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Bitter “Suite”: Why the Fine Art Resale Royalty Act Should Not Expand

Published onJul 17, 2012
Bitter “Suite”: Why the Fine Art Resale Royalty Act Should Not Expand

In 1958, Robert Rauschenberg sold his painting Thaw for $960, but, only fifteen years later, Thaw resold for $85,000 at a Sotheby’s auction. Rauschenberg did not receive a penny of that profit. Outraged, Rauschenberg and many supporters of art started to lobby for fine art royalty rights. Although the concept of a fine artist receiving a share of re-sales has been widely accepted in Europe, where the mandate is known as droit de suite,” it remains controversial in the United States. Several state governments have contemplated enacting a droit de suite mandate but California is the first and only state to incorporate such a law. In 1977 California enacted the California Resale Royalty Act (CRRA), which requires 5% of the total resale price of all fine art sold for over $1,000 to be given to the original artist. While resale royalty acts have noble intentions these laws fail for many reasons. Two major issues surrounding the droit de suite laws are the failure to fulfill the legislative intent and the stifling complications of defining “art.”

Possibly the most glaring problems with the CRRA is its failure to realize legislative intent. If an artist’s work has appreciated enough for a reseller to make a profit, then presumably the artist can create more work to sell at that increased price. It is at this stage of analysis that many proponents of the droit de suite laws compare fine art to arts that generally receive royalties—the music and publication industries. In the fine arts, value is derived from the originality and uniqueness of the piece. Musicians and authors are routinely compensated for the original work and by the number of copies sold. Droit de suite laws ignore this fundamental distinction between fine arts and other work that receives royalties, ignoring the risk that a buyer accepts when purchasing an unknown artist’s work. Fine artists can be more closely compared to architects, because of the elements of originality and uniqueness, who are paid a large upfront price and are financially disassociated with the building upon sale.

Furthermore, droit de suite statutes fail to assist new artists, and, therefore, do not fulfill legislators’ intent of furthering the arts. British sculptor Anthony Caro has expressed his concern with this issue stating, such mandates “will mainly benefit artists who are already successful.” It is these artists, the ones that have “made it” that can support themselves on their own. The “starving artists” are the ones who require financial assistance. Therefore, droit de suite laws are not encouraging the arts to progress but simply making the already successful artists wealthier.

Another issue of droit de suite statutes is that “art” must be defined. A definition is necessary in droit de suite law to prevent producers of any unique or custom good from claiming a royalty. The art community, however, has battled defining “art” for centuries because such classification stifles the creativity of artists.

Art that is now globally revered as quintessentially beautiful was originally criticized. Painters like Monet, Renoir, and Cezanne are celebrated yet, these painters’ impressionistic style was initially rejected as sloppy and unrefined by the leading art critics at the time. For example, in 2011, Paul Cezanne’s post-impressionistic painting, “The Card Players” sold for $250 million—the largest price ever paid for a painting—validating the value society has placed on work that did not always fit neatly into critics’ definition of art. Now, art includes Mark Rothko’s iconic simple rectangles, Andy Warhol’s Campbell’s Soup Can, and Marcel Duchamp’s Fountain—a signed urinal positioned on its side. The now celebrated broad understanding of art, that so many artists have fought for centuries to achieve, will be sacrificed, possibly taking the paramount trait of creativity with it, if a definition of art is enforced by mandate.

All fine art resale royalty rights are implemented with the intention to promote the arts for cultural and economic advancements. In a perfect world, all artists would have the creative and financial freedom to add to the world’s appreciated, and sometimes not appreciated, collection of art. The world, however, is not perfect; it is riddled with changing values of the ever-fluctuating art industry. To allow artists to earn an income and encourage their creativity and innovation, incentives such as droit de suite laws are attractive at first glance. However, the CRRA and other fine art resale royalty acts require a dangerously restrictive definition of “art” and in the end give an advantage to only the most successful artists. Recently a United States District Court in California struck down the CRRA as unconstitutional. Although the issue will be appealed to the Circuit Court, the above outlined problems will continue to plague any future litigation and may prevent the acceptance of any additional droit de suite laws.

*Emily Nahan-Krotki is a rising third-year law student at Wake Forest University School of Law. She holds a Bachelor of Arts in Psychology and a minor in economics from the University of California Davis. Upon graduation she intends to return to California to practice family law.

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