Art collectors duped into buying works purportedly painted by famous artists including Jackson Pollock and Mark Rothko may proceed with their suit against the Knoedler Gallery LLC, a federal court said.

A change in corporate structure won’t allow Knoedler to escape liability, Judge Paul G. Gardephe wrote May 8 for the U.S. District Court for the Southern District of New York.

The court granted summary judgment on some claims in favor of Michael Hammer, the sole shareholder of the sole...