Murder Mystery and Egon Schiele's Dead City: Nazi Looted Artworks in US Museums

In May of this year I gave a lecture at the Jewish Museum titled "Murder, Mystery and Egon Schiele's Dead City: Swiss Laundering of Stolen Austrian Artwork". You can access a video of the lecture here at a blog called Art Stolen from Fritz Grunbaum.

I took the photo at left in the Holocaust Tower at the Jewish Museum.

If you care about the issue of artworks looted by the Nazis being concealed by the Austrians and the Swiss - and never returned to the heirs of their murdered Jewish owners, then you will find the video of interest.

According to 2006 Congressional testimony of AAMD President James Cuno, U.S. museums contain tens of thousands of artworks that were potentially looted by the Nazis that U.S. museums have failed to research. Since many families were wiped out entirely, there are no heirs to claim stolen Jewish assets in U.S. museums.

According to a recent statement by Amb. Stuart Eizenstat, 1% of Holocaust survivors die each month. 36% of them live at or below the poverty line.

U.S. museums promised to make all of their records relating to Holocaust-era assets public in 1999 and to put this information online to aid the Diaspora in tracing their heritage. This was at the Washington Conference on Holocaust-Era Assets.

Unfortunately, U.S. museums have failed to follow up on their promises. Each item in a museum, like, for example, the Museum of Modern Art, has a "confidential object file" The "confidential object file" is concealed from historians as a matter of routine. New York City taxpayers subsidize this concealment by giving tax breaks and grants to institutions like the MoMA.

If you visit the MoMA's website, you can click "Explore" and "Collection" and find "Provenance Research Project". In there, you will find 719 objects fitting the criteria of having entered the U.S. after 1932 but created before 1946. Numerous of these objects were stolen by the Nazis and never returned to their true owners.

Although there was a movement during the Clinton Administration to push U.S. museums to reveal information relating to European artworks entering the U.S. after 1933 but created before 1945, but this initiative was dropped like a hot potato once the Bush/Cheney administration came to power.

Unfortunately, Edgar Bronfman, who was a real leader in this area was replaced by art collector Ronald Lauder who has resisted disclosure of his art dealings.

Visiting the Jewish Museum in Berlin was an incredible experience. The building was designed by architect Daniel Libeskind in a manner designed to disturb and disrupt your expectations.

I have reprinted below the Washington Principles on Nazi-Confiscated Art from the U.S. State Department website.

Other countries have made great strides in remedying this problem. Let's hope that the Obama Administration will make it a priority.

Washington Conference Principles On Nazi-Confiscated Art Released in connection with the Washington Conference on Holocaust-Era Assets, Washington, DC, December 3, 1998

In developing a consensus on non-binding principles to assist in resolving issues relating to Nazi-confiscated art, the Conference recognizes that among participating nations there are differing legal systems and that countries act within the context of their own laws.

I. Art that had been confiscated by the Nazis and not subsequently restituted should be identified.

II. Relevant records and archives should be open and accessible to researchers, in accordance with the guidelines of the International Council on Archives.

III. Resources and personnel should be made available to facilitate the identification of all art that had been confiscated by the Nazis and not subsequently restituted.

IV. In establishing that a work of art had been confiscated by the Nazis and not subsequently restituted, consideration should be given to unavoidable gaps or ambiguities in the provenance in light of the passage of time and the circumstances of the Holocaust era.

V. Every effort should be made to publicize art that is found to have been confiscated by the Nazis and not subsequently restituted in order to locate its pre-War owners or their heirs.

VI. Efforts should be made to establish a central registry of such information.

VII. Pre-War owners and their heirs should be encouraged to come forward and make known their claims to art that was confiscated by the Nazis and not subsequently restituted.

VIII. If the pre-War owners of art that is found to have been confiscated by the Nazis and not subsequently restituted, or their heirs, can be identified, steps should be taken expeditiously to achieve a just and fair solution, recognizing this may vary according to the facts and circumstances surrounding a specific case.

IX. If the pre-War owners of art that is found to have been confiscated by the Nazis, or their heirs, can not be identified, steps should be taken expeditiously to achieve a just and fair solution.

X. Commissions or other bodies established to identify art that was confiscated by the Nazis and to assist in addressing ownership issues should have a balanced membership.

XI. Nations are encouraged to develop national processes to implement these principles, particularly as they relate to alternative dispute resolution mechanisms for resolving ownership issues.

When Buying A Painting Can You Rely on an Expert Appraisal You Didn't Personally Commission?

In Mandarin Trading Ltd. v. Wildenstein, --- N.Y.S.2d ---, 2009 WL 2497306 (1st Dept. August 18, 2009) New York's Appellate Division first department struggled with the question of whether a purchaser of a painting may rely on an expert appraisal commissioned by an intermediary in an art transaction. The plaintiff Mandarin purchased Gauguin's Paysage aux trois arbres. According to the complaint, the defendant Wildenstein had ownership interests in the painting, yet issued an expert appraisal with an inflated value, knowing that Mandarin would rely on it.
The Supreme Court judge (in New York this is the trial level judge) tossed the case out on a pre-answer motion, finding that there was no privity between Wildenstein and Mandarin and that the appraisal contained non-actionable opinion.

Two dissenters (Justice Tom and Justice Nardelli) balked. Tom believed that the complaint stated a claim in equity for unjust enrichment. In a very well-reasoned dissent, Justice Nardelli found that the majority had made numerous factual findings unsupported by the record, which on a pre-answer motion is to be construed in favor of the plaintiff. Also Justice Nardelli found that fraudulent misrepresentation, negligent misrepresentation, third-party beneficiary (contract), and unjust enrichment were all well-pleaded claims.

When there are two dissenters at the Appellate Division, one may take an appeal to the New York Court of Appeals "as of right".

If art dealers can write bogus "appraisals" for works in which they have an ownership interest, it really taints the market and encourages fraud. Many art transactions are concluded through intermediaries for perfectly legitimate reasons. Justice Nardelli's dissent is compelling and appears to be a correct statement of the law.

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Stormy Weather for Joint Authors: Doo Wop Ditties in the Seventh Circuit

Clients who are grateful to collaborators often wish to give credit to someone, particularly when they can't pay that person for their services. Designating that person a "joint author" may have unpleasant consequences.

Janky v. Lake County Convention and Visitors Bureau, --- F.3d--- 2009 WL 2357929 (7th Cir.) is a litigation involving members of the Doo Wop band Stormy Weather. I have written on the case before involving the issue of attorney sanctions. In this appeal the attorney committed the faux pas of forcing the client to pay sanctions against him out of a judgment he'd won. Since he lost the appeal, the issue was moot because "there is now no verdict from which sanctions can be deducted.

But the issue that divided the Sevent Circuit (opinion by Judge Evans, dissent by Judge Ripple) was on the issue of joint authorship.

Janky wrote a song. She copyrighted it, listing herself as the sole author. Farag listened and gave some suggestions. Based on those suggestions, Janky modified the work. Janky filed a copyright registration calling the modified version a "joint work". In the registration, she noted that Farag had a "10% ownership share". When she sued Farag for copyright infringement, she claimed that she didn't intend to make Farag a joint author.

Joint authors can't sue each other for copyright infringement. They can each license the work and must account to each other for proceeds.

The classic test for joint authorship is 1. whether the parties intended to create a joint work; and 2. whether each party contributed an independently copyrightable contribution.

The Seventh Circuit granted summary judgment against Janky in what it called a "close call". The dissent believed that there were issues of fact on both prongs of the test.

A good case on what type of evidence it takes to prove joint authorship and why it's important to think twice in filling out copyright registration forms.

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Pete Gleason Calls for New York City Holocaust Art Disclosure Act

New York City Council District 1 candidate Pete Gleason calls for a Holocaust Art Disclosure Act for New York City museums. Such an Act would compel New York museums to disclose provenance documents of artworks potentially looted by the Nazis currently in their collections.

This local action follows Amb. Stuart Eizenstat's call for a U.S. Commission to assist descendants of Holocaust victims in determining title to artworks stolen by the Nazis and is a follow-up to this June's Prague Conference on Holocaust-Era Assets.

Pete Gleason's press release is here and his campaign website is www.pete2009.com. The Democratic Primary is September 15.

Last week, the Liz Benjamin of the Daily News reported here a scandal involving a charity on New York's Lower East Side involving the incumbent City Councilman using the charity's employees to collect signatures.

New York County Lawyers' Art Litigation Institute Now on DVD

Art Litigation and Dispute Resolution Instititute Flyer

I recommend highly a Continuing Legal Education program that I helped to organize on art litigation and dispute resolution - you get 4 CLE credits for ethics and it is HIGHLY entertaining. Many attendees told me that it was the best CLE program they had ever attended.

To purchase the DVD, visit www.nycla.org

Credits: 8.5 MCLE Credits8.5 MCLE Credits: 4 Ethics; 1 Skills; 3.5 Professional Practice; Non-Transitional

Faculty: Matthew F. Bogdanos, Manhattan District Attorney’s Office; Judith A. Bresler, Withers Bergman; John J. Byrne, Byrne Goldenberg & Hamilton, Washington, D.C.; John R. Cahill, Lynn & Cahill; Hon. Miriam Goldman Cedarbaum, US Dist. Ct., SDNY; Sharon H. Cott, Metropolitan Museum of Art; Andrea Crane, Gagosian Gallery; Hon. Stephen G. Crane, JAMS; Raymond J. Dowd, Dunnington Bartholow & Miller; Hon. Laura E. Drager, New York State Supreme Court; Monica S. Dugot, Christie’s; David J. Eiseman, Golenbock, Eiseman, Assor & Bell; Robert J. Feinstein, Pachulski, Stang, Ziehl & Jones; Edward W. Hayes, Edward W. Hayes; Hon. Barbara Jaffe, Civil Court of NYC; Lawrence M. Kaye, Herrick Feinstein LLP; Thomas R. Kline, Andrews Kurth, Washington, D.C; John B. Koegel, Koegel Group LLP; Hon. John G. Koeltl, US Dist. Ct., SDNY; Jules B. Kroll, Jemkroll Holdings; Ralph E. Lerner, Withers Bergman; Dean R. Nicyper, Fleming, Zulack, Williamson, Zauderer; Anke Nordemann, Boehmert & Boehmert, Berlin, Germany; William G. Pearlstein, Golenbock, Eiseman, Assor & Bell; Lindsay Pollock, Art & Auction Magazine; Jan Prasens, Sotheby’s; Hon. Eve M. Preminger, Kramer, Levin, Naftalis & Frankel; Hon. Loretta A. Preska, US Dist. Ct., SDNY; Dr. Lucille Roussin, Cardozo Law; Jay G. Safer, Locke, Lord, Bissell & Liddell; Ronald D. Spencer, Carter, Ledyard & Milburn; Howard Spiegler, Herrick Feinstein; Peter R. Stern, McLaughlin & Stern; Hon. Joseph P. Sullivan (Ret.) Holland & Knight; Nancy E. Wolff, Cowan, DeBaets

Description: One of our finest course offerings from NYCLA-CLE, brings together an unparalleled panel of experts from the bench, bar, museums, art galleries, auction houses, trade publications, appraisers, and insurance companies to discuss the latest legal issues affecting the art community. Specific panels presented included:

Art Litigation and Dispute Resolution: Litigation, Arbitration or Mediation—Considerations for Practitioners Learn how to choose between and among litigation, arbitration and mediation when confronted with disputes concerning pieces of art. Some of the issues discussed by the panel of experts include the advantages and disadvantages of litigation, arbitration and mediation in the art context; how arbitration and mediation can be used more effectively in art disputes; and ways to make mediation more useful in art disputes.

Commencing an Action in Art Litigation: Replevin, Quiet Title, Slander of Title, Injunctive Relief and Statutes of Limitation In art law cases, the use of provisional remedies is neither rare nor usual. Typically provisional relief is sought to prevent a sale or other transfer of art – often because it has surfaced publically for the first time in years. A discussion of the forms of provisional remedies available is provided, as well as illustrative cases involving art law.

Art Lending, Bailments, Consignments, UCC, Liens and Security Interests While Article 2 of the U.C.C. governs an array of issues arising in art transactions, many states, including New York, doubting the sufficiency of the U.C.C. alone to safeguard art buyers, have enacted legislation that in some cases overrides the U.C.C. Learn about warranties, both from a review of U.C.C. principles and legislative and judicial expansions of the protections.

Contemporary Art, Copyright and Moral Rights The United States has reluctantly recognized the moral rights of artists to protect their reputations from harm through adverse treatment of their works of art or misuse of their identity as artists. Non-economic and personal to the artist, these rights exist independently of an artist’s copyright in or ownership of his or her own creation.

Dealing with Artists Estates and Foundations, Dealers, Auction Houses and Museums Experts discuss issues relating to how to deal with artists’ estates and foundations, art dealers, auction houses, museums and the press. Hear how the estate of Andy Warhol was handled, including litigation concerning attorney’s fees; learn about the issues surrounding how a private gallery works with attorneys to avoid and resolve disputes; discover how museums handle dispute resolutions; and find out how the press covers breaking legal stories in the art world.

Art Litigation and Dispute Resolution: Antiquities, Authentication, Provenance, Insurance, Damages, Appraisals and Valuation; Foreign Law and Choice of Law

Buying and selling ancient art requires the prudent purchaser to research the origin and history of ownership of an object and to evaluate the available information in the context of the legal framework discussed by this panel, for potential penalties for the unwitting purchaser of smuggled objects include civil forfeiture and for those who knew or in retrospect “consciously avoided” full knowledge, jail.

Program Co-Chairs: Hon Stephen G. Crane, JAMSRaymond J. Dowd, Dunnington Bartholow & Miller LLPAll Programs include: (1) Affirmation, (1) DVD/CD packet and (1) set of Written Materials TITLE AVAILABLE IN DVD FORMAT ONLY.