Posts Tagged ‘art royalties’

Lawsuits Over Unpaid Artist Royalties

November 1, 2011

Whenever a work of fine art is sold and the seller resides in California or the sale takes place in California, the seller or the seller’s agent shall pay to the artist of such work of fine art or to such artist’s agent 5 percent of the amount of such sale.   (California Civil Code §986(a)).

As the New York Times reported today, as a class action plaintiff, Chuck Close  is suing auctioneers Sotheby’s, Christie’s and eBay in relation to the section of the California Art Resale Royalties Law quoted above. If an art seller resides in California, the obligation to pay the royalty may include sales that occurred outside of the boundaries of California as well, and potentially, some sales of American artwork that may have occurred outside of the country.

According to the report, two related lawsuits for failure to pay royalties to artists seek disclosure of the identities of art sellers–including sellers who live in California– and by extension, seek to identify sellers who did not pay the required 5% royalty to artists on profitable sales.   Knowledge of seller identities is critical for enforcing the law and ensuring that artists’ rights to the royalty payment have not been violated.  The information concealed by the auctions is, as attorney Eric George noted, “the very information necessary to know whether a royalty is due.”

The same article also notes that only a shockingly small sum of art royalties have been paid under the law– a mere $328,000 over 34 years.  Clearly not all who should have paid did so.

See Artuntitled.com for more information about the California Art Resale Royalties Law.

Friction as Artists File Suit Over Resale Royalties” by Patricia Cohen, New York Times, November 1, 2011.

California’s Art Resale Royalties

September 19, 2011

In regards to yesterday’s posting, one concern is the effect that such corporate oriented changes to Federal artist rights would have on similar state laws.   Depending upon the scope of a Federal law, it could potentially preempt (override) an overlapping state law.  If so, it would be particularly detrimental to California artists who already have a right to receive royalties upon the resale of their artwork.

The California Arts Council (CAC) is the agency that manages the art resale law.  Here’s a seller’s guide about paying the royalties, when it is required and how to do it.  A few of main points are that the sale must occur in California and that the seller has experienced a gain in the sale.  The resale royalties are only required when the artist is a U.S. citizen or an established California resident, and is still living or no more than 20 years have passed since the artist’s death.  Another condition is that the artwork is sold for more than $1000 or exchanged for property with a fair-market value of the same or more.  If the artist or heirs cannot be found by the seller, the California Arts Council holds the funds on behalf of the artist for 7 years.  If the funds are not retrieved, then they eventually revert to CAC for the purpose of public arts projects.

See:  The California Arts Council (http://www.cac.ca.gov) and especially the section on the resale royalties law.

CAC’s list of artists who have not claimed their resale royalties.  (Interestingly, it includes some well-known names).

Backhanding Artists’ Rights

September 18, 2011

A for-profit corporation proposes profit increasing legislation under the guise of artists rights:

The Art Newspaper reports that a corporation known primarily for its copyright licensing business is lobbying Congress in support of Federal legislation that would create art resale royalties. Artists have sought a law whereby subsequent sales of a physical artwork would mandate a small royalty fee to the artist of the work.  Generally, such fees are only paid during the lifetime of the artist of the artwork.  However, this is not necessarily the goal or result of the Federal legislation now.   It is apparently proposed  under the guise of artists rights or droit de suite, but in this case, it belies the probable aim of the proposed law– the increase of corporate profits.

The lobbying effort is apparently supported by the Artists Rights Society, which despite its name is not a grassroots or artist-based rights organization.  Rather, Artists Rights Society is a for-profit company whose primary business is copyright licensing.  Artists Rights Society, Inc., (ARS) is listed on the New York Department of State website as a (for profit) business corporation.

Not to confuse the proposed law with, for example, the California resale royalties law, the ARS supported Federal legislation apparently has a drive-a-truck-through-it sized exception for galleries and dealers.  In other words, galleries and dealers would not have to pay the resale royalty to artists.

Although this author strongly supports resale royalties for artists, I particularly oppose the ARS supported legislation because it would be detrimental to most working artists and because it excludes the primary generators of potential royalties– galleries and dealers.  The ARS supported legislation is far too exclusionary and would not benefit any artists whose work is sold by a gallery or dealer.  This would likely subject only auctions and private party hand-to-hand sales to the royalty payment, the later of which are somewhat atypical and often unreported.  The legislation seems designed to primarily benefit ARS and the like, rather than average artists, and seems to be geared in part towards ARS’ side business of artist representation.  In other words, it appears that as ARS (and other such businesses) may be the true recipients of the royalty payments gained from art sales.  It certainly isn’t clear if ARS would pay the revenue to any of the (living) artists that it may represent, but it seems not.  It would be interesting to see the terms of ARS’ representation contracts.

The Art Newspaper says, quoting John Henry Merryman in part:

“The rights collecting associations, the principal lobbying force for enacting the resale right in the US and abroad, would break out the champagne and dance in the streets,” if the resale law was made legal.

Legislation that provides for a Federal resale royalty should be for the interest of the average visual artist, as real support for the progress of the arts, rather than as profit for the exclusive few and corporate business interests.  (See U.S. Constitution, Art. I. § 8 (8)).  Progress in the arts depends upon artists, not licensing companies.  I do not support this legislation and I encourage artists to not settle for a so-called rights law that does not protect or adequately recognize their interests.