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Au Revoir, Droit de Suite—9th Circuit Narrows California Resale Royalty Act to a Single Year’s Sales

Posted by Nicholas O'Donnell on July 9, 2018 at 10:33 AM

The idea of moral rights continues to be a notable difference between European and American intellectual property rights with respect to visual arts. Last week’s decision by the U.S. Court of Appeals for the 9th Circuit in a case brought by artist Chuck Close and others addressing the California Resale Royalty Act (the CRRA) underscores those distinctions. In holding that the CRRA is mostly preempted by federal copyright law and thus can be applied to entitle artists to secondary royalties only for sales of art in a single calendar year—1977—the 9th Circuit affirmed the skepticism with which American law continues to regard anything other than classic copyright. Given the failure of efforts to pass national legislation to provide for resale royalties, this decision is probably the end of the line for the foreseeable future in the U.S. for droit de suite, the term of art used to describe the concept.

There is, for better or worse, clearly no political constituency for resale royalties in the U.S. As I told Law360, and as we’ve opined before about the Visual Artists Rights Act of 1990 (VARA), property rights are in many ways a quintessential American policy. We all reflected on the Declaration of Independence last week, and its proclamation of the primacy of Life, Liberty, and the Pursuit of Happiness—which revised John Locke’s famous statement that governments are instituted to secure “life, liberty, and property.” Copyright is and always will be a limitation on absolute ownership, but Americans guard those limitations jealously. There is little sign that will soon change.

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Topics: American Royalties Too Act, Chuck Close, Commerce Clause, Visual Artists Rights Act of 1990, Christie's, Cal. Civ. Code § 986(a), VARA, Rep. Jerrold Nadler (D-NY), Dormant Commerce Clause, Preemption, droit de suite, California Resale Royalty Act, U.S. Constitution, Sotheby's, eBay, CRRA, Declaration of Independence, Copyright Act of 1976, Morseburg v. Baylon, John Locke, Supremacy Clause, 1909 Copyright Act

California Resale Royalty Act Claims Dismissed as Preempted by Copyright Law, Despite 1980 Ninth Circuit Holding to the Contrary

Posted by Nicholas O'Donnell on April 13, 2016 at 11:21 AM

Just three months after the Supreme Court denied certiorari review of last year’s Ninth Circuit decision finding California’s Resale Royalty Act unconstitutional under the Dormant Commerce Clause in part—but also valid in part—the U.S. District Court in Los Angeles has ruled the entire law invalid as preempted by copyright law. Critically, the opinion relies on last year’s Ninth Circuit ruling on the Commerce Clause issue to overrule a 1980 Ninth Circuit case that expressly rejected the idea that the law was preempted. This core holding of yesterday’s opinion is hard to square with Ninth Circuit precedent, but that will be tested on appeal, for sure. As before, expect proponents of Congressional efforts to enact national legislation to use this decision as support for the idea that a federal solution is necessary, but those efforts have born little fruit to date.

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Topics: Legislation, Preemption, California Resale Royalty Act, Copyright

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

Copyright Office is Seeking Comment on Resale Royalty Legislation

Posted by Nicholas O'Donnell on October 24, 2012 at 1:46 PM

The Art Law Report’s very first post was on the revival of efforts to pass federal legislation on resale royalties, yet there was little movement after that. Earlier this year, the California Resale Royalty Act was struck down on constitutional grounds, a case now on appeal.

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Topics: Resale Royalties, California Resale Royalty Act, Copyright

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, eBay

Federal Legislation Proposed for Artists' Resale Royalties

Posted by Nicholas O'Donnell on December 22, 2011 at 11:08 AM

In place of rumored legislative efforts last summer, legislation has been formally introduced to codify under U.S. federal law droite de suite rights of resale for artists, under certain circumstances.

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Topics: Legislation, Stop Online Piracy Act, Resale Royalties, Freakonomics, droite de suite, Resale Royalty, Jerrold Nadler, Christie's, California Resale Royalty Act, Sotheby's, Herb Kohl, eBay

Christie’s and Sotheby’s Sued over California Resale Rights

Posted by Nicholas O'Donnell on October 20, 2011 at 5:56 AM

Christie’s and Sotheby’s were sued this week by several artists (including Chuck Close) as class action plaintiffs, alleging violations of California’s Resale Royalty Act. The Resale Royalty Act is one of the few statutes in the United States recognizing artists’ rights to some of the proceeds of the sale of their works, even after the initial sale, a concept known as droite de suite. As noted by the Art Law Report last month, there have been noises at the federal level about reviving droite de suite as it is used in Europe, but to date little concrete change has materialized. A useful definition of the idea can be found, with some irony, at the Christie’s website.

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Topics: Legislation, Chuck Close, Christie's, Collections, droit de suite, California Resale Royalty Act, Sotheby's

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About the Blog

The Art Law Report provides timely updates and commentary on legal issues in the museum and visual arts communities. It is authored by Nicholas M. O'Donnell, partner in our Art & Museum Law Practice.

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

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