Around the Block Ruling in 5Pointz

April 10, 2018

By Lise Berichel

From the editors: Cases involving street art continue to multiply and blossom in court. Just think of the Swedish fashion company H & M’s complaint filed on March 9, 2018 (and voluntarily dismissed a week later, on March 16, 2018) against the graffiti artist Jason Williams, a/k/a Revok — whose mural the fast-fashion brand used in an advertising campaign, and over which they claimed that the artist did not own any copyright. The spectator sport that is the fight between street artists and real estate and fashion houses continues. Following is our Part II coverage of the 5Pointz case, now dissecting the Judge Block’s holding that the 1990 Visual Artists Rights Act (VARA) was violated and awarding multi-million dollar damages for copyright infringement.

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The 5Pointz compound, widely recognized for the “graffiti” artworks that covered its walls, was owned by Gerald Wolkoff.^[i] In 1993, Wolkoff gave Jonathan Cohen, a named plaintiff in the 2018 5Pointz decision,^[ii] authority to be curator of the art (tags, murals, combos, etc) and the keys for access to spaces to work and store supplies on the 5Pointz property. Under Cohen’s guidance, 5Pointz evolved into a “street art mecca.” In 2013, Wolkoff decided to destroy the compound. To preserve their works, more than 20 artists filed a request for preliminary injunctive relief asking the court to prevent Wolkoff from destroying the site. The Court first issued a temporary restraining order but eventually denied artists’ request for injunctive relief on November 12, 2013, and on that same night, the 5Pointz art was whitewashed. In June 2014, plaintiffs filed a complaint seeking “declaratory, injunctive, and equitable relief, monetary damages and attorney fees to redress defendant’s unlawful destruction of their works of art in violation of the Visual Artists Rights Act 1990^[iii] (“VARA”).”^[iv]

The case first went before a jury, but the Plaintiffs eventually decided to waive their jury rights and convert the case to a bench trial. Since the jurors had already spent a significant amount of time listening to the trial in anticipation of deliberating, the Court decided that the jury would offer an advisory opinion instead of summarily dismissing them. The advisory nature of their ruling was kept silent to enhance the integrity of the verdict. On November 7, 2018, the jury found that the plaintiffs were entitled to damages for 36 out of 49 works of art, either because they had achieved “recognized stature” (28 out of the 49 destroyed works) or because they had been mutilated, distorted or otherwise modified to the prejudice of the artists’ honor or reputation (8 out of the 49 destroyed works). As will be further discussed below, these are the requirements for an artist to be entitled to damages under VARA. The jury awarded the plaintiffs $545,750 in actual damages and $651,750 in statutory damages.

Senior District Judge Frederick Block went further. In his final verdict, spanning 100 pages and containing color reproduction of all artworks in dispute, handed down on February 12, 2018, he found the Defendant liable for 45 out of 49 works of art, stating that “given the abject nature of Wolkoff’s willful conduct, the Court awards the maximum statutory damages under VARA for each of the 45 works of art wrongfully and willfully destroyed ….”. Judge Block therefore ordered Wolkoff to pay a total of $6.75 million to 21 artists.^[v] The decision is now pending an appeal.^[vi]

“Works of Recognized Stature”

As explained in the Center for Art Law’s previous article, The Making of the Moral Rights Case: The Factual and Legal Background of the 5Pointz Trial, VARA grants the author of a “work of visual art” the right to paternity and to prevent intentional distortion, mutilation or other modification of the work that would be prejudicial to his/her reputation; and, in the case of works of “recognized stature,” the right to prevent their destruction.^[vii]

The term “recognized stature” is not defined in VARA. It has been interpreted in case law to require that: (1) the visual art in question has “stature,” i.e. is viewed as meritorious; and (2) this stature is “recognized” by art experts, other members of the artistic community, or by some cross-section of society.^[viii] In the present case, the Court indicated that Plaintiffs had brought such a “plethora of exhibits and credible testimony . . . that even under the most restrictive of evidentiary standards, almost all of the plaintiffs’ works easily qualify as works of recognized stature.” First, the Court stressed that the fact that one of the Plaintiffs, Jonathan Cohen, had been acting as curator of the work to be displayed on the long-standing walls at 5Pointz, thereby carefully selecting specific works. The Court viewed these actions as “powerful, and arguably singular, testament to their recognized stature.” Second, the Court acknowledged that all of the Plaintiffs had achieved artistic recognition outside of 5Pointz. Third, the Court recognized that plaintiffs had three highly qualified experts testifying in their favor. One expert specifically, Renee Vara, a certified art appraiser and art professor at New York University, testified to the quality and recognized stature of the works. She provided detailed findings as to the skill and craftsmanship of each of the works, the importance of 5Pointz as a mecca for aerosol art, the academic and professional interest of the art world in the works, and her professional opinion that they were all of recognized stature. The Court found Vara’s testimony convincing and, after analyzing each of the works individually, found that 45 of the 49 works had achieved recognized stature.

Temporary Aspect of the Work

Defendant based the major part of his argumentation on the temporary aspect of the works of art of the plaintiffs. He was adamant that the artists knew that the warehouse buildings bearing their works of art would one day come down to be replaced by high-rise residential condos, and that as a consequence, they should not be afforded VARA protection for their temporary works. According to the Court however, “there is no legal support for the proposition that temporary works do not come within VARA’s embrace.”

First, the Court pointed to the letter of the law, in particular to § 113(d)(1), which specifies that an unremovable work incorporated in a building is protected by VARA, unless the artist waives his or her rights in a writing signed by both the artist and the building owner. Second, the Court made reference to § 113(d)(2) pursuant to which artists are entitled to 90 days’ written notice to allow them to salvage their removable works, thereby contemplating that such works may be temporarily on the side of a building. The Court then concluded that VARA draws no distinction between temporary and non-temporary works. Instead, VARA shapes the protection it provides depending on whether the work is removable or not.

The Court mentioned Mass. Museum of Contemporary Art Found., Inc. v. Buchel,^[ix] in which the Court decided that VARA protects interim, unfinished works, even though they are temporary by nature since they are only temporarily in that unfinished form. The Court also pointed to case law highlighting specific exceptions. For example, the Court mentioned Flack v. Friends of Queen Catherine Inc.,^[x] in which it was decided that modifications that are “the result of the passage of time or the inherent nature of the materials” are not violations of VARA. The Court therefore concluded that if Congress chose to exclude protection for a specific category of temporary work, “there is no categorical exception for temporary work”.

In the 5Pointz case, an expert hired by the Plaintiffs testified that with the use of recent curation techniques, removal of works of art from the wall of a building was feasible. According to her, other works on siding, plywood or sheetrock could easily have been removed. However, Wolkoff did not provide the artists with any written notice thereby making it impossible for them to salvage their work. And even if the works (or at least some of them) were considered unremovable, none of the artists had signed any written waivers and as such, the works would be protectable under VARA.

Damages

The Court decided that “the plaintiffs failed to establish a reliable market value for their works” and that “the gain realized by Wolkoff and his companies is best addressed in calculating an award under the statutory damages factors” rather than with actual damages.

In order to determine the amount of statutory damages to award the plaintiffs, the Court determined whether the infringement had been committed willfully by Wolkoff. The Court stated that “Wolkoff knew from the moment the lawsuit was initiated that the artists were pressing their VARA claims” and that Wolkoff’s conduct was “an act of pure pique and revenge for the nerve of the plaintiffs to sue to attempt to prevent the destruction of their art. This was the epitome of willfulness.”

Next, the Court looked at the other factors which courts must consider when determining the amount of statutory damages to award:  “(1) the infringer’s 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.”^[xi] According to the Court, “all five relevant factors supported the maximum award of statutory damages.” The Court therefore awarded $150,000 for each of the 45 works, for a total statutory damages award of $6,750,000. The Court then added: “If not for Wolkoff’s insolence, these damages would not have been assessed.”

Implications and Expected Consequences of the Decision

The 5Pointz decision was generally seen as a victory for graffiti artists since it suggests that street art can be eligible for VARA protection if it obtains certain recognition, despite its fleeting nature. Additionally, the decision may be seen as a victory for artists in general. Indeed, by holding that VARA’s applicability extended to “temporary works,”] the Court may be considered to have widened VARA’s scope. Some commentators also suggested that following 5Pointz, “deeming artwork to be of a “recognized stature” may not be as high a bar as earlier cases suggested.”

Although Judge Block pays an important tribute to street and community art, it may be premature to conclude that the 5Pointz decision revolutionizes the way VARA is to be interpreted and the scope of protection given to moral rights in the United States. Indeed, even if the plaintiff’s lawyer is of the view that there is no basis for an appeal, Wolkoff has decided to appeal the decision, “confident that the appeals court will acknowledge ‘how ridiculous this whole thing is.’” More importantly, the decision may have more to do with the behavior of Wolkoff in this specific case, and the fact that the judge wanted the decision to have a deterrent effect on this specific defendant, than with a conscious willingness of the judge to expand the scope of VARA.

Certain commentators indicated that the decision could actually be terrible for street art in that “it could have a chilling effect on building owners, who may hesitate to let artists paint on walls if they are worried these works will limit their ability to sell or redevelop properties later.” It is certainly putting real estate players on alert. Similarly, others said that “the only sure way to prevent this conflict was for Wolkoff to have kept his building as a monochrome block. Then New York would have gone 40 years with a little less color and a little less life, but at least nobody would have gotten upset.” These advocates for the rights of real estate owners and developers forget that a) permissible street art is negotiated by artists and real estate owners and thus the duration of the work could be contractually addressed, and b) had Wolkoff offered the artists to come and remove parts of their art from the walls of 5Pointz, the court would not have found that his behavior was willful in destroying intellectual rights of artists who have not only “beautified” New York but also allowed Wolkoff to offer his property for filming and photography over the years. The licensing fees charged by Wolkoff to film at the site netted him hundreds of thousands of dollars^[xii]. VARA, a feeble attempt to incorporate moral rights for artists into the US law, only offers monetary damages to the artists whose works are destroyed or modified. More often than not, courts decline to find VARA violations^[xiii]. Here however, Wolkoff’s behavior (hiring whitewashing team to come in the middle of the night and being paid in cash for their deeds) speaks for itself.

The decision does not address the question as to whether the artists in this case could have invoked and relied on VARA the same way, had Wolkoff never granted them authorization to paint of the walls of his building in the first place. This question lies at the heart of the recent dispute opposing H & M and Revok in Brooklyn. In this dispute, H & M argued that the company did not need Mr. Williams’ permission because, according to them, his graffiti was “created through criminal conduct”. Courts have not conclusively decided whether unauthorized graffiti are protected under copyright law and it would have been interesting to see how this dispute, which ventured into unsettled legal territory, would have unraveled. However, H & M decided to withdraw its complaint and reach out to the artist to come up with a solution. In that regard, the long-term effects of the 5Pointz decision remain to be seen.

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Cited cases:

• Cohen v. G&M Realty L.P., No. 13-CV-05612(FB)(RLM), 2018 U.S. Dist. LEXIS 22662 (E.D.N.Y. Feb. 12, 2018). Available here.
• H&M Hennes & Mauritz v. Jason Williams, Civil Action No. 1:18-cv-1490-ENV- PK (E.D.N.Y. March 16, 2018).
• Martin v. City of Indianapolis, 192 F.3d 608, 612 (7th Cir. 1999).
• Lubner v. City of Los Angeles, 45 Cal. App. 4th 525, 531 (1996).
• Carter v. Helmsley-Spear, Inc., 861 F. Supp. 303 (S.D.N.Y. 1994) (“Carter I”), aff’d in part, vacated in part, rev’d in part, 71 F.3d 77 (2d Cir. 1995) (“Carter II”).
• Museum of Contemporary Art Found., Inc. v. Buchel, 593 F.3d 38, 65 (1st Cir. 2010).
• Flack v. Friends of Queen Catherine Inc., 139 F. Supp. 2d 526 (S.D.N.Y. 2001).
• Bryant v. Media Right Prods., 603 F.3d 144 (2d Cir. 2010).
• Phillips v. Pembroke Real Estate, 459 F.3d 128 (2006).
• Kelley v. Chicago Park District, 635 F.3d 290 (7^th 2011).
• Pollara v. Seymour, 344 F.3d 265, 265 9 (2d Cir. 2003).

Notes:

^[i] Cohen v. G&M Realty L.P., 113 U.S.P.Q.2D (BNA) 2130, 2131 (2015).

^[ii] Cohen v. G&M Realty L.P., No. 13-CV-05612(FB)(RLM), 2018 U.S. Dist. LEXIS 22662 (E.D.N.Y. Feb. 12, 2018). Available here.

^[iii] 17 USCS §§ 101.

^[iv] Second Amended Complaint (June 17, 2014) (“Second Am. Compl.”) ¶ 2.

^[v] Supra note 2.

^[vi] http://www.qgazette.com/news/2018-02-21/Front_Page/5_Pointz_Owners_To_Appeal_Judges_Decision.html.

^[vii] 17 U.S.C. § 106A(a).

^[viii] Martin v. City of Indianapolis, 192 F.3d 608, 612 (7th Cir. 1999); Lubner v. City of Los Angeles, 45 Cal. App. 4th 525, 531 (1996); Carter v. Helmsley-Spear, Inc., 861 F. Supp. 303 (S.D.N.Y. 1994) (“Carter I”), aff’d in part, vacated in part, rev’d in part, 71 F.3d 77 (2d Cir. 1995) (“Carter II”).

^[ix] Mass. Museum of Contemporary Art Found., Inc. v. Buchel, 593 F.3d 38, 65 (1st Cir. 2010).

^[x] Flack v. Friends of Queen Catherine Inc., 139 F. Supp. 2d 526 (S.D.N.Y. 2001).

^[xi] Bryant v. Media Right Prods., 603 F.3d 144 (2d Cir. 2010) (quoting Twin Peaks Prods., Inc. v. Publ’ns Int’l, Ltd., 996 F.2d 1366, 1382 (2d Cir. 1993)).

^[xii] Supra Note 4 at. p47.

^[xiii] See Carter v. Helmsley-Spear, Inc.(supra note 7); Phillips v. Pembroke Real Estate, 459 F.3d 128 (2006); Kelley v. Chicago Park District, 635 F.3d 290 (7^th Cir. 2011) and Pollara v. Seymour, 344 F.3d 265, 265 9 (2d Cir. 2003).

Disclaimer: This article is intended for educational use only.

About the Author: Lise Berichel is a LL.M student at Benjamin N. Cardozo School of Law. Prior to her LL.M, Lise practiced commercial and intellectual property law at Blake, Cassels & Graydon LLP. in Montreal, Canada. Lise has a special interest in Intellectual Property, Art, Fashion and Entertainment. She can be reached at berichel@law.cardozo.yu.edu.

About the illustration: Special thanks to Elizabeth Williams, the courtroom artist, for her permission to reproduce the portrait of Judge Block.