We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
In the same era Gerald Ford advised his fellow Americans that
"our long national nightmare is over," as he succeeded
Richard Nixon as president, the California Legislation enacted the
sloppily-drafted California Resale Royalty Act, Civil Code Section
986. The act was not exactly a nightmare, in truth it slumbered for
most of its thirty-plus lifetime. It seemed more honored in the
breach than the observance. Recent awareness of the resale royalty
obligation, though, has caused confusion and consternation for
California sellers, for California artists and for the art trade
nationwide. Some have, in fact, described it as a nightmare. As of
late last week, the nightmare may be over.
On May 17, Judge Nguyen, the newly-appointed judge to the U.S.
Ninth Circuit Court of Appeals, issued her District Court ruling in
the class action lawsuit brought by a class of artist against
auction houses Christie's, Inc. and Sotheby's, Inc., and
internet auctioneer eBay, Inc., alleging that the defendants sold
their artwork at California auctions and on behalf of California
sellers, but failed to withhold royalties due.
In short, Judge Nguyen ruled that the statute violated the
Commerce Clause because it expressly sought to regulate conduct
beyond the California borders. The court struck down the statute in
its entirety as unconstitutional.
There remains the likelihood that plaintiffs will appeal the
action. They have 30 days to file notice of appeal (so the decision
is not yet final); and while it's not over until it's over,
we are close to conclusively resolving the matter. On a related
note, actions under the statute are pending against certain
defendant galleries, and rulings have not been issued in those
cases.
Enacted in 1976 and effective in 1977, the Resale Royalty Act
states that an artist shall be entitled to a royalty upon the
resale of the artist's work of art provided that (a) the artist
at the time of the sale is a United States citizen or has been a
California resident for at least two years; (b) the seller resides
in California or the sale takes place in California; (c) the work
is an original painting, drawing, sculpture or original work of art
in glass; (d) the work is sold by the seller for more money than
she or he paid; (e) the work is sold for a gross price of more than
$1,000 or is exchanged for one or more works of art or for a
combination of cash, other property, and one or more works of fine
art with a fair market value of more than $1,000; and (f) the work
is sold during the artist's lifetime or within 20 years of
artist's death.
Finally, at the federal level, legislation proposing a
nationwide artist resale royalty is currently making its way
through the U.S. Congress. In an election year, most think
there's not a glimmer of hope for passage. As we noted in our
October blog article on this subject, we will continue to monitor
these lawsuits. Please stay tuned.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Last week, by virtue of a 63-30 procedural vote, the Senate moved forward with a bill called the Marketplace Fairness Act, with a final Senate vote set for May 6, according to The Wall Street Journal.
Corporate tweeters or bloggers – employees who post promotional and often entertaining commentary on behalf of their employers’ businesses – add much of their own personal brand – their voice, their opinions, their snarky remarks – to the information they are disseminating on the company’s behalf.
No blog can really take itself seriously unless it's written about Lindsay Lohan. Plus our Marketing Department claims she'll do wonders for our search rankings.
In a First Report and Order, Further Notice of Proposed Rulemaking and Notice of Inquiry released at the end of March in a proceeding begun in 2003, the Federal Communications Commission continued its comprehensive review of its rules, policies and procedures governing radiofrequency radiation and limits on exposure to human beings.
