With new Congress, resale royalties bill and Foreign Cultural Exchange Jurisdictional Immunity Clarification Act are dead (again)

Art Law Report 5 January 2014
By Nicholas O'Donnell

A quirk of parliamentary procedure is that any bill in Congress exists only for so long as that particular Congress is in session.  This week, the 114th Congress took its seats, meaning that any bill not passed by both the House of Representatives and the Senate, and signed by the President, is a dead letter.  This is the fate of many, many bills—indeed most.

As readers know, we have followed two proposed laws for the better part of four years now, each of which have been introduced in some form or other in successive Congresses, only to lapse when a new Congress stepped in.

The first is the effort by Rep. Jerrold Nadler (D-NY) to enact a resale royalty for visual art.  Known as droit de suite, the resale royalty compensates artists for secondary sales of their works.  In the case currently on appeal to the Ninth Circuit, for example, concerning California’s statute, the artists (led by Chuck Close) note that they are often the last person to benefit when their work appreciates in value later.

Nadler introduced a resale royalty bill in 2011, but it failed to become law.  Last year, on the heels of a Copyright Office recommendation to enact resale royalty legislation, Nadler introduced the Resale Royalties Too Act of 2014.  He gave an impassioned defense of the idea at the Appraisers Association of America’s Art Law Day at NYU in November, and it briefly appeared headed for a vote, but with the turn of the calendar page this version too is now void.  Will he, or others, try again? 

As for the Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, that too has been the subject of much commentary here.  The bill was first introduced in 2012, to address an unintended gap between the Foreign Sovereign Immunities Act 28 U.S. § 1605 (FSIA) and the Immunity from Seizure Act, 22 U.S.C. § 2459 (IFSA).  The FSIA is an important law that provides U.S. federal court jurisdiction over cases against foreign sovereigns and their subdivisions and instrumentalities under certain limited circumstances.  In Nazi-looted art cases, that circumstance is often the “expropriation exception,” which allows for jurisdiction when the case concerns rights in property taken in violation of international law (i.e., Nazi theft), and the sovereign defendant is engaged in commercial activity in the U.S. (including, importantly, lending paintings to temporary exhibitions).  The U.S. also has another important law to encourage international loansā€‘IFSA.  IFSA immunizes an object, not a defendant, from seizure, if it has been pre-cleared by the State Department.  But what if the object has been immunized, but is otherwise the only commercial activity by the defendant?  This happened, and a lawsuit proceeded on that basis against the City of Amsterdam.

The proposed bill would have closed that gap, though not for Nazi-looted claims.  Given that it would have foreclosed claims over objects that, thanks to IFSA, would never be returned, we have always regarded it as a sensible idea, if only a half-measure.  Many disagreed.  And the fact is that the foregoing circumstance has still only happened once, so far as we know, so it is not exactly a burning issue.  But the larger point is that it has now fallen short twice, despite passing the House both times.  And now, neither are even just bills sitting on Capitol Hill anymore. 

Will the short session before a Presidential election provide the political climate for a different outcome on these laws this time?  Don’t hold your breath.
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