Ninth Circuit to hear Artist’s Resale Rights Appeal

In 2001 a number of artists including Chuck Close, Laddie John Dill, and the estates of Robert Graham and Sam Francis brought suit against auction houses and eBay to receive royalties they had been owed under California’s Resale Royalty Act. That Moral Rights legislation provided that visual artists should receive 5% of the resale price when their work was resold by a California resident, or resold in the state of California for more than $1,000. The District Court struck down the law as unconstitutional on the grounds that commerce like this must be regulated at the federal level under the Commerce Clause to the Constitution.

Now comes word that the case has been appealed to the Ninth Circuit Court of Appeals, and in an unusual move the 9th Circuit will hear the appeal en banc, meaning that instead of a typical 3-judge panel, a panel of what will likely be 11 judges will hear the appeal. Unfortunately for art law fans and those interested in the policy implications of a moral rights regime, the appeal will probably have relatively little to offer in terms of arts policy. Rather the Ninth Circuit will attempt to resolve is a bit more mundane, as explained by Nicholas O’Donnell:

The question to the parties was framed as a question about a possible conflict in earlier caselaw, and likely explains why the Court took the case en banc, not that it foretells anything specific about the likely outcome.

The potential conflict in Ninth Circuit law is between two recent cases. Rocky Mountain Farmers Union v. Corey concerned California’s fuel standards and efforts to regulate carbon dioxide output, California’s Low Carbon Fuel Standard (Cal. Code Regs. tit. 17, §§ 95480–90 (2011)). In Rocky Mountain, the Ninth Circuit held that the law’s provisions were not facially discriminatory to out of state ethanol, nor discriminatory in purpose or effect against either that ethanol or against crude oil.

By contrast, Ass’n des Eleveurs de Canards et d’Oies du Quebec v. Harris affirmed the District Court’s denial of a motion to preliminarily enjoin the State of California from enforcing California Health & Safety Code § 25982, which bans the sale of products that are the result of force feeding birds to enlarge their livers beyond normal size. The plaintiffs, non-California entities that raise ducks for slaughter, argued that the law discriminated against them as out of state actors, but the Ninth Circuit allowed the law to be enforced.

Estate of Graham v. Sotheby’s Inc., 860 F. Supp. 2d 1117 (Dist. Court, CD Cal. 2012).

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