Wednesday, December 17, 2014

Update on the California Resale Royalty Lawsuit

The en banc hearing in the California resale royalty case took place yesterday.  Story here.  You can watch the argument here.  With the usual caveat that it's dangerous to read too much into these things, I came away with the strong impression that the commerce clause aspect of the decision (i.e., that California can't regulate sales that take place in New York) would be affirmed, but the severability aspect would not (i.e., that, unlike the lower court, the Court would leave the statute in place as it pertains to sales within California).  That would remain a big win for the auction houses.  (I'm not even sure why they're bothering to fight so hard on severability.)