CHUCK CLOSE; LADDIE JOHN DILL, individuаlly and on behalf of all others similarly situated v. SOTHEBY‘S, INC., a New York corporation; THE SAM FRANCIS FOUNDATION; CHUCK CLOSE, individually and on behalf of all others similarly situated; LADDIE JOHN DILL, individually and on behalf of all others similarly situated v. CHRISTIE‘S, INC., a New York corporation; THE SAM FRANCIS FOUNDATION; CHUCK CLOSE, individually and on behalf of all others similarly situated; LADDIE JOHN DILL, individually and on behalf of all others similarly situated v. EBAY INC., a Delaware corporation
No. 16-56234, 16-56235, 16-56252
United States Court of Appeals, Ninth Circuit
December 3, 2018
Before: Danny J. Boggs, Jay S. Bybee, and Paul J. Watford, Circuit Judges.
D.C. No. 2:11-cv-08604-MWF-FFM, 2:11-cv-08605-MWF-FFM, 2:11-cv-08622-MWF-PLA
Filed December 3, 2018
Before: Danny J. Boggs,* Jay S. Bybee, and Paul J. Watford, Circuit Judges.
Order
Attorneys’ Fees
The panel granted defendants-appеllees’ applications for attorneys’ fees pursuant to Ninth Circuit Rule 39-1.6 and the California Resale Royalties Act, following the panel‘s opinion affirming in part and reversing in part the district court‘s dismissal of claims for resale royalties.
In Close v. Sotheby‘s, Inc., 894 F.3d 1061 (9th Cir. 2018), the panel held that plaintiffs’ claims for resale royalties under the CRRA were expressly preempted by the 1976 Copyright Act, and the panel affirmed the dismissal of claims involving art sales postdating the Copyright Aсt‘s effective date of January 1, 1978. The panel reversed the dismissal of CRRA claims to the extent that they involved sales occurring before January 1, 1978, but after the CRRA‘s effective date of January 1, 1977.
Granting the applications for attorneys’ fees, the panel held that defendants were entitled to fees under the CRRA‘s fee-shifting provision, which mandates a fee award to the prevailing party in any action under the CRRA. The panel rejected рlaintiffs’ argument that fees were not available under the CRRA because the effect of the panel‘s decision was to void the CRRA, including its fee-shifting provision. The panel referred the fee applications to the Appellate Commissioner to calculate the amount of fees to be awarded.
In Close v. Sotheby‘s, Inc., 894 F.3d 1061 (9th Cir. 2018), we held that plaintiffs’ claims for resale royalties under the California Resale Royalties Act (“CRRA“) are expressly preemрted by the 1976 Copyright Act. We thus affirmed the district court‘s dismissal of plaintiffs’ claims that involved any art sales postdating the Copyright Act‘s effective date of January 1, 1978. We reversed, however, the district court‘s dismissal of plaintiffs’ CRRA claims to the extent they involved sales occurring before January 1, 1978 (but after the CRRA‘s effective date of January 1, 1977), because those claims are not preempted by federal copyright law.
Defendants Sotheby‘s and eBay have filed applications for attorneys’ fees pursuant to Ninth Circuit Rule 39-1.6. They seek fees under the CRRA fee-shifting provision, which mandates a fee award to the “prevailing party in any action brought under” the CRRA.
I. BACKGROUND
The background of this case is detailed in the panel‘s opinion. In brief, the California Resale Royalties Act of 1976 (“CRRA“) required the seller of a work of fine art or the seller‘s agent to withhold 5% of the sale price and pay it to the artist.
If a sеller or the seller‘s agent fails to pay an artist the amount equal to 5 percent of the sale of a work of fine art by the artist or fails to transfer such amount to the Arts Council, the artist may bring an action for damages within three years after the date of sale or one year after the discovery of the sale, whichever is longer. The prevailing party in any action brought under this paragraph shall be entitled to reasonable attorney fees, in an amount as determined by the court.
Plaintiffs filed this action against Sotheby‘s, Christie‘s, and eBay seeking royalties for resales of artwork dating back to the CRRA‘s January 1, 1977 effective date. After claims involving out-of-state sales were filtered out on dormant Commerce Clause grounds, see Sam Francis Found. v. Christies, Inc., 784 F.3d 1320, 1322 (9th Cir. 2015) (en banc), the parties litigated the claims involving in-state sales. The district court granted defendants’ motion to dismiss those claims on two grounds: (1) the CRRA claims werе preempted, and (2) eBay was not a seller subject to the CRRA.
On appeal, we affirmed in part, reversed in part, and remanded. Close, 894 F.3d at 1076. We held that all CRRA claims that involved sales after the effective date of the 1976 Copyright Act—January 1, 1978—were expressly preempted by the Copyright Act‘s preemption provision,
We further held that any CRRA claims that involved sales before the 1976 Act‘s effective date, to the extent they exist, are not expressly preempted, because the operative federal law at the time of these sales—the 1909 Copyright Act—did not contain an express preemption provision. Id. at 1072. Nor are such claims barred by conflict preemption. Id. at 1072–74 (discussing Morseburg v. Balyon, 621 F.2d 972, 977–78 (9th Cir. 1980)). We thus reversed the district court‘s dismissal of any claims involving sales between the CRRA‘s effective date of January 1, 1977 and the 1976 Act‘s effective date of January 1, 1978—i.e., sales that occurred in 1977. Id. at 1074.
After we denied a petition for rehearing, Sotheby‘s and eBay filed timely applications for attorneys’ fees pursuant to Ninth Circuit Rule 39-1.6, seeking fees under the CRRA fee-shifting provision,
The CRRA fee-shifting provision provides: “The prevailing party in any action brought under this paragraph shall be entitled to reasonable attorney fees, in an amount as determined by the court.”
Plaintiffs oppose the fee applications on two grounds, arguing that the CRRA fee-shifting provision is unenforceable because it is preempted, and that Sotheby‘s is not a prevailing party. We address each argument in turn.
A. Preemption
Plaintiffs contend that the CRRA fee-shifting provision is preempted and unenforceable. They raise two arguments: first, that our opinion in this case rendered the CRRA “null and void” and thus there is no surviving attorneys’ fees provision to apply; and second, that the 1976 Copyright Act
1. The CRRA fee-shifting provision is not “null and void”
According to plaintiffs, our decision in this case means that, as of January 1, 1978 (the effective date of the 1976 Copyright Act), “the CRRA was null and void and could not thereafter be enforced” and, accordingly, the 1982 amendments to the CRRA are ineffectual because “a nonexistent statute cannot be amended.” This argument misapprehends the effect of our decision.
The Supremacy Clause of the U.S. Constitution provides that the “Constitution, and the Laws of the United States which shall be made in Pursuance thereof . . . shall be the supreme Law of the Land.”
The doctrine of preemption therefore provides “a rule of decision” that “instructs courts what to do when state and federal law clash.” Armstrong v. Exceptional Child Ctr., Inc., 135 S. Ct. 1378, 1383 (2015); see also Gilchrist v. Jim Slemons Imports, Inc., 803 F.2d 1488, 1497 (9th Cir. 1986) (describing preemption as “a choice-of-law question“). When
Holding that a state law is preempted by federal law does not, however, render the entire state law “nonexistent” in the way that plaintiffs argue. The state law continues to exist until the legislature that enacted it repeals it. At the same time, any portion of the law that is preempted is unenforceable in court until Congress removes the preemptive federal law or the courts reverse course on the effect of the federal law. See Jonathan F. Mitchell, The Writ-of-Erasure Fallacy, 104 VA. L. REV. 933, 953 (2018) (“[S]tate statutes that contradict ‘supreme’ federal law continue to exist as ‘laws,’ even as they go unenforced, and they would become enforceable if federal law were amended
Our opinion in this case made this distinction clear. We addressed the question “whether plaintiffs’ claims are preempted by federal copyright law.” Close, 894 F.3d at 1064 (emphasis added). Our answer to that question does not control our answer to the question whether defendants are entitled to attorneys’ fees; rаther, that question is a matter of state law. And nothing in the text of the CRRA fee-shifting provision is concerned with how a prevailing party prevailed. Rather, it applies if the “action [was] brought under” the CRRA,
In sum, we conclude that our preemptiоn holding in this case did not render the CRRA fee-shifting provision “null and void.”
2. The CRRA fee-shifting provision is not preempted
Plaintiffs also argue that the CRRA fee-shifting provision is preempted by the 1976 Copyright Act itself. As we explained in our opinion, two forms of preemption are available with respect to the 1976 Copyright Act—express preemption and conflict preemption. Id. at 1068. Neither applies here.
First, the 1976 Copyright Act does not expressly preempt the CRRA fee-shifting provision. The 1976 Act expressly preempts state laws gоverning “legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106.”
Second, fee shifting in this case does not conflict with the 1976 Copyright Act. Under the CRRA, fee shifting applies to “any action brought under this paragraph.”
That this action involves only state-law claims distinguishes it from actions brought under both federal law and state law. We have held that a prevailing party in such a case cannot “resort to a state statutory procedure to reach around [federal-law] attorneys’ fees provisions for fees on [a federal-law] clаim.” S.F. Culinary, Bartenders & Serv. Emps. Welfare Fund v. Lucin, 76 F.3d 295, 298 (9th Cir. 1996) (emphasis added); cf. Ryan, 786 F.3d at 762 (noting that conflict preemption “might” apply in a case involving “a [state] fee-shifting statute . . . that permitted a fee award where the Copyright Act did not” (emphasis omitted)). The
Lucin is instructive. There, we held that a request for fees under a state fee-shifting statute for work performed in an underlying ERISA suit was “preempted” by ERISA‘s fee-shifting provision. 76 F.3d at 298. Wе did not, however, “declare the state statute itself preempted but only any implementation of it that fails to use the applicable ERISA standards to determine the propriety of an award of attorneys’ fees for work done in the underlying ERISA action.” Id. We thus made clear that “to the extent that state law provides for attorneys’ fees with respect to a state law action, ERISA is not implicated.” Id. And because “ERISA attorney‘s fees рrovisions do not apply to non-ERISA actions generally, those provisions likewise do not preempt them generally.” Id.
That same principle applies here. The 1976 Copyright Act‘s fee-shifting provision governs only “action[s] under” the Copyright Act.
B. Prevailing Party Status
The CRRA fee-shifting provision awards fees to а “prevailing party.”
California courts take a “pragmatic approach [to] determining prevailing party status,” generally looking to “the extent to which each party has realized its litigation objectives, whether by judgment, settlement or otherwise.” Graciano v. Robinson Ford Sales, Inc., 50 Cal. Rptr. 3d 273, 281–82 (Cal. Ct. App. 2006) (citations omitted). And here, Sotheby‘s has obtained a judgment in its favor for all claims involving sales that occurred after January 1, 1978. See Close, 894 F.3d at 1076. All that remains on remand is the “sliver of claims” involving sales that occurred in 1977. Id. at 1072. Sotheby‘s is, in any practical sense, a prevailing party.
Plaintiffs also contend that “there may be no fee award while, as here, a case is still pending.” But California courts, like federal courts, “allow attorney fee awards even where there has been no decision on the merits.” Winick Corp. v. Safeco Ins. Co., 232 Cal. Rptr. 479, 481 (Cal. Ct. App. 1986); accord Animal Lovers Volunteer Ass‘n, Inc. v. Carlucci, 867 F.2d 1224, 1225 (9th Cir. 1989) (“The fact [that] the dispute between the parties may continue does not preclude a fee award.“). The “case need not be completely final” for
The cases cited by plaintiffs involve fee requests by a party who won a procedural victory on appeal that merely continued the litigation. See Hanrahan v. Hampton, 446 U.S. 754, 758 (1980) (reversing fee award where the applicants had “not prevailed on the merits of any of their claims” on appeal but insteаd only obtained a new trial); Presley of S. Cal. v. Whelan, 196 Cal. Rptr. 1, 2 (Cal. Ct. App. 1983) (declining to award fees for achieving a reversal of summary judgment). But as we have explained, these cases addressing purely procedural victories are “irrelevant” if the prevailing party has “won a determination on the merits.” Animal Lovers, 867 F.2d at 1225. Sotheby‘s is the “prevailing party” with respect to all of the fee-shifting claims and is entitled to a fee award for the work performed on them.
III. CONCLUSION
Sotheby‘s and eBay are entitled tо a fee award under the CRRA fee-shifting provision. Their applications for attorneys’ fees (Case No. 16-56234, Dkt. Nos. 72 and 74) are accordingly GRANTED.5 We refer the matter to the Appellate Commissioner to determine the appropriate amount of fees to be awarded, subject to reconsideration by this panel. See Ninth Circuit Rule 39-1.9.