Wednesday, February 29, 2012
Resale Royalty Reply
The auction houses filed their reply brief this week in the California resale royalty lawsuit. I remain most interested in the Commerce Clause argument. The auction houses argue that "Plaintiffs' argument that the [statute] does not regulate conduct 'outside' California simply because it involves a California resident" "borders on the frivolous." (I wondered about that argument too.) They say "courts have consistently rejected state laws that project legislation into another state based on nothing more than the involvement of one of the legislating state's residents," that "the Supreme Court and lower courts have uniformly held that where ... a sales transaction occurs wholly outside the regulating state, the Commerce Clause precludes application of the regulating state's laws to that transaction even if a state resident is involved."