Morseburg v. Balyon

Decision Date17 June 1980
Docket NumberNo. 78-2129,78-2129
Parties, 1978-81 Copr.L.Dec. 25,161 Howard MORSEBURG, Plaintiff-Appellant, v. Andre BALYON and California Arts Council, an agency of the State of California, Defendants-Appellees, v. Richard MAYER and Peter Alexander, Defendants in Intervention-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Richard K. Simon, Los Angeles, Cal., argued, for plaintiff-appellant.

Gary Greenfield, Los Angeles, Cal., for amicus.

Henry G. Ullerich, Deputy Atty. Gen., Los Angeles, Cal., argued, for defendants-appellees.

John J. Davis, Jr., San Francisco, Cal., for amicus.

Appeal from the United States District Court for the Central District of California.

Before: SNEED, SCHROEDER and ALARCON, Circuit Judges.

SNEED, Circuit Judge:

Appellant is an art dealer. On March 24, 1977, he sold two paintings under such circumstances as to require him to pay royalties under the California Resale Royalties Act (California Act), which is set forth in full in the margin. 1 He thereupon brought suit challenging the Act's constitutionality, claiming that it is preempted by the 1909 Copyright Act 2 and that it violates due process and the Contracts Clause of the Constitution. The lower court rejected these contentions. We affirm.


Appellant's preemption argument has compelled us to review in some detail the preemption doctrine as applied by the Supreme Court and developments in copyright law during much of this century and, to some extent, even those of an earlier time. We shall not extend this opinion describing in detail our research but shall limit it to stating our reasoning in a direct and straightforward manner.

Before commencing this statement we emphasize that this case concerns the preemptive effect of the 1909 Act only. We do not consider the extent to which the 1976 Act, particularly section 301(a) and (b), 17 U.S.C. § 301(a) and (b), may have preempted the California Act. It is unavoidable that certain of our reasons will be weighed and measured to determine their applicability to the 1976 Act. Nonetheless, our holding, as well as our reasons, to repeat, are addressed to the 1909 Act only.

Appellant utilizes as the foundation to his argument portions of sections 1 and 27 of the 1909 Act. The selected portion of section 1 reads:

"Any person entitled thereto, upon complying with the provisions of this title, shall have the exclusive right: (1) To print, reprint, publish, copy, and vend the copyrighted work." (Italics supplied.)

The section 27 portion, after providing that the copyright was distinct from the object and that the latter's transfer did not of itself transfer the copyright, reads:

"but nothing in this title shall be deemed to forbid, prevent, or restrict the transfer of any copy of a copyrighted work the possession of which has been lawfully obtained." (Italics supplied.)

On this foundation appellant asserts that the California Act impairs the artist's ability to vend his "work of fine art" when it is a "copyrighted work" within the meaning of section 1 of the 1909 Act. He also asserts that the California Act "restricts the transfer" of a copyrighted "work of fine art" when in the hands of one who lawfully obtained it, such as a purchaser from the artist. It follows, appellant contends, that the California Act conflicts with the 1909 Act. Under these circumstances, appellant concludes, the California Act is preempted by the 1909 Copyright Act.

To evaluate appellant's position we shall describe briefly certain aspects of the "works of fine art" market place as well as our perception of the current attitude of the Supreme Court with respect to preemption generally.


Aspects of the Market Place For "Works of Fine Art"

Turning to the market place for "works of fine art," it is frequently the case that such works are not copyrighted and that the sales proceeds realized by the artist upon its first sale are significantly less than the prices at which it subsequently changes hands. See Sheehan, Why Don't Fine Artists Use Statutory Copyright? An Empirical and Legal Survey, 22 Bull. Copyright Soc'y 242 (1975); Price & Price, Right of Artists: The Case of the Droit de Suite, in Art Works: Law, Policy, Practice 67 (1974). There are several explanations for both circumstances. The failure to utilize copyright protection has its source in, among other things, ignorance, a distaste for legal details, weak bargaining power, and the desire to avoid defacing the work with a copyright symbol. See Note, Courting the Artist With Copyright: The 1976 Copyrights Act, 24 Wayne L.Rev. 1685-86 (1978). An increase in the price of an artist's works after they have left his hands may be the result of greater recognition of the artist, an increase in the overall demand for art works, inflation, unpredictable shifts in fashion and taste, or some combination of the above.

The California Act functions under these conditions. It is an American version of what the French call the droit de suite, an art proceeds right. See Emley, The Resale Royalties Act: Paintings, Preemption and Profit, 8 Golden Gate Univ.L.Rev. 239, 240 n.9 (1978). It provides by force of state law a conditional economic interest of a limited duration in the proceeds of sales other than the initial one. Similar rights perhaps could be obtained by contract. See Projansky & Siegelaub, The Artist's Reserved Rights Transfer and Sale Agreement, Art Works: Law, Policy, Practice, supra at 81. Opinions differ as to whether the existence of such an interest, without regard to its source, will increase the incentives to produce available to the young and not well known artist. See Katz, Copyright Preemption Under the Copyright Act of 1976: The Case of Droit de Suite, 47 Geo.Wash.L.Rev. 200, 220-21 (1978). Some argue that only a few artists will benefit, as appears to have been the French experience, while others believe such an interest prevents exploitation of the artist's creativity. See Hauser, The French Droit de Suite: The Problem of Protection For the Underprivileged Artist Under the Copyright Law, 6 Bull. Copyright Soc'y 94 (1959). See Merryman & Elsen, Law, Ethics and the Visual Arts, ch. IV passim (1979). Resolution of that dispute is not necessary for the purposes of this opinion.

B. Preemption and the Supreme Court

With respect to preemption the Supreme Court's emphasis varies from time to time. At times the preemption doctrine has been applied with nationalistic fervor while during other periods with generous tolerance of state involvement in areas already to some extent the subject of national concern. See Note, The Preemption Doctrine: Shifting Perspectives on Federalism and the Burger Court, 75 Colum.L.Rev. 623 passim (1975). Without regard to the emphasis of the period certain basic doctrinal notions repeatedly are used in applying preemption. Thus, the extent to which the federal law has "occupied the field" and the presence of "conflict" between the federal and state law have always been focuses of analytic attention. The nature of the Court's emphasis at a particular time is revealed by whether "occupation of the field" and "conflict" are easily found to exist or not. "Occupation" can require no more than the existence of a federal law generally applicable to a significant portion of the area in question to no less than an express statement demonstrating an intention to occupy the area duly enacted by Congress. "Conflict," likewise, can require no more than a mechanical demonstration of potential conflict between federal and state law to no less than a showing of substantial frustration of an important purpose of the federal law by the challenged state law. When the emphasis is to protect and strengthen national power "occupation" and "conflict" are easily found while not so easily found when the emphasis is to promote federalism.

Although there is a discernable cyclical character in the Supreme Court's choice of emphasis, it is also true that, without regard to the particular point in the cycle at which a preemption issue arises, the choice of emphasis is heavily influenced by the area of the law in which the issue arises. Thus, when the area concerns foreign affairs, as in Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581 (1941), or labor relations, as in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), the emphasis, not surprisingly, is on the national interest, while when the area is protection of consumers of commodities, as in Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963), the emphasis understandably is upon the state's interest particularly and the imperatives of federalism generally. See Note, The Preemption Doctrine: Shifting Perspectives on Federalism and the Burger Court, supra at 638-39.

Fortunately, the Supreme Court provided clear guidance with respect to the emphasis proper for this case. This was done in Goldstein v. California, 412 U.S. 546, 93 S.Ct. 2303, 37 L.Ed.2d 163 (1973), in which the Court held valid a California statute making it a criminal offense to "pirate" recordings produced by others, an activity against which the copyright holder at that time had no protection. The interests of California in particular and of federalism in general were given emphasis. The Court refused to read the Copyright Clause of the Constitution to foreclose the existence of all state power "to grant to authors the exclusive Right to their respective Writings." Id. at 560, 93 S.Ct. at 2311. Also it held that the 1909 Copyright Act did not preempt the California statute. In support of this conclusion the Court observed that Congress had not exercised its full power under the Copyright Clause and that it was not required to do so. In addition, Congress had evidenced no intent, either expressly or impliedly, to bar the states from...

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