Bilinski v. Keith Haring Foundation, Inc., 2015 WL 996423, No.
14cv1085 (S.D.N.Y. Mar. 6, 2015)
Keith Haring was a “prolific artist and social activist
whose work responded to the New York City street culture of the 1980s.” Plaintiffs alleged that they owned Keith
Haring artwork, and that defendants interfered with the exhibition and sale of
their art, reducing the value of their property. The court dismissed all of
plaintiffs’ many claims.
The Foundation is a nonprofit established by Haring; other
defendants were individual officers and directors, an entity that operated an
authentication committee for the Foundation, Haring’s estate, and the president
of Artestar, a company that represents the Foundation in licensing and
consulting. Haring bequeathed the
majority of his works to the Foundation, as well as “any copyrights relating
hereto” and trademarks. The Foundation’s collection of Haring works was valued
at approximately $25 million as of 2011. It earns income by selling pieces from
its collection; individual pieces can fetch millions of dollars.
The Foundation operated an Authentication Committee to
review artwork attributed to Haring and issue opinions regarding the authenticity
of submitted works, which was dissolved in 2012. The dissolution increased the
value of previously-authenticated works. “Many auction houses require a
certificate of authentication as a condition of sale, but will sell Haring
artwork without a certificate with the tacit approval of the Foundation.”
Private sales may occur at reduced prices without authentication or Foundation
approval.
Plaintiffs owned 111 pieces of Haring work they believed to
be authentic, tracing title through a personal friend of Haring. In 2007, the
Foundation rejected 41 of Bilinski’s works as “not authentic,” but did not
provide a reason and stated that the determination by the Committee could
“change by reason of circumstances arising or discovered ... after the date of
this opinion.” Bilinski gathered additional evidence of authenticity, including
a signed statement of origin from Haring’s friend. In 2008, the Foundation accused Bilinski in
writing of selling or making “available for sale items you are representing to
be original works by Keith Haring when you have been duly warned they are not,”
and warned Bilinski that legal action could follow if she did not cease this
activity. The Foundation refused to respond to her attempts to address the
issue.
In 2010, Bilinski brought her works to Sotheby’s. A
Sotheby’s representative indicated his belief that the works were authentic,
but reported that he could not do anything to help her because of the
Foundation. The Gagosian Gallery reacted similarly. Bilinski asked the Foundation to reconsider,
and it refused. Another auction house told
Bilinski that the works appeared to be authentic and it would be willing to
produce an auction. Bilinski also commissioned a forensic analysis of two of
the works, which concluded that the two paintings “could be considered as
having been produced in the mid–1980s.”
In 2013, plaintiffs participated in an exhibition featuring
their Haring works that was scheduled to run from March 7–10. On March 8, the
Foundation filed suit and sought a TRO, referring to the works as “fakes,
forgeries, counterfeits and/or infringements.” The motion for a TRO referred to
the show as “fraudulent.” That same day, the Foundation and the organizers of
the exhibition agreed to the removal of all but ten works, and to remove and
destroy all copies of the brochure and/or catalog. In a press release, the
Foundation described the lawsuit as an “effort to stop the display of fake
Haring works at the exhibition.” The Press Release reports that the organizers
of the Miami Exhibition “agreed to remove all fake Haring works from the exhibition
immediately and to destroy the offending catalogue that illustrated most of the
fake works.” One plaintiff lost the sale of artwork to a museum in London as a
result of the press release and litigation.
The antitrust claims of course failed.
The Lanham Act claims based on the complaint and press
release also failed because they weren’t “commercial advertising or promotion.” Allegations that the complaint and press
release were published “with the intent of preventing sales of the [the
plaintiffs’] works ... and of increasing the value of Defendants’ artworks at
their expense” failed to allege a sufficient connection between either document
and a proposed commercial transaction.
(Although the Lexmark Court
didn’t resolve the commercial advertising issue, this seems in some tension
with its general recognition that defaming a competitor can be enough to be
false advertising, even without a direct promotion of competing goods.)
Plaintiffs’ state law tort claims also failed. The court
exercised its supplemental jurisdiction from concerns of convenience and
judicial economy. “Under New York law, statements made in the course of legal
proceedings are absolutely privileged if pertinent to the litigation,” even if
made with actual malice. The statements in the underlying complaint were
privileged, because they were directly relevant to the central dispute.
The statements in the press release, however, weren’t
privileged. The fair report privilege protected
substantially accurate reports of any judicial proceeding, but application of
that privilege was inappropriate at the motion to dismiss stage if a reasonable
jury could conclude that the report “suggest[ed] more serious conduct than that
actually suggested in the” judicial proceeding.
The press release characterized the parties as having agreed to remove
“fake” Haring works. But there was no
such admission by the exhibition organizers, and a reasonable jury could find
the privilege inapplicable.
Defamation/conspiracy to defame claims failed because no
reasonable jury could conclude that the press release was of and concerning
them, rather than the organizers of the exhibition. Any defamation was of the
organizers; any implication only disparaged their property.
Tortious interference with business relationships: the
complaint failed to identify the London buyer or allege that the defendants
knew of the business relationship at the time they filed their lawsuit or
issued the press release.
Trade libel: assuming the plaintiffs sufficiently alleged
defamation of their goods, they still failed to allege special damages, which
had to be itemized. Again, the complaint
didn’t name the London buyer or the sales price. Plaintiffs argued that the
requirement that the lost customers be identified may be relaxed when
disparaging comments are disseminated widely and the nature of the plaintiffs’
business prevents the identification of lost customers. But none of those cases
excused the failure to identify the lost sales associated with the London
Museum, and they weren’t solid authority for this situation. Intentional
infliction of economic harm/prima facie tort: again, plaintiffs failed to plead
special damages.
Unjust enrichment: The allegations that the value of
defendants’ Haring works was increased by preventing others from selling the
works, and that certain individual defendants were enriched through the
salaries and fees paid by the Foundation, weren’t sufficient. The benefits allegedly acquired didn’t flow
directly to the defendants at plaintiffs’ expense; they were indirect and
hypothetical. Also, the connection between the alleged harm to the plaintiffs
and the compensation paid to individual defendants was too attenuated to
support an unjust enrichment claim.
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