Last month, in the latest chapter of the ongoing legal saga arising from the whitewashing of “5Pointz,” the former aerosol-art mecca located in Queens, New York, the Second Circuit granted defendants’ motion to stay issuance of its appellate mandate pending defendants’ petition for a writ of certiorari in the Supreme Court of the United States. Defendant real estate developers indicate that they seek the high court’s review of (i) the scope of the statutory term “recognized stature” in the Visual Artists Rights Act of 1990 (“VARA”) and (ii) the constitutionality of the $6.75 million dollars in statutory damages that Judge Frederic Block of the Eastern District of New York awarded against them. Defendants’ petition comes on the heels of the Second Circuit’s February 2020 affirmance of Judge Block’s landmark February 2018 decision, which constituted the first judicial application of VARA to aerosol art.
The Second Circuit’s Affirmance
As discussed previously on this blog, this case arose out of defendant property-developer Gerald Wolkoff’s decision to whitewash his Long Island City building complex (“5Pointz”), thereby destroying numerous works of the aerosol artists to whom he had granted permission to paint on its walls.[1] Wolkoff whitewashed the works after successfully defeating the attempt of more than twenty aerosol artist–plaintiffs (“Plaintiffs”) to obtain a preliminary injunction against him and his real estate companies (“Defendants”), but before Judge Block issued his written decision and without giving notice to those Plaintiffs. On February 12, 2018, Judge Block ruled that the whitewashed aerosol works were of “recognized stature” under VARA, and therefore Wolkoff’s “willful”[2] destruction of them warranted the maximum amount of statutory damages available.[3] On June 13, 2018, Judge Block denied Defendants’ post-trial motion to grant a new trial or vacate the February 2018 judgement under Federal Rules of Civil Procedure 59(a)[4] and 52(b).[5]
Sitting on a three-judge panel, Second Circuit Judges Barrington Parker, Reena Raggi and Joseph Bianco heard the 5Pointz case, and Judge Parker issued the court’s decision. On appeal, Defendants were required to show that Judge Block abused his discretion or that findings of fact he made were clearly erroneous, not simply debatable.[6] Defendants marshalled most of their points on appeal in support of an argument that the destroyed aerosol works did not qualify for protection under VARA. The appellate panel was not persuaded. Defendants argued that, because the majority of the works were “temporary,” they could not meet VARA’s “recognized stature” requirement.[7] The court disagreed, finding that nothing in VARA “excludes temporary artwork from attaining recognized stature.”[8] The court noted not only that Defendants’ own expert acknowledged that temporary artwork could achieve recognized stature, but also that the statute itself “does not adopt categories of ‘permanent’ and ‘temporary.’”[9] Additionally, the court highlighted how “street art, much of which is ‘temporary,’ has emerged as a major category of contemporary art,” citing to the works of influential aerosol artists Banksy and King Robbo.[10]
Defendants advanced several other arguments about why the district court should not have found the aerosol works in question to be of “recognized stature.” Defendants argued that the district court “erroneously focused on recognized quality, rather than recognized stature,” noting that “recognized stature must be assessed at the time of a work’s destruction, not at the time of trial.”[11] Defendants asserted that, in determining that the Plaintiffs’ aerosol works were of “recognized stature,” the district court improperly credited the testimony of both (i) Renee Vara, the artists’ expert, who had not actually examined the works before their destruction, other than in photographs, and (ii) Jonathan Cohen, the artist who curated 5Pointz, who screened works for “stature” only before they were painted, not after. Finally, Defendants argued that the district court erroneously focused on the stature of the 5Pointz site as a whole, rather than that of each individual 5Pointz work.[12]
The Second Circuit summarily dismissed Defendants’ first argument regarding timing, pointing out that the district court “explicitly stated that the ‘focus of [its] decision was the recognition the works achieved prior to the whitewash.’”[13] The panel rejected the argument that it was clearly erroneous for the district court to rely on Ms. Vara’s testimony, finding that there was “nothing wrong and nothing clearly erroneous” with Vara assessing the artworks on the basis of photographic images only.[14] Citing the landmark VARA case Carter v. Helmsley-Spear, Inc., the court noted that expert testimony is “often the linchpin in claims of ‘recognized stature.’”[15] The court also found that the district court properly credited Jonathan Cohen’s testimony, because “a respected aerosol artist’s determination that another aerosol artist’s work is worthy of display is appropriate evidence of stature.”[16] Finally, the Second Circuit dismissed defendants’ argument that the district court placed undue weight on the stature of the 5Pointz site by “conclud[ing] that the site of a work is relevant to [that work’s] recognition and stature and may, in certain cases, render the recognition and stature of a work beyond question,” citing major museums like the Louvre and the Prado as examples of locations that “ensure[] . . . a work will be recognized.”[17]
Defendants also challenged the district court’s finding that their VARA violation was “willful,” as well as its award of statutory damages.[18] On the basis that defendant Wolkoff (i) knew that Plaintiffs were advancing their VARA claims and (ii) intentionally destroyed the aerosol works immediately after the district court denied the preliminary injunction, the Second Circuit affirmed the district court’s finding that “Wolkoff acted willfully and was liable for enhanced statutory damages.”[19] In assessing whether the statutory damages awarded, $6,750,000, were an abuse of discretion by the lower court, the Second Circuit found that the district court correctly assessed the six factors relevant to a determination of statutory damages.[20] Particularly persuasive for the court in making this determination was defendant Wolkoff’s conduct in court—e.g., misrepresenting material facts in his affidavit in opposition to the application for a preliminary injunction—and toward Plaintiffs—e.g., choosing to immediately whitewash their artworks “without any genuine business need to do so.”[21]
Implications of the Affirmance
The Second Circuit’s 5Pointz decision, should it stand, solidifies the protection of aerosol street art under VARA. However, some commentators express concern that it may provide a precedent for overbroad protection: Although Wolkoff sanctioned the artwork at issue here, some worry that the decision may also support VARA protection for unauthorized street art.[22] The statutory language of VARA does not differentiate between authorized and unauthorized art, so if a court (like the Second Circuit here) is hesitant to impose additional requirements not contained in the statute, then such an outcome is a viable possibility, at least in theory. On the other hand, practically speaking, a number of factors courts consider when applying the “recognized stature” standard—such as location and curation—would most likely weigh against a finding of VARA protection in the case of unauthorized street art.[23]
Another noteworthy aspect of the decision is the Second Circuit’s strong rebuke of Wolkoff’s behavior—a warning to all property owners considering a “quick-fix” response to a VARA claim. The court reiterated the district court’s observation that Wolkoff’s whitewashing of the aerosol works was an “‘act of pure pique and revenge’ towards the artists who sued him.”[24] Where even a substantial financial penalty (such as the $6.75 million award against Wolkoff here) may insufficiently deter property owners facing the business decision of whether to make their property immediately available for a lucrative real estate deal potentially worth hundreds of millions of dollars (as was the case here), the threat of public reputational damage may be a significant additional counterincentive.
Defendants’ Constitutional Contentions
In moving to stay issuance of the Second Circuit’s mandate, Defendants indicated that they intend to ask the Supreme Court to review the scope of the statutory term “recognized stature” and the constitutionality of the $6.75 million damages they face.[25] With regard to the former, Defendants allude to “possible constitutional defects” in the standard adopted by the Second Circuit panel from Carter v. Helmsley-Spear, Inc., which they argue was “determined with minimal analysis of the statute and not long after VARA’s enactment.”[26] With regard to the latter, Defendants signal that they will argue that the statutory damages awarded are “grossly excessive” and thus in violation of the Due Process Clause.[27] Plaintiffs opposed Defendants’ motion, arguing that neither issue rises to the level of “a substantial question,” as required to warrant a stay.[28] This time, however, the Second Circuit sided with Defendants, granting the 90-day stay and giving Defendants until Monday, August 3, 2020 to file their petition.[29]
[1] Beginning in the early 1990s, Wolkoff agreed to let aerosol artists paint on the 5Pointz walls. Cohen v. G&M Realty L.P., 320 F. Supp. 3d 421, at 432 (E.D.N.Y. 2018). 5Pointz soon became a mecca for internationally recognized aerosol artists, but Wolkoff decided to knock down the building in 2013 to make room for new, high-rise residential buildings. Id. The 5Pointz artists sued, seeking a preliminary injunction against Wolkoff under VARA. Id. at *1. On November 13, 2013, Judge Block denied the plaintiffs’ motion pending trial. Cohen v. G&M Realty L.P., 988 F. Supp. 2d 212, 214 (E.D.N.Y. 2013). On November 20, 2013, Wolkoff unexpectedly whitewashed 5Pointz, destroying 45 works of aerosol art. Cohen, 2018 WL 851374, at *6. In response, the artist-plaintiffs filed a Second Amended Complaint seeking damages under VARA. See id.
[3] 17 U.S.C. § 106A(a)(3)(B).
[4] Under Rule 59(a), a losing party can ask the court to re-try a case if significant legal errors occurred during the trial. The moving party must make the motion within 28 days after the court formally enters its final judgment.
[5] A Rule 52(b) motion, which often accompanies a Rule 59(a) motion, allows a court to amend its judgment or make additional findings.
[6] Castillo v. G&M Realty L.P., 950 F.3d 155, 167 (2d Cir. 2020).
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Id. at 169.
[12] Id. at 170.
[13] Id. at 169.
[14] Id.
[15] Id. at 170 (citing 861 F. Supp. 303, 325 (S.D.N.Y. 1994), aff’d in part, rev’d in part on other grounds, 71 F.3d 77 (2d Cir. 1995)). Hughes Hubbard represented the artist plaintiffs in that action.
[16] Id. at 169.
[17] Id. at 170.
[18] Id. at 172.
[19] Id.
[20] Id. at 171-72. The six factors, drawn from copyright law, are as follows: (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 infringing material; and (6) the conduct and attitude of the parties. See Bryant v. Media Right Prods., Inc., 603 F.3d 135 (2d Cir. 2010).
[21] Castillo, 950 F.3d at 172.
[22] Amelia K. Brankov, Second Circuit Affirms $6.75 Million Damages Award to 5Pointz Artists, Mondaq (Feb. 26, 2020), available at http://www.mondaq.com/unitedstates/Intellectual-Property/897352/Second-Circuit-Affirms-675-Million-Damages-Award-To-5Pointz-Artists.
[23] Additionally, the act of creating unauthorized street art might in itself constitute a tort or crime—the reality of which would likely act as a deterrent to the artist bringing the VARA claim in the first instance.
[24] Castillo, 950 F.3d at 172.
[25] Appellants’ Motion to Stay Issuance of the Mandate, Castillo v. G&M Realty L.P., 950 F.3d 155 (2d Cir. 2020), (Dkt. No. 186).
[26] Id. at 2.
[27] Id. at 3 (citing BMW of North America, Inc., v. Gore, 517 U.S. 559, 562 (1996)).
[28] Opposition to Appellants’ Motion to Stay Issuance of the Mandate, Castillo v. G&M Realty L.P., 950 F.3d 155 (2d Cir. 2020), (Dkt. No. 189); see Fed. R. App. Proc. 41(d)(1).
[29] Order Granting Motion to Stay, Castillo v. G&M Realty L.P., 950 F.3d 155 (2d Cir. 2020), (Dkt. No. 194); see Fed. R. App. Proc. 41(d)(2)(B)(i).