All You Need to Know About the Right of Resale Lawsuits

Starts right here.

We posted last week on the two “right of resale” lawsuits, where a group of artists, including Chuck Close, filed two lawsuits on  October 18, 2011 with the U.S. District Court for the Central District of California asserting their rights under the California Resale Royalty Act of 1976 that would force sellers of their work to a share a percentage of the revenue when the artists’ works were resold. The lawsuits are, Estate of Robert Graham v. Sotheby’s Inc. (C.D. Cal.No. 2:11-cv-08604-JHN-FFM), and Sam Francis Foundation v. Christie’s Inc. (C.D. Cal.No. 2:11-cv-08605-SVW-PJW).

The Bureau of National Affairs has an interesting take, arguing that the California statute may implicate the Fifth Amendment’s Takings Clause:

Should these claims be substantively addressed, the court would have to reconcile them with the [Copyright Act’s] first sale doctrine, 17 U.S.C. §109(a), which gives a creator no rights to control the subsequent disposition of copies of works once they have been sold off. It might also implicate the Takings Clause of the Fifth Amendment of the U.S. Constitution, which prohibits the government from taking private property for public use without compensation.

Here’s the part of the Fifth Amendment that may apply here:

No person shall … be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation

Not sure what’s going on, or what the California statute is about? Check out Andrew Russeth’s overview over at GalleristNY. For a helpful outline of the Takings Clause, take a look at this chart.

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