The hidden hand of law in the life of art

Imagine a lovely painting created in the 1980s, now hanging in an art museum. What role did the law play in the creation of the work and in how the work arrived at the museum? 

Art is about creativity and expression, about crossing boundaries and provoking reflection. The law is about rules, predictability, order and responsibility. Art and law seem like separate worlds, but they intersect in so many ways, just considering a single work of art.

Some 40 years ago, an artist created our imagined painting. Local zoning regulations allowed the artist to paint in a live/work studio. Some of the pigments used in the painting were hazardous, subject to state or federal restrictions to protect the artist's health. If she was lucky enough, the artist was represented by a dealer. Maybe they had a written contract; if not, law provides rules governing their relationship. For example, an artist's delivery of a work to a dealer for purposes of sale is considered a consignment. That means title (ownership) in the painting remains with the artist, although the dealer can transfer title to the work directly to a buyer upon sale. The dealer owes fiduciary duties to the artist from the moment the work is delivered to the dealer until either it is returned to the artist (unsold), or is sold and the artist's share of the sale proceeds (minus the dealer's agreed commission) are delivered.   

Let's imagine further: the work has been sold to a noted collector. The artist's reputation rises, and so do the prices for her works. Some years later, the collector, needing cash, looks to sell the work for an appreciated amount. But the collector would like to have a photographer make an exact reproduction of the painting to continue to display on his wall after he sells the original. Can the collector do so under copyright law? 

The collector consigns the work to an auction house to sell. Once again, under the rules of consignment, the collector retains title until the work is sold at the fall of the auction hammer, when title passes directly to the buyer.

But what would happen if, before the auction, the auctioneer has some uncertainty about whether the painting is, in fact, by the artist? The auction house may decline to proceed with its sale at auction. Perhaps the collector blames the auction house for raising the issue of authenticity, which would depress the painting's market value. Is there any redress? 

Let's assume the authenticity issue is resolved, and the painting sells at auction to another collector. The first collector makes a hefty profit on his original investment in the painting. Can the collector deduct the costs of framing and insuring the painting for many years from any profit on which tax would be owed? Is the collector's profit on the auction sale taxed as capital gain or ordinary income?

Now the second collector owns the painting for a number of years. The reputation of the artist continues to rise -- and with it, the prices for her paintings. Some years later, this collector decides to donate the work to a museum, both to benefit the museum and to realize a significant charitable tax deduction. How will this collector structure the donation to maximize the tax benefits? And consider if this collector is also a trustee of the museum, and if he owns several paintings by this same artist. The museum's acceptance and exhibition of the painting may well increase the value of the artist's other works, including the other paintings the collector still owns. Should that matter as a legal (or ethical) matter if this collector is a museum trustee?

The museum accepts the painting and holds title to it. Would copyright law permit the museum to reproduce the painting on posters promoting an exhibition that includes the work or sell postcards of the painting in the museum gift shop? If the painting were controversial (maybe it conveys a political message, or includes sexual imagery), the museum might remove it from exhibition following public protest. Would the museum have violated the artist's freedom of expression? What if, some years down the line, the museum, concluding the painting no longer fits in its collection, decides to sell the work; is there any legal reason the museum cannot do so? If the collector who donated the work is alive and unhappy the museum is selling it, does he have any recourse?

If the painting were older, maybe a century older, perhaps an Impressionist work, perhaps it changed hands in Europe during the Nazi regime. Could the family that had owned the work recover it long after World War II, after it had been resold multiple times? What if the work of art were an antiquity, from Cambodia, Greece, or Benin, for example? What if it was exported illegally from the source country or not properly declared to Customs on entry into the U.S.? Should the work be returned to the country of origin? 

These are just a few of the ways in which the law touches on most every work of art we see in museums. While law and art might seem antithetical, law serves to establish the conditions of social peace and stability that liberate artists to make and sell their art. Law provides artists with enforceable rights in their works and in their relationships with dealers, collectors and the art market. It protects works of art against theft and destruction, and against adulteration and misrepresentation through fakes and forgeries. Law provides rules for the assembly and display of art collections and exhibitions, and the formation and operation of museums. It supports and regulates the market for art, providing an orderly process for its distribution (and redistribution).

When viewing a beautiful painting, a provocative sculpture, or a mysterious work from antiquity, it is natural to see only the work and think little of the law. We can also recognize the diverse ways in which the law set the stage for works' creation, distribution and display.

Going forward, I expect "The Art of Law" columns to explore specific instances where law and art intersect, not always comfortably -- but always in interesting and thought-provoking ways.