Rare Book Monthly

Articles - January - 2017 Issue

California's New Autograph Law: Is It A Threat to Booksellers?

That's not what I meant! Assemblywoman Chang explains law's meaning.

A new law concerning the sale of autograph material in the state of California, which caused booksellers much consternation when it was passed in September, goes into effect on January 1. It applies not only to signed documents and memorabilia, but signed books as well. The demands it makes came across as draconian to some booksellers with signed material in their inventory. Sellers would have to supply a Certificate of Authenticity for autographs, with various detailed requirements including a description of the item, purchase price, an express warranty, size of edition if it is part of a limited edition, whether it was signed in the dealer's presence and the name of a witness to the signing, and if purchased from a third party the name and address of the person from whom it was purchased. That last requirement added the issue of privacy, as individuals who sell books to a dealer or through an auction often, maybe usually, want to maintain their privacy, rather than have their name and address given to the new purchaser. That certificate of authenticity, revealing the previous owner's name and address, could show up on eBay or Amazon at some future date.

 

Other provisions place requirements on dealer advertising and the type of sign that must be displayed in their shop. It also provides that the rules not only apply to in state sales by California dealers, but to sales by California dealers to out of state consumers, and from out of state dealers to California customers. If a dealer violates these requirements, the customer may recover actual damages, and an amount equal to ten times actual damages, plus court costs, attorney's fees, expert witness fees, and interest.

 

There is one limitation to this requirement. It only applies to items sold for $5 or more. Sell your signed copy of the Gettysburg Address for $4.99 and you're safe.

 

While a first reading led some to conclude the law is a death knell to small booksellers with autographed items, a deeper look indicates it may not be quite the monster they first thought. As with so many laws, the devil is in the details, or perhaps, in the interpretation. Legalese is not always as clear in its meaning as lawmakers may imagine. That is particularly true here when it comes to average booksellers because, despite the appearance of some of the language, it was not meant to impact them at all. It is targeted at businesses that run fake autograph mills, notably involving sports and celebrity collectibles. These places are evidently filled with knowingly fake autographs. The state legislature was rightfully trying to protect its citizens against such unscrupulous sellers.

 

We will start with why the legislation looked so frightening at first blush to booksellers. The law provides that whenever a dealer sells a "collectible" within or from the state of California, they must provide a certificate of authenticity meeting all of the described requirements, and subject to the aforementioned punishments if incorrect. A "collectible" is described as, "an autographed item sold or offered for sale in or from this state by a dealer to a consumer for five dollars ($5) or more." Previous law limited "collectibles" to sports-related items, but the new law expands it to any autographed item that a seller describes as being autographed.

 

So that brings us down to the question of to whom does this law apply? Who is a dealer? Here is where we need to take a close look at the exact definition. This is how the new law defines a "dealer":

 

“'Dealer' means a person who is principally in the business of selling or offering for sale collectibles in or from this state, exclusively or nonexclusively, or a person who by his or her occupation holds himself or herself out as having knowledge or skill peculiar to collectibles, or to whom that knowledge or skill may be attributed by his or her employment of an agent or other intermediary that by his or her occupation holds himself or herself out as having that knowledge or skill. 'Dealer' includes an auctioneer who sells collectibles at a public auction, and also includes persons who are consignors or representatives or agents of auctioneers. 'Dealer' includes a person engaged in a mail order, telephone order, online, or cable television business for the sale of collectibles."

 

Have you found the magic word, the bookseller's get-out-of-jail free card (maybe)? That word is "principally." To be a "dealer" to whom this law applies, you need to be "principally" in the business of selling "collectibles." Remember, for purposes of this law, "collectibles" doesn't mean anything collectible, like a book, but only an autographed item selling for $5 or more. Clearly, a person who specializes in selling autographed books and documents, or promotes himself as an expert on autographs, will be bound by this legislation. However, for the average bookseller, autographed copies are an occasional, incidental part of the business, not the "principal" part.

 

As a result of the controversy created by the bill, it's author, Assemblywoman Ling Ling Chang, released a statement explaining it was not meant to apply to booksellers. She then issued a letter, which in part reads:

 

"Both the letter and the spirit of the law are clear that AB 1570 does not apply to booksellers. I refer specifically to how "dealer" is defined in Section 1739.7 (a)(4)(A) which states that a dealer is defined as anyone who is "principally in the business of selling signed collectibles [emphasis added]. Bookstores, both as they are understood generally and many who communicated with my office, are not principally in the business of selling signed collectibles any more than a convenience store. It is true that some booksellers’ inventory include signed merchandise, including books signed by authors during special signing events. However, it is clear, even taking those items into consideration, a bookstore would not meet the bar of being ‘principally’ in the business of selling signed collectibles."

 

Assemblywoman Chang goes on to say. "Furthermore, the intent behind the expansion of this 25 year old consumer protection law was not to include booksellers." Of course, an after-the-fact letter by a legislator is not law, but it gives added force to what was the intent of using the word "principally." It reinforces what appears to me to be the correct interpretation of the law. California booksellers, and out-of-state booksellers who sell to California customers, should be able to rest easy. In the grand scheme of things, you are more akin to a 7-Eleven than to an autograph seller. Congratulations.


Posted On: 2017-01-01 01:31
User Name: eurekabookselle

This law most seriously impacts consignors to auctions and auctioneers, but professional booksellers are not off-the-hook as you suggest.

Contrary to any dictionary definition, this law explicitly defines "dealers" as any "persons who are consignors" to auctions of signed items (art, books, manuscripts, celebrity photos, etc.). That means a consignor to an auction can be sued for failing to provide a Certificate of Authenticity. The auction house also has to provide a COA under this law for everything signed, no matter what medium; so every signed item sold at auction now requires two COAs, one from the consignor and one from the auctioneer.

While ex-Assembly member Chang wrote a letter saying booksellers aren't covered, the Legislative Counsel (the attorney for the legislature) has produced a five-page memo detailing how booksellers are affected. Basically, any member of a professional organization requiring its members to authenticate items (ABAA, IOBA, PADA, Manuscript Society) is covered by the rather low standard of having "knowledge" of autographs. Expertise is not required. This knowledge-based definition of "dealer" applies even if the bookseller is not principally engaged in selling signed items. No fewer than four attorneys who have looked at this provision have reached the same conclusion as the Legislative Counsel.

The LA Times Editorial Board singled out AB1570 as the single worst California law approved in 2016, writing, "This bill never should have passed. The Legislature must fix or repeal it immediately when it resumes business (October 19, 2016)." The ACLU is on record with the New York Times (Dec. 8, 2016) saying "The law is an invasion into privacy and should be amended." Expect more opposition as the law takes effect in 2017.

Scott Brown
Eureka Books, ABAA, IOBA


Posted On: 2017-01-01 03:45
User Name: bookfever

Unfortunately, Chang in her letter ignored the fact that the definition included an "or" - "or a person who by his or her occupation holds himself or herself out as having knowledge or skill peculiar to collectibles" -

If a booksellers sells any autographed item (where they did not actually witness the signing) as "authentic" then that bookseller is holding themselves out as having knowledge. . The law does not say that they have to hold themselves out as "experts" - just knowledgeable -

if the sentence said "and" instead of "or" then "principally" might exempt some booksellers - but it doesn't. It says "or"

and, of course, there is still the issue of consignors and auctioneers -

Chris Volk


Posted On: 2017-01-01 15:54
User Name: essexbooks

Well Intended as this may be ( we ALL know of the fake auctions ) it means that a dealer selling to California ( and soon the rest of the USA ? ) must SEE the signing of anything. With some illustrators / artists / writers this may not prove a problem , but whay happens with artists like Sherlock or Banksy who are impossible to identify , let alone watch ? Does their art become worthless ? Tis act has VERY far reaching effects , mainly , dealing with California just isn't worth the trouble.


Posted On: 2017-01-01 19:24
User Name: bookfever

I think that this is another error in the article: the law does not apply to dealers selling TO customers in California - "from or in" would cover all sales by California dealers, both in California and out of state, and sales made by all dealers IN California - for example, if exhibiting at a book fair in California or consigning something at auction, etc. Since the original bill which this amended had been around for 20+ years, it doesn't seem likely that other states will emulate this. The Uniform Commercial Code already requires that a seller have a reasonable belief that all autographed items are genuine, etc

Chris Volk, IOBA.


Posted On: 2017-01-01 22:47
User Name: buyingitall

Simply put, it appears Cal. Assem. Bill No. 1570 (2015-2016 Reg. Sess. [BILL]) and the chaptered amendments to Cal. Civ. Code, § 1739.7 (CODE) are vague, overbroad and lacks fair notice. The BILL has not stated any enforceable criminal citations, just speculation and irrelevant facts and biased opinions. The CODE contributes a misperception to all members of the public on what is being prohibited or what the penalties are for breaking that law, if any.

The former Cal. Assemblymember Ling Ling Chang’s (CHANG) letter dated October 18, 2016 was an attempt to unilaterally supplement and redefine the BILL and CODE outside the legislative and public realm and it drastically failed. The letter confuses the public’s understanding of what behavior is covered and what behavior is not. The letter is a futile exercise and should be ignored as moot.

It appears CHANG’s letter was disingenuous, outright neglectful, without merit and lacks public participation. The California courts have said that the motive of the bill’s author (CHANG) is irrelevant in looking at legislative intent after the bill passed. See California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692, 700.

A court adjudicating a facial attack on a statute considers only the text of the challenged measure (Tobe v. City of Santa Ana (1995) 9 Cal.4th 1069, 1084) and its legislative history (see Zuckerman v. State Bd. of Chiropractic Examiners 2002) 29 Cal.4th 32, 42). The above Court opinions contradicts CHANG’s meritless letter.

CHANG neglected and attempted to sidestep the mandated transparency regulations under the Cal. Public Records Act (Cal. Gov’t Code, § 6250 et seq.) that provides public access to state and local government records; Legislative Open Records Act (Cal. Gov’t Code, § 9070 et seq.) that provides public access to records of the Legislature; Information Practices Act (Cal. Civ. Code § 1798 et seq.) requirements on state agencies in relation to the collection, use, maintenance and dissemination of information relating to individuals; and, Bagley-Keene Open Meeting Act (Cal. Gov’t Code, § 11120) defines Cal. State open meeting laws and notice.

For a good read: Authenticity at the Right Price: The Development and Implications of Commodified Sports Memorabilia by Stephen Andon
http://nsuworks.nova.edu/cgi/viewcontent.cgi?article=1009&context=quadrivium

Any questions do not hesitate to contact me. Thank you. Richard Hopp mail@MrHopp.com. The above is my opinion and is not legal advice.


Posted On: 2017-01-03 05:15
User Name: armadillo

I appreciate RBH and the Assembylwoman Chang's attempt to calm everyone -- but unfortunately, the new law is a serious risk to booksellers and needs to be amended or repealed until a more sensible version is developed.

According to the original bill analysis by the Senate Judiciary committee the existing law being amended applied to “Any autographed sports item (including … books….)” Now it is any autographed item, not just sports collectibles. As noted earlier, ‘dealer’ means not only those who deal ‘principally’ in autographed collectibles, but also one who “by his or her occupation” holds himself out as having skill or expertise with “collectibles.” What does that mean? Probably you are OK if you buy at Goodwill and sell on Amazon…but unless you can truthfully say under oath that you have never appraised a signed book you are probably SOL. The skill or expertise is not necessarily in authenticating the autographs; it may be sufficient that you are skilled at determining the value of a signed JFK Profiles in History vs. one that is not signed. That is why the “express warranty” you are required to give “cannot be negated” by any weasel words or statements that “in your opinion” an autograph is genuine. As for relying on the fact that booksellers aren’t “principally” in the business of selling autographed books, neither are pawnbrokers. Yet the law expressly excludes them and does not exclude booksellers.

Then there is the real killer -- You may be liable for 10x damages and costs not only if your COA proves up false, but also if you failed to offer one or provide one. What does this mean? It means your purchaser may be injured even if a signature is genuine and even if they don’t try to resell it themselves -- because the item’s potential resale value, investment value, inheritance value, or whatever is substantially diminished. They may not notice that at the time of sale, but they will discover it eventually.

And finally -- let’s suppose you get sued and you convince the court the law was not intended to apply to booksellers, that you are not principally a ‘dealer’, and since this is the only autographed book you sold this decade you don't hold yourself out as knowledgeabl.. Congratulations, you are only out court costs and attorney fees..

I don’t mean to be alarmist -- but we should all be writing our legislators to fix this; not relying upon suppositions or author statements that all will be OK.

Scott Burns
Armadillo & Dicker Books (Independent)


Posted On: 2017-01-04 16:50
User Name: Fattrad1

A question for the booksellers, how can one be knowledgeable without having some type of formal education or the passing of a standardized examination???? Without those basic standards, "it looks good to me" is proper level of assurance. This would be valid concept to present in court should the situation arise.


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