Art Law Report

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.

Essentially, the issue raised by the defendants is whether California can pass a law concerning art re-sales that could affect commerce outside of the state. If it does, it could run afoul of what lawyers call the Dormant Commerce Clause to the U.S. Constitution. There is, in fact, no Dormant Commerce Clause. Rather, the affirmative grant of authority by the Commerce Clause to the U.S. Congress to regulate interstate commerce is taken, by negative implication, to preclude regulation of interstate commerce by the states. If that were the case, it wouldn't matter if the defendants violated the California Resale Royalty Act, because law would itself be unconstitutional. The case could then be dismissed at the preliminary stage.

Stay tuned for the final result and more discussion.

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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