Topic: Art law
Description:
Imagine that the Gagosian Gallery in New York, which represents the noted American appropriation artist Jeff Koons (b. 1955), will be selling one of his works from The New series, The New Hoover Celebrity IV. Executed from 1981--1986, the piece is emblematic of Koons’s conceptual and artistic practice in the 1980’s at a time when he challenged the artistic conventions of his predecessors, Pop Art and Dada, on the readymade as art. The New series, first exhibited at the New Museum in New York in 1980, presented themes and concepts that have transformed the way we think and feel about art. Surrounded in Plexiglas, this work elevated the Hoover and Shelton machines from quotidian household appliances to illuminated sculptural masterpieces. According to Koons, “Once I encased it, that’s when I think it really happened for me. I was starting to make art.”1
To maximize exposure of this piece to an emerging art market, the Gagosian Gallery has decided to exhibit it at an art fair in Artland in September. Last week, the gallery shipped the work, which was not disassembled, and insured it for the fair market value of $15,000,000. The gallery based its price on the estimate of $10,000,000 — $15,000,000 at Sotheby’s
1 Jeff Koons, cited in Hans Werner Holzwarth, ed., Jeff Koons, Cologne, 2009, p. 108.
Contemporary Art Evening Sale in May 2013. Though the work was bought in, its impeccable provenance – purchased by the mega--collector Peter Brant at Sotheby’s for $137,500 in April 1991 – eager collectors are descending at the fair in Artland. Other pieces in the same series were featured in the Koons retrospective at the Whitney, attracting worldwide attention.
When the sculpture arrived at Artland’s airport, however, the customs agent removed it from the crate and classified it as ”household appliances,” notwithstanding its identification as a work of art. Therefore, rather than being exempt from tax and customs duty as a work of art, 2 the piece was subject to a 20% ad valorem tax applicable to “household appliances fixtures” ($3,000,000) plus customs duty. The tax assessment value was based on the importer’s declared value of $15,000,000 (rather than the much lower value of the materials used to create the piece). The gallery posted a bond so that the piece could be exhibited at the fair in Artland, and appealed the customs agent’s determination.
You are an intern at the Gagosian Gallery and mentioned to your boss that you have studied Brancusi v. United States, Haunch of Venison Partners Ltd. v. HM Revenue and Customs and the European Commission Regulation, which could be relevant. “Great!” exclaimed your boss.
Harmonized Tariff Schedule of Artland (2014), Section XXI, Chapter 97, WORKS OF ART, COLLECTORS’ PIECES AND ANTIQUES, pertains to “Original sculptures and statuary, in any material made by the sculptor, as well as the first 12 castings, replicas or reproductions made from a sculptor’s original work or model, by the sculptor himself or by another artist, with or without a change in scale and whether or not the sculptor is alive at the time the castings, replicas or reproductions are completed.” Chapter 97, however, “does not apply to mass-- produced reproductions or works of conventional craftsmanship of a commercial character, even if these articles are designed or created by artists.”
“Would you please write a 1,500 word Essay analyzing these cases as they would apply to The New Hoover Celebrity IV so I can discuss the problem with our lawyer on October 22nd.”
“Please include in your analysis legal arguments that are likely to be made by Customs and legal arguments we might make in response. You may discuss cases cited in Brancusi and Haunch of Venison, but please do not do any additional legal research or cite secondary sources. Also, please do not discuss copyright infringement or fair use. Let’s assume that these cases (and the precedent cited within the cases) and the European Commission Regulation are relevant in Artland.”