Antitrust and Unfair Competition Law

Artist’s Claims Against Alleged Art Cartel Dismissed: Cenedella v. Metropolitan Museum of Art, 2018 WL 6629408 (S.D.N.Y Dec. 19, 2018)

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Mark F. Ram
Cotchett, Pitre & McCarthy, LLP

Contemporary artist Robert Cenedella alleged that five leading New York City museums (the Metropolitan Museum of Art, the Whitney Museum of American Art, the Museum of Modern Art, the Solomon R. Guggenheim Foundation, and the New Museum of Contemporary Art) violated the Sherman Act and New York’s Donnelly Act by conspiring to shut him out of New York City’s contemporary art market.Cenedella v. Metropolitan Museum of Art, 2018 WL 6629408 (S.D.N.Y Dec. 19, 2018). Judge John G. Koeltl of the Southern District of New York dismissed Cenedella’s claims without prejudice.

Cenedella’s work “has been the subject of one-man shows throughout the United States and Europe.”Id. at *1.A 2016 documentary film portrayed him “as a rebel, the anti-Andy Warhol, and an unabashed art world outsider.”Id. He brought the case on behalf of a nationwide class consisting of “at least dozens” of contemporary artists who created artwork “eligible for exhibition in major contemporary art museums in the United States.”Id.

Cenedella alleged the museums entered into a conspiracy with unnamed co-conspirators to “artificially fix, raise, and control prices for contemporary art in the United States and to blackball some producers of contemporary art.”Id. at *2. The unnamed co-conspirators included galleries, auction houses, and private collectors. Id. Cenedella alleged that the conspiracy kept his art out of the five defendant museums, despite the fact his art “is of the quality that would otherwise be show[n] in” the museums. Id. He also claimed that the conspiracy caused his artwork to be artificially undervalued.Id.

Cenedella asserted that the museums have acquisition policies that they follow in acquiring art, but that the policies are not fully disclosed to the public.Id. Naturally, when an artist’s work is displayed in one of the defendant museums, the value of that work increases.Id.

Cenedella alleged that between 2007 and 2013, nearly one-third of solo museum exhibits across the United States featured artists represented by one of five commercial galleries (the “Five Galleries”).Id. Additionally, during this time period, artists represented by the Five Galleries accounted for 45-percent of “single-artist shows” at the Museum of Modern Art, 40-percent of “major shows” at the New Museum, and 90-plus percent of the “major solo exhibitions” at the Guggenheim.Id. Moreover, “select few galleries” provide “financial, logistical, and other support to the museums in putting on exhibitions.”Id.

Cenedella claimed that the above allegations – the defendants not fully disclosing their acquisition policies, the rise in a work’s value once displayed in the museums, the Five Galleries providing many of the defendant museums’ exhibitions, and galleries supporting the museums – suggest a conspiracy, and have anticompetitive effects harmful to him and other artists.Id. More specifically, he alleged that the museums purchase and exhibit primarily the work of artists represented by the Five Galleries, driving up the prices of works by those artists. The value and desirability of these artists’ works continue to rise as the museums continue purchasing and exhibiting these same artists’ works. This, according to Cenedella, appeases the Five Galleries, which become more willing to support the museums, and further benefits the museums by making their collections more valuable and exhibitions more popular.Id.

In sum, Cenedella alleged that the museums agreed to use their power in the art world to make certain artists’ works increasingly valuable, and then continued to draw upon those same artists to their collective benefit.Id. at *3. To carry out this alleged scheme, the museums coordinate with various galleries, auction houses, and private collectors, who are in on the conspiracy. Id. The museums allegedly hid their scheme by not disclosing fully their acquisition policies; Cenedella claims that if the museums fully disclosed their policies, they would have to draw upon a more diverse array of artists to appear in compliance with their policies.Id.

The net effect of the conspiracy, according to Cenedella, is that the alleged conspiracy shuts him and others out from the New York City contemporary art market.Id. He alleged that he and other artists whose works are not purchased by, or displayed in, the defendant museums suffer harm in the form of “artificial depression” in the prices of their works.Id. Put differently, but for the alleged conspiracy, the museums would purchase Cendella’s artwork and that of others, and consequently Cenedella and others would see a rise in the value of their artwork.Id.

The museums moved to dismiss Cenedella’s claims on several grounds, including failure to allege facts sufficient to demonstrate (1) Article III standing, (2) antitrust standing, and (3) a conspiratorial agreement among the defendants.[1]

The court agreed with the museums that Cenedella failed to sufficiently allege Article III standing. In Judge Koeltl’s words, “[i]f the defendants’ alleged conspiracy were enjoined, it is mere speculation that the defendants would begin purchasing the plaintiff’s work.. . .Which artists’ works the defendants purchase is up to the defendants’ discretion. Although the plaintiff assures the Court that his artwork is of a quality that would be shown in the defendant museums if not for the alleged conspiracy, this subjective boast alone cannot substantiate the plaintiff’s claim that enjoining the alleged conspiracy would lead the defendants to begin purchasing his work.”Id. at *4.

The court concluded that Cenedella lacked antitrust standing because he is not an “efficient enforcer” of the antitrust laws.Id. at *4 –7 (citing In re Aluminum Warehousing Antitrust Litig., 833 151, 157 (2d Cir. 2016) and In re Aluminum Warehousing Antitrust Litig., 95 F.Supp.3d 419, 441 (S.D.N.Y 2015)).Courts consider the following factors when deciding whether a private plaintiff “is fit to bring suit” (Cenedella, 2018 WL 6629408 at *4):“(1) the directness or indirectness of the asserted injury; (2) the existence of an identifiable class of persons whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement; (3) the speculativeness of the alleged injury; and (4) the difficulty of identifying damages and apportioning them among direct and indirect victims so as to avoid duplicative recoveries.” In re Aluminum Warehousing Antitrust Litig., 95 F.Supp.3d at 441.Judge Koeltl found that each factor weighed against Cenedella. First, Cenedella’s asserted injury was indirect: his theory of harm depended upon the “tenuous inference that five museums effectively control the value of not just the art that they purchase and display but the value of all contemporary artwork in New York City.”Cenedella, 2018 WL 6629408 at *6. Second, “the purchasers and museums outside of the conspiracy who pay the inflated prices” would be motivated to enforce the antitrust laws.Id. Third, Cenedella’s claimed injury is “highly speculative:” he “assumes that if the alleged conspiracy did not exist, his work would appear in the defendant museums and become more valuable. This theory depends entirely upon the discretion and subjective tastes of the defendants.”Id.Fourth and finally, Cenedella’s “alleged damages are also highly speculative, and therefore difficult to identify and apportion. . . . [D]etermining how much of the alleged artificial undervaluing of the plaintiff’s artwork is attributable to the defendants, and how much to other factors – such as public taste, the interest of other purchasers, and the opinions of critics and academics – calls for extensive speculation.”Id.

The court agreed with the museums that Cenedella failed to allege a plausible antitrust conspiracy. Cenedella did “not allege direct evidence of an agreement among the defendants.”Id. at *7. And he failed to allege any “plus factors” that would support the conclusion a conspiratorial agreement took place.Id. Rather, Cenedella “provide[d] nothing more than conclusory allegations.[He did] not allege during what time period the conspiracy was formed, or who among the defendants’ employees created the conspiracy. Nor [did he] clarify the extent to which the conspiracy is horizontal versus vertical[.]. . .In short, the plaintiff’s amended complaint is completely devoid of facts indicating who agreed with whom, to what, and when.”Id. The court also concluded that “there is an obvious alternative explanation to the alleged conspiratorial conduct – the defendants simply view works of certain artists, who are often represented by the Five Galleries, as worthy of collecting and showing.” *8.

While Cenedella may have pleaded an interesting case, Judge Koeltl’s opinion shows the many hurdles a plaintiff with a sniff of anticompetitive harm faces when entering court. Cenedella said in a statement after the dismissal: “This lawsuit was never about me. It has always been about exposing the secrecy and insider dealing of the art world, in which curators, dealers, and donors conspire to profit off of the work of a select few artists, regardless of talent or artistic merit. Almost one-third of all solo museum exhibitions in the United States—and at the Met, MoMA, the Whitney, the Guggenheim, and the New Museum—feature artists represented by just five galleries, out of more than 1,400 galleries in New York City.”[2] Perhaps Cenedella’s intended effects will come to fruition despite his pleading failures.

[1] The museums also moved to dismiss on the grounds that Cenedella failed to adequately allege (i) a relevant geographic market, and (ii) an adverse effect on competition stemming from the museums’ alleged conspiracy.The Court accepted each of these arguments as grounds for granting the motion to dismiss.This note will not examine these grounds.

[2] (last accessed Jan. 21, 2019).

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