The California Resale Royalty Act, which provides fine artists with a 5% inalienable royalty on future sales of their work, has been challenged on several legal grounds, including due process, freedom of contract and preemption. While these challenges have failed, it has also been suggested that the act amounts to a physical taking under the Fifth Amendment. While the act has yet to be challenged as such, the argument has been made that such a challenge would prevail. The question of whether or not the act is a taking is important because of the current expansion of similar statutes around the world, particularly in Europe and involves the question of whether or not the United States will follow with a similar federal statute. The argument that the California Resale Royalty Act amounts to a taking has been used in arguments against the adoption of a similar federal statute in the United States. Whether the United States adopts a similar federal statute may have significant impact on the sale of art in the global economy.
This article helps present analysis of takings law in the context of a fairly unique statute and contributes to the debate about artists’ rights in the United States by making the case that as far as the Fifth Amendment is concerned, the United States would be constitutionally permitted to adopt a federal statute similar to the California Resale Royalty Act. The article explores and rebuts the position that the California statute is a physical taking by illustrating through the use of precedent and analysis of the arguments that the proper analysis is a regulatory takings analysis and not a physical takings analysis. Under a regulatory takings analysis, the article demonstrates that the statute is not a taking under the Fifth Amendment. The article also raises the possibility that the courts may not hear a takings argument because of particular case law.
The California Resale Royalty Act and the Fifth Amendment: Why the Act Survives Takings Challenges,
1 Berkeley J. Ent. & Sports L.