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SB-579 Collectibles: sale of autographed collectibles.(2017-2018)

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Date Published: 08/23/2017 04:00 AM
SB579:v94#DOCUMENT

Amended  IN  Assembly  August 22, 2017
Amended  IN  Assembly  July 10, 2017
Amended  IN  Senate  May 15, 2017
Amended  IN  Senate  May 01, 2017
Amended  IN  Senate  March 29, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 579


Introduced by Senator Galgiani
(Coauthors: Senators Anderson, Bates, Hertzberg, Pan, and Wilk)
(Coauthor: Assembly Member Baker)

February 17, 2017


An act to amend Section 1739.7 of the Civil Code, relating to collectibles, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


SB 579, as amended, Galgiani. Collectibles: sale of autographed collectibles.
Existing law regulates the sale or offer to sell by a dealer to a consumer of a collectible in or from this state, as specified. Existing law defines the term “collectible” to mean any autographed item, as specified, sold or offered for sale in or from this state by a dealer, to a consumer for $5 or more.
This bill would instead define “autographed collectible” to mean autographed sports or entertainment media items, as specified, sold or offered for sale in or from this state by a dealer to a consumer for $50 or more, bearing the signature of a person signed by that individual’s own hand. The bill would exclude from the definition, among other items, signed books, works of fine art, furniture, and decorative objects. The bill would exclude, among other items, works of fine art, signed books, furniture, and certain decorative objects, from the definition of an autographed collectible.
Existing law defines a “dealer,” among other things, as a person who is principally in the business of selling or offering for sale collectibles in or from this state or a person who by his or her occupation holds himself or herself out as having knowledge or skill peculiar to collectibles. Existing law includes a person engaged in a cable television business for the sale of collectibles in the definition of dealer. Existing law excludes from the definition of dealer, among other persons, the personality who signs the memorabilia. Existing law also excludes from the definition of dealer a provider or operator of an online marketplace, provided that the marketplace provider or operator is not principally in the business of selling, or offering for sale, collectibles, in or from the state, exclusively or nonexclusively, or does not hold itself out as having knowledge or skill peculiar to collectibles.
The bill would amend the definition of a dealer to be, among other things, a person who is in the business of selling autographed collectibles and who is required to have a seller’ s permit issued by the California Department of Tax and Fee Administration. sells 3 or more autographed collectibles in a period of 12 months. The bill would include an auctioneer, an auction company, and a person engaged in any television business for the sale of autographed collectibles in the definition of dealer. The bill would amend the terms under which a provider or operator of an online marketplace is excluded from the definition of dealer to exclude a provider or operator through which prospective buyers connect with the sellers of autographed collectibles who are in actual physical possession of the merchandise being offered for sale and does not hold itself out as having knowledge or skill peculiar to collectibles.
Existing law requires a dealer, as defined, to provide a certificate of authenticity for each collectible to, among other things, indicate whether the item was obtained or purchased from a third party. If the item was obtained or purchased from a third party, existing law requires the certificate of authenticity to indicate the name and address of this third party.

This bill would eliminate the requirement that the name and address of the third party be indicated on the certificate of authenticity and would, instead, provide that a dealer is not obligated to provide the name and address of a third party, unless litigation ensues related to that item, and, in that instance, would authorize a consumer to obtain that information pursuant to a subpoena or judicial order. The bill would require the dealer to retain records of the name and address of the third party for a specified amount of time. The bill would provide for specified civil penalties and other costs of suit to be paid by a dealer to a consumer who brings a successful lawsuit for violations of the provisions requiring the certificate of authenticity.

The bill would provide that its provisions apply to sales physically conducted in California by a seller, as specified.

This bill instead would require a dealer to provide an express warranty, as specified. The bill also would require a dealer, for items obtained on and after January 1, 2018, separate from the express warranty, to maintain a record stating whether the autographed collectible was purchased by the dealer from a third party, for a period of 7 years, as well as the name and address of that third party. The bill would permit discovery of this information in a civil dispute, as specified.
The bill would require a consumer to have the right to cancel the contract for the purchase of an autographed collectible represented by a dealer as authentic until at least midnight of the 3rd day after the day on which the consumer purchased the autographed collectible, except when the autographed collectible is purchased at a public auction, as specified. The bill would specify procedures and conditions of the cancellation. The bill would require the 3-day right of return, except as specified, to be included in the sign and the onscreen message a dealer is required to display.
Existing law prohibits a dealer from displaying or offering for sale a collectible in this state at any trade show or similar event primarily featuring sales of collectibles or other memorabilia that offers onsite admission ticket sales, except as provided. Existing law requires a promoter who arranges or organizes a trade show featuring collectibles and autograph signings to provide a specified notification to any dealer who agrees to purchase or rent space in the trade show.
This bill would repeal those provisions.
Existing law provides that a consumer who is injured by a failure of the dealer to provide a certificate of authenticity is entitled to recover from that dealer, among other things, 10 times his or her actual damages.
This bill instead would provide for specified civil penalties in a civil action against the dealer for failure to comply with the provisions regarding express warranties. The bill would also provide for civil penalties for knowingly providing a false warranty, as well as attorney’s fees and other costs to be paid to the consumer.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1739.7 of the Civil Code is amended to read:

1739.7.
 (a) As used in this section:
(1) “Autographed collectible” means an item bearing purporting to bear the signature of a particular person in that person’s own hand that is sold or offered for sale for fifty dollars ($50) or more. more, excluding sales tax, shipping fees, other surcharges, and buyer’s premiums, when the dealer offers the signed item at a higher price than the dealer would charge for a comparable item without the signature.
(2) For purposes of this section, an autographed collectible shall be limited to the following items:
(A) Sports items, including, but not limited to, a photograph, ticket, plaque, sports program, trading card, item of sports equipment or clothing, or other sports memorabilia.
(B) Entertainment media items related to music, television, and films, including, but not limited to, a picture, photograph, record, compact disc, digital video disc, ticket, program, playbill, clothing, hat, poster, toy, plaque, trading card, musical instrument, or other entertainment memorabilia.

(C)

(3) For purposes of this section, and notwithstanding paragraph (2), an autographed collectible does not include the following items:

(i)

(A) Works of fine art, as defined by paragraph (1) of subdivision (d) of Section 982 that are originals or numbered multiples signed by the artist or maker.

(ii)

(B) Furniture and decorative objects, including works of pottery, jewelry, and design that are signed by the artist or maker.

(iii)

(C) Signed books, manuscripts, and correspondence, as well as ephemera not related to sports or entertainment media.

(iv)

(D) Signed numismatic items and bullion.

(3)

(4) “Consumer” means any natural person who purchases an autographed collectible from a dealer for personal, family, or household purposes. “Consumer” also includes a prospective purchaser meeting these criteria.

(4)

(5) (A) “Dealer” means a person who is in the business of selling or offering for sale autographed collectibles exclusively or nonexclusively, and is required to have a seller’s permit issued by the California Department of Tax and Fee Administration. sells three or more autographed collectibles in a period of 12 months. “Dealer” includes an auctioneer or auction company who sells autographed collectibles at a public auction, and also includes persons who are consignors or representatives or agents of auctioneers. auction conducted in the state, whether by broadcasting the auction from the state, or by being physically present in the state. “Dealer” includes a person engaged in a mail order, telephone order, mail-order, telephone-order, online, or television business for the sale of autographed collectibles.
(B) “Dealer” does not include any of the following:
(i) A pawnbroker licensed pursuant to Chapter 3 (commencing with Section 21300) of Division 8 of the Financial Code, if the autographed collectible was acquired through a foreclosure on a collateral loan, provided that the pawnbroker does not hold himself or herself out as having knowledge or skill peculiar to autographed collectibles.
(ii) The personality who signs the autographed collectible.
(iii) An online technology provider or marketplace through which prospective buyers connect with the sellers of autographed collectibles who are in actual physical possession of the merchandise being offered for sale and does not hold itself out as having knowledge or skill peculiar to autographed collectibles. that meets all of the following criteria:
(I) Connects a prospective buyer to a seller of an autographed collectible.
(II) Does not have actual physical possession of the autographed collectible being offered for sale.
(III) Does not hold itself out as having knowledge or skill peculiar to autographed collectibles.

(5)“Description” means any of the following:

(A)Any representation in writing, including, but not limited to, a representation in an advertisement, brochure, catalog, flyer, invoice, sign, Internet Web page, email, or other commercial or promotional material.

(B)Any oral representation.

(C)Any representation included in a radio or television broadcast or online communication to the public in or from this state.

(6) “Limited edition” means any autographed collectible that meets all of the following requirements:
(A) A company has produced a specific quantity of an autographed collectible and placed it on the open market.
(B) The producer of the autographed collectible has posted a notice, at its primary place of business, that it will provide any consumer, upon request, with a copy of a notice that states the exact number of an autographed collectible produced in that series of limited editions.
(C) The producer makes available, upon request of a consumer, evidence that the electronic encoding, films, molds, or plates used to create the autographed collectible have been destroyed after the specified number of autographed collectibles have been produced.
(D) The sequence number of the autographed collectible and the number of the total quantity produced in the limited edition are printed on the collectible.

(7)“Mint condition” means any autographed collectible sold on the open market or through a private transaction that meets all of the following requirements:

(A)The item has never been circulated, used, or worn.

(B)The item exhibits little or no sign of aging or degradation caused by oxidation or exposure to sunlight as a result of its display.

(C)The item is otherwise free from creases, blemishes, or marks.

(8)“Promoter” means a person who arranges, holds, organizes, or presents a trade show featuring autographed collectibles, autograph signings, or both.

(9)

(7) “Person” means any natural person, partnership, corporation, limited liability company, company, trust, association, or other entity, however organized.
(8) “Representation” means any oral or written representation, including, but not limited to, a representation in an advertisement, brochure, catalog, flyer, invoice, sign, radio or television broadcast, online communication, Internet Web page, email, or other commercial or promotional material.
(9) “Auctioneer” means an auctioneer as defined in subdivision (d) of Section 1812.601, including any person who is a consignor, representative, or agent of an auctioneer.
(10) “Auction company” means an auction company as defined in subdivision (c) of Section 1812.601.
(b) Whenever a dealer, A dealer who, in selling or offering to sell to a consumer an autographed collectible in or from this state, provides a description of that autographed collectible as being autographed, the dealer shall furnish a certificate of authenticity collectible, makes a representation to a consumer that the signature on the autographed collectible is authentic, shall furnish an express warranty to the consumer at the time of sale. The certificate of authenticity shall be in writing, shall be signed by the dealer or his or her authorized agent, and shall specify the date of sale. The certificate of authenticity shall be in at least 10-point boldface type and shall contain the dealer’s true legal name and street address. The express warranty may be included in the bill of sale or invoice. The dealer shall retain a copy of the certificate of authenticity express warranty for not less than seven years. Each certificate of authenticity shall do all of the following: The express warranty shall meet all of the following criteria:

(1)Describe

(1) Is written in at least 10-point type.
(2) Is signed by the dealer or his or her authorized agent, and contains the dealer’s true legal name, business street address, and the last four digits of the dealer’s seller’s permit account number, if any, from the California Department of Tax and Fee Administration.
(3) Specifies the date of sale and the purchase price.
(4) Describes the autographed collectible and specify specifies the name of the personality person who autographed it.

(2)Either specify the purchase price and date of sale or be accompanied by a separate invoice setting forth that information.

(3)Contain an express warranty, which shall be

(5) Expressly warrants the autographed collectible as authentic, and that the warranty is conclusively presumed to be part of the bargain, of the authenticity of the autographed collectible. This bargain. The warranty shall not be negated or limited by reason of the lack of words such as “warranty” or “guarantee” or because the dealer does not have a specific intent or authorization to make the warranty or because any statement relevant to the autographed collectible is or purports to be, or is capable of being, merely the dealer’s opinion.

(4)Specify whether

(6) If the autographed collectible is offered as one of a limited edition and, if so, specify edition, specifies (A) how the autographed collectible and edition are numbered and (B) the size of the edition and the size of any prior or anticipated future edition, if known. the dealer has knowledge of that information. If the size of the edition and the size of any prior or anticipated future edition is not known, the certificate warranty shall contain an explicit statement to that effect.

(5)Indicate

(7) Indicates whether the dealer is surety bonded or is otherwise insured to protect the consumer against errors and omissions of the dealer and, if bonded or insured, provide provides proof thereof.

(6)Indicate the last four digits of the dealer’s resale certificate number from the California Department of Tax and Fee Administration.

(7)Indicate whether the item was autographed in the presence of the dealer and specify the date and location of, and the name of a witness to, the autograph signing.

(8)Indicate whether the item was obtained or purchased from a third party. The dealer is not obligated to provide the name and address of a third party, unless litigation ensues related to that item. In that instance, the consumer may obtain the name and address pursuant to a subpoena or judicial order. The dealer shall retain records of the name and address of the third party for a period of seven years.

(8) Indicates whether the autographed collectible has a certificate of authenticity from a third party, or if it was autographed in the presence of the dealer, and any proof thereof.
(9) Include Indicates an identifying serial number that corresponds to an identifying number printed on the autographed collectible item, if any. The serial number shall also be printed on the sales receipt. If the sales receipt is printed electronically, the dealer may manually write the serial number on the receipt.

(c)A dealer shall not represent an item as an autographed collectible if it was not autographed by the personality in his or her own hand.

(c) In addition to retaining the express warranty described in subdivision (b), the dealer shall also retain, on and after January 1, 2018, a record stating whether the autographed collectible was purchased by the dealer from a third party and the name and address of that third party. This third-party information may be discoverable during a civil dispute. However, nothing in this subdivision prohibits a party from objecting to a discovery request on the grounds of a right to privacy.
(d) (1) In addition to any other right or remedy provided under existing law, including, but not limited to, any rights and remedies provided under contract law, a consumer shall have the right to cancel the contract for the purchase of an autographed collectible represented by a dealer as authentic until midnight of the third day after the day on which the consumer purchased the autographed collectible. Notice of the cancellation may be provided in person or in a written or electronic form, and is deemed effective once communicated or sent. The autographed collectible shall be returned to the dealer within 30 days of the sale in the same condition in which it was sold, and the cost of the return shall be borne by the consumer. The price paid by the consumer shall be refunded within 10 days of receipt of the returned autographed collectible. Nothing in this section prevents the parties from agreeing to cancel a contract after midnight of the third day after the day on which the consumer purchases the autographed collectible.
(2) This subdivision does not apply to an autographed collectible sold by an auctioneer or auction company.

(d)

(e) (1) No dealer shall display or offer for sale an autographed collectible in this state unless, at the location where the autographed collectible is offered for sale and in close proximity to the autographed collectible merchandise, there is a conspicuous sign that reads as follows:
“SALE OF AUTOGRAPHED COLLECTIBLES: AS REQUIRED BY LAW, A DEALER WHO SELLS TO A CONSUMER ANY AUTOGRAPHED COLLECTIBLE DESCRIBED AS BEING AUTOGRAPHED MUST PROVIDE A WRITTEN CERTIFICATE OF AUTHENTICITY AN EXPRESS WARRANTY AT THE TIME OF SALE. SALE AND A THREE-DAY RIGHT OF RETURN. THIS DEALER MAY BE SURETY BONDED OR OTHERWISE INSURED TO ENSURE THE AUTHENTICITY OF ANY AUTOGRAPHED COLLECTIBLE SOLD BY THIS DEALER.”
(2) This subdivision does not apply to a collectible sold by an auctioneer or auction company at a public auction.

(e)

(f) Any dealer engaged in a mail-order, telephone-order, or online business for the sale of autographed collectibles in or from this state: collectibles:
(1) Shall include the disclosure specified in subdivision (d), (e), in type of conspicuous size, in any written advertisement relating to an autographed collectible.
(2) Shall include in each television or online advertisement relating to an autographed collectible the following written on-screen onscreen message, which shall be prominently displayed, easily readable, and clearly visible for no less than five seconds, and which shall be repeated for five seconds once during each four-minute segment of the advertisement following the initial four minutes:
“A written certificate of authenticity express warranty is provided with each autographed collectible, as required by law. This dealer may be surety bonded or otherwise insured to ensure the authenticity of any autographed collectible sold by this dealer.”
(3) Shall include as part of the oral message of each radio advertisement for an autographed collectible the disclosure specified in subdivision (d). (e).

(f)No dealer shall display or offer for sale an autographed collectible in this state at any trade show or similar event primarily featuring sales of autographed collectibles or other memorabilia that offers onsite admission ticket sales unless, at each onsite location where admission tickets are sold, there is prominently displayed a specimen example of a certificate of authenticity.

(g) (1) A dealer who fails to provide a certificate of authenticity, an express warranty or provides a certificate of authenticity an express warranty that does not comply with all of the requirements of subdivision (b), shall be subject to a civil penalty of up to one thousand dollars ($1,000), payable to the consumer in a civil action brought against the dealer.
(2) A dealer who knowingly provides a false certificate of responsibility shall be subject to a civil penalty of up to five thousand dollars ($5,000), payable to the consumer, plus court costs, reasonable attorney’s fees, interest, and expert witness fees, if applicable, incurred by the consumer in a civil action brought against the dealer.
(3) The remedy specified in this section is in addition to, and not in lieu of, any other remedy that may be provided by law.

(h)No person shall represent himself or herself as a dealer in this state unless he or she possesses a valid seller’s permit issued by the California Department of Tax and Fee Administration.

(i)

(h) A dealer may be surety bonded or otherwise insured for purposes of indemnification against errors and omissions arising from the authentication, sale, or resale of autographed collectibles.

(j)Whenever a promoter arranges or organizes a trade show featuring autographed collectibles and autograph signings, the promoter shall notify, in writing, any dealer who has agreed to purchase or rent space in this trade show what the promoter will do if any laws of this state are violated, including the fact that law enforcement officials will be contacted when those laws are violated. This notice shall be delivered to the dealer, at his or her registered place of business, at the time the agreement to purchase space in the trade show is made. The following language shall be included in each notice:

“As a vendor at this autographed collectibles trade show, you are a professional representative of this hobby. As a result, you will be required to follow the laws of this state, including laws regarding the sale and display of autographed collectibles, as defined in Section 1739.7 of the Civil Code, forged and counterfeit autographed collectibles and autographs, and mint and limited edition autographed collectibles. If you do not obey the laws, you may be evicted from this trade show, be reported to law enforcement, and be held liable for a civil penalty of 10 times the amount of damages.”

(k)This section applies to both of the following:

(1)Sales physically conducted in California by sellers who operate exclusively in California, regardless of state of residence of consignor or purchaser of property.

(2)Sales physically conducted in California by sellers who operate nonexclusively in California, as long as the seller’s California operations would qualify them as “dealers” under this section.

SEC. 2.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to alleviate some of the burdens on, and to protect the privacy of, bookstore owners, comic book retailers, consignors, art galleries, antique dealers, and auction houses as soon as possible, it is necessary that this act take effect immediately.