For over three years, Ellis George has been fighting, on behalf of artists, to force auction houses Sotheby’s, Christie’s, and eBay to comply with the California Resale Royalty Act, which requires that artists be paid a five percent royalty when their work is resold in California or by a California resident. That fight is now headed to a full “en banc” panel of the United States Court of Appeals for the Ninth Circuit.
After Ellis George filed the case against the auction houses in federal court in 2011, a district judge held that the Act violated the dormant Commerce Clause of the U.S. Constitution. Ellis George appealed to the Ninth Circuit. A three-judge panel of that court heard oral argument earlier this year.
Described by the Daily Journal as “a rare move,” the Ninth Circuit today ordered that the case be heard en banc now rather than after a decision by the three-judge panel. In the Daily Journal article about the order, Ellis George partner Eric George defended the constitutionality of the Act, saying “[t]he auction houses are attempting to extend the dormant Commerce Clause to a place it has never gone” and explaining that “California’s law covers only in-state transactions, or art sold by California residents through auction houses that have a substantial California presence.” Also quoted in the article as agreeing that the Act is constitutional were constitutional law scholars Erwin Chemerinsky and Jesse Choper.
