By Cynthia Li and Center for Art Law Team

Background

Victoria and Albert Museum (the V&A), the world’s leading museum of art and design, launched its program Culture in Crisis in 2015. According to the recollection of Vernon Rapley, the director of cultural heritage protection and security at the V&A, the program was conceived against the backdrop of the mass destruction of historic sites in Iraq, Yemen, and Syria.^[1] The meeting between Rapley and then director of the Yale University Institute for the Preservation of Cultural Heritage marked the exact moment of the birth of the program. Together, they planned the inaugural conference at the V&A under the patronage of UNESCO in April 2015. Delegates coming from around the globe signed a statement of intent as The London Declaration at the end of the conference, which has become the backbone of the V&A’s Culture in Crisis program. The Declaration highlights the program’s commitment to protecting global cultural heritage, supporting communities that suffer cultural heritage loss, convening those with a shared interest in protecting cultural heritage, and raising public awareness.

The program opened up to the public in 2016 when Laura Searson joined. She has been responsible for managing the program across all V&A sites and creating public programs for Culture in Crisis, such as international conferences, podcast series, webinars, and the Culture in Crisis Portal.^[2]

In 2023, on the 28th of February, Culture in Crises held a conference about Heritage at War: Plan and Prepare’ with panels “Learning from the Past” and “Preparing for the Present.” The program was outstanding, but for the title of the second panel. IT seems that we are doing more to prepare for the future than to be ready for the present.

What’s next?

Later in the spring, on the 8th and 9th of May 2023, the Cultural Heritage Working Group at the European University Institute in Florence will organize a conference entitled ‘Bridging epistemic divides in cultural heritage protection: An exercise in confrontation and conversation’.

How to engage with Culture in Crisis?

• The first step is to subscribe to the Culture in Crisis’s mailing list.
• The Culture in Crisis Portal is the world’s largest and most accessible database of heritage protection projects. It is free to search listings and register your heritage preservation projects.
• Culture in Crisis Conversations is digital events that examine how the experiences of recent years have encouraged cultural organizations across the globe to adapt and transform in the face of global challenges and new opportunities; looking to build a future that is more sustainable, equitable, and ecological. Global heritage perspectives and Cultural heritage protection in a post-Covid landscape are the two past series that recordings are free to access.
• Culture in Crisis Podcast brings voices in the heritage preservation field. Listen to season one Preservation by Design to learn about solutions to threats faced by cultural heritage. Season two Fighting the illicit trade traces the criminal activities of trading cultural heritage.
• Over years the program has carried out a number of major international conferences that discuss key issues in the field. Check out previous conferences.
• There are a wide range of free events that open up dialogues between artists, designers, heritage workers, activists and many others.

Selected Resources and References

• Link to the 2015 inaugural conference https://www.youtube.com/playlist?list=PLe2ihXndm5juIuR2xUhRsS7GZlVMTUtGk
• “Culture in Crisis | International Institute for Conservation of Historic and Artistic Works,” June 28, 2022, available here https://www.iiconservation.org/content/culture-crisis.
• The Mosaic Rooms. “Laura Searson.” Accessed March 9, 2023. https://mosaicrooms.org/laura-searson/.

About the author:

Cynthia Li is a graduating senior at the University of Michigan – Ann Arbor. She has a major in art history and a minor in political science. She is the undergraduate intern for the Center in Spring 2023.

1. “Culture in Crisis | International Institute for Conservation of Historic and Artistic Works.” ↑

2. “Laura Searson.” ↑

The post Spotlight: Culture in Crisis (Victoria & Albert Museum, UK) appeared first on Center for Art Law.

By Laura Dowdy

Introduction

On December 31st, each year, new creative works enter the public domain. ^[1] This means that while some artists/creators lose the right to preclude others from copying a work, others can create new works that utilize aspects of previously copyrighted works. When artists and creators create derivative works, such as films, novels, and plays, which are based on or reference aspects of a work in the public domain, the world gets to experience new expressions of creativity that would otherwise be prohibited as infringing upon the artists’ intellectual property rights.

It may help to think of the public domain as a qualification rather than a location. Works that are not protectable by any intellectual property laws, including copyright, trademark, or patent laws, are included in the public domain. When a creative work, such as a painting, sculpture, photograph, song, or book, is in the public domain, anyone can freely use, share, or adapt it without permission from its author. Copyright laws vary by country, but generally, works that are protected by copyright law fall into the public domain 70 years after the author’s death. ^[3]

Today, some of the world’s most revered artworks are in the public domain, freely available for copying and distribution for monetary gain. For example, Vincent Van Gogh, born March 30, 1853, in Zundert, Netherlands, painted The Starry Night in June 1889. The artist died on July 29th, 1890 in Auvers-sur-Oise, France. Because Van Gogh passed away over 70 years ago (132 years ago at the time this article was written), a reproduction of The Starry Night (1889), currently on display in the Museum of Modern Art in New York, is now in the public domain. The same methodology applies to works created by artists such as Gustav Klimt (born July 14, 1862, in Baumgarten, Vienna, Austria; died February 6, 1918, Vienna, Austria), and to literary works such as The Great Gatsby (1925) by F. Scott Fitzgerald (born September 24, 1896, in Saint Paul, Minnesota; died December 21, 1940, in Los Angeles, California).

Legal Frameworks

Although there is no law that will provide copyright protection for the author of a work in every country, several rules exist that provide a global framework for copyright law. For example, the Berne Convention for the Protection of Literary and Artistic Works began in 1866 at an international assembly in Bern, Switzerland. There, ten European countries gathered to establish a set of legal principles to govern copyright protection for authors of creative works. The Berne Convention establishes minimum protections for creators of works including but not limited to the right to make adaptations and arrangements of the work, perform it in public, adapt it into musical works, broadcast it, and make reproductions in any manner or form.

The Convention also provides for “moral rights”, which means that the creator of the work retains the right object to portrayals or modifications of the work that are prejudicial to the author’s honor or reputation. The Berne Convention proscribes a minimum duration of protection for 50 years after the author’s death. This number provides a floor, rather than a ceiling, of protection. However, when an author of a work is a national of a country whose copyright protections are longer, the longer term supersedes the 50-year term provided by the Berne Convention. For example, the United States’s general copyright duration is 70 years after the death of the author, and Mexico’s duration is 100 years after the death of the author.

Copyright protections apply to works differently by country, and each country has its own standards for how and when a work can enter the public domain. However, the most common reasons for a work to enter the public domain ^[4] in the United States are:

• The type of work is not eligible for protection under copyright laws;
• The copyright expired;
• The work was made by an office or official of the U.S. Government;
• The owner of the copyright did not renew the copyright registration in a timely manner or intentionally forfeited their rights to the work.

Once a work enters the public domain, ownership of the copyright expires. Any person or company is free to use, copy, and distribute the art. For example, someone may find a reproduction/image of Gustav Klimt’s The Kiss (1907-1908), which is currently housed in the Österreichische Galerie Belvedere, online, print it, and sell it outside of any museum to the general public. This commercial exploitation of a work created by a known artist is permissible under copyright law because the artist’s works are in the public domain.

Instead of printing a photo as the example above mentions, however, immersive art experiences are a newly popularized and commercialized form of creative works that have largely been based on works in the public domain. Furthermore, certain aspects of these experiences may be protected under copyright law.

The Rise of Public Domain Art in Immersive Art Experiences

Although immersive art experiences are not new, they have become popular in recent years. In 2012, Culturespaces Digital, a company specializing in immersive art experiences, began producing digital art exhibits in the Carrières des Lumières in France. The company focused on different noteworthy artists each year; in 2013, Culturespaces opened an immersive exhibit highlighting Gustav Klimt. Other exhibits featured Vincent Van Gogh in 2019, Paul Cezanne in 2021, and Claude Monet in 2022, all of whose art is in the public domain.

Other companies have followed, creating immersive art exhibits around the world. The Immersive Van Gogh Exhibit, which was created and designed by contemporary immersive artist, Massimiliano Siccardi, focuses solely on the life and work of Vincent Van Gogh, and acts as a traveling exhibit, visiting different larger cities across North America. Because Van Gogh’s works are in the public domain, it is permissible under copyright law for anyone to create an immersive experience featuring the artist, which is evident in the many companies that have Van Gogh-specific immersive exhibits. Immersive experience companies such as Superblue, which opened in Miami in 2021, is a physical space dedicated to showcasing the works of different artists through digital immersive art technology. Australia-based, Grande Experiences, offers companies the option of obtaining a license to host one of their immersive art shows in any city, featuring artists such as Dali, Monet, and DaVinci, and also has permanent immersive art venues in Melbourne and Indianapolis. Their business model allows companies to lease the right to use and profit from their immersive experiences. The immersive entertainment industry, estimated to be valued at over $61.8 billion, according to the HERE Institute’s 2020 annual report, is highly profitable because it eliminates high costs associated with moving and insuring physical artwork, especially those of famous artists.

The digital technology that creates these immersive art experiences allows visitors to feel transported into the art itself. For instance, viewers might feel physically present in a field of Van Gogh’s sunflowers or walk over the bridge Monet painted in the water lily garden. Immersive experiences also often offer 360-degree projections of landmark paintings and works of art, as well as mega-size screens that allow viewers to sit under and around the paintings to fully experience the creative magnitude of classic masterpieces. Coupled with the lighting and sound that is engineered specifically for each exhibit and artist, the sensory experience becomes fully immersive.

Copyright Protection for Immersive Art Experiences

People may be interested in reproducing art that has fallen into the public domain for several reasons. For example, with famous artists such as Salvador Dali or Leonardo DaVinci, whose works are in the public domain, immersive art companies attract a wide audience and therefore stand to profit from both the name recognition and from the opportunity to create a new experience for viewers, portraying the art on a larger scale, and in an amplified way. Some companies have successfully registered for copyright protection for their immersive art exhibits. For example, Belgium-based company, Dirty Monitor registered its immersive art project, Van Gogh Immersive Exhibition, in 2017 with the U.S. Copyright Office, (registration number PA0002347152). Thus, although no one may obtain copyright registration for reproducing a copy of one of Van Gogh’s paintings, companies such as Dirty Monitor are able to obtain copyright protection for the aspects of a reproduction that are independently copyrightable. For example, Dirty Monitor did not register the photographs of Van Gogh’s paintings that they used in their exhibit, but they did register all other cinematographic material, the additional new footage, and the production as a motion picture. Because immersive art companies create so many different elements involved in the exhibit, such as lighting design, sound effects and musical scores, and video and virtual reality, they are able to obtain copyright protection for the way in which they express art that is in the public domain. When these companies have copyright-protected immersive art experiences, they also retain the right to preclude others from creating immersive art exhibits that copy elements of their exhibits, known as “compilation” and “derivatives.” This is because copyright law protects not only the original artworks themselves but also derivative works that are created based on the original artworks. See the U.S. Copyright Office’s explanation of “Copyright in Derivative Works and Compilations.”

Derivative works include works that are based on or incorporate the original artwork, such as reproductions, adaptations, and translations. For example, an immersive art exhibit wherein images of a Klimt painting or one of the gardens in a Monet painting are displayed through a virtual reality headset, with the addition of elements such as sound recordings and special lighting, may be considered a derivative work that is protected by copyright law. The U.S. Copyright Office defines derivative works as:

“A derivative work is a work based on or derived from one or more already existing works. Common derivative works include translations, musical arrangements, motion picture versions of literary material or plays, art reproductions, abridgments, and condensations of preexisting works. Another common type of derivative work is a “new edition” of a preexisting work in which the editorial revisions, annotations, elaborations, or other modifications represent, as a whole, an original work.” ^[5]

In some cases, the owners of the original works may also have intellectual property rights in the immersive art experience itself. For example, all texts and illustrations published on the website of the Klimt Foundation are still protected under copyright law, while Klimt’s painting, The Kiss is in the public domain in the United States because it was published (or registered with the U.S. Copyright Office) before January 1, 1928. On the other hand, immersive art experience companies such as Klimt: The Immersive Experience, claim copyright protection, although no registration can be found on the U.S. Copyright Office’s database.

Additionally, copyright protection may expire for the original artwork, but the derivative work may still be protected because it was created within the protected period of time. Additionally, fair use and other exceptions to copyright law may apply to certain uses of the original artwork or derivative works, such as when the art is displayed or reproduced for educational or non-commercial purposes.

Infringement and Immersive Art

Some creators of immersive art experiences have encountered copyright infringement issues, including teamLab, a Japanese art collective that sued the for-profit Museum of Dream Space (MODS) in 2019 (teamLab Inc. v. Museum of Dream Space, LLC et al), for copying its immersive art exhibit. In January 2023, teamLab declared a victory in their lawsuit after a California court found that there was substantial similarity between the MODS immersive exhibit and the teamLab exhibit, such that there was significant evidence of copying. However, teamLab’s exhibits do not include art from the public domain, and therefore, proving infringement for an immersive art company that bases its exhibits on art in the public domain would require a finding that the company accused of infringement copied the particular expression of the immersive experience, rather than copying the public domain art itself or the idea of an immersive art experience featuring a particular public domain artwork.

In summary, immersive art experiences featuring artwork from the public domain has become a highly lucrative and popular way in which people are consuming art. In the coming months and years, as technology continues to advance and art continues to fall into the public domain, it is probable that more infringement suits will arise, and therefore, copyright laws will need to be refined to adapt to these challenges.

Selected Sources

1. Jenkins, J., & Tucker, N., Public Domain Day 2023, Duke University School of Law, https://web.law.duke.edu/cspd/publicdomainday/2023/.
2. Rich Stim, The Public Domain – Copyright Overview, Stanford Copyright and Fair Use Center, https://fairuse.stanford.edu/overview/public-domain/.
3. How Long Does Copyright Protection Last? (FAQ). (n.d.). U.S. Copyright Office, https://www.copyright.gov/help/faq/faq-duration.html.
4. Jessie Ball duPont Library: Copyright: All You Need to Know: Public Domain and Open Access Resources. (Jun. 30, 2022), https://library.sewanee.edu/c.php?g=240692&p=1600520.
5. Circular 14: Copyright in Derivative Works and Compilations. U.S. Copyright Office, https://www.copyright.gov/circs/circ14.pdf.

Disclaimer: This and all articles are intended as general information, not legal advice, and offer no substitution for seeking representation.

About the Author:

Laura Dowdy, Legal Intern with the Center for Art Law, is a second-year law student at New England Law | Boston, concentrating on Intellectual Property law, especially art, copyright, and trademark law. She can be reached at laura.dowdy@nesl.edu.

The post The Public Domain and Immersive Art: How Copyright Law Impacts Interactive Art Experiences appeared first on Center for Art Law.

By Yuha Jung, PhD

This article compares the differences between 501(c)(3), community benefiting nonprofits, and 501(c)(7), social clubs, and applies them to discussing legal obligations in the field of art museums that are mostly 501(c)(3) tax-exempt organizations. In doing so, it critically discusses how museums must differentiate themselves from social clubs in order to afford the wider tax benefits that are given only to 501(c)(3) nonprofits. These wider tax benefits include exemption from federal income taxes^[1] and often state taxes (e.g., income tax, property tax, excise tax) as well as tax deductions enjoyed by their donors under § 170(c)(2).^[2] While this article consults the tax codes and regulations and uses empirical evidence for arguments, it includes critical and theoretical arguments of how art museums should serve diverse public to differentiate themselves from social clubs and remain worthy of tax benefits they currently enjoy. Below, the article (1) shares brief background information on the practice of art museums, (2) presents major differences between 501(c)(3) and 501(c)(7) based on the tax codes and regulations, (3) applies them to the current practice of art museums, especially regarding the “no private benefits” provision, and (4) proposes an affirmative community benefit standard to rectify any possible deviations of museum practice from being qualified as public benefiting nonprofits.

Art Museums in the United States

While there are a few examples of public (e.g., Smithsonian museums) and for-profit (e.g., International Spy Museum) museums, the majority of museums in the United States—especially art museums—are nonprofit organizations with a 501(c)(3) status.^[3] This means that most museums in this country are considered charities described under both § 501(c)(3) and § 170(c)(2), receiving most tax benefits among 29 different classifications of tax-exempt organizations described in 501(c).^[4] While there are many statutory, organizational, and operational tests charitable organizations need to satisfy in order to get maximum tax benefits afforded under both § 501(c)(3) and § 170(c)(2),^[5] they exist to ensure that they serve the wider general public in exchange for extensive tax benefits. One specific provision that this article focuses on is the “no private benefit” provision; 501(c)(3) organizations must provide wider public benefits.^[6] The extensive tax benefits afforded to charities in exchange for providing public benefits are not given to other types of nonprofits, for example, 501(c)(7) social clubs because they do not provide services to wider classes of people.

Differences between 501(c)(3) and 501(c)(7) Organizations

Section 501(a) states that “[a]n organization described in subsection (c) or (d) or section 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 501 or 503.”^[7] Under 501(c), both 501(c)(3) and 501(c)(7) organizations are qualified for tax-exemption. Section 501 defines 501(c)(3) organizations as “… organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition.”^[8] Museums fall under the educational exemption category.^[9] Section 501 defines social clubs as “organized for pleasure, recreation, and other nonprofitable purposes, substantially all of the activities of which are for such purposes and no part of the net earnings of which inures to the benefit of any private shareholder.”^[10] Prime examples of 501(c)(7) organizations are country clubs, fraternities and sororities, and hobby clubs, which benefit their members only.

Therefore, while they are both 501(c) tax-exempt organizations, one of the main differences is who they serve, which warrants further tax benefits only afforded to 501(c)(3) organizations. In other words, 501(c)(7) organizations are not qualified for donor tax deduction because it is not described in §170(c).^[11] “The tax code treats social clubs least favorably of all mutual benefit organizations”^[12] because it serves only the members of the organization for a narrow recreational or interest purpose. A club derives exclusive “mutual benefit” among members by sharing costs, characteristics, or goods.^[13] Therefore, club goods are either excludable to nonmembers or priced higher to those who do not belong to the club.^[14] This built-in exclusiveness in membership distinguishes clubs from public benefit organizations that are open to the public. To demonstrate the stark difference between their publicness and exclusiveness, assets of public benefit organizations are distributed to other public benefit organizations when they are dissolved,^[15] whereas the assets of closing clubs can go to the members of the entity.

No Private Benefit Provision of 501(c)(3) Museums

While § 501(c)(3) does not specifically mention private benefits restrictions,^[16] it is found in the Treasury Regulation § 1.501(c)(3)-1(d)(1)(ii), which prohibits an organization from operating “for the benefit of private interests such as designated individuals, the creator or his family, shareholders of the organization, or persons controlled, directly or indirectly, by such private interests.”^[17] No private benefits provision—unlike the no private inurement provision that only applies to people directly involved with the organization such as board members, employees, and their families—can be applicable to anyone.^[18] Lacking a public purpose and benefiting a small group of people could violate this provision.^[19]

The practice of many museums has been more like a social club, where a certain group of people feel belonging and are comfortable visiting. Many art museums in this country have been practicing exclusivity (not in a sense of being exempt for exclusive purposes but in a sense of excluding certain groups of people) that is more aligned with the practice of 501(c)(7) organizations. It is widely known and criticized that museum visitors, board, staff, and donors are homogeneous. For example, their visitors often consist of white, wealthy, older, and well-educated people.^[20] The National Endowment for the Arts’ most recent arts participation survey stated that about 27% of white adults in the US visited an art museum or gallery compared to only 17% of black adults visiting the same.^[21] The link between museum participation and higher socioeconomic status is well documented, as well.^[22] People who govern and manage them (especially upper level positions) share very similar characteristics culturally, socioeconomically, and educationally.^[23] Their collections and represented artists mimic this trend. A majority of mainstream art museum collections remain white and male with 85% of represented artists being white and 87% male.^[24]

This point about museums acting more like clubs can be further illustrated when looking at how museum donors are also the ones who use the museum. For example, in a homeless shelter, the donors and main beneficiaries (users) of the organizational service rarely overlap. Yet in museums, some board members donate money or works of art in exchange for opportunities to network with members of their class.^[25] Additionally, if one takes a look at most museums’ membership structure that gives free admission or discounts to museum store purchases to members, nonmembers pay the regular price which is set higher for them. Social clubs must be supported by membership fees, dues, and assessments.^[26] Most museums’ governance make-up and membership structure could be seen as a characteristic of a 501(c)(7) social club rather than a 501(c)(3) charitable nonprofit.^[27]

In American Campaign Academy v. Commissioner,^[28] the court found that the taxpayer was violating the no private benefits provision when it primarily served one political party over the other, and the evidence lacked in trying to be nonpartisan. The case stated that “the administrative record and the partisan affiliation of the candidates served fail to establish that the petitioner broadly distributed its secondary benefits among political entities and candidates in a nonselect manner.”^[29] If this same logic were to apply to museums, they primarily serve a white, wealthy, and highly-educated class of people; acting more like a club, by not affirmatively reaching out to different classes of people who are currently not using their services, they are therefore possibly violating the no substantial private benefits provision. In General Counsel Memorandum 39862 (Nov. 21, 1991),^[30] even indirect or unintentional private benefits can jeopardize a taxpayer’s tax exemption status. While a charity could have a class of people who require specific service from the charity indefinitely (e.g., homeless shelter serving homeless people indefinitely),^[31] the group that primarily benefits from museum services could not be a charitable class because art museums’ exempt purposes are not to benefit white, wealthy, and educated people to be further educated through the preservation, display, and research of dominant art.

Future Directions

Are art museums then providing public benefits? Or are they representing and serving a class of people not reflecting the diversity of the public? As described above, some practices of many nonprofit art museums could be more aligned with the qualities of social clubs rather than public benefiting nonprofits, which may mean that many art museums could be violating the no private benefit implied in § 501(c)(3) and articulated in CFR § 1.501(c)(3)-1(d)(1)(ii). What can art museums do to avoid pitfalls and become more aligned with the Congressional intent of § 501(c)(3), providing public benefits to broad ranks of people in society and not just a select few? Given the long history of art museums that have been catering to certain groups of people, we know that change may require affirmative action or community benefit standards, just like those that nonprofit hospitals have adopted. While art museums do not provide imminent or otherwise critical health care to people, they nonetheless can provide “human care” that make people “human” through the preservation, appreciation, and learning of arts and culture.

The suggested community benefit standard below is designed to combat structural problems that have led to the accessibility issues of arts in the art museum sector. For example, there is an empirically positive link between diversity of arts nonprofit boards and their community and public serving activities.^[32] Paying close attention to museum board composition, therefore, has potential to change museums’ core activities and who they can attract. It is also focused on providing actual community benefits broadly, not just specific services that could be counted as benefiting a few members from the community. The benefit standards are as follows:

• Nonprofit museums should demonstrate that they provide benefits to diverse classes of people broad enough to benefit the community and operate to serve a public interest
• Establish free membership and admission options for those who are unable to pay
• Maintain a board of directors drawn from the community that is representative of the community’s broader demographics
• Maintain staff who reflect the community population
• Devote resources to further diversify its collection and programming efforts and research more equitable ways to present plural arts and cultural values
• Offer more educational services to diverse communities, including school-aged children
• Conduct ongoing program and performance evaluations for achieving continued effectiveness of services

A genuine and long-lasting change usually requires a cultural and structural change that has to come from within each museum as well as a policy change that can lead to wide-spread transformation. Without internal cultural change accompanied, policy and legal enforcement may not be sufficient. If the standard provides specific action steps that are designed to trigger structural and systemic change, we may be able to motivate museums to change from within. Berg in her article said, “We might think creatively about how to employ the current structure in a way most beneficial to the community, since, after all, community benefit is the purpose of providing tax exemptions.”^[33]

About the Author

Dr. Yuha Jung is an associate professor and director of graduate studies of Arts Administration at the University of Kentucky. She is currently pursuing a part-time JD at the University of Kentucky J. David Rosenberg College of Law. She is also an associate editor for the journal Museum Management and Curatorship and a board member for the Association of Arts Administration Educators. Her research focuses on systems theory, organizational culture, and cultural diversity in arts and culture organizations. Her recent monograph, Transforming Museum Management: Evidence-Based Change through Open Systems Theory, was published in 2022. To learn more about her qualifications and publications, visit her website and faculty page.

Additional Readings

• E. Alex Kirk, The Billionaire’s Treasure Trove: A Call to Reform Private Art Museums and the Private Benefit Doctrine, 27 Fordham Intell. Prop. Media & Ent. L.J. 869 (2017). Available at: https://ir.lawnet.fordham.edu/iplj/vol27/iss4/4
• John, Leila, Museums and the Tax Collector: The Tax Treatment of Museums at the Federal, State, and Local Level, University of Pennsylvania Journal of Business Law, (2013), Available at https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1442&context=jbl
• Muir, Elisha, “Museums and the Tax Code: A Fraught Friendship” (2019). Thesis. Rochester Institute of Technology, Available at https://scholarworks.rit.edu/cgi/viewcontent.cgi?article=11292&context=theses
• Takis, Benjamin, Art Law Visiting the Non-profit Side: On Qualifying for 501©(3) Status as an Arts Organization Center for Art Law (2014), Available at: https://itsartlaw.org/2014/05/27/visiting-the-non-profit-side-on-qualifying-for-501c3-status-as-an-arts-organization/
• Social Clubs, IRS, Available at: https://www.irs.gov/charities-non-profits/other-non-profits/social-clubs

1. I.R.C. § 501(c)(3). ↑
2. I.R.C. § 170(c)(2). ↑
3. Roland Kushner & Randy Cohen, National Arts Index 2016: An Annual Measure Of The Vitality Of Arts And Culture In The United States: 2002-2013, at 43 (2016), https://www.americansforthearts.org/sites/default/files/NAI%202016%20Final%20Web%20Res.042216.pdf. ↑
4. David Brennen, Darryll Jones, Beverly Moran & Steven Willis, The Tax Law of Charities and Other Exempt Organizations 3 (4th ed. 2021). ↑
5. See Brennen, supra note 4, at 4. ↑
6. Treas. Reg. § 1.501(c)(3)-1(d)(1)(ii). ↑

7. I.R.C. § 501(a). ↑

8. I.R.C. § 501(c)(3). ↑
9. Treas. Reg. § 1.501(c)(3)-1. ↑
10. I.R.C. § 501(c)(3). ↑
11. I.R.C. § 170(c)(2). ↑
12. See Brennen, supra note 4, at 653. ↑
13. Richard Cornes & Todd Sandler, The Theory of Externalities, Public Goods and Club Goods (1986). ↑
14. Roland Kushner & Arthur E. King. Performing Arts as a Club Good: Evidence from a Nonprofit Organization. 18 J. Cult. Econ. 15, 16 (1994). ↑
15. Treas. Reg. § 1.501(c)(3)-1(b)(4). ↑
16. See Brennen, supra note 4, at 331. ↑
17. Treas. Reg. § 1.501(c)(3)-1(d)(1)(ii). ↑
18. See Brennen, supra note 4, at 331-32. ↑
19. Easter House v. United States, 12 CI. Ct. 476, 490 (1987). ↑
20. See generally Betty Farrell & Maria Medvedeva, Demographic Transformation and the Future of Museums (2010); David Fleming, Positioning the Museum for Social Inclusion, In Museums, Society, Inequality, at 213 (Richard Sandell, ed., 2002); Richard Sandell, Museums as Agents of Social Inclusion, 17 Museum Management and Curatorship, 401 (1998). ↑
21. NEA (National Endowment for the Arts). U.S Patterns of Arts Participation: A Full Report from the 2017 Survey of Public Participation in the Arts 36 (2019). https://www.arts.gov/sites/default/files/US_Patterns_of_Arts_ParticipationRevised.pdf; Notice that this accounts for visits to art museums or galleries, which include for-profit galleries. ↑
22. See NEA, supra note 21, at 36; Catherine D. D. Bowman, Adrianna Adkins, Brooke L. Owen, Kyle J. Rogers, Edgar Escalante, Judd D. Bowman, Brian C. Nelson & Alison Stoltman, Differences in visitor characteristics and experiences on episodic free admission days, 35 Museum Management and Curatorship 265 (2019); See Farrell & Medvedeva, supra note 20, at 14. ↑
23. See generally Farrell & Medvedeva, supra note 20; See generally Fleming, supra note 20. ↑
24. Chad M. Topaz, Bernhard Klingenberg, Daniel Turek, Brianna Heggeseth, Pamela E. Harris, Julie C. Blackwood, C. Ondine Chavoya, Steven Nelson & Kevin M. Murphy, Diversity of Artists in Major US Museums, 14 PLOS ONE 1 (2019) ↑
25. Alexandra Olivares & Jaclyn Piatak. Exhibiting Inclusion: An Examination of Race, Ethnicity, and Museum Participation, 33 Voluntas 122 (2022); See generally Francie Ostrower, Trustees of Culture Power, Wealth, and Status on Elite Arts Boards (2002). ↑
26. Social Clubs, Internal Revenue Service, (Aug. 18, 2021), https://www.irs.gov/charities-non-profits/other-non-profits/social-clubs. ↑
27. See Kushner & King, supra note 14, at 16. ↑
28. American Campaign Academy v. Commissioner, 92 T.C. 1053 (1989). ↑
29. Id., 1077. ↑
30. GCM 39862 (IRS GCM), 1991 WL 776308. ↑
31. Publication 3833 (Rev. 12-2014), https://www.irs.gov/pub/irs-pdf/p3833.pdf. ↑
32. Young-Joo Lee, Nonprofit Arts Organizations’ Pursuit of Public Interests: The Role of Board Diversity, 12 Nonprofit Policy Forum 563 (2021). ↑
33. Jessica Berg, Putting the Community Back into the Community Benefit Standard, 44 GA. L. REV. 430 (2010). ↑

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By Livia Solaro

From December 16, 2022 to April 10, 2023, the Scuderie del Quirinale in Rome is entirely dedicated to the exhibition “ARTE LIBERATA 1937-1947. Masterpieces saved from war,” a sui generis itinerary that guides visitors across the incredible adventure(s) of the men and women who strived to protect Italy’s cultural treasures during the most tragic decade of its history.

By showcasing a remarkable selection of masterpieces (visitors are greeted by the Discobolus Lancellotti and end their tour under the ecstatic gaze of Tiziano’s Danae), the exhibition offers a novel look into a chapter of World War II that is often reduced to the intervention, during the conflict’s final years, of the Monuments, Fine Arts, and Archives program (better known as Monuments Men). The goal behind “Arte Liberata” is to let visitors dive into the exploration of what happened at the national level prior and around the Monuments Men’s arrival to Sicily. To this end, a series of highly detailed exhibition panels (accompanied by some fascinating archival materials) provide information both in Italian and English. The final result is a well-rounded reconstruction of the challenges and choices that marked a decade, adding a new layer to an important chapter in the history of cultural property protection in times of war.

A different perspective

The peculiarity of the initiative is already evident from its title. When discussing Nazi looted artworks, it is not uncommon to read how they were recovered, for example, from the Altaussee salt mine or rescued from private collections, such as that amassed by Hermann Göring in his Carinhall estate; when successfully identified by the national delegations, they were then returned from the German collecting points to the countries they had been plundered from.^[1] To define art as being liberata (liberated), however, is quite unusual and potentially confusing; after all, most of the pieces on display never fell under enemy control nor did they leave the national territory, thus requiring no “liberation.” The choice of words, however, needs to be read in connection to the concept of Liberazione, which indicates the end of the Nazi occupation of Italy and the simultaneous fall of the Fascist regime. Liberazione is, in turn, deeply intertwined with the ideals of the Resistenza, the relentless guerilla fight carried out by the partigiani after the 1943 Armistice officially turned the German allies into invaders. In this context, cultural property protection is presented as yet another front on the battle for freedom and its protagonists as heroes of their own account. By transcending the familiar boundaries of “restitution,” the meaning of this exhibition becomes heavily political, as the untold stories of museum directors, curators, and art historians are presented as a proper component of the fight for Liberazione.^[2]

And yet, the risk of falling into a flat and nationalist glorification of the past remained a pretty big one, especially in light of the current Italian political climate (Scuderie del Quirinale is, like most museums in Italy, a public institution). Indeed, the Minister of Culture’s contribution to the exhibition’s catalogue heavily insists on the patriotic sense of pride and gratitude towards these unlikely heroes.^[3] Thankfully, the universality of values and ideals behind the individuals’ efforts for the protection of cultural properties is strongly highlighted throughout the exhibition. Thus, albeit organized as a collection of stories, “Arte Liberata” ends up telling a much broader tale of war and culture, as a handful of intellectuals and public officials found themselves fighting a battle that was way bigger than any of them.

Regrettably, the exhibition does not make any mention of the separate, yet deeply correlated issue of those cultural properties that were taken by the Italian government, in force of the Fascist racist policies that, starting from 1935, were adopted against Jewish families; nor does it touch at any point upon the possible presence, within the Italian public collections, of artworks whose provenance might be unclear (or the lack of efforts, at the national level, to investigate in this regard). While clearly focused on a different aspect of the affair, this lack of consideration for “the other side of the coin” represents an evident flaw in an otherwise beautifully organized exhibition.

A presentation of stories through space and time

The ambitious goal of the exhibition to offer both an artistic and a didactic experience is effectively supported by an efficient organization of the materials along three narrative strands: one strand follows the forced or illegal exportations of protected artworks, one focuses on the moving and hiding of hundreds of thousands of cultural goods across the national territory, and a small conclusive part deals with the repatriation negotiations that took place after the end of the conflict. Each theme is addressed in a separate section, which avoids any overlap of contents and allows the exhibition to open and close with the most valuable pieces on display.

These three narratives also follow a chronological order: forced exportations – dealt with at the beginning of the exhibition – occurred at a time when the Nazi regime was still considered a valuable ally, and Fascist high officials intervened to facilitate (or outright impose) the sale of cultural goods that, according to the Italian cultural heritage law then in force, should not have left the Italian territory. Probably the most striking example of such a praxis is the sale of the Discobolus, which was requested in 1938 by Philipp von Hessen-Kassel on behalf of Hitler himself. Regardless of the restrictions imposed by the law, and the negative opinion of the Minister of Education Giuseppe Bottai himself, the marble statue – widely considered to be the best Roman copy of the long-lost bronze Discobolus of Myron – ended up in the Glyptothek München as a gift from the Führer to the German people.

Next to the statue, a short extract from the film “Olympia” by Leni Rifensthal provides the visitors with some background to Hitler’s fixation with this work of art (which prompted the involvement of the Italian Minister of Foreign Affairs Galeazzo Ciano to secure the positive conclusion of the sale). The prologue of the film, realized in celebration of the 1936 Berlin Olympic games, saw several statues of athletes – including the Discobolus – turn into as many sculptured humans in an evocative scene that had indelibly struck the imagination of the Führer. This is only one of the ample exceptions made during the Fascist years to the safeguards already in place at the time for “things of artistic, historical, archeological or ethnographic interest” (an even more stringent legislation was adopted in 1939).

The influence of the powerful Nazi ally bore a significant impact also on the private market, where several objects that should have never exited the country were sold to German art professionals and enthusiasts. The exhibition makes an example out of the “Ventura affair,” whereby sixteen works of art were sent by the antique dealer Eugenio Ventura to Göring, in exchange for various French masterpieces that had been previously looted from the private collections of some prominent Jewish families in occupied France. How the two sets of artworks entered and left the Italian soil was never clarified, with the Soprintendenza (the competent administrative authority) providing contradicting and incomplete information. The exchange also highlights the willingness, at least by a portion of the private sector, to overlook the 1942 London Declaration, which aimed at discouraging precisely these kinds of transactions.

National and regional efforts: the two sides of the protection of cultural heritage

As “Arte Liberata” focuses on the active fight against Nazi plunder and the measures taken to preserve artworks in the midst of the war, it is the second of its three main narratives that represents the true heart of the exhibition. From the second room onwards, the tale of the myriad of operations that took place before and during the war is told in great – and unprecedented – detail, starting with the national preparations that took place during the hectic nine months between the beginning of the conflict and Italy’s entry into war. Official decrees ordering nationwide surveys and inventories, signed by the Minister of Education Bottai, hang on the walls of the Scuderie (which, in turn, are covered by planks of raw wood to mimic the crates used to store the artworks).

Taking the operations carried out by the Spanish museums during the Spanish Civil War as a model of what not to do, Bottai envisioned a war preparation plan that would not require the artworks to leave the country. Photographs and videos from the historical archive Istituto Luce also offer powerful images of iconic monuments and cultural landmarks buried under bags of sand or disappearing under anonymous hard wooden structures. Walking across the rooms, visitors witness the arches of the Colosseum being filled up to prevent structural collapses, Trajan’s Column progressively wrapped in several protective layers, or Canova’s statue of Paolina Bonaparte hidden under a weirdly pyramidal cage. s World famous museums, such as Galleria Borghese in Rome or the Egyptian museum of Turin, were systematically emptied of their collections, an astonishing flow of artworks had to be directed towards a series of refuges identified by the local Soprintendenti and museums’ directors.

It is at this point that the historical events split into a collection of regional tales that are individually presented in different sections of the exhibition. Starting from the middle of the country, so to speak,^[4] the first regional story to be covered is that of the Marche region, whose position and geography made it an ideal destination for the crates of art coming from all across Italy. Thanks to the significant loans from the Galleria Nazionale delle Marche, “Arte Liberata” hosts a great number of artworks that were moved to and across the region, in order to be stored within the thick walls of Renaissance fortifications like the Rocca di Sassocorvaro or historical buildings like the Palazzo dei Principi Falconieri in Carpegna.

This region’s vicissitudes are also particularly illustrative of the tragic practical consequences of the 1943 Italian Armistice, which unexpectedly overturned the previous power dynamics and local balances. All of a sudden, what had been considered to be the safest region in Italy was caught in between the two enemies’ lines; consequently, many of the refuges previously identified had to be evacuated once more, and new shelters had to be found either before the arrival of the Kunstschutz or to avoid the Nazi punitive expeditions. Similar situations arose across all of the Italian territory, with the additional complication that – with the country split in two – there no longer was a central administration coordinating the operations of safekeeping of cultural goods, leaving every man and woman for themselves.

The names and faces behind history: the individuals who stepped up

Next to the wool and silk tapestries, frescoes, marble and bronze busts, original Rossini’s scores, pottery and tondos, the Scuderie adds the names – and often the photographs – of those responsible for their salvage. Visitors are then presented with the stories of a handful of foresighted museum directors, such as Fernanda Wittgens, Noemi Gabrielli, and Jole Bovio Marconi, who moved their collections right before a military attack could destroy or damage them, or that of Pasquale Rotondi, the Soprindentente responsible for the fate of around 10,000 artworks (including several Caravaggios that had arrived from San Luigi dei Francesi and Santa Maria del Popolo in Rome and the San Marco treasure from Venice). Pietro Zampetti, from Modena, had only his bike to transport pieces from the Estense collection from one place to another, and Emilio Lavagnino managed to negotiate with the Vatican the reception of those artworks that could no longer remain on Italian soil. Lavagnino then helped carry them there himself, using his family car that ran on gasoline acquired on the black market.^[5]

As visitors make their way through the exhibition, the list of names goes on, as does the tale of the adventurous (and often desperate) operations whose reality is restored through the incredible archival photographs of the artworks. The contrast is striking: whereas the artworks are now securely positioned onto solid pedestals, or hang behind a hyper-sensitive alarm system, the exhibition’s pictures show them almost forgotten in a corner of some museum closed off to the public or dangerously positioned on the edge of an open carriage of a cargo train. A sense of precarity lingers in each room of the Scuderie, perfectly captured by the details in the stories on the walls: the artworks had to be carried, depending on the region, on the back of donkeys, by bicycle, on Gondolas, or with small cars driven at night with the lights off.

After the war and beyond

After rooms of pasty wooden planks, black and white photographs, and artworks placed over rough blocks of pine, the final room of the exhibition greets the visitors with a red velvet curtain embracing Tiziano’s Danae, the final piece on display. The space of the Scuderie is seamlessly connected to the iconic photograph (reproduced next to the painting) of Rodolfo Siviero – the man considered responsible for many of the post-war restitutions to Italy.

The picture, which celebrates the return to Italy of the Danae (reportedly used by Göring as his personal headboard), also introduces the visitors to the last narrative thread of the exhibition: namely, the delicate process of negotiating the return of artworks subtracted at a time when Italy was still an ally of Nazi Germany and that were often “sold” and semi-lawfully exported rather than outright stolen. On top of that, the 1943 Armistice entailed an unconditional surrender, which, in itself, questioned the possibility of any such request on the part of the Italian delegation. Only an amendment to section 77 of the Peace Treaty with Italy, and subsequent extensive negotiations that culminated in a 1953 agreement between the Italian Prime Minister De Gasperi and German Chancellor Adenauer, ensured the return of numerous artworks that had left the country during the war.

While presented as an undiscussed protagonist of this phase, Siviero is also framed as a controversial and problematic character, considering his unwavering determination and sometimes questionable methods. In a way, Siviero’s picture also creates a trait d’union between “Arte Liberata” and the two major exhibitions that, in the aftermath of the war, were organized (with the help of Siviero) to celebrate what had been emphatically called “the return of Beauty” to Italy. It is by virtue of this connection that it is possible to further appreciate not only the evolution of the sensibility around the concept of restitution but also the emphasis put by this exhibition on the efforts and preparations to protect an invaluable cultural heritage at all costs.

Practical information

“ARTE LIBERATA 1937-1947. Masterpieces saved from war” is open from 16 December 2022 to 10 April 2023, and is curated by Luigi Gallo and Raffaella Morselli. The exhibition is organized by Scuderie del Quirinale in Rome (Via XXIV Maggio 16 – 00187 ROMA). A series of conferences will cover those aspects that could not be discussed within the exhibition itself (the full program is available on the website of the Scuderie, alongside the recordings of the conferences that already took place: https://www.scuderiequirinale.it/).

* The exhibition’s catalogue “ARTE LIBERATA Capolavori salvati dalla guerra 1937-1947” (ed. by Luigi Gallo and Raffaella Morselli, Electa 2023) was used as a valuable source while writing this article.

About the author:

Livia Solaro is a PhD candidate at Maastricht University (Netherlands), where she is involved in the teaching of Property law, Private international law and Art law; her research project focuses on the study of Nazi looted art litigation in the US, a topic on which she has recently published a book in Italy: “Il saccheggio nazista dell’arte europea: Uno Sguardo Comparatistico sul Contenzioso Transnazionale nei Restitution Cases” (Franco Angeli Edizioni, 2022), available in Open Access at https://library.oapen.org/handle/20.500.12657/54283.

1. For a complete historical account of the Nazi plunder of artworks, see Lynn H Nicholas, “The Rape of Europa: The Fate of Europe’s Treasures in the Third Reich and the Second World War” (Vintage Books) (1995). ↑
2. As explained by Paolo Conti, an Italian journalist and the author of a short pamphlet that comes with the ticket and provides visitors with a short introduction to the exhibition. ↑
3. Ed. by Luigi Gallo and Raffaella Morselli, “Arte Liberata, Capolavori salvati dalla guerra. 1937-1947” (Electa) (2023), p. 10. ↑
4. Marche sits at the very centre of Italy, halfway between the North and the South, and it covers part of the Appennini, the mountain chain situated between the Eastern and Western coasts of Italy. ↑
5. We then have Antonio Morassi and Orlando Grosso, who were active in the Liguria region (which was bombarded the day after Italy had entered the war), as well as Gino Fogolari, Vittorio Moschini and Rodolfo Pallucchini, who operated in Venice, where transportations were particularly problematic – due to the peculiarities of the city – and the risk of an attack was extremely high at all times. ↑

The post WYWH: “Arte Liberata” – An Exhibition to Investigate the Italian Struggle to Protect the Country’s Cultural Heritage during World War II * appeared first on Center for Art Law.

By Joseph Gergel

To dissect the often esoteric language of consignment and representation agreements between artists and dealers and conflicting practices, the Center for Art Law hosted “The Essentials: A Guide to Artist-Dealer Relationships and Contracts” on January 25, 2023.

The program examined common questions and sources of conflict between artists and dealers, including issues regarding storage and transportation fees, payment deadlines, installation costs, and consignment commitments. Panelists considered common practices of handshake agreements and informal communications, and they outlined best practices with formal, written contracts that outline clear obligations of both parties. The panel included Megan Noh, Esq., co-chair of Pryor Cashman’s Art Law Group; Sara Maria Salamone, gallerist and director of Mrs., a contemporary art gallery; and Onyedika Chuke, an artist, archivist and founder of Storage Gallery. The panel was moderated by Jessica Wessel, Esq., Director of Business Development, Northeast at Gurr Johns.

Jessica Wessel introduced the panel and stressed the keyword of “leverage” in contract negotiations, where the party in relative power in the transaction will dictate the terms of the agreement. The discussion was broken down into four scenarios of issues art world players commonly face. Within this framework, the panelists gave perspectives from their positions as lawyers, gallerists, and artists.

Scenario #1: An artist is approached by a gallery to exhibit a work in a group summer show. The gallery sends a van to pick up the artwork, without any written agreement other than emails back and forth between the artist and gallery.

Onyedika Chuke stressed the importance of the consignment agreement at the outset of any artist-gallery relationship. Chuke pointed out the difference between the retail value of an artwork versus the material costs of an artwork, and artists should consider whether the gallery’s insurance for loss or damage covers the retail price. By contrast, insurance that only covers material costs would be valued at substantially less. In this scenario, Chuke stated that the gallery should have already sent the consignment agreement before any art exchanged hands. Sara Maria Salamone added that these forms are typically facilitated by the gallery’s registrar, who keeps a record of all artworks coming in and out of the gallery.

Megan Noh explained that even without best practices in place, such as a written and signed agreement, states such as New York still provide laws that protect artists’ rights in these situations. The New York Arts and Cultural Affairs Law states that galleries must act as fiduciaries for their consignments, which places a duty of trust by treating the artwork and sales as “trust” property. Thus, the consignment relationship is assumed and the artist is entitled to its proceeds. Even though this law protects the artist in receiving proceeds, the absence of a consignment agreement leaves open questions, such as the commission split and the length of time which the artist must be paid.

However, there are many problems that could go wrong along the way, such as loss or damage to the artwork. Without more documentation in a consignment agreement, there is no indication of the scope of the insurance policy, such as who pays the insurance and how much the artwork is insured for. In an ideal world, the artist will receive a Certificate of Insurance (COI), which outlines what insurance is covered. In addition, it is important for the gallery to make a Condition Report, which includes images of the artwork when the gallery receives it, to have a baseline documentation for comparison if any issues arise. It is important that the artwork is insured under the gallery’s insurance policy, which should be a commercial fine art policy, rather than only the shipper’s policy, which generally only covers federally-mandated limits.

Scenario #2: An artist agrees to a solo exhibition with a gallery. However, after the artist agrees by email and gives a pick-up date, the artist gets cold feet and doesn’t make the paintings and disappears.

Onyedika Chuke pointed out that this is a sticky situation, because the gallery has incurred costs associated with planning the projects. Communication between the gallery and artist is key, as there should have been discussion throughout the artistic process, such as artist sketches and studio visits. He also stated that in some instances, artists should be liable for expenses incurred after permanently backing out of a project. Sara Maria Salamone would have a conversation about postponing the exhibition if such a scenario occurred. She said that there has to be a base level of trust, and this scenario has the potential to ruin the relationship.

Megan Noh suggested considering a Liquidated Damages clause, or a Kill Fee on the artist if they pull out after a certain date. While this is not common, a gallery may consider such a clause if there is cause for concern. The gallery could sue the artist for damages, including expenses and projected profits, having to prove in court the extent of its damages based on the artist’s non-performance. Noh also raised a scenario where the gallery paid for some of the production costs. Under the New York Arts and Cultural Affairs Law, a gallery is not entitled to interest in the artwork even where they have advanced production costs themselves. See Case Review: Art Works, Inc. v. Diana Al-Hadid. However, it would still be a debt that the artist has to pay. Before running to court, it is important to consider business-oriented solutions, and contracts can help frame the solution.

Scenario #3: A mid-career artist is asked to make a large-scale public installation in Central Park, but would only receive $5,000 for the commission and must pay for shipment, storage, and transportation fees.

According to Sara Maria Salamone, this situation happens often, where artists are expected to cover many aspects of a public installation. Even though organizations are often well-intentioned, many aspects such as shipping should not be the artist’s responsibility. A budget needs to be put in place from the outset that covers production, transportation, and installation. Even large budgets end up getting diminished quickly. Salamone stated that sometimes these scenarios are more trouble than it is worth. Onyedika Chuke said that the $5,000 commission fee is still standard, and he has even seen fees for $2,500, which can be contradictory when an institution approves a proposal knowing that it will exceed this amount. The issue may begin with an artist not asking for enough money in the proposal, and then there is pressure to make something great that cannot ultimately be accomplished within the budget limitations.

Megan Noh raised the issue of artists’ rights. It is important to consider the copyright ownership scheme in the contract. If it is a commissioned work, it should be clear whether the commission was a “work for hire,” which will dictate if the organization owns the artwork. Apart from owning the actual artwork, who owns the copyright? Noh also brought up the issue of moral rights of an artist. The Visual Artists Rights Act (VARA) gives artists the right of attribution to be credited as the author for the artwork, and for the artwork’s integrity in not being destroyed or used in a manner that is detrimental to the artist’s reputation.

Scenario #4: A major global art gallery approaches an emerging artist who is gaining traction, and offers worldwide exclusive representation with only a handshake offer. The artist had previously been selling artworks from their studio and on Instagram.

Onyedika Chuke stated that he often speaks with artists to consider which gallery is the best gallery for them — not only which is the flashiest, but which gallery will create a community to support the artist’s ideas. A good place for artists to begin is consigning one artwork and seeing how the relationship blossoms. When Sara Maria Salamone started representing artists in 2020, they did not have a lawyer, and then they realized they needed formal contracts. When it comes to a handshake offer, she stressed that it is best to follow up with a written contract.

Megan Noh considered contractual provisions that may be helpful for artists or galleries. From an artist’s perspective, contract provisions that are helpful include a commitment to certain solo exhibitions, gallery locations, its publication program, and PR strategy. Artists can stipulate that the gallery is working on institutional placements, potentially implementing resale restrictions, sharing a percentage of secondary market sales, and restrictions on who the artwork may be placed with. From a gallery’s perspective, contract provisions that are helpful include exclusivity (though some would say that exclusivity is not necessary), in addition to a commitment to a certain level of inventory. Galleries can also ask the artist to give assurance that the artworks are owned by the artist and indemnify the gallery from having to pay defense costs in defending claims.

Conclusion

With over seventy participants in attendance, there was an immense amount of interest and participation. Center for Art Law will host its next Artist-Dealer Relationships Clinic on May 17, 2023, which will allow for artists, dealers, and attorneys to speak more in depth about the issues raised on the panel. Interested participants may register HERE.

Premium Members of the Center for Art Law can view the recording and archives of the event and of past Center events.

About the Author

Joseph Gergel is a Legal Intern at the Center for Art Law in Spring 2023. He is a second-year law student at Fordham University Law School, with a focus in art law, intellectual property, and international law.

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By Nikki Vafai

David Friedmann (1857-1942) was a wealthy Jewish sugar industrialist and art collector in Breslau, Germany (now Wrocław, Poland), whose extensive art collection included works by renowned artists such as Pissarro, Rousseau, and Liebermann. In 1939, the Friedmann collection also caught the eye of Nazi bureaucrats, who were gathering information about private property of Jewish families and took inventory of all of the paintings in Friedmann’s collection, forbidding him from selling any of the works.^[1] One Nazi official wrote that the sale of Friedmann’s collection would generate revenue for the Reich.^[2] Due to his Jewish background, the Nazis then confined Friedmann and confiscated his vast art collection. Friedmann passed away in 1942 and his only daughter died in a death camp.

71 years later, Friedmann’s great-nephew, attorney David Toren, rediscovered one of the paintings his great-uncle had owned, “Two Riders on the Beach,” after seeing the painting on television following the discovery of German art dealer and collector, Cornelius Gurlitt’s art trove.^[3] Toren filed a successful claim for this one work, starting a long legal battle to recover all the works lost by his family to the Nazi regime.

In 2016, Toren filed a suit against Germany, seeking compensation for the regime’s taking of his family’s unrecovered art pieces and securities. The case was stayed while the United States Supreme Court decided Fed. Republic of Germany v. Philipp, 141 S. Ct. 703 (2021).

Federal Republic of Germany, et al. v. Alan Philipp

The precedent setting case, Federal Republic of Germany, et al. v. Alan Philipp (et al.), was commenced in 2017 and heard before the United States Supreme Court in 2020. It involved the heirs of a consortium of Jewish art dealers and collectors who alleged the Nazis unlawfully forced the consortium to sell its collection of medieval relics known as the Welfenschatz, or Guelph Treasure, for a fraction of its value to Prussia. Today, the Guelph Treasure, on display at a Berlin museum, is valued as high as $250 million dollars.^[4]

In 2015 the claimants brought several common law property actions against the Federal Republic of Germany and the Stiftung Preussischer Kulturbesitz (SPK), an instrumentality of the republic, which currently maintains the relics, as well as sought to lift immunity traditionally due to foreign sovereigns. The heirs sought $250 million in compensation.

Before the Supreme Court, the heirs (respondents) argued that their claims fell within the Foreign Sovereign Immunities Act’s (“FSIA”) expropriation exception. Under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1605(a)(3), a foreign government has sovereign immunity and cannot be sued in the U.S. There are, however, some exceptions in which the U.S. does have federal subject matter jurisdiction. One of these exceptions is the FSIA’s expropriation exception, which establishes that courts can exercise jurisdiction in cases where “rights in property taken in violation of international law are in issue” and where “that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state.”^[5] The heirs argued that because the forced sale of the Guelph Treasure was part of the Nazi’s genocidal plan against the Jewish people, it constituted an act of genocide. Therefore, the Guelph Treasure was taken in violation of international human rights law and Germany was not immune from suit in the U.S.

In response, Germany argued that the international law of expropriation applied in connection to the Guelph Treasure case, not the law of genocide.^[6] Under the international law of expropriation, a foreign sovereign’s taking of its own nationals’ property is a domestic affair. The invocation of the domestic takings rule would mean that the Nazi’s taking of art from Germany’s own citizens did not interfere with inter-state relations and therefore, international law should not apply.

While the heirs conceded that the domestic takings rule applied at the time of the FSIA’s enactment, they argued that “right in property taken in violation of international law” applied to all international norms, not just the international law of expropriation. Furthermore, the argument advanced by the respondents suggested that Germany revoked citizenship of its jewish population and thus the taking was not perpetuated against German nationals.

Additionally, the heirs also relied on the 2016 Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, an act which amended the FSIA to clarify that participation in “art exhibition activities” does not constitute “commercial activity” under the expropriation exception. The heirs claimed that this act suggested that Congress anticipated Nazi-looted art claims under the expropriation exception.

The Court sided with Germany, ruled that “rights in property taken in violation of international law” refers to violations of the international law of expropriation and that the FSIA expropriation exception does not extend to a sovereign’s taking of the property of its own nationals. Therefore, the Court held that the domestic takings rule should be invoked. The Court explained that the United Nations’ Universal Declaration of Human Rights and Convention on the Prevention of Genocide did not address property rights and international tribunals have therefore maintained that international law does not govern property taken by a state from its own nationals.^[7]

However, the Court vacated and remanded the case to the lower courts to decide the issue of whether the sale of the Guelph Treasure was not subject to the domestic takings rule because the consortium of dealers were not German nationals at the time of the taking. The District Court ultimately dismissed the claims against Stiftung Preussischer Kulturbesitz on the grounds of lack of subject matter jurisdiction due to foreign sovereign immunity.^[8] The District Court found that the heirs did not provide enough information to support the argument that the consortium dealers were not German nationals at the time of the taking. According to the District Court, the allegations of Nazi mistreatment of Jewish individuals during the Nazi era and the emigration of two of the consortium members was not enough evidence of relevant property being taken in a way that violated international law.^[9]

Toren v. Federal Republic of Germany

Unfortunately, during the stay for Philipp (as court waited for the decision, David Toren passed away. His son, Peter Toren, took over the efforts to reclaim the family’s art collection.^[10]

Following the 2021 decision of the Supreme Court in Philipp, Peter filed the Second Amended Complaint with the United States District Court for the District of Columbia. Toren argued that his claims were encompassed by the expropriation exception to the FSIA and that his family members were not German nationals at the time of the taking. He claimed that his family and other German Jews were stateless at the time of the taking due to the various Nazi-era decrees and the Nazi regime’s persecution against German Jews.

Germany filed a renewed motion to dismiss for lack of subject matter on the basis that the FSIA makes it, a foreign sovereign, immune from claims against it in American courts.

The District Court agreed with Germany that, following Philipp, Toren’s claims are not encompassed by the FSIA’s expropriation exception. The Court, in its opinion rendered by Judge Richard J. Leon, explained that Philipp established that the expropriation exception was limited to property taken in violation of the international law of expropriation rather than of human rights and does not apply to a country’s own nationals. The Court did not address whether Friedmann had been deprived of his German nationality but stated that the Supreme Court decision has rendered that the expropriation act does not apply to claims based on a foreign state taking property from a stateless person​​. The Court elaborated that not only would severing nationality based on genocidal actions create an exception that would “swallow” the Supreme Court’s rule, determining whether genocidal action was enough to make an individual stateless is subjective and difficult to measure.^[11] Furthermore, the judge claimed that Toren’s claim is identical to the claims made in Philipp.

Thus, the Court stated that it lacked subject matter jurisdiction and granted Germany’s motion to dismiss. Toren plans to appeal this ruling.

Distinguishing Toren from Philipp

While the District Court judge stated that Toren’s claim was indistinguishable from the claims made in Philipp, this is arguably not so, as the facts of the cases differ. In both cases, the Plaintiffs argued that their ancestors were not nationals of Germany due to Germany’s genocidal campaign against Jewish individuals. However, in the case of Philipp, the Plaintiffs argued that their ancestors were not nationals based on the general mistreatment of Jewish individuals during the Nazi era and the emigration of two of the consortium members, an argument that the Court did not accept. It is undeniable that the situation of the consortium members in Philipp was abhorrent and certainly duress-inducing. Nevertheless, in Philipp, the members of the consortium conducted business and sold, albeit at fraction of the value, the relics. In Toren, however, an art collection was confiscated from a Jewish family, without any remuneration or compensation, with rightful owners exterminated, as part of the Nazi-genocidal efforts. Furthermore, in Toren, the genocidal campaign profoundly impacted the family as they were placed in concentration camps following the taking of their art collection. Thus, there is a more direct link between the taking of their art collection in the process of their direct genocidal actions towards the family.

The District Court in Toren claimed that the Supreme Court’s decision in Philipp made clear that “the expropriation exception…[does not encompass] a claim based on a foreign sovereign’s rendering its own nationals stateless before taking their property.”^[12] However, the Supreme Court did not make this clear or even address statelessness. What the Supreme Court did clearly state was that the FSIA expropriation exception does not extend to a sovereign’s taking of the property of its own nationals and that it was not going to address whether the sale was “not subject to the domestic takings rule because the consortium members were not German nationals at the time of the transaction.”^[13] The Supreme Court did not expressly deny Phillip compensation because it left it to the lower courts to decide whether the members were German nationals or not. Thus, Toren may have presented a valid argument that David Friedmann was not a German national at the time his property was expropriated in 1942. Thus the FSIA expropriation exception applies and the court does have subject matter.

Additionally, following FSIA, the Second Hickenlooper Amendment to the Foreign Assistance Act of 1964 was passed, prohibiting U.S. courts from applying the act of state doctrine—a doctrine that discourages U.S. courts from deciding the validity of acts committed by foreign governments within their own territory—when a taking of property occurred in violation of the principles of international law. This amendment was understood to permit claims against foreign governments for the taking of property with the exclusion of the property of the foreign nation’s own nationals. While, the Second Hickenlooper Amendment does not apply to U.S. citizens who were not U.S. nationals at the time of taking, David Friedmann was arguably not a German national at the time his property was expropriated and so unlike in Philipp, the Second Hickenlooper Amendment could potentially apply in Toren’s case.

The Second Hickenlooper Amendment, the Department of State’s application of pressure on international institutions and governments that hold holocaust-related artwork to which American citizens have a claim, as well as the 1998 Washington Principles which promote provenance research and the restitution of Nazi-looted art all indicate some pushback on the policy side to the judicial interpretation of the FSIA.^[14]

Moving Forward

While restitution of Nazi-looted art has proven to be extremely difficult, there have been some successful court cases and promising measures taken towards restitution. For example, just earlier in 2022, the United States Supreme Court decided Cassirer et al. v. Thyssen-Bornemisza Collection Foundation. The case was brought by the heirs of Lilly Cassirer (Germany 1876 – U.S. 1862) against the Thyssen-Bornemisza Museum in Madrid, in an effort to reclaim ownership of a Camille Pissarro painting sold to the Nazis under duress. While the lower court had sided with the Madrid museum, the U.S. Supreme Court remanded the case and its ruling narrowed the arguments available in the museum’s defense.^[15]

Outside of the courtroom, influences on the outcomes of the restitution claims, such as the increasing public pressure on museums, have proven to be extremely powerful in restituting Nazi-looted works and increasing awareness of provenance of such works. Also in 2022, a New York bill was passed that requires museums to label artworks that were looted or sold against the owner’s will under Nazi rule.^[16] Additionally, controversy and outrage following Kunsthaus Zürich’s exhibition of the Emil G. Bührle collection, a collection belonging to the deceased arms manufacturer and supplier to Nazi forces, played an influential role in creating an independent commission on Nazi looted art in Switzerland.

Over the last twenty some years, much progress has been made to seek fair and just solutions for disputes involving Nazi-era looted art. A handful of restitution committees have been created to handle Nazi-looted art claims and have been beneficial for the heirs of Nazi-looted art. For example, in a recent win in the Dutch Restitutions Commission, the heirs of a Jewish collector won back “View of Murnau with Church” by Wassily Kandinsky.^[17] Following new evidence that the real seller of the work was not Karl Legat, but Myrtil Frank, the commission held that it was “sufficiently plausible” that possession of the work was involuntarily lost “as a result of circumstances directly related to the Nazi regime.” It is worth noting that the Van Abbemuseum, which housed the painting, waived its right to invoke good faith as a legal grounds for having purchased the work.^[18]

Furthermore, many museums and individuals have begun to take the initiative of returning Nazi-era looted artworks on their own. In 2022, the Museum of Fine Arts (MFA), Boston, returned the “View of Beverwijk” to the heirs of Jewish art collector Ferenc Chorin, upon learning that the painting had been stolen by the Nazis.^[19] MFA had updated the provenance of the painting on its website, which allowed the Chorin family to locate the work, demonstrating that databases and provenance transparency measures such as those set forth in the aforementioned New York bill can assist Holocaust victims and their heirs to find their lost assets.

Conclusion

The reluctance of the U.S. court system to interfere with the actions of foreign nations has proven a challenge to the restitution of Nazi looted art. The Supreme Court in Philipp vocalized concerns that interfering with Germany’s past actions could result in not only an overwhelming flow of similar cases in U.S. courts, but also retribution from Germany against the U.S. in its courts. Naturally, the United States of America, itself a foreign sovereign outside its national borders, would vehemently argue its immunity from action in other courts. Still, the wrongs perpetuated by the Nazi officials against personal liberties and property rights, as hard as they are to document and uncover, must be addressed and remedied, lest same crimes are perpetrated again and again. These obstacles have made it difficult if not impossible for heirs of Holocaust victims and Jewish Germans to receive monetary compensation or to recover their lost works of art or compensation for forced labor, loss of life and health. Public pressure on owners of Nazi looted art has proven to be a very successful means of delivering justice to the heirs of victims.

About the Author:

Nikki Vafai is a law student at the University of Maryland Carey School of Law and holds a B.A. in International Affairs and Art History from the George Washington University. Nikki is a 2022 fall legal intern at the Center for Art Law who interviewed Peter Toren in connection with this article.

Select Sources:

1. Michael E. Ruane, Nazi-looted art finds its way back to original owner’s descendants, The Washington Post (May 15, 2015), https://www.washingtonpost.com/local/nazi-looted-art-finds-its-way-back-to-original-owners-descendants/2015/05/15/bfc8962a-f8e6-11e4-9030-b4732caefe81_story.html ↑
2. Id. ↑
3. University of Glasgow, The Nazi Seizure of the “Two Riders on the Beach” Painting, Future Learn, https://www.futurelearn.com/info/courses/art-crime/0/steps/11896 ↑
4. Sarah Cascone, In a Precedent-Setting Move, the Supreme Court Denies Jewish Heirs’ Attempt to Reclaim the $250 Million Guelph Treasure, Artnet News, (February 3, 2021), https://news.artnet.com/art-world/supreme-court-guelph-treasure-ruling-1941380 ↑
5. 28 U.S.C § 1605(a)(3). ↑
6. Fed. Republic of Germany v. Philipp, 141 S. Ct. 703 (2021). ↑
7. Id. ↑
8. Sarah Cascone, The $250 Million Guelph Treasure Will Not Be Returned to the Heirs of Jewish Collectors, a U.S. Court Has Ruled, Artnet News (August 30, 2022), https://news.artnet.com/art-world/the-250-million-guelph-treasure-will-not-be-returned-to-the-heirs-of-jewish-collectors-a-u-s-court-has-ruled-2167352 ↑
9. Philipp v. Stiftung Preussischer Kulturbesitz, No. CV 15-00266 (CKK), 2022 WL 3681348 (D.D.C. Aug. 25, 2022) ↑
10. Peter Toren is one of the Center’s Directors. ↑
11. Fed. Republic of Germany v. Philipp, 141 S. Ct. 703, 715 (2021). ↑
12. Id. ↑
13. Id. ↑
14. J. Christian Kennedy, The Role of the United States Government in Art Restitution, U.S. Department of State Archive (April 23, 2007), https://2001-2009.state.gov/p/eur/rls/rm/83392.htm ↑
15. Tessa Solomon, The U.S. Supreme Court Sends Decades-Long Case over Nazi-looted Pissarro Back to California Court, ARTnews (April 22, 2022), https://www.artnews.com/art-news/news/the-u-s-supreme-court-sends-decades-long-case-over-nazi-looted-pissarro-back-to-california-court-1234626316/ ↑
16. Maysoon Khan, New York museums to disclose artwork looted by Nazis, AP News (September 16, 2022), https://apnews.com/article/travel-new-york-9b364ebf2b8b2ef7b68d7d971675218f ↑
17. Julia Rodrigues Casella Hommes, Heirs of Jewish Collector win back the family’s Kandinsky, The Institute of Art and Law (October 9, 2022), https://ial.uk.com/heirs-of-jewish-collector-win-back-the-familys-kandinsky/ ↑
18. Id. ↑
19. Alex greenberger, MFA Boston Restitutes 17th-Century Landscape Painting Looted During World War II, ARTnews (January 24, 2022), https://www.artnews.com/art-news/news/mfa-boston-restitutes-salomon-von-ruysdael-painting-1234616501/ ↑

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