BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2765
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          ASSEMBLY THIRD READING
          AB 2765 (Committee on Judiciary)
          As Amended April 22, 2010
          Majority vote 

           JUDICIARY           10-0                                        
           
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          |Ayes:|Feuer, Tran, Brownley,    |     |                          |
          |     |Evans, Hagman, Jones,     |     |                          |
          |     |Knight, Monning, Nava,    |     |                          |
          |     |Skinner                   |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
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           SUMMARY  :  Clarifies application of the "discovery rule" for  
          purposes of recovering works of historic, artistic, and cultural  
          significance and extends by three years the statute of  
          limitations for recovery of works from a museum, gallery,  
          auctioneer, or dealer.  Specifically,  this bill  :  

          1)Extends the statute of limitations for specific recovery of a  
            stolen article of historical, interpretive, scientific,  
            cultural, or artistic significance from three to six years if  
            the action for recovery is brought against a museum, gallery,  
            auctioneer, or dealer. 

          2)Clarifies, in response to differing appellate court rulings,  
            that the "discovery rule" for triggering the statute of  
            limitations for the recovery of articles of historical,  
            interpretive, scientific, cultural, or artistic significance  
            applies to property taken by theft prior to 1983, when the  
            discovery rule was first codified, and further clarifies that  
            "discovery" under the discovery rule means "actual" rather  
            than "constructive" discovery.

          3)Defines "actual discovery" to mean that the party bringing the  
            action has express knowledge of the identity and the  
            whereabouts of the person or entity that possesses the article  
            of historical, interpretive, scientific, cultural, or artistic  
            significance, and specifies that actual discovery does not  
            include constructive knowledge imputed by law. 

          4)Specifies that the statute of limitation as set forth in this  








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            bill applies notwithstanding the state's "borrowing" statute  
            that permits application of another state's statute of  
            limitation under prescribed circumstances.

          5)Specifies that the provisions of this bill relating to actions  
            against a museum, gallery, auctioneer, or dealer shall apply  
            to pending actions, as specified.  Specifies that previously  
            dismissed actions may be revived without prejudice if the  
            action was dismissed on statute of limitation grounds but  
            would not have been dismissed if the provisions of this bill  
            had applied at the time of dismissal. 

           EXISTING LAW  : 

          1)Provides, generally, that an action for taking, detaining, or  
            injury any goods or chattels, including actions for the  
            specific recovery of personal property, must be commenced  
            within three years.  

          2)Provides that a cause of action for recovery in the case of  
            theft of any article of historical, interpretive, scientific,  
            or artistic significance is not deemed to have accrued until  
            the discovery of the whereabouts of the article by the  
            aggrieved party, his or her agent, or the law enforcement  
            agency that originally investigated the theft.  
           
          FISCAL EFFECT  :  None

           COMMENTS  :  This bill amends the statute of limitation (SOL) in  
          Code of Civil Procedure Section 338 (c) relating to the recovery  
          of stolen works of art or other objects of historical, artistic,  
          or cultural significance.  Specifically, it will primarily do  
          three things:  1) it will clarify that the "discovery" rule  
          adopted in 1983 applies to works stolen before that date,  
          thereby clarifying disparate opinions of the California Courts  
          of Appeal on this point; 2) it will clarify that the discovery  
          rule adopted by the legislature was one of "actual" and not  
          "constructive" discovery; and, 3) it will extend to six years  
          the SOL for actions for specific recovery brought against a  
          museum, gallery, auctioneer, or dealer. 

          At one level, this bill seeks to clarify competing  
          interpretations of California's statute of limitations for the  
          specific recovery of personal property.  As importantly, it  








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          seeks to address a vexing problem faced by theft victims who are  
          attempting to recover art and other valuable works that may have  
          been stolen several years ago, but where the victim only learns  
          the whereabouts of the work many years later.  It is in the very  
          nature of stolen art that it circulates underground for several  
          years before it appears in museums and galleries, and by that  
          time the SOL has long run its course.  Courts in California and  
          elsewhere have long recognized that, given the nature of stolen  
          art, the proper trigger for the SOL should be the discovery by  
          the owner of the whereabouts of the work, not the time of theft  
          or even the time of the first public display of the work.   
          Appellate courts in California, however, have divided on two  
          critical questions:  1) whether the "discovery" rule that was  
          adopted by the Legislature in 1982 applies to works stolen  
          before 1983 (when the statute became effective); and, 2) whether  
          the "discovery" rule was intended to require "actual" or  
          "constructive" discovery.  This bill would clarify these  
          questions for purposes of actions for brought to recover art, or  
          other works of historical or cultural significance, on display  
          in a museum or gallery.  In short, this bill would adopt the  
          reasoning of courts that have interpreted California's discovery  
          rule to:  1) apply to works stolen before 1983; and, 2) require  
          "actual" discovery.  In addition, this bill would extend the SOL  
          for recovering works from a gallery or museum from three to six  
          years.  

           
          Analysis Prepared by  :    Thomas Clark / JUD. / (916) 319-2334 

                                                               FN:  0004139