Thursday, September 29, 2016

New California law to make autographed books scarcer than water

greene autograph.jpg

More than half the autographs from noted celebrities such as singer Michael Jackson and astronaut Neil Armstrong are fake, state officials say.

That’s why actor Mark Hamill, who played Luke Skywalker in the original “Star Wars,” joined forces with elected officials, police and the Disney Co. in Burbank on Tuesday to trumpet a new bill to put a stop to them.

Hamill gathered with Assembly members Ling Ling Chang, R-Diamond Bar, Evan Low, D-Campbell and West Covina Police Chief Dave Falkner of the California Police Chiefs Associated at the Walt Disney Studios to tout AB 1570, a new law signed by the governor to crack down on fake signatures.

In the $1 billion memorabilia market, counterfeit signatures constitute more than half the supply, lawmakers say, making it too easy to defraud consumers. Some of the most forged Hancocks, according to industry experts, include the cast of “Star Wars,” “The Force Awakens” and the cast of the TV series “The Walking Dead.”

The new law will put safeguards in place, as well as provide civil recourse for buyers of fake autographs.

-Dana Bartholomew, “‘Star Wars’ actor Mark Hamill touts new hope for crackdown on fake autographs,” Los Angeles Daily News, September 20, 2016

Sounds like a fine idea, eh? California Assembly Bill 1570, signed by Governor Jerry Brown last week and set to go into effect January 1, aims to solve a long-festering problem. But in the process, it has the potential to drawn American booksellers in overwhelming paperwork and record-keeping requirements, put a sizeable dent in the much-loved tradition of author signings in bookstores, and leave out of state dealers wondering if they can risk selling to Californians.

AB 1570’s summary sounds innocuous enough:

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 an autographed sports item, as specified, sold or offered for sale in or from this state by a dealer to a consumer for $5 or more. Existing law defines a “dealer” as, among other things, a person who is 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 provides for the regulation of pawnbrokers and makes it unlawful for a person to engage in the business of a pawnbroker without a license issued by the chief of police, the sheriff, or where appropriate, the police commission.

This bill would instead define the term “collectible” to mean all autographed items, whether or not sports related, as specified, and would make conforming changes to the provisions regulating the sale or offer to sell by a dealer to a consumer of a collectible in this state. The bill would exclude a pawnbroker licensed pursuant to a specified law, under specified circumstances, the personality who signs the memorabilia, and a provider or operator of an online marketplace, as specified, from the definition of a dealer.

And, indeed, the law does say that:

“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 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 collectibles.

(ii) The personality who signs the memorabilia.

(iii) A provider or operator of an online marketplace, provided that the online 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.

That’s a thrift shop/flea market, pile-stuff-high-and-sell-it-cheap exception.

But under AB 1570, a little learning is a dangerous thing:

“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.

Eureka (CA) bookseller Scott Brown has sounded the alarm:

Unfortunately for you, the consumer, the legislators never seem to have considered that buyers of autograph material eventually become sellers of autograph material.

Let’s say you like to go to author events and get books signed. Eventually, your shelves fill up, and you want to trade books in at a shop like Eureka Books.

Guess what? Remember that Certificate of Authenticity that sounded so reasonable? Well your name and address has to go on the certificate of authenticity because I (as the person issuing the COA) have to say where I got the book. This applies to signed books, artwork, and any other autographed items you own...

Maybe you’d like to sell that Morris Graves painting you inherited. You send it to an auction house, where it sells for $40,000. Good for you. But did you supply a Certificate of Authenticity? What? Why do I have to issue a COA? What do I know about authenticating Morris Graves paintings?

Guess what? AB 1570 requires YOU, as the owner of the painting, to guarantee its authenticity. And you don’t issue the COA? You can be liable for TEN TIMES damages, plus attorneys fees. Call it a cool half mill, because you didn’t know you were supposed to issue a COA.

Maybe you decide to sell it at an auction house outside of California. Good luck, because if the person who buys your painting lives in the Golden State, the law still applies.

Consumers aren’t the only ones significantly affected by this law.

Consider bookstores that do a lot of author events. Let’s imagine that Neil Gaiman does one of his typical massive book signings in February for his forthcoming book, Norse Gods. Say 1000 people show up and buy books at $25.95. The bookstore either has to issue 1000 COA, or risk being sued for $25.95 x 1000 x 10, plus attorney’s fees. Call it $300,000.

Is it any wonder that many of California’s best bookstores are very worried that this law will make it much harder to hold book signings and other author events. The legislature and the governor apparently had a similar response, because the law was passed with almost no discussion.

Brown continues,

[A]rt dealers should also be up in arms, since the law as written requires the person a dealer sells a signed item to to be informed about who he bought it from:
This is both an invasion of privacy and represents a danger to the seller as the COA provides a literal map for potential thieves. Auction houses, such as Bonhams, PBA Galleries, Clars, Heritage, Christie's, and Sotheby's would also find it difficult to sell signed items of any kind after this law goes into effect...every signed item in our inventories would now require certificates of authenticity bearing the name of the person from whom we acquired the item.

Can I put their name and address on the COA without their permission, since it is now required by law? Or do I need to ask, and what happens to the items for which the seller declines to have that information made public? Do I have to discard tens of thousands of dollars in signed inventory to protect the privacy of my sources? The problem for art dealers could easily reach into the millions of dollars.

Rare Books & Collections reports,

Not only that, but if a third-party seller is involved, he/she must be identified on the COA. So, for example, if Brown buys a signed book from a scout, or a collector who is deaccessioning, or someone who inherited a collection, he would have to supply that person’s name and address to the future buyer on the COA.

Legislative analysis of AB 1570 was, at best, cursory, and focused on sports and entertainment memorabilia. In those fields, the market makers are giant media corporations and celebrities. Signed memorabilia is a product they manufacture to extend their brands and further monetize the movies and their stars.

For booksellers, Brown says, there’s no warehouse filled with worker bees:

Here’s the problem: We sell greeting cards by local artist John Wesa. He signs each one. If we sell one for $5, under this law, we have to provide a certificate of authenticity, and we have to keep our copy of the COA for seven (7!) years. For a $5 greeting card.

Each year, we sell more than a thousand books signed by local authors, every one of these will need to have an accompanying COA. In odd-numbered years, we sell books for the Humboldt County Children’s Book Author Festival. In 2015, we sold 1605 signed books to benefit the festival. That’s 1605 COAs, to be filed and stored for seven years.

Any dealer, anywhere, who does business in California, or in the state, is liable to get caught in this new regulatory web. In an open letter to Assembly members, Scott Brown predicts the first impact on out-or-state dealers will be felt early next year:

“Surely many out-of-state vendors who exhibit at conventions and trade shows in California will choose not to participate because of this law.”

The 50th California International Antiquarian Book Fair is scheduled for February 10-12, 2017 in Oakland.