Chuck Close; Laddie John Dill, individually and on behalf of all others similarly situated, Plaintiffs-Appellants,
Sotheby's, Inc., a New York corporation, Defendant-Appellee. The Sam Francis Foundation; Chuck Close, individually and on behalf of all others similarly situated; Laddie John Dill, individually and on behalf of all others similarly situated, Plaintiffs-Appellants,
Christie's, Inc., a New York corporation, Defendant-Appellee. The Sam Francis Foundation; Chuck Close, individually and on behalf of all others similarly situated; Laddie John Dill, individually and on behalf of all others similarly situated, Plaintiffs-Appellants,
Ebay Inc., a Delaware corporation, Defendant-Appellee.
and Submitted April 10, 2018 Pasadena, California
from the United States District Court for the Central
District of California Michael W. Fitzgerald, District Judge,
Presiding D.C. No. 2:11-cv-08604-MWF-FFM,
Michael A. Bowse (argued), Ira Bibbero, and Eric M. George,
Browne George Ross LLP, Los Angeles, California, for
Dunning (argued) and John C. Dwyer, Cooley LLP, Palo Alto,
California, for Defendant-Appellee eBay Inc.
E. Maynard (argued), Morrison & Foerster LLP, Washington,
D.C.; Paul T. Friedman, Morrison & Foerster LLP, San
Francisco, California; Howard B. Comet and Steven A. Reiss,
Weil Gotshal & Manges LLP, New York, New York; for
Defendant-Appellee Sotheby's Inc.
K. Lloyd, Matthew E. Delgado, Hillary A. Hamilton, and Jason
D. Russell, Meagher & Flom LLP, Los Angeles, California,
for Defendant-Appellee Christie's Inc.
A. Hirsch, Keker Van Nest & Peters LLP, San Francisco
California; John J. Davis Jr., McCracken Stemerman, San
Francisco, California; for Amici Curiae California Lawyers
for the Arts and Peter Alexander.
Before: Danny J. Boggs, [*] Jay S. Bybee, and Paul J. Watford,
panel affirmed in part and reversed in part the district
court's dismissal of claims for resale royalties under
the California Resale Royalties Act, which grants artists an
unwaivable right to 5% of the proceeds on any resale of their
artwork under specified circumstances.
the dismissal in part, the panel held that plaintiffs'
CRRA claims concerning sales that postdated the 1976
Copyright Act's effective date of January 1, 1978, and
thus were covered by the 1976 Act, were expressly preempted
by 17 U.S.C. § 301(a).
in part, the panel held that CRRA claims concerning sales
that occurred between the CRRA's effective date of
January 1, 1977, and the 1976 Act's effective date of
January 1, 1978, were not expressly preempted, nor were they
preempted by conflict preemption. The panel remanded those
claims to the district court for further proceedings.
California Resale Royalties Act ("CRRA") grants
artists an unwaivable right to 5% of the proceeds on any
resale of their artwork under specified circumstances. To
that end, the CRRA requires the seller of the artwork or the
seller's agent to withhold 5% of the resale price and pay
it to the artist or, if the artist cannot be found, to the
California Arts Council. If the seller or the seller's
agent fails to pay the 5% resale royalty, the artist may
bring an action for damages.
are artists and their successors in interest seeking resale
royalties under the CRRA from the statute's effective
date of January 1, 1977, to the present. The issue in this
case is whether plaintiffs' claims are preempted by
federal copyright law. The district court held that they are,
as a matter of both express and conflict preemption.
affirm in part and reverse in part. Plaintiffs' CRRA
claims covered by the 1976 Copyright Act-i.e., those
concerning sales postdating the 1976 Act's effective date
of January 1, 1978-are expressly preempted by 17 U.S.C.
§ 301(a). We therefore affirm dismissal of those claims.
1909 Copyright Act, however, has no express preemption
provision. As such, plaintiffs' CRRA claims covered only
by the 1909 Act-i.e., those concerning sales that occurred
between the CRRA's effective date of January 1, 1977, and
the 1976 Act's effective date of January 1, 1978-cannot
be expressly preempted. Nor are they preempted by conflict
preemption. See Morseburg v. Balyon, 621 F.2d 972,
977-78 (9th Cir. 1980). Accordingly, we reverse dismissal of
those claims and remand them to the district court for
LEGAL AND FACTUAL BACKGROUND
The Droit de Suite
nations recognize the droit de suite,  under which
artists 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. See generally U.S.
Copyright Office, Droit de Suite: The Artist's Resale
Royalty (Dec. 1992) ("1992 Copyright Report");
U.S. Copyright Office, Resale Royalties: An Updated
Analysis (Dec. 2013) ("2013 Copyright
Report"); 2 Melville B. Nimmer & David Nimmer,
Nimmer on Copyright §§ 8C.04[A] & n.3 (rev.
ed. 2017) ("Nimmer").
droit de suite protects visual artists, who face
particular difficulty in capitalizing on their work. Literary
and recording artists can generally profit from their efforts
by controlling the reproduction of books or music. For visual
artists such as painters and sculptors, however, the right to
control reproduction is often not their principal source of
income. Rather, it is often the sale of their original work
that allows them to make a profit. The droit de
suite gives these artists an economic interest in
subsequent sales of their original work, thereby allowing
them to capture some of its appreciation in value after the
droit de suite also appears in international
copyright law. Since 1948, the Berne Convention has
recognized that artists possess an "inalienable right to
an interest in any sale of the work subsequent to the first
transfer by the author of the work." Berne Convention
for the Protection of Literary and Artistic Works art.
14ter(1), Sept. 9, 1886, as amended Sept. 28, 1979,
S. Treaty Doc. No. 99-27 (1986). Nevertheless, the Berne
Convention does not obligate its signatories to adopt the
droit de suite. Instead, the Berne Convention makes
the recognition of such rights optional, but rewards such
recognition with reciprocity: countries recognizing the right
will protect the right of each others' artists.
See Lee D. Neumann, The Berne Convention and
Droit De Suite Legislation in the United States: Domestic and
International Consequences of Federal Incorporation of State
Law for Treaty Implementation, 16 Colum.-VLA J.L. &
Arts 157, 159 (1992).
United States became a signatory to the Berne Convention in
1989, but to date, it has not adopted the droit de
suite. As early as the 1970s, Congress considered
adopting the droit de suite as part of U.S.
copyright law, but those efforts have never proved
successful. A droit de suite provision made its way
into an early version of the Visual Artists Rights Act of
1990 ("VARA"), but was removed from the bill that
Congress ultimately enacted. Compare S. 1619, 100th
Cong., 1st Sess. (1987), with VARA, Pub. L. No.
101-650, §§ 601-10, 104 Stat. 5089 (1990). Instead,
VARA directed the Copyright Office to conduct a study on the
feasibility of implementing such a right in the United
States. VARA § 608(b).
1992, the Copyright Office issued an extensive report
concluding that there was insufficient economic or
copyright-policy justification to adopt the droit de
suite in the United States. See generally 1992
Copyright Report. The report recommended that "[g]iven
potential problems of preemption, enforcement, and multiple
application, any droit de suite that is enacted in
the United States should be at the federal level."
Id. at vi; see also id. at 77-86. Two
decades later, members of Congress requested that the
Copyright Office revisit the issue, and the Copyright Office
issued a second report. See generally 2013 Copyright
Report. This time, in light of "the adoption of resale
royalty laws by more than thirty additional countries since
the Office's prior report," the Copyright Office
endorsed "implementation of a resale royalty right in