## Facts

- David Stein was a painter and former art dealer who had been convicted in New York of counterfeiting artwork and grand larceny after selling paintings he had created and falsely represented as works by famous artists.
- After serving a U.S. sentence, Stein was deported to France, where he was later imprisoned for similar conduct involving forged artworks.
- While incarcerated in France, authorities allowed Stein to paint works in the style of well-known artists on the condition that he sign the paintings with his own name.
- Wright Hepburn Webster Gallery, Limited, a New York art gallery with a London affiliate, obtained and exhibited approximately 68 of Stein’s prison paintings in New York and offered them for sale.
- The gallery’s advertising and exhibit materials highlighted Stein’s notoriety, referring to the works as “forgeries” and identifying Stein as the painter; the paintings were signed “David Stein.”
- The State of New York, acting through the Attorney General, brought a special proceeding asserting that the exhibition and sale of these works amounted to fraudulent or illegal business practices and a public wrong affecting the public interest.
- The State argued that even if buyers at the gallery were told the truth, Stein’s signature could later be covered or removed, enabling downstream sellers to pass the works off as originals by the artists whose styles Stein imitated.
- Relying on Executive Law § 63(12), the Martin Act, and the State’s protective authority, the Attorney General sought extraordinary interim relief, including appointment of a receiver pendente lite to take custody of the paintings and control sale proceeds, and injunctive restraints on disposition of the works.
- Stein was not served in the New York civil proceeding; the gallery opposed the requested relief.

## Issues

1. Whether the Attorney General was entitled, under Executive Law § 63(12) and related authority, to the extraordinary remedy of a receiver pendente lite over Stein’s paintings and the proceeds of their sale based on alleged fraudulent or illegal business practices.
2. Whether the gallery’s exhibition and sale of paintings openly identified as Stein’s works—publicly characterized as “forgeries” or imitations—constituted actionable fraud or illegality warranting broad injunctive relief.
3. Whether, despite the absence of present misrepresentation at the point of sale, the court could impose limited equitable safeguards aimed at reducing the risk of later deception in the secondary art market.

## Decision

- The court denied the Attorney General’s request to appoint a receiver pendente lite over the paintings and sale proceeds.
- The court declined to enjoin outright the exhibition or sale of the paintings where the record showed that the works were presented as Stein’s and were not being sold as genuine works of the artists whose styles were copied.
- The court nevertheless granted limited, targeted injunctive relief requiring clear disclosures and documentation so that purchasers received written identification that each work was painted by David Stein and not by any other named artist, and restricting any presentation that could be taken as certifying the works as genuine masterpieces by the imitated artists.
- The court left open the possibility of further relief upon a stronger showing of deception or illegal conduct.

## Legal Principles

- Executive Law § 63(12) authorizes the Attorney General to seek equitable relief against repeated fraudulent or illegal acts in business, but the State must show conduct that is meaningfully deceptive or unlawful, not merely offensive or in poor taste.
- Appointment of a receiver pendente lite is an extraordinary remedy and requires a strong showing of necessity; courts will not transfer control of property or a business absent a demonstrated need to prevent imminent harm or preserve the subject matter of the litigation.
- Where an art seller fully discloses that a work is made by the named creator (here, Stein) and is an imitation “in the style of” others, the element of present misrepresentation is substantially weakened, even if the seller uses sensational labels such as “forgeries.”
- A court sitting in equity may fashion narrow safeguards—such as mandatory certificates of authorship and restrictions on potentially misleading descriptions—to reduce a foreseeable risk that works will later be misrepresented after leaving the original seller’s control.
- General appeals to public policy against allowing criminals to profit from notoriety do not, standing alone, justify suppressing otherwise lawful sales in the absence of a specific statutory prohibition or proof of current deception.

## Conclusion

The court refused to place Stein’s prison paintings and related funds into a receivership and rejected a broad shutdown of the gallery’s exhibit and sales because the works were presented as Stein’s imitations rather than as authentic Picassos or Matisses; however, recognizing a realistic risk of later resale deception, the court imposed limited disclosure-based injunctions requiring written identification of the paintings as Stein’s and limiting any sales presentation that could be understood as certifying the works as genuine originals by the artists whose styles were copied.


State of New York v. Wright Hepburn Webster Gallery, Limited, 314 N.Y.S.2d 661, 64 Misc. 2d 423 (1970)