The California Resale Royalty Act (Civil Code section 986) entitles artists to a royalty payment upon the resale of their works of art under certain circumstances.
The law is based on the French ideal that artists have certain moral rights in their works. The particular right upon which the California Act is based is the droit de suite or “art proceeds right.”[1]
The droit de suite was first proposed in Europe around 1893, in response to a decrease in the importance of the salon, the end of the private patron, and to champion the cause of the “starving artist.” California’s droit de suite statute, the California Resale Royalty Act, was enacted in 1976.[1] California is the only state that requires royalties to be paid. Legal challenges have argued that this is a copyright issue, but according to the Copyright Office’s 1992 study, it was “not persuaded that sufficient economic and copyright policy justification exists to establish droit de suite in the United States.” This is backed up by Stanford law professor Mr. John Henry Merryman, who states that “the realization of a work of art is in exhibition, not in duplication.” The law was implemented after Robert Scull sold Robert Rauschenberg’s 1958 painting “Thaw” in a 1973 auction for $85,000 when he bought it for only $900.[2] It applies to all works of fine art resold in California, or resold anywhere by a resident of California, for a gross sale of $1000 or more. It mandates a five percent royalty on the resale price of any work of fine art. An artist may only waive this right “by a contract in writing providing for an amount in excess of five percent of the amount of such sale.” [1]
At least one scholar has proposed that this law is unconstitutional in that it effects a Fifth Amendment "taking of private property."[1]
The law has already endured two legal challenges. Since the law was implemented in 1976, about 400 artists have received a total of $328,000. The law is currently the subject of three class-action suits, where artists Chuck Close, Laddie John Dill, and Robert Graham are claiming that Sotheby’s, Christie’s, and eBay are not paying royalties. [3]
Opponents of the law claim that it can hurt new artists selling their work into the primary market.
“Artists File Lawsuits, Seeking Royalties.” The New York Times. 1 Nov. 2011. Web. 3 Nov. 2011. http://www.nytimes.com/2011/11/02/arts/design/artists-file-suit-against-sothebys-christies-and-ebay.html?pagewanted=2&sq=copyright&st=cse&scp=4