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United States District Court for the Central District of California
April 11, 2016, Decided; April 11, 2016, Filed
Case Nos. CV-11-08604-MWF-FFM; CV-11-08605-MWF-FFM; CV-11-08622-MWF-PLA
[*979] Proceedings (In Chambers): ORDER RE MOTIONS TO DISMISS [No. 11-8604: 98, 99] [No. 11-8605: 106] [No. 11-8622: 92]
Before the Court are three Motions filed in these related actions:
• Auction House Defendants' Joint Motion to Dismiss the Complaints (the "Joint Motion"), filed on February 1, 2016. (No. 11-8604: 99; No. 11-8605: 103). Plaintiffs submitted an Opposition to the Joint Motion on February 22, 2016, followed by the Auction Defendants' Joint Reply [**3] on March 7, 2016. (No. 11-8604: 101, 106; No. 11-8605: 106, 109).
• Defendant Sotheby's Motion to Dismiss Class Action Complaint under Rule 12(b)(1) (the "Sotheby's Motion"), filed on February 1, 2016. (No. 11-8604: 98). Plaintiffs filed an Opposition on February 22, 2016, and Defendant Sotheby's Reply followed on March 14, 2016. (No. 11-8604: 104, 107).
• Defendant eBay's Motion to Dismiss Plaintiff's Complaint (the "eBay Motion"), filed on February 1, 2016. (No. 11-8622: 92). Plaintiffs filed an Opposition on February 22, 2016, and Defendant eBay's Reply followed on March 7, 2016. (No. 11-8604: 92, 99).
Having considered the papers filed on the Motions and the parties' arguments at the hearing held on March 21, 2016, the Court rules as follows:
The Joint and eBay Motions are GRANTED to the extent they argue that the California Resale Royalty Act ("CRRA") is preempted under the Copyright Act of 1976. The CRRA stands in conflict with the first sale doctrine codified in 17 U.S.C. § 109(a), which prohibits copyright holders from exercising downstream distribution control of their products. Because the CRRA regulates secondary transactions of fine art by permitting artists to recover unwaivable royalties from resellers, [**4] the state law frustrates the purpose of § 109(a) and disrupts the equilibrium of the Copyright Act. Plaintiffs' claims, moreover, are independently [*980] preempted under the express preemption clause of 17 U.S.C. § 301(a) because they are not qualitatively different from garden-variety copyright claims.
The eBay Motion is also GRANTED to the extent it contends that Defendant eBay is not a proper Defendant under the CRRA. Plaintiffs' allegations that Defendant eBay acted as a seller or a seller's agent are implausible in light of the functionality of Defendant eBay's website. Because the CRRA imposes liability on only sellers of fine art or their agents, Plaintiffs' claims against Defendant eBay are deficient.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
178 F. Supp. 3d 974 *; 2016 U.S. Dist. LEXIS 53079 **; Copy. L. Rep. (CCH) P30,914
Estate of Robert Graham, et al. -v- Sotheby's, Inc.
Subsequent History: Affirmed by Close v. Sotheby's, Inc., 894 F.3d 1061, 2018 U.S. App. LEXIS 18407 (9th Cir. Cal., July 6, 2018)
Prior History: Estate of Graham v. Sotheby's Inc., 860 F. Supp. 2d 1117, 2012 U.S. Dist. LEXIS 77262 (C.D. Cal., May 17, 2012)
eBay, royalty, seller, state law, Plaintiffs', resellers, artists, holders, preempted, first sale doctrine, sales, preemption, downstream, resale, rights, allegations, punitive damages, fine art, auction, property interest, regulation, artwork, en banc, buyers, motion to dismiss, dispose, property right, infringement, transactions, notice