California Statute Violates The Dormant Commerce Clause.
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The issue revolves around the dormant Commerce Clause, which is a limitation upon the power of the States to prohibit discrimination against interstate commerce. The statute involved is California’s Resale Royalty Act [Civil Code section 986(a)] which requires the seller of fine art to pay the artist a five percent royalty if the seller resides in California or the sale takes place in California. Plaintiffs are artists who claim auction houses and retailers violated the Act by failing to pay them royalties on sales of their fine art. The Ninth Circuit, sitting en banc, held the Act violates the dormant Commerce Clause insofar as it regulates sales outside California, but that the offending provision is severable from the remainder of the statute. (Sam Francis Found. v. Christies, Inc. (Ninth Cir.; May 5, 2015) 784 F.3d 1320.)
