On Thursday, the 9th U.S. Circuit Court of Appeals decided that the court needs to convene en banc to decide whether California’s Resale Royalties Act — which grants California fine artists a small percentage of the revenue from resales of their work — runs afoul of the Commerce Clause of the U.S. Constitution. Resale royalties for artists, who otherwise receive no reward from works that have skyrocketed in value since their original sale, is an interesting question in and of itself: Though nearly 80 countries around the world grant artists a piece of the proceeds from such sales, California is the only state in the United States with a resale royalties law. But there’s much more at stake in this appeal than money for artists. The 9th Circuit took the case en banc to resolve a conflict in its previous rulings on California laws that affected out-of-state businesses. The court’s decision in the resale royalties case will shape California’s ability to extend its regulations beyond state lines.
The California Public Employees’ Retirement System, the largest public pension fund in the United States, rarely takes a stand as an amicus in trial court. But in an amicus brief filed earlier this month, Calpers warned that the future of private investment in California is at stake in a dispute over a few million dollars in unpaid bonuses to former employees of the now-defunct HRJ Capital. Unless a state-court judge overturns a colleague’s ruling that limited-partner investment funds are on the hook for liabilities of the general partner and fund manager, Calpers said, California risks losing its stature as an incubator of start-up business.