I can’t believe I am just writing about this wonderful ethics saga from 2005 now, after it had been sitting in my files for all this time. The story has everything: fine art, cowboys, nasty tycoons, fraud, irony, lawsuits, unethical lawyers and condign justice.

In 1972, Steve Morton, heir to the Morton Salt fortune and a noted California art collector, bought the 21-by-27-inch watercolor above, “”Lassoing a Longhorn,”  from the Kennedy Galleries in New York for $38,000. The Kennedy Galleries had purchased it from the Amon Carter Museum of Fort Worth, Texas, which had acquired it from its founder, Amon Carter, a collector of western art. The painting was signed by Charles Russell, along with Frederic Remington recognized as the master of Wild West fine art.  Morton decided to sell the painting in 2001, as the value of Russell painting had ballooned.He arranged to have the Coeur d’Alene Art Auction in Reno, Nevada handle the sale, and as was their practice, the auction house had the painting appraised.

Before agreeing to sell the painting, the auction house contacted Western art expert Steve Seltzer to examine the work, and he announced that it wasn’t a genuine Russell at all. He concluded that it was forgery by a a lesser-known western artist who forged Russell’s signature on the painting. If anyone would know, Seltzer would: the forger was his own grandfather, O.C. Seltzer.

Morton was furious: not only did Seltzer’s verdict (which he gave without compensation) reduce the value of his property from about $800,000 to an estimated $80,000, it also made him look like a fool. So, as rich guys are wont to do, he hired a big law firm, Gibson Dunn & Crutcher, to do some dirty work for him. Their assignment: push, threaten and harass Steve Seltzer into declaring that the painting was an original Russell after all. The firm drafted and sent letters to Seltzer, demanding that he publicly  recant his opinion, or else, or else being that they would sue him, break him, and ruin his reputation.

Seltzer, no weenie he, refused. So the firm filed Morton’s suit in July 2002 – claiming that Seltzer’s opinion was “untrue,” that it “destroyed the sellability of the painting, blemished irreparably its authenticity, defamed the provenance and authenticity of the painting,” and lowered its value by more than 95%. The complaint alleged defamation, negligence and interference with business dealings, and sought $750,000 in damages

This is what is known as an “unethical law suit.” The firm had nothing to back up its claims. In fact, every art expert they could find agreed with Seltzer, and not only that, reacted by saying, in essence, “Are you kidding? This guy is the world’s expert on his grandfather’s paintings, and you’re challenging him? Are you nuts?” Then the same experts signed affidavits for Seltzer stating that his assessment was correct.

Well, Morton and his mercenaries weren’t that nuts. After discovering that no one would back Morton’s desperate claims, the firm dropped the suit. Then Seltzer sued Morton, alleging that Morton and his attorneys had filed the federal suit solely in an attempt to force Seltzer to recant his position, and had committed malicious prosecution and abuse of process.

That lawsuit went to trial, and a disgusted Montana jury sided with the art expert.. It awarded Steve Seltzer $21.35 million for the damage done to his reputation as an art appraiser, but the best part is that the bulk of the award was in punitive damages against Gibson Dunn & Crutcher: $20 million worth.

Ordering the law firm to pay was the jurors’ way of sending a “loud and clear message,  Seltzer’s lawyer said. “The reason it’s high is because their conduct was so terrible.” Yet a lawyer or law firm being held financially liable for doing a clients’ bidding is extremely unusual. On appeal, the jury’s verdict held, but the punitive damages were reduced to just under $10 million, still a substantial hit to the firm. The message was delivered, but in case they weren’t paying attention:

• Rich clients often persuade lawyers to abandon ethics and good judgment. An ethical firm would have looked at the facts objectively and told Morton, “No.”
• I can find no record of the lawyers being disciplined. They should have been.
• Such penalties should be levied against lawyers more often. The argument against such awards is that it might undermine the right to legal representation. But there is no right to abuse process and to use financial resources to intimidate and bully.