Simon-Whelan's antitrust suit

An art collector and film producer Joe Simon-Whelan purchased an Andy Warhol self-portrait for $195,000 in 1989. The work had been authenticated by the executors of Andy Warhol as well as his estate and the foundation before the purchase.

After 17 years of ownership Simon-Whelan decided to sell the painting and addressed Andy Warhol Art Authentication Board Inc (hereinafter - the Board) for authentication. The Board was a non-profit organization that rendered opinions about whether Warhol paintings are authentic or not, and was formed under supervision of the Andy Warhol Foundation for the Visual Arts. According to the art dealer "[...] it is nearly impossible to sell an Andy Warhol painting without first submitting it to the Board for authentication. The Board claims that theirs is "just an opinion" but the fact is that Sotheby's and Christie's will not sell a picture unless it has the Board's approval." (for more detailed opinion of Joe Simon-Whelan, please see: http://www.myandywarhol.eu/my/my_story.asp )

The Board stamped “DENIED” on the back of the painting, ruining any possibility that it could be accepted as a genuine Warhol in the future. In fact that means that the work was rendered worthless. After documenting the painting's exceptional provenance Joe Simon-Whelan resubmitted it for authentication, but the Board again stamped “DENIED” on his painting.

In 2007, Joe Simon-Whelan filed the antitrust lawsuit against the Board and Foundation. This was the first time in the USA when an antitrust claim against an authentication board survived the defendant's motion to dismiss.

It should be noted that the Foundation had its' own collection of Warhols and even tried to buy the painting in question before the claimant bought it.

Joe Simon-Whelan alleged artificial reduction of the number of authenticated Warhols on the market (trade restraint; Section 1 of the Sherman Act), and engagement in anticompetitive conduct in order to monopolize the market for the re-sale of works by Warhol (monopolization, Section 2 of Sherman Act).

 

There were three main points that allowed the Simon-Whelan's claim to go further.

 

Firstly, the court concluded Simon-Whelan’s Section 1 claim met the “plausibility” standard by alleging the Board:

(1) made unsolicited suggestions that Warhol owners submit their work for authentication,

(2) reversed prior authentication determinations,

(3) refused to authenticate works the Foundation had attempted to purchase, and

(4) and was not independent of the Foundation.

 

The court secondly established that Warhol artworks form a relevant geographic product submarket within the market for modern and contemporary art (case law: Vitale v. Marlborough Gallery, 1994 WL 654494, (S.D.N.Y. July 5, 1994); Kramer v. Pollock-Krasner Foundation, 890 F. Supp. 250, 254 (S.D.N.Y. 1995))

 

Thirdly, the court accepted allegation of antitrust injury. Simon-Whelan alleged the Board’s practice of stamping “DENIED” on his artwork prevented him from participating as a seller in the market for authentic Warhol art. "The court affirmed the Board’s practice of stamping “DENIED” on artwork, deeming it “not authentic,” was a sufficient antitrust injury: “the double-stamping of ‘Denied’ on his artwork in furtherance of the alleged antitrust conspiracy has prevented him from competing as a seller in the lucrative market for authentic Warhols”" (https://digital.law.washington.edu/dspace-law/bitstream/handle/1773.1/560/6WJLTA185.pdf?sequence=4, p.12; citing Simon-Whelan v. Andy Warhol Found. for the Visual Arts, Inc., No. 07 Civ. 6423(LTS), 2009 WL 1457177, at *6, 2009 U.S. Dist. LEXIS 44242 (S.D.N.Y. May 26, 2009)

 

The case was ultimately settled. After several years of litigation the plaintiff ran out of money whereas they say that the defendants spent over $7M for this lawsuit.

 

Please find below two exceptional sources discussing the topic:

- Gareth S. Lacy, STANDARDIZING WARHOL: ANTITRUST LIABILITY FOR DENYING THE AUTHENTICITY OF ARTWORK6WASH. J.L. TECH. & ARTS 185 (2011), available at: https://digital.lib.washington.edu/dspace-law/handle/1773.1/560 

or here: gareth-slacy-antitrust-liability-for-denying-the-authenticity-of-artwork.pdf

- Joe Simon-Whelan, My Story, MY ANDY WARHOL, http://www.myandywarhol.eu/my/my_story.asp

 

Preview photo: Joe Simon with Andy Warhol Self-Portrait Stamped “Denied”, source: http://blog.thefineartblog.com/2010/10/andy-warhol-antitrust-lawsuit-over.html#axzz4SLVzC8zs