Last August, the OMA sued De Groft and the owners of a series of paintings included in the scandal-ridden 2022 show “Heroes & Monsters: Jean-Michel Basquiat.” The museum alleged that De Groft and others used the show and the museum’s reputation to legitimize a group of 25 paintings they claimed were by Basquiat so that they could be sold after. However, the show was shuttered in June 2022 after several reports doubting their status as bonafide Basquiats, which culminated in the FBI seizing the paintings. A subsequent FBI investigation provided evidence that the works were not by Basquiat, with Los Angeles-based auctioneer Michael Barzman admitting in a plea deal to helping paint and sell the works himself.

The case figures to be a complicated one. Akerman LLP, the law firm representing the museum, said in the case-management report that it expects to depose 50 “art scholars and museum directors” for the case. Further, a representative for the firm told the Sentinel that the lawsuit could cost the museum $500,000. That’s in addition to the more than $100,000 OMA has already paid Akerman since June 2022, according to the Sentinel, when the FBI raided the museum and seized the allegedly phony paintings.

Further delay in the suit could be caused by a series of countersuits against the OMA. DeGroft filed a countersuit against the OMA in November claiming wrongful termination, breach of contract, and defamation. In the countersuit, DeGroft claimed he is being made a scapegoat as part of the OMA’s media strategy for dealing with the scandal. He alleged that Cynthia Brumback, the OMA’s former board chair who resigned in the wake of the Basquiat scandal, and an outside legal team, had approved of the exhibition, even after it was clear the FBI, which subpoenaed the OMA for records regarding the paintings a year before they were seized, was investigating claims of forgery.

Additional countersuits for defamation are expected from defendants in the case, including the group of artworks’ owners called the Basquiat Venice Collection Group/ who claim “that the value of the Basquiat works of art has been tremendously devalued by OMA’s statements to various outlets, including but not limited to the filing of this lawsuit,” according to the court documents. 

De Groft and the owners of the supposed Basquiats have denied wrongdoing and maintain that the pieces are real.

There have been reports that mediation and a settlement could resolve the dispute between museum and DeGroft, though, according to court documents, “certain parties” have entered into negotiations and “appear to be far from settlement,” however they have agreed to a neutral mediator.

The lawsuit, which was filed this week, features allegations that Kappo Masa employees both past and present are still owed tip money for their services. The restaurant relied upon “improper formulas for the calculation of and distribution of tips during regular restaurant service, and also for the calculation of and distribution of gratuities/service charges for private events,” according to the filing.

Orin Kurtz, a lawyer representing the plaintiffs, told Eater, which first reported the news Thursday, that Kappo Masa “underpaid its employees by 12 percent.” Carolyn D. Richmond, a lawyer for the restaurant, pledged to contest the suit and said that Kappo Masa had “been in full compliance with all state and federal wage and hour laws.”

Should the Kappo Masa employees win, any tipped worker who has worked there since September 20, 2017 may be entitled to money.

Kappo Masa, which opened in 2014, has gained a reputation for its priciness. In his one-star review of it, New York Times critic Pete Wells wrote that it is “expensive in a way that’s hard to forget either during or after the meal. The cost of eating at Kappo Masa is so brutally, illogically, relentlessly high, and so out of proportion to any pleasure you may get, that large numbers start to seem like uninvited and poorly behaved guests at the table.”

The restaurant is located beneath Gagosian’s Madison Avenue gallery. According to a recent New Yorker profile of the dealer, he dines there several times a week.

Many galleries depend on verbal deals made with artists, collectors, and museum officials in order to sell artworks and curate exhibitions. But a new lawsuit shows how quickly those agreements can unravel, threatening the short- and long-term financial sustainability of a long-established gallery.

The co-owners of Santa Fe’s Turner Carroll Gallery are suing art critic Jeff Kelley, alleging that he acted with “oppression, fraud, and malice.” His aim, the gallery claims, was to destroy the gallery’s relationship with his wife, the late Chinese American artist Hung Liu, whose portraits are the subject of a survey that is still traveling the US.

Tyler Atkinson, one of the lawyers retained by the Turner Carroll Gallery, told ARTnews, “It’s a very sad but very necessary case at this point. These plaintiffs have really been left with no recourse.”

The nine allegations in the 14-page complaint, filed on August 29 in the Superior Court of the State of California in Alameda County, include breach of contract, breach of fiduciary duties, intentional interference with prospective economic relations, and trade libel.

Gallery co-owners Michael Carroll and Tonya Turner Carroll allege that Kelley and two of his associates, Dorothy Moss and Markus Kager, actively and intentionally stoked animosity against the dealers among their own customer base. According to the lawsuit, this resulted in clients thinking the gallerists were no longer legally authorized to sell Liu’s work.

On Liu’s website and on LinkedIn, Moss is listed as the director of the artist’s estate, while Kager is listed as director of Hung Liu Studio.

Liu, who died in 2021, was known for monumental paintings and illustrations, some of which incorporated ID cards and immigrant papers. Her arduous journey from China to the United States in her mid-30s ended up informing her art, making international headlines in 2019 after the Chinese government prevented a major solo show from going forward at the UCCA Center for Contemporary Art in Beijing.

The artist’s career included a teaching position at Mills College, and she was a two-time recipient of the National Endowment for the Arts Fellowship in painting.. She died at 73 of causes related to pancreatic cancer just a few days before her first retrospective opened at the National Portrait Gallery in Washington, D.C.

The Carrolls’ lawsuit was filed a week after another exhibition of Liu’s work opened at the Jordan Schnitzer Museum of Art at Portland State University.

It is normal for artists and their estates to move from one gallery to another and to argue over sales proceeds. But the lawsuit alleges Kelley, Moss, and Kager went beyond that, destroying its relationships with its other artists, clients, and peers.

“Within weeks,” the lawsuit states, “Kelley’s actions damaged [the Carrolls’] accomplishments, turned the Gallery into a pariah, impaired its position as a respected art dealer, voided many relationships with existing and potential customers, and diminished the value of works plaintiffs had already acquired. Long-time patrons and museum directors severed ties; artists formerly housed or affiliated with the Gallery no longer wanted to have anything to do with it. Plaintiffs also lost out on the profits to which they were entitled under their agreements with Liu and Kelley and, following Liu’s passing, with Kelley.”

The dealers claim that Kelley, Moss, and Kager used social media to “a. affirmatively and systematically [search] for and [contact] every business contact of the Gallery to tell them that the Gallery was offensive, dishonest, and making a mockery of Hung Liu’s legacy; b. affirmatively and systematically [search] for individuals and entities who may have business with the Gallery, and [contact] the same, to spread false information about the nature of the falling out between plaintiffs and defendants.”

According to Atkinson, Turner Carroll was promised Liu’s oil painting No Savior from on High Delivers II (2007), but later discovered that Kelley shipped the gallery a different piece after selling the other work in 2018.

“When you promise somebody something, and they rely on that promise, you have to deliver it,” Atkinson told ARTnews. “If you don’t, then you’re in breach. And that’s what happened here.”

The lawsuit also states that Kelley has banned the Carrolls from writing anything about Liu, despite the fact that they collaborated with the artist and Kelley for 16 years before her death and continued to do so after her passing.

Established in 1991, the Turner Carroll Gallery specializes in international and modern contemporary art. It sells work by artists such as Stephen Hayes, Mildred Howard, Agnes Martin, Pussy Riot member Nadya Tolokonnikova, and Meow Wolf cofounder Matt King.

Turner Carroll’s CV for Liu states that the gallery organized 11 solo and group exhibitions and that it placed her work with institutions such as the Metropolitan Museum of Art, the Whitney Museum, the National Museum of Women in the Arts, and the San Jose Museum of Art.

Katherine Wilson-Milne, a lawyer for Kelley, Moss, and Kager, said in an email that the complaint was “an entirely baseless and misleading response to the end of a business relationship and it will be vigorously contested.”

The suit was first filed in 2015 by the photographer Donald Graham, who claimed that Prince had infringed on his copyright by using his photographs in works presented at Gagosian the year before.

The Graham work at the center of the lawsuit, Untitled (Portrait of Rastajay92), shows a crouched-over man smoking a joint. Prince’s take on it features that same image in the form of a screenshot of an Instagram post containing it, along with all the comments and likes that accompanied the image.

After that work was included in a 2014 show called “New Portraits” at Gagosian, Graham filed a cease-and-desist order against Prince. Other Prince works in the exhibition were publicly decried by the people represented, with their subjects claiming that he had not sought their permission before using their images.

Untitled (Portrait of Rastajay92) had not sold since Gagosian first purchased it, and Judge Sidney H. Stein’s decision rested on “indirect and unrealized profits,” or money that the gallery would have brought in, had the work found a buyer. He said that there was not enough evidence that those potential profits were “connected to the alleged infringement and [were] overly speculative.”

Whether Prince infringed on Graham’s copyright is still undecided. Much of Graham’s suit is still pending.

Prince, an artist well-known for appropriating others’ photographic material in his own work, has previously faced other lawsuits, most notably one in 2011 brought by the photographer Patrick Cariou over allegations of copyright infringement. The case ended in a settlement in 2014.

The estate of John Baldessari, a key Conceptual artist who died in 2020, is currently embroiled in two lawsuits.

In one, the estate accused its former gallery and an insurance company of having damaged artworks, some beyond repair. In the other, the estate was sued by a production company who claimed that a tense back-and-forth with Baldessari’s descendants ultimately led to the cancelation of a Gagosian gallery show.

A lawyer for the estate declined to comment on both lawsuits, citing the fact that they were still pending.

‘A Total Loss’

In October of last year, the Baldessari Trust sued New York’s Marian Goodman Gallery, its former representative, and the insurance company AXA XL, claiming that it is owed $21 million after dozens of works were damaged.

The Baldessari estate’s suit, which was filed in the Supreme Court of New York, has more recently taken another turn, with Marian Goodman Gallery seeking to be indemnified by AXA. If the gallery is successful, it could mean that AXA will have to cover any costs the gallery would have to pay to the estate in connection with the suit.

Marian Goodman Gallery, which is currently preparing to move from Midtown to Tribeca, showed Baldessari’s work for roughly two decades, from the late ’90s until roughly around the time of his death. His estate is no longer listed on the gallery’s roster.

Representatives for Marian Goodman Gallery and AXA declined to comment on the lawsuit.

The suit claims that 55 works were damaged, but it does not note which ones or their individual values. (Baldessari’s auction record, set in 2007, stands at $4.4 million; most of the works by him that have been sold publicly went for less than $1 million.)

“Some are a total loss,” the suit reads. “All others require conservation and are diminished in value as a result of the damage.”

Later on, the suit clarifies how the works were allegedly harmed: “It is immediately apparent from simply looking at many of the works of art that they were grossly mishandled by [Marian Goodman Gallery], for example by evidently having been dropped, leaving large dents, broken corners, scratches, and cracks in the surface of the art itself and in the materials on which they were created. Some of the paintings that had evidently been dropped show that the board materials on which such paintings had been created are now split and have significant and obvious loss of paint in places. Others show mishandling evidenced by water damage, punctures, rips and tears in the art itself.”

“In addition to the art itself being seriously damaged,” the suit continues, “many of the frames on works of art similarly show mishandling with clear evidence that they were dropped (such as broken, split and dented corners, broken glass and plexiglass, etc.), or were scratched by sharp objects. The damage was necessarily caused by [Marian Goodman Gallery’s] own employees and/or by [Marian Goodman Gallery’s] failure to properly supervise other workers.”

The Baldessari estate alleges that when representatives for its current gallery, Sprüth Magers, went to pick up these works, some pieces were even contained in boxes that had “DAMAGED” stickers affixed to them.

In court filings, Marian Goodman Gallery and AXA denied the Baldessari estate’s claims. They are seeking to have the case dismissed. Marian Goodman Gallery attributed any alleged damage against these works to “negligence, carelessness, recklessness and/or intentional acts of third persons over whom Defendant had no control.”

According to the suit, the Baldessari estate went to retrieve his art from the gallery in 2020, after his passing, in order to appraise it in preparation for a tax filing. By that point, the gallery had “refused to cooperate and refused to communicate with the appraisers,” and the works were to be transferred to Sprüth Magers. The estate said it stopped consigning works to Marian Goodman Gallery that same year.

The Baldessari estate said it informed Marian Goodman Gallery of the damage in 2021 but, it alleged, neither that gallery nor AXA would cover conservation costs.

A Tussle with a Production Company

This past May, in the Southern District Court of New York, Beyer Projects, a New York–based art production company, sued the Baldessari estate, alleging that a “controversy” over the ownership of multiple artworks fabricated while the artist was alive moved Gagosian gallery to call off an exhibition planned to take place this year.

Beyer Projects, whose website claims it has also produced art for artists ranging from Anish Kapoor to Lawrence Weiner, said in the suit that its contracts with Baldessari established a 50-50 ownership structure by which it would recoup half the profits when a work sold. But the Baldessari Trust, Beyer Projects claims, is seeking full ownership and possession of unsold works.

Meanwhile, Beyer Projects claims in its suit that Baldessari’s descendants will not issue a certificate of authenticity for Pineapple (2019), a six-and-a-half-foot-tall sculpture of a fruit that allegedly went unsigned upon his passing. It also alleges something similar regarding Brain Fountain, a functioning fountain shaped like a brain that Baldessari conceived in 2011. Beyer Projects claims that the estate has requested materials related to the work “so that it can ultimately sell Brain Fountain itself and deny Beyer Projects its contractual share of the profits.”

Per the suit, Beyer Projects had begun discussing a Gagosian show of Baldessari works that it owned and co-owned. The show was eventually slated for May 2023 and was expected to “bring in millions of dollars—potentially as much as $10,000,000 or more,” according to the suit. But, “because of this cloud on ownership, however baseless, the Gagosian Gallery canceled their exhibition.”
Sprüth Magers, Beyer Projects says, now will not return two works the production company says it co-owns. The gallery has become involved in a “scheme” to cut the company out of dealings involving those pieces, it claims.

The Baldessari estate filed a motion to dismiss the case in which it said it had not breached the Beyer Projects contract. A lawyer for Beyer Projects did not respond to a request for comment.

In the civil lawsuit, filed in Worcester County Superior Court last month, Rachel Parikh alleges she was “subjected to a hostile and offensive work environment” during her employment at the museum. “The malicious and relentless harassment made the work environment intolerable,” the lawsuit said, alleging that Parikh was “mocked and ridiculed because she is a brown-skinned South Asian” Indian woman.

The 64-page filing details allegations against WAM director Matthias Waschek and Claire Whitner, director of curatorial affairs and curator of European art, who was Parikh’s supervisor. The civil lawsuit alleges that Parikh endured several instances of “racism and unwelcome and offensive behavior,” including multiple comments about her appearance, negotiations over her job title that did not accurately factor in Parikh’s six years of work experience, new staffers being treated more favorably, and her various attempts to report the alleged incidents.

The accusations in the filing include allegations about two meals Parikh had with Waschek and his husband outside the museum, where Parikh alleges the men asked intrusive questions about her cultural background and imitated an Indian accent in reference to a British television show that aired in the 1990s.

The suit also names four officers on the museum’s executive committee as defendants: Dorothy Chen-Courtin, Douglas Brown, Sarah Berry, and Susan Bassick.

Parikh is a specialist in South Asian and Islamic art, particularly works on paper as well as arms and armor. Before WAM, Parikh worked at the Art Institute of Chicago and the Metropolitan Museum of Art, and was a Calderwood Curatorial Fellow of South Asian Art at the Harvard Art Museums.

After the consultancy firm LAM & Associates investigated Parikh’s allegations of harassment and retaliation at WAM in 2022, a final report said it couldn’t substantiate the claims with other colleagues but did find her statements “credible.”

The firm’s investigator, Laurie Margolies, interviewed several museum employees and also found “little trust that employees felt they were protected and would be kept safe.” Margolies wrote in the July 2022 report that she observed that “loyalty seemed to trump honesty or memory” and that descriptions of Parikh’s allegations “fit a pattern that began prior to her arrival at the museum.”

Parikh resigned from her position at WAM as associate curator of the arts of Asia and the Islamic World in September 2022. According to the complaint, Parikh’s notice said her resignation was due to WAM failing to uphold its own policies and applicable laws, as well as the “resulting hostile and psychologically unsafe work environment.”

“I have been left no choice but to leave WAM due to the detrimental impact all of this is having on my emotional, mental, and physical health, as well as my well-being,” Parikh wrote.

“The Board had endorsed and approved the discriminatory and retaliatory behavior in complete disregard of Dr. Parikh’s rights by failing to take her seriously, and refusing to hold Mr. Waschek accountable even though the outside investigator had concluded that Mr. Waschek’s behavior was completely unacceptable,” the complaint reads.

After the release of the LAM & Associates report, the museum board required Waschek to undergo “further training and efforts to increase DEAI efforts at the Museum,” according to documents provided to WBUR.

On August 10, a WAM spokesperson sent a written statement to ARTnews acknowledging the lawsuit filed in Worcester Superior Court, and that the museum “remains committed to providing a workplace where everyone is treated with dignity and respect, so we take these allegations very seriously.” The statement also said the documents reveal “confidential HR information.”

“This has put the Museum in a position where the only way to set the record straight would be to disclose confidential and private information in a manner that would violate our own policies and compromise the privacy of current and former employees,” wrote WAM spokesperson Madeline Feller. “We look forward to addressing these claims through the legal process.”

The public relations firm Rasky Partners also sent ARTnews an email with a written statement from Waschek, which said he was dismayed by the allegations made in the lawsuit, calling them “false,” and that they invoked “homophobic tropes.”

“I have worked hard over the last thirty plus years to build a reputation of professionalism and integrity,” Waschek wrote. “As a gay man who has experienced discrimination first-hand, I have always held DEAI issues as a core value, and have sought to do my best to eliminate discrimination from the workplace and build a culture of inclusivity. To read these patently false statements and to see my husband, who doesn’t even work at the Museum, dragged into it and similarly maligned, is staggering.”

Parikh’s attorney, Lana Sullivan, also told WBUR this lawsuit is her second case against the museum and Waschek. The previous case, filed in 2015, resulted in a settlement.

The news of the lawsuit was first reported by WBUR.

During the hearing, the judge appeared to side with AI companies, thus making it likely that he would dismiss the case.

“I don’t think the claim regarding output images is plausible at the moment, because there’s no substantial similarity [between the images by the artists and images created by the AI image generators],” Orrick said during the hearing, which was publicly accessible over Zoom.

The issue is that copyright claims are usually brought against defendants who have made copies of pre-existing work or work that uses a large portion of pre-existing works, otherwise called derivative works. In other words, a one-to-one comparison typically needs to be made between two works to establish a copyright violation.

But, as explained in the most recent Art in America, the artists in the lawsuit are claiming a more complex kind of theft. They argue that AI companies’ decision to include their works in the dataset used to train their image generator models is a violation of their copyrights. Because their work was used to train the models, the artists argue, the models are constantly producing derivative works that violate their copyrights.

The defendants’ lawyers pointed out various issues with the artists’ arguments. To begin with, out of the three named plaintiffs—Sarah Andersen, Karla Ortiz, and Kelly McKernan—only Andersen has registered some of her works with the U.S. Copyright Office. That Ortiz and McKernan don’t hold registered copyright is a major obstacle to claiming valid copyright infringement claims. Meanwhile, it didn’t seem that Andersen was in a much better position, despite having sixteen of her works registered.

“Plaintiffs’ direct copyright infringement claim based on output images fails for the independent reason that Plaintiffs do not allege a single act of direct infringement, let alone any output that is substantially similar to Plaintiffs’ artwork,” Stability AI’s counsel wrote in their motion to dismiss. “Meanwhile, Plaintiffs’ allegations with respect to Andersen are limited to only 16 registered collections but even then, Plaintiffs do not identify which “Works” from Andersen’s collections Defendants allegedly infringed.”

Orrick was also skeptical of how much of an impact these three artist’s works could have had on the models, insofar as they are likely to produce derivatives, given that these models were trained on billions of images. While the judget has not yet filed his official decision, if he dismisses, the artists will have the opportunity to refile and address the weak aspects of the suit.

Orrick’s reaction to the suit appears to confirm legal and technology analysts’ assessment that current copyright law is not equipped to address the potential injustices engendered by AI.

An ongoing study by technologists under the name Parrot Zone have tested image-generator models and found that the system is capable of recognizing and reproducing the styles of thousands of artists. Out of 4,000 studies done, they found that these models can reproduce the style of 3,000 artists, both living and dead, all without recreating any specific works. The issue is that, even as these models are appear to credibly copy existing artists’ styles, “style” is not protected under existing copyright laws, leaving a kind of loophole that AI image-generators can exploit to their benefit.

[To learn more about this lawsuit, read “Artists Are Suing Artificial Intelligence Companies and the Lawsuit Could Upend Legal Precedents Around Art“]

In 2021 and 2022, Hodes sold off his 15 percent stake in the company —his only compensation for 18 months of work— for a mere $100. Then, just months after it was sold, the company engaged in a seed-funding round that generated $101 million in investment at a valuation of $1 billion. The company has since started a new funding round at a valuation of $4 billion, which if successful would make Hodes’ former stake worth over half a billion dollars.

The complaint, filed Thursday in the U.S. District Court, Northern District of California, names Mostaque and Stability AI as defendants. Hodes is seeking a reinstatement of his stake, or an equivalent reward for rescissory damages, as well as additional rewards for monetary and punitive damages. Lastly, Hodes demands that Mostaque and Stability AI “disgorge any profits or unjust enrichments based on their misconduct.

How exactly did Mostaque allegedly defraud Hodes, in the co-founder’s view?

When Hodes joined Stability AI, he was already a world renowned AI expert. He had previously founded blockchain AI startup AIGC Chain and consulted the United Arab Emirates and Organisation for Economic Co-operation and Development on the emerging technology. Stability AI brought in Hodes to help develop the proof-of-concept project Collective and Augmented Intelligence Against COVID-19 (CAIAC), which was meant to aid governments in decision-making around Covid using generative AI.

Yet, according to the complaint, Hodes started receiving some troubling information about Mostaque, who had a degree in Mathematic and Computer Science from Oxford, 13 years of experience at UK-based hedge-funds, and a failed venture called Symmitree that was supposed to provide technological access to people in poverty, but which shuttered after a year, according to his LinkedIn.

In the complaint, Hodes alleges that “Mostaque had embezzled funds from Stability AI to pay the rent for his family’s lavish London apartment” and that he “further learned that Mostaque had a long history of cheating investors in prior ventures in which he was involved.”

Meanwhile, CAIAC was floundering and investors were unimpressed with the results of the project, which was experiencing heavy delays. The complaint alleges that those delays were due to Mostaque being distracted by a secret project that he did not inform Hodes about: Stable Diffusion.

Stable Diffusion is the backbone of text-to-image generation, both referring to the process that was used to create image generation (diffusion) and the company that made its development possible (Stability AI). This product, which rivals OpenAI’s DALL-E and Midjourney, has made Stability AI a household name. But Hodes claims Mostaque kept the project secret so that he would think his stake was basically worthless, allowing him to part with it for much less than its value.

“This was corporate greed at its worst,” said Hodes’s lawyer Avi Weitzman in a statement to ARTnews. “We look forward to a full airing of Defendants’ wrongdoing in Court.”

“The suit is without merit and we will aggressively defend our position,” wrote a Stability AI spokesperson to ARTnews.

This is not the first time the young start-up has been embroiled in legal action. Earlier this year, artists filed a class action lawsuit against Stability AI and other companies, accusing the companies of using their copyrighted images to train image-generation models.

Update 7/14/2023 8:45 AM: This article has been amended to include a statement from Stability AI.

In the class action lawsuit, Virginia resident Daniel Harper, who invested in Astrals NFTs and later suffered losses after the crypto market tanked, has accused O’Neal of violating Section 15 of the Securities Act of 1933, which requires brokers to be registered with the Securities and Exchange Commission, and for offering and selling unregistered securities.

O’Neal and his son Myles founded Astrals in 2022. They brought on freelance creature artist Damien Guimoneau to create the look of the project, which features 10,000 NFTs of humanoid animals and creatures brandishing weapons and other accessories. The NFTs were sold on Solana, a popular blockchain similar in function to Ethereum.

O’Neal promoted the project to his millions of fans on social media, offering giveaways, access to private Discord channels, and promising a return on investment, the complaint alleges. In one video posted to social media, O’Neal told his followers, “we’re not stopping until 30 SOL floor,” in other words, O’Neal believed that the least valuable NFT in the Astrals collection would be worth 30 SOL, which at the time was around $2,400.

Harper, the plaintiff, bought 96 Astrals over the course of a year. According to a chart Harper provided, the most he spent on one of these NFTs was 13.5 SOL.

As crypto markets have tumbled over the past year and NFT collectors have found themselves with little to show for their investment, class action lawsuits have been filed around the country, alleging that companies like Yuga Labs and Dapper Labs shilled unregistered securities to a public that did not have the knowledge to accurately assess the novel assets they were buying.

In each of these cases, courts have been applying the Howey test—a common legal test established in 1946 by the United States Supreme Court in SEC v. W.J. Howey Co.—to ascertain whether or not the NFT projects in question are securities. Under the Howey test, something is a security if it meets following four conditions: It is an investment of money; there is an expectation of profits from the investment; the investment of money is in a common enterprise and; any profit comes from the efforts of a promoter or third party.

In Friel v. Dapper Labs, a judge ruled this past February that Dapper Labs’ product, NBA Top Shot NFTs, are securities. The case will now head to trial unless Dapper Labs decides to settle. While no court has ruled that all NFTs should be considered securities, the Dapper Labs ruling gives some insight into how judges are interpreting novel assets and the novel ways in which they have been promoted. For example, while Dapper Labs never used the word “profit” in the promotion of their NFTs, the case judge found that Dapper Labs found other ways to signal a promise of profits.

“Although the literal word ‘profit’ is not included in any of the Tweets, the ‘rocket ship’ emoji, ‘stock chart’ emoji, and ‘money bags’ emoji objectively mean one thing: a financial return on investment,” read the judge’s decision.

If the case is not dismissed, the assigned judge will likely apply the Howey test to the Astrals.

O’Neal is far from the only celebrity to find himself in legal trouble over NFTs. Madonna, Justin Bieber, and Jimmy Fallon were recently named in a class action lawsuit that alleges they promoted the sale of Bored Ape Yacht Club NFTs without disclosing that they were being compensated.

The activists, both members of the Letze Generazione climate activist organization, glued themselves to the frame of The Bethlehemitische Kindermord (1638) by Peter Paul Rubens. The painting, which depicts children being stolen from the mothers was chosen for the action to represent a future being stolen due to climate change.

The adhesive left behind on the frame warranted attention by conservators. An initial estimate for the monetary damages was 11,000 Euros, but that price has now ballooned to 50,000, according to a report by Monopol. During court proceedings today, the general director of the Bavarian State Painting Collections, Bernhard Maaz, said that the trace amounts of adhesive left would only be visible to the trained eye.

The defendants’ lawyer attempted to argue that these trace amounts of damage might in fact increase the value of the frame one day, marked as it is now with potentially historical significance and further argued that the charges should be dropped all together. The judge did not agree and the trial will continue later this month to determine if a fine should be levied against the protestors and if so, what amount.

For their part, the protestors stand behind their actions, one of them saying, “I would agree to stick myself to the frame regularly if necessary.” Meanwhile, the younger protestor clarified his organizations actions in museums, “We don’t want to destroy art, we don’t want to be terrorists.”