California revamps law on autographed collectibles

In late 2016, the California legislature passed a new law expanding existing regulations on the autographed sports memorabilia market which had, suffice it to say, unintended consequences. The law went into effect on January 1, 2017 and placed significant restrictions on dealers selling any and all autographed items – including comic books – for more than $5.00 in or from California. For example, the new law required dealers of autographed collectibles to furnish certificates of authenticity containing an express warranty and certain information, such as whether the item is part of a limited edition, the size of the edition if known, the name of the witness to the signing, and the name and address of any third party from whom the item was obtained. The law also required certain signage at the point of sale, that all dealers have a resale certificate from the California State Board of Equalization, and placed notification obligations on promoters of trade shows, among other regulations.

The law specifically excluded the person signing the memorabilia from the definition of a “dealer,” so comic writers and artists, for example, selling their own autographed memorabilia were exempt from the impact of the law. However, the law still resulted in burdens on the comic industry. For example, if creators appeared at stores or conventions for signings, and the store or some other third-party was selling the autographed items, then the law applied.

After much lobbying and at least one lawsuit, the California legislature amended the law, effective October 12, 2017. The new revisions maintain the exclusion of the person who signed the collectible as an affected “dealer.” Moreover, the law specifically excludes books – including comic books – from its application. Works of fine art that are originals or numbered multiples are also excluded. What about posters, trading cards, toys or other autographed items that are often sold in connection with comics? The law still applies to them if they are sports items or items “related to” music, television, or films. There are some further limitations to the application of the law as well. For example, the price point when the law becomes applicable was raised from $5.00 to $50.00 and the dealer must be selling the autographed item at a higher price than it would sell a comparable non-autographed item. Under the definitions, an interesting question arises as to whether the law applies to a $60.00 toy that is related to a book that has not yet made its way to television or film, and what exactly does “related to” mean?

Where the law still applies, the requirements of the law have also been tailored. For example, the requirements of an express warranty and disclosure of certain information remain, but requirements such as the disclosure of the name and address of any third party from whom the item was obtained have been eliminated, although the dealer must retain such information for seven years. The law affords consumers a three day right to cancel the contract for the sale of the items, but under the new law, that right does not apply to sales at public auctions or trade shows. The signage requirements remain, but have been altered depending on whether the dealer is at a retail store, an auction, or a trade show. The requirement that dealers have a resale certificate has also been eliminated. The new law has several additional requirements that may or may not apply based upon the circumstances of the sale and anyone who may be a “dealer” should discuss the applicable requirements and the possible penalties for non-compliance with their counsel.