Graphic Artist Guild Lawsuit Dismissed
NEW YORK, NY - April 27, 2011 Last week the New York State Supreme Court, New York County, dismissed all claims in a million dollar lawsuit brought by the Graphic Artists Guild (GAG) against the Illustrators' Partnership of America (IPA) and five named individuals.
In the lawsuit, GAG asserted claims for defamation and interference with contractual relations, alleging that IPA had interfered with a "business relationship" GAG had entered into that enabled GAG to collect orphaned reprographic royalties derived from the licensing of illustrators' work. GAG alleged that efforts by IPA to create a collecting society to return lost royalties to artists "interfered" with GAG's "business" of appropriating these orphaned fees.
In her decision, Judge Debra James ruled that statements made by the Illustrators' Partnership and the other defendants were true; that true statements cannot be defamatory; that illustrators have a "common interest" in orphaned income; and that a "common-interest privilege" may arise from both a right and a duty to convey relevant information, however contentious, to others who share that interest or duty.
Regarding a key statement at issue in the lawsuit: that GAG had taken over one and a half million dollars of illustrators' royalties "surreptitiously," the judge wrote:
"Inasmuch as the statement [by IPA] was true, [GAG]'s claim cannot rest on allegations of a reckless disregard of whether it was false or not. Truthful and accurate statements do not give rise to defamation liability concerns." (Emphasis added.)
And she noted:
"The plaintiff Guild has conceded that it received foreign reprographic royalties and that it does not distribute any of the money to artists."
Labor Department filings provided as evidence to the court document that between 2000 and 2007, GAG collected at least $1,581,667 in illustrators' reprographic royalties. GAG admitted to having collected similar royalties since 1996. GAG's officers have repeatedly refused to disclose how much money their organization has received to date or how the money has been spent.
DUTY AND COMMON INTEREST
The judge concluded that this situation justified an assertion of common interest by IPA. This means that "the party communicating [relevant information] has an interest or has a duty" to convey that information truthfully to others "having a corresponding interest or duty":
"The duty need not be a legal one, but only a moral or social duty. The parties need only have such a relation to each other as would support a reasonable ground for supposing an innocent motive for imparting the information. Here the plaintiff Guild's factual allegations demonstrate that the defendants' statements were both true, and fall within the parameters of the common-interest privilege." (Emphasis added.)
We hope this decision will end the two and a half years of litigation during which GAG pursued its claims against IPA and artists Brad Holland, Cynthia Turner and Ken Dubrowski of IPA, as well as attorney Bruce Lehman, former Commissioner of the US Patent Office and Terry Brown, Director Emeritus of the Society of Illustrators.
All defendants were participants in a public presentation sponsored February 21, 2008 by 12 illustrators organizations. The presentation was disrupted by GAG's officers and their attorney. A videotape of the event proves that statements which GAG alleged to be defamatory were made only in response to GAG's intervention, and that until that time, no speakers had mentioned GAG or GAG's longstanding appropriation of illustrators' royalties.
Last year, on January 12, 2010, Judge James issued a prior ruling dismissing nearly all of GAG's causes of action. This left only a claim asserted by GAG against Brad Holland. But in a response filed with the court February 4, 2010, attorney Jason Casero, serving as counsel for IPA, pointed out that GAG's remaining claim rested on an allegedly defamatory statement that Holland never made. When confronted with evidence, GAG was forced to admit it had "inadvertently attributed" the statement to Holland.
GAG subsequently filed new motions in an effort to revive its claims against IPA and the other defendants. Last summer the judge consolidated GAG's multiple motions and on April 18, 2011, she dismissed all ten causes of action against IPA and all the defendants.
REPROGRAPHIC RIGHTS AND ORPHAN WORKS
GAG served the lawsuit on IPA October 10, 2008, seven days after Congress failed to pass the Orphan Works Act of 2008. The Illustrators' Partnership and 84 other creators' organizations opposed that legislation. GAG had lobbied for passage of the House version of the Orphan Works bill. Mandatory lobbying disclosures document that GAG spent nearly $200,000 in Orphan Works lobbying fees.
In our opinion, the issues behind the lawsuit are greater than whether an organization should be allowed to benefit from the millions of dollars that, collectively, illustrators are losing. We believe the reprographic rights issue is linked to both orphan works legislation and the Google Book Settlement, which Federal Judge Denny Chin dismissed on March 22, 2011.
Each of these developments involves an effort by third parties to define artists' work and/or royalties as orphaned property, and to assert the right, in the name of the public interest or class representation, to exploit that work commercially or to appropriate the royalties for use at their sole discretion. So far, judges have affirmed that copyright is an individual, not a collective right, and that unless one explicitly transfers that right, no business or organization can automatically acquire it by invoking an orphaned property premise. Now the challenge for artists will be to see that Congress does not pass legislation to permit what the courts have so far denied.
We'll have more to say about this issue in the future. For now we'd like to conclude by thanking our attorney Jason Casero, who provided us with a strong, incisive and heartfelt defense; his law firm, McDermott Will & Emery, which provided us with his services; the Volunteer Lawyers for the Arts of New York and its Director Elena Paul. We'd also like to thank Dan Vasconcellos, Richard Goldberg, and the over 700 artists and illustrators who in 2008 signed a petition asking GAG (unsuccessfully as it turned out) to drop the lawsuit; the support of so many colleagues was a great tonic at a low time. Finally we'd like to thank the representatives of the 12 organizations that comprise the American Society of Illustrators' Partnership (ASIP). ASIP is the coalition organization IPA incorporated in 2007 to act as a collecting society to return royalties to artists.
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