Court to Reconsider California Resale Royalty Act

The Art Newspaper is reporting a US court will reconsider the previously ruled unconstitutionality of the California Resale Royalty Act. It is interesting news, especially given the reports coming out of England that similar laws are hurting art market sales, and not really helping artists and their families. The Art Newspaper also reports the full court will hear the case on December 15, and also, there is a pending bill in the US congress for a 5% artist resale royalty.

The Art Newspaper reports

A US court is due to reconsider the California Resale Royalty Act, which was deemed unconstitutional in 2012 after a high-profile lawsuit. The law, originally passed in 1976, gave visual artists 5% of the resale price when their work was resold by a California resident or resold in the state for $1,000 or more.

The artists Chuck Close, Laddie John Dill, the estate of Robert Graham and the Sam Francis Foundation sued the auction houses Sotheby’s, Christie’s and eBay in 2011 to recover unpaid royalties under the act. But their lawsuit backfired when the district court sided with the auction houses. The judge determined the law violated the US Constitution by attempting to govern commerce outside California.

The Ninth Circuit Court of Appeals is scheduled to rehear the case on 15 December. (Because of the case’s relationship to other recent decisions about interstate commerce, the appeal will be considered by the entire court, rather than a typical three-judge panel.) The artists have argued that the royalty should still govern in-state art sales even if it is not enforceable outside California. An attorney for Christie’s has said that such a decision would cause California’s art market to “collapse”.

A federal bill granting a 5% resale royalty—the American Royalties Too Act—is pending in Congress. A spokesman from Sotheby’s declined to comment and Christie’s did not immediately respond to a request for comment.

Source: The Art Newspaper