With blood, sweat, and tears, a quartet of California artists pursued their vision, winning over decades international critical attention and praise for their paintings and sculptures. But should these creators also be allowed more insight into their dealers’ pricing and a share of the rising profitability of their one-of-a-kind works?
No, a federal appellate court in California has at long last decided, declining to allow in American law the so-called “moral right” that has been embraced internationally: droit de suite (French for “right to follow”).
Under this “right,” which the Golden State pioneered and became the only state to adopt as the 1977 California Resale Royalty Act (CRRA), the court noted: “[A]rtists receive a royalty each time the original, tangible embodiment of their work is resold. The practice was first recognized in France in 1920 and then adopted in other civil law jurisdictions. More recently, a number of common-law jurisdictions have adopted some form of the droit de suite. In those countries that recognize it, the droit de suite is
considered a moral right, albeit one with economic value.”
The CRRA provided that a seller of art in the secondary market must pay a resale royalty of 5 percent, if the seller resided in California or the sale took place in California, as long as the artist was a U.S. citizen or California resident.
But artists came to recognize that this act was rarely enforced, and big dealers, the creatives claimed, were less than forthcoming about later sales of creative works. Their frustration boiled up when, knowing their pieces had become exponentially more valuable over time, the works also found new markets online and artists had no idea where their pieces were going, for what prices, and to whom.
This led to lawsuits from foundations and estate representatives of renowned painter Sam Francis and sculptor Robert Graham, as well as Chuck Close, a painter and photographer (shown at work in photo above), and Laddie John Dill, a “light sculptor.” They sued major dealers, including Christie’s, Sotheby’s, and eBay, accusing them of violating the CRRA and owing them royalties.
The case took lawyers, judges, and the courts through an extensive examination of copyright law and droit de suite.
In a previous round, the dealers asked the courts to consider whether the CRRA and the artists’ claims conflicted with the Commerce Clause of the U.S. Constitution. These arguments were dismissed at the federal district level and went up on appeal, where a three-judge panel heard arguments but balked at issuing a ruling. Instead, the appellate court ruled en banc, tossing big parts of CRRA over how it tried to extend California regulation of art sales beyond the state’s borders.
In this round, the dealers turned to yet another argument, contending the artists’ claims were preempted by the Federal Copyright Act of 1976. That argument prevailed against other aspects of the remaining lawsuit, in the U.S. Court of Appeals for the Ninth Circuit, with judges Danny J. Boggs, Jay S. Bybee, and Paul J. Watford presiding.
Bybee wrote for the court, noting that the California law was passed about the same time the U.S. Congress amended the Copyright Act. Under the first sale doctrine, codified in the 1909 Copyright Act and reaffirmed in the 1976 Copyright Act, an artist has the right to receive payment on the first sale only. That conflicted with the CRRA granting artists the right to receive a percentage payment on all sales of artwork after the first sale.
“The CRRA,” Bybee explained, “is designed precisely to alter the first sale doctrine by affording artists a right to at least some measure of payment on every sale after the first. At the same time, the CRRA also restricts the federal distribution right by forbidding artists from fully alienating copies of their artwork. In effect, the CRRA creates an inalienable restraint on alienation.”
Artists who sold major paintings or sculptures in California in 1977 caught a lucky break under the CRRA’s royalty rules: The appellate judges found that those sales were not expressly preempted, nor were they preempted by conflict preemption. The affected sales occurred between the CRRA’s effective date of Jan. 1, 1977, and the 1976 Act’s effective date of Jan. 1, 1978.
The Ninth Circuit’s droit de suite ruling is the second in recent months in which appellate judges considered conflicts between U.S. copyright law and international practices. The circuit, which holds sway over one of the nation’s leading region for entertainment (Hollywood) and intellectual property (Silicon Valley) recently booted an attempt to extend droit moral in American copyright. It’s the notion accepted in other countries that give creatives protections for their artistic reputations and others changing or using them to the detriment of their works’ integrity.