5Pointz appeal marks quantum shift in U.S. copyright law

Posted on: March 18, 2020 by

(Detail) Artwork at 5Pointz before it was whitewashed.

The appeal of a multi-million dollar award in favor of a group of artists that made headlines in 2018 was recently decided by a U.S. appeals court. The question looming for the last two years in the precedential case known as 5Pointz: would a New York developer be required to pay over $6 million in damages for whitewashing graffiti on property that he owned? The answer: a resounding yes.

“High art” of graffiti given protection under U.S. copyright law

Writing for the Second Circuit Court of Appeals, Judge Barrington Parker issued a thirty-two page opinion that sent a clear message – the lower court committed no error in finding that forty-five works of graffiti and street art destroyed at the 5Pointz aerosol art center in Queens, New York, fell under the umbrella of U.S. copyright law. As previously discussed here, the lower court’s February 2018 decision by the Honorable Frederic Block held that those works had achieved “recognized stature” under the Visual Artists Rights Act of 1990, 17 U.S.C. Section 106A (“VARA”), which is the federal copyright legislation in the U.S. that protects artists’ moral rights. Destruction of the works at 5Pointz was, therefore, a violation of the moral right held by the artists who created those works “to prevent any destruction” of those works (see Case 18-498, Document No. 178, February 21, 2020 Opinion at 3 (citing 17 U.S.C. Section 106A).

A common thread in the Second Circuit’s opinion was respect for the graffiti and street art at issue. “In some quarters”, Judge Parker wrote, such works are considered “high art” (at 18).  In so ruling, the Court debunked developer Gerald Wolkoff’s argument that VARA barred “temporary” works. “Nothing in VARA […] excludes temporary artwork” (at 16).  The Court made clear that temporary works “embodied … for at least several minutes” are more than transitory, and thus meet VARA’s “minimal durational requirement” (at 20). Referencing Banksy’s self-destructing Girl with a Balloon, which was shredded just after it sold for $1.4 million in October 2018, Judge Parker noted the “significant artistic merit” and “cultural importance” such transitory works have and how the short life span of that particular Banksy work actually increased its recognition (at 18). Thus, as Wolkoff’s expert has acknowledged, and the Court agreed: “temporary artwork can achieve recognized stature” (at 16). And so it has here – forty-five times over.

In denying each of the arguments on appeal, the Court pointed out that Wolkoff had inappropriately asked the Court to “revisit and reconsider a number of [the lower court’s] decisions that were debatable (at 16, emphasis added). However, the standard of review at this stage required that Wolkoff show the trial court abused its discretion or made “clearly erroneous, not simply debatable” findings of fact (at 16). The developer failed to “hurdle” this “high bar” (at 16).

Sanctions to deter Wolkoff and encourage good faith dealings with artists

The Second Circuit minced no words in affirming the $6.75 million damages award handed down by the lower court. It found no abuse in Judge Block’s determination that Wolkoff willfully destroyed the works as an “act of pure pique and revenge” (at 29). And, that willfulness triggered the lower court to rightly use its wide discretion to order the maximum sanctions allowed under US copyright law – $150,000 for each work that achieved “recognized stature” (at 13, 28).

The Court considered the relevant factors that determine the propriety of a statutory damages award and found “Wolkoff rings the bell on each” (at 28). Those factors included Wolkoff’s conduct, state of mind, and attitude; his expenses saved and profits earned, and the deterrent effect sanctions would have on him and others (at 28 citing Bryant v. Media Right Prods., Inc., 603 F.3d 135, 144 [2d Cir. 2010]). Both the lower court and the advisory jury who sat through a three-week trial of the “vast” evidence against Wolkoff had concluded that he intentionally destroyed the works (at 25). This evidence included his unabashed testimony that he “would make the same decision today” and his acts of “set[ting] out in the dark of night” to whitewash the works, together with “standing behind his workers and urging them to keep painting and paint everything” as they whitewashed the art (at 29-30).

The Court also noted the lack of any business necessity or urgency to whitewash the works. Wolkoff was found to have wholly contradicted himself on the crucial point of the alleged loss he would suffer if his construction project was delayed. Prior to trial, Wolkoff represented that “it was critical that demolition of the site occur within a few months” or else it would cost him “millions of dollars in credits and possibly the entire project” (at 31). Yet, at trial, Wolkoff testified to a mere “possibility” of financial loss if a delay occurred and – strikingly – his application for a demolition permit was not made until four months after the whitewashing (at 31). By his own admission, Wolkoff suffered no loss by this self-imposed delay. It was in light of these “material untruths” and “conscious material misrepresentations” that the Court found Wolkoff’s decision to whitewash the works “most troubling” (at 10, 27, 31).

To comply with VARA and avoid damages, Wolkoff was “required” either to have obtained written acknowledgment from the artists that “installation of the work may subject the work to destruction, distortion, mutilation, or other modification, by reason of its removal”; or, if the art could have been safely removed, he was “required” to have given “written notice” of demolition to the artists and allowed them a ninety-day window “to remove the work or to pay for its removal”. (at 20-21, citing 17 U.S.C. Sections 113(d)(1)(B) and (d)(2)(B)). The Court found it “undisputed” that Wolkoff had not met these requirements (at 21).

Wolkoff’s failure to obtain written permission or give ninety-days’ notice in compliance with VARA, along with his own testimony and the volumes of evidence against him, all played into the Second Circuit’s conclusion that there was no error in the imposition of sanctions in the form of enhanced statutory damages. Citing again the defense expert’s testimony, the Court noted that he had “credibly testified to challenges that would impede calculations of a market value” for the destroyed works (at 8). Where, like here, actual damages are difficult to quantify, statutory damages are the alternative remedy – and they also send a message to Wolkoff and others who might follow in his footsteps. “In these circumstances, a maximum statutory award could serve to deter Wolkoff from future violations of VARA. It could further encourage other building owners to negotiate in good faith with artists whose works are incorporated into structures and to abide by the 90-day notice provision set forth in VARA when incorporated art can be removed without destruction or modification” (at 30).

 The Future Impact of 5Pointz

Nearly thirty years after its adoption, VARA’s impact has been significantly strengthened with this decision. It now gives artists enhanced leverage to better protect themselves and their work. And while it has not been announced whether Wolkoff will petition the U.S. Supreme Court to review the Second Circuit’s decision, the current 5Pointz precedent serves as a warning to property owners that real consequences exist if they trample on the moral rights of artists.


Image credit: Photo by Aaron Harewood (5pointz graffiti), CC BY 2.0 via Wikimedia Commons