Tuesday, October 26, 2010

Warhol authentication and a lesson in litigation strategy

NEW YORK. The U.S. justice system is hardly the breeding ground for David and Goliath-type endings so when Joe Simon went up against the Warhol Foundation and Art Authentication Board all guns blazing, it was only a matter of time before "money, power and legal expertise" dictated the outcome of the litigation. Instead of limiting the complaint to challenging the Board's rejection on two occasions of myandywarhol's authenticity, Simon also sought damages and injunctive relief in federal court "alleging anti-trust violations, collusion and fraud." Despite the abrupt, unsatisfactory ending to the three-year long litigation (not to mention the waste in litigation costs), the case should lead to increased scrutiny of the Warhol Foundation's exercise of its leverage in the market. Technically, the Art Authentication Board's opinion on the authenticity of a work is but one more opinion; however, the reality on the market is vastly different as the major players, including Sotheby's and Christie's, will not sell a purported Warhol without Board authentication. The mere existence of the power to manipulate the entire market for Warhols is not, in and of itself, sufficient to prove the unlawful exploitation of such power. Still, given how prolific Warhol's oeuvre is and the fact that there is more than one collector out there feeling hard done-by the Authentication Board and/or Foundation, this may not be the last time the organization has to retain the services of the preeminent legal minds in the country.

Joe Simon intend to abandon his claims against the Warhol Foundation at the next hearing scheduled for November but counsel for the defendant has made a statement making it clear that the Warhol Foundation will continue to pursue its counterclaim against Joe Simon. According to The Art Law blog, the Foundation's attorneys made the following statement:
"The resources Mr. Simon forced the Foundation to expend litigating against these meritless claims would have otherwise gone to funding its charitable mission of promoting the visual arts and preserving the legacy of Andy Warhol. While Mr. Simon may now prefer not to face Defendants’ legitimate counterclaims, the Warhol Foundation is fully committed to pursuing all its legal rights and claims against Mr. Simon to recover the funds it has been forced to waste and give them back to the charitable causes to which they always belonged."

1 comment:

  1. Thanks for the post. The Washington Journal of Law, Technology & Arts recently published an article “Standardizing Warhol: Antitrust Liability for Denying the Authenticity of Artwork,” analyzing the litigation and discussing the standards that might have applied at trial: http://ssrn.com/abstract=1595778