Warhols and Harings and Rothkos: The Future of Art Authentication Hangs in Limbo
In the art world, the existence of authenticity, or at least the consensus of its existence, is hugely important to the market value of a work of art. Art is scarce, worth a lot of money, and in many cases, capable of being forged. As such, the art world will never be devoid of characters looking to profit off counterfeit works.
When a work is created with the intention to deceive, as in the Knoedler case (the trial of which is going on right now ), it is quite easy to say that the work is fake, forgery, or counterfeit. But questions of authenticity also arise in subtler, more complicated circumstances. Sometimes a work's "authenticity" is not nearly so cut and dry.
Double Denied was submitted to the Warhol Foundation for authentication in 1987. The trustee of the foundation and executor of Warhol’s estate, Fred Hughes, decreed it authentic, and stamped it with Warhol’s signature. In 1988, Double Denied was submitted again to the Warhol Foundation for authentication. This time, Fred Hughes wrote on the painting’s edge: “I certify that this is an original painting by Andy Warhol completed by him in 1964” and signed his name:
In 1989, Joe Simon-Whelan purchased Double Denied for $195,000, in no small part due to its impeccable, double-approved record with the Warhol Foundation. Seventeen years later in 2006, Simon-Whelan had an offer on the table for $2 million, with one condition - the buyer wanted him to submit the work to the Warhol Foundation for authentication again. The third time was not the charm for Double Denied. On the contrary, Double Denied came back defaced - with a red stamp on the back declaring "DENIED."
According to Simon-Whelan, after the rejection a Warhol representative encouraged him to do further research to document the work's provenance (i.e., the chain of custody of an artwork going back to the artist) and then re-submit it for authentication. Thus, Simon-Whelan spent the next year conducting exhaustive research, travelling the globe, collecting evidence, and interviewing and getting sworn statements from Warhol's employees and compatriots attesting to the work's authenticity. When the Warhol Foundation sent it back with a second red stamp (hence the name Double Denied), Simon-Whelan filed suit against the Warhol Foundation for fraud and antitrust claims, among others.
The infamous red stamps
Simon-Whelan marshalled some pretty persuasive evidence and documentation
pointing to Double Denied's authenticity (which he has posted on his website). Many commentators have gone on the record at length as to the indisputability of Double Denied's authenticity. Why would an artist's estate refuse to authenticate a work in the face of uncontroverted evidence of its legitimacy? Simon-Whelan had some pretty insidious theories: he alleged that the Warhol Foundation conspired to use the authentication process to remove competing Warhols from the market, inflate the prices of works owned by the Foundation, and ensure that galleries, museums and collectors only bought Warhols from the Foundation, or from its “approved” circle.
Simon-Whelan survived an initial motion to dismiss, and the Warhol Foundation eventually settled (after spending a reported $7 million on the defense). The Warhol Foundation denied any wrongdoing whatsoever.
Soon after the Double Denied case settled in late 2010, the Warhol Foundation disbanded its authentication committee. It said the potential liability exposure from disgruntled collectors who received responses they didn't like was just too great. The estates of Roy Lichtenstein, Keith Haring, and Jean-Michel Basquiat quickly followed suit in 2012 - no more authentications. And most of the artist estates have left it at that.
The Keith Haring Foundation, however, took what some might call a paradoxical position. It was no longer providing authentication services to collectors seeking to obtain its imprimatur, but at the same time it maintained that it had the authority to prohibit the exhibition of suspect Keith Haring art.
In March 2013, the city of Miami was on fire with excitement - a huge of exhibit of almost 200 Keith Haring works, many of them never before displayed to the public, was the talk of the town. Even better, many of the works were for sale.
But Haring Miami had only a few brief hours of glory. Armed with lawyers and press releases trumpeting "fakes, forgeries, counterfeits and infringements," the Keith Haring Foundation swooped in on opening day and shut the Haring Miami exhibition down.
Except... if the Keith Haring Foundation was not examining or authenticating works anymore...how did it know that the 200 Haring Miami works were fake? How could the Foundation cast aspersions on the authenticity of works it had not examined, and indeed pursuant to its new policy, refused to examine? The owners of the impugned Haring Miami works, who claimed they had substantial evidence linking the works back to Keith Haring, were wondering the same thing.
The Haring Miami collectors turned around and filed their own lawsuit against the Haring Foundation, primarily on a defamation basis. The Haring Miami Plaintiffs also alleged a conspiracy not quite unlike the one postulated in the Double Denied case. They accused the Haring Foundation of controlling and manipulating the market for Haring's work by declaring real Keith Haring works to be fake, all so that the pieces in the Haring Foundation's own collection would be seen as rarer, and hence more valuable.
The Southern District of New York (the same court that allowed Double Denied to survive initial dismissal) was not persuaded. It found the facts in the Haring Miami case distinguishable from those in Double Denied, and threw the case out in March 2015. The plaintiffs appealed to the 2nd Circuit, but the decision came down relatively swiftly, in December 2015, affirming the district court's dismissal.
At the end of the day, the Haring Foundation technically won. Its defense was successful. But even if the Haring Miami Plaintiffs did not necessarily state colorable causes of action, it's hard not to sympathize with their quandary. What is a collector to do when an artist's estate simultaneously refuses to authenticate a work (decimating its market value), and then also blocks whatever (compromised) sale the collector attempts?
There are no easy answers. One thing that is clear is that art authentication can be a dangerous business, and artists' estates are not the only experts exposed to liability for an allegedly erroneous judgment call. Gallerists such as Ann Freedman, former director of the Knoedler Gallery know this all too well. Freedman stood accused of selling a fake Rothko painting for $8.3 million, until she settled literally hours be she was set to testify in trial. Would the jury have believed her prostestations that she was just as duped by the fake masterpiece as her clients?
Mikhael Bortz is an intellectual property, media and business attorney based out of Chicago and Miami. Mikhael specializes her legal practice in worldwide intellectual property, fine art issues, licensing, merchandising, branded entertainment, technology, and social media.