Steve Schindler:  Yeah, also, I don’t think that there was a lot of attention placed on the sort of good faith purchaser aspect of this or at least it hadn’t really been developed, but you know one consideration is that good faith purchasers, people who come in and maybe purchases work should be able to rely on…

Katie Wilson-Milne:  The Netherlands.

Steve Schindler:  …the Netherlands and also the express waiver of a party who was well counseled and waived her rights, so that is another consideration.

Katie Wilson-Milne:  Right.  How are we going to draw these boundaries about what people decided to do with work they identified after the war?  That’s what I think makes this case different and it’s harder than other cases because of that.

Katie Wilson-Milne:  Alright so, should we talk about few other…

Steve Schindler:  Yes, let’s move on.

Katie Wilson-Milne:  …cases?  Alright, so —

Steve Schindler:  You want to talk about the fishermen or the…?

Katie Wilson-Milne:  Yes. So, we’ll briefly talk about one interesting case that came out of the Italy this year and then Steve will talk about US case that is equally interesting.  Alright so, the Getty Villa is located outside of Los Angeles in California and it’s a beautiful Renaissance-style villa, full of amazing art that John Paul Getty had collected and then gifted to the Getty Trust and some that the Getty Trust subsequently bought to build this collection.  So at the end of 2018, a month ago, the highest court in Italy ruled that a valuable and a prized bronze sculpture, that’s likely of ancient Greek origin and that’s currently on display at the Getty Villa outside of Los Angles, must be returned to Italy.  This is a pretty interesting case in terms of who has rights to certain cultural property and also jurisdictional conflicts between property that’s being held in US and foreign court decisions.  So, what happened is that in 1964, there were two Italian fishermen who somehow miraculously, while out fishing in their boat, retrieved this ancient Greek statue in Adriatic waters off the shore of Italy.  This statue is now referred to either as Victorious Youth or the Getty Bronze and is widely recognized to be a sculpture of Greek origin cast in the second or third century BC, and then potentially looted by the Romans and lost by the Romans at sea as they were transporting at somewhere a very long time ago.  So, fast forward to the 1960s, these Italian fishermen find this heavily encrusted decrepit statue, but know it’s something valuable and they take it back to their hometown of Fano, Italy and they buried it in a cabbage field because they realized that there’s probably with some legal issue…

Steve Schindler:  I think that’s correct.  Yes, right.

Katie Wilson-Milne:  …With dealing with it.  So, they bury it in the cabbage field and then they find someone sell it to, who then eventually sells it, and it ends up out of Italy.  All the while, the Italian authorities know nothing about that.  Okay.  So, in the 1970s, the statue surfaces in Europe.  It’s owned by an art holding company there that restores it and cleans it up and offers it for sale to US museums.  In 1977, the Getty ends up buying this work, where it’s still on view.  So, Italy has made claims about the return of this statue for decades.  It’s nothing new.  And, after a very long and protracted litigation in Italy, which the Getty did heavily defend, the highest court ruled that the statue was part of the cultural history of Italy, was state property and had been wrongfully exported and basically ordered the Getty to return it to Italy, and the Getty, a US institution said, “No, thanks.  We had no intention of complying with this order and we dispute the merits of your decision and we’re not going to follow it.  What you’re going to do?”  So, how did we even get to this place? How does Italy have a real claim to a Greek statue that was created 2000 years ago that was found in…

Steve Schindler:  In international waters, right?

Katie Wilson-Milne:  …in the water by two Italians.  Is it the fact that these two Italian fishermen found it that makes it Italian cultural property?  Those were the issues that came up.  What is the connection to Italy that makes it an Italian-owned object?  So, the Italian government’s position on this is that they claimed it was found it Italian waters that this was in waters that Italian fishermen were using for commerce, this was Italy.  And then, once in Italy, it was exported illegally without the proper paperwork and thus was never properly sold out of Italy, that there was no legal process by which it could have been transferred, because it didn’t have the right export permits.  And, that related to a 1939 law, so it wasn’t effect in the 1960s when this happened.  This law says that the authorities have to be notified when antiques and archeological works are discovered in Italy and the objects are not allowed to leave Italy without a proper export license.  So, that is the law that the Italian government is looking to when they are making this claim that if there is no paperwork, there’s something wrong here and it shouldn’t have left.

Steve Schindler:  And, typically US courts don’t enforce export claims.

Katie Wilson-Milne:  Right.

Steve Schindler:  That is not something that…

Katie Wilson-Milne:  Exactly.  They —

Steve Schindler:  That US courts ever recognize…

Katie Wilson-Milne:  Right they rarely enforce foreign judgments.

Steve Schindler:  …as opposed to patrimony claims, I mean they do recognize that, but the fact that something may have been exported without an export license may raise a claim in Italy, but it’s not one that is generally recognized here.

Katie Wilson-Milne:  Right.  So, the Getty’s position is that Italy doesn’t have any rights to the statue because it’s not Italian.  It was discovered in international waters and secretly smuggled into Italy until it was sold, but the fact that it was located it Italy for some brief period of time doesn’t make it Italian, it’s still Greek and it’s been at the Getty for over 50 years and, you know, why move it now?  So, obviously, the Italian court agreed with Italy, surprisingly, and even though it had in the 1960s, I think 1968, as part of a litigation around whether the fishermen who found it held title to the statue or whether it had been stolen, the court in 1968 said that actually it wasn’t a stolen property and that you know it would be hard to say it was owned by Italy at that time.  But, fast forward to 2018, they take a different position and they said it is indeed the property of the Italian state.  So, as Steve, you mentioned this is a completely academic exercise unless Italy can enforce this decision against the Getty in California and US Federal Court probably, and US courts are not, you know, they are unlikely to enforce a foreign judgment like this, especially if it’s not found to be contrary to accepted international law in some way, and as you mentioned all that’s really at stake here is this export license.  So, Italy has a couple of avenues they could, of course try to just enforce it in court.  I am skeptical about the success of that.  They could go to the Department of Justice or the State Department to try to get the federal government to help force the return of the statue, but we do know that the Getty…

Steve Schindler:  When it reopens.

Katie Wilson-Milne:  …When the government reopens, which hopefully will be by the time people are listening  to this podcast and the Getty has committed to fight it.  They are not going to return it.

Steve Schindler:  So, why isn’t this an act-of-state?

Katie Wilson-Milne:  I think the Italian government took no acts, not — in applicable circumstances.

Steve Schindler:  Okay, alright.

Katie Wilson-Milne:  Alright so, a little bit ironically, as some people may have read in the papers over the last you know decade, the Getty and Italy have a very complicated and long history.  They’ve been involved in litigation and negotiations before about the return of Italian objects and the Italian government is extremely aggressive in pursuing return of cultural property and it has been successful in a lot of ways.  The Getty itself has returned, I think, something like 40 or more works from its own collection to Italy and it’s, you know, made significant investments in having cross-cultural exchange and inviting Italians scholars, and so, it’s interesting in the backdrop of the Getty and Italy having sort of try to work this out and work together in the past that this is still going on.

Steve Schindler:  And why do they draw the line here, that’s always the question, you know why — why this particular statue?

Katie Wilson-Milne:  Why for Italy?

Steve Schindler:  Or why does the Getty draw the line here?  In other words, they’ve cooperated before, they’ve given things back.

Katie Wilson-Milne:  I think this is not Italian.

Steve Schindler:  Yeah.  Well, I don’t — I agree with you, but ..

Katie Wilson-Milne:  I think that’s the Getty’s possession as they said, you know we made good faith returns to you based on Italian cultural property and our agreement, you know, to cooperate, but this is really out there.  So, we will see what happens.

Steve Schindler:  Okay, alright.  The saga continues.

Steve Schindler:  So, I am going to talk a little bit about a US case, a case here in New York that was decided also this summer, which is the Mayor Gallery versus the Agnes Martin Catalogue Raisonné case.  And, this is a particularly interesting case because we’ve heard so many complaints about the risks that authenticators take when they authenticate art works and it’s a serious problem in New York particularly, which is a sort of art center, when foundations and experts and individuals whose job it is or should be to determine whether or not a work is authentic are reluctant to do it, because in the past number of years, there have been some very high-profile cases against authenticating bodies.  And even though often those cases are won by the authenticating bodies the legal fees that are incurred are tremendous and can force them to go out of business or to not authenticate works anymore.

Katie Wilson-Milne:  On what basis could you sue someone for giving an opinion about whether something is authentic?

Steve Schindler:  Well, and just to be clear to this case, that wasn’t base of this lawsuit, but there are all kinds of bases there is negligent misrepresentation.  There are various kinds of misrepresentations, there’s fraudulent  business practices, there have been lawsuits based on antitrust principles.  The scenario usually is that there is an owner of an artwork and there is an authenticator, and the authenticator is taking the position usually publicly in some fashion that either expressly or implicitly that the work is inauthentic and the holder of that work then has a work that goes from maybe a very large value to zero, and so they then turnaround and then try to come up with various claims that they can bring against the authenticator.  I’ll talk about the claims in this case and there has been an effort, as Katie and I have worked with our Bar committee, on trying to get the New York state legislature to pass legislation protecting or giving some protection to authenticators because when exports do not want authenticate works.  It opens the field for fakes and forgeries to be out in the market with really no check on that.  So, it’s very important.  And so the case that was brought by the Mayor Gallery against the Agnes Martin Catalogue Raisonné entity, as well as some of its members including Arne Glimcher who is the owner of the Pace Gallery and the executive director of that authentication committee, was based upon the submission of 13 works of art to that committee.  As many of our listeners know, a catalogue raisonné is usually the definitive compilation of works by an artist, and often the catalogue raisonné is published either in hardcopy or digitally by a catalogue raisonné organization, usually it’s a nonprofit organization, sometimes it’s an organization that’s set up by an artist’s estate when she passes away.  And then, usually, there is a committee that reviews works of art for the catalogue raisonné entity and determines whether or not the works are authentic and should therefore be placed in the catalogue raisonné.  And, there is usually a process for doing this.  So, Agnes Martin, a very well-known abstract expressionist whose works sell for 100s of 1000s and sometimes millions of dollars at auction died in 2004 and the Agnes Martin Catalogue Raisonné was established in 2012 to authenticate her paintings and works on paper and to compile what would be a digital catalogue of her works.  And, the Mayor Gallery sold a number of her works, actually sold 13 of her works to their clients and it’s worth pointing out that both Sotheby’s and Christie’s recognize the Agnes Martin Catalogue Raisonné as definitive compilation of her works, and essentially if a work is not in the catalogue raisonné, it cannot be sold at auction.  So, it’s very important, if you are the owner of such a work, to have the work included in the catalogue, and of course, the catalogue didn’t exist until 2012, so most of the works, you know, were being incorporated, and so if you are the collector who owns an Agnes Martin and you want to sell it to Sotheby’s or Christie’s, you need to submit it to the catalogue raisonné committee and have them review it.  And so, in this particular case, the catalogue raisonné committee, well-represented by council, drafted the submission agreement, which was non-negotiable.  In order to get your work included, you have to sign this agreement, and this particular submission agreement said that you would waive and not bring any claims against the catalogue raisonné, and, in the event that you made a legal claim of any kind that the plaintiff, the party bringing the claim, would be responsible for the payment of any and all reasonable legal fees, costs, and expenses of the committee, and that was signed by all the people who submitted.  Now what happened was there was a submission by one of the clients of the Mayor Gallery, that happened to have been a collector, Jack Levy, who submitted a work, and basically, when you submitted a work, the only thing that you got back, you got one of two letters, one either said it was included and the second was it’s not included, and what the committee, what the catalogue raisonné specifically didn’t do is to both give you any kind of information about what their process was, why they determined what they did and they did not opine significantly also an authenticity.  You know, they just said you’re included or you are not included.  Of course, implicitly, they were opining, because if they weren’t including it, they didn’t think that it was authentic.

Katie Wilson-Milne:  That’s the likely reason.

Steve Schindler:  But that they weren’t giving a reason.  So, Jack Levy submitted a request for a work that he had purchased from the Mayor Gallery for a couple of million dollars.  He got one of the—the letter that said, “we are not including this in the catalogue raisonné” and he went back to the Mayor Gallery who basically rescinded the transaction, gave him his money back, and then submitted again themselves and got back, not surprisingly, the same answer.  They then hired a lawyer who served essentially a set of information requests on the catalogue raisonné entity, which resulted in silence and then they brought the lawsuit.  And, basically, they brought the claims that you would expect them to bring which were, you know, breach of contract, negligent misrepresentation, business violation of New York fair business practices, and tortious interference with their contracts with their clients.  Now, interestingly, the Mayor Gallery was also claiming that all of the other Agnes Martin works that they sold even if they hadn’t had a determination yet, were potentially part of their claim.  The decision which, I think, was fairly obvious and clear was that the Agnes Martin Catalogue Raisonné and the individuals all made motions to dismiss the complaint, because it failed to state a claim and the Supreme Court of New York County granted that motion in its entirety dismissing the entire complaint against all of the defendants.  The motion dismissed also asked for legal fees, based upon the examination agreement, and the court went ahead and granted the request for legal fees and then there was ultimately a hearing, there was a   request for a reargument on the legal fees.  That request was denied and there doesn’t seem to have been an appeal.  So, I think what’s interesting about this decision, ultimately, it’s of course a lesson that these kinds of aggressive attorney’s fees will be enforced, and of course, they should be in any kind of agreement that a catalogue raisonné committee or organization has, you know, before they examine any of the works.  Now, it’s a great protection potentially for organizations that can require that people sign these agreements.  It doesn’t apply quite so easily to —

Katie Wilson-Milne:   Lesser known artists.

Steve Schindler:  To experts or lesser known, you know, sort of — or individuals who are rendering opinions, but it would seem, you know, to be negligent really at this point to not have that kind of fee agreement in an examination submission.  So, anyway, particularly, I think among the community of people who care about authenticators, this was a very important case.

Katie Wilson-Milne:  Great.

Steve Schindler:  And that’s it for today’s podcast.  Please subscribe to us on iTunes or wherever you get your podcasts and send us feedback at podcast@schlaw.com.  And, if you like what you hear, give us a 5-star rating.  We are also featuring the original music of Chris Thompson.  And, finally, we want to thank our fabulous producer Jackie Santos for making us sound so good.

Katie Wilson-Milne:  Until next time, I’m Katie Wilson-Milne.

Steve Schindler:  And I’m Steve Schindler bringing you the Art Law Podcast, the podcast exploring the places where art insects with and interferes with the law.

Katie Wilson-Milne:  And vice-versa.  The information provided in this podcast is not intended to be a source of legal advice.  You should not consider the information provided to be an invitation for an attorney-client relationship, should not rely on the information as legal advice for any purpose and should always seek the legal advice of competent council in the relevant jurisdiction.


Music by Chris Thompson.  Produced by Jackie Santos.