BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON
          BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
                              Senator Jerry Hill, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 1570         Hearing Date:    June 13,  
          2016
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          |Author:   |Chang                                                 |
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          |Version:  |June 8, 2016                                          |
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          |Urgency:  |No                     |Fiscal:    |No               |
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          |Consultant|Mark Mendoza                                          |
          |:         |                                                      |
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              Subject:  Collectibles:  sale of autographed memorabilia

          SUMMARY:   
            Requires dealers, as specified, who advertise and sell any  
          type of autographed collectible to provide a certificate of  
          authenticity to the purchaser, and generally expands a variety  
          of consumer protections that currently only apply to autographed  
          sports memorabilia to cover all such collectibles.  

          Existing law:
          
          1)Regulates the sale or offer to sell by a dealer to a consumer  
            of a sports collectible in or from this state.  (Civil Code  
            (CC)  1739.7)



          2)Requires a dealer, in selling or offering to sell to a  
            consumer an autographed sports collectible in or from this  
            state, to furnish a certificate of authenticity to the  
            consumer at the time of sale.  The certificate of authenticity  
            must be in writing, be signed by the dealer or his or her  
            authorized agent, specify the date of sale, be in at least  
            10-point boldface type and contain the dealer's true legal  
            name and street address.  The dealer must retain a copy of the  
            certificate of authenticity for at least seven years.  (CC   
            1739.7(b))









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          3)Requires each certificate of authenticity to do all of the  
            following: 



             a)   Describe the collectible and specify the name of the  
               sports personality who autographed it;





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



             c)   Contain an express warranty, which shall be conclusively  
               presumed to be part of the bargain, of the authenticity of  
               the collectible, as specified;



             d)   Specify whether the collectible is offered as one of a  
               limited edition and, if so, specify how the collectible and  
               edition are numbered; and the size of the edition and the  
               size of any prior or anticipated future edition, as  
               specified;



             e)   Indicate 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 proof thereof;



             f)   Indicate the last four digits of the dealer's resale  
               certificate number from the State Board of Equalization;










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             g)   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;



             h)   Indicate whether the item was obtained or purchased from  
               a third party, and the name and address of this third  
               party, if applicable; and



             i)   Include an identifying serial number that corresponds to  
               an identifying number printed on the collectible item, if  
               any, which shall also be printed on the sales receipt.  (CC  
                1739.7(b))



          1)Prohibits a dealer from representing an item as a collectible  
            if it was not autographed by the sports personality in his or  
            her own hand.  (CC  1739.7(c))



          2)Prohibits a dealer from displaying or offering for sale a  
            collectible in this state unless he or she displays a  
            conspicuous sign at the location where the collectible is  
            offered for sale and in close proximity to the collectible  
            merchandise, as specified.  


          (CC  1739.7(d))

          3)Requires any dealer engaged in a mail-order or telephone-order  
            business for the sale of collectibles in or from this state to  
            make specified disclosures in any written, radio or televised  
            advertisement.  (CC  1739.7(e)) 



          4)Prohibits a dealer from displaying or offering for sale a  
            collectible in this state at any trade show or similar event  








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            primarily featuring sales of collectibles or other sports  
            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.  (CC  1739.7(f))



          5)Entitles any consumer injured by the failure of a dealer to  
            provide a valid certificate to recover, in addition to actual  
            damages, a civil penalty in an amount equal to 


          10 times actual damages, plus court costs, reasonable attorney's  
            fees, interest, and expert witness fees, if applicable, plus  
            additional damages based on the egregiousness of the dealer's  
            conduct.  (CC  1739.7(g))

          6)Prohibits a person from representing himself or herself as a  
            dealer in this state unless he or she possesses a valid resale  
            certificate number from the State Board of Equalization.  (CC  
             1739.7(h))



          7)Requires a promoter arranging or organizing a trade show  
            featuring collectibles and autograph signings to notify in  
            writing any dealer who has agreed to purchase or rent space in  
            this trade show as to their legal responsibilities, as  
            specified.  


          ((CC  1739.7(j))







          This bill:

          1) Expands existing consumer protections and requirements  
             pertaining to the trade in autographed sports collectibles,  








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             including specified requirements for a certificate of  
             authenticity and dealer disclosures, by deleting the  
             reference to "sports", thereby making the existing provisions  
             apply to all autographed collectibles.    



          2) Expands the definition of a "collectible" to mean any  
             autographed item sold or offered for sale in or from this  
             state by a dealer to a consumer for five dollars ($5) or  
             more.



          3) Revises the definition of "dealer" to any person who is  
             principally in the business of selling or offering for sale  
             collectibles in or from this state.


          4) Expands the definition of a "dealer" to include a person  
             engaged in an online business for the sale of collectibles.


          5) Excludes from the definition of a "dealer" a licensed  
             pawnbroker 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. 


          6) Excludes from the definition of a "dealer" the personality  
             who signs the memorabilia.


          7) Excludes from the definition of "dealer" an 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 this  
             state, exclusively or nonexclusively, or does not hold itself  
             out as having knowledge or skill peculiar to collectibles. 


          8) Expands the definition of "description" to include  
             representations on an Internet webpage or in an email, or a  








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             representation in an online communication to the public in or  
             from California. 


          9) Makes other technical or clarifying amendments. 


          

          FISCAL  
          EFFECT:  None.  This bill is not keyed "fiscal" by Legislative  
          Counsel. 

          
          COMMENTS:
          
          1. Purpose.  The  Author  is the sponsor of this bill.  According  
             to the Author, "Current law has strong consumer protections  
             in place for signed sports memorabilia, however forged  
             collectibles are just as prevalent outside of the sports  
             market.  No law is currently in place to protect consumers  
             from music, movie, historical, or other non-sport related  
             forgeries.  Professional authenticators evaluate hundreds of  
             thousands of autographs annually worldwide, and often  
             determine the signatures to be forged.  According to industry  
             experts, the rejection rate can reach over 50% of submitted  
             items for the more prominent names, including Neil Armstrong,  
             Michael Jackson, and others.

          Fake autographs can be difficult for anyone to identify without  
             professional validation, let alone children who are often the  
             victims of fake signed memorabilia.  Because it is so easy to  
             fabricate a signature, authentication requirements are needed  
             across all genres of collectibles to ensure consumers have  
             ample protections - including civil recourse if they are sold  
             fake items."

          2. Background.   According to the Author, there is widespread  
             fraud in the market for autographed collectibles "Experts  
             estimate that?94 percent of all autographed Beatles  
             memorabilia is forged, as are 76 percent of Marilyn Monroe  
             and Elvis Presley collectibles.  In the last twenty years,  
             the FBI instituted two major investigations uncovering  
             millions in forged sports, entertainment and historical  








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             autographed memorabilia - both cases involved operations in  
             California.  During the most recent investigation, the FBI  
             estimated forged memorabilia 'comprises between $500,000,000  
             and $900,000,000' of the overall market.

             "As recently as 2015, the widow of The Jimi Hendrix  
             Experience drummer Mitch Mitchell warned that many items sold  
             online that purported to have been signed by Jimi Hendrix  
             were really fake.  While Star Wars icon Mark Hamill took to  
             Twitter to tell fans which of their signed collectibles were  
             forged and which were genuine."

          3. Arguments in Support.  The  Consumer Federation of California   
             asserts that "forged autographs are estimated to account for  
             $100 million of the approximately $1 billion per year  
             autographed memorabilia market in the United States.   
             Signatures are comparatively easy to fake and consumers are  
             often defrauded by bad actors.  Current law already protects  
             consumers in the case of sports memorabilia; the autographs  
             of famous non-athlete historical figures are no different and  
             consumers deserve the same protections for those purchases."

             The  Motion Picture Association of America, Inc.  underscores  
             that "this bill is consistent with MPAA and member company  
             efforts to protect motion pictures and television from theft  
             and to ensure the integrity of these high value productions  
             for the benefit of viewers and consumers."

             The  California Police Chiefs Association  writes that  
             "unfortunately no law is currently in place to protect the  
             consumers from music, movie, historical, or other non-sport  
             related forgeries, despites these forged collectibles being  
             just as prevalent.  AB 1570 closes this loophole and will  
             reduce the number of victims of forgery by strengthening the  
             safeguards for non-sports memorabilia enthusiasts."  

          
           NOTE  :  Double-referral to the Senate Committee on Judiciary.
          

          SUPPORT AND OPPOSITION:
          
           Support:  









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          California Police Chiefs Association 
          Consumer Federation of California
          Genuine COA
          Mark Hamill, Actor
          Motion Picture Association of America, Inc.
          The Screen Actors Guild-American Federation of Television and  
          Radio Artists, AFL-CIO

           Opposition:  

          None on file as of June 7, 2016.

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