The act does not apply if: When the sale of a work meets the conditions outlined above, a seller must pay the artist 5% of the resale price.
[7] The Berne Convention for the Protection of Literary and Artistic Works of 1886 included a droite de suite provision in Article 14ter[8] in its 1948 revision.
The Copyright Office conducted a study,[9] published in 1992, evaluating the nature of the resale right and the possibility of adopting a federal droite de suite.
In conjunction with the consideration of the legislation, in September 2012 Congress published a Notice of Inquiry[13] requesting comments from the public on factual and policy matters relating to a possible federal resale royalty right.
The Resale Royalty Act came under legal scrutiny when, in October 2011, a group of artists and their heirs filed class action suits against auction houses Christie's and Sotheby's, and auction site eBay, for failure of those brokers to pay royalties per the Resale Act.
[14] In a decision[15] on May 17, 2012, in the United States District Court for the Central District of California, Judge Jacqueline H. Nguyen dismissed the suits on the grounds that the Resale Royalty Act violated the Commerce Clause of the United States Constitution, and was therefore invalid as law (Estate of Graham, et al, v. Sotheby's Inc.).
"[16] Judge Nguyen found that where the act regulates any transaction in which the seller resides in California, regardless of the location of the sale, buyer, or artist, the Resale Royalty Act "explicitly regulates applicable sales of fine art occurring wholly outside California.
[16] In this instance, the California law requires the New York company to withhold the amount of the royalty from the sale price, and either locate and pay the artist in New York or remit payment to the California Arts Council should the artist not be located.
[16] In 2015, an eleven-judge en banc panel of the Court of Appeals for the Ninth Circuit affirmed, holding that applying the Act to out-of-state sales made by a California resident was unconstitutional.