The US Copyright Office has been asked by Congress to review how the current copyright legal system affects and supports visual artists; and how a federal resale royalty right for visual artists would affect current and future practices of groups or individuals involved in the creation, licensing, sale, exhibition, dissemination, and preservation of works of visual art.
California Lawyers for the Arts responded with a statement emphasizing our strong support. CLA, then Bay Area Lawyers for the Arts, advocated for the passage of the California Resale Royalty Act, which was enacted in 1976 and went into effect in 1977.
Our organization has vigorously defended the law because we believe that it provides a important economic incentive as well as remuneration for visual artists whose work increases in value over time. In fact, more than 80% of the visual artists who responded to our recent survey said that the resale royalty is an important incentive for them to continue working as visual artists. Through US copyright protection, statutory and industry standards, musical, literary and performance artists benefit from the continuous resale of their works. Singularly, visual artists have not had a national framework for reaping such rewards. California remains unique in the nation in providing visual artists with the resale royalty, which was modeled on the European "droit de suite
California Civil Code Section 986, the California Resale Royalty Act (CRRA), provides that an artist is entitled to a resale royalty of 5% if the work is resold for a profit and for a gross sale price of at least $1,000. The royalty can only be waived in a written agreement for a higher royalty. The work must be an original work of visual art (defined as a painting, drawing, sculpture or original work of glass). The royalty is due if the seller resides in California or the sale takes place in California and the artist must be a US Citizen or a California resident for at least two years.
When a group of art dealers and collectors sued in federal court challenging the constitutionality of the CRRA in Morseburg v. Balyon v Mayer, BALA was an amicus
and provided the artist-intervenors with representation in an effort led by BALA Board Member Jack Davis and Hamish Sandison, then Executive Director. The US District Court upheld the law in 1978. Judge Robert Takasugi praised the law "as the very type of innovative lawmaking that our federalist system is designed to encourage. The California Legislation has evidently felt that a need exists to offer further encouragement to and protection of artists." In 1980, the US Court of Appeals affirmed the lower court's judgment.
Once again, the CRRA is being challenged in federal court. Artists Chuck Close, Laddie John Dill, and Robert Graham claimed in a lawsuit that Sotheby's Christie's and EBay were not paying royalties. On a motion to dismiss without any evidentiary hearings, US District Court Judge Jacqueline Nguyen held that the Act is unconstitutional based on the Commerce Clause of the US Constitution. L.A. attorney Eric George, who represents the plaintiffs in the class-action suit against the auction houses, told the LA Times
: “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 constitutional law. 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.”
Arguments that the requirement to pay resale royalties would drive the art business outside the state of California have not been validated over time. A federal resale royalty law will obviously eliminate any remaining arguments that the resale royalty interferes with interstate commerce. Furthermore, a federal law would align the United States with Article 14ter of the Berne Convention
, “Droit de suite” in Works of Art and Manuscripts, which provides the following:
(1) The author, or after his death the persons or institutions authorized by national legislation, shall, with respect to original works of art and original manuscripts of writers and composers, enjoy the inalienable right to an interest in any sale of the work subsequent to the first transfer by the author of the work.
(2) The protection provided by the preceding paragraph may be claimed in a country of the Union only if legislation in the country to which the author belongs so permits, and to the extent permitted by the country where this protection is claimed.
(3) The procedure for collection and the amounts shall be matters for determination by national legislation.
It is time for the United States to take its place in the community of nations on this issue.
Alma Robinson, Executive Director
California Lawyers for the Arts