On April 3, the California Senate Business, Professions and Economic Development Committee approved SB 579, a measure that corrects the problems created by the provisions in AB 1570 (Chang) [Ch. 258, Stat. 2016], Signed Memorabilia, while preserving consumer protection. The vote was unanimous: 9 aye, 0 no. SB 579 is authored by Senator Cathleen Galgiani and co-authored by a bipartisan group of five members of the California State Senate.
Last year, the California State Legislature approved and Gov. Jerry Brown signed into law AB 1570 (Chang) enacting new provisions in Section 1739.7 of the California Civil Code, effective Jan. 1, 2017. The amendments were intended to rigorously govern the sale of “autographed” sports and entertainment memorabilia by requiring dealers who advertise and sell any item bearing a signature to provide a certificate of authenticity to the purchaser. The new regulation also requires various onerous practices and procedures relating to record maintenance and disclosures of the identity of consignors of such “autographed” items, the latter of which raises privacy and confidentiality concerns. Violation of the statute includes severe civil penalties (up to 10 times actual damages, or more, plus legal fees and costs to a successful claimant).
The language of the current law severely impacts entities that are not, or are only minimally, engaged in the sale of sports and entertainment memorabilia and that were and are not the intended focus of the statute, thereby unintentionally hindering commercial activity in the state of California.
SB 579 corrects this recently enacted statute by the following:
• Revising the definitions of “Collectibles” so as to more clearly target “Sports and Entertainment” Memorabilia.
• Revising the definition of “Dealer” to exclude an auction company or auctioneer already governed by existing law, the Auctioneer and Auction Companies Act.
• Clarifying certain provisions in recognition of federal precedent on the unconstitutionality of state statutes regulating out-of-state sales (see Sam Francis Found. v. Christie’s Inc., 784 F.3d 1230 (9th Cir. 2015)).
• Striking the requirement that dealers of autographed memorabilia disclose consignors’ identities, in favor of a requirement that dealers maintain records of such data for seven years and make such a disclosure if mandated by subpoena or court order.
SB 579 preserves provisions in existing law, including the protections afforded consumers in the penal, commercial and civil codes. This bill would declare that it is to take effect immediately as an urgency statute.
One of the companies in the coalition that has been actively advocating for passage of SB 579 is LiveAuctioneers, whose online bidding platform is used by 489 California auction houses. LiveAuctioneers CEO Jason Finger commented, “In any transaction involving a signed collectible item, auctioneers take very seriously the need to provide trustworthy provenance. To maintain a thriving marketplace for autographed sports and entertainment memorabilia, it is also extremely important for both buyers and sellers to know their privacy will be respected. We’re delighted that SB 579 has passed unanimously in the California Senate’s Business, Professions and Economic Development Committee and will continue to lend our support to the auction-house alliance promoting the bill's passage.”
The measure now goes to the California Senate Judiciary Committee.