Gmurzynska v. Hutton

• Decision Date: 13 January 2004
• Docket Number: Docket No. 03-7317.
• Citation: 355 F.3d 206
• Parties: Galerie GMURZYNSKA, Plaintiff-Appellee, v. Ingrid HUTTON, Leonard Hutton Galleries, Inc., Magdalena Dabrowski, Eugena Ordonez, a/k/a Eugena Chu, Alexandra Shatskikh, Defendants-Appellees, and Bengt SCHWITTERS, Defendant.
• Court: U.S. Court of Appeals — Second Circuit

355 F.3d 206

Galerie GMURZYNSKA, Plaintiff-Appellee, v. Ingrid HUTTON, Leonard Hutton Galleries, Inc., Magdalena Dabrowski, Eugena Ordonez, a/k/a Eugena Chu, Alexandra Shatskikh, Defendants-Appellees, and Bengt SCHWITTERS, Defendant.

Docket No. 03-7317.

United States Court of Appeals, Second Circuit.

Argued October 20, 2003.

Decided January 13, 2004.

Appeal from the United States District Court for the Southern District of New York, Richard M. Berman, J.

COPYRIGHT MATERIAL OMITTED

Judd Burstein, New York, N.Y. (Peter B. Schalk, Judd Burstein, P.C., of counsel), for Plaintiff-Appellant.

Richard Wasserman, New York, N.Y. (George P. Felleman, Douglas J. Lutz, Wasserman Grubin & Rogers, LLP, of counsel), for Defendants-Appellees Ingrid Hutton and Leonard Hutton Galleries, Inc.

Jeremiah S. Gutman, New York, N.Y. (Levy Gutman, of counsel), for Defendant-Appellee Eugena Ordonez.

Daniel H. Weiner, New York, N.Y. (Robin Jackson, Hughes Hubbard & Reed LLP, of counsel), for Defendant-Appellee Magdalena Dabrowski.

Jean M. Swieca, New York, N.Y. (William M. Popalisky, John F. Finnegan, Christopher Griffith, Cadwalader, Wickersham & Taft LLP, of counsel), for Defendant-Appellee Alexandra Shatskikh.

(Bernard Ben Buecker, San Antonio, TX (Law Offices of Ben Buecker; Jay Safar, Brian R. Feinstein, Central Islip, NY, Sinnreich & Safar LLP, of counsel)), for Defendant Bengt Schwitters.

Before OAKES, MESKILL and B.D. PARKER, Circuit Judges.

PER CURIAM.

Plaintiff-appellant Galerie Gmurzynska ("Galerie"), an art gallery in Germany, sued defendant-appellees Leonard Hutton Galleries, Inc., a competing New York gallery, and its owner, Ingrid Hutton (collectively, "Hutton Galleries"), as well as three art experts, Magdalena Dabrowski, Eugena Ordonez, and Alexandra Shatskikh.¹ The complaint alleged that Hutton Galleries promoted itself and disparaged Galerie in the Russian avant-garde art world by conspiring with the art experts to have them falsely question the authenticity of Galerie's artwork in their expert opinions. The complaint asserted a claim under section 43(a)(1)(B) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), and state law claims for tortious interference with business expectancy and defamation. It also sought declaratory judgment that the works of art Galerie sold were genuine.

The United States District Court for the Southern District of New York, Richard M. Berman, Judge, dismissed the complaint as to all defendants, finding that the Lanham Act claims against the art experts failed because there was no allegation the experts were in commercial competition with Galerie, and that the claims against Hutton Galleries failed because there was no allegation that Hutton Galleries made any false or misleading representations. The court held that the conclusory allegations of conspiracy failed to salvage plaintiff's Lanham Act claims. With no justiciable controversy remaining, the court also dismissed the declaratory judgment claim and declined to exercise jurisdiction over the pendent state law claims.

Galerie now appeals, claiming that the district court improperly applied a heightened pleading standard contrary to the liberal pleading standards of the Federal Rules of Civil Procedure recently reaffirmed in Swierkiewicz v. Sorema N.A., 534 U.S. 506, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). Under the federal rules, "a complaint must include only `a short and plain statement of the claim showing that the pleader is entitled to relief.'" Swierkiewicz, 534 U.S. at 513, 122 S.Ct. 992 (quoting Fed.R.Civ.P. 8(a)(2)). A short and plain statement "must simply `give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.'" Id. (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). We find that even under this liberal pleading standard, the complaint does not state a claim for violation of the Lanham Act. Accordingly, we affirm its dismissal.

BACKGROUND

The 33-page complaint describes a long-simmering hostility between the two competing art galleries. In the allegations relevant to this decision, the complaint distills two schemes as the basis for its claims.

In one scheme, Ms. Dabrowski, an art historian and a former senior curator at the Museum of Modern Art ("MOMA"), allegedly disparaged Galerie in three private consultations with Mr. Norbert du Carrois, an art collector, on April 20, October 25 and November 28, 2000. In each of these meetings, du Carrois inquired about certain works that Galerie had shown or was offering for sale. In response to these inquiries, Dabrowski said in the first meeting that one work was "not what you want for your collection," and that du Carrois should go to the Hutton Gallery because there, "you will find what you are looking for." In the second meeting, Dabrowski told du Carrois that a drawing offered for sale by Galerie was worthless, that Krystyna Gmurzynska "has no knowledge of Russian art," and that she was "only working for the money." Furthermore, she said Galerie was selling fake works by a non-existent artist. In the third meeting, du Carrois showed Dabrowski a drawing from Galerie he was considering purchasing, and "she immediately replied, `it's nothing,"' and told du Carrois she had advised another customer that certain works were "not worth to be acquired." She also said that a painting owned by Galerie was "so bad" and made by the artist's pupils. When du Carrois mentioned an expert who had supported the authenticity of works in a particular collection, she said the works in that collection were "doubtful" and that the said expert was not credible. She then criticized other drawings as "`ridiculous,' `fakes,' `caricatures,' and `like a child's drawing.'" She went on to say that all the works that Ernst Schwitters, a collector, bought from Galerie were fakes, that the Sprengel Museum in Hanover, Germany, had asked a restorer to check up on them, and that all were made after 1940.

In a second scheme, the Sprengel Museum allegedly solicited and relied upon expert opinions by Ordonez, an art historian and assistant conservator for MOMA, and Shatskikh, an expert in Russian art, to support statements the museum had already published in its exhibition catalogue challenging the authenticity of eight works that had been purchased from Galerie. As part of this museum scheme, the experts influenced a reporter for the journal ART-news to write a negative article about the ensuing controversy between Galerie and the museum. Although the article was not published, the journal had advertised that it would be publishing an article concerning Galerie's dispute with the museum.

Galerie's complaint refers to the defendants as conspirators throughout, and alleges that their conduct in the two schemes was "part of a larger illicit compact pursuant to which Dabrowski, Ordonez and Shatskikh ... do Hutton's bidding," and that the defendants agreed to deliver the opinions Hutton wanted. The complaint states this conspiracy created a prospective customer for Hutton Galleries each time defendants persuaded a customer not to deal with Galerie.

DISCUSSION

We review de novo the Rule 12(b)(6) dismissal of plaintiff's complaint. Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir.2002). A complaint "should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. at 45-46, 78 S.Ct. 99. An appellate court is "free to affirm a district court decision on any grounds for which there is a record sufficient to permit conclusions of law, even grounds not relied upon by the district court." Alfaro Motors, Inc. v. Ward, 814 F.2d 883, 887 (2d Cir.1987).

Galerie claims a violation of the Lanham Act, which provides, in relevant part:

(a) Civil action

(1) Any person who, on or in connection with any goods or services, ... uses in commerce any ... false or misleading description of fact, or false or misleading representation of fact, which —

(A) [...], or

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C. § 1125(a)(1)(B)(2003).

In this circuit, to constitute "commercial advertising or promotion" under the Lanham Act, a statement must be: (1) ...