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Christie’s, Sotheby’s, Ebay Try To Block Ninth Circuit Royalty Act Rehearing

Sotheby's

Sotheby’s.

Last Friday in San Diego, a joint effort between Christie’s, Sotheby’s and eBay attempted to move the Ninth Circuit Court of Appeals away from rehearing a class of artists’ appeal to their challenge of the California Royalties Act, Law360 reported Monday.

The contentious back-and-forth between artists and auction houses in California stems from a 2011 class action the artists brought against Christie’s, Sotheby’s, and eBay, stating that under the Royalties Act, which pays artists 5 percent of the resale price on a work of art, all three houses owed artists revenue. Following the lawsuit, the act was found unconstitutional in 2012 under the federal Commerce Clause, which says that only Congress may regulate inter-state commerce, since many California art sales transact across state borders.

The artists took the case to a Ninth Circuit panel this past April but on Friday sides representing the auction houses tried to stop the case from going to the Ninth Circuit proper, stating that two other cases regarding the sale of foie gras and fuel standards sufficiently established the court’s opinion on certain aspects of inter-state commerce.

From Law360:

“Both the Supreme Court and the Ninth Circuit, in an unbroken line of cases, have made clear that states may not directly regulate transactions that occur beyond their borders or use their regulatory powers to control out-of-state conduct,” Christie’s said in its brief.

Whether the artists will continue to have their day in court remains to be seen.

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