California today – where next?
California is – for better or worse – a trend-setter, even in law. A good example is the California Resale Royalty Act of 1976. The provisions of this state law are unique to the United States, but are well established in some European countries. Artists who qualify must be, at the time of sale, a US citizen or resident in California for at least two years. Briefly, a seller (who resides in California or where the sale takes place there) must pay an artist or their estate five percent of the resale price, although certain sales by an art dealer are not considered a triggering event. Artworks specifically noted are original paintings, drawings, sculpture, or glass.
If a gallery or auction-house cannot find the artist in 90 days after the sale, royalty payments are sent to the California Arts Council, which can use the money for Art in Public Places if it is not claimed in seven years. The limiting factor is that the art must be sold in the artist's lifetime, or within 20 years of the artist's death. The art must be sold for more than the dealer paid, with a gross price of over $1,000 or traded for objects with that market value.
If the legal title to the art remains with the artist, the law does not apply. The law also does not apply if the sale is between dealers during a 10 year period. Clearly law introduces paperwork, but many visual artists suggest that such a law is in keeping with other intellectual property laws, such as copyright. Copyright protected works in many countries are protected for the life of the artist plus 70 years.
On Tuesday 18 October 2011 a group of painters including Chuck Close, the heirs of abstract expressionists Sam Francis and sculptor Robert Graham filed lawsuits against Sothebys and Christie's in the US District Court in Los Angeles. The group alleges that the auction houses are not telling the winners that they will have to pay royalties.
Further, the suits allege that the two auctioneers are concealing the location of some of their sellers, who as California residents are liable to pay royalties. The case could not come at a better time for various arts groups who are lobbying for an expansion of a law similar to that in California to the federal level. Particularly if the case gains class action status, it could become a lengthy battle.
The auction-houses claim that the charges are lack merit and that the case will be vigorously defended but critics point out that an expansion of such laws to other states, or the federal level, could have a dampening effect on art sales.
Murray Eiland