Canilao v. City Commercial Investments, LLC

Background

Six artists—Monica Canilao, Zarathustra Wesolowski, Ellery Bakaitis, Jeremy Novy, Susan Greene, and Hailey Gaiser—alleged that they painted large murals on the exterior walls of The Stud, a bar operated by Handsome Heidi, LLC. City Commercial Investments, LLC (CCI) owned the building. After The Stud closed in May 2020, CCI allegedly painted the building white and then beige, destroying the murals without warning or notice.

The artists sued CCI under the federal Visual Artists Rights Act (VARA), the California Arts Preservation Act (CAPA), and negligence. They sought damages, including statutory and punitive damages, and an injunction preventing CCI from destroying their artwork. CCI moved under Rule 12(b)(1) for dismissal based on lack of subject-matter jurisdiction and under Rule 12(c) for judgment on the pleadings. A Rule 12(c) motion generally applies the same standard as a motion to dismiss for failure to state a claim.

VARA Claim

The court held that the artists had not plausibly stated a VARA claim. VARA protects certain artistic rights, including rights against intentional destruction of a work of recognized stature. For artwork incorporated into a building, the court interpreted 17 U.S.C. § 113(d)(1) to require an artist to allege the building owner’s permission when the artwork cannot be removed without destruction, distortion, mutilation, or another modification.

The complaint did not allege that CCI gave permission to install the murals. The artists argued that Handsome Heidi had consented and that Handsome Heidi’s consent could be attributed to CCI through apparent agency or ratification. The court rejected those theories at the pleading stage because the complaint did not allege facts showing that Handsome Heidi appeared to be CCI’s agent, that CCI created such an appearance, that the artists reasonably relied on it, or that CCI ratified Handsome Heidi’s actions.

The court separately held that no prior owner consent was required if the murals were removable. But the complaint did not adequately allege removability. The allegation that portions of the murals might be saved, preserved, or moved if the building were demolished did not establish that the murals could be removed without destruction or modification. The court also found that the artists had adequately alleged that CCI intentionally destroyed the murals.

The court therefore dismissed the VARA claim under Rule 12(b)(6) for failure to state a claim. It granted leave to amend because the artists said discovery might provide facts supporting consent and might clarify which murals were removable.

State-Law Claims

The court held that the CAPA claim, as pleaded, was preempted by VARA. Preemption means that federal law displaces a state-law claim. The artists described their CAPA claim as protecting their right of integrity—the right to prevent alteration or destruction of their artwork—and the court found that this right was equivalent to the VARA right asserted in the complaint.

The court also held that the negligence claim was preempted. The alleged duty—to preserve the murals and give the artists an opportunity to remove them—was based on the same interests protected by VARA. The complaint did not adequately allege a separate ownership or title right in the physical murals that would distinguish the negligence claim from the federal moral-rights claim.

The court granted leave to amend the CAPA and negligence claims because further discovery might reveal facts supporting viable, non-preempted claims.

Disposition

The court granted CCI’s motion to dismiss or for judgment on the pleadings as to the VARA claim because the artists failed to state a claim. It also granted CCI’s motion for judgment on the pleadings as to the CAPA and negligence claims and granted leave to amend the VARA and state-law claims. The amended complaint was due within 30 days of the order’s entry. Judge Edward M. Chen’s order disposed of CCI’s motion, Docket No. 51.