A federal judge has declared the 1977 California Resale Royalty Act unconstitutional.
at the US District court in Los Angeles on May 17 described the
decision to strike down a highly controversial, widely
misunderstood and little enforced state law as "a major
As reported in ATG No 2014, in November 2011 a group of
powerful American artists filed class action lawsuits against Christie's and Sotheby's
complaining that the auction houses had violated the 35-year-old
Under the 1977 California law - unique in the US but similar to
Artist Resale Right laws in the UK - any person selling an
artwork by an artist who is either alive or has been dead for less
than 20 years must give the artist or the artist's estate five per
cent of the sale's proceeds.
The law applies to both works of art sold in California and
those sold outside the state by a California resident. It applies
only to fine art - defined here as "an original painting,
sculpture, or drawing, or an original work of art in glass".
Editioned photographs and prints are not included.
The lawsuits alleged that the New York auctioneers routinely
violate the Resale Royalty Act by purposefully concealing the
identities and residencies of sellers who live in California,
thereby getting around paying artists or their estates a
Certainly the act is seldom enforced: only around 400 painters
and sculptors have received a total of $328,000 in resale royalties
Hoping to change this, the New York painter Chuck Close, the Los
Angeles artist Laddie John Dill and the estates of Los Angeles
sculptor Robert Graham and the Santa Monica painter and printmaker
Sam Francis were the lead plaintiffs in the class action suit -
only the second fully litigated case on the Resale Royalties Act in
its 35-year history (the other was in 1981). The auction houses,
however, have long believed the act was subject to serious legal
challenges and had been looking forward to their day in court.
Their lawyers argued that California's law violates the Commerce
Clause of the U.S. Constitution because it is an attempt by one
state to control commerce outside its borders.
In granting a motion by Christie's and Sotheby's to dismiss the
class-action suit Federal Judge Jacqueline Nguyen agreed. "Under
its clear terms, the (Resale Royalties Act) regulates transactions
occurring anywhere in the United States, so long as the seller
resides in California.
"Even the artist, the intended beneficiary of the CRRA, does not
have to be a citizen of, or reside in, California," Nguyen
"For these reasons, the court finds that the (law) has the
'practical effect' of controlling commerce 'occurring wholly
outside the boundaries' of California even though it may have some
'effects within the state'. Therefore, the (law) violates the
Representing the plaintiffs, Los Angeles attorney Eric George
said the matter was not over: "For a single federal judge to
invalidate the law, more than 35 years later, and without allowing
any evidence to be taken, marks a departure from established
"We are confident, as both sides have always believed, this case
will ultimately be resolved by the Ninth Circuit Court of Appeals,
which already upheld this very statute in 1981."
California is the only state in the USA that has such a law,
although the country's main copyright and licensing collecting
agency is pushing to see the debate over pan-American artists'
resale rights revived on Capitol Hill.
Supported by Bruce Lehman, ex-US Commissioner of Patents, and
Senator Herbert Kohls from Wisconsin, the Artists' Rights Society
hope to bring an abridged version of resale rights into federal
It would apply only to art sold by auctioneers with a turnover
of more than $25m and only for sales over $10,000. Dealers and
internet auctioneers would not be affected.