When “free of charge” becomes “pay what you wish, but you must pay something”

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Written by Linda Hohnholz

The New York City (the City) Metropolitan Museum of Art (the Met) is one of the world’s great art museums housing more than “1.5 million objects spanning five millennia in 2.4 million square feet

The New York City (the City) Metropolitan Museum of Art (the Met) is one of the world’s great art museums housing more than “1.5 million objects spanning five millennia in 2.4 million square feet of space on Manhattan’s Upper East Side (serving) about 6.2 million visitors a year…(of which) more than 100,000 New York City school children visit the museum free each year…20 percent of visitors are city residents, and similar percentages are from the tri-state area and the rest of the country. The remaining 40 percent are international tourists…’the average voluntary admission (fee) is about $10. It costs us about $50 per person to run the museum’…According to its most recent financial statement, the museum’s annual revenues are $345 million-10 percent from ‘pay-as-you-like’ admissions, 10 percent from membership fees, 7.5 percent from city subsidies and 25 percent from profits generated by its $2.5 billion endowment. The rest come from charitable donations” [see Bedell, Met Museum’s ‘Pay What You Wish’ Policy Is Upheld, New York Law Journal (2/6/2015)].

This week’s article discusses the case of Saska v. The Metropolitan Museum of Art [42 Misc. 3d 548 (2013), affirmed 2015 WL 463764 (2015)] and addresses the question of what should be the admission charge to enter the Met, if any? Should it be “free of charge” as originally intended when the Met began operations in the 1870s or “pay what you wish but you must pay something” [See Bedell, supra, “Patrons now are asked to pay a ‘suggested’ admission price of $25 per adult”], the first admission charge being authorized 100 years later in the 1970s.

The Case

In the consolidated cases before the New York State Supreme Court (J. Kornreich) of Grunewald v. The Met and Saska v. The Met, the plaintiffs asserted, inter alia, causes of actions including (1) breach of the 1878 lease between the Met and the City (asserted as purported third party beneficiaries) by failing to provide free admission; (2) violation of Chapter 476 of the Laws of 1893 (the 1893 Act) by charging admission; (3) violation of GBL (New York State General Business Law) section 349 regarding admission costs [for a discussion of GBL section 349 see Dickerson, Consumer Protection Chapter 98 in Commercial Litigation In New York State Courts: Fourth Edition (Robert L. Haig ed.) West & NYCLA (2015)], (4) misrepresentation regarding admission costs. In response the Met sought to dismiss the first two causes of action based upon the 1893 Act and the 1878 lease.

At The Creation: The Act And The Lease

As noted by the Court in Saska “On July 21, 1853 Central Park was created…On April 18, 1870 the New York State Legislature created the Museum ‘for the purpose of…encouraging and developing the study of the fine arts, and the application of arts to manufacturing and practical life, of advancing the general knowledge of kindred subjects and, to that end, of furnishing popular instruction and recreation…On April 5, 1871, the Legislature authorized the Parks Department to build the Museum in Central Park…In 1892 the State Legislature authorized “funding of up to $70,000 each year for the Museum…provided the Museum ‘be kept open and accessible to the public hereafter free of all charge throughout the year”. Regarding the Lease it was executed in 1878 “whereby the City granted a perpetual, rent-free lease to the Museum (which provided that it) be kept open and accessible to the public free of charge ten o’clock AM until half an hour before sunset”.

The “Serious Budget Deficit”

“In 1970, to address a serious budget deficit, the Museum sought to charge an admission fee so that it could continue to provide the same level of public access in a fiscally responsible manner (which the City approved subject to conditions such as) [t]he amount of the admission fee is left entirely to the individual’s discretion and that advice to that effect be conspicuously posted (and) [t]he proceeds derived from this program shall be used by the Museum for operating expenses only”.

Paying Only One Cent

Starting in 1970s the Museum’s policy has been to post signs which read “Pay what you wish but you must pay something”. In 1975 Thomas Hoving, the Museum’s Director, responded to a letter from the Commissioner of the Parks Department inquiring about the admission fee sign. “Over the years since we instituted the discretionary admissions policy, we have from time to time had visitors who insist upon their right to pay one cent. Under the policy this is perfectly permissible, although of course it does nothing to achieve our purposes of keeping down the annual deficit in operating funds. Most of our visitors are more generous and appreciative, however, so that the average contribution from those not admitted free anyway (such as members, students, children, persons over age 65, servicemen, etc.) fluctuates between about $.85 and $.95 per person”.

The Decision

“[T]he relevant inquiry is whether plaintiffs have standing to sue the Museum for its failure to admit all members ‘free of charge’ which they argue violates the 1893 Act and the…Lease. The Museum contends that (1) there is no private right of action under the 1893 Act and (2) defendants cannot sue for beach of the Lease as third-party beneficiaries. The court agrees with the Museum on both issues”.

The Reality Of Modern Times

“It is clear that plaintiffs are part of the class which the 1893 Act was intended to benefit. Indeed, the 1893 Act was intended to benefit both plaintiffs and the Museum. Specifically, it was enacted to educate and enlighten New York City’s citizenry, foster commerce and trade and provide funding to the Museum so that it could afford to provide free access to the public. However, by 1970, inflation, legislative inaction and budgetary constraints eroded the efficacy of the 1893 Act’s goal. By that point, and even more so today, $70,000 was simply not enough to fund the cost of providing free access to the public while maintaining the quality and quantity of the Museum’s vast art collection…the real question is whether the goal of the 1893 Act-providing a mechanism to make access free for the public and affordable for the Museum in order to educate and foster commerce-is furthered by allowing plaintiffs to stop the Museum from charging admission, when doing so would put the Museum’s ability to provide the current level access in jeopardy. The answer is no”.

Nudging Visitors To Donate

“All members of the public can afford to visit the Museum under the present scheme. For those without means, or those who do not wish to express their gratitude financially, a de minimus contribution of a penny is accepted. Admission to the Museum is de facto free for all. Actual access, provided in a way that ‘nudges’ visitors to donate, is not incompatible with the 1893 Act. Such a policy furthers the goal of the 1893 Act-providing sufficient funding to ensure access to all. On the other hand, plaintiffs’ lawsuit, at best, would undermine the ability of the Museum to provide free access…At worst, it might well push the Museum to charge for exhibitions, which might include a substantial percentage, if not the majority, of the art on exhibit. A large part of the Museum’s operating funding would be cut and the objective of educating the public and encouraging commerce undermined”.

The author, Justice Dickerson, been writing about Travel Law for 38 years including his annually-updated law books, Travel Law, Law Journal Press (2014), and Litigating International Torts in U.S. Courts, Thomson Reuters WestLaw (2014), and over 300 legal articles many of which are available at www.nycourts.gov/courts/9jd/taxcertatd.shtml .

This article may not be reproduced without the permission of Thomas A. Dickerson.

About the author

Avatar of Linda Hohnholz

Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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