Art Law Report

California Resale Royalty Act Ruled Unconstitutional as to Out of State Sales, What Effect on the Market?

Posted by Nicholas O'Donnell on May 6, 2015 at 6:53 AM

In a decision long awaited by artists and auction houses in particular, the Ninth Circuit Court of Appeals has ruled that the California Resale Royalty Act of 1976 (CRA)—America’s only droit de suite—is unconstitutional top regulate any sales of art outside of California. The court concluded, however, that that portion of the law is severable from the rest, and let the regulation of in-California sales stand for further interpretation by a subsidiary panel of the appeals court. There are two likely aftereffects of this decision. Galleries and auction houses can put any concerns to rest about sales in New York in particular, but one has to wonder about the effect it will have on putting items for sale in California, which will effectively have a premium not present in other states. It also raises the possibility that the resulting piecemeal framework will motivate movement on the pending federal bill (the American Royalties Too (ART) Act of 2015) concerning resale royalties. Could this be the development that prompts movement in Congress?

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Topics: Legislation, Resale Royalties, Chuck Close, Supreme Court, Christie's, Cal. Civ. Code § 986(a), Dormant Commerce Clause, droit de suite, sales tax, Cal. Redev. Ass’n v. Matosantos, use tax, American Royalties Too (ART) Act of 2015, California Resale Royalty Act, Copyright, Ninth Circuit Court of Appeals, Sotheby's, eBay

Full Ninth Circuit to Review California Resale Royalty Act En Banc

Posted by Nicholas O'Donnell on October 31, 2014 at 7:48 AM

Several weeks ago, the parties to the appeal over the constitutionality of the California Resale Royalty Act (CRRA) briefed the question about whether the Ninth Circuit Court of Appeals should hear the case, rather than a three-judge panel that would otherwise be assigned to the case. The Ninth Circuit granted the petition yesterday, meaning the appeal will now go before the full court.

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Topics: Legislation, Foie Gras, 538 U.S. 644, N. Randy Smith, 729 F.3d 937, Auction Houses, California Health & Safety Code § 25982, Chuck Close, 730 F.3d 1070, Moral Rights, Commerce Clause, Affordable Care Act, Ass’n des Eleveurs de Canards et d’Oies du Quebec, Judge Jacqueline H. Nguyen, Jerrold Nadler, Christie's, Research & Mfrs. of Am. v. Walsh, California Resale Royalties Act, Ethanol, Dormant Commerce Clause, 491 U.S. 324, U.S. Constitution, Copyright, royalties, Garcia, Ninth Circuit, Cal. Code Regs. tit. 17 §§ 95480–90, Sotheby's, Rocky Mountain Farmers Union v. Corey, Healy v. Beer Inst., Ferdinand F. Fernandez, eBay, Google, Mary H. Murguia

Have Some Foie Gras with Your Ethanol: Auction Houses Urge Ninth Circuit Not to Rehear California Resale Royalties Act Argument

Posted by Nicholas O'Donnell on September 23, 2014 at 8:43 AM

The defendants in the case on appeal over the constitutionality of California’s Resale Royalty Act have just briefed the court’s question about whether the full court should rehear the case. Responding to an order that the parties explain whether the case conflicts with recent Ninth Circuit precedent, Christie’s, Sotheby’s, and eBay all argued emphatically that no conflict justifies reinstating the law that a District Court struck down in 2012.

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Topics: Legislation, Foie Gras, Resale Royalties, 538 U.S. 644, N. Randy Smith, 729 F.3d 937, Auction Houses, California Health & Safety Code § 25982, Chuck Close, 730 F.3d 1070, Moral Rights, Commerce Clause, Affordable Care Act, Innocence of Muslims, Ass’n des Eleveurs de Canards et d’Oies du Quebec, Judge Jacqueline H. Nguyen, Christie's, Research & Mfrs. of Am. v. Walsh, California Resale Royalties Act, Ethanol, Dormant Commerce Clause, 491 U.S. 324, U.S. Constitution, Copyright, royalties, Garcia, Ninth Circuit, Cal. Code Regs. tit. 17 §§ 95480–90, Sotheby's, Rocky Mountain Farmers Union v. Corey, Healy v. Beer Inst., Ferdinand F. Fernandez, eBay, Google, Low Carbon Fuel Standard, Mary H. Murguia

California Law Struck Down as Unconstitutional: U.S. District Court Dismisses California Resale Royalty Act Case against Sotheby’s, Christie’s, and eBay

Posted by Nicholas O'Donnell on May 18, 2012 at 5:08 AM

Consistent with expectations after reports from the court hearing in March, the U.S. District Court in Los Angeles dismissed the case brought by artist Chuck Close and others that alleged violations of the California Resale Royalty Act (the “CRRA”) by Sotheby’s, Christie’s and eBay, and ruled that the CRRA is unconstitutional in its entirety. Similar claims against eBay were also dismissed in a shorter opinion referencing the Sotheby’s and Christie’s decision.

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Topics: Legislation, Resale Royalties, Chuck Close, Commerce Clause, Christie's, California Legislative Council, Dormant Commerce Clause, Collections, California Resale Royalty Act, Copyright, Jacqueline H. Nguyen, Sotheby's, intellectual property, eBay

California Resale Royalty Act Case Against Sotheby's, Christie's, and eBay to Be Dismissed?

Posted by Nicholas O'Donnell on March 14, 2012 at 5:11 AM

Donn Zaretsky at the Art Law Blog (whose prior commentary on the case gives excellent analysis of the Commerce Clause and other issues) reports that the U.S. District Court issued a tentative ruling at a hearing on Monday to dismiss the California Resale Royalty Act cases against Sotheby's, Christie's and eBay (Chuck Close is one of the plaintiffs). No written order has come down, but we will report and analyze when it does. This is big news; for the moment the case docket indicates only that the hearing took place and that the judge took the matter under advisement.

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Topics: Legislation, Donn Zaretsky, Resale Royalties, Chuck Close, Christie's, California Resa, Dormant Commerce Clause, Collections, Art Law Blog, Sotheby's, eBay

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