Calif. Royalties Act Struck Down As Unconstitutional

Law360, New York (May 18, 2012, 1:53 PM EDT) -- A California federal judge struck down the state's Resale Royalties Act as unconstitutional on Thursday, handing a major defeat to artists trying to recover royalties on sales of fine art from Christie's Inc., Sotheby's Inc. and eBay Inc.

U.S. Circuit Judge Jacqueline H. Nguyen wiped out the entire statute, dismissing with prejudice three punitive class actions brought by artists Chuck Close and Laddie John Dill, the estate of Robert Graham and the Sam Francis Foundation.

Judge Nguyen –who was sitting by designation—sided with the auction companies, finding that the Royalties Act violated the commerce clause of the U.S. Constitution by improperly...

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