Art Market
Why You Can’t Always Buy a Work of Art Just Because You Have the Cash
For new collectors, the gallery snub—entering the bright white cube, politely inquiring about a work on the wall, then getting told it’s not available—is almost a rite of passage. And for galleries, it’s a long-standing business practice that ensures the best works go only to the best collectors.
But is it legal? Why can a dealer pick and choose who buys their artists’ work, selling to some, but not others?
In fact, a gallery’s main legal duty is to the consignor whose work it is selling, be that the work of a living artist or a consignment from Joe the plumber looking to unload a few . Beyond that, a gallery has no obligation to sell to any particular buyer, according to legal experts.
“Someone who walks into a gallery off the street does not have a right to purchase something on the wall,” said William Pearlstein, a partner at Pearlstein McCullough & Lederman LLP, an art law firm in New York.
That’s not to say wealthy collectors haven’t sought to claim this right, especially in the face of blacklists. One famous 2010 case involved Miami-based real estate developer and mega-collector Craig Robins, who sued gallerist David Zwirner for telling the South African artist that Robins had resold one of her paintings, thereby landing Robins on her blacklist. In a case brought in New York’s Southern District, Robins sought $8 million in damages for Zwirner’s indiscretion, claiming he suffered “irreparable harm” because he was prohibited by Dumas from buying a selection of her paintings from a then-contemporaneous show at Zwirner’s gallery.
Judge William Pauley III, who appeared to have little patience for the tantrums of wealthy collectors (according to one report, he “complain[ed] that he was late for a murder trial”), described the lawsuit as an “unflattering portrait” of “a realm of self-proclaimed royalty…and astonishing chicanery.” But despite his clear skepticism of all involved, the judge did find Robins’s case for “irreparable harm” convincing, noting that art is unlike other goods.
“Original works of art are within the small category of intrinsically unique goods for which a specific performance remedy is appropriate,” Judge Pauley said in his opinion. In other words, the one-of-a-kind nature of art means that one cannot simply cite a standard amount of damages to make up the harm he suffered.
That’s in contrast to the infamous wedding cake that never was in the case of Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, which made it all the way to the U.S. Supreme Court, in part due to baker Jack Phillips’s claim that his customized wedding cakes were artworks. Phillips said he was no mere baker, but a “cake artist.” (The case was decided in favor of Phillips, but the high court dodged many of the civil rights issues at hand, leaving them unresolved.)
“In [the] Masterpiece [case], [Phillips] was admitting he was discriminating—there was no dispute about what was happening…[but] he could always make another cake,” said Donn Zaretsky, a partner at John Silberman Associates in New York. Art galleries are doing something different when it comes to choosing who can and cannot buy unique works of art, he said.
“We’re not discriminating if we only have 20 paintings in the show, and we want to place them in the best collections, and so the blacklist is people who aren’t considered the right homes for these works,” Zaretsky said. “I can’t think of a legal theory why you couldn’t [do that].”
When would the practice count as “discrimination”? The Civil Rights Act of 1964 created a number of “protected classes” against whom the law made it illegal to discriminate in hiring and other employment scenarios. These included race, color, religion, sex, and national origin, and were later expanded to include age, disability, and genetic information.
So if a gallery were to blacklist anyone from France, that would probably not hold up in court, said Chris Robinson, a partner at Cahill Cossu Noh & Robinson LLP in New York. But even then, there could be other reasons not to sell to someone from France.
“Maybe it’s a jurisdictional issue—that artist may be repped in Europe,” Robinson said. “As long as it’s not solely because of [someone’s national origin], then there wouldn’t be a problem.”
In other words, as long as a dealer is not choosing buyers on the basis of one of the prohibited forms of discrimination, she or he is free to pick and choose who, what, when, and where anyone can buy from them. Dealers, he said, can always cite their responsibility to look out for an artist’s long-term career prospects, and note that the artist has an interest in seeing a work go to a museum or a well-known collector who is known for lending out works.
“Can a consumer do anything about it?” Robinson mused. “I think that would be tricky.”
Pearlstein was even less sure a consumer would have any case, noting that civil rights law is largely related to employment, not consumer rights.
“I’m not sure there is a right of equal opportunity to buy artwork,” he said.
In another case, Lehmann v. The Project Worldwide, collector Jean-Pierre Lehmann sued art dealer Christian Haye for denying him the purchase of eight paintings by , who was represented by Haye’s gallery, The Project, at the time. Haye had solicited a $75,000 investment in his gallery from Lehmann, and in return, Haye promised him a 30 percent discount and the right of first refusal on works by any artist in the gallery’s roster. Haye, Lehmann claimed, was bypassing him and selling Mehretu’s large paintings to other, more important collectors. Although Haye normally would have been well within his right to do that, his contractual relationship with Lehmann put him in the wrong. Due to the clear breach of contract, a New York State Supreme Court judge ruled in Lehmann’s favor, awarding him $1.7 million in damages.
“Some of the other people coming along had more important collections, and [the gallery] couldn’t say no,” said Pearlstein. “That’s where the dealer has a problem—fiduciary duty should have trumped his own issue with this particular collector, but he boxed himself into a corner because he had this contractual relationship.”
While galleries typically don’t discriminate on the basis of race, color, creed, or age, Pearlstein said, they do uphold what he calls a “cartel of taste.” He traces it back to the post-war period, when a small group of dealers and collectors essentially created a canon and pushed up prices by trading amongst themselves.
“The art market in New York for post-war and contemporary [art] was really the function of a handful of galleries and collectors selling to a slightly larger handful of collectors, and the stuff would end up in the MoMA,” Pearlstein said. “The whole canon for post-war and contemporary has been created in the span of two generations.”
That pattern has only intensified as new buyers from Asia, Russia, and elsewhere have entered the market, further inflating prices for the agreed-upon favorites, such as , , , , , , and , Pearlstein said.
“At the apex of the market, it’s 10 to 12 international galleries selling two dozen A-list artists to four dozen important collectors. Therefore, it’s very important for the gallery to place the work of art…with the right collector, to maintain the pricing, the support,” Pearlstein said. “Galleries take a lot of care to make sure not to sell just to anybody with money if there’s a choice.”
Anna Louie Sussman