Appeal from an order of Charles E. Stewart, Jr., Judge, entered December 13, 1982, in the United States District Court for the Southern District of New York, holding defendant in contempt for violating a Final Judgment on Consent entered on June 30, 1982. Reversed.
Van Graafeiland, Pierce and Wisdom,*fn* Circuit Judges.
Defendant appeals from an order of the United States District Court for the Southern District of New York entered on December 13, 1982, by Charles E. Stewart, Jr., Judge, finding defendant in contempt. The order found that defendant's manufacture, reproduction, and sale of certain works of art entitled "Hoyt's Cove," "Chasm," and "Horizon" constituted contempt by violating a Final Judgment on Consent entered on June 30, 1983.
Plaintiff-appellee Jerome Schurr is a financially successful commercial artist who produces seriagraph images of California and Western landscape scenes in an impressionistic form known as the California or Western style. Defendant-appellant Austin Galleries of Illinois, Inc. (Austin), is a chain of retail art galleries in the Chicago and Detroit areas. In 1981, Austin formed a separate publishing division, Austin Publishing Company, to publish and distribute, at wholesale, signed limited edition prints. Among others, Austin manufactures and distributes the works of Robert Wilson, a commercial artist who creates California and Western coastline, lake, and mountain scenes.
Schurr's style of creation, accomplished by a silk screening method, features images of mountains, bodies of water, and sky. One basic color is chosen to represent each landscape component. The mountains are shown as a series of flat, superimposed planes, each slightly offset from the next, with the planes varying sequentially in thirty to thirty-five gradations of shades of the same color from light to dark. A narrow border in a contrasting color, representing a beach, appears at the interface of the water and mountains. People, buildings, wildlife or other details do not appear in Schurr's works. The Schurr works are priced at $600 to $1500. Also, they have become commercially popular as decorative art when reprinted as low price posters. According to Austin, the Schurr works are not of museum quality and are not considered fine art.
In April, 1982, Schurr became aware that Austin was advertising and selling works of art attributed to Robert Wilson entitled "Blue Bay," "Canyon Lake," "Rocky Coast," "Reflections," and "Solitude." In May, 1982, Schurr commenced an action in the United States District Court for the Southern District of New York, in which he claimed that the five works of Wilson, manufactured and distributed by Austin, violated and infringed upon his (Schurr's) copyrighted works.
After settlement negotiations, the parties executed a Settlement Agreement and a Final Judgment on Consent. Paragraphs 2b and 3 of the Settlement Agreement and paragraph 5 of the Final Judgment on Consent provided, inter alia, that Austin would not manufacture, reproduce, print, or sell any work "which visually simulates the style and subject matter of any work created" by Jerome Schurr.*fn1 E. Leonard Rubin, Austin's then Chicago counsel, forwarded a transmittal letter, dated June 16, 1982, to Schurr's New York counsel with the signed Settlement Agreement and Final Judgment on Consent. Paragraph three of the transmittal letter stated:
I feel it important to once again stress that the language ". . . visually simulates the style and subject matter of any work created by SCHURR . . ." as it appears in paragraphs 2b) [sic] and 3 of the Settlement Agreement and in paragraph 5 of the Final Judgment on Consent, is not intended to and should not be interpreted to limit in any way any lawful right of Austin Galleries of Illinois, Inc. to use or sell works that imitate the style of Jerome Schurr, so long as such imitation does not constitute copyright infringement; the point is that Austin Galleries is not agreeing to surrender any of the lawful rights it may have under United States copyright laws.
On June 30, 1982, the Final Judgment on Consent was entered by the United States District Court for the Southern District of New York.
On November 24, 1982, Schurr initiated a proceeding to hold Austin in contempt for the latter's alleged failure to comply with the Final Judgment on Consent. Schurr contended that four new works by Robert Wilson -- "Eagle Pass," "Rocky Reach," "Chasm," and "Cascade" (also known as "Hoyt's Cove") -- which were featured in an advertisement which appeared in the November 1982 issue of Art Business News, violated the Final Judgment on Consent.
Upon Schurr's application, and after an initial visual comparison of the works at an oral hearing held by Judge Stewart, a temporary restraining order was entered prohibiting further sale of the four new Wilson works. The order was entered on November 24, 1982.
On November 29, 30, and December 1, 1982, a hearing as to contempt was held before the district judge. At the hearing, the four aforementioned Wilson works and another work -- "Horizon" -- were examined. Immediately following the hearing, on December 1, 1982, the judge rendered his opinion from the bench. He found Austin in contempt and enjoined further sales of "Chasm," "Horizon," and "Hoyt's Cove." An order encompassing the ...