Several prominent artists seeking a cut of the profits from their works’ resale under a novel California law have been dealt another setback.
U.S. District Court Judge Michael Fitzgerald denied a motion Friday to reconsider his April dismissal of the case. The denial sets up a likely appellate court battle that could determine the fate not just of the plaintiff artists’ resale royalties, but of the underlying statute.
The law at issue, the California Resale Royalty Act, allows for some artists to collect a five percent royalty fee on the sale of their work on the secondary market. While the law has been trimmed by an appellate court ruling last year, Fitzgerald’s decision, if upheld by the 9th U.S. Circuit Court of Appeals, could effectively moot the entire statute.
The artists' attorneys said the matter was always heading for an appellate court and that they respected Fitzgerald's decision.
"We have enormous respect for Judge Fitzgerald's decision, which itself states what all counsel involved here know – that this is a matter destined for resolution before the Ninth Circuit," said Ira Bibbero, a partner at Browne George Ross in Century City, representing Close, Dill, and the others.
The case was filed in October 2011 by artist including Chuck Close and Venice-based artist Laddie John Dill alleging Christie’s, Sotheby’s, and eBay Inc. all owed them royalties under the California law. The law was passed in the mid-1970s as part of an effort to insulate artists from art market profiteering.
If the case is upheld on appeal, the only way to save a resale royalty provision would be to enact federal legislation, the plaintiffs’ lawyers said after Fitzgerald’s April ruling.
“Either there would have to be a national resale royalty law adopted by Congress or an amendment made to the Copyright Act,” said Michael Bowse, another partner at Browne George Ross.
Jason Russell, a partner at Skadden Arps Slate Meagher & Flom LLP in downtown who represents Christie’s, declined to comment.