CA Resale Royalties Act Preempted by Copyright Act

On July 6, 2018, a panel of the Ninth Circuit ruled that California’s Resale Royalties Act only applies to art sales conducted prior to 1978.

​See this article about the decision from The New York Times: California Tried to Give Artists a Cut. But the Judges Said No

See below a synopsis of the opinion. BYBEE, Circuit Judge:

The California Resale Royalties Act ("CRRA") grants artists an unwaivable right to 5% of the proceeds on any resale of their artwork under specified circumstances. To that end, the CRRA requires the seller of the artwork or the seller's agent to withhold 5% of the resale price and pay it to the artist or, if the artist cannot be found, to the California Arts Council. If the seller or the seller's agent fails to pay the 5% resale royalty, the artist may bring an action for damages.

Plaintiffs are artists and their successors in interest seeking resale royalties under the CRRA from the statute's effective date of January 1, 1977, to the present. The issue in this case is whether plaintiffs' claims are preempted by federal copyright law. The district court held that they are, as a matter of both express and conflict preemption.

We affirm in part and reverse in part. Plaintiffs' CRRA claims covered by the 1976 Copyright Act—i.e., those concerning sales postdating the 1976 Act's effective date of January 1, 1978—are expressly preempted by 17 U.S.C. § 301(a). We therefore affirm dismissal of those claims.

The 1909 Copyright Act, however, has no express preemption provision. As such, plaintiffs' CRRA claims covered only by the 1909 Act—i.e., those concerning sales that occurred between the CRRA's effective date of January 1, 1977, and the 1976 Act's effective date of January 1, 1978—cannot be expressly preempted. Nor are they preempted by conflict preemption. See Morseburg v. Balyon, 621 F.2d 972, 977-78 (9th Cir. 1980). Accordingly, we reverse dismissal of those claims and remand them to the district court for further proceedings.

National Resale Royalties for Visual Artists?

In a law review article published in the Cybaris Intellectual Property Law Review, CLA Executive Director Alma Robinson makes the case for federal legislation, which would allow US artists to receive resale royalties in more than 70 countries around the world.