The debate over artist resale rights in the U.S. continues to intensify. In early 2010 artist Mark Grotijahn sued Los Angeles art collector Dean Valentine after he resold several of Grotjahn’s works at a profit without compensation to the artist. The California Resale Royalty Act (CRRA) states that any time a work of fine art is resold for $1,000 or more and either the seller resides in California or the sale takes place in California, the artist is entitled to five percent of the sale. With the case still pending a decision in the state court, Valentine unexpectedly agreed to pay all royalties, plus interest, as well as a portion of the attorney fees incurred by Grotjahn in order to settle the lawsuit. The settlement totaled just over $150,000, of which roughly $70,000 was allocated for royalty fees and $85,000 for Grotjahn’s legal fees.
This agreement between artist and seller has been struck at a time when Sotheby’s and Christie’s are themselves defending class action lawsuits brought against them in California for the same issue.
Just last month, the auction houses filed a joint motion to dismiss the cases arguing that the CRRA interferes with United States interstate and foreign commerce regulations. Among other objections, the auction houses maintain that the CRRA is “preempted by the Copyright Act of 1976” under which Congress had “the express objective of creating national, uniform copyright law by broadly pre-empting state statutory and common-law copyright regulation.” Online auctioneer eBay has also been sued, but has requested dismissal on the grounds that the website only serves as a platform for fine art sales and is not an actual sales agent.
The class action suits against Sotheby’s and Christie’s were filed in central California by a group of artists and estates, including the Sam Francis Foundation, the estate of Robert Graham and artists such as Chuck Close and Laddie John Dill. The suits target “the willful and systematic violation” by the respective defendants of the CRRA law. Los Angeles-based attorney Eric George explains to ARTnews that the ultimate goal of prosecution is to secure the same compliance of resale royalties that already exists in Europe.