The case of the day is Pivar v. Van Gogh Museum (S.D.N.Y. 2022). Full disclosure: I was counsel for The Van Gogh Museum Foundation (“the Museum”), the defendant in the case. The Museum houses (though it does not own) the world’s largest collection of the works of Dutch artist Vincent Van Gogh. One service the Museum provides, generally free of charge, is its opinion on whether artworks can be attributed to Van Gogh. In a typical year, hundreds of art owners ask for the Museum’s opinion. As you would guess, in almost all cases the Museum is able to give an opinion based only on photographs of the work and other written information about the work and its provenance. Occasionally the Museum will ask to have the work sent to Amsterdam for more in-depth examination. The Museum provides its opinion privately to the owner.
In 2021, New York art collector Stuart Pivar purchased a painting that he believed was painted by Van Gogh, which he called Auvers, 1890, shown in the image. He brought it to the Museum’s attention, along with the opinion of an expert he had consulted opining that the painting was the real thing. The Museum was closed during COVID and was not accepting requests for its opinion on authenticity, but it agreed to make an exception in Mr. Pivar’s case and invited him to make a request. It sent him an email, which attached a blank agreement and its general terms and conditions, which the agreement form incorporated by reference.
The agreement provided that a request for authentication is “subject to our General Terms and Conditions of the Van Gogh Museum Foundation for purposes of Researching Authenticity (hereinafter referred to as General Terms and Conditions Researching Authenticity”), and it stated that “by signing this document, you acknowledge that you are familiar with and consent to the General terms and Conditions Researching Authenticity …” The General Terms and Conditions provided that the Museum would use “the due care expected of a good contracting party,” provided that Dutch law governed, and included the following choice of forum agreement:
To the extent that national or international rules of law do not mandatorily provide otherwise, any disputes in the matter of or arising from or related to these Terms and Conditions or the contractual and extra-contractual obligations arising therefrom or related thereto will solely be submitted for settlement to the competent court in Amsterdam.
Mr. Pivar signed and returned the agreement. The Museum reviewed photographs and documents regarding the painting and sent Mr. Pivar a report opining that the painting was not painted by Van Gogh and stating that the Museum did not believe an inspection of the painting itself was necessary.
Mr. Pivar then brought suit in the New York State court, alleging a breach of the contractual obligation quoted above and negligence, and demanding more than $300 million in damages. The Museum removed the case to federal court and moved to dismiss, arguing that the court should enforce the choice of forum clause and that the court lacked personal jurisdiction.
The court granted the motion to dismiss, relying on the choice of forum argument alone and not considering the jurisdictional point. (This is a proper procedure under Sinochem v. Malaysia International Shipping, 549 U.S. 422 (2007), where “considerations of convenience, fairness, and judicial economy so warrant”). Federal courts enforce forum selection clauses under the heading of forum non conveniens when the chosen forum is a state court or a foreign country court (if the chosen forum is another federal court, the court relies instead on the transfer statute). Under Second Circuit precedent, such a clause is presumptively enforceable if it was (1) reasonably communicated to the party resisting enforcement, (2) is mandatory, and (3) covers the claims and the parties in the suit. If a clause is presumptively enforceable, the other party can escape from it by showing that: (1) it was the product of fraud or overreaching; (2) the law the foreign court will apply is fundamentally unfair; (3) enforcement would violate a strong public policy of the forum; or (4) enforcement would be so difficult and inconvenient as to deprive the plaintiff of his day in court.
The Second Circuit has a very sensible approach to the question of which law governs each of these four issues. Under Martinez v. Bloomberg, 740 F.3d 211 (2d Cir. 2014), where the parties have chosen a foreign law, the court should apply the chosen law to the interpretation of the clause (i.e., whether the clause is mandatory, and whether it covers the claims and parties in the case), and it should apply federal law to the enforceability of the clause (i.e., whether the clause was reasonably communicated, whether it was the product of fraud, whether there is an issue of fundamental unfairness, public policy, etc.). There is also an interesting theoretical issue about whether, in a removal case, New York forum non conveniens law or federal forum non conveniens law should govern, though the cases generally say that the two are virtually identical and thus that nothing turns on this issue.
The judge found that under Dutch law, the clause was mandatory, and it did cover the claims and parties. Those points were never really in dispute. Mr. Pivar’s argument was that the agreement was a contract of adhesion and was unconscionable. His argument, as the court understood it, also encompassed an argument that the clause had not been reasonably communicated to him.
The judge disposed of the point about how the terms and conditions were communicated without much fuss. He noted that the general terms and conditions were provided to Mr. Pivar at the same time and indeed in the same email as the document that Mr. Pivar signed, and that the document he signed referenced the general terms and conditions clearly and explicitly. He also noted that the forum selection clause was in English and was “clearly stated.” Finally, the judge wrote that it was not lost on him that Mr. Pivar was, on the one hand, bringing a claim that arose under the general terms and conditions and, on the other hand, claiming he could not recall receiving or reading them and making an argument about the manner in which the terms were communicated to him.
The judge also disposed of the argument about adhesion. He noted that form contracts are not unenforceable as a general matter and that the Museum had not pressured or deceived Mr. Pivar into signing. “On the contrary, the facts suggest that the Museum had very little interest in securing the agreement, considering it did not receive, nor seek, any payment for its services,” he wrote, and “it was Mr. Pivar who repeatedly contacted the museum regarding the Auvers painting …”
Finally, the judge rejected the argument of unconscionability. There was no procedural unconscionability because Mr. Pivar had a meaningful choice whether to sign the agreement. “Mr. Pivar did not need to enter into an agreement with the Museum, and the Museum had no need to force Mr. Pivar into such an agreement.” Nor was there any substantive unconscionability. Mr. Pivar pointed to nothing in Dutch law that would be unfair, contravene public policy, or deprive him of his day in court. (And, it might be added, even if the case should be heard in ta US court on the merits, the parties had agreed that Dutch law would govern, so I don’t think the judge needed to ask whether Dutch law was fair). Mr. Pivar did argue that his old age and frailness would make it difficult to litigate in the Netherlands, but as the judge pointed out, those facts alone do not make a contract unconscionable.