Wednesday, October 19, 2011

Contemporary Artists Sue Christies

Editor's note: This is an interesting suit enabled by a rather narrow California law. A broader issue that to my knowledge has not been tested is reimbursement to artists whose work is featured in auction catalogs creating both sales of catalogs and excitement in the property. In many cases publication rights may have not been transferred with the sale of the work. It seems to me that this has been a class action waiting to happen for years. I would expect potential liability would cause Christies to go to the mats to defend this one.

Los Angeles - Wall Street Journal - A group of major artists, including painter Chuck Close, and the heirs of abstract expressionist Sam Francis and sculptor Robert Graham, filed a pair of lawsuits against Sotheby's and Christie's seeking royalties on auction sales of their work in California.
The artists allege that the world's two biggest auction houses are failing to abide by a little-known California law that promises royalties to artists whenever their works are resold within the state or auctioned off elsewhere on behalf of owners who live in California. A Sotheby's spokeswoman said the "claim is meritless, and it will be vigorously defended."

A spokeswoman for Christie's, part of Christie's International PLC, said the law itself appears flawed and the auction house "looks forward to addressing these issues in court."
Calls to Mr. Close and the Sam Francis Foundation weren't returned. Royalties are commonplace in the realms of music and film, but the California Resale Royalty Act of 1976 is the only law of its kind in the U.S. It insists that visual artists living in California receive a 5% share of any subsequent sales of their artworks worth over $1,000 during their lifetimes or within two decades of their deaths.
The law also requires California-based art sellers to pay the same fee whenever they resell the affected work from their collection.
The pair of lawsuits filed by Mr. Close and others contends that Sotheby's and Christie's, who act as agents for their sellers, have repeatedly refused to pay royalties to California-based artists following auction sales of their work. The suits also claim the houses aren't telling their California clients upfront that they will need to set aside a portion of their sale proceeds to pay artists covered by the royalty law.
The law applies to original paintings, drawings, sculptures or original works of art in glass. Royalties for artists whose whereabouts can't be immediately determined are meant to be funneled to the California Arts Council. The lawsuits allege that the auction houses also are concealing the location of some of their California-based sellers by refusing to flag their works in auction catalogs. By contrast, artworks that fall under similar European royalty laws are routinely flagged in auction catalogs.
The suits seek compensatory damage for the artists as well as an overhaul of the way the houses alert artists and the public about the works that are covered by the California law.
At least 50 countries around the world maintain similar royalty rights for visual artists, including Britain and France. In Europe, the laws are typically referred to as droit de suite, a French phrase for artist's rights.
The suits come at a time when artists' rights groups like the Artists' Rights Society are lobbying Congress for legislation to make droit de suite a federal law.
Eric George, a lawyer with Browne George Ross in Los Angeles, is seeking class-action status for the two suits, which he filed on behalf of the artists on Tuesday in U.S. District Court in Los Angeles.

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