When the gavel fell at a Christie’s art auction in May, a painting offered for sale by Randolph College, Rufino Tamayo’s “Troubadour,” sold for $7.2-million—more than double the auction house’s sales estimate. The work was reported to be the highest-priced piece of Latin American art ever sold at auction.
While the sale made history in art circles, it also put an exclamation point on a several-year saga at Randolph College involving important questions of institutional property ownership and board and administrative decision making. It portrayed in bold relief the legal complications that colleges can confront if they try to raise funds by disposing of art from their collections. The controversy over the possible sale of Jackson Pollock’s “Mural” by the University of Iowa to help pay for its museum’s flood-recovery costs, along with Fisk University’s legal entanglements after its attempt to sell a painting by Georgia O’Keeffe to pay for capital improvements, are yet more examples.
Many colleges have art collections, part or all of which may be in campus art museums. Although the American Association of Museums and other professional organizations have adopted policies that disapprove of “deaccessioning,” or disposing of art from an institution’s collection, if the proceeds are not used to replenish the institution’s collection, it is not uncommon for colleges to try to sell works to pay salaries, refurbish buildings, or simply keep their doors open. Thomas Jefferson University sold three Thomas Eakins paintings in order to develop a new 13-acre campus, and the Royal College of Art, in Britain, sold a Francis Bacon work for similar reasons.
Typically, college art museums are neither independent nonprofit entities with their own articles of incorporation and governing boards (like regional museums) nor government-supported institutions (like the National Gallery of Art). Instead, they often function in a precarious zone of perceived independence from, yet actual operational dependence on, the colleges that provide for their existence and upkeep, leading some scholars to call them “embedded” museums. The cultural treasures found in such museums have significant emotional and aesthetic value to museum patrons, but such value does not give patrons the right to assert legal attachments to those works.
As lawyers representing Randolph College in its art litigation, we are very familiar with what unfolded when the college tried to sell four paintings—including the Tamayo—from its art collection, which includes nearly 3,500 works of art. In October 2007, after a careful exploration of all options, the college made the difficult decision to enter the paintings into New York auctions in order to add to an endowment strained by a high spending rate. Each of the paintings had been given decades earlier to the college as an unrestricted gift or purchased by the college without restrictions.
But on the eve of the auction in mid-November, 19 plaintiffs (including several students, a former museum-studies professor at the college, and its former museum director) sued the college, asking the judge to enjoin the pending sale. The decision to sell the paintings and the ensuing litigation ignited a firestorm of controversy and attention among museum professionals and art enthusiasts, not to mention the college’s alumnae. The court granted a temporary injunction, but the injunction dissolved in February when the plaintiffs failed to post the full amount of the bond that the Virginia Supreme Court had ordered them to pay to maintain the injunction.
From a legal standpoint, a college’s ability to sell off works from its art collection is closely related to the acquisition process. Most museum professionals recognize the importance of acquiring works, through either purchase or gift, that come with “no strings attached.” To accept gifts with conditions is more onerous: It requires a document or other evidence showing that clearly established conditions have been placed on the transfer of property. Those conditions, in turn, may require perpetual attentiveness to particular desires (for example, where, when, and how a work may be displayed), or may establish outright prohibitions on sale or loan of the artwork—giving the donor the right to take back the gift should the donee engage, or attempt to engage, in the prohibited conduct.
But a donor’s preferences on how the donation should be used, how long it must be kept, and whether, to whom, or under what circumstances it may be sold or loaned are of no legal effect, even if they are expressed to third parties or the institution itself, without clear evidence that the gift was given or accepted under those conditions.
The plaintiffs in the Randolph College case—without any evidence that the four paintings to be auctioned were governed by legally recognized restrictions—turned to the novel argument that they were individually the beneficiaries (as well as the representatives of untold, unnamed beneficiaries) of a “public trust” that allegedly prevented the sale of any art from the college’s collection. They claimed that the alleged trust arose from the circumstances under which the individual items had been acquired and were displayed in the college’s museum, as well as from Randolph College’s status before 2006 as a single-sex institution called Randolph-Macon Woman’s College.
Many of the same plaintiffs had earlier brought two separate lawsuits challenging, on contract and “public trust” theories, the college’s change from single-sex to coed status, and claimed in the art litigation that no sales proceeds could be used for the benefit of coeducation. The court sidestepped the argument about all the art in the college’s collection and limited the issues to examining the alleged restrictions on the four pieces set for auction. But soon after the dissolution of the injunction, the plaintiffs voluntarily dismissed all their claims regarding the art, apparently having decided—at least according to an organization that had helped support the art litigation—to focus resources and energies on the coed cases, which they eventually lost.
Although appealing to the popular press, certain professionals in the museum industry, and others, the implications of the “public trust” argument are troubling when it comes to colleges. If colleges were not allowed to sell what they own, like any other private owner of personal or real property who has free and clear title to his or her assets, institutional progress and the fulfillment of colleges’ missions would be impeded. Aging equipment in laboratories could never be replaced, open green spaces could never be sold or developed to create new buildings, and on and on. The “public trust” argument necessarily fails because it knows no end.
Some constituencies with an interest in art collections often expect—and in the case of selling off artworks, demand—that the reason articulated for a sale be valid in their estimation. However, absent clear restrictions in a deed of gift or sale, the law imposes no such requirement. Colleges have no obligation to hold public referenda on whether to sell assets. Instead, every college governing body must exercise its fiduciary duty to sensibly manage the institution’s assets. In carrying out that duty, the board is bound to use reasonable business judgment, which from time to time may result in an informed decision to sell assets.
That perspective appropriately trumps all others, as the purpose of colleges is to educate students as best they can using the limited resources in their control, not to hold their art collections sacrosanct and inviolable to the deprivation of the institution’s overall well-being. Owning art that can be displayed in a museum or elsewhere on a campus undoubtedly plays an important role in furthering a college’s mission—as do concert halls, theaters, sports facilities, dining halls, and dormitories—but the interest in preservation by art-museum professionals and others should never be allowed to overtake a college’s mission or run counter to it. Critics of selling parts of collections for the purpose of anything other than replenishing them must remember that without a college, there can be no college art collection. The opposite is not also true.
No board wants to have to part with popular and beloved artworks, but doing so might make practical sense for the institution, depending on the circumstances it faces. Accordingly, administrators and board members should understand the policies in place at any art museum that the institution owns and controls, and familiarize themselves with the legal landscape. Early and clear communication of governing roles and decision-making powers, as well as proper respect for procedural formalities, will minimize conflict should an institution determine that selling a work—for whatever reason—is in its best interests. Administrators and board members should also ponder the following questions:
Where is art located, and who oversees its display, storage, and upkeep? Consider who oversees art displayed or stored in places other than the art museum, such as student centers, classrooms, dining halls, and offices. The physical location of the art could determine its lines of oversight, which may be inconsistent with board and administrative interests. Conducting an “art audit” may help clarify what art the institution owns, how it was acquired, who looks after it, and where it is located. The president’s office should keep, and ensure the update of, that information.
To whom does the museum’s director report? The less oversight over the director, the more autonomous the museum will appear. Any artificial perception of autonomy could give rise to resentment and personnel challenges if the college ever considers selling art from its collection.
Who must approve the museum’s policies, and what should those policies say? Policies should clearly state the director’s powers and limitations so there is never any confusion of roles or responsibilities. If a deaccession policy is adopted, it should distinguish between a donor’s general aspirations and a binding commitment by the institution. The board should approve all significant commitments.
What language is contained in standard bills of sale or gift policies, and who has the discretion to make acquisitions? Policies should be clear that only the governing board has the authority to accept gifts or make purchases that contain restrictions. Standard bills of sale or gift policies should clearly state that the work is being sold or given without the seller’s or donor’s imposing any restrictions.
Is the museum accredited by the American Association of Museums? Such accreditation can lead to prominence and the adoption of many good practices. It can also lead employees at the college museum to think of their profession first and their institution second, causing their goals and priorities to diverge from those of administrators and boards. Seeking accreditation usually means that the museum will have to adopt a “statement of permanence” for the college’s art collection. Accreditation should thus be sought only with board approval and the written understanding that the museum will continue to follow the board’s policies and decisions.
Nothing short of institutional self-governance and autonomy are at stake for many colleges as they face the types of challenging issues that Randolph College confronted. Responsible governing boards could find that uncertainties or doubts raised by the questions above may mean that they have to reconsider old policies and craft new ones.
Gilbert E. Schill Jr. is a partner and Jacob H. Rooksby is an associate with the law firm McGuireWoods in Richmond, Va. This article does not necessarily reflect the views of the firm or Randolph College.