Washington, D.C. - (January 11, 2000) The U.S. Court of Appeals has affirmed that New York art collectors are under no obligation to probe into the origin of an art piece. For art dealers and collectors, the uncertainty about who is obligated to investigate the history behind pieces for sale has finally been resolved.
The case centered on the purchase of a $850,000 Picasso by two New York art collectors, whose names have been protected throughout the litigation and are referred to as Mr. and Mrs. Doe. The Does purchased the Picasso from a reputable gallery after verifying the price of the painting with another dealer. The Does did not probe further to discover that the dealer was actually one of several involved in selling the piece, and that the original owner never received payment. Mr. and Mrs. Doe were sued by the piece's original owner who felt that the Does should have launched a complete investigation into the origin of the painting, rather than relying on information from the dealer.
"This case establishes due diligence standards for the art community in New York," said Joshua Kaufman, attorney for Mr. and Mrs. Doe. "My clients are experienced art collectors and acted appropriately. Unfortunately, others in this transaction did not fulfill their contractual obligations, but, as the courts ruled, my clients certainly are not to be held responsible."
The U.S. Court of Appeals affirmed the earlier decision by the U.S. District Court for the Southern District of New York on December 23, 1999. Both courts agreed that the Does acted in good faith and were not required to do extensive research.
Joshua Kaufman is a partner at Venable. He counsels and litigates in the fields of art, entertainment, e-commerce, computer, licensing, intellectual property, copyright, trademark, licensing, media and literary law. He advises his clients in structuring and negotiating transactions in which they exploit their intellectual property rights or in acquiring them from others.
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