Knoedler v. Wildenstein

Longstanding rivalry between two of the world's biggest art dealers broke into open hostilities last week when Manhattan's 110-year-old firm, M. Knoedler & Co., filed suit against its archcompetitor, Wildenstein & Co. Inc., for unfair competition growing out of wiretapping. The suit, filed in Manhattan's Federal Court, charged violation of the Federal Communications Commission Act, asked $500,000 in damages.

Knoedler's suit was an outgrowth of the conviction last December of John G. Broady, Manhattan lawyer and private eye (TIME, Dec. 19), on wiretapping charges. Among Broady's clients: a Wildenstein Vice President, Emmanuel J. Rousuck, 55. In court testimony, Rousuck --as an individual--admitted hiring Wiretapper Broady to put a bug on the telephone of Art Dealer Rudolph Heinemann, who frequently works with Knoedler's in top-drawer transactions. For a payment of $125-$!50 a week, testified Rousuck, he received recordings of Heirtemann's telephone calls over a period of some six months. But, he added, the wiretap service was largely a waste of money.

Knoedler's, in its suit last week, charged otherwise: "The defendants obtained much information which . . . was of a confidential character, and the defendants used such confidential information to compete unfairly . . . The possession and use by defendants of such confidential information caused [Knoedler] serious injury in its business, good will and reputation . . ." Wildenstein's lost no time in sniping back: "The Wildenstein Galleries have never engaged in any wiretapping, and there was no evidence in the Broady trial to show that Wildenstein had participated in any way in the wiretapping. It would appear that Knoedler has instituted this action for selfish business reasons .

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