Hermann Goering, the founder of the Gestapo, acquired a portrait
of a lady as Diana, wounded by Cupid, by the middling 18th-century
painter Louis-Michel van Loo, in 1939. Exactly how Goering acquired
the work is unclear, but you can imagine. The picture appeared at a
Sotheby's auction in 2004 and was bought for US$96,000 by
Steven Brooks. When Brooks later wanted to sell it at
Christie's, he was informed of the painting's dubious
provenance and the uncertain circumstances under which it was
acquired by Goering. The auction house said it could not help to
sell it, given its questionable history. So back to Sotheby's,
which wouldn't sell it either -- or refund the purchase price.
Brooks sued Sotheby's in California, alleging unfair and
deceptive trade practices under the California Consumers Legal
Remedies Act (CLRA), fraudulent concealment, negligent
misrepresentation and unjust enrichment. Sotheby's pointed to
the forum-selection clause in the terms of sale found in the
auction catalogue, which gave jurisdiction over all disputes
arising from the sale to the English courts. Brooks countered with
a provision of the CLRA which precludes removal of a case to a
foreign forum where to do so would violate public policy
(consistent with the position at common law). Brooks argued that
enforcing the forum-selection clause would violate public policy by
requiring him to waive CLRA remedies and a jury trial.
The district court in San Francisco enforced the clause in the
catalogue: Brooks v Sotheby's (ND Cal, 1 July 2013).
Brooks failed to show that he had waived any remedies available
under the CLRA, as an English court might well decide the dispute
was governed by California law and apply that; and a jury trial
remained a possibility even if the forum was England. Seeborg J
thought the forum-selection clause a perfectly reasonable one,
given that Sotheby's does business in 40 countries in 10 global
salesrooms with customers from all over the world;
the provision was a reasonable way to manage litigation. The
clause had been reasonably communicated to Brooks: no auction
virgin, he had made 32 previous purchases at Sotheby's, and
would have had 'a large incentive to study' the terms of
sale of a big-ticket item.
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