New York Law Journal Publishes Article by Thomas Kearns on 5Pointz VARA Litigation Outcome

In the latest development in the ongoing saga of the 5Pointz litigation, the U.S. District Court of the Eastern District of New York recently awarded plaintiffs, a group of graffiti artists, a total judgment of $6,750,000.00 under the Visual Artists Rights Act of 1990 (VARA) against real estate developer and property owner, Gerald Wolkoff for his white-washing and eventual demolition of the street art painted on the exterior walls of his buildings located in Long Island City, Queens.

VARA protects visual artists against the intentional destruction, mutilation, or other modification of visual art of “recognized stature.” 17 U.S.C. § 106A(a)(3). The buildings, known as “5Pointz,” were, at one point, abandoned and vandalized in the 1990s until plaintiff Jonathan Cohen, with Wolkoff’s permission, began curating the space by carefully selecting the artists and artwork permitted to be shown there. The works were always intended to be temporary. Indeed, the artists understood that the walls served as a rotating platform for other artists, that the majority of the works would be painted-over regularly to make room for others, and that eventually, the buildings themselves would be torn down. See Jonathan Cohen v. G&M Realty L.P., No. 13-CV-05612 (FB)(RLM); No. 15-CV-3230(FB)(RLM), 2018 U.S. Dist. LEXIS 22662, at *18 (E.D.N.Y. Feb. 18, 2018).

Though the court denied plaintiffs’ request in 2013 for a preliminary injunction to prevent the destruction of their art, the court held that street art fell under the purview and protections of VARA despite their “subculture” status and despite their temporary nature. See generally Jonathan Cohen v. G&M Realty L.P., 988 F. Supp. 2d 212 (E.D.N.Y. 2013). The court reasoned in 2013 that VARA protects visual art of all mediums and that the artists’ acknowledgment of the venue’s temporary nature would not serve to waive the artists’ VARA rights and protections; indeed, only a written instrument executed by the artist could effect such waiver. Id. What was left to be decided at trial was simply whether and which of the 49 artworks in question would meet the criteria of “recognized stature” necessary to invoke VARA protections. Id.

After a full trial on the merits lasting three weeks, the court issued an opinion on Feb. 12, 2018 that not only found for plaintiffs, but also awarded damages of $6.75 million, the maximum statutory amount permitted. The court recited that the whitewashing was done sloppily shortly after the injunction was denied with no notice to the artists to permit removal and the buildings were not demolished for months after the whitewashing, leaving the damaged art “visible by millions of people on the passing 7 train.” Cohen, 2018 U.S. Dist. LEXIS 22662, at *20. This article will address the key takeaways and significance of the court’s opinion.

Recognized Stature

The court’s opinion shed further light on the factors and considerations for determining “recognized stature.”

The court summarized that Carter v. Helmsley-Spear, remained the seminal case in defining the phrase “recognized stature”—not defined in VARA—which requires “a two-tiered showing: (1) that the visual art in question has ‘stature,’ i.e., is viewed as meritorious, and (2) that this stature is ‘recognized’ by art experts, other members of the artistic community, or by some cross-section of society.” Cohen, 2018 U.S. Dist. LEXIS 22662, at *27 (citing 861 F. Supp. 303-25 (S.D.N.Y. 1994)).

As the 5Pointz court noted in its 2013 opinion, the question would be whether the court would, in defining recognized stature, “embrace the strictures of the academic views espoused by the defendants or the more expansive ones suggested by the plaintiffs.” Cohen, 988 F. Supp. at 226.

After surveying the current state of the law, the court found the “plaintiffs adduced such a plethora of exhibits and credible testimony, including the testimony of a highly regarded expert, that even under the most restrictive of evidentiary standards almost all of the plaintiffs’ works easily qualify as works of recognized stature.” Cohen, 2018 U.S. Dist. LEXIS 22662, at *30. Nonetheless, it was telling that the court pointed to the lack of “significant third-party attention or social media buzz” and “social media coverage” as the sole basis for dismissing certain works as lacking “recognized stature,” signaling a move away from the higher standard of academic, scholarly expert consensus towards a more populace-based determination. Id. at 34. Indeed, the court criticized the defendant’s witness for using an “unduly restrictive interpretation of recognized stature that was more akin to a masterpiece standard.” Id. at 32. It remains to be seen how and whether courts will adopt this court’s interpretation of “recognized stature,” and how much weight “third party attention” and “social media buzz” will bear on such analysis in the future.

Statutory Damages and Willfulness

The court’s opinion also provided further guidance on the determination of damages. While VARA does not impose a limit on the amount of actual damages for each work, a plaintiff is not entitled to both actual and statutory damages but must elect one or the other. 17 U.S.C. §504(c)(1). Statutory damages may be between $750 and $30,000 “as the court considers just,” but if the court finds that infringement was committed willfully, the court may increase the award for each work to up to $150,000. 17 U.S.C. §504(c)(1) & (2). Statutory damages may also be particularly appropriate “when no actual damages are proven or they are difficult to calculate.” Cohen, 2018 U.S. Dist. LEXIS 22662, at *39 (citing Warner Bros. v. Dae Rim Trading, 877 F.2d 1120, 1126 (2d Cir. 1989)).

Here, the court found that actual damages were impossible to ascertain since there was no reliable market value for the work. As a result, the court moved to award statutory damages, which was determined based on the following considerations: (1) the infringer’s (in this case the building owner) state of mind; (2) the expenses saved, and profits earned, by the infringer; (3) the revenue lost by the copyright holder; (4) the deterrent effect on the infringer and third parties; (5) the infringer’s cooperation in providing evidence concerning the value of the infringing material; and (6) the conduct and attitude of the parties. Id. at 44-45.

The court noted that the most significant factor here was the fourth prong—the deterrent effect on the infringer and third parties. Id. at 47. Finding Wolkoff to be “willful,” “unrepentant,” “unresponsive,” a “difficult witness” and “argumentative,” the court stated that “[i]f not for Wolkoff’s insolence, these damages would not have been assessed.” See generally id. at 49. The court even stated that, “[g]iven the degree of difficulty in proving actual damages, a modest amount of statutory damages would probably have been more in order.” Id. Because of Wolkoff’s conduct (both inside and outside of the courtroom), however, the court awarded the maximum statutory damages permitted under VARA.

Final Remarks

If a building owner finds itself in a position where it must remove art protected by VARA and no written VARA waiver was obtained, the owner should proceed cautiously and in good faith in the destruction or removal of the art. For example, notice should be provided to the artist of the landlord’s intention to remove the art, ample time should be provided for its removal (no less than 90 days), and other accommodations should be made to facilitate the art’s preservation and removal. Though an action for injunction may still ensue if the work cannot be safely removed without destruction, the hope is that any damage award would, at the very least, be mitigated in light of the owner’s good faith efforts. In 5Pointz, maximum statutory damages were awarded because of the landlord’s aggressive actions, which were held to be an insult to the artists.

This is Mr. Kearns’ third published article on The Visual Rights Act (VARA). The first provided a primer on the law and its legal implications for property owners and can be found here, while the second addressed VARA from the artist’s perspective and can be found here

Thomas Kearns is a partner with Olshan Frome Wolosky LLP’s real estate department, New York, N.Y.

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