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Chuck Close v. Sotheby's Inc.
Case Number: 16-56234
Judge: Danny J. Boggs,* Jay S. Bybee, and Paul J. Watford, Circuit Judges.
Court: United States Court of Appeals for the Ninth Circuit (San Francisco County)
Plaintiff's Attorney: Not Available
Defendant's Attorney: Not Available
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
preempted 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. Cal. Civ. Code § 986(a)(3).
Plaintiffs argue that fees are not available under the CRRA
because the effect of our decision was to void the CRRA,
including its fee-shifting provision. We disagree. We hold
that Sotheby’s and eBay are entitled to fees under the CRRA
fee-shifting provision and refer the applications to the
Appellate Commissioner to calculate the amount of fees to be
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. Cal. Civ. Code § 986(a). Artists could bring an
CLOSE V. SOTHEBY’S 5
action to enforce this requirement under the following
If a seller 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.
Id. § 986(a)(3).
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 were
preempted, and (2) eBay was not a seller subject to the
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, 17 U.S.C.
6 CLOSE V. SOTHEBY’S
§ 301(a). Close, 894 F.3d at 1068–72. We thus affirmed the
district court’s dismissal of those claims. Because this
holding disposed of all claims against eBay, we declined to
rule on eBay’s alternative argument that it was not subject to
the CRRA. Id. at 1068 n.6.
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.
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 feeshifting
provision, Cal. Civ. Code § 986(a)(3). Plaintiffs
oppose these applications, arguing that the CRRA fee-shifting
provision is preempted by federal law and that Sotheby’s is
not a prevailing party. Because this is a diversity case, state
law governs both “the right to fees” and “the method of
calculating the fees.” Mangold v. Cal. Pub. Utils. Comm’n,
67 F.3d 1470, 1478 (9th Cir. 1995). The preemptive effect of
a federal statute is a question of federal law. See Allis-
Chalmers Corp. v. Lueck, 471 U.S. 202, 214 (1985).
CLOSE V. SOTHEBY’S 7
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.” Cal. Civ. Code § 986(a)(3). Three
features of this provision are significant. First, by using the
phrase “prevailing party,” this provision grants defendants as
well as plaintiffs the opportunity for a fee award. See Jankey
v. Lee, 290 P.3d 187, 191 (Cal. 2012). Second, by using the
phrase “shall be entitled,” fee-shifting under this provision is
mandatory. See id. at 192; Hsu v. Abbara, 891 P.2d 804, 809
(Cal. 1995) (explaining that “[t]he words ‘shall be entitled’”
mean that the court is “obligated to award attorney fees
whenever the statutory conditions have been satisfied”). And
third, the fee-shifting provision was added to the CRRA in
1982, see 1982 Cal. Stat. 6434, and it applies only to claims
involving sales of art that occurred on or after January 1,
1983, see Cal. Civ. Code § 986(f). Thus, the only claims that
remain pending on remand—those involving sales in
1977—do not fall within the fee-shifting provision.
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.
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
8 CLOSE V. SOTHEBY’S
itself preempts the attorneys’ fees provision of the CRRA.
We disagree with both arguments.
1. The CRRA fee-shifting provision is not “null and
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.” U.S. Const. art. VI, cl. 2. As a
consequence, “Judges in every State shall be bound thereby,
any Thing in the Constitution or Laws of any State to the
Contrary notwithstanding.” Id. When we adjudge a state law
preempted under this provision, we do not render the law null
and void in some ultimate sense, such as a presidential veto;
rather, our judgment renders the law unenforceable in the
case before us. We, as judges, cannot enforce the state law
because the “Laws of the United States” are “supreme” and
displace the “Laws of any State to the Contrary.” Id.
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
CLOSE V. SOTHEBY’S 9
a state law, “in [its] application to [a particular] case, come[s]
into collision with an act of Congress,” the state law “must
yield to the law of Congress.” Gibbons v. Ogden, 22 U.S.
(9 Wheat.) 1, 210 (1824); cf. Massachusetts v. Mellon,
262 U.S. 447, 488 (1923) (describing the power “to review
and annul” a statute as “little more than the negative power to
disregard an unconstitutional enactment, which otherwise
would stand in the way of the enforcement of a legal right”);
Marbury v. Madison, 5 U.S. (1 Cranch) 137, 178 (1803)
(explaining that when “both [a state] law and [federal law]
apply to a particular case, . . . the court must determine which
of these conflicting rules governs the case,” enforcing the
“superior” law and “disregarding” the inferior law). The
effect of our judgment is to render the preempted state law
inoperative with respect to the claims before us. See
Trollinger v. Tyson Foods, Inc., 370 F.3d 602, 608 (6th Cir.
2004) (“[T]he [preemption] doctrine generally concerns the
merits of the claim itself—namely, whether it is viable and
which sovereign’s law will govern its resolution.”).
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 Writof-
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
10 CLOSE V. SOTHEBY’S
or reinterpreted to remove the conflict.”).1 Preemption is
1 We are aware that, as far back as Marbury, there is language
suggesting that an unconstitutional or preempted law is “void” and must
be treated as “though it be not law.” Marbury, 5 U.S. at 177; see also,
e.g., Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 479 (1974)
(considering whether a state law was “void under the Supremacy
Clause”); Chi., Indianapolis, & Louisville Ry. Co. v. Hackett, 228 U.S.
559, 566 (1913) (stating that “an unconstitutional act is not a law” and is
“inoperative as if it had never been passed”); Ex parte Siebold, 100 U.S.
371, 376 (1879) (“An unconstitutional law is void, and is as no law.”);
Duke Energy Trading & Mktg., L.L.C. v. Davis, 267 F.3d 1042, 1058–59
(9th Cir. 2001) (finding state regulations “void under the Supremacy
Clause”). Indeed, one court has gone so far as to declare that preempted
state laws “are void ab initio.” Antilles Cement Corp. v. Fortuno,
670 F.3d 310, 323 (1st Cir. 2012). Such sweeping pronouncements may
overstate the actual effect of judicial review and the Supremacy Clause.
A federal law passed in violation of the Constitution’s procedural
requirements may be void ab initio, see Mester Mfg. Co. v. INS, 879 F.2d
561, 570 (9th Cir. 1989), but state laws that clash with federal law
(including the Constitution) may be amended by the legislature that
enacted them. It is more accurate to state that these laws are “without
effect,” rather than treat them as nonexistent. Cipollone v. Liggett Grp.,
Inc., 505 U.S. 504, 516 (1992) (quoting Maryland v. Louisiana, 451 U.S.
725, 746 (1981)); accord Harris ex rel. Harris v. Ford Motor Co.,
110 F.3d 1410, 1415 (9th Cir. 1997). Preempted laws are constitutionally
unenforceable, but they are not snipped from the statute books.
Here, the CRRA could not have been void ab initio, because its
effective date antedated the effective date of the 1976 Copyright law that
preempted it. There is no reason why the entire CRRA may not remain on
the books in California until California chooses to amend or remove it. It
is true that portions of the CRRA are, in effect, dormant—at least unless
we reverse our judgment about the preemptive effect of the federal
copyright laws, the Supreme Court reverses our judgment for us, or
Congress removes the preemptive provision of the 1976 Copyright Act or
otherwise recognizes the droit de suite. See Close, 894 F.3d at 1065–66
(discussing similar proposals). If, for example, Congress removed the
preemption provision from the Copyright Act, the preempted portions of
CLOSE V. SOTHEBY’S 11
therefore claim-driven: when a party successfully invokes
preemption as a defense to a state-law claim, the court will
apply the federal law and the state law will be disregarded to
the extent the laws conflict.2
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; rather, 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, Cal. Civ. Code § 986(a)(3), which this action
indisputably was. The reason for our dismissal of plaintiffs’
claims is thus irrelevant, as it does “not affect the character or
type of action that has been brought.” Tract 19051
Homeowners Ass’n v. Kemp, 343 P.3d 883, 888 (Cal. 2015).
Courts have awarded fees under provisions like this one even
when the substantive law that houses the fee-shifting
provision is inapplicable to the underlying claims. See, e.g.,
Love v. Associated Newspapers, Ltd., 611 F.3d 601, 614 (9th
Cir. 2010); Tract 19051, 343 P.3d at 889–94 (collecting
the CRRA would automatically revive; the CRRA would not have to be
reenacted to become effective.
2 Indeed, preemption must be claim-driven, because “[p]reemption
ordinarily is an affirmative defense forfeitable by the party entitled to its
benefit.” Sickle v. Torres Advanced Enter. Sols., LLC, 884 F.3d 338, 345
(D.C. Cir. 2018); see Brannan v. United Student Aid Funds, Inc., 94 F.3d
1260, 1266 (9th Cir. 1996); Johnson v. Armored Transp. of Cal., Inc.,
813 F.2d 1041, 1043–44 (9th Cir. 1987).
12 CLOSE V. SOTHEBY’S
Moreover, plaintiffs’ proposed understanding of
preemption would end up favoring certain defenses over
others by conditioning fees based on how the defendant
prevailed. We can easily envision cases in which defendants
would forgo a meritorious preemption argument in order to
preserve the possibility of recovering attorneys’ fees. In this
case, the rule advanced by plaintiffs would be particularly
unfair to eBay, as we specifically declined to “address eBay’s
argument that it is not subject to the CRRA” given our
preemption holding. Close, 894 F.3d at 1068 n.6. It would
be strange to allow eBay to recover attorneys’ fees if we held
that the CRRA is inapplicable to eBay, but not if we held that
the CRRA is unenforceable because it is preempted.
In sum, we conclude that our preemption holding in this
case did not render the CRRA fee-shifting provision “null and
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
First, the 1976 Copyright Act does not expressly preempt
the CRRA fee-shifting provision. The 1976 Act expressly
preempts state laws governing “legal or equitable rights that
are equivalent to any of the exclusive rights within the
general scope of copyright as specified by section 106.”
17 U.S.C. § 301(a) (emphasis added). In other words, “the
rights asserted under state law [must be] equivalent to the
CLOSE V. SOTHEBY’S 13
rights contained in 17 U.S.C. § 106” for the Act’s preemption
provision to apply. Maloney v. T3Media, Inc., 853 F.3d
1004, 1010 (9th Cir. 2017) (citation omitted). The rights
contained in § 106 are the rights of reproduction, preparation
of derivative works, distribution, display, and performance.
17 U.S.C. § 106(1)–(6). Notably missing is any mention of
attorneys’ fees, which are in fact governed by a different
section—17 U.S.C. § 505. The CRRA fee-shifting provision
“does not fall within the scope of § 301(a) and therefore is not
preempted by the express terms of the Copyright Act.” Ryan
v. Editions Ltd. W., Inc., 786 F.3d 754, 761 (9th Cir. 2015).
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.” Cal. Civ. Code
§ 986(a)(3). Under the Copyright Act, fee-shifting applies to
“any civil action under this title.” 17 U.S.C. § 505. The
applicability of the two provisions depends on whether the
“action” was brought “under” state or federal law. And here,
plaintiffs brought this action under the CRRA. The CRRA
fee-shifting provision thus applies, and the Copyright Act feeshifting
provision does not.
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] claim.” 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
14 CLOSE V. SOTHEBY’S
reason is straightforward—when claims under state law and
federal law overlap, it is generally “impossible to distinguish
the fees necessary to defend against the [state-law] claim
from those expended in defense against the [federal-law]
claim.” Hubbard v. SoBreck, LLC, 554 F.3d 742, 745 (9th
Cir. 2009). A fee award in this circumstance would
encompass fees for litigating the federal claim. And granting
that award under a more generous state-law fee-shifting
provision could allow the prevailing party to evade the
stricter federal-law fee-shifting provision that would
ordinarily apply to the federal claim.
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 feeshifting
provision. 76 F.3d at 298. We 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
provisions do not apply to non-ERISA actions generally,
those provisions likewise do not preempt them generally.”
That same principle applies here. The 1976 Copyright
Act’s fee-shifting provision governs only “action[s] under”
the Copyright Act. 17 U.S.C. § 505. Plaintiffs brought their
claims exclusively under the CRRA. The Copyright Act’s
CLOSE V. SOTHEBY’S 15
fee-shifting provision does not apply to—and has no
preemptive effect in—this non-Copyright Act lawsuit.3
B. Prevailing Party Status
The CRRA fee-shifting provision awards fees to a
“prevailing party.” Cal. Civ. Code § 986(a)(3). Plaintiffs do
not dispute that eBay is a prevailing party, as we disposed of
all of the claims against eBay in eBay’s favor. See Close,
894 F.3d at 1076. Plaintiffs argue that Sotheby’s is not a
prevailing party because the 1977 claims remain pending on
remand. Indeed, plaintiffs make an abrupt about-face from
their contention that defendants “succeeded in gutting the
entire CRRA,” now arguing that they are the prevailing
parties because they succeeded in obtaining reversal of some
of the previously dismissed claims.
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
3 We reject plaintiffs’ judicial estoppel argument, as defendants have
not taken “inconsistent positions regarding [their] entitlement to fees” so
as to be judicially estopped from requesting them. Ryan, 786 F.3d at 763.
16 CLOSE V. SOTHEBY’S
Plaintiffs argue that Sotheby’s “cannot be deemed to be
the prevailing party” because of the remanded claims. The
CRRA fee-shifting provision, however, applies only to claims
involving sales that occurred after January 1, 1983. See Cal.
Civ. Code § 986(f). Sotheby’s is thus the prevailing party for
all of the claims that fall within the fee-shifting provision.
And under California law, a party who prevails on a feeshifting
claim remains a prevailing party “even when such a
claim is made with other claims on which attorney fees are
not recoverable.” Sharif v. Mehusa, Inc., 193 Cal. Rptr. 3d
644, 650 (Cal. Ct. App. 2015); see Jankey, 290 P.3d at 198
(“The general rule is that where a non-fee-shifting claim
overlaps with a fee-shifting claim, it does not limit fee awards
under the fee-shifting claim.”).4 The non-fee-shifting claims
might affect the “amount of” the fee award, but they do not
negate a party’s “entitlement to” a fee award. Graciano,
50 Cal. Rptr. 3d at 283.
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
4 This rule disposes of plaintiffs’ argument that a fee award is proper
only when the prevailing party prevails in the entire “action.” California
courts have expressly considered and rejected this argument, holding that
the phrase “any action” in a fee-shifting statute “refers to any ‘cause of
action,’” not the entire lawsuit. Aleman v. AirTouch Cellular, 146 Cal.
Rptr. 3d 849, 868–69 (Cal. Ct. App. 2012); see, e.g., Ramos v. Garcia,
204 Cal. Rptr. 3d 214, 222 (Cal. Ct. App. 2016).
CLOSE V. SOTHEBY’S 17
fees to be awarded as long as the victory obtained on the feeshifting
claims is “secure.” Urbaniak v. Newton, 24 Cal.
Rptr. 2d 333, 336 (Cal. Ct. App. 1993) (citation omitted).
And here, Sotheby’s has obtained a secure victory on all of
the claims for which fees may be awarded.
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 instead 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.
* * *
5 Plaintiffs’ motion to strike defendants’ replies in support of their fee
applications (Case No. 17-56234, Dkt. No. 82) is DENIED.
Outcome: Sotheby’s and eBay are entitled to 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.